• Study Breaks Down Health Insurance Premium Costs
• Census Figures Show Growth in Hispanic Entrepreneurship
• As Tax Day Approaches, IRS Provides Tips
• Member Poll: A Taxing Time for Micro-Businesses

Study Breaks Down Health Insurance Premium Costs

A recent America’s Health Insurance Plans (AHIP) report, “The Factors Fueling Rising Healthcare Costs 2006” examined the causes of rising health care costs and how health insurance premium dollars are being spent. The study found that premiums increased 8.8 percent between 2004 and 2005, which is lower than the 13.7 percent increase a similar report found in 2002. Higher utilization of services accounted for much of the increase. The report also found that 86 cents out of every premium dollar go directly towards paying for medical services. Included within the 86 cents are the costs of medical liability and defensive medicine, which are estimated to be ten cents of the premium dollar. According to the study, of the remaining premium dollar, five cents go to consumer services such as prevention, disease management, care coordination, investments in health information technologies and health support; provider support; and marketing. Six cents go to costs associated with government payments, regulation and claims processing and other administration. Health insurance plan profits comprise three cents of the premium dollar. Premium increases have closely followed health care spending increases over time. Over the most recent ten-year period, premiums grew at an annual rate of 7.3 percent and the cost of health care services grew at an annual rate of 7.2 percent. For more information on the study, visit www.ahip.org. For more information on the policy work the NASE is doing to lower health costs for small businesses, visit http://advocacy.NASE.org. Census Figures Show Growth in Hispanic Entrepreneurship Last week, the U.S. Census Bureau released 2002 figures on Hispanic-owned businesses. According to the report, the number of Hispanic-owned firms in the U.S. tripled between 1997 and 2002. This means that nearly 1.6 million Hispanic-owned firms generate nearly $222 billion in revenue. Even so, Hispanic-owned firms make up only a small part of the more than 23 million individually-owned businesses in the U.S. This number is expected to continue to grow. To read the Census’ full report, visit http://www.census.gov/prod/ec02/sb0200cshisp.pdf. As Tax Day Approaches, IRS Provides Tips As you struggle with finishing your taxes, keep in mind that the NASE and IRS have extensive resources to help. Recently, the IRS released the following headliner article regarding the home office deduction: If you use a portion of your home for business purposes, you may be able to take a home office deduction whether you are self-employed or an employee. Expenses that you may be able to deduct for business use of the home may include the business portion of real estate taxes, mortgage interest, rent, utilities, insurance, depreciation, painting and repairs. You can claim this deduction for the business use of a part of your home only if you use that part of your home regularly and exclusively: As your principal place of business for any trade or business As a place to meet or deal with your patients, clients or customers in the normal course of your trade or business Generally, the amount you can deduct depends on the percentage of your home that you used for business. Your deduction will be limited if your gross income from your business is less than your total business expenses. If you use a separate structure not attached to your home for an exclusive and regular part of your business, you can deduct expenses related to it. If you are self-employed, use Form 8829 to figure your home office deduction and report those deductions on line 30 of Schedule C, Form 1040. There are special rules for qualified daycare providers and for persons storing business inventory or product samples. Additionally, NASE Members have access to the TaxCentral benefit. By typing “TaxCentral” in the Quick Link box on the NASE homepage (www.NASE.org), NASE Members have access to many online tax tools and services to assist in tax season. Home office users can also find a line-by-line description of how to fill out IRS Form 8829 at www.NASE.org/schedulec. For more assistance from the IRS, visit www.irs.gov. Member Poll: A Taxing Time for Micro-Businesses Taxes are a source of frustration for the self-employed. The NASE has long supported tax simplification and tax fairness for micro-businesses. Please take this short member survey regarding your opinions on federal tax reform. Let the NASE know your opinions by visiting the MyNASE Web site at http://my.NASE.org/. Log in to your free MyNASE Web Account. If you have not set up an account, you can do so at http://my.NASE.org/ with your member number. Let your voice be heard in the association by taking this survey during March.