| Issue: # 2 |
November 6, 2007 |
| Advantage Benefits Newsletter |
Greetings!
Keeping you informed of the latest developments in the employee benefit marketplace. HIRD Filing deadline is nine days away. |
| Employer HIRD Report
Question 1 |
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Many employers have called us with questions determining the number of hours for the applicable 12 month period. Your payroll companies should be able to provide this within 48 hours. The purpose of question 1 is to determine whether the underlying employer is subject to the requirements of the new Massachusetts Healthcare Reform Laws, and any penalties if they are not in compliance. The key number is 22,000 hours.
Please note there is a cap of 2,000 hours per employee. This can impact a small business, but with a heavy reliance on overtime.
Example: A small machine shop with 6 employees and a total of 23,000 hours for the 12 month period. This employer would NOT be subject to the requirements of the new law, since their answer to Question 1 would be 12,000 hours.
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Part-Timers
How does the new law work?
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We have also received questions regarding companies that provide health insurance to a small group of employees, like a golf course, restaurant or local Y. Those businesses with a high "part time population" will most likely have over 22,000 in the 12 month period and be subject to the new requirements.
If these businesses fail to meet the minimum employer contribution requirement of 33%, they would have to pay the penalty of $295 per employee. It is NOT limited to the smaller group on the health insurance, however, but to ALL the employees including part-timers and seasonal. These types of businesses must be very careful and make sure that they are in compliance or face a rather large penalty.
In the past, we have seen many of these groups drop the hours requirement to 20 hours and allow the part-timers to participate with no employer contribution. Those employers should pay attention to the minimum employer contribution of 33% and make sure you have a written policy to determine the number of hours for health insurance eligibility. We recommend 30-35, no lower.
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| Health Insurance Reform
Employer Filing Deadline November 15, 2007 |
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Copied from last issue, but very important and deadline fast approaching.
The first annual filing of the Fair Share Contribution Report and Employer HIRD report with DUA began on October 1, 2007. Filing is completed on line, and determines whether the employer is subject to payment. Recently you received a letter from the Division of Unemeployment regarding your group health insurance. This letter gives you instructions to complete ON-LINE filing by November 15, 2007. Click here to to access the form, please note you will need your DUA number to get started.
Only employers with eleven or more full-time employees, or part-time equivalents, are required to file. The Commonwealth considers one full-time employee to work 2,000 hours thus eleven or more full-time employees, or part-time equivalents, would work equate to 22,000 hours. The first question on the form asks for the hours worked between October 1, 2006 through September 30, 2007. In sounds complicated, but your payroll company should be able to provide this quite easily. For these reporting purposes, no one employee can work more then 2,000 hours.
If your answer to the first question is less then 22,000 hours, you will be directed to the end of the questionnaire and not be subject to the new Massachusetts health insurance requirements. On the other hand, if you hours workes is equal to or more then 22,000, all of the questions will need to be answered. Other questions include:
- Number of eligible employees for the employer health insurance plan.
- Number of employees particiapting in employer health insurance plan.
- Employer contribution level.
- Confirmation that you have a Section 125 Plan in place.
Make sure you get this done before November 15, 2007!! | |
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Sincerely,
Bill Randell
Advantage Benefits | |
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