Health Care Reform's Employer Mandate: 3 Things You Need to Know

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In 2013, the IRS has proposed regulations which further clarify employer shared responsibility, specifically the requirement of employers with at least 50 full-time and/or full-time equivalent employees to offer affordable healthcare coverage with a minimum level of coverage or pay a penalty.

1. Employers must determine if they need to offer a minimum level of healthcare coverage.

According to the regulations, each year, employers will need to determine if they must offer healthcare coverage with a minimum level of coverage or pay a penalty by averaging the number of employees they employ across months in the year, which accounts for fluctuations in the workforce. If the average is 50 or more full-time equivalent or full-time employees, the employer must offer healthcare coverage or pay a penalty.

There is a $2,000 penalty for each full-time employee not covered by the plan beyond the first 30 full-time employees. There are additional large penalties for coverage that is not deemed to be "affordable."

2. Employers must use a specific calculation method to determine how many full-time/full-time equivalent employees it has.

The proposed regulations also offer a calculation method for determining how many full-time and full-time equivalent employees an organization has.

  1. Employers need to calculate the total number of hours of service per month for all employees who were not employed an average of 30 hours of service per week for that month.
  2. Employers should divide the total hours of service by 120 to yield the number of full-time equivalent employees employed in a given month.
  3. Employers should add the number of full-time employees (those working 30 hours or more each week) to the number of full-time equivalent employees.

*If employees in excess of 50 FTEs were seasonal workers for a period of no more than 120 days, an employer is not subject to the shared responsibility requirement.

3. A calculator will be provided for employers to use to determine if they meet affordable healthcare coverage requirements.

In addition, the regulations state that the IRS and Department of Health and Human Services will provide a calculator for employers to use to determine if they meet the “affordable healthcare coverage” requirements.

Health coverage is considered affordable if the plan has a single employee premium no more than 9.5% of the employee's household income. Additionally, a healthcare plan must meet the requirement of minimum essential coverage when the policy pays out at least 60% of the actuarial value of the covered benefits (Source: Buckingham, Doolittle & Burroughs, LLP).

Please note that by providing you with research information that may be contained in this article, ERC is not providing a qualified legal opinion. As such, research information that ERC provides to its members should not be relied upon or considered a substitute for legal advice. The information that we provide is for general employer use and not necessarily for individual application.

 

$20 Million in Training Grant Dollars Available to Ohio Companies

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Update (1/10/13): As of January 10, 2013 over 400 applications have been submitted for the Ohio Incumbent Workforce Training Voucher Program. According to the Ohio Development Services Agency (formerly Ohio Department of Development), many more companies have begun applications. The Ohio Development Services Agency is still encouraging companies to apply for funding.

The Ohio Incumbent Workforce Training Voucher Program has been officially announced, making $20 million available for training opportunities to enhance worker skills.

The ultimate goal of this program is twofold: allow employers to retain and grow their existing Ohio workforce and create a statewide workforce that can meet the present and future demands in an ever changing economy.

Applications are now available at www.OhioMeansJobs.com. Funding is made available on a first come, first served basis. The caps on the program funding will be $500,000 per eligible company and/or $4,000 per eligible employee, with a reimbursement rate of up to 50%; all training must begin and be completed between February 4, 2013 and June 30, 2013.
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Occupational Outlook: A Snapshot of 2013

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A recent article from Forbes.com, cited Software Developers, Accountants & Auditors, and Market Research Analysts as the three job categories with the “best” outlook for 2013. According to the report, these jobs have seen job growth rates since 2010 of 7%, 3%, and 10% respectively. In terms of the total number of positions that’s just under 140,000 individual jobs created among those top three categories, with half falling exclusively under the Software Developer category (including both systems and applications developers).

According to the Bureau of Labor Statistics’ 2012-13 Occupational Outlook Handbook, not only have these jobs seen relatively strong job growth post-recession, but they are also being projected to continue growing at or above the market average- with Market Research Analysts coming in at an impressive 41% growth through 2020.
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2013 HR Compliance Timeline

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Due Date Compliance Requirement
January 1, 2013 New tax provisions in fiscal cliff deal take effect
January 1, 2013 Ohio Minimum Wage change takes effect
January 1, 2013 Social Security and Medicare changes take effect
January 1, 2013 New Fair Credit Reporting Act forms for background checks take effect
January 1, 2013 New Medicare tax under health care reform takes effect
January 1, 2013 New defined benefit/contribution plan limits take effect
January 1, 2013 New limits on employees’ flexible spending accounts (FSA) take effect
January 31, 2013 W-2s need to be issued to employees by this date; W-2s need to include cost of employer-sponsored group health care coverage for employers required to issue 250 or more W-2s
January 31, 2013 Form 940 due and Federal Unemployment Tax Rate (FUTA) needs to be deposited if owed
February 1, 2013 OSHA 300 Log (Forms 300 & 300A) needs to be posted on February 1st through April 30th
February 10, 2013 Form 940 due if FUTA deposits have been made on time
February 15, 2013 W-4 changes must be made for employees claiming no exemptions last year
March 1, 2013 Employers must provide written notice to new-hires and current employees about health insurance exchanges under health care reform law
July 31, 2013 Form 5500 due for calendar year defined contribution and benefit plans; Form 5500 due by the last day of the 7th month following end of the plan year for non-calendar year plans; Insured and self-insured healthcare plans must pay $1 per member (applicable to 2012 plan year) to fund comparative effectiveness research of medical treatments. This payment increases to $2 per member for 2013 plan year.
September 30, 2013 EE0-1 reporting deadline
September 30, 2013 VETS-100/100A Form filing deadline
December 31, 2013 Group health plans must certify that they are compliant with HHS rules on electronic transactions between health providers and health plans.

Note: This chart is subject to change and more filing deadlines may apply for your specific organization than those listed in the chart. By providing you with research information that may be contained in this chart, the Employers Resource Council (ERC) is not providing a qualified legal opinion concerning any particular human resource issue. As such, research information that ERC provides to its members should not be relied upon or considered a substitute for legal advice. The information that we provide is for general employer use and not necessarily for individual application. We also recommend that you consult your legal counsel regarding workplace matters when and if appropriate.

2013 HR Compliance Guide

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We’ve developed an easy guide summarizing what your organization needs to know to stay compliant as it begins the New Year. The guide includes a summary of several regulations that take effect as well as important legal issues on the horizon.

Regulations that Take Effect

Below are several major regulations and initiatives will take effect during the first few months of 2013.

Legal/HR Issue Description of Regulation Effective Date
2013 Income Tax Withholding Tables Provides income tax withholding tables for 2013 here. Immediately
Unemployment Benefits Extends unemployment benefits for one year. Immediately
Tax Changes Extends current tax cuts for individuals earning less than $400,000 per year and couples earning less than $450,000. Increases top tax rate to 39.6% and tax rate on capital gains and dividends to 20% for individuals and couples earning more than these thresholds. Permanently indexes AMT (alternative minimum tax) for inflation. For 2012, the exemption amounts are $78,750 for married taxpayers filing jointly and $50,600 for single filers Immediately
HR-Related Tax Credits The employer-provided benefit tax credits for educational assistance and child care credits are now permanent. Several other tax credits are extended through 2013, including an employer wage credit for employees who are active duty members of the uniformed services. Immediately
Social Security Withholding Re-sets withholding rates at 6.2%. January 1, 2013
Social Security Wage Base Increases the Social Security Old Age Survivor's and Disability Insurance (OASDI) taxable wage base for 2013 from $110,100 to $113,700. January 1, 2013
Minimum Wage Raises minimum wage in Ohio to $7.85 per hour for non-tipped employees and $3.93 per hour for tipped employees. January 1, 2013
Mileage Rates Increases standard mileage rate to 56.5 cents per mile for business miles driven and 24 cents per mile for medical or moving purposes. Continues 14 cents per mile driven in service of charitable organizations. January 1, 2013
Retirement Plan Limits Raises the 2012 limit on the exclusion for elective deferrals in 401(k), 403(b), and 457(e) plans to $17,500, up from $17,000. For changes to other pension plan limits, click here. January 1, 2013
W-2 Benefits Reporting Requires employers who have an employer-sponsored group health plan to report the cost of coverage under their plan on employees' W-2s unless they are filing fewer than 250 forms. January 1, 2013
Contribution Limit for FSAs Limits an employee’s annual pre-tax salary reduction contributions to a health flexible spending account (FSA) to $2,500. January 1, 2013
Medicare Tax Increases Medicare Part A (hospital insurance) tax rate by 0.9 percent (from 1.45 percent to 2.35 percent) on earned income over $200,000 for an individual taxpayers and $250,000 for married couples filing jointly; also includes a 3.8 percent tax on unearned income in the case of individual taxpayers earning over $200,000 and $250,000 for married couples filing jointly). January 1, 2013
Fair Credit Reporting Act Notices Requires that employers must update their Fair Credit Reporting Act (FCRA) notices and forms because enforcement of the FCRA is now under the Consumer Financial Protection Bureau. January 1, 2013
Notice of Health Insurance Exchanges Requires that employers provide all new hires and current employees with a written notice about the future availability of health insurance exchanges in their state. March 1, 2013

Legal Issues on the Horizon

The following table summarizes several major legal issues that could lead to greater scrutiny and more regulations for employers in 2013.

Legal/HR Issue Description of Issue
Implementation of health care reform In 2012, the Supreme Court ruled that the health care reform law is constitutional. As a result, employers will need to keep pace with preparing for and complying with health care reform provisions, including those set to go into effect in 2013.
Jobs/job-related training Both federal and state governments will be focused on jobs and job-related training/workforce readiness in 2013, which may lead to tax incentives, grants for training, and other initiatives that assist employers with hiring and training efforts.
Social media in the workplace The federal government, some state governments, and the National Labor Relations Board (NLRB) are scrutinizing employers' social media policies and use of social media in the hiring, selection, and pre-screening process.
Background screening The Equal Employment Opportunity Commission (EEOC) released guidance this past year on background check practices, particularly as it relates to enhancing opportunities for those with criminal backgrounds. Ohio recently passed a law which reduces employment barriers for residents with misdemeanor or felony convictions.
Expansion of NLRB The National Labor Relations Board (NLRB) has expanded its influence throughout 2012, providing guidance on issues such as social media, at-will statements, and concerted activity. Expect this growing influence to continue.
Protection of unemployed individuals Bills were proposed at both state and federal levels to protect unemployed individuals from discrimination in the hiring process in 2012, and may gain further ground in 2013.
Targeted enforcement of  discrimination The EEOC will continue to focus its efforts on issues of systemic discrimination, intentional hiring discrimination, pregnancy discrimination, and transgender bias.
Increased wage and hour enforcement Wage and hour lawsuits filed under the Fair Labor Standards Act (FLSA) are dramatically rising, and the Department of Labor's (DOL) enforcement of the law has also increased. Misclassification also continues to be a focus of the DOL. Additionally, employers can expect that addressing equal pay may also be a priority for the federal government.
Workplace leave Both state and federal governments have shown interest in expanding workplace leave and enhancing the availability of flexible or alternative work arrangements.
Reduction of barriers for disabled workers The DOL continues to increase resources allocated to reducing barriers in employment for individuals with disabilities, including improving access to opportunities, increasing accessibility of accommodations, and changing perceptions regarding hiring people with disabilities.
Retirement plan reform The government continues to be interested in ensuring that employees are saving adequately for their retirement and is exploring a number of options.

If your organization needs more assistance, guidance, or detail with regard to these or other compliance-related issues, here are several additional resources and services, provided by ERC, which you can consult:

  • HR Help Desk: Contact hrhelp@yourERC.com to ask any HR or compliance-related question and receive answers, guidance, and research. Service offered to ERC members only.
  • BNA HR Essentials & Tools: An online tool that houses notices, posters, sample policies, forms, federal and state law summaries, and local wage and tax information. Accessible in the ERC Member Center at www.yourERC.com. Resource offered to ERC members only.

Congress Passes Bill to Avoid Fiscal Cliff

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In January of 2013, Congress passed a bill to avert the fiscal cliff, which maintains the Bush-era tax cuts for individuals earning less than $400,000 per year and couples earning less than $450,000.

The bill raises taxes for those making more than these income thresholds, increasing tax rates from 35 to 39.6 percent for individuals making more than $400,000 and couples making more than $450,000 per year. Taxes on capital gains and dividends will also increase to 20% for individuals and couples earning income above these thresholds.

The bill also contains other provisions. Among those, it extends unemployment insurance for a year; caps itemized deductions for individuals making $250,000 and for married couples making $300,000; permanently adjusts the alternative minimum tax for inflation; raises the estate tax to 40%; and renews many childcare, tuition, research and development, and business related tax credits. In addition, it delays a series of automatic cuts in federal spending for two months.

Despite this measure, Social Security tax rates will return to 6.2% for 2013, up from the temporary rate decrease (4.2%) last year.

Source: CNN, National Journal

Additional Resources

Tax Changes Affecting 2013 Payrolls – What You Need to Know (Source: ADP)
2013 Federal Tax Legislation - What to Expect  (Source: ADP)
Fiscal Cliff Tax Deal: What Does It Mean for Small Business? (Source: Forbes)
Here's What's in the Fiscal-Cliff Deal (Source: National Journal)
Congress Passes Fiscal Cliff Act (Source: Journal of Accountancy)

4 Ways to Handle Attendance & Pay During Bad Weather

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attendance policy for exempt employees 4 Ways to Handle Attendance & Pay During Bad Weather

The snow is finally here (sorry, but it was inevitable) and with it comes issues of absenteeism, tardiness, pay, and FLSA compliance.

  1. How will you consider absences during bad weather?
  2. Should you forgive tardiness in these circumstances?
  3. How will you handle pay for both exempt and non-exempt employees for missed work time due to weather?
  4. What do you need to know to stay compliant with FLSA?

Here are guidelines for your most pressing HR problems resulting from inclement weather, supported by research from our 2015 ERC Inclement & Adverse Weather Practices Survey.

1. Absenteeism

Over half of organizations consider absences excused for both non-exempt and exempt employees, if those absences are due to weather conditions. In addition, just over one-third of organizations determine whether these absences should be considered excused or unexcused on a case-by-case basis.
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Evolving Communication Methods in Inclement Weather

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Despite the lack of winter weather here in Northeast Ohio thus far, earlier in 2012 Hurricane Sandy demonstrated that no matter what the temperature, communicating organizational closures or delays due to inclement weather in a timely and effective manner to employees is critical.

While the 2012 ERC Inclement & Adverse Weather Survey reports that only 41% of participants have a formal inclement and adverse weather policy in place, 95% of the total sample indicated that they have some type of communications plan that can be put into motion should the organization decide to close or delay their start time during inclement weather conditions. Most commonly this communications plan takes the form of the traditional phone-tree (52%).

More forms of communication

However, there also appears to be an emerging trend in the 2012 survey data pointing towards the inclusion of more diverse forms of electronic communication within these plans. More specifically, text messaging (20%) and email notification (29%) methods are up 11% and 7%, respectively, since 2010.

Who is responsible for initiating these communications remains very much the same, with one-third of respondents relying on supervisors/managers, 14% indicating it is the responsibility of the CEO/President/ED, and 13% reporting that HR handles these communications.
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Re-thinking Healthy Resolutions

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At one time or another, many of us have set a New Year’s Resolution regarding exercise or weight loss. If you walk into a fitness center in January, there is usually an influx of people who have resolved to “get in better shape” or “lose some weight” in the New Year.

By the time March rolls around, however, many individuals’ resolutions have fallen by the wayside and census in fitness centers return to usual levels. The following are some tips to put some more resolve into your resolutions by re-thinking of them as goals.

1. Set realistic, specific, and measurable goals with a target date.

Examples: I’m going to lose 10 pounds by July 1 or I am going to exercise for at least 30 minutes three times per week.
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6 Important Healthcare Reform Changes You Need to Know

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Several important healthcare reform provisions will begin to take effect during 2013. Below is a short summary of the major healthcare provisions that will start to affect your business in early 2013 as well as resources you can access for more information.

1. Reporting Requirements for Form W-2

Beginning January 1, 2013, employers are required to report the value of certain health benefits on employees' W-2s unless they are filing fewer than 250 forms. The IRS provided guidance (links below) on these reporting requirements, which include medical plan coverage, Medicare supplemental coverage, onsite medical coverage, and employer-sponsored flex credits contributed to a flexible spending account (FSA).
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