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Welcome to the Benefits, Inc. Newsletter!
Thank you for being part of Benefits, Inc. The landscape of the business world is changing every day. This newsletter is provided in order to inform you of up to date and accurate information regarding federal and state legislation, HR trends, compliance, and benefit strategies.
We appreciate your business and if you have any questions please feel free to contact us at 615-446-3303.
Sincerely,
Tim White & Kevin Smith
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Compliance Corner with Norma
Have You Seen the New COBRA Model Forms?
A new model COBRA notice and an election form were recently released by the U.S. Department of Labor (DOL). Employers should begin using the new model forms immediately and continue until 2016 when these model forms are scheduled to expire or until updated versions are released by DOL.
So what's new in the new model forms?
The big difference is that employees and their beneficiaries are now notified up-front that they may elect COBRA coverage or seek an individual policy through the Exchange, also known as the Health Insurance Marketplace (Marketplace).
The new model General Notice of COBRA Continuation Coverage Rights (General Notice) adds the information about the Marketplace in the third paragraph on page 1. The remaining three pages of the General Notice explain what COBRA is and how an individual can elect COBRA coverage. The General Notice should be distributed at the time the employee enrolls in the employer's group health plan.
After the employee's employment ends, the employee and any covered dependents should receive the new model COBRA Continuation Coverage Election Notice (Election Notice).
The Election Notice begins with a paragraph explaining that the individual may be able to get coverage through the Marketplace that costs less than COBRA. There is also an explanation of how the Marketplace and COBRA coverage interact along with a list of factors to consider when choosing between COBRA and the Marketplace.
The Election Notice includes familiar information such as why the individual is receiving the Election Notice, how long COBRA lasts and how to elect COBRA coverage. The last two pages consist of the actual Election form.
Disclaimer: The information above is general in nature and does not constitute legal or tax advice on the issues discussed. Please consult a lawyer or tax professional to discuss your company's specific circumstances.
Norma Shirk
Manager/Owner
Corporate Compliance Risk Advisor, LLC
norma.shirk@complianceriskadvisor.com
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Minimum Wage to Increase in Several States This Summer
The minimum wage rates are set to rise in a number of states over the coming months, generally as follows:
- California: $9.00 per hour, effective July 1, 2014
- Delaware: $7.75 per hour, effective June 1, 2014
- District of Columbia: $9.50 per hour, effective July 1, 2014
- Michigan: $8.15 per hour, effective September 1, 2014
- Minnesota: $8.00 per hour (enterprises with annual gross volume of sales of $500,000 or more) and $6.50 per hour (enterprises with annual gross volume of sales of less than $500,000), effective August 1, 2014
If an employee is subject to both state and federal minimum wage laws, the employee is entitled to the higher minimum wage. Be sure to comply with any city or other local wage requirements (which may be higher than the state or federal minimum wage) that may apply to your business.
The rates for tipped employees are also changing in a number of states. Be sure to review our State Laws section for more information on state wage and hour requirements, including downloadable posters that are required to be displayed in the workplace.
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Employers Face Significant Penalties for Reimbursing Employees' Individual Health Insurance Policy Premiums
New guidance from the IRS explains the consequences when an employer does not establish a health insurance plan for its own employees, but instead chooses to reimburse those employees for some or all of the premiums they pay for individual health insurance, either inside or outside the Health Insurance Marketplace (Exchange). Such arrangements are described as "employer payment plans," which are considered group health plans subject to the Affordable Care Act's market reforms (including the annual dollar limit prohibition and preventive services requirements). Employer payment plans also include arrangements under which an employer uses its funds to directly pay the premium for an individual health insurance policy covering an employee. The term generally does not include arrangements under which an employee may choose either cash or an after-tax amount to be applied toward health coverage. Consistent with prior FAQs, the new guidance confirms that employer payment plans cannot be integrated with individual policies to satisfy the Affordable Care Act market reforms. Accordingly,such arrangements fail to satisfy the market reforms and may be subject to a $100 per day excise tax per applicable employee ($36,500 per year, per employee) under the federal tax code.
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New FAQs Address Summary of Benefits and Coverage Template and Other Affordable Care Act Topics
The U.S. Department of Labor has released its latest set of FAQs regarding implementation of various provisions of the Affordable Care Act. Highlights of the FAQs are presented below. Summary of Benefits and Coverage (SBC)
Group health plans are required to provide, without charge, a standard SBC form explaining plan coverage and costs to employees at specified times during the enrollment process and upon request. (For insured group health plans, the notice requirement may be satisfied if the issuer furnishes recipients with a timely and complete SBC.)
continues to be authorized until further guidance is issued. The FAQs also confirm that certain safe harbors and other enforcement relief with respect to providing the SBC continue to apply.
Effect of Health FSA Carryovers on 'Excepted Benefits' Status
Excepted benefits provided under a group health plan generally are exempt from the Affordable Care Act's market reforms. Health FSAs may constitute excepted benefits if, among other requirements, the arrangement is structured so that the maximum benefit payable to any employee participant in the class cannot exceed a certain amount.
The latest set of FAQs explains that unused carryover amounts remaining at the end of a plan year in a health FSA (permitted under the modified "use-or-lose" rule) should not be taken into account when determining if the health FSA satisfies the maximum benefit payable limit to constitute excepted benefits.
Other topics addressed in the FAQs include the application of cost-sharing limits to out-of-network items and services, and preventive coverage related to tobacco cessation interventions. For more on the Affordable Care Act, including previously released questions and answers, please visit our Health Care Reform section.
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4 Ways to Keep Your Employees Motivated During the Summer
The warm weather and eagerly anticipated outdoor activities of summer may take a toll on your workers' concentration. If you're noticing a lack of focus among your employees during this time of year, consider the following ideas to help keep them motivated: - Encourage your employees to step outside for at least 15 minutes each day. Exposure to natural sunlight can prevent workers from feeling confined to the office during the warm summer months. Holding business meetings outside may also help to boost workers' morale.
- Change things up! Employees may become more motivated when their jobs are more challenging and interesting. Consider lateral moves to build your workers' skill levels and knowledge base.
- Create opportunities for casual interaction. A company sports team, a family day or an outdoor after-hours social event can keep your employees engaged and interested in each other and in their workplace.
- Consider flexible working arrangements. Arrangements such as flextime or staggered work hours may allow employees to enjoy summer activities and attend to family obligations, while coming to work refreshed. It's a good idea for employers to work with a knowledgeable employment law attorney when creating policies on flexible working arrangements, to ensure policies and practices are in compliance with the law and do not unlawfully discriminate against certain employees.
Our section on Motivating Employees offers additional strategies to help you motivate your workers at any time of year.
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About Benefits, Inc.
Benefits, Inc. is a full service employee benefits agency. However we also offer Business Insurance, Work Comp, and Risk Analysis. Contact us today at 615-446-3303 for more information. |
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