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.

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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Benefits Compliance: 3 Areas to Focus On

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Courtesy of Fisher & Phillips LLC

2013 marks not just the start of a new calendar year, but also compliance obligation deadlines for some employee benefit plans. We have outlined a number of key provisions impacting welfare and retirement plans, as well as changes to your payroll system, to help you be prepared. Let me know if you have any questions,

Medical Plans

  • A Summary of Benefits and Coverage (SBC) must be provided to all group medical plan enrollees by the first day of the first annual open enrollment period beginning on and after September 23, 2012. This means if your medical plan is operated on a calendar year basis, you must provide SBCs to enrollees as part of your upcoming annual open enrollment period for coverage that takes effect January 1, 2013.
  • Health FSAs must be redesigned for the 2013 plan year to limit annual account balances to $2,500. Make sure to update your plan document as well.
  • Ensure that your group health plan SPDs have been properly amended to reflect any applicable changes under the Patient Protection and Affordable Care Act of 2010 (PPACA).
  • Claims’ correspondence (claims and appeals responses) must use “culturally and linguistically appropriate language” when 10%+ or more of employees reside in a county literate only in the same non-English language. The HHS website provides a list of all U.S. counties which meet or exceed the 10% threshold.   If you send a claims or appeals response to an address in a county that meets the 10% threshold, you must include a one-sentence statement in the relevant non-English language indicating how to access language services. You must also provide oral language services (such as a telephone customer assistance hotline) and, upon request, a notice in any applicable non-English language.
  • The Women’s Health and Cancer Rights Act of 1998 (WHCRA) requires group medical plans to provide an annual written notice to participants and beneficiaries of the availability of medical and surgical benefits under the plan with respect to mastectomy and breast reconstruction. Including the WHCRA notice as part of your open enrollment materials is one way to fulfill your annual notice obligations.
  • Sponsors of group medical plans must notify employees annually concerning the availability of state premium assistance through Medicaid or CHIP.  The Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) imposes this notice requirement, which can be met by including the DOL’s model “Employer CHIP Notice” as part of your annual open enrollment materials.  For calendar year plans, the Employer CHIP Notice must be provided no later than January 1, 2013.
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6 Post-Election Workplace Issues You Need to Know

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The national election results suggest that the overall political landscape will remain largely unchanged in Washington, for at least the next two years until the 2014 midterm election. As a result, HR professionals should expect similar legal trends to persist at the federal level, with President Obama and split control of Congress between the Republicans and Democrats. Here are six (6) workplace issues you need to know:

1. Fiscal Cliff

The fiscal cliff is approaching and could result in numerous spending cuts and large tax increases that will affect both your business and employees on January 1, 2013. Notable taxes set to increase which may apply to your employees include the payroll tax, Bush-era tax cuts, Obama-era tax cuts, AMT patch, and taxes associated with health care reform. In addition, large cuts in defense spending are set to go into effect at the same time. Congress still has time to act before all of these changes go into effect, but no agreements have yet been reached.
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The Top 3 Benefits Trends You Need to Know

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Three types of benefits have seen the most significant changes in 2012 trends, based on our research nationally, locally, and among employers of choice. Find out what they are and how these trends impact your organization as it plans and budgets for 2013.

Health Insurance & Wellness

Survey data released by Towers Watson and Aon Hewitt show that the widespread majority of employers plan to offer health care benefits to their employees in the future. Most employers, according to their surveys, do not foresee eliminating health plans, even in light of health care reform.
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National, Local Health Insurance Premiums Increase

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In a report published jointly by The Kaiser Family Foundation and The Health Research & Educational Trust in October of 2012, organizations were asked about a number of practices and metrics related to employer provided health benefits. Participants indicated that their health insurance premiums for 2012 increased by approximately 4% nationally over 2011. More specifically, single coverage cost 3% more than in 2011 and family coverage cost 4% more. The report, 2012 Annual Employer Health Benefits Survey, notes that differences based on company size and geography have the most significant variation in the health insurance premiums reported.

A more local analysis of the current state of employer provided health benefits lends additional support to this claim with Northeast Ohio organizations facing much higher than 4% increases. Of the 100 organizations participating in the ERC/Smart Business Workplace Practices Survey, the average size was only 143 employees. With an average increase of just over 10% among a sample of 100 Northeast Ohio organizations, the size of the organizations surveyed may be contributing to these higher premiums.
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2012/2013 Salary & Benefits Budgeting Guide

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We’ve compiled a brief compensation and benefits budgeting guide to help your organization make important pay and health care decisions for fall 2012. The guide summarizes the latest and most important trends as of September, 2012 related to administering compensation and health care benefits, which affect your organization as it plans for 2013. 
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Financial Concerns Drive Innovation in the Workplace

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The results of the 2012 ERC/Smart Business Workplace Practices Survey demonstrate a commitment among Northeast Ohio employers to improving their workplaces despite and in some cases because of the financial challenges they face in today’s economy. While respondents indicate for the second year running that the economy is no longer their most pressing challenge, cost related challenges more generally such as funding, healthcare costs, controlling costs and financial stability are all among the top ten challenges reported by employers.

Perhaps the most striking fiscal measure being utilized to control costs reported by participants is layoffs. After a sharp decline in 2011, the percent of organizations anticipating layoffs for the coming year increased to 10.3%. However, it is important to note that while higher than 2011, this number still falls in line with pre-recession levels when double digit percentages were commonplace.
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Strategies for Stress Management

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Information provided by ERC Partner University Hospitals

Stress – the mere mention of the word often evokes images of racing heartbeat, headache or tension. Stress may be considered as any physical, chemical, or emotional factor that causes bodily or mental unrest and that may be a factor in causing disease.  

Americans continue to struggle with high stress levels, which can have a detrimental effect on their health. According to the American Psychological Association, 75% of adults reported experiencing moderate to high levels of stress in the past month and nearly half reported that their stress has increased from 2011.  The problem is not limited to adults. Stress is a top health concern for U.S. teens, and psychologists say that if they don’t learn healthy ways to manage that stress now, it could have serious long-term health implications.
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