Tuesday, December 7th 2010 PRESENTERS: PAUL S. LIM, CFP® AND DARREN B. TODD, CFP® Darren B. Todd, CFP® Todd Financial & Insurance Services, Inc. 2020 Camino Del Rio North, Suite 400 San Diego CA 92108 (858) 863-4010 x6227 firstname.lastname@example.org CA Insurance License# OE61933 Darren is a Certified Financial Planner™ Professional with 17 + years of financial planning and employee benefits experience. In 1993, Darren originally entered into the financial planning profession as a stock broker and has since been exposed though practical experience to the diverse array of financial planning concepts. Darren opened his own employee benefits consulting firm, now known as Todd Financial & Insurance Services, Inc., in 2000 and has grown the business to become a highly respected agency in Southern California. His experience in designing, implementing and servicing accounts of all sizes has made him a key resource to many companies, associations and financial professionals throughout the country. Wellness programs come in many different shapes and sizes and the tax rules that apply to them vary accordingly. Generally they come in 4 Basic Categories: ◦ Education Health Risk Assessments (HRAs) ◦ Health Assessment Tests Blood Pressure, Cholesterol, Blood Sugar ◦ Behavior Modification Programs Weight Loss, Smoking Cessation ◦ Disease Management Monitoring Diabetes and other Chronic Diseases Plans filed as “Health Insurance Plans” ◦ Chiropractic, Acupuncture Benefits ◦ Enhancements to Dental and Vision Plans ◦ Employee Assistance Programs (EAPs) Stand-Alone Incentive Plans ◦ Benefit Bank Allowances ◦ Health Habits – Encouragement Plans ◦ Health Reimbursement Arrangements (HRAs) targeting specific preventative care Hybrid of both types of plans Motivate employees to achieve specific health standards through incentives / penalties that encourage participation There are 3 main incentive types that vary in tax efficiency: ◦ Cash / Cash Equivalents ◦ De Minimis Gifts ◦ Premium Offset Plan / Premium Based Incentives Examples include Gift Cards, Charge Cards or Credit Cards of any amount. Always taxable to Employer and Employee Cost to the Employer will range from $1.10 - $1.35 for every $1.00 in taxable benefits paid for the employee to receive $0.60 - $0.75 after taxes Examples include Movie Tickets, Lower Cost Items and Inexpensive Sporting Events Meals fall into their own category of De Minimis Gifts Internal Revenue Code is subject to interpretation. Please consult your tax advisor De Minimis Gifts cost $1.00 for every $1.00 paid in benefit Premium Offset Plans and Premium based incentive plans are the most tax efficient wellness incentive. Plans will cost between ($0.20) to $0.20 for every $1.00 in benefits paid. Depending on the design, a wellness program may be subject to a broad range of federal, state and local laws. ◦ Department of Labor ◦ Department of Health & Human Services ◦ Health Insurance Portability and Accountability Act (HIPAA) ◦ Americans with Disabilities Act (ADA) Please consult your legal advisor. Is it necessary for a CA Employer to report coverage of non-dependent children as state taxable income to the employee? Pursuant to IRS Circular 230: Todd Financial & Insurance Services, Inc., its agents, and representatives may not give tax or legal advice. Any discussion of taxes herein or related to this document is for general information purposes only and does not purport to be complete or cover every situation. Tax law is subject to interpretation and legislative change. Tax results and the appropriateness of any product for any specific taxpayer may vary depending upon the facts and circumstances. You should consult with and rely on your own independent legal and tax advisors regarding your particular set of facts and circumstances.