New Form I-9 Released 

U.S. Citizenship and Immigration Services (USCIS) has released a new version of Form I-9, Employment Eligibility Verification.

Background

Federal law requires employers to hire only individuals who may legally work in the United States–either U.S. citizens or foreign citizens who have the necessary authorization. To comply with the law, employers must verify the identity and employment authorization of each person they hire by completing and retaining Form I-9.

New Form I-9 Dates

The new Form I-9 is dated November 14, 2016 and has an expiration date of August 31, 2019. Employers may continue using a Form I-9 with a revision date of March 8, 2013 (or may use the new version) through January 21, 2017. Beginning January 22, 2017, however, employers must use only the new version.

Employers should also continue to follow existing storage and retention rules for all of their previously completed Forms I-9.

Note: The instructions for completing Form I-9 are now separate from the form.

For more information on complying with employment eligibility verification requirements, please visit our section on Form I-9.

 

Deadlines Extended for Furnishing Forms 1095-B and 1095-C in Early 2017

The Internal Revenue Service (IRS) has extended the deadlines for furnishing 2016 Forms 1095-B and 1095-C to covered individuals and full-time employees, respectively, from January 31, 2017, to March 2, 2017.

Background

Applicable large employers (generally those with 50 or more full-time employees, including full-time equivalents or FTEs), must use Forms 1094-C and 1095-C to report information to the IRS and to their full-time employees about their compliance with the employer shared responsibility provisions (“pay or play”) and the health care coverage they have (or have not) offered in a calendar year. Forms 1094-B and 1095-B are used by insurers, self-insuring employers, and other parties that provide minimum essential health coverage (regardless of size, except for large self-insuring employers) to report information on this coverage to the IRS and to covered individuals.

Reporting entities are require to report in early 2017 for coverage offered (or not offered) in calendar year 2016.

Furnishing Deadline Extension

The IRS has extended the deadline for furnishing 2016 Forms 1095-B and 1095-C to covered individuals and full-time employees, respectively, from January 31, 2017, to March 2, 2017. However, the deadline to file 2016 Forms 1094-B, 1095-B, 1094-C, and 1095-C with the IRS was not extended, and remains February 28, 2017 (or March 31, 2017, if filing electronically).

Check out our Information Reporting section for more on the information reporting requirements.

 

New ADA Wellness Program Notice Requirement Effective January 1

Employers subject to the Americans with Disabilities Act (ADA)–generally those with 15 or more employees–that offer a wellness program that collects employee health information must provide a new notice to employees as of the first day of the plan year that begins on or after January 1, 2017.

New Notice Requirement

A recent final rule requires employers offering wellness programs that collect employee health information to provide a notice to employees informing them of what information will be collected, how it will be used, who will receive it, and what will be done to keep the information confidential. The requirement to provide the notice takes effect as of the first day of the plan year that begins on or after January 1, 2017 for the health plan an employer uses to calculate any incentives it offers as part of the wellness program. The rule does not require that employees get the notice at a particular time–once the notice requirement becomes effective, employees must receive the notice before providing any health information, and with enough time to decide whether to participate in the program.

Click here for a sample notice from the Equal Employment Opportunity Commission (EEOC). To help employers comply with the new notice requirement, the EEOC has also released a set of Q&As.

To learn more about the ADA, please visit our Disability Discrimination section.

 

Dollar Amount Used to Determine PCORI Fee Rises to $2.26

The Internal Revenue Service (IRS) recently issued guidance that increases the applicable dollar amount used to determine the Patient-Centered Outcomes Research Institute (PCORI) fee for plan years that end on or after October 1, 2016 and before October 1, 2017.

Background

PCORI fees are imposed on plan sponsors of applicable self-insured health plans for each plan year ending on or after October 1, 2012 and before October 1, 2019. The fees support research to evaluate and compare health outcomes and the clinical effectiveness of certain medical treatments, services, procedures, and drugs.

Fee Increase

Under IRS Notice 2016-64, for plan years ending on or after October 1, 2016 and before October 1, 2017, the fee is $2.26 multiplied by the average number of lives covered under the plan (up from $2.17). Click here for details on how to determine the average number of lives covered under a plan.

Check out our PCORI Fees for Self-Insured Plans section for more on PCORI fees.

 

Alcohol and Office Holiday Parties: 7 Ways to Reduce Your Liability

Office holiday parties can build morale, offer opportunities for more casual interactions among workers, and reward employees for a productive year–but did you know they can also be a source of liability for your company? If you choose to have alcohol at your holiday party, consider the following tips to help keep you and your employees safe:

1 Review your insurance coverage before the party.

◦If the party will be hosted onsite, determine whether you are covered for injuries or damage to property if you serve alcohol on your premises. You may need to purchase separate special event coverage or an additional liquor liability policy.

◦For gatherings held offsite, such as in a restaurant, request a copy of the venue’s certificate of insurance and determine if you need additional coverage.

2 Don’t make attendance at the party mandatory. Employees should understand that no work will be conducted at the party.

3 Make it clear before the party that overindulgence and other offensive behavior are not acceptable.

◦Remind employees that alcohol is no excuse for illegal or inappropriate behavior, such as sexual harassment.

◦Consult your employee handbook and make sure that any company-sponsored festivities are not in violation of the policies in your handbook (such as those relating to an alcohol-free workplace).

4 Avoid open bars.

◦Approve the types of drinks that will be served in advance and consider the effects. According to the Centers for Disease Control and Prevention, one 12-ounce beer has about the same amount of alcohol as one 5-ounce glass of wine, or a 1.5-ounce shot of liquor.

◦Consider a cash bar or provide a limited number of “free drink” tickets to each employee.

◦Be sure there are a variety of non-alcoholic drinks available as well.

5 Stop offering alcohol at least 1 hour before the party ends. Serve coffee, desserts, and plenty of bottled water during this time.

6 Make arrangements for employees to get home safely. Offer free cabs and enlist designated drivers. Remember–you could be on the hook if employees leave a company-sponsored party drunk.

7 Make it a daytime event or family party. Consider serving non-alcoholic beverages only and make it a family-oriented party instead.

For more information on serving alcohol during company-sponsored holiday parties, please read the U.S. Small Business Administration’s Tips to Avoid Company-Sponsored Holiday Party Liability blog.

 

Nationwide Preliminary Injunction Granted Against New Federal Overtime Rule

The U.S. District Court for the Eastern District of Texas has granted a nationwide preliminary injunction against the U.S. Department of Labor’s (DOL) new federal overtime rule, which was set to become effective on December 1, 2016. The injunction prevents implementation and enforcement of the final rule on a nationwide basis. Please monitor this DOL webpage for the latest legal developments.

Our Fair Labor Standards Act section features information on exemptions from the FLSA’s minimum wage and overtime requirements.

 

Newsletter provided by:

Summit Insurance Advisors

11350 McCormick Road, Executive Plaza III

Hunt Valley, MD 21031

(410) 584-9600

jb@sumfi.com

www.summitinsurnceadvisors.com

Please Note: The information and materials herein are provided for general information purposes only and are not intended to constitute legal or other advice or opinions on any specific matters and are not intended to replace the advice of a qualified attorney, plan provider or other professional advisor. This information has been taken from sources which we believe to be reliable, but there is no guarantee as to its accuracy. In accordance with IRS Circular 230, this communication is not intended or written to be used, and cannot be used as or considered a ‘covered opinion’ or other written tax advice and should not be relied upon for any purpose other than its intended purpose.

The information provided herein is intended solely for the use of our clients and members. You may not display, reproduce, copy, modify, license, sell or disseminate in any manner any information included herein, without the express permission of the Publisher. Kindly read our Terms of Use and respect our Copyright.

© 2016 HR 360, Inc. – All rights reserved

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2017 HSA and Health FSA Contribution Limits Announced 

The Internal Revenue Service (IRS) has announced the inflation-adjusted contribution limits for health savings accounts (HSAs) and health flexible spending arrangements (health FSAs) for tax year 2017.

2017 Contribution Limits
The tax year 2017 contribution limits for HSAs and health FSAs are as follows:

• HSAs: The annual limitation on deductions for an individual with self-only coverage under a high deductible health plan (HDHP) is $3,400 (up from $3,350 for 2016). The annual limitation on HSA deductions for an individual with family coverage under an HDHP is $6,750 (unchanged from 2016). For 2017, an HDHP is defined as a health plan with an annual deductible that is not less than $1,300 for self-only coverage or $2,600 for family coverage (unchanged from 2016), and annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) that do not exceed $6,550 for self-only coverage or $13,100 for family coverage (unchanged from 2016).
• Health FSAs: The annual dollar limitation on employee contributions to employer-sponsored health FSAs rises to $2,600 (up from $2,550 for 2016).

For more information, please see IRS Revenue Procedures 2016-28 and 2016-55.

Visit our HSAs, FSAs, and Other Tax-Favored Accounts section for more on HSAs and health FSAs.

2016 ACA Transitional Reinsurance Program Contributions Form Due by November 15

Employers sponsoring certain self-insured plans that use a third-party administrator in connection with claims processing, claims adjudication, and enrollment functions (“contributing entities”) must submit their 2016 Annual Enrollment and Contributions Submission Form and schedule a payment for the 2016 benefit year no later than November 15.

Reinsurance Contribution Process
To successfully complete the reinsurance contribution process, contributing entities (or third-party administrators or administrative services-only contractors on their behalf) must register on Pay.gov (or confirm a password if such entities registered for the previous benefit years of the program) and submit their annual enrollment counts of the number of covered lives of reinsurance contribution enrollees for the 2016 benefit year using the 2016 form.

2016 Contribution Amounts
The 2016 reinsurance contribution rate is $27.00 per covered life. For the 2016 benefit year, contributing entities have the option to pay:

• The entire 2016 benefit year contribution in one payment, no later than January 17, 2017 reflecting $27.00 per covered life; or
• In two separate payments for the 2016 benefit year, with the first remittance due by January 17, 2017 reflecting $21.60 per covered life, and the second remittance due by November 15, 2017 reflecting $5.40 per covered life.

Our Transitional Reinsurance Program section features additional information on the reinsurance contribution process.

IRS Releases Final 2016 Forms 1094 and 1095

The Internal Revenue Service (IRS) has released the final forms and instructions for Forms 1094 and 1095 for calendar year 2016 reporting. Employers are required to report in early 2017 for calendar year 2016.

2016 Forms and Instructions
The following calendar year 2016 reporting forms and instructions are now available:

• Form 1094-C (transmittal)
• Form 1095-C
  • 2016 Instructions for Forms 1094-C and 1095-C
• Form 1094-B (transmittal)
• Form 1095-B
  • 2016 Instructions for Forms 1094-B and 1095-B

Information Reporting Deadlines
Applicable large employers (ALEs)–generally those with 50 or more full-time employees, including full-time equivalents (FTEs)–must furnish a Form 1095-C to each of its full-time employees by January 31, 2017. Forms 1094-C and 1095-C are also required to be filed with the IRS by February 28, 2017 (or March 31, 2017, if filing electronically).

Insurers, self-insuring employers, and other parties that provide minimum essential health coverage (regardless of size, except for large self-insuring employers) must furnish a copy of Form 1095-B to the person identified as the “responsible individual” by January 31, 2017. The responsible individual is the person who, based on a relationship to the covered individual(s), the primary name on the coverage, or some other circumstances, should receive the statement. Forms 1094-B and 1095-B are also required to be filed with the IRS by February 28, 2017 (or March 31, 2017, if filing electronically).

Employers subject to both reporting provisions (generally self-insured employers with 50 or more full-time employees, including FTEs) will satisfy their reporting obligation.

 

Newsletter provided by:

Summit Insurance Advisors
11350 McCormick Road, Executive Plaza III,, Hunt Valley, MD 21031
(410) 584-9600
jb@sumfi.com
www.summitinsurnceadvisors.com

Please Note: The information and materials herein are provided for general information purposes only and are not intended to constitute legal or other advice or opinions on any specific matters and are not intended to replace the advice of a qualified attorney, plan provider or other professional advisor. This information has been taken from sources which we believe to be reliable, but there is no guarantee as to its accuracy. In accordance with IRS Circular 230, this communication is not intended or written to be used, and cannot be used as or considered a ‘covered opinion’ or other written tax advice and should not be relied upon for any purpose other than its intended purpose.

The information provided herein is intended solely for the use of our clients and members. You may not display, reproduce, copy, modify, license, sell or disseminate in any manner any information included herein, without the express permission of the Publisher. Kindly read our Terms of Use and respect our Copyright.

© 2016 HR 360, Inc. – All rights reserved

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Medicare Part D Disclosure to Individuals Due by October 14 

In preparation for the Medicare fall open enrollment period, employers sponsoring group health plans that include prescription drug coverage are required to notify all Medicare-eligible individuals whether such coverage is “creditable” under the law. Creditable coverage means that the coverage is expected to pay, on average, as much as the standard Medicare prescription drug coverage.

Written Disclosure to Individuals
Employers can satisfy this notice requirement by providing a written disclosure notice annually by October 14, and at various other times as required under the law, to the following individuals:

• Medicare-eligible active working individuals and their dependents (including a Medicare-eligible individual when he or she joins the group health plan);
• Medicare-eligible COBRA individuals and their dependents;
• Medicare-eligible disabled individuals covered under an employer’s prescription drug plan; and
• Any retirees and their dependents.

Model notices are available from the Centers for Medicare & Medicaid Services (CMS).

Online Disclosure to CMS Also Required
Additionally, employers are required to complete an online disclosure to CMS to report the creditable coverage status of their prescription drug coverage. This disclosure must be completed annually no later than 60 days from the beginning of a plan year, and at certain other times.

Our section on Medicare further details how the program impacts group health plans.

Current Version of Employer CHIP Notice Set to Expire on October 31

With preparations for open enrollment underway, please be advised that the current version of the Employer Children’s Health Insurance Program (CHIP) Notice is set to expire on October 31, 2016.

Annual Notice Requirement
Employers that provide coverage in states with premium assistance through Medicaid or CHIP must inform employees of potential opportunities for assistance in obtaining health coverage annually before the start of each plan year. An employer may provide the notice applicable to the state in which an employee resides concurrent with the furnishing of:

• Materials notifying the employee of health plan eligibility;
• Materials provided to the employee in connection with an open season or election process conducted under the plan; or
• The summary plan description (SPD).

Current Model Notice Set to Expire on October 31
The current version of the Employer CHIP Notice is set to expire on October 31, 2016. A news alert will be sent out as soon as the new Employer CHIP Notice is available.

Our section on CHIPRA (the Children’s Health Insurance Program Reauthorization Act) contains additional information on employer responsibilities related to CHIP.

Maximum Individual Mandate Payment Amount for 2016 Released

The Affordable Care Act’s “individual mandate” provision requires every individual to have minimum essential health coverage for each month, qualify for an exemption, or make a penalty payment when filing his or her federal income tax return. Recently, the Internal Revenue Service (IRS) issued Revenue Procedure 2016-43, which provides information needed to determine the maximum penalty that may be due for 2016.

Calculating the Payment
For tax year 2016, individuals will generally pay whichever of the following penalty amounts is higher:

• 2.5% of the individual’s yearly household income above his or her applicable filing threshold; or
• $695 per person for the year ($347.50 per child under age 18).

The maximum penalty is capped at the cost of the national average premium for a bronze-level health plan available through a Health Insurance Marketplace in 2016. According to the IRS, the monthly national average premium for qualified health plans that have a bronze level of coverage and are offered through a Health Insurance Marketplace in 2016 is:

• $223 per individual; and
• $1,115 for a family with five or more members.

Our section on the Individual Mandate (Individual Shared Responsibility) provides information on the statutory exemptions from the individual mandate requirement.

Top 5 Tips on Adopting and Enforcing a Time-Off Policy

Whether paid or unpaid, time-off is an important respite that allows employees to take vacations, attend to personal or family business, or simply rest and recharge. However, managers and employees alike must recognize that not every request for time off can be approved. The following are the top 5 tips on adopting and enforcing a time-off policy:

1. Adopt a Written Policy: Employers should adopt a written time-off policy, detailing the amount of sick, personal, and vacation time allotted to employees and procedures for taking that time off. This policy should clarify how far in advance employees must notify their supervisors of their intention to take time off, and whether those requests will be approved based on corporate or departmental needs.
2. Communicate the Time-off Policy to Employees: Communicate this time-off policy in both the employee handbook as well as on the company’s internal web site, or intranet, if one exists. Employers should also communicate in writing any variances to the time-off policy that apply to specific departments or positions. When hired, an employee should sign a written acknowledgement that he or she has received and read the handbook. This acknowledgement should be placed in the employee’s personnel file.
3. Comply with Applicable Law: When considering whether to grant an employee’s time-off request, it is necessary to comply with applicable federal, state, and local laws regarding time off and nondiscrimination. For example, employers covered by the federal Family and Medical Leave Act (FMLA) must provide eligible employees with leave for specified family or medical reasons. In addition, many laws contain specific procedures and notice requirements for both employers and employees regarding requests for time off.
4. Consider Flexible Work Options: In managing employees’ requests for time off, an employer should also consider whether a flexible work option is a good fit for their company. Flexible work hours can minimize inconvenient time-off requests and help managers plan for extra coverage during busy times.
5. Be Fair: Time-off requests must still on occasion be denied. Remember to follow all applicable laws, and apply those laws and company policies consistently and fairly among all employees. If appropriate, the employer should explain why the request was denied and attempt to find a resolution that works for both the employee and the company.

Our Federal Laws section details the federal laws which regulate employee leave.

Social Security Requirements for Employee Name Changes

With the summer wedding season now over, it is critical for employers to ensure that each employee’s name and Social Security Number (SSN)–as shown on his or her Social Security card–matches the employer’s payroll records and year-end Forms W-2.

Employers
If an employee legally changes his or her name because of marriage, employers should continue to use the old name and tell the employee to contact Social Security to obtain an updated card. Employers should change their payroll records only after the employee obtains an updated Social Security card with the new name. Using a new name before the employee updates Social Security’s records may prevent the posting of earnings to the employee’s Social Security earnings history.

Employers can use Social Security’s free Social Security Number Verification Service (SSNVS) to match employees’ names and SSNs at the time they are hired, or before the employer prepares and submits employees’ Forms W-2.

Employees
Employees must take the following three steps in order to obtain a corrected Social Security card:

1. Show the required documents, including proof of identity. See Learn What Documents You Need for more information. (Under the heading “Type of Card,” select “Corrected” for a list of the documents needed);
2. Fill out and print an Application for a Social Security Card; and
3. Take or mail the application and documents to a local Social Security office.

There is no charge for a Social Security card–this service is free. For complete instructions, please click here.

Our section on Social Security includes helpful information regarding Social Security benefits.

 

Newsletter provided by:

Summit Insurance Advisors
11350 McCormick Road, Executive Plaza III,, Hunt Valley, MD 21031
(410) 584-9600
jb@sumfi.com
www.summitinsurnceadvisors.com

Please Note: The information and materials herein are provided for general information purposes only and are not intended to constitute legal or other advice or opinions on any specific matters and are not intended to replace the advice of a qualified attorney, plan provider or other professional advisor. This information has been taken from sources which we believe to be reliable, but there is no guarantee as to its accuracy. In accordance with IRS Circular 230, this communication is not intended or written to be used, and cannot be used as or considered a ‘covered opinion’ or other written tax advice and should not be relied upon for any purpose other than its intended purpose.

The information provided herein is intended solely for the use of our clients and members. You may not display, reproduce, copy, modify, license, sell or disseminate in any manner any information included herein, without the express permission of the Publisher. Kindly read our Terms of Use and respect our Copyright.

© 2016 HR 360, Inc. – All rights reserved

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New Federal Minimum Wage and Employee Polygraph Workplace Posters Must Be Posted 

The U.S. Department of Labor (DOL) recently updated its Fair Labor Standards Act (FLSA) and Employee Polygraph Protection Act (EPPA) posters. The new versions are now available for download.

New Posters
Every employer of employees subject to the FLSA’s minimum wage provisions must post (and keep posted) a notice explaining the law in a conspicuous place in all of its establishments so as to permit employees to readily read it. An approved copy of the minimum wage poster is available for employers to post.

Additionally, an employer subject to the EPPA must post (and keep posted) on its premises a notice explaining the law. The notice must be posted in a prominent and conspicuous place in every establishment of the employer where it can readily be observed by employees and applicants.

As of August 1, 2016, employers subject to these provisions must post the new versions of the FLSA and EPPA posters.

More information on federal posting requirements and links to downloadable posters are featured in our Federal Poster Requirements section.

2016 ACA Transitional Reinsurance Program Contribution Rate and Deadlines Announced

The Centers for Medicare & Medicaid Services (CMS) has announced the 2016 benefit year contribution rate and deadlines for the Affordable Care Act’s (ACA) Transitional Reinsurance Program.

Transitional Reinsurance Program Explained
The Transitional Reinsurance Program is a three-year program established by the ACA that requires employers sponsoring certain self-insured plans (“contributing entities“) to make contributions to support payments to individual market issuers that cover high-cost individuals.

2016 Contribution Rate and Deadlines
The 2016 Reinsurance Contribution Rate is $27.00 per covered life. For the 2016 benefit year, CMS will offer contributing entities the option to pay:

• The entire 2016 benefit year contribution in one lump sum payment, no later than January 17, 2017, reflecting $27.00 per covered life; or
• In two separate payments for the 2016 benefit year, with the first remittance due by January 17, 2017 reflecting $21.60 per covered life, and the second remittance due by November 15, 2017 reflecting $5.40 per covered life.

The annual enrollment count submission deadline for the 2016 benefit year is November 15, 2016. While not yet available, the 2016 ACA Transitional Reinsurance Program Annual Enrollment and Contributions form is expected to be available on www.pay.gov in time for the submission deadline.

More information on the reinsurance contribution process can be found in our section on the Transitional Reinsurance Program.

DOL Issues Guidance for Private Employers on Final Overtime Rule

The U.S. Department of Labor (DOL) has issued new guidance on its final overtime rule to help private sector employers evaluate current practices and transition to the rule’s requirements.

Final Overtime Rule
The DOL’s final overtime rule, effective December 1, 2016, updates the salary and compensation levels required for executive, administrative, and professional workers to be exempt from the minimum wage and overtime pay protections of the federal Fair Labor Standards Act (FLSA). In particular, the final rule:

• Raises the salary threshold from $455 a week to $913 per week (or $47,476 annually) for a full-year worker;
• Sets the highly-compensated employee (HCE) total annual compensation level equal to $134,004 annually; and
• Amends the regulations to allow employers to use nondiscretionary bonuses, incentives, and commissions to satisfy up to 10% of the new standard salary level, so long as employers pay those amounts on a quarterly or more frequent basis.

Note: When both the FLSA and a state law apply, the employee is entitled to the most favorable provisions of each law.

New DOL Guidance
Among other things, the DOL’s new guidance details some of the options employers may exercise in determining how to comply with the final rule. Employers have certain options for responding to the changes to the salary level, and the DOL does not dictate or recommend any method. Such options include:

• Providing pay raises that increase workers’ salaries to the new threshold;
• Spreading employment by reducing or eliminating work hours of individual employees working over 40 hours per week for which no overtime is being paid; or
• Paying overtime.

Note: The rule does not require employers to convert a salaried worker making less than the new salary threshold to hourly status; employers can pay non-exempt employees on a salary basis and pay overtime for hours worked beyond 40 in a week.

Our section on the Fair Labor Standards Act features additional information on DOL’s final overtime rule.

IRS Releases 2016 Draft Forms 1094-C and 1095-C and Instructions

The IRS has released draft versions of the Forms 1094-C and 1095-C and instructions that employers will use in early 2017 to report on health coverage offered in the 2016 calendar year.

Who is Required to Report
Under the Affordable Care Act, applicable large employers (“ALEs”)–generally those with 50 or more full-time employees, including full-time equivalent employees–use Forms 1094-C and 1095-C to report information to the IRS and to their employees about their compliance with the employer shared responsibility provisions (“pay or play”) and the health care coverage they have offered.

2016 Draft Forms and Instructions
The following draft forms are now available for 2016:

• Draft Form 1094-C (transmittal)
• Draft Form 1095-C

The 2016 Draft Instructions for Forms 1094-C and 1095-C are also now available. Among other items, the draft instructions clarify:

• The reporting rules which require employers who are Members of an “Aggregated ALE Group”–a group of ALE Members treated as a single employer under the Internal Revenue Code–to file Forms 1094-C and 1095-C, even if the ALE Member has fewer than 50 full-time employees of its own;
• The indicator codes that should be used to report offers of COBRA continuation coverage on lines 14 and 16 of Form 1095-C; and
• The definitions of “full-time employee” and “Employee Required Contribution” for purposes of Forms 1094-C and 1095-C reporting.

Visit our Information Reporting section for more on these requirements.

5 Tips to Prepare Your Business for a Natural Disaster

Natural disasters such as floods or hurricanes can happen suddenly at any time. The loss of essential records, files, and other materials during a disaster is commonplace and cannot only add to your damage costs, but may also delay your return to normal operations.

Securing Company Documents and Equipment
To reduce your vulnerability, determine which records, files, and materials are most important; consider their vulnerability to damage during different types of disasters (such as floods, hurricanes, and earthquakes) and take steps to protect them.

1. Confirm your insurance: Make sure you are aware of the details of your flood insurance and other hazard insurance policies, specifically which items and contents are covered and under what conditions. Check with your insurance agent if you have questions.
2. Back up essential files: Regularly back up vital electronic files (such as billing and payroll records and customer lists) and keep backup copies in a secure off-site location. Important papers (plans, legal documents, etc.) should also be stored securely off-site.
3. Consider the location of equipment susceptible to damage: Raise computers above flood level, move heavy objects to low shelves, and secure any equipment that could move or fall during a natural disaster.
4. Take inventory: For both insurance and tax purposes, you should maintain written and photographic inventories of all important materials and equipment. Estimate the cost of repairing or replacing each essential piece of equipment in your business.
5. Perform regular building maintenance and repairs: Periodically evaluate the building envelope to make sure that wind and water are not able to penetrate the building.

Our section on Planning for Workplace Emergencies includes additional guidelines on developing an emergency action plan to protect your employees and business during a disaster.
Newsletter provided by:

Summit Insurance Advisors
11350 McCormick Road, Executive Plaza III,, Hunt Valley, MD 21031
(410) 584-9600

Please Note: The information and materials herein are provided for general information purposes only and are not intended to constitute legal or other advice or opinions on any specific matters and are not intended to replace the advice of a qualified attorney, plan provider or other professional advisor. This information has been taken from sources which we believe to be reliable, but there is no guarantee as to its accuracy. In accordance with IRS Circular 230, this communication is not intended or written to be used, and cannot be used as or considered a ‘covered opinion’ or other written tax advice and should not be relied upon for any purpose other than its intended purpose.

The information provided herein is intended solely for the use of our clients and members. You may not display, reproduce, copy, modify, license, sell or disseminate in any manner any information included herein, without the express permission of the Publisher. Kindly read our Terms of Use and respect our Copyright.

© 2016 HR 360, Inc. – All rights reserved

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Penalties Increase for Employers Violating Certain Federal Labor Laws

Employers that do not comply with certain requirements under a number of federal labor laws will face increased fines beginning with civil penalties assessed after August 1, 2016 (whose associated violations occurred after November 2, 2015).

Key Penalty Increases
Penalty increases announced by the U.S. Department of Labor that may be of particular interest include:

• Repeated or willful violations of the Fair Labor Standards Act (FLSA) minimum wage or overtime pay requirements will be subject to a penalty of up to $1,894 per violation (formerly $1,100);
• Willful violations of the Family and Medical Leave Act (FMLA) posting requirement will be subject to a penalty not to exceed $163 for each separate offense (formerly $110) (note: covered employers must post this general notice even if no employees are eligible for FMLA leave);
• Failure to provide employees with a Children’s Health Insurance Program (CHIP) notice will be subject to a penalty of up to $110 per day per violation (formerly $100);
• Failure to provide a Summary of Benefits and Coverage (SBC) will be subject to a penalty of up to $1,087 per failure (formerly $1,000);
• Failure or refusal to file a Form 5500 will be subject to a penalty of up to $2,063 per day (formerly $1,100); and
• Violations of the Occupational Safety and Health Administration’s posting requirement will be subject to a maximum penalty of $12,471 for each violation (formerly $7,000).

Our Compliance by Company Size chart features a summary of key federal labor laws that may apply to a company based on its number of employees.

Proposed Changes to Form 5500 Include Elimination of Filing Exemption for Small Group Health Plans

The U.S. Department of Labor and other federal agencies have released two proposed rules revising the Form 5500 and Form 5500-SF Annual Returns/Reports that are required to be filed by certain employee benefit plans.

Among other changes, the proposed rules would:

• Introduce basic reporting requirements for all group health plans that have fewer than 100 participants and are covered by Title I of the Employee Retirement Income Security Act (ERISA)–most of which are currently exempt from reporting requirements;
• Create a new schedule (Schedule J), by which applicable group health plans would satisfy certain ERISA reporting requirements added by the Affordable Care Act (ACA); and
• Revise the Schedule C reporting requirements to more closely track the information that plan service providers are required to disclose to plan fiduciaries.

The target for implementing the proposed revisions is the Plan Year 2019 Form 5500 Series Annual Returns/Reports, though some form changes may be made earlier or later.

You may review our Benefits Notices Calendar for additional notice and disclosure requirements that apply to group health plans under federal law.

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ACA PCORI FEES:

What is PCORI? When, Why and How Much?

PCORI = Patient-Centered Outcomes Research Trust Fund Fee (IRC 4375, 4376 and 4377):

What:  The PCORI Trust Fund fee is a fee on plan sponsors and issuers of health insurance individual and group policies.  The fee is designed to create a funding for the Patient-Centered Outcomes Research Institute, which is tasked with researching health plans and making informed health decisions by advancing the quality and relevance of evidence-based medicine.

Who: Any fully insured employer with an HRA (Health Reimbursement Account) plan or non-excepted FSA (Flexible Spending Account) plan will need to pay the fee directly to the IRS for any employees participating in the offered HRA or FSA. For fully insured employers who do not offer HRA (Health Reimbursement Account) plans, their issuer, or carrier, are responsible for filing and paying the PCORI fee to the IRS on your behalf.  The fee is included in your monthly premium.  Self-funded employers must complete IRS Form 720 (see attached) and pay the PCORI fee directly to the IRS.  Additionally, if you offer accident / health coverage or major medical insurance, even if under multiple plans, you are subject to the fee.  Retiree-only health or major medical coverage is also subject to the PCORI fee.  The fee also applies to COBRA coverage.  Dental benefits, vision benefits, or HSA (Health Savings Account) plans are not affected by this requirement.

When:  The PCORI fee applies to specified health insurance policies with policy years ending after Sept. 30, 2012, and before Oct.1, 2019, and applicable self-insured health plans with plan years ending after Sept. 30, 2012, and before Oct. 1, 2019.  The PCORI fee is due to the IRS by July 31^st, annually.

How much: The fee is equal to the average number of lives covered during the policy year or plan year multiplied by the applicable dollar amount for that specific year. The amount of the PCORI fee is adjusted annually to reflect inflation in National Health Expenditures, as determined by the Secretary of Health and Human Services. For plan years ending on or after 10/01/2015 and before 10/01/ 2016, the fee of $2.17 per employee is due July 31, 2016 to the IRS.

Calculating the Average Number of Lives: The PCORI Fee is based on the average number of covered lives (employees, spouses and dependents) during the plan year. Only those residing in the U.S. must be counted. If the address on file for the primary covered subscriber is outside the U.S., you may presume that the spouse and dependents also reside outside the U.S. Self-insured plan sponsors may use any of the following methods to calculate their covered lives subject to the PCORI Fee:

1. Actual Count Method: Calculate the sum of the covered lives for each day of the plan year and divide the sum by the number of days in the plan year.
2. Snapshot Method (Factor or Count Methods): Add the total number of covered lives on one selected date in each quarter of the plan year, or an equal number of dates for each quarter, and divide the total covered lives by the number of dates on which a count was made. To count covered lives on a designated date, use either the snapshot factor method or the snapshot count method.
   1. Snapshot Factor Method: The number of covered lives is equal to the sum of the number of primary plan participants with self-only coverage on that date, plus the number of primary participants with other than self-only coverage (e.g., participant plus spouse or family coverage) multiplied by 2.35. (This is the method for those not wishing to count dependents separately.)
   2. Snapshot Count Method: The number of covered lives is the actual number of covered lives (primary participants and all covered dependents) on the designated date.
3. Form 5500 Method: Use the formula that includes the number of participants actually reported on the Form 5500 for the plan year.

Plan sponsors must use only one method in each year, but are not required to use the same method from year to year.

Generally, all individuals who are covered during the policy or plan year must be included in computing the average number of lives covered for that year. Thus, for example, an applicable self-insured health plan must count an employee and his one dependent child as two separate covered lives. The exception to this is for both health reimbursement arrangement (HRA) and flexible spending arrangement (FSA).

When a plan sponsor has multiple plans, FSAs and HRAs will fall under one of the below three categories for paying these fees:

1. Stand-alone HRA or FSA.
2. If the plan sponsor has no other medical healthcare plan with the HRA, then the fee will be paid by the plan sponsor on the average number of covered lives under the HRA. HRA or FSA with an insured medical plan.
3. If the plan sponsor has other medical healthcare plans and that coverage is fully insured, covered lives that were already counted with the medical healthcare plan will need to be counted and paid again for the FSA or HRA plan. The insured carrier will pay the fees for the medical healthcare plan and the plan sponsor will pay the fees for the FSA or HRA plan.

HRA or FSA with a self-funded medical plan. If the plan sponsor has other medical healthcare plans that are self-funded and on the same plan year as the FSA or HRA, then any covered life that was already counted for the medical healthcare plan will not need to be counted and paid again for the FSA or HRA plan.  If the plan sponsor has other medical healthcare plans that are self-funded and NOT on the same plan year as the FSA or HRA, then any covered life that was already counted for the medical healthcare plan will need to be counted and paid again for the FSA or HRA plan.

The IRS allows several different methods for determining the average number of covered lives. You may want to consult your tax professional to discuss which method is best for your organization. For more information on the PCORI fee, please go to http://www.irs.gov/uac/Newsroom/Patient-Centered-Outcomes-Research-Institute-Fee

The information and materials herein are provided for topical general reference purposes only and are not intended to constitute legal, tax or other advice. Opinions on any specific matters and are not intended to replace the advice of a qualified attorney, tax consultant or plan provider. Federal and state laws change frequently and, as such, there is no guarantee as to the accuracy or completeness of the information featured herein. In accordance with IRS Circular 230, this communication is not intended or written to be used, and cannot be used as or considered a ‘covered opinion’ or other written tax advice and should not be relied upon for any purpose other than its intended purpose.

 

 

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We have received many questions from clients regarding Health Savings Accounts and we thought it would be helpful to provide an overview. Health Savings Accounts are part of the movement toward “consumer-driven healthcare”, which is an approach aimed at encouraging patients to make better informed choices about the costs associated with their health care.

An HSA is a personal tax advantaged medical savings account set up to pay qualified medical expenses on a tax-free basis. To be eligible and qualify for an HSA, an individual must be enrolled in a qualified high deductible health plan (HDHP). An HDHP is defined as a plan with a deductible of $1300 or more for an individual and $2600 or more for two or more coverage.

Generally, an adult who is covered by a high-deductible health plan (and has no other first-dollar coverage) may establish an HSA. During 2016, HSA’s allow for tax deductible contribution of up to $3,350 for a self-only plan and $6,750 for coverage of two or more. Additionally, any 55 year old or older subscriber is eligible for a $1,000 catch-up deduction.

 

The advantages of HSA accounts include:

• Exempt from payroll taxes

• Deductible contributions include both earned and unearned income

• Choice of investment types and risks

• Funds can be used at any time/any age for qualified medical expenses

• Can continue to make deductible contributions after employment
• The account owner is able to spend it on eligible health care expenses, invest it, or spend it on consumer goods (although penalties, such as taxes, apply)

• Rollovers

• Portability

 

If you have any further questions on this, feel free to give us a call.

 

 

The information and materials herein are provided for topical general reference purposes only and are not intended to constitute legal, tax or other advice. Opinions on any specific matters and are not intended to replace the advice of a qualified attorney, tax consultant or plan provider. Federal and state laws change frequently and, as such, there is no guarantee as to the accuracy or completeness of the information featured herein. In accordance with IRS Circular 230, this communication is not intended or written to be used, and cannot be used as or considered a ‘covered opinion’ or other written tax advice and should not be relied upon for any purpose other than its intended purpose.

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Changes to Federal Overtime Rules for ‘White Collar’ Workers

A final rule, effective December 1, 2016, updates the regulations governing which executive, administrative, and professional employees (white collar workers) are entitled to the minimum wage and overtime pay protections of the federal Fair Labor Standards Act (FLSA).

Current Rules
The current federal rules provide an exemption from both the FLSA minimum wage and overtime pay requirements for bona fide executive, administrative, and professional employees who meet certain tests regarding their job duties and who are paid on a salary basis at not less than $455 per week ($23,660 per year). “Highly-compensated employees” (HCEs) who are paid total annual compensation of $100,000 or more and meet certain other conditions are also deemed exempt.

Key Changes  
The final rule focuses primarily on updating the salary and compensation levels needed for executive, administrative, and professional workers to be exempt. No changes are being made to the current job duties tests. In particular, the final rule:

• Raises the salary threshold from $455 a week to $913 per week (or $47,476 annually) for a full-year worker;
• Increases the HCE total annual compensation level to $134,004 annually;
• Establishes a mechanism for automatically updating the salary and compensation levels every 3 years, beginning on January 1, 2020; and
• Amends the regulations to allow employers to use nondiscretionary bonuses, incentives, and commissions to satisfy up to 10% of the new standard salary level, so long as employers pay those amounts on a quarterly or more frequent basis.

Note: When both the FLSA and a state law apply, the employee is entitled to the most favorable provisions of each law.

Our section on the Fair Labor Standards Act features additional information on exemptions from the law’s minimum wage and overtime requirements.

 

Employers Should Continue to Use Current Version of Form I-9 Until Further Notice

As a reminder, U.S. Citizenship and Immigration Services has advised that employers should continue using the current version of Form I-9, even though the March 31, 2016 expiration date on the form has passed. The agency recently proposed several revisions to Form I-9 and stated that it will provide updated information about the new version of the form as it becomes available.

Federal law requires employers to hire only individuals who may legally work in the United States–either U.S. citizens or foreign citizens who have the necessary authorization. To comply with the law, employers must verify the identity and employment authorization of each person they hire by completing and retaining Form I-9.

For more information on complying with the employment eligibility verification requirements, please visit our section on Form I-9.

Certain Employers May Receive Marketplace Notices

The Affordable Care Act (ACA) and its accompanying rules require Health Insurance Marketplaces to notify any employer whose employee has enrolled in a Marketplace plan and has been determined eligible for advance premium tax credits and cost-sharing reductions. A sample employer notice that will be used by the federally-facilitated and certain state-based Marketplaces is now available for review. Because these events may trigger employer penalties under the ACA’s “pay or play” provisions, an employer appeal request form has also been provided by the federal government.

Receipt of Notices
Marketplaces must notify employers within a reasonable timeframe following any month of the employee’s eligibility determination and enrollment. Previously released FAQs indicated that the Marketplaces would begin sending out employer notices in spring 2016, with additional notices to follow throughout the year.

Employer Appeals Process
Appeal of an employer notice generally must be made within 90 days. In the appeal, the employer may assert that it provides its employee access to affordable, minimum value employer-sponsored coverage or that its employee is enrolled in employer coverage, and therefore that the employee is ineligible for advance payments of the premium tax credit.

Our Pay or Play section includes step-by-step guidance, worksheets, and calculators that can help employers understand if they will be subject to a penalty and how to calculate it.

6 Factors for Deciding Whether to Pay Interns

Are you planning to hire interns this summer? While it can be tempting to allow such individuals to volunteer at your place of business or pay less than the minimum wage, the fact is that internships are most often considered “employment” subject to the federal minimum wage and overtime rules.

The Fair Labor Standards Act
Under the federal Fair Labor Standards Act (FLSA), interns in the for-profit private sector who qualify as employees typically must be paid at least $7.25 per hour, and not less than one and one-half times the regular rate of pay after 40 hours of work in a workweek.

Note: When both the FLSA and a state law apply, the employee is entitled to the most favorable provisions of each law. Be sure to check your state wage and hour laws for applicable requirements.

The Test for Unpaid Interns
There are some circumstances under which individuals who participate in for-profit private sector internships or training programs may do so without compensation. The determination of whether an internship or training program meets this exclusion depends upon all of the facts and circumstances. The U.S. Department of Labor uses the following six criteria which must be applied when making this determination:

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
2. The internship experience is for the benefit of the intern;
3. The intern does not displace regular employees, but works under close supervision of existing staff;
4. The employer that provides the training derives no immediate advantage from the activities of the intern, and on occasion its operations may actually be impeded;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

If all of the factors listed above are met, an employment relationship likely does not exist under federal law, and the FLSA’s minimum wage and overtime provisions do not apply to the intern. (This exclusion is narrow, because the FLSA’s definition of “employ” is very broad.)

Visit our Employee Pay section for information on other common federal wage issues.

New Rules Apply to Wellness Programs Beginning in 2017

New rules issued by the U.S. Equal Employment Opportunity Commission describe how the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) apply to wellness programs offered by employers that request health information from employees and their spouses. The new rules, which apply beginning in 2017, affect all workplace wellness programs (including those in which employees or their family members may participate without also enrolling in a particular health plan).

Background
The ADA and GINA, which apply to employers with 15 or more employees, generally prohibit employers from obtaining and using information about employees’ own health conditions or about the health conditions of their family members. Both laws, however, generally allow employers to ask health-related questions and conduct medical examinations if the employer is providing health or genetic services as part of a voluntary wellness program.

New Rules
Subject to certain conditions, the new rules generally allow employers to:

• Provide limited incentives as part of wellness programs that make disability-related inquiries or require medical examinations; and
• Offer limited inducements to an employee whose spouse receives health or genetic services offered by the employer–including as part of a wellness program–and provides information about his or her manifestation of disease or disorder as part of a health risk assessment.

In general, the maximum incentive or inducement may not exceed 30% of the total cost of self-only coverage under the applicable health plan. Among other things, the new rules also detail several requirements that must be met in order for participation in a wellness program to be considered voluntary, and require employers to provide employees with a notice clearly explaining what medical information will be obtained, who will receive it, how it will be used, and how it will be kept confidential.

Additional Information
In addition to complying with the ADA and GINA, certain wellness programs must meet specific requirements to satisfy nondiscrimination rules under the federal Health Insurance Portability and Accountability Act (HIPAA). Due to the changing law and the complexity of the requirements that apply to employment-based wellness programs, employers are advised to check with a knowledgeable employment law attorney to ensure that any program complies with all applicable federal and state laws.

Our section on Wellness Programs provides additional details.

Newsletter provided by:

Summit Insurance Advisors
11350 McCormick Road, Executive Plaza III,, Hunt Valley, MD 21031
(410) 584-9600

Please Note: The information and materials herein are provided for general information purposes only and are not intended to constitute legal or other advice or opinions on any specific matters and are not intended to replace the advice of a qualified attorney, plan provider or other professional advisor. This information has been taken from sources which we believe to be reliable, but there is no guarantee as to its accuracy. In accordance with IRS Circular 230, this communication is not intended or written to be used, and cannot be used as or considered a ‘covered opinion’ or other written tax advice and should not be relied upon for any purpose other than its intended purpose.

The information provided herein is intended solely for the use of our clients and members. You may not display, reproduce, copy, modify, license, sell or disseminate in any manner any information included herein, without the express permission of the Publisher. Kindly read our Terms of Use and respect our Copyright.

© 2016 HR 360, Inc. – All rights reserved

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2017 HSA Contribution Limits and Minimum Deductibles

The IRS has released the 2017 inflation adjusted amounts for health savings accounts (HSAs). To be eligible to make HSA contributions, an individual must be covered under a high deductible health plan (HDHP) and meet certain other eligibility requirements.    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.

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 year are 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.

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. Our section on the Family and Medical Leave Act includes additional FMLA forms and notices for use by employers.

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:

1.     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.

2.     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.

3.     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.

New Versions of SBC Template and Related Documents Finalized

Federal agencies have finalized new versions of the summary of benefits and coverage (SBC) template, instructions, uniform glossary, and related documents, which are authorized for use on or after April 1, 2017. Under the Affordable Care Act, group health plans and health insurance issuers are generally required to provide a written SBC to plan participants and beneficiaries at specified times during the enrollment process and upon request.   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.

Additional information can be found in our Summary of Benefits and Coverage (SBC) section.

Newsletter provided by:

Summit Insurance Advisors 11350 McCormick Road, Executive Plaza III,, Hunt Valley, MD 21031 (410) 584-9600

Please Note: The information and materials herein are provided for general information purposes only and are not intended to constitute legal or other advice or opinions on any specific matters and are not intended to replace the advice of a qualified attorney, plan provider or other professional advisor. This information has been taken from sources which we believe to be reliable, but there is no guarantee as to its accuracy. In accordance with IRS Circular 230, this communication is not intended or written to be used, and cannot be used as or considered a ‘covered opinion’ or other written tax advice and should not be relied upon for any purpose other than its intended purpose.

The information provided herein is intended solely for the use of our clients and members. You may not display, reproduce, copy, modify, license, sell or disseminate in any manner any information included herein, without the express permission of the Publisher. Kindly read our Terms of Use and respect our Copyright.

© 2016 HR 360, Inc. – All rights reserved

 

 

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HR News Alert Brought to you by Summit Insurance Advisors April 2016 Issue 5 Q&As About ACA Information Forms for Employees As a result of the new information reporting requirements under the Affordable Care Act (ACA), employers may be fielding questions from employees about the different forms they are receiving with information about their health coverage. The following questions and answers for employees may be helpful: 1. What are the health care tax forms that employees might receive? Employees may receive one or more forms providing information about the health care coverage they had or were offered during the previous year, including: Form 1095-B, which is furnished by health insurance companies, small self-insuring employers, and other providers of minimum essential health coverage. Form 1095-C, which is provided by applicable large employers (ALEs)–generally those with 50 or more full-time employees, including full-time equivalent employees. Individuals that enrolled in coverage through the Health Insurance Marketplace will receive Form 1095-A. 2. How do employees use the information on these forms? An employee uses the information on these forms to verify that the employee, his or her spouse, and any dependents had minimum essential health coverage for each month during the prior year and to report that coverage on his or her federal income tax return. Employees that did not have minimum essential health coverage may be liable for an individual shared responsibility payment. 3. Can employees file their tax returns if they have not received these forms? Yes. Employees should not wait for either Form 1095-B or 1095-C to file their individual income tax returns. Other forms of documentation that may assist in reporting health coverage include insurance cards, explanations of benefits, and Forms W-2 reflecting health insurance deductions. (Employees enrolled in Health Insurance Marketplace coverage will need the information on Form 1095-A to file a complete and accurate tax return.) 4. Should these forms be attached to individual income tax returns? No. Although employees may use the information on the forms to help complete their tax returns, these forms should not be attached or sent to the IRS. The issuers of the forms (e.g., employers or health insurance companies) are required to send the information to the IRS separately. Employees should keep the forms for their records along with other important tax documents. 5. Who should employees contact with questions about these forms? Employees should contact the provider of the form (e.g., the employer or health insurance company), not the IRS, with questions about Form 1095-B or 1095-C. For questions about Form 1095-A, employees should contact the Health Insurance Marketplace. Our section on Information Reporting provides more information on the requirements for employers. New ACA Guidance on SBC Templates, Cost-Sharing Limits, and Extended Transition Relief for Existing Coverage Employers should take note of important new agency guidance affecting a number of Affordable Care Act (ACA) requirements over the next year. Implementation Date for Using New Proposed SBC Template A new FAQ regarding the applicable date for using the new proposed summary of benefits and coverage (SBC) template and associated documents provides the following expected implementation dates: Health plans and issuers that maintain an annual open enrollment period will be required to use the new SBC template and associated documents 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. For health plans and issuers that do not use an annual open enrollment period, use of the new proposed SBC template and associated documents would be required beginning on the first day of the first plan year that begins on or after April 1, 2017. 2017 Cost-Sharing Limits Released New guidance from the U.S. Department of Health and Human Services updates the limit on annual out-of-pocket cost-sharing for coverage of essential health benefits by non-grandfathered group health plans. For 2017, annual out-of-pocket expenses may not exceed $7,150 for self-only coverage or $14,300 for family coverage. Small Businesses May Be Able to Keep Existing Health Coverage Through Policy Years Beginning On or Before October 1, 2017 A previously extended transitional policy which allows health insurance issuers, at their option, to continue small business group coverage that would otherwise be terminated or cancelled has been extended further—to policy years beginning on or before October 1, 2017, provided that all policies end by December 31, 2017. Health insurance issuers that renew coverage under the extended policy are required to provide standard notices to affected small businesses for each policy year. Policies subject to the transitional relief will not be considered to be out of compliance with some of the ACA’s key provisions, including: The requirement to cover essential health benefits; The requirement that any variations in premiums be limited with regard to a particular plan or coverage to age and tobacco use, family size, and geography; and The requirements regarding guaranteed availability and renewability of coverage for employers. Be sure to visit our Health Care Reform section to stay on top of the latest ACA updates. 3 Tax Recordkeeping Tips for Employers Keeping good records not only makes tax filing easier and faster, but it can also help you monitor the progress of your business, prepare your financial statements, and support items reported on your tax returns. Here are three simple tips from the IRS to help you get organized: 1. Save Certain Business Records The following are some of the types of records you should keep: Gross receipts are the income you receive from your business. You should keep supporting documents that show the amounts and sources of your gross receipts. Purchases are the items you buy and resell to customers. Your supporting documents should show the amount paid and that the amount was for purchases. Expenses are the costs you incur (other than purchases) to carry on your business. Your supporting documents should show the amount paid and that the amount was for a business expense. Assets are the property, such as machinery and furniture, that you own and use in your business. You need records to compute the annual depreciation and the gain or loss when you sell the assets. 2. Keep Employment Tax Records The following information should be available for IRS review: Your employer identification number (EIN); Amounts and dates of all wage, annuity, and pension payments; Amounts of tips reported; The fair market value of in-kind wages paid; Names, addresses, social security numbers, and occupations of employees and recipients; Any employee copies of Forms W-2 that were returned to you as undeliverable; Dates of employment; Periods for which employees and recipients were paid while absent due to sickness or injury and the amount and weekly rate of payments you or third-party payers made to them; Copies of employees’ and recipients’ income tax withholding allowance certificates; Dates and amounts of tax deposits you made; Copies of returns filed; Records of allocated tips; and Records of fringe benefits provided, including substantiation. 3. Store and Organize Your Records Business owners should generally keep all employment-related tax records for at least 4 years after the tax is due, or after the tax is paid, whichever is later. The length of time you should keep other documents depends on the action, expense, or event the document records. You can review our section on Employee Records and Files for information on other federal recordkeeping responsibilities for employers. Common Workplace Poster Mistakes and How to Correct Them A number of federal, state, and local laws require employers to display labor posters in their workplaces that include information about relevant employment laws. Employers should be mindful of the following mistakes concerning workplace posters. Mistake #1: Posting the Wrong Posters A good place to start your poster inspection is with the U.S. Department of Labor’s (DOL) online Poster Advisor, an interactive tool that can be used to determine the poster requirements of several federal laws administered by the DOL. Be sure to check with your state labor office for state-specific poster requirements, as well as any industry-specific requirements that may apply to your business. You should also check with your local municipal government, as certain localities may require additional workplace postings. Mistake #2: Posting Outdated Posters Workplace posters are updated from time to time–for example, to reflect changes in the law–so make it a regular practice to check whether the posters displayed in your workplace are the most recent versions available. Mistake #3: Posting the Wrong-Sized Poster Many of the agency links to required workplace posters contain specific information regarding a poster’s size. If you have any questions regarding the required size of a poster, contact the DOL or the applicable state or local agency. Mistake #4: Hanging Posters in the Wrong Place Workplace posters must generally be displayed in a prominent location where all employees can see them, but some posters may have special location requirements. Check for specific requirements for the posters you must display, and choose each poster’s placement carefully. Information regarding the federal requirements and links to downloadable posters are featured in our Federal Poster Requirements section. For state-specific posters, visit our State Laws section, select your state, and click on ‘Posters’ in the left-hand navigation menu.

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Please Note: The information and materials herein are provided for general information purposes only and are not intended to constitute legal or other advice or opinions on any specific matters and are not intended to replace the advice of a qualified attorney, plan provider or other professional advisor. This information has been taken from sources which we believe to be reliable, but there is no guarantee as to its accuracy. In accordance with IRS Circular 230, this communication is not intended or written to be used, and cannot be used as or considered a ‘covered opinion’ or other written tax advice and should not be relied upon for any purpose other than its intended purpose.

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