Health Costs

As Congress wrestles with health care, no one has more at stake than employers. Firms pay a huge share of health costs. About 63% of employers offer health insurance and pay more than 75% of their workers' premiums. Built into those premiums are the medical costs of the uninsured who can't pay for health care. Plus employers get taxed to help finance Medicare.

Details of an overhaul remain in flux. But the key elements are emerging, and it's clear that firms face hundreds of changes. Among them:

• An insurance exchange. At the very heart of most plans is a "marketplace" where companies and individuals can buy coverage. More competition is the goal, with added options and lower premiums. Small businesses would gain the most from this because they would get more power to bargain over prices.
• Employer mandates. A real sticking point - with liberal Democrats insisting on "play or pay" rules for all but the smallest of businesses. Other Democrats and the few Republicans involved in the negotiations prefer incentives to spur employers to offer coverage. Odds favor a mandate but with smaller penalties than the proposed $750 per worker.
• Less flexibility. A government mandate will include minimum requirements for what counts as coverage, giving businesses less discretion to craft their policies.

The bottom line is that some businesses will benefit and others will pay more. Many will go along if they are convinced the bill will bring down costs in the long term. They know it will be expensive, but they also feel the current system is unsustainable.

Be Careful!

Here is a story that reminds all of us how important it is to be vigilant with our credit union accounts and our personal finances in general. Fraud, deception, and dishonesty is on the rise. In order to protect your savings and credit score, it is important to exercise caution in all you do. Your credit union will help you to the degree that they can, but you also have to help yourself.

PHOENIX - A member of Desert Schools Federal Credit Union was horrified when she realized she deposited $5,800 into the wrong account because she incorrectly typed one digit of her online account number when making the transfer - she typed a six instead of an eight.

The miscue - every online banking user's worst fear - sent the funds to another credit union member who quickly went out and spent the money - on bills, clothes and a new tattoo.

After the credit union realized the mistake it contacted the erroneous recipient to ask him to return the funds. "We called the member three different times to ask him to return the money and he refused," said Jason Meyers, chief spokesman for the $3-billing credit union.

They contacted the police, who charged the member with felony theft, inducing him to repay the erroneously obtained funds. Even though the young member spent the money, his parents have apparently agreed to make it up, according to Meyers.

Employee Leasing

I used to work as the CEO of an extremely small credit union so I am intimately familiar with the challenges that managers of small institutions face on a daily basis. I think that one of the most time consuming, challenging, and frustrating functions can that that of HR. One solution is to look into employee leasing.

Smaller companies looking to expand their workforce may be comfortable with the technical side of the hiring process, but not the human resource side. Business owners often find themselves overwhelmed by all the payroll accounting, record keeping and benefits which accompany newly hired employees. One popular solution to this problem is the practice of employee leasing.

Employee leasing is similar to the process of hiring temporary workers, but the key difference is permanency. A company wishing to pursue employee leasing will first contact a professional employment organization (PEO) to discuss its particular employment needs. The PEO or other employment leasing company might set up an interview process for recruiting new staff, or might take responsibility for existing workers. The company can still participate in the hiring process, but any hired personnel will officially work for the employee leasing company.

For many employees, the switch from their original company to an employee leasing company is actually a better deal financially. Since a typical PEO handles a large number of employees from numerous companies, future health insurance and other benefits can be negotiated in bulk. A worker at a small electronics company can enjoy the same level of benefits as a worker in a massive automotive plant. Wages and performance reviews are under the auspices of theemployee leasing organization, not the original companies.

Employers often pursue employee leasing options in order to eliminate the need for accountants and human resource managers. The employee leasing agency charges a fee in addition to the employees' wages, much like temporary employment agencies. This fee is often less than the cost of hiring human resource experts and payroll accountants. Because workers are not considered employees of the company in a legal sense, personal injuries and workers' compensation claims become the responsibility of the employee leasing agency.

Employee leasing is not a perfect solution for some companies, however. Since workers are not completely under the control of management, communications may become strained. Conflicts may have to be arbitrated by representatives of the employee leasing agency. Termination of non-productive workers may not be as simple as handing out pink slips. Certain union contracts actually prohibit the use of employeeleasing agencies or PEOs in order to prevent companies from outsourcing their human resource departments.

Was It Worth It?

KINGSPORT, Tenn. - One member of Kinsport CU may thing better of expressing his anger at the drive-thru: 68-year-old Harry Boyer, who was "flipping the bird" at tellers in the drive-thru window was arrested and charged with disorderly conduct. The member had just left a nearby convenience store where he cussed out employees, then walked through the CU's drive-thru while "giving the finger" to employees. It was all witnessed by an off-duty police officer who called central dispatch to have boyer arrested.

Payday Loans

Yet another reason why credit unions have an edge over the competition:

HARRISBURG, Penn. - A Commonwealth Court here has upheld a Pennsylvania Department of Banking requirement that payday lenders be licensed, including Internet payday lenders and any other out-of-state company that issues consumer loans to Pennsylvanians. The decision was applauded by the Pennsylvania CU Association, which noted that the Credit Union Better Choice program allows members to obtain short-term loans of $500 or less at an interest rate of 18% or less and an application fee of no more than $25. At the loan's disbursement, an amount equal to 10% of the loan is deposited into a savings account in the borrower's name. Lastly, all borrowers are offered financial counseling. That program is now offered by 82 CUs.

This product is not unique to Pennsylvania. Several credit unions in the state of Utah are offering short-term loans to provide cash for immediate needs through a program called CU on Payday.

Long-term loans combined with effective budgeting is preferred over these short-term, high-interest loans, but there are times when people need short-term cash advances for unforeseen expenses and/or emergencies. Using your local credit union to fulfill this need is always your best option.

The Pope "Loves" Credit Unions

I came across this story earlier today:

VATICAN CITY - Pope Benedict XVI has compared "love" and "credit unions" in his third encyclical, titled "Charity in Truth." The document offers the pope's thoughts on business, finance and broader economic issues. "If love is wise, it can find ways of working in accordance with provident and just expediency, as is illustrated in significant ways by much of the experience of credit unions," the pope stated, calling for more economic resources to aid the poor and the environment. He released the statement in conjunction with the G-8 meeting that was being held in Italy.

A credit union is a cooperative financial institution that is owned and controlled by its members, and operated for the purpose of promoting thrift, providing credit at reasonable rates, and providing other financial services to its members. Many credit unions exist to further community development or sustainable international development on a local level.

My First 8 Bagger

The traditional investment advice is that you should steer clear of "penny stocks," those low-priced, speculative securities of small companies. However, like most investors, I have dabbled in my fair share of them over the years, hoping to get lucky at least once.

Earlier this year I came across a company called Air Transport Services Group, Inc. (ATSG) that was trading at $0.25 per share at the time. ATSG through its subsidiaries, provides air cargo transportation and related services in the United States. It offers package handling and other cargo related services; airlift services to other airlines, freight forwarders, and the U.S. military; freight transportation and supply chain management services; passenger transportation primarily to the U.S. military; and package sorting and handling services.

I use an online stock broker called Share Builder, which offers trades for as low as $4 per transaction. The primary drawback is that they only place buy orders on Tuesdays. One of the major benefits is that you can purchase partial shares (you can select to invest a dollar amount rather than a certain number of shares).

Anyways, I am a pretty small time investor, so I threw $25 at this company. To date, I have earned a 800.46% return on my investment. That makes this my first 8 bagger! My annualized gain is an unrealistic 11,419.02%! The toughest thing now is deciding how long to hold on. On The Motley Fool, the stock is ranked as a CAPS 4 star and more than 90% of the users there believe that it will continue outperform the market. I guess the final question I have is when I get filthy rich from this $25 investment (I am obviously joking), who should I hire as my accountant and tax attorney?!

Here's to hoping that ATSG continues its meteoric rise!