Cheat Sheet Q&A: How should businesses plan for ACA for 2015 -

Today’s entry:

Hi Brian,

Where do we currently stand with the employer mandate on businesses being enforced for 2015?  Do you think businesses will get another wavier for next year?

Bottom Line:  It’s hard to believe we’re now on the backside of 2014 & that budget planning for 2015 is about underway for many companies.  Healthcare and ACA compliance certainly is a huge consideration for any company currently offering benefits or that has 50 or more employees and will have to account for ACA sooner or later.  First and foremost here’s where we currently stand for 2015:


·         Companies with 50 or more employees must offer healthcare benefits to at least 70% of their full-time workforce


So it’s set to begin to tier in for employers next year. 


·         By 2016 Companies with 50 or more employees must offer healthcare benefits to at least 95% of their full-time employees


As to what I think might happen?  I don’t think that the President is going to push back compliance any further – for two reasons.  First the individual mandate is being enforced this year, so the administration has shown that it’s serious about enforcement.  Secondly, this is the President’s signature law, he has two years left in office and will want this fully implemented before he leaves office to make it far more difficult to undo.  So as a business I’d suggest being prepared for the 70% mandate next year and 95% for 2016. 


If you have a topic or question you’d like me to address email me:


Audio Report:



What percentage of home flippers are successful today vs. years ago?:


Bottom Line:  Home flipping became a four letter word during the housing crisis.  These days, many have taken a more constructive view of flipping as investors have played an important role in buying, refurbishing and renting or selling (flipping) a home to someone who will take care of the property.  How many are making vs. losing money though? 


·         During 2007-2008 – the last stretch leading up to the nationwide crisis, just 24% of home flippers made money


·         Currently 77% of home flippers (defined as those who buy & sell) make money

So it’s still anything but a sure thing.  The 23% of flippers who are losing money are most often those who are new to flipping and/or those who are financing part or most of the transaction.  The professionals who have cash & reno teams in place not surprisingly are those most likely to turn a profit. 


Audio Report:


The week that was...  worst week for stocks in just over two years - where we currently stand:


Bottom Line: History suggests that we should have a correction (defined as a decline of 10% or more) before the end of 2014.  Many have wondered if last week’s selloff in stocks was the beginning of a correction.  That remains to be seen of course but here’s where we stand.   


Last week was the worst for stocks in literally two years and a week.  I broke out the declines by index:


·         Dow 4% from it's highs


·         Nasdaq:  3% from its highs


·         S&P 500:  3.3% from its highs


·         Russell 2000:  8% from its highs

So clearly there is a big difference between the average technology based Nasdaq company and the smaller companies that comprise the Russell 2000.  One more bad day and the Russell 2000 Will be in correction territory while we would need two more similar weeks to get most of the rest of market into correction territory. 


Audio Report:



Follow-up on jobs report - What the average hourly wage is and & how to know where you stand regardless of whether you're part-time or full-time:


Bottom Line:  Last week I broke down the composition to demonstrate that many of the jobs that have been created in the recovery are part-time jobs.  In fact we have the largest composition of the workforce that’s part-time (19-20%) that we’ve ever experienced.  That being said we are starting to see wages head higher factoring in full and part-time people. 


·         The average salary at the end of the Great Recession (summer of 09’) was $22 per hour

·         The average currently salary is $24.45 and rising


So it’s not all meh news with the job growth.  The rising average hourly wage also would seem to demonstrate that there is a need for skilled part-time personal within many businesses as well.  This is likely a by-product of companies that are using more part-time personal as a way to try to avoid the cost implications of the ACA. 


Audio Report: 



How parent's who pay for college are doing so & here's what you need to know to do it more effectively:


Bottom Line:  According to Sallie Mae here’s a breakdown for how parents who do pay for at least some of their kid’s college tuition, are doing so: 

·         Current Income:  46%

·         College Savings plans:  15%

·         Non-retirement or college plan savings:  12%

·         Retirement account withdrawal:  7%


Everything else was under 5%. 


So here’s the not good news.  Only 15% of parents who are paying for at least some college are doing so effectively.  Using current income means that parents are reallocating existing money that can be used to pay off debt and/or invest.  This is a huge part of the coming retirement shortfall.  Speaking of retirement shortfall…  The 7% pulling from retirement accounts is the single worst way to pay for college.  Not only are you depleting your retirement directly but you’re incurring penalties and taxes to do so!  Terrible.  Student loans would be a much better option. 

The 15% using college savings plans are on the right path.  Not only do you get to cap the college expense at today’s rates (if you use Florida’s state plan), but regardless of using a state of or Federal 529 plan you get to save and invest in a tax advantaged way.  If your kids don’t go to college or use all that’s available in the account – you get that money back plus its gains.  So there’s no downside.  Plan early and wisely, it’s in the best interest of you and if you’re inclined to pay for your kid’s college – them too. 


Audio Report: