NASE Self-Informed Article on Fred Diamond
Published on: Mar 3, 2016
Transcripts - NASE Self-Informed Article on Fred Diamond
SelfInformedPublished by the National Association for the Self-Employed January 2015
Table of contents
How ACA Will Impact
Your Business in 2015
Ask the Expert
How the Affordable
Care Act Will Impact
Your Business in 2015
Since it passed in 2010, the Patient and Protection
and Affordable Care Act (the full title of the bill) or “ACA” has
transformed the way Americans and business buy health insurance.
From access to availability, minimum requirements of health care
coverage, and enhanced consumer protections, every single American’s
health insurance has been impacted. This year additional changes
could be coming down the pipe, including implementation of the
individual coverage penalty, a Supreme Court challenge to health care
subsidies, and repeal of the entire bill by the Republican controlled
Congress. As a business owner, it is important that you keep abreast
of the latest health care news!
2SelfInformed january 2015
Quick ACA Re-Fresher
The three core elements of the ACA were: access, coverage
and affordability. The law created the establishment of
health insurance marketplaces that allowed for individuals
and small businesses (49 or less employees) to purchase
health insurance through an “exchange”; either run by your
state or the federal government. Within those exchanges
you had the option of four plans: Platinum, Gold, Silver,
or Bronze, all will various monthly deductibles and out-
of-pockets expenses. The Platinum plan would have a
higher monthly deductible but very low or no out-of-pocket
expenses versus the Bronze plan that would be opposite,
low monthly deductible and higher out-of-pocket expenses.
The ACA also set new standards for the coverage requirements
in an acceptable health insurance plan. Plans now must cover
ten essential health benefits like hospitalization coverage,
prescription drugs, and maternity care. States could also expand
essential health benefit requirements in their state, for instance,
Washington State covers acupuncture and cochlear implants.
In order to ensure that individuals purchased health insurance,
the law also set limits for out-of-pocket costs. In 2015, a health
insurance plan is only acceptable if the most an individual could
pay out-of-pocket per year is $6,600 or $13,200 as a family.
Changes in 2015
In 2015, the biggest impact of the ACA for millions of
individuals will come into effect, verification of coverage via
your 2014 tax filing. The ACA requires every individual to
have a qualified health care plan, failure to provide verification
of health care coverage on your 2014 tax filing will result
in a penalty that will be assessed on your 2014 return. The
penalty for 2014 is the higher of either $95 or 1% of your total
household income above roughly $10,000. In 2015, this goes
up to $325 or 2% of your income above $10,000.
Penalties Per Year:
1% of Income
1% of Income
1% of Income
3SelfInformed january 2015
King v. Burwell
The U.S. Supreme Court will hear arguments in
King v. Burwell in the coming weeks, challenging
the distribution of federal subsidies for health care
premiums paid to individuals and families enrolled in the
federally-facilitated health exchange because their state of
residence declined to establish a state-based exchanged.
Plaintiffs argue that the legislative language in the
ACA established premium assistance only allows for
enrollees in state facilitated exchanges to receive premium
assistance and that the IRS incorrectly interpreted the
language to allow for premium subsidies to be distributed
to all ACA enrollees regardless.
In 2014, nearly 87% of health care exchanged enrollees,
roughly 4 million Americans, received nearly $36 million
in subsidies. Many health care experts believe that should
the Supreme Court rule with the plaintiffs and block the
use of subsidies in federally-facilitated exchanges, the
individual marketplace created by the ACA will crumble
sending health insurance costs skyrocketing.
Republican Control of Congress
Without a doubt the upcoming year will see numerous
legislative attempts to repeal, replace, and in some
cases generally undermine the ACA by the Republican
controlled Congress. Already in the 114th the Republican
led House of Representatives voted to repeal the 30
hour work week definition to the generally accepted
40 hour work week definition of full-time employee,
it is unclear when the Republican led U.S. Senate will
take-up the measure. Congressman Boustany (R-LA) has
re-introduced legislation repealing the employer mandate,
requiring companies with 50 or more employees
to provide employer-sponsored health insurance or
face significant, crippling fines. It is expected that
Republicans will introduce legislation repealing the
individual mandate penalty in the coming weeks.
It is unlikely that even if the House and Senate pass
popular repeal measures that the President would sign
them into law, due to their nature of undermining the
core tenets of the ACA. In fact, already the President has
of health care
roughly 4 million
4SelfInformed january 2015
N A T I O N A L A S S O C I A T I O N F O R T H E S E L F - E M P L O Y E D ’ S
Do a full assessment of your current health care needs.
Being able to assess what is important to you and your
family will make it easier to sift through the plan option
in the exchange. For example, do you anticipate any
“big” medical expenses (birth of a child, surgery, etc.)?
What is your current prescription drug needs? Do you
require specialists for a known health ailment?
Make sure you have a full list of
your current doctors in front of
you. You’ll want to ensure that
your doctors are considered “in
network” for any of the potential
plans you are considering selecting.
Establish a realistic business budget
that includes calculating health care
costs. Any good business owner knows
to prepare a budget that helps provide
planning and stability down the road.
Have an idea of what your budget is for
health care costs in 2015 and what’s
a realistic amount for you to spend on
coverage for you and/or your family.
Have your 2013 tax filing information ready
and available? Your 2013 tax filings will be
important for you to have available in order to
gauge what, if any, health care subsidies you
may be available to take advantage of in 2015.
For those already enrolled previously in
the exchange, do you need to increase or
decrease your coverage? Having the right
health care plan that best fits your individual
needs is essential. Paying for an oversized
plan that provides many bells and whistles
you haven’t utilized in the past – and will be
unlikely to utilize in the future – may be a
good place to start in order to help cut costs
around your health care budget next year.
issues a veto threat deceleration on
the changes to the full-time work
week definition passed by the House
Republicans. However, it would not
be surprising if Republicans and the
Obama White House do find some
areas of reform that they could agree
on, but first Republicans must work
through their repeal efforts.
NASE Tackles Health
While Congress is distracted
with their efforts to repeal the
ACA, the NASE is laser-focused
on bringing attention to a
significant consequence caused
by the Departments of Treasury,
Health and Human Services, and
Labors decision to restrict Health
(HRAs) for the self-employed and
under 49 employee, employers.
On September 13, 2013, the
Departments of Treasury,
Health and Human Services,
and Labor,released Technical
Release No. 2013-03, ”Application
of Market Reform and other
Provisions of the Affordable Care
Act to HRAs, Health FSAs, and
Certain other Employer Healthcare
Arrangements.” The guidance
stipulates that an employer that
offers an HRA to two or more
employees, but does not offer a
group health care plan, is not
compliant with annual limit
regulations and the business would
5SelfInformed january 2015
be subject to penalty. However, a single employee
business can still offer an HRA plan and would not run
afoul of compliance issues under the ACA.
The NASE does not believe that an HRA should be
viewed under any circumstance as a qualified group plan
and we do not disagree with the following assessment
within the technical guidance, “HRA 105 Plans, by
definition, will not meet the requirements of an ACA
compliant health insurance plan.”
Our assessment of the technical guidance has found
support on Capitol Hill, in the closing days of the
113th Congress, Reps. Boustany (R-LA) and Thompson
(D-CA) introduced bi-partisan legislation, H.R. 5860,
Small Business Healthcare Relief Act of 2014, which would
allow for standalone health reimbursement arrangements
(HRAs) for small employers (with 49 employees or less).
The legislation will be re-introduced in the early weeks of
the 115th Congress. For the NASE, this will remain our
top legislative priority in the 114th Congress.
Crystal Ball Predictions
Perhaps there is no crystal ball, but undoubtedly 2015
will see the possibility of significant changes to the
ACA. From the enforcement of the individual mandate
penalty, the a earthshattering supreme court ruling, and
the systematic, coordinated effort by House and Senate
Republicans to repeal the core of the ACA, the health
care crystal ball is hazy at best. The NASE will continue
to advocate and supports efforts that make health
insurance flexible, affordable, and comprehensive for the
23 million self-employed.
6SelfInformed january 2015
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7SelfInformed january 2015
Q:I know most people are confused, but
exactly how much will my penalty be
if I didn’t have the required ACA compliant
health insurance policy?
A:The most difficult part of your question is the
word ‘exactly’ since the actual amount that any of
us would pay is kind of a moving target. Let’s start with
the basic idea of how much your penalty could be. There
are two calculations and you will be required to pay the
HIGHER of these two amounts:
1) $95 per adult, plus $47.50 per child. Maximum
amount is $285, or
2) 1% of your total household. Maximum amount is the
national average premium cost for a Bronze Plan times
the number of people in the family, up to five people.
(Bronze plan for an individual for 2014 was $2,448)
A single individual with no children would pay a penalty
between $95 and $2,448 depending on their household
income. A married couple would pay a penalty between
$190 and $4,896 depending on their household income.
And a married couple with two minor children would pay
a penalty between $285 and $12,240 depending on their
As you can already see, the most difficult part is
determining the second of the two calculations which is
based on your total household income. The first thing to
remember is that taxable income up to the IRS threshold
for required tax return filing doesn’t count. If you are below
that threshold for your specific filing status, then there will
be no penalty. That filing threshold for single taxpayers for
2014 is $10,150. For a married couple filing a joint return,
the threshold amount is $20,300.
Your family’s total income for the calculation was generally
the adjusted gross income from your 2014 Federal
income tax return. This is the amount on line 37 at the
very bottom on page one of the return. If you have an
excluded income such as tax-free interest income, some
social security benefits, and perhaps some foreign income,
those amounts must be added back to arrive at your total
If you are single and your adjusted gross income is $35,000,
your penalty will be $249. That is $35,000 less the filing
threshold amount of $10,150, times one percent. ($35,000
- $10,150 = $24,850 x 1% = $248.50) If your adjusted
gross income was $18,000 your penalty would be $95.
$18,000 less the filing threshold amount of $10,150 times
one percent would be $79 so you would be subject to the
minimum amount of $95.
If you are married filing jointly with one child and your
adjusted gross income is $70,000 your penalty will be $497.
That’s $70,000 less the filing threshold amount of $20,300
times one percent. ($70,000 - $20,300 = $49,700 x 1%
= $497) If your adjusted gross income was $40,000 your
penalty would be $238. $40,000 less the filing threshold
amount of $20,300 times one percent would be $197, which
is less than the minimum amount of $95 for you, $95 for
your spouse, and $47.50 for your child for a total of $238.
As you probably guessed there are additional complications
but there are a number of good websites that can help you
calculate the amount of the penalties depending on the size
of your family and your family’s total household income.
The U.S. Centers for Medicare & Medicaid Services
maintains a very good website at HealthCare.gov as does
the Tax Policy Center at TaxPolicyCenter.org. You can
click straight to their calculators http://taxpolicycenter.org/
As always, don’t forget that you are not alone. Bookmark
our website at NASE.org as well as the HealthCare.gov site
and the TaxPolicyCenter.org site and you will always be
able to find the help you need.
8SelfInformed january 2015
Fred Diamond is the President of Diamond
Strategic Marketing (DSM) and Founder of
the Institute for Excellence in Sales & Business
Development (IES&BD). Though Fred joined the
NASE in 2004 initially for the health insurance, he
agrees the NASE has proven over the years to offer
much more than just a source of health insurance.
Diamond Strategic Marketing helps growing
companies (local, national and international)
develop sound and smart product and vertical
marketing strategies that lead to revenue rewards.
The Institute for Excellence in Sales & Business
Development provides thought leader-led workshops
for selling professionals across the US.
What inspired you to enter the field you are in?
I have always been in product and corporate marketing
with companies as large as Apple Computer to tiny start-
ups. When I decided to work for myself, it seemed natural
to offer my marketing expertise to as many companies
as possible. A lot of companies have benefitted from my
expertise. I was also fortunate to have Microsoft offer my
services to many of their exceptional partners.
When and why did you start your business?
I opened Diamond Marketing (now Diamond Strategic
Marketing) in February 2002. To be honest, I started
working for myself because I had just been laid off. I had
wanted to work for myself for years and the opportunity
quickly and unavoidably presented itself. Although getting
laid off is not fun, it forced me to finally start working for
myself, which is what I wanted to do for years.
9SelfInformed january 2015
What challenges have you faced in your business?
How have you overcome them?
A big challenge is getting associates and partners to
truly understand what your new company offers. I
started a few lead share groups so that I could have the
opportunity to let these people know what I do. Another
challenge is that when you work for yourself, you have to
get really good at time management and prioritization.
I’ve created support networks and hired business coaches
to help me stay on track.
How do you market your business?
I do a ton of networking in professional, social, and
charitable organizations. I also started a number of my
own networking groups to help associates understand what
DSM does and how it could help their clients. I also started
an adjunct entity, the IES&BD, to help bring clients to
where I was. Many of the IES&BD members are trying to
accelerate their sales processes and DSM is able to help put
smarter marketing programs in place to help do so.
That does not seem like "traditional marketing," can
you elaborate on why and how you came to the
decision that this was the best path for your business?
90% of my clients come from referrals from colleagues
or past clients or word-of-mouth. My goal was to
establish myself as the go-to-marketing consultant to
tech companies looking to grow. Most of the time, clients
are looking for evidence that you’re that person. I knew
early on that if I was going to be successful, it was going
to be from referrals from personal relationships. I have
not gotten one client at all from “traditional marketing”
mechanisms and I think most service professionals would
probably say the same thing.
Tell me more about your business, do you have any
I don’t have any full time employees although at times I’ve
had up to 20 people working on our projects. These people
included other consultants and marketing support people
such as graphics designers, writers, and researchers. I don’t
anticipate bringing anyone on board full time. There are
great resources out there to tap into as needed.
10SelfInformed january 2015
Learn More in the NASE Small Business Locator
Learn more about Fred Diamond, Diamond Strategic Marketing, Institute for Excellence
in Sales & Business Development, and other Self Employed businesses in the NASE Small
Business Locator directory. You can add your own company to the NASE Small Business
Locator in up to three categories at no charge – it is a free benefit to NASE members.
You mentioned you work with local, US and
International markets, do you travel a lot?
At this time, I do not travel much. It all depends on
the client load. I’ve had times when my client base was
distributed around the country so I was flying frequently.
With technology such as skype and go-to-meeting, I can
support clients without ever meeting them. For example,
I’ve been providing product marketing leadership to a client
in the Far East and we’ve never met!
What's your schedule like, what's a typical day
for Fred Diamond?
Good question, have a look:
5:00 AM Exercise.
6:00 AM Blog or book writing.
7:00 AM Make children breakfast and prepare
them for school.
8:00 AM Mandatory breakfast meeting with
anyone. I always make it a point to
have breakfast with someone, even
though I typically drink a protein shake
in the morning.
9:00 AM–Noon Client activity. Attend meetings at their
Noon Mandatory lunch meeting with a prospect
1:30–4:00 PM IESBD meetings, either with members
4:00 PM Phone calls with prospects.
5:00–7:30 PM Charity or professional networking.
7:30 PM Dinner, homework, etc., quality time
with wife and kids.
10:30 PM Sleep.
What’s the best thing about being self-employed?
You have the freedom to pursue additional business
opportunities. When you work for a company, you
really need to give your best effort to making the
company successful, which restricts you from pursuing
new opportunities that might arise. If you have any
entrepreneurial drive, this can be quite frustrating.
What’s the best compliment you’ve ever received
from a client?
One client hired me for a three month engagement that
lasted nine years. They also usually tell me how smart I am.
What’s the most important piece of advice you
would give to someone starting their own business?
Get your spouse on board. If your spouse or life partner
is not on-board, the experience can be much, much more
difficult than it should be.
11SelfInformed january 2015
In the closing days
of the 113th
(R-LA) and Thompson
(D-CA) introduced H.R.
5860, the Small Business
Healthcare Relief Act of
2014, which would allow
for standalone health
(HRAs) for small employers (49
or less employees).
Health Reimbursement Accounts
have historically been a very
powerful and effective tool for
the small business community.
HRA’s allows small business owners
to do the right thing by helping
provide financial assistance to their
employees for qualified health care
expenses. Established in 2002, Health
(HRAs) or Health Reimbursement
Accounts are employer-funded, tax-
advantaged employer health benefit
plans that reimburse employees for
out-of-pocket medical expenses
and individual health insurance
premiums. Health Reimbursement
Accounts are funded solely by the
employer, and cannot be funded
through employee salary deductions.
The employer sets the parameters
for the Health Reimbursement
Accounts, and any unused funds
remain with the employer. There are
only two requirements to establish
an HRA plan: 1) the plan must be in
writing; 2) the plan must be non-
discriminatory (i.e. each employee
receives the same reimbursable rate).
In September 2013, through
Technical Release No. 2013-03 the
Departments of Treasury, Health
and Human Services, and Labor,
significantly restricted the use of
HRAs by small employers, stipulating
that an employer that offers an
HRA to two or more employees, but
does not offer a group health care
plan, is not compliant with annual
limit regulations and other health
insurance market requirements and
therefore, the business would be
subject to significant penalty.
H.R. 5860 would reverse the Technical
Release for employers with 49 or less
employees that offer an HRA to their
employees. While the legislation will
have to be re-introduced in the 114th
Congress, the NASE remains steadfast
in its determination to have HRAs
unrestricted to the self-employed and
micro-business community as way in
which employers can help financially
contribute to their employees’ health
Access to Health Reimbursement
Arrangements for Self-Employed
been a very
tool for the
community. Katie Vlietstra is NASE’s Vice President for
Governme nt Relations and Public Affairs; You
can contact her at kvlietstra@ nase.org
12SelfInformed january 2015