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Welcome to the Benefits, Inc. Newsletter!
"Sweet April showers do spring May flowers." - Thomas Tusser
Thomas Tusser was an English poet and farmer that lived in the mid-1500's. I'm confident you have heard the quote, but most people are unaware of the man behind the pen.
In addition to flowers, May 8th is Mother's Day. Don't forget to acknowledge this very important day! Punishment can be severe.
May 30th is Memorial Day, which unofficially kicks off Summer. Be mindful and thankful of employees and families with servicemen.
In the insurance and benefits world, May is disability insurance awareness month. Disability insurance protects your most valuable asset--your ability to work and produce an income. From a cost standpoint, it's a tremendous value. Businesses may offer guaranteed issue long-term disability (LTD) plans with as few as five employees. If you don't currently offer a plan, you should certainly explore the idea.
Remember... "A fool and his money are soon parted." - Thomas Tusser
Kevin Smith and Tim White
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Should You Get Disability Insurance?
Chronic pain, cancer treatment, severe depression...these are just a few of the virtually countless reasons you may not be able to show up to work for a significant period of time. Consider this statistic: A 20-year-old has a 30% chance of becoming disabled by the time he or she reaches retirement age. Needless to say, the financial consequences of a disability can be devastating. In 2001, more than one-fifth of bankruptcies in the United States occurred because the debtors (or their spouses) lost at least two weeks of income due to injury or illness.
While government programs such as Social Security provide disability benefits, the eligibility requirements are strict: Your disability must be expected to last for at least a year and the government must conclude that you are incapable of any gainful employment. Also, the benefits may fall well short of your lost income. A 40-year-old making $60,000 a year, for instance, can only expect about $1,700 a month from Social Security in the event of disability.
There is another way to guard against the worst-case scenario. Disability insurance can provide some financial security and peace of mind if you're unable to provide it yourself.
What is disability insurance?
Disability insurance, also known as disability income insurance, replaces a portion of your income typically between 50% and 70% if you are no longer able to work due to sickness or injury. (No insurer will agree to replace all of your pre-disability income, the rationale being that you would have little incentive to return to work.).Your ability to earn an income is likely to be your largest financial asset. It's worth protecting.
When do you need disability insurance?
The short answer: right now. You want to buy it when you don't need it at all. If you wait until you are actually ill, you may be uninsurable. Policies are most affordable when you are young and healthy.
There are two main types of policies: non-cancelable, in which both the premium and the benefits remain unchanged over the life of the policy; and guaranteed renewable, a substantially cheaper option with fixed benefits that allows the insurer to increase the premiums in some cases.
Every policy varies in its definition of what constitutes a disability, and when the benefits will begin. Some policies may limit coverage for mental health problems, for instance, while others might require that you be unable to perform any job, not just the occupation you were in when you became disabled. Depending on the premium, the waiting period before the payments start can range from 30 days to 6 months or more. Make sure your policy is broad enough for your needs.
Where can I get disability insurance?
Benefits, Inc. is committed to providing our clients with the best options for disability insurance. Our brokers are knowledgeable about this topic and can provide you with any information needed to help you make this decision. If you have questions about obtaining disability insurance, please feel free to contact our office for assistance.
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2017 HSA Contribution Limits and Minimum Deductibles
High Deductible Health Plan Coverage
An HDHP has a higher annual deductible than typical health plans and a maximum limit on the sum of the annual deductible and other out-of-pocket expenses. For 2017, the minimum annual deductible is $1,300 for self-only coverage or $2,600 for family coverage. Annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) may not exceed $6,550 for self-only coverage or $13,100 for family coverage.
Annual HSA Contribution Limitation
An eligible employee, his or her employer, or both may contribute to the employee's HSA. For calendar year 2017, the annual limitation on HSA deductions for an individual with self-only HDHP coverage is $3,400. For an individual with family coverage under an HDHP, the annual limitation on HSA deductions is $6,750. The limit is increased by $1,000 for eligible individuals age 55 or older at the end of the tax year.
You can learn more about HSAs in our section on Health Savings Accounts.
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Upcoming Deadlines for Employers to File ACA Information Returns With the IRS
Employers subject to the new Affordable Care Act (ACA) information reporting requirements are reminded that the deadlines for filing the first ACA information returns with the IRS for the 2015 calendar yearare quickly approaching. The due dates are as follows:
- Applicable large employers (ALEs)--generally those with 50 or more full-time employees, including full-time equivalents--must file Forms 1094-C and 1095-C with the IRS no later than May 31, 2016 (or June 30, 2016, if filing electronically).
- Self-insuring employers that are not considered ALEs, and other parties that provide minimum essential health coverage, must file Forms 1094-B and 1095-B with the IRS no later than May 31, 2016 (or June 30, 2016, if filing electronically).
The ACA information returns are used to report certain information to the IRS about the health care coverage offered to employees and other covered individuals (as applicable). Affected employers were also required to furnish employee/individual statements, on or before March 31, 2016, that included the same information provided to the IRS.
Be sure to review our Information Reporting section for more information, guidance, and Q&As.
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Updated FMLA Poster Now Available
The U.S. Department of Labor (DOL) has released an
updated version of the "Employee Rights Under the Family and Medical Leave Act" poster (often referred to as the "General FMLA Notice"), along with a new guide to help employers comply with the law. Employers may use either the new April 2016 version of the poster or the prior February 2013 version of the poster to fulfill their FMLA posting requirements.
Background
The federal FMLA provides eligible employees of covered employers (including private sector employers who employ 50 or more employees for at least 20 workweeks in the current or preceding calendar year) with unpaid, job-protected leave for specified family and medical reasons. The law also includes certain family military leave entitlements. Employers are required to maintain group health insurance coverage for an employee on FMLA leave on the same terms as if the employee continued to work.
Updated FMLA Poster
Every employer covered by the FMLA is required to display a poster prepared by the DOL which summarizes the major provisions of the law. The poster must be displayed in a conspicuous place where employees and applicants can see it, even if there are no employees eligible for FMLA leave. An April 2016 version of the required FMLA poster is now available for employers; however, the February 2013 version of the FMLA poster is still valid and can be used to fulfill the posting requirement.If a covered employer has any eligible employees, it must also provide the general notice to each employee by including it in employee handbooks or other written guidance concerning employee benefits or leave rights, if such written materials exist (otherwise, the employer may distribute a copy of the general notice to each new employee upon hire).
New Employer's Guide
A new employer's guide was also released, which is designed to provide information about employers' obligations under the law and their options in administering FMLA leave. The guide contains resources such as charts, examples, and citations for further information.
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3 Things for Employers to Know About Vacation Leave
With summer just around the corner, now is a great time to review existing vacation leave policies. Here are three things employers need to know about vacation leave:
- Vacation leave is not required under federal law. While vacation days are a common employer-provided benefit, federal law generally does not require either time off or pay for vacation. However, if an employer decides to offer vacation leave to its employees, the policy should be applied fairly and uniformly.
- State laws may apply to pay in lieu of earned vacation. In addition to allowing employees annual time off for vacation, employers also commonly provide pay in lieu of vacation time that employees have earned. A number of states require employers to pay employees for unused accrued vacation upon termination. Contact your state labor department for guidance on your state's laws regarding vacation pay.
- Vacation policies should be in writing and communicated to employees. It is very important for employers to develop a clear, written policy regarding paid vacation leave and follow it exactly. Non-written leave policies can lead to inconsistency and complaints from confused employees, as well as claims of discrimination. At a minimum, the policy should include:
- The categories of employees who are eligible to accrue and use paid vacation leave;
- The amount of paid vacation leave provided each year and how leave is earned;
- Whether paid vacation leave can be carried over from year to year; and
- Whether employees will be paid for unused vacation leave upon termination of employment (in compliance with any state law requirements).
Check out our section on Leave and Time Off to learn more about federal and state-mandated leave requirements, as well as common types of employer-provided voluntary time off.
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New Versions of SBC Template and Related Documents Finalized
Changes to SBC Template
The new SBC template includes an additional coverage example as well as language and terms to improve individuals' understanding of their health coverage. Specifically, the new template includes more information about cost-sharing, such as enhanced language to explain deductibles, and requires plans to address individual and overall out-of-pocket limits. Changes have also been made to the SBC to improve readability.
Date for Using Updated Template and Related Documents
The implementation date for using the new SBC template and associated materials will be as follows:
- Health plans and issuers that maintain an annual open enrollment period will be required to use the new editions beginning on the first day of the first open enrollment period that begins on or after April 1, 2017 with respect to coverage for plan years beginning on or after that date.
- Health plans and issuers that do not use an annual open enrollment period will be required to use the new editions beginning on the first day of the first plan year that begins on or after April 1, 2017.
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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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