Filed under: Benefits | Tags: Employee Development, employees, Human Resources, wellnes
February 7, 2011
A Wellness Program for Your Employees
by Candace Rorrer
Envision a company motivated to be physically active; employees walking to co-workers’ desks to discuss issues face-to-face instead of sending an email, joining peer groups to walk or run after work or during lunch, and participating in charitable races on the weekends as a company team. Not only will employees acquire the benefits of being in good physical shape, but the company will enjoy lower medical costs due to a decrease in illness, increase in work productivity and an increase in attendance.
The Wellness Committee at Landrum offers educational opportunities for employees by improving health awareness in the areas of nutrition, physical activity, and emotional well-being. To promote nutrition, the wellness committee has invited local experts to come in and educate employees on properly reading nutrition labels and provide tips on eating healthier. To promote physical activity the committee created a walking program – a run/walk team that trains for local races, and a “boot camp” and yoga class that takes place in the office after hours. The committee promotes emotional wellbeing by inviting motivational speakers to teach the staff. Classes cover the topics of health and humor, stress, and managing emotions.
There are a number of ways to promote wellness in the office while promoting positive reflections to a company’s bottom-line. Start by organizing the following strategies:
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Maintain Senior-level support
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Determine goals and objectives
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Recruit a team
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Develop a budget
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Promote activities
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Decide on incentives
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Have a kick-off celebration
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Sign up participants
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Evaluate progress
Have little to no money to put towards a wellness program? Check your organization’s insurance carrier for discounts. Most insurance companies offer discounts to gym memberships, weight loss programs and educational materials. Contact local gyms, spas or weight loss programs to see if they offer a company discount. You also might want to consider employees paying a registration fee to put towards a cash prize for the person that logs the highest number of steps or miles walked, as an example. Here are a few web-based tracking programs that start promoting physical activity.
http://www.startwalkingnow.org
http://www.acsworkplacesolutions.com/activeforlife.asp
Let’s get active!
Candace Rorrer, Benefits Accounting Specialist, Landrum Human Resource Companies, Inc. Candace serves as the Cobra Coordinator and tracks paid leave policies for over 300 Landrum client companies. She has 12 years experience in the healthcare field and is currently working towards a degree in Exercise Science. Candace oversees Landrum’s internal Wellness Program.
Filed under: Benefits, Health Reform, Healthcare Tax, Human Resources | Tags: Health Reform, Human Resources, Insurance Reform, PEO, tax
The new law makes significant changes to the health insurance industry. Many provisions are complex and not yet defined by the federal government. And many more are subject to both state and federal rules and regulations. Some measures will be implemented this year. Many take effect in 2014, while others are not implemented until 2018.
(excerpt from presentation made by Diane Boyle, Vice President, Federal Government Relations National Association of Insurance and Financial Advisors (NAIFA), on the Patient Protection and Affordable Care Act (PPACA). )
We have provided two video links we hope you will find informative and helpful in understanding the PPACA. We will continue to monitor the new regulations as they are developed and distributed by the government.
Videos
Healthcare Insurance Reform Seminar
Your Small Business and Health Care Legislation
Feel free to share these videos with your staff or colleagues. Submit your questions in the comment section or email questions@LandrumHR.com.
Filed under: Benefits, Health Reform, Healthcare Tax, Human Resources, Landrum Lagniappe | Tags: employees, employer, Health Reform, Human Resources, Insurance Reform, PEO
The Carrot or the Stick – Tax credits vs. Penalties
By Susan Hunsucker,CEBS
Well, I’ve spent the last three weeks talking about different aspects of health care reform. Because of the complex structure and its carrot vs. stick approach to health insurance in the form of credits and penalties for businesses, employers may want to take a new look at offering health insurance benefits. Keep in mind additional, clarifying information to help with implementation will trickle down from government agencies for some time to come. We will post updates as they are available.
There is no employer mandate to offer health insurance. The mandate is on individuals who, beginning in 2014, will have access to coverage through state insurance exchanges; however, this is where the “sticks” come into play. If you are a large employer and don’t offer qualified, affordable health insurance, there will be penalties. In 2014 when most of the new rules take full affect, employers will have to weigh the cost of paying to provide health insurance for their employees against paying the penalty for not providing it.
THE STICKS – Penalties for Large Employers
Large employers, defined as an employer that employed an average of at least 50 full-time employees on business days during the preceding calendar year, will be subject to penalties for the following:
• Failure to offer minimum essential coverage: Penalty for any month is equal to the number of full-time employees over 30, multiplied by one-twelfth of $2,000 ($166.67).
• Not offering minimum essential coverage and having at least one employee being certified as receiving a subsidy or tax credit for the premium . Penalty is one-twelfth of $3,000 ($250) for each employee, capped at 30, multiplied by one-twelfth of $2,000.
• Providing unaffordable coverage, defined as coverage with a premium required to be paid by the employee that is more than 9.5% of the employee’s household income: Penalty applies for any employee receiving an affordability waiver. Direction will be required for this as employers will not know the household income of their employees.
THE CARROT – The Small Business Tax Credit
(Employers with 25-50 employees are not eligible for credits)
According to a recent article in the Miami Herald, 80% of Florida’s small businesses (246,000) with fewer than 25 employees will qualify for the tax credit, and 77,400 of them will qualify for the maximum 35% for this year. In a previous blog I provided information on eligibility and how to calculate the credit. These credits may pay for up to half of the costs of providing health insurance. The maximum credit is 35% before 2014 and 50% for two years after. However, there is no transition after the two year cutoff. So come 2016, some firms’ costs could double, or they may be forced to drop a benefit that employees have relied upon.
WHAT NOW
We’ll have to wait for further clarification and instruction from the government agencies overseeing the implementation of healthcare reform. But here are a couple of options to consider if you have more than 50 employees:
Option 1: Don’t offer health insurance coverage to employees.
Result: There is a tax of $167.50 per month for all full-time employees (less 30).
Option 2: Do offer minimum essential coverage to all employees and dependents
Result: Employer cost of premiums
$250 tax per month per full-time employee getting subsidies, or $167.50 tax per month for all full-time employees (less 30), whichever is less.
Total cost will depend on several variables, such as employer contribution to the plan (minimum 50%), employee participation rate, and number of employees receiving the subsidy.
Employers will want to run the numbers and strategize how to best control costs. One strategy would be to minimize the number of employees receiving the subsidy by matching the lowest level in the Exchange, so employees aren’t eligible for the subsidy. Then the employer contribution must be high enough to make it affordable to employees.
I don’t know about you, but I’m looking forward to the release of additional direction on these matters. Without the final regulations and direction it may be too early to run the numbers, but it might not hurt to talk with your tax advisor and see how things look for your organization. Check back to the Landrum Blog for updates.
Susan Hunsucker, CEBS
A Certified Employee Benefit Specialist from the Wharton School, Susan serves as Director of Operations, for Landrum Professional Employer Services. She handles benefits administration and payroll administration for thousands of employees throughout the Southeast. Susan has over 20 years experience in all aspects of benefits administration including insurance, retirement plans, COBRA, HIPAA, and ERISA.
Filed under: Benefits, Health Reform, Healthcare Tax, Landrum Lagniappe | Tags: employees, Health Reform, Human Resources, Medical, PEO
As promised in earlier blogs, here is additional information on the Grandfather and Non-discrimination provisions of PPACA (aka healthcare reform).
GRANDFATHERED PLAN STATUS
Grandfathered plans are group health plans that were in existence on or before March 23, 2010. Originally, it seemed advantageous to maintain grandfathered status to avoid compliance with some of the new requirements; however, grandfathered plans may lose their status if certain plan changes are made. Employers will have to weigh the cost of maintaining the grandfathered status against the cost of making plan changes.
Grandfathered plans do not have to comply with the following requirements:
- Nondiscrimination requirements for fully insured plans
- Providing participants with the right to select a primary care provider/pediatrician
- Elimination of any pre-authorization or increase cost sharing for emergency services
- Elimination of preauthorization or referral for OB/GYN services
- Changes to the appeals process
- First dollar coverage for preventative care
- Reporting health care quality and wellness initiates to HHS
- Incorporating cost sharing limits on out of pocket deductible expenses
- Coverage of routine costs of patients who are part of clinical trials
- Providing for minimum essential benefits
Plan changes that could jeopardize grandfathered status:
Clarification regarding grandfathered plans was provided by Health and Human Services (HHS) on June 14, 2010. If a plan loses its grandfathered status, it becomes subject to the above mandates. The changes listed below will cause a plan to lose grandfathered status if implemented March 23, 2010 or later:
- Changing insurance companies or entering into a new insurance policy
- Cutting benefits resulting in loss of coverage for a particular condition
- Reducing an employer’s contribution by more than 5%
- Increasing a member’s coinsurance percentage by any amount
- Increasing a member’s fixed-amount copayment above a specified level (defined as Medical Inflation expressed as a percentage, plus 15%); however a copay increase up to $50 increased for Medical Inflation is permitted – that is $5 times Medical Inflation plus $5
- Increasing deductibles above a specified level (defined as Medical Inflation expressed)
- Reclassifying employees so that the reclassified employees are eligible for a different plan (even if it’s a grandfathered plan), without a bona fide employment reason
- Adding an overall annual limit or reducing an existing overall annual limit
- Failing to maintain at least one covered individual
Plan changes which will not jeopardize grandfathered Status:
- Changing third-party administrators (without changing insurer)
- Changing premiums
- Making changes to comply with state or federal law including PPACA
- Agreeing to binding renewals before March 23, 2010
- Allowing new employees and their dependents to enroll
- Allowing new dependents of current subscribers to enroll
NON-DISCRIMINATION RULES FOR INSURED BENEFITS
Retirement plans and self-funded insurance plans have long been subject to non-discrimination rules and testing. Now some of those rules have been expanded to insured benefit plans, including rules that the plan may not discriminate in favor of highly compensated individuals as to eligibility to participate.
Compliance regulations are expected from the Department of Labor, IRS and other federal agencies. We expect rules similar to those for self-funded plans to be applied to insured group health plans, including rules for eligibility, benefits, and controlled groups. If this is the case, it will affect employers who have “tiered” benefit plans – richer benefits for owners or highly compensated employees, or employers who have multiple companies and offer health insurance to employees of one company, but not to employees of another company with the same ownership. We are still waiting for clarification on how the non-discrimination rules will be applied. Check back for updates.
Susan Hunsucker, CEBS
A Certified Employee Benefit Specialist from the Wharton School, Susan serves as Director of Operations, for Landrum Professional Employer Services. She handles benefits administration and payroll administration for thousands of employees throughout the Southeast. Susan has over 20 years experience in all aspects of benefits administration including insurance, retirement plans, COBRA, HIPAA, and ERISA.
Filed under: Benefits, Consulting, Health Reform, Healthcare Tax, Human Resources, Landrum Lagniappe | Tags: "Business Etiquette", "human resources consulting", Human Resources, Insurance Reform, tax
By Susan Hunsucker, CEBS
For those of you who are gluttons for punishment, here’s more about health care reform. This topic does come with some good news for those employers who qualify for a tax credit. The full 35% tax credit is available to employers with fewer than 10 full time equivalent (FTE) employees averaging annual wages of $30,000. The tax credit is reduced for employers that have fewer than 25 FTEs, averaging $50,000 in annual wages. The information below is a summary. The actual IRS calculations can be much more involved. Click here for the complete IRS News Release.
Here’s how the Small Business Health Care Tax Credit works:
Requirements:
• Have fewer than 25 full-time equivalent (FTE) employees employed during the tax year
• Wages averaging less than $50,000 per employee per year
• Offer a qualifying health plan (generally, health insurance bought from a state-licensed insurance company)
• Employer must pay at least 50% of single coverage for their employees
Step I. Do YOU QUALIFY?
A. Do you offer qualified health insurance?
For any tax year beginning in 2010, 2011, 2012 or 2013, qualified health insurance is insurance coverage within the meaning of Code Sec. 9832(b)(1). Generally, health insurance coverage bought from a state-licensed insurance company.
B. Determine the number of FTEs:
Divide the total number of hours paid to employees during the year (not to exceed 2080 for any one employee) by 2080. Round fractions to the next whole number. Some employees may be excluded from the calculations, such as seasonal workers.*
C. Determine the average annual wages:
Divide the total wages paid to employees during the employer’s tax year by the number of FTEs for the year. Round down to the nearest $1,000. Wages means wages as defined for FICA purposes.*
D. Determine the amount of eligible premium:
Health and Human Services (HHS) has determined the average premium for the small group market in a state and the IRS has published those figures. The amount of an employer’s premium payments for purposes of calculating the credit cannot exceed the published average premium for the state the employer is operating in. For Florida, the amount is $5,161 for employee-only coverage and $12,453 for family coverage. For other states, click here.
Step II. CALCULATING THE AMOUNT OF THE TAX CREDIT
Example: For the 2010 tax year, a qualified employer has 12 FTEs and average annual wages of $30,000. The employer pays $96,000 in health care premiums for those employees (which does not exceed the average premium for the small group market in the employer’s state) and otherwise meets the requirements for the credit.
The credit is calculated as follows:
1) Initial amount of credit determined before any reduction:
35% x $96,000 = $33,600
2) Credit reduction for FTEs in excess of 10; $33,600 x 2/15 = $4,480
3) Credit reduction for average annual wages in excess of $25,000;
$33,600 x $5,000/$25,000 = $6,720
4) Total credit reduction $4,480 + $6,720 = $11,200
5) Total 2010 tax credit: $33,600-$11,200 = $22,400
Step III. CLAIMING THE TAX CREDIT
The credit is claimed on the employer’s annual income tax return. For a tax-exempt employer, the IRS will provide further information on how to claim the credit.
The National Association of Professional Employer Organizations (NAPEO), has been busy in Washington looking out for the interests of small businesses. They were successful in having a provision included in PPACA, which allows a “look through” of the PEO to the client size, when determining eligibility for the tax credit. So if you are a Landrum Professional Employer Services client and would qualify for a tax credit, your relationship with Landrum does not change your eligibility. As a matter of fact, we can provide you with much of the information for your CPA to make the tax credit calculations.
*For more detailed information and examples, visit the IRS website.
Don’t forget to sign up for the free Health Care Insurance Reform Seminar at www.landrumhr.com. The speaker is Diane Boyle, Vice President, Federal Government Relations National Association and Financial Advisors.
Susan Hunsucker, CEBS
A Certified Employee Benefit Specialist from the Wharton School, Susan serves as Director of Employee Benefits and handles benefits administration for thousands of employees throughout the Southeast. Susan has over 20 years experience in all aspects of benefits administration including insurance, retirement plans, COBRA, HIPAA, and ERISA.
Filed under: Benefits, Health Reform, Healthcare Tax, Human Resources, Landrum Lagniappe, Uncategorized | Tags: "Healthcare reform", employees, Human Resources, PEO
By Susan Hunsucker, CEBS
Landrum Human Resource Companies, Inc
To be completely honest, the health care reform complexities have my head spinning. The terminology and volume of the law is simply mind boggling. Implementation will be long (with some provisions not scheduled to take effect until 2018) and cumbersome. After reading through hundreds of newsletters, updates, articles 
and websites, I decided to make an attempt at wrapping my brain and arms around the more immediate provisions of the law. For additional information, attend the free Health Care Insurance Reform Seminar on July 15th at the Amos Studio at WSRE-TV, PJC. The seminar is being sponsored by Landrum Human Resources, O’Sullivan Creel and Combined Insurance Services.
Background
On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act (P-PACA). Just two days later, on March 25th, Congress passed the Health Care and Education Reconciliation Act of 2010, which modified P-PACA and included other provisions. Together they are “health care reform.” Over a series of blogs, I’ll give you an overview of the provisions, how they affect employers and the timeline for implementation.
Provisions Taking Effect in 2010:
• Small Business Health Tax Credit: Up to 35% of premiums immediately available to small firms that choose to offer coverage. Applies to employers with fewer than 25 full-time equivalent employees. More detail on this in my next blog.
• Young Adults on Parent’s Health Plan: Health plans are required to allow young adults up to age 26 to stay on their parents’ health plan. The State of Florida currently allows young adults up to age 30 to remain on a parent’s plan if they meet certain eligibility requirements.
• Insurers are prohibited from excluding coverage of pre-existing conditions for children up to age 19, in the individual market. Beginning in 2018, insurers are prohibited from denying coverage to anyone with pre-existing conditions.
• Group health plans and insurance companies are banned from rescinding coverage due to a medical condition, once an individual is enrolled in a plan.
• Group health plans and insurers are prohibited from setting lifetime limits. Annual limits are banned in 2014.
• Non-Discrimination Rules: New group health plans cannot discriminate in favor of highly compensated individuals as to eligibility to participate. Also, the benefits provided under the plan may not discriminate in favor of participants who are highly compensated. This does not apply to “grandfathered” health plans. More on “grandfathered” plans in a future blog.
• New private plans are required to cover preventive services with no deductible and no co-payments. By 2018 this will apply to all plans.
Other 2010 Provisions:
• Temporary reinsurance program to help companies that provide early retiree benefits for individuals aged 55-64.
• A high-risk pool will provide immediate access to insurance for Americans who are uninsured because of a pre-existing condition. People who have been uninsured for at least 6 months and who have a pre-existing condition will be eligible for subsidized coverage through a temporary national high-risk pool.
• Medicare beneficiaries who pay for prescriptions out of pocket once they hit the $2,830 mark up until they hit $4,550 when Medicare picks up again, this is know as the donut hole, receive a $250 rebate. The coverage gap is closed completely by 2020.
• Increased funding for community health centers to serve the expected increased number of patients.
• States may cover parents and childless adults up to 133% of poverty level and receive current federal matching contributions.
• New limits set for the percent of premiums that insurers can spend on non-medicals costs. In 2010, health plans are required to report the proportion of premiums spent on items other than medical care
• Review of Annual Premium Increases: In 2010, the HHS secretary and states will establish a process for annual review of unreasonable premium increases. Health insurers will be required to submit to the Secretary and the relevant state a justification for an unreasonable increase prior to implementation of the increase.
Future blogs will expand on the Small Business Health Care Tax Credit, the effects of the non-discrimination rules and grandfathered plan rules, as well as a timeline for implementation of additional provisions of the law.
Don’t forget to sign up for the free Health Care Insurance Reform Seminar at www.landrumhr.com. The speaker is Diane Boyle, Vice President, Federal Government Relations National Association and Financial Advisors.
Susan Hunsucker, CEBS
A Certified Employee Benefit Specialist from the Wharton School, Susan serves as Director of Employee Benefits and handles benefits administration for thousands of employees throughout the Southeast. Susan has over 20 years experience in all aspects of benefits administration including insurance, retirement plans, COBRA, HIPAA, and ERISA.
Filed under: Health Reform, Healthcare Tax, Human Resources, Landrum Lagniappe, Uncategorized | Tags: CPA, employees, Health Reform, Healthcare Tax, Human Resources, PEO, tax
2010 Hire Act: Two New Tax Benefits Aid Employers Who Hire and Retain Unemployed Workers
post written by: Sharee Rich, CPP
Controller, Landrum Human Resources.
On March 18, 2010 a new law went into affect to provide employers with a tax credit for hiring workers who were previously unemployed or only working part time. As with any legislation, there are specific qualifications for both the employer and employees. A list of these qualifications can be found on the IRS Website.
Under the HIRE Act, employers who hire qualified individuals between February 3, 2010 and December 31, 2010 may be eligible for (1) an exemption of the 6.2% Social Security payroll tax contribution for that individual, and (2) an additional tax credit of up to $1,000.
The payroll tax exemption applies to wages paid from March 19, 2010 through December 31, 2010 to a “qualified employee”. Employers eligible for the 6.2% payroll tax exemption will be able to begin claiming the new tax incentive on a revised employment tax form (pending issuance by the IRS) for the second quarter of 2010. Even though the exemption begins on March 19, 2010, employers won’t lose out, because the amount of first-quarter wages that would have been forgiven will be allowed as a credit for the second quarter.
The reduced tax withholding will not affect the employee’s future Social Security benefits, and employers would still be responsible for withholding the employee’s share of Social Security taxes (as well as income taxes). The employer and employee’s shares of Medicare taxes would also still apply to these wages.
For each qualified employee retained for at least one year, employers may claim the “Retained Worker Tax Credit” which is equal to the lesser of $1,000 or 6.2% of such employee’s wages for the one year period. This retention credit can first be claimed on employer’s 2011 income tax returns. Note: For workers that would otherwise be eligible for the Work Opportunity Tax Credit, the employer must select one benefit or the other for 2010. There is no double dipping.
In order for employers to claim HIRE Act Benefits, including a payroll tax exemption or a new-hire retention credit, a qualified employee must complete and sign the affidavit. Form W-11 is available on the IRS Website.
On May 25, 2010, Landrum Human Resources and O’Sullivan Creel hosted a webinar on the HIRE Act and other new healthcare laws. Watch it now: Realities for Small Businesses Under New Healthcare Laws
