The Patient Protection and Affordable Care Act (the “ACA”) adds a new Section 4980H to the Internal Revenue Code of 1986 which requires employers to offer health coverage to their employees (aka the “Employer Mandate”). The following Q&As are designed to deal with commonly asked questions. These Q&As are based on proposed regulations and final regulations, when issued, may change the requirements.
Question 1: What Is the Employer Mandate?
On January 1, 2014, the Employer Mandate will requiring large employers to offer health coverage to full-time employees and their children up to age 26 or risk paying a penalty. These employers will be forced to make a choice:
OR
This “play or pay” system has become known as the Employer Mandate. The January 1, 2014 effective date is deferred for employers with fiscal year plans that meet certain requirements.
Only “large employers” are required to comply with this mandate. Generally speaking, “large employers” are those that had an average of 50 or more full-time or full-time equivalent employees on business days during the preceding year. “Full-time employees” include all employees who work at least 30 hours on average each week. The number of “full-time equivalent employees” is determined by combining the hours worked by all non-full-time employees.
To “play” under the Employer Mandate, a large employer must offer health coverage that is:
This includes coverage under an employer-sponsored group health plan, whether it be fully insured or self-insured, but does not include stand-alone dental or vision coverage, or flexible spending accounts (FSA).
Coverage is considered “affordable” if an employee’s required contribution for the lowest-cost self-only coverage option does not exceed 9.5% of the employee’s household income. Coverage provides “minimum value” if the plan’s share of the actuarially projected cost of covered benefits is at least 60%.
If a large employer does not “play” for some or all of its full-time employees, the employer will have to pay a penalty, as shown in following two scenarios.
Scenario #1- An employer does not offer health coverage to “substantially all” of its full-time employees and any one of its full-time employees both enrolls in health coverage offered through a State Insurance Exchange, which is also being called a Marketplace (aka an “Exchange”), and receives a premium tax credit or a cost-sharing subsidy (aka “Exchange subsidy”).
In this scenario, the employer will owe a “no coverage penalty.” The no coverage penalty is $2,000 per year (adjusted for inflation) for each of the employer’s full-time employees (excluding the first 30). This is the penalty that an employer should be prepared to pay if it is contemplating not offering group health coverage to its employees.
Scenario #2- An employer does provide health coverage to its employees, but such coverage is deemed inadequate for Employer Mandate purposes, either because it is not “affordable,” does not provide at least “minimum value,” or the employer offers coverage to substantially all (but not all) of its full-time employees and one or more of its full-time employees both enrolls in Exchange coverage and receives an Exchange subsidy.
In this second scenario, the employer will owe an “inadequate coverage penalty.” The inadequate coverage penalty is $3,000 per person and is calculated, based not on the employer’s total number of full-time employees, but only on each full-time employee who receives an Exchange subsidy. The penalty is capped each month by the maximum potential “no coverage penalty” discussed above.
Because Exchange subsidies are available only to individuals with household incomes of at least 100% and up to 400% of the federal poverty line (in 2013, a maximum of $44,680 for an individual and $92,200 for a family of four), employers that pay relatively high wages may not be at risk for the penalty, even if they fail to provide coverage that satisfies the affordability and minimum value requirements.
Exchange subsidies are also not available to individuals who are eligible for Medicaid, so some employers may be partially immune to the penalty with respect to their low-wage employees, particularly in states that elect the Medicaid expansion. Medicaid eligibility is based on household income. It may be difficult for an employer to assume its low-paid employees will be eligible for Medicaid and not eligible for Exchange subsidies as an employee’s household may have more income than just the wages they collect from the employer. But for employers with low-wage workforces, examination of the extent to which the workforce is Medicaid eligible may be worth exploring.
Exchange subsidies will also not be available to any employee whose employer offers the employee affordable coverage that provides minimum value. Thus, by “playing” for employees who would otherwise be eligible for an Exchange subsidy, employers can ensure they are not subject to any penalty, even if they don’t “play” for all employees.
Our payroll stuffer this month will focus on the important topic of Nutrition. It covers topics important to your employees such as:
Increasing Your Nutrition IQ
More and more people are learning to read the labels when grocery shopping, but so you know what all the terms mean? Learn how to decode a few of the more confusing food label phrases.
Three Surprising Superfoods
Learn about the many health benefits of mushrooms, quinoa, and pistachio nuts.
Surprising Fact about Mushrooms: Mushrooms as medicine have been used for centuries in Asian cultures. Today, maitake and shiitake mushrooms are being studied for potential cancer-fighting properties. Studies are being done to see if the shiitakes may also help boost the immune system and fight heart disease.
Never heard of quinoa? It is a grain with a fluffy, creamy, slightly crunchy texture and a nutty flavor when cooked. It is higher in protein than other grains and the protein is provides is a complete protein meaning it includes all nine essential amino acids just like animal protein.
Pistachios rank as one of the most popular nuts that contain high amounts of phytosterols. These are substances that are known to help lower cholesterol in your body.
Why Kids Overeat and How You Can Help Them Stop
Overweight and obese kids face serious health concerns. The extra weight puts kids and teens at risk for many health problems, including high blood pressure, type 2 diabetes, and heart disease. By understanding why kids overeat, you can help your child get on the right path to a healthy weight.
For the full version of this document, please contact luann@visitaag.com.
According to a recent employer survey by the nonprofit National Business Group on Health and Fidelity Investments, corporate employers plan on spending an average of $521 per employee on wellness-based incentives in 2013. This marks a 13% increase from the average of $460 per employee in 2011 and almost doubles the per employee average from 2009.
The survey also found that the overall use of these incentives among corporate employers continues to increase. 86% of employers surveyed indicated that they offered wellness-based incentives.
The most populate wellness-based incentives continue to be:
A large majority of employers (54%) have also expanded their wellness-based incentives to include dependents as well. As part of the wellness incentives, employer are requiring employees to complete a health activity- like an employer sponsored biometric screening or health risk assessment- in order to determine their eligibility for the company’s health plans in 2013. Some employers are even taking steps as far informing employees that their failure to complete a health risk assessment may result in the employee being moved automatically into a less attractive medical plan offered by the company or even completely being removing them from the health coverage.
Forty-one percent of employers include, or plan to include, an outcomes based metrics as part of their incentive program. This will give both the employer and employees a measurable goal that can be used to reward behavior or results in certain health categories, such as lowering cholesterol or blood pressure or their waist line.
The official revised Employment Eligibility Verification Form I-9 was released March 8, 2013 by the U.S. Citizenship and Immigration Services (USCIS).
Employers should begin using this new form immediately. The new Form I-9 will contain a revision date of 03/08/13 that is located on the bottom left-hand corner of the form.
Final Changes to the Form I-9
The revised Form I-9 makes several improvements designed to minimize completion errors. The key revisions to Form I-9 include:
60-Day Grace Period
Prior versions of the I-9 will no longer be accepted and should not be used after May 7, 2013. The agency is providing employers 60 days to make the necessary internal changes in their business processes to implement the new form.
The new I-9 form can be downloaded here.
A Spanish-language version of the new Form I-9 is available, however may only be filled out by employers and employees in Puerto Rico only.
Handbook for Employer
The M-274 Handbook for Employers is in the process of being updated as well. Employers are advised by USCIS to follow instructions on the new Form I-9 until the revised handbook has been updated.
Employers are required to maintain an I-9 for as long as an individual is employed and for the required retention period following their employment termination, which is the later of three years after the date of hire or one year after the date employment ended.
Failure of an employer to ensure proper I-9 completion and retention may subject the employer to civil monetary penalties, and possibly even criminal penalties.
USCIS noted that employers do not need to complete the new Form I-9 for current employees for whom there is already a properly completed Form I-9 on file, unless reverification applies.
The infamous internal memo concerning eliminating telework at Yahoo was never intended for public release. At the top of the memo the call for privacy was clearly defined as “Proprietary and Confidential Information- Do Not Forward”. However, despite Yahoo’s directive, the memo was leaked on a blog post on February 22, 2013. This leak resulted in a lot of online attention – most of it bad. But it is not the first time a firm’s information has been leaked online and it will not be the last.
Recently, a Groupon CEO tweeted “I was fired today”. As a British entertainment retailer was announcing that it was laying off nearly 200 employees, a member of the company’s social media team took to Twitter and posted “We’re tweeting live from HR where we’re all being fired! Exciting!!”.
It is an aspect of the business world now. From layoffs to policy changes, decisions and information that was intended only for the eyes of your staff may actually be shared with the world via social media now.
The question- what is management to do?
Be Transparent and Proactive
To be transparent is to be clear and concise about expected or even suspected changes that have the potential to be controversial and could cause issues internally with your staff. Employer privacy is very limited and you can not realistically control what someone posts on their blog, Facebook, or Twitter account. Corporate bad news has a way of seeping into the limelight online.
“In the era of social medial and social sharing there’s almost no such thing as a truly internal e-mail announcement,” said Curtis Midkiff, director of social strategy and engagement at SHRM. “There are ways to share confidential information with your employees, but e-mail may not be the most appropriate because it is not a truly private form of communication. You can put as may disclaimers as you want, but when you push send…you always have to be prepared for it to fall in the wrong hands. You should almost pre plan that the e-mail may be seen by unintended audiences.”
One way to pre plan and be proactive is to break the news on social media sites yourself first. For example, Zappos CEO often tweets memos to employees from his Zappos Twitter account. He did so a few years ago when the company announced layoffs.
Another good rule of thumb? Try to limit surprises by including workers in decision early on, if at all possible. There are different obligations depending on if the company is a public or privately held company, but the more input that employees feel they have the better they will handle change in the long run.
Companies can try to soften the blow of bad news by keeping employees in the loop and telling them that change is coming. They can educate their employees on the process so that when the memo actually comes out, they are expecting it and do not freak out and leak it online.
Bad news is never good news and you can strive to be as transparent as possible with information. However, business leaders often have to make difficult and unpopular decisions and it can, in the end, become difficult to manage the emotions or reaction of one employee.
Our topic this month covers the Final Rule from HHS and the Exchanges.
Areas discussed include:
Contact us today for more information on this topic.
On Sunday, March 10, 2013, most people in the USA will set their clocks forward one hour to start daylight savings time (DST). The loss of sleep brought on by the daylight savings time change may increase workplace accidents and injuries, according to researchers.
Most organizations have developed protocols for dealing with the technological requirements as a result of the time shift, such as adjusting the time on their computer systems and time clocks. Many employers, however, should be aware of the potential effects on employee safety caused by the start of DST.
Studies show that it takes most people a few days to adjust to the loss of one hour of sleep. According to a study in theJournal of AppliedPsychology, losing just an hour of sleep for those who work in a hazardous work environment could pose dangerous consequences.
Recent data collected by the Department of Labor found that the DST switch resulted a 5.7% increase in workplace injuries and nearly 68 % more workdays lost to injuries. Studies have shown that the loss of even one hour of sleep causes attention levels to drop off which can present a potential danger for occupations that require a high level of attention to detail.
All covered employers are required to display a Department of Labor poster summarizing the major provisions of The Family and Medical Leave Act (FMLA). The poster must be displayed in a conspicuous place where all employees and applicants for employment can see it and must be displayed at all locations even if there are no eligible employees.
Changes have been made to the FMLA regulations including military caregiver leave for a veteran, qualifying exigency leave for parental care, and the special leave calculation method for flight crew employees. These changes will go into effect March 8, 2013.
You may start using the new poster immediately or you may use your current FMLA poster until March 7th.
Please contact our office if you need a copy of the new poster.
Wage and Hour suits hit a record high of 7064 in the recent fiscal year.Our monthly topic focuses on a Wage & Hour Audit. It covers understanding the steps to take in the event of an investigation by the Wage & Hour Division.
Do you know what areas you should you review prior to a Wage & Hour investigation to ensure you are in compliance?
What options are available to you when the Department of Labor shows up for an audit?
Contact us today for more information on this topic.
Our payroll stuffer this month will focus on the important topic of Heart Health. It covers topics imporant to your employees such as:
Heart Disease & Diet
If you have high cholesterol, are at risk for heart disease or just want to follow a healthy diet, see what the TLC diet can do for you.
Nutty Ways to Keep Your Heart Healthy
If you have heart disease, nuts are healthier than many other snacks. You can easily incorporate them into your diet by adding them to your morning yogurt or adding to your favorite stir fry recipe.
Exercise Prescriptions
If your doctor writes you a prescription for an antibiotic, you are most likely going to take it. Research has show that people are likley to start and stick to an exercise program if their doctor tells them to do so…and actually writes them a prescription to exercise as well.
Step By Step Exercising with Heart Disease
Regular exercise can be safe and has many benefits such as improving cholesterol levels, helping you manage medical conditions such as high blood pressure and diabetes, as well as increasing endurance and improving muscular strength and flexibility. Just be sure you are aware of any symptoms you might have before starting an exercise program that would make working out dangerous.
For the full version of this document, please contact luann@visitaag.com.