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The IRS has released the 2013 version of Form 8941, which eligible small employers will need to use to calculate their small business health care tax credit.
Employers may qualify for a tax credit of up to 35% (or up to 25% for eligible tax exempt organizations) of nonelective employer contributions under a qualifying health insurance arrangement, if they have fewer than 25 employees AND pay average annual wages of less than $50,000 per employee. A qualifying health insurance plan generally requires the employer to pay a uniform percentage of the premium (not less than 50%) for each enrolled employee’s health coverage. Once calculated, the tax credit is claimed as a general business credit on Form 3800 (or for tax exempt small employers as a refundable credit on Form 990-T).
There are important changes to the tax credit that become effective beginning with 2014 taxable years that are important to note:
1. the maximum credit amount increases from 35% to 50% of employer paid premiums
2. coverage under a qualifying arrangement must be offered through a SHOP Exchange
3. the credit can be claimed for only 2 consecutive years beginning in or after 2014, and
4. due to the cost-of-living adjustment, the tax credit will be reduced if an employer’s average annual wages exceed $25,400 and will be eliminated if average annual wages exceed $50,800
Employers who plan on claiming the small business tax credit for 2014 will need to make sure they are familiar with these new requirements.
Current as well as former employees have information that could prevent accidents and disasters and it is up to HR to gather it and help solve problems that could lead to future catastrophes.
“The sooner you can get the feedback the better, because you can solve problems before it is too late,” said Beth Carvin, the president and CEO at Nobscot Corp., an HR technology company that specializes in employee retention and development.
She feels that HR should be conducting exit interviews, especially in high risk occupations like health care, to identify any areas that may put the company, its customers, and consumers at risk.
Case in point is the fungal meningitis outbreak in late 2012 among patients who received contaminated steroid injections. The main focus of the investigation of this disaster was the New England Compounding Center (NECC), a pharmacy in Massachusetts, but ex-employees of Ameridose, a drug manufacturer that shared many of the same owners as NECC, came forward later with claims that NECC’s corporate culture encouraged shortcuts even if it compromised safety.
According to The New York Times, one ex-quality control technician at Ameridose stated that he was overruled by management when he tried to stop the production line when he spotted missing labels. An ex-pharmacist said she resigned because she was worried that unqualified people were preparing dangerous narcotics for use by hospitals. A salesman shared that he was allowed into the sterile lab to help out with packaging and labeling during rush orders, without any prior training.
Employees, as shown, had strong concerns about business practices as both the NECC and Ameridose. Carvin expressed that this case is a big reminder of how important getting this kind of feedback in an exit interview is. Collecting data like this during an exit interview may have allowed someone in HR to make changes before the fungal meningitis disaster occurred.
A Listening Culture
So how exactly can HR use employee feedback to prevent a costly tragedy?
One of the first steps is to create and maintain a work environment and company culture where open communication is encouraged.
Employees should feel comfortable to share their concerns on policies and practices, especially when they relate to safety and compliance. It is important to create a culture where you listen to your employees and they actually believe that you are listening.
Once you provide opportunities for employees to give feedback, you must then also act upon it, Carvin advised. This is the challenge that faces HR. You get busy and may not have time to deal with the feedback collected, but in order to becoming a listening culture, you should try to act on the information you receive from employees.
And it is important to communicate this to employees as well. If you implement something based on employee feedback, let them know that you are doing this as a result of employee feedback. The more you do that, the more feedback you will end up receiving.
Make The Business Case
Managers also need to be trained on the importance of balancing business needs with safety and to take frontline employee concerns seriously.
Carvin explained that this is where HR needs to be involved. “In the contaminated steroid tragedy, if HR had identified that safety was being set aside in favor of speed, they could have made a case to senior management for why this was bad not just from a consumer safety standpoint but also from a business prospective”.
Especially in high risk occupations, HR should analyze the information for trends and share important findings and recommendations with senior management. HR can then help facilitate discussions and set up task forces for the next steps.
How to Gather Employee Feedback
The key to gathering employee feedback is a systematic approach. Employee responses should be gathered in such a way that they transform from anecdotal stories (most often collected from a few disgruntled employees) into information that help shine light on specific and objective trends.
You need to be able to show your data is transforming from the anecdotal, which senior management will typically write off, to being aggregated and tracked. You will begin to notice that an issue will come up from not just one person but three or four, and then maybe seven, as your data builds up over time.
In exit interviews, you want to go beyond the “Why did you leave?” questions. You want to have employees rate the company on a number of factors like the work environment, direct supervisors and senior management, and try to get feedback on all aspects of their workplace experience. This is when you will see the issues start to come out.
HR staff should use both quantitative and qualitative ratings, noted Carvin. The quantitative points to where the issues are while the qualitative lets you understand the data better as it lets you know what the concern is.
To get the most out of an exit interview, Carvin suggests HR should break the data down into departments. Each department may have its own concerns, even among job types. You could then break the data down even further into gender and race and really pinpoint issues before they get bigger.
Released 4/2/13, the Obama Administration is delaying a key portion of the federally-run SHOP Marketplace, in which small businesses can offer a choice of health plans to their employees through the public marketplace. As a result, small businesses will be limited to offering a single plan through the federally-run SHOP Marketplace until 2015.
The multi-place choice option was supposed to become available to small employers via the federally-run SHOP Marketplace in January 2014. But administration officials said they would delay it until 2015 in the 33 states where the federal government will be running the SHOP insurance marketplaces.
Many feel this delay will “prolong and exacerbate healthcare costs that are crippling 29 million small businesses” according to a recent NY Times article.
What is the SHOP Marketplace?
As part of the Affordable Care Act (ACA), states are required to provide a Group Market Health Insurance Exchange for businesses (called the Small Business Health Options Program or “SHOP”). The SHOP Marketplace is essentially a public group health insurance exchange that will be available for small businesses starting January 1, 2014. The new program was designed to simplify the process of finding health insurance for small businesses and applying any applicable tax credits that an individual may qualify for.
As with the individual health insurance marketplace, all states have three options for offering a SHOP marketplace: (1) create their own state-run marketplace, (2) join a federal-state partnership, or (3) default to the federally-run SHOP marketplace. As mentioned above, 33 states are expected to default to the federally-run marketplace.
Initially, the SHOP marketplaces are for businesses with up to 100 employees. However, states can limit participation to businesses with up to 50 employees until 2016, so eligibility will ultimately vary from state to state.
The new healthcare reform law includes a number of new taxes and fees which are rarely mentioned by the law’s supporters. On December 5, the IRS announced final regulations governing new fees on health insurers and employer sponsors of self-insured health plans, designed to fund the “Patient Centered Outcomes Research Trust”. This Trust finances an “Institute” tasked with “advancing the quality and relevance of evidence medicine through the synthesis and dissemination of comparative clinical effectiveness research findings”.
Say what??
Since insurers must pay the fee with respect to insured plans, the following discussion will center on obligations of self-funded plan sponsors. For calendar year plans, the first payment is due July 31, 2013. Employers sponsoring self-insured plans need to be aware of these issues now since 2012 plan data will be necessary to calculate the fee owing in 2013.
The regulations describe how the new fee is calculated and paid by sponsors of self-insured plans for plan years ending on or after Oct 1, 2012 and before Oct 1, 2019, when the fee is scheduled to expire. The fee is based on the number of lives covered by the plan, which means the sponsor pays on the basis of participants (including COBRA recipients), as well as covered spouses, dependents and other beneficiaries.
Since the fee affects all plans with plan years ending on and after Oct 1, 2012, it is required for most plans this year, including all calendar year plans. For plan years ending before Oct 1, 2013 (for most plans, the current plan year), the fee is $1 times the average number of lives covered by the plan.
For plan years ending on and after Oct 13, 2013, the fee is $2 per average number of lives, and for years ending after Oct 13, 2014, the fee will increase based on the projected per capita amount of national health expenditures. Fees are due no later than July 31 of the year following the last day of the plan year. For calendar year plans, that means the first fee is due July 31, 2013.
For more detailed information, please review the full alert on Fisher & Phillips LLP website.