Human Resources

W2 vs 1099 Worker – ACA Regulations make it Important to Get It Right

By August 27th, 2014   Compliance - ACA & Other, Human Resources

July 16th we blogged IRC 60566/6056 “will prove to be the most cumbersome and costly part of Obamacare.” We wrote: “Employers with part-time, seasonal and variable hour workers (someone working for a company with different job functions/classifications, thus hours under two different pay codes) will particularly have difficulties and will need a managed solution. This makes it more important than ever to properly class workers under either W2 or 1099.

Answer YES to the following and it indicates the worker is an Employee (W2).

  1. Does the business provide instructions to the worker about when, where and how too\ perform the work?
  2. Does the business provide training to the worker?
  3. Are the services provided by the worker integrated into the business’ operations?
  4. Must the services be rendered personally by the worker?
  5. Does the business hire, supervise and pay assistants to the worker?
  6. Is there a continuing relationship between the business and the worker?
  7. Does the business set the work hours and schedule?
  8. Does the worker devote substantially full time to the work of the business?
  9. Is the work performed on the business’ premises?
  10. Is the worker required to perform the services in an order or sequence set by the business?
  11. Is the worker required to submit oral or written reports to the business?
  12. Is the worker paid by the hour, week or month?
  13. Does the business have the right to discharge the worker at will?
  14. Can the worker terminate the relationship with the business at any they wish without incurring liability to the business?
  15. Does the business pay the traveling expenses of the worker?

If the answer is YES for the following questions, it indicates the worker is an independent contractor (1099)>

  1. Does the worker furnish significant tools, materials and equipment?
  2. Does the worker have a significant investment in the facilities?
  3. Can the worker realize a profit or loss as a result of his or her services?
  4. Does the worker provide services for more than one firm at a time?
  5. Does the worker make their services available to the general public?

What Makes a Great EAP?

By August 20th, 2014   Healthcare Services, Human Resources

Most employers now believe Employee Assistance Programs (EAP) are important elements in their total compensation and benefits offerings.  They know the equation:  by helping employees identify and solve personal concerns, EAPs create the opportunity for employees to focus and perform at their highest levels.  The return for employers is proven time and again by staff who are more engaged and work harder to achieve organizational goals.

However, selecting an Employee Assistance Program (EAP) can be a complicated process.  EAP service delivery models vary greatly as do the depth, quality and comprehensiveness of clinical, management consultation and training services offered.  EAP “parent organizations” are also disparate; health plans, life insurance companies, workers compensation and even payroll services now offer EAPs, although usually with limited benefits.  While some large employers choose to offer in-house EAPs, most organizations contract with external providers and offer a broad range of professional and confidential EAP services, from brief assessment and referral models to comprehensive early intervention, counseling, crisis management, education and wellness programming.

Below are some questions to consider when choosing an EAP:

  • Does the EAP provide easy access with 24-hour response?
  • Are employees and family members able to participate in confidential, professional, thorough assessments and face-to-face counseling services with skilled, licensed clinicians?
  • If specialized or ongoing care is indicated, do employees receive well-matched referrals to treatment or community resources?
  • Does the EAP offer expert Drug Free Workplace Programs such as DOT/ SAP assessments, management support and mandated supervisory referrals ?
  • Is there significant follow-up to assure employee satisfaction, compliance and best outcomes?
  • Is the EAP skilled assisting leadership prevent workplace violence and responsive when there is a need for crisis intervention, de-escalation or post-traumatic event management?
  • If a crisis occurs at the workplace, are professional and unlimited crisis intervention services provided?
  • Does the EAP offer FREE and targeted promotion to heighten EAP awareness and utilization, including outreach to engage employees with the most severe problems (many with devastating and costly substance abuse and mental health issues)?
  • Are unlimited EAP promotional materials and employee orientations included?
  • Are on-site services such as employee education, management training, mediation and organizational development core elements of the EAP offering?
  • Is the EAP “all-inclusive”?  A high quality EAP should be comprehensive and not charge extra for management referrals, strong utilization rates, crisis debriefings, EAP orientation or supervisory training programs; these items should be included in the quoted rate.

Selecting an EAP begins, first, with understanding your organizational needs and how an EAP can help you meet them.  Be aware of choosing an EAP that is “free” or “embedded” in another benefit product. This may seem like an economic option, but may not be the best value or quality for your organization or employees. A great EAP should be highly promoted, well utilized by employees and families, and the “go to” resource for employers who want results.

This article was contributed by Melissa Fabrikant, LCSW, CIRS – Director of Project Management from Managed Care Concepts EAP www.theemployeeassistanceprogram.com.

7 Advantages of Partially Self-Funded Health Plans

By August 6th, 2014   Healthcare, Human Resources

Obamacare allows no rate consideration for health conditions on fully-insured small group plans. Rates are the same whether a group is very healthy or very sick. Healthier groups must subsidize the cost for sicker groups. Since groups are not underwritten, the business owner usually has no way of knowing if the cost includes a subsidy for sicker groups.

Self-insured small group health plans are allowed to underwrite and set rates for each group based on the health of the group. By going through this underwriting process, a small business owner can see the price based on the health of the employees. Once the rates for a self-insured plan are determined, the business owner can make a decision of what is best.

Very few plans a totally self-funded, so when EBA refers to the self-funded it important to realize these plans are partially self-funded.

  1. Lower Costs – Savings may result from underwriting, fewer mandates, greater flexibility in plan design, tax savings, and a refund of claims funds. The savings can be significant.
  2. Tax Savings – Self-funded plans save on state insurance taxes and ACA taxes. State insurance tax is paid only on the stop loss insurance portion of the cost. This is typically less than one half the total plan cost and results in a typical savings of one half or more of the state premium tax.
  3. Money Back from Claims Fund – In years that claims are less than funded for, the money left over in the claims fund belongs to the employer.
  4. Monthly Claims Report – The employer receives monthly claims reports showing where dollars are being spent. This information can be used by the employer and advisor to design a plan that works best for the specific business.
  5. Not Subject to State Mandates – Carriers selling fully insured plans must spend large amounts of resources just to comply with the different state mandates. With a self-funded plan, the employer selects benefits that work best for the employees.
  6. Underwriting Based for Type of Business, Age, Sex, Health and Lifestyle – With a fully-funded plan, the healthier and younger groups must subsidize the cost for older and less health groups. The underwriting process used for self-funded plans allows you to be charged the correct amount for your group, rather than being included in a community rated traditional plan. This can result in significant savings.
  7. More Latitude in Plan Design – With self-funded plan an employer is allowed to select the benefit that works best for that specific business. Deductibles, co-insurance, co-pays, prescription benefits and other options allow for a custom design.

Healthcare Bluebook brings Price Transparency

By July 30th, 2014   Healthcare, Healthcare Services, Human Resources

Healthcare Bluebook provides transparency to consumers to compare healthcare costs and quality. Employers can provide a valuable tool to employees that will enable them to shop for the most affordable high quality care.

How does Healthcare Bluebook work?

  • Employees search for services using common language
  • Employees learn the price range they can expect to pay how much they can save by making cost effective choices
  • Prices are based on your local area network rates
  • Employees can compare specific providers on both cost and quality

Why do employers need a transparency solution?

  • In-network prices for healthcare services vary by 300% to 500%
  • Employees don’t know that prices vary within their network or how to find lower cost quality providers
  • Employers and employees can cut healthcare costs if they have the right information, tools and incentives

Healthcare Bluebook can be paired with both self-funded and fully insured plans. Although it supports traditional plan designs, EBA believes it is a super-value-added support for consumer driven high deductible plans. Healthcare Bluebook says employers have been decreasing total medical spend by 4% to 12%.

Humpty Dumpty Had a Great Fall

By July 23rd, 2014   Compliance - ACA & Other, Healthcare, Human Resources

Employee Benefit Advisors blogged Oct 9, 2013 about court cases that have been falling under the radar. EBA said “These cases could dismantle health care reform as we know it.”  –  Yesterday the decision came down the “Court bars PPACA aid for federal exchange shoppers.” The decision has already been appealed, however, the way PPACA is written makes it very clear that the subsidy is available only to people who bought plans on state-run exchanges. Only 14 states have opted to set up their own marketplaces.

A conflicting ruling was also issued on an almost identical case by the 4th Circuit Court of Appeals in VA. To complicate things further, there are two other cases still pending before other circuit courts. These conflicting rulings mean that the issue will almost certainly be appealed to the U.S. Supreme Court later this year. If and when heard by the Supreme Court, expect a final decision regarding the availability of subsidies in federally facilitated marketplaces no sooner than June 2015.

HiRes

 

Humpty Dumpty sat on a wall,
Humpty Dumpty had a great fall;
All the King’s horses, and all the King’s men
Cannot put Humpty Dumpty together again.

…so apropos

 

Four Numbers that may cause you to say Four Letter Words

By July 16th, 2014   Compliance - ACA & Other, Healthcare, Human Resources, PEO

The U.S. Treasury Department and Internal Revenue Service has issued the final regulations on the employer mandate under the Affordable Care Act. The new 6055 & 6056 regulations are 227 pages long and Employee Benefit Advisors believes will prove to be the most cumbersome and costly part of Obamacare. We say costly because we believe this will prove to be far more complicated, and thus burdensome than employers realize. Employers with part-time, seasonal and variable hour employees (as an example a bus driver who also works maintenance; so he would have hours under two different pay codes or a temporary that works temp to perm etc.) will particularly have difficulties and will need a managed solution.

Software is available to help manage your employees and meet the new Healthcare Reform guidelines. This system is fully automated to your specifications and will complete all the necessary reporting documents. Contact Employee Benefit Advisors for a demo.
_______________

The laws reporting requirements fall under sections 6055 and 6056 of the internal revenue code. Under section 6056, large employers subject to the employer mandate must file a return with the IRS and provide a statement to each full-time employee with information regarding their offer of employer-sponsored healthcare coverage. Under section 6055, employers who offer self-funded plans and insurers generally must file a return with the IRS and provide a statement to each individual who is covered by plans that constitute minimum essential coverage.
Here are the nuts and bolts of the full regulation:

  1. Employers that have between 50 and 99 full-time equivalents will have until 2016 to provide health insurance, not 2015. So if you have 100 or more full-time equivalents in 2014, Jan. 1, 2015 is still your target. But if you have 99 or fewer, you get a one-year extension.
  2. Transitional relief is now available for non-calendar plans. There was some confusion over whether the 2014 transition relief would apply for 2015 and now it appears that it does. Employers with non-calendar year plans are subject to the mandate based on the start of their 2015 plan year rather than on Jan. 1, 2015.
  3. Large employers (those with more than 99 full-time employees) have to comply in 2015, but for the first year, they will only have to offer coverage to 70% or more of their full-time employees. The 95% requirement will not go into effect until 2016.
  4. For large employers that contribute to a multi-employer plan, an employer will not be subject to shared responsibility penalties with respect to employees for whom the employer is required by the collective bargaining agreement or appropriate related participation agreement to make contributions to the multi-employer plan.
  5. Some categories of employees are better defined:
  • For volunteers for a government or tax-exempt entity (like emergency response personnel), hours they volunteer will not count in consideration of their full-time employment status.
  • For teachers and other educational employees, they will not be treated as part-time for the year simply because their school is closed or operating on a limited schedule during the summer. Also, for adjunct faculty, employers of adjunct faculty may credit them with 2 ¼ hours of service per week for each hour of teaching or classroom time.
  • For those in traditionally seasonal positions where annual employment is customarily six months or less, they will not be considered full-time employees.
  • For students in work-study programs, these hours will not be counted in determining whether they are full-time employees.

Charity & Community

By July 9th, 2014   Human Resources

Over $8,000 was raised for CARRFOUR by Mike Schunk / Employee Benefit Advisors working with the Miami Finance Forum. The event itself raised $1,360 and then for every dollar donated, Carrfour was able to leverage $5.00 in government funding. This means a gift of $1,360 will yield $6,800 in government funding for an impact value of $8,160; which will provide supportive housing for one family for approximately 13 months.

Carrfour’s mission is to confront homelessness by developing affordable housing and providing supportive services as a pathway to self-sufficiency. – See more at: http://carrfour.org

Employee Benefit Advisors donates a portion of our revenue on a monthly basis to local charities.

mike

 

Pictured left to right;
Mike Schunk, CEBS – President of Employee Benefit Advisors
Anthea Pennant – Director, Fund Development for Carrfour
Carlos J. Deupi – MFF Chairman, General Counsel the Brilla Group

How to choose a PEO – Part 2 (Health Insurance)

By June 18th, 2014   Human Resources, PEO

Get a clear understanding of the health insurance. How is it rated? Ask about tier placement and get a guarantee you can only be moved down a few tiers in any one year. Ask for claims/utilization records supporting the decision. Key points for Health Insurance Renewals

  • What rate increases have your clients experienced in the past 3 years?
  • When? Annually? Quarterly?
  • How far in advance are clients notified of the renewal?

HR & Benefit Compliance is more and more important with required SBC distribution, increase in ACA & DOL audits resulting from Obamacare. I have asked several PEOs to show the support provided for these audits. Repeatedly I’m told “Our Benefits Department has advised that this information is provided to the employee in the package that is mailed to them from the carrier after enrollment and advises they may visit the carrier website or contact the carrier’s customer support to obtain a copy of the SPD.”

SPDs and Wrap documents are not provided by the carrier, SBCs ares. However, SBC distribution is the obligation of the PEO. – Whoever answered the question either did not understand or does not know what an SBC or SPD is. It is the responsibility of the group to provide the SPD and Wrap. I this case, if a PEO is undertaking the compliance for their clients, it would be the PEO’s responsibility.

We recommend working with a PEO broker like Employee Benefit Advisors. The experience brought to the table can save headaches that you otherwise might not have seen.

How to choose a PEO – Part 1 (Transparency)

By June 11th, 2014   Human Resources, PEO

Many variables exist when choosing a PEO. – The first step is deciding IF a PEO is the right decision. It’s never always yes or no. You may have the goal of being in a PEO for the short term or long term. If short term you may be trying to correct WC, health insurance or administrative problems. If long term, be sure to choose a strategic partner. Regardless, always consider the opt-out clause; i.e. lengthy contract obligation, one year, 30 day opt-out, terminate anytime or only at renewal…

Questions for a PEO and the right fit for each PEO will be different depending on the potential client. Is price the primary concern? What’s their culture? Do they value customer service? Do they provide training; HR, WC, etc…? Performance reviews? Are they strategic? Tactical?

Employee Benefit Advisors places transparency right at the top of the list. – Ask to see a sample bill and ask to see all rates you are being charged, not a bundled rate. What are they trying to hide that they cannot tell you? Many PEOs hide their cost within the margins of the billing points and charge an artificially low administration rate. What are the transparent points in evaluating a PEO?

  • WC
  • Payroll Tax; FICA, Medicare, FUTA, SUTA
  • FSAs
  • Tax cutoff points – Does PEO continue to charge?
  • Does the PEO make the ER/EE whole if contracted mid-year?
  • Is the PEO passing on Work Opportunity Tax Credits (WOTC) you may be eligible for?
  • Is the PEO SSAE 16 Type 2 certified? (formerly known as SAS70. This is an independent audit vendors should obtain to verify their systems, processes and data security.)
  • Restaurants: Is the PEO passing on FICA Tax Tip Credits you may be eligible for?

PEOs receiving federal and state tax credits should be offering this tax savings opportunity to their clients.

You want your PEO to be financially stable. The best PEOs are accredited by the Employer Services Assurance Corporation and have a current Statement on Standards for Attestation Engagements No. 16 audit (formerly known as SAS 70). Do your homework, make sure your PEO has a strong presence in your industry. Talk to references.

Memorial Day – Short History Lesson

By May 28th, 2014   Human Resources

Memorial Day was formerly known as Decoration Day and originated after the American Civil War to commemorate the Union and Confederate soldiers who died in the war. By the 20th century, Memorial Day had been extended to honor all Americans who have died while in the military service.

(Memorial Day is not to be confused with Veterans Day; Memorial Day is a day of remembering the men and women who died while serving, while Veterans Day celebrates the service of all U.S. military veterans.)

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