The Treasury Department and Internal Revenue Service recently issued guidance to help businesses and individuals take advantage of the new Health Savings Accounts, which were created by the recently passed Medicare bill.
Under the legislation, individuals and their employers can make tax-free contributions to the accounts starting Thursday. Money in the accounts can then be used to pay for qualified medical and retirement expenses.
Legislators and small-business lobbyists have said the accounts could help small firms counteract several years of double-digit increases in health insurance premiums, particularly at firms that offer high-deductible health plans. The new accounts are supposed to be less restrictive and available to more people than the existing Medical Savings Accounts.
The guidance issued by the government agencies provides detailed information about how to establish the accounts, rules about contributions and withdrawals and other matters.
A link to the guidance is available in a Treasury Department release (http://www.treas.gov/press/releases/js1061.htm).
Agencies aim to ease difficulties
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Several agencies are working together to try to simplify the federal contracting process.
The Small Business Administration, Department of Defense, Office of Management and Budget, and General Services Administration are working to create an integrated database of small firms that want to do business with the government.
By combining the Pro-Net database and the Defense Department’s Central Contractor Registration, government buyers will be able to more quickly locate eligible firms and assist small businesses in marketing themselves to the buyers, according to an SBA news release.
“We are helping to advance the president’s goal of a single, user-friendly, integrated acquisition environment,” said SBA Administrator Hector Barreto.
The integration effort will begin Thursday.
All of the information and search options that existed in Pro-Net will move to the Central Contractor Registration site (www.ccr.gov).
Pricing power makes a comeback
A recent economic report from the National Federation of Independent Business points to two positive signs as evidence of the strengthening economy–a return of pricing power to small firms without a problematic jump in inflation.
The share of business owners who have raised their prices this year jumped 9 percentage points through November.
The federation’s surveys have found that more firms are raising, rather than lowering, prices. Still, William Dunkelberg, the group’s chief economist, said the price hikes are gradual enough that inflation should not be an immediate concern.