For questions or to learn more: Alyshia Foster 214-461-1129 or alyshia.foster@staffone.com

The recent passage of the Patient Protection & Affordable Care Act (H.R. 3590) and the Health Care & Education Affordability Reconciliation Act of 2010 (H.R. 4872) will impact every business. How will it affect you? For your convenience, we have created a chronological summary for employers in general and also a bonus edition for small business owners.

Summary of the Legislation by Number of Employees:
50 employees or more | 100 employees or less | 25 or less

Effective January 1, 2014
**Applies to firms with greater than 50 employees

• Promoting Employer Responsibility. The Act requires employers with 50 or more employees who do not offer health coverage to their employees to pay $2,000 annually for a “full-time employee” (i.e., an employee working 30 or more hours per week).

• The 50-employee threshold is based on the employer’s average number of employees on business days during the preceding calendar year.
• Both full-time and part-time employees are considered in determining whether the employer has 50 or more employees; however, the number of part-time employees to be counted is determined by dividing the aggregate number of hours of service for those part-time employees for each month by 120.
• The $2,000 penalty then applies only to full-time employees who work 30 or more hours per week.
• In order to encourage employers to expand beyond 50 employees, the first 30 employees are not included in calculating the applicable penalty amount.
• The penalty can also increase to $3,000 for a full-time employee receiving a federal tax credit in the exchange where the employer offers health coverage, but that coverage would be deemed “unaffordable” because the employee has to pay more than 9.8 percent of his or her income, or the employer contributes less than 60 percent of the actuarial value of the plan.
• Therefore, while employers are not required to offer health coverage under the Act, significant penalties may be imposed on those employers that do not offer it or that only offer health coverage deemed “unaffordable.”
• In addition, employers may still impose a waiting period for coverage without being subject to a penalty, but this waiting period may not exceed 90 calendar days.

Effective January 1, 2011
**Applies to Firms with 100 employees or less

• Cafeteria Plans. The Act creates a Simple Cafeteria Plan to provide a vehicle through which small employers can provide tax-free benefits to their employees.

• Small employers are defined as employers who on average employ 100 or fewer employees over the previous two years. The Act aims to ease the administrative burden of sponsoring a cafeteria plan for such small employers.
• The Act also exempts small employers who make contributions for employees under a Simple Cafeteria Plan from pension-plan nondiscrimination requirements applicable to highly compensated and key employees.

Effective January 1, 2014

**Applies to firms with 100 employees or less

• Exchanges. The Act provides for the creation of health-insurance exchanges at the state level in 2014, where individuals and small employers would be able to buy health coverage in a manner similar to that of larger employers. Initially, the state exchanges would be open to individuals and small employers with 100 or fewer employees, unless the state opts to limit this to

organizations with 50 or fewer employees. Beginning in 2017, states would have the option to expand the exchange to larger employers.

**Applies to Firms with 100 employees or less

• Wellness Programs. The Act provides that employers can offer increased incentives to employees for participation in a wellness program or for meeting certain health-status targets. The Act permits rewards or penalties, such as premium discounts of up to 30 percent of the cost of coverage. Existing wellness regulations are limited to wellness incentives of up to 20

percent of the total premium, provided that certain conditions are met. In addition, the Act creates a $200 million, five-year program to provide grants to certain small employers (fewer than 100 employees) for comprehensive workplace-wellness programs. The grants would go to small employers that did not have a wellness program when the Act was enacted.

Effective January 1, 2010
**Applies to firms with 25 employees or less

• Small-Business Tax Credit. A small-business tax credit of up to 35 percent of the employer’s contribution to purchase health insurance for employees is now established for “qualified small employers.”

• A “qualified small employer” is an employer that has no more than 25 full-time employees for the taxable year and the average annual wages of those employees do not exceed $50,000 (indexed for inflation.
• Employers with 10 or fewer employees and average annual wages of less than $25,000 would be eligible for the full credit.

• Small-Business Tax Credits. When health-insurance exchanges are established in 2014, the available tax credit will increase to 50 percent of premiums.

For questions or to learn more: Alyshia Foster 214-461-1129 or alyshia.foster@staffone.com

The recent passage of the Patient Protection & Affordable Care Act (H.R. 3590) and the Health Care & Education Affordability Reconciliation Act of 2010 (H.R. 4872) will impact every business. How will it affect you? For your convenience, we have created a chronological summary for employers in general and also a bonus edition for small business owners.

Summary of the Legislation by Effective Date:
2010 | 2011 | 2013 |  2014 | 2018

Effective January 1, 2010
• Medicare Part D. The Act provides a $250 rebate check for all Part D enrollees who enter the “donut hole.” Currently the “donut hole” coverage gap falls between $2,830 and $6,440 in total drug spending by Part D enrollees.

• Adoption Tax Credit. The Act increases the adoption tax credit and adoption assistance exclusion by $1,000 (now set at $13,150), makes the credit refundable and extends the credit
through 2011.

Effective 90 Days After Enactment (i.e., June 21, 2010)
• Early Retirees. The Act establishes a temporary reinsurance program to provide reimbursement to employer health plans offering health coverage for early retirees (ages 55 to 64) and their families. The reinsurance program would reimburse employer health plans for 80 percent of the cost of benefits provided per enrollee in excess of $15,000 and below $90,000. The employer health plans are required to use the funds to lower costs assumed directly by participants and beneficiaries, and the program incentivizes plans to implement programs and procedures to better manage chronic conditions.

• Pre-Existing Conditions. The Act provides that group-health plans and health-insurance issuers offering group or individual health-insurance coverage may not impose any pre-existing condition exclusions with respect to such plans or coverage. Therefore, group-health plans that include such pre-existing condition exclusions will no longer be permitted.

Effective 90 Days After Enactment (i.e., June 21, 2010)
• Pre-Existing Conditions. The Act provides that group-health plans and health-insurance issuers offering group or individual health-insurance coverage may not impose any pre-existing condition exclusions with respect to such plans or coverage. Therefore, group-health plans that include such pre-existing condition exclusions will no longer be permitted.

Effective Six Months After Enactment (i.e., September 23, 2010)
• Additional Protections for Children. The Act: (1) bars health-insurance companies from imposing pre-existing condition exclusions on coverage for children and (2) requires any group-health plan or plan in the individual market that provides dependent coverage to continue to make that coverage available until the child turns 26 years of age, if the child does not have access to other health coverage (without regard to the child’s marital status).

• Lifetime Limits. The Act prohibits insurers from imposing lifetime limits on benefits. Additionally, beginning in 2014, the Act prohibits insurers from imposing annual limits on the amount of coverage an individual may receive.

• Preventive Health Services. The Act requires that all new group-health plans and plans in the individual market provide first-dollar coverage for preventive services (i.e., not subject to a deductible). Examples of preventive services include well-childcare visits and certain immunizations.

Effective January 1, 2011
• W-2 Reporting. The Act requires employers to disclose the value of the benefit provided by the employer for each employee’s health-insurance coverage on the employee’s annual Form W-2. This is a W-2 reporting obligation and will not result in additional taxable income to employees.

• Additional Tax for Health Savings Account (HSA) Withdrawals. The Act increases the additional tax for Health Savings Account withdrawals prior to age 65 that are not used for qualified medical expenses from 10 percent to 20 percent.

• Medicare Part D. The Act provides a 50-percent discount on all brand-name drugs and biologics in the “donut hole” and begins phasing in additional discounts in brand-name and generic drugs to completely fill the “donut hole” by 2020 for all Part D enrollees.

Effective January 1, 2013
• Healthcare Flexible Savings Accounts. The Act limits the amount of contributions to healthcare reimbursement flexible-spending accounts to $2,500 per year. No limit was previously imposed upon healthcare reimbursement flexible-spending accounts. This new limit will raise healthcare costs for employees with unreimbursed healthcare expenses in excess of $2,500 annually, to the extent the employee currently has a flexible-spending account that permits contributions in excess of $2,500—and would potentially create increased taxable income for employees.

• Limiting Deductibility of Executive Compensation for Insurance Providers. With respect to services performed after 2009, the Act limits the deductibility of executive compensation under section 162(m) of the Internal Revenue Code for insurance providers if at least 25 percent of the insurance provider’s gross premium income from health business is derived from health-insurance plans that meet the minimum creditable-coverage requirements. The deduction is limited to $500,000 per taxable year (as opposed to the typical $1,000,000 limitation) and applies to all officers, employees, directors and other workers or service providers performing services for, or on behalf of, a covered health-insurance provider.

• Medicare Part D. The Act eliminates the federal income-tax deduction for the 28-percent subsidy for employers who maintain prescription drug plans for their Part D eligible retirees.

• Itemized Deduction for Medical Expenses . The Act increases the income threshold for claiming the itemized deduction for medical expenses from 7.5 percent to 10 percent. Individuals over age 65 would be able to claim the itemized deduction for medical expenses at 7.5 percent of adjusted gross income through 2016.

Effective January 1, 2014
**Applies to Firms with 50 or more employees
• Promoting Employer Responsibility. The Act requires employers with 50 or more employees who do not offer health coverage to their employees to pay $2,000 annually for a “full-time employee” (an employee working 30 or more hours per week).

• The 50-employee threshold is based on the employer’s average number of employees on business days the preceding calendar year. Both full-time and part-time employees are considered in determining whether the employer has 50 or more employees; however, the number of part-time employees to be counted is determined by dividing the aggregate number of hours of service for those part-time employees for each month by 120. The $2,000 penalty then applies only to full-time employees.
• In order to encourage employers to expand beyond 50 employees, the first 30 employees are not included in calculating the applicable penalty amount.
• The penalty can also increase to $3,000 for a full-time employee receiving a federal tax credit in the exchange where the employer offers health coverage, but that coverage would be deemed “unaffordable” because the employee has to pay more than 9.8 percent of his or her income, or the employer contributes less than 60 percent of the actuarial value of the plan. Therefore, while employers are not required to offer health coverage under the Act, significant penalties may be imposed on those employers that do not offer it or that only offer health coverage deemed “unaffordable.”
• In addition, employers may still impose a waiting period for coverage without being subject to a penalty, but this waiting period may not exceed 90 calendar days.

**Note: firms with more than 200 employees must provide coverage, of which an employee can opt out.

Effective January 1, 2014 Continued
• Wellness Programs. The Act provides that employers can offer increased incentives to employees for participation in a wellness program or for meeting certain health-status targets. The Act permits rewards or penalties, such as premium discounts of up to 30 percent of the cost of coverage. Existing wellness regulations are limited to wellness incentives of up to 20 percent of the total premium, provided that certain conditions are met.

• Waiting Period. In addition, employers may still impose a waiting period for coverage without being subject to a penalty, but this waiting period may not exceed 90 calendar days.

• Exchanges. The Act provides for the creation of health-insurance exchanges at the state level in 2014, where individuals and small employers would be able to buy health coverage in a manner similar to that of larger employers. Initially, the state exchanges would be open to individuals and small employers with 100 or fewer employees, unless the state opts to limit this to organizations with 50 or fewer employees. Beginning in 2017, states would have the option to expand the exchange to larger employers.

Effective January 1, 2018
• High-Cost Plan Excise Tax. The Act imposes a nondeductible excise tax of 40 percent on insurance companies and plan administrators (including self-insured plans) for any health-insurance plan where the combined annual employer/employee premiums exceed the threshold of $10,200 for self-only coverage and $27,500 for family coverage. The tax would apply to the amount of the premium in excess of the threshold. An additional threshold amount of $1,650 for singles and $3,450 for families would be available for retired individuals over the age of 55 and for plans that cover employees engaged in high-risk professions (e.g., law-enforcement professionals, EMTs, construction and mining).

adapted from the IRS

Getting ready to file your tax return?  Make sure you have all your documents before you start. You should receive a Form W-2, Wage and Tax Statement from each of your employers.  Employers have until February 1, 2010 to send you a 2009 Form W-2 earnings statement. For employers who are clients of Staff One, W-2 were sent out during the first week in January.

If you haven’t received your W-2, follow these four steps:

1. Contact your employer (if your employer is a client of Staff One, contact us) If you have not received your W-2, contact your employer to inquire if and when the W-2 was mailed.  If it was mailed, it may have been returned to the employer because of an incorrect or incomplete address.  After contacting the employer, allow a reasonable amount of time for them to resend or to issue the W-2.

2. Contact the IRS If you do not receive your W-2 by February 16th, contact the IRS for assistance at 800-829-1040. When you call, you must provide your name, address, city and state, including zip code, Social Security number, phone number and have the following information:

• Employer’s name, address, city and state, including zip code and phone   number
• Dates of employment
• An estimate of the wages you earned, the federal income tax withheld, and when you worked for that employer during 2009. The estimate should be based on year-to-date information from your final pay stub or leave-and-earnings statement, if possible.

3. File your return You still must file your tax return or request an extension to file by April 15, even if you do not receive your Form W-2. If you have not received your Form W-2 by April 15th, and have completed steps 1 and 2, you may use Form 4852, Substitute for Form W-2, Wage and Tax Statement. Attach Form 4852 to the return, estimating income and withholding taxes as accurately as possible.  There may be a delay in any refund due while the information is verified.

4. File a Form 1040X On occasion, you may receive your missing W-2 after you filed your return using Form 4852, and the information may be different from what you reported on your return. If this happens, you must amend your return by filing a Form 1040X, Amended U.S. Individual Income Tax Return.

Form 4852, Form 1040X, and instructions are available on the IRS Web site, IRS.gov or by calling 800-TAX-FORM (800-829-3676).

• 70% of Employers are non-compliant with wage and hour laws, according to the Department of Labor (DOL).
• 2 out of 3 workplace-related lawsuits that go to trial are won by the employee.
• $10.3 Million: Civil penalties assessed against employers by the Wage &  Hour Division of the DOL in 2007.
• $220.6 Million:  Damages paid by employers for wage and hour non compliance in 2007.
• 11.2 Million:  The jury award against Mary Kay Cosmetics for classifying beauty “consultants” as independent contractors.
• $650,000:  The average jury award to plaintiffs for damages in workplace-related lawsuits.
• 88,846:  Number of violations recorded by OSHA inspectors in 2007, of which 67,176 were serious.
• $1 million: Potential per-occurrence fine for failure to safeguard personal/non-public information against identity theft under the Gramm/Leach/Bliley safeguard Bill.

At home, most of us would be outraged if we thought someone was listening to our conversations or looking at our computers. But what happens when we go to work?

Generally speaking, an employer obtains the right to monitor internet usage, e-mails, and phone calls in the workplace without the consent of the employee. In 1986 Congress passed the Electronic Communications Privacy Act (ECPA). The act states that one is liable if they “intentionally intercept, use or disclose any wire, oral or electronic communications.” However, there are many exceptions to the ECPA such as the consent exception, business use, and provider exception that leave the issue of employee privacy open to broad interpretation. There are certain circumstances where employees may have rights.

For example, if an employer is monitoring phone calls and realizes the call is personal, they must stop monitoring the call immediately. However, if the employer has told employees not to make personal calls on business phones, then the employee takes the risk that those phones may be monitored. Also, union contracts may limit an employer’s ability to monitor e-mails or phone calls. There also may be additional rights in the state of California.

The fact is, three out of four companies monitor employee activities in one form or another. 63% of those companies track internet use, 47% review e-mails, 15% use video surveillance, 12% monitor phone calls, and 8% review voicemail messages. Employees need to be aware that they can be monitored if they are using company property such as computers and phones. Over the last couple of years, social networks have become increasingly popular and a growing concern for employers. The concern that employers are losing productivity has caused an increase in electronic monitoring.

Because workplace privacy laws are few and weak, employers can monitor employees, and there is virtually little to no protection. So with that, a good general rule is to assume someone is watching and don’t take any chances! Take personal calls on a cell phone and use your personal computer for personal use.

References:

http://www.workplacefairness.org/sc/privacy.php

http://www.privacyrights.org/fs/fs7-work.htm

http://jobsearchtech.about.com/od/laborlaws/a/work_privacy.htm

http://www.llrx.com/congress/090400.htm

The $856 billion health care reform proposal released Sept. 16 by Senate Finance Committee Chairman Max Baucus (D-Mont.) does not require that employers provide health care benefits. Starting in 2013, however, companies with more than 50 workers that do not offer health coverage would have to reimburse the federal government for each full-time employee receiving a health care affordability tax credit in the new health care exchanges designed to help individuals find affordable policies.

While there is no provision to prevent employers from dropping coverage, committee staff members said most employers believe that providing coverage gives them a competitive advantage in attracting and retaining the best workers.

Under the proposal, businesses with fewer than 25 employees and average annual wages of less than $40,000 could receive credits up to 35 percent for tax years 2011 and 2012. Annual contributions to flexible spending accounts would be limited to $2,000 and FSA funds could not be used to buy over-the-counter medications without a prescription.

The Senate Finance Committee is scheduled to start debating the proposal on Sept. 22.

For a copy of the legislation, click here.

The Uniformed Services Employment and Reemployment Rights Act (USERRA) clarifies and strengthens the Veterans’ Reemployment Rights (VRR) Statute. USERRA protects civilian job rights and benefits for veterans and members of Reserve components.

USERRA also makes major improvements in protecting service member rights and benefits by clarifying the law, improving enforcement mechanisms, and adding Federal Government employees to those employees already eligible to receive Department of Labor assistance in processing claims.

USERRA establishes the cumulative length of time that an individual may be absent from work for military duty and retain reemployment rights up to five years (the previous law provided four years of active duty, plus an additional year if it was for the convenience of the Government). There are important exceptions to the five-year limit, including initial enlistments lasting more than five years, periodic National Guard and Reserve training duty, and involuntary active duty extensions and recalls, especially during a time of national emergency. USERRA clearly establishes that reemployment protection does not depend on the timing, frequency, duration, or nature of an individual’s service as long as the basic eligibility criteria are met.

In addition, USERRA provides protection for disabled veterans, requiring employers to make reasonable efforts to accommodate the disability. Service members convalescing from injuries received during service or training may have up to two years from the date of completion of service to return to their jobs or apply for reemployment.

USERRA provides that returning service-members are reemployed in the job that they would have attained had they not been absent for military service (the long-standing “escalator” principle), with the same seniority, status, and pay, as well as other rights and benefits determined by seniority. USERRA also requires that reasonable efforts (such as training or retraining) be made to enable returning service members to refresh or upgrade their skills to help them qualify for reemployment. The law clearly provides for alternative reemployment positions if the service member cannot qualify for the “escalator” position. USERRA also provides that while an individual is performing military service, he or she is deemed to be on a furlough or leave of absence and is entitled to the non-seniority rights accorded other individuals on non-military leaves of absence.

Health and pension plan coverage for service members is provided for by USERRA. Individuals performing military duty of more than 30 days may elect to continue employer sponsored health care for up to 24 months; however, they may be required to pay up to 102 percent of the full premium. For military service of less than 31 days, health care coverage is provided as if the service member had remained employed. USERRA clarifies pension plan coverage by making clear that all pension plans are protected.

The period an individual has to make application for reemployment or report back to work after military service is based on time spent on military duty. For service of less than 31 days, the service member must return at the beginning of the next regularly scheduled work period on the first full day after release from service, taking into account safe travel home plus an eight-hour rest period. For service of more than 30 days but less than 181 days, the service member must submit an application for reemployment within 14 days of release from service. For service of more than 180 days, an application for reemployment must be submitted within 90 days of release from service.

USERRA also requires that service members provide advance written or verbal notice to their employers for all military duty unless giving notice is impossible, unreasonable, or precluded by military necessity. An employee should provide notice as far in advance as is reasonable under the circumstances. Additionally, service members are able (but are not required) to use accrued vacation or annual leave while performing military duty.

The Department of Labor, through the Veterans’ Employment and Training Service (VETS), provides assistance to all persons having claims under USERRA, including Federal and Postal Service employees.

Answers to Frequently Asked Questions For Reservists Being Called To Active Duty may be viewed at: http://www.dol.gov/ebsa/faqs/faq_911_2.html.

To access a copy of the final rule and poster, visit http://www.dol.gov/vets/programs/userra/poster.htm.

With a new administration and a dismal economy, new and amended laws are on the horizon to transform the ever-changing world we call human resources.  Among these changes, Michelle Obama is making work/family balance a top priority in her role of first lady.  So what does this mean?

For the first time, the government is attempting to mandate paid sick days and paid leave for businesses.  It is proposed that employers with 11 or more employees provide nine paid sick days for full-time workers and smaller businesses provide five days.  While these particular mandates are still in the early stages, activists predict quick action on the Healthy Families Act, which would require employers with at least 15 employees to provide seven paid sick days per year.

Milwaukee, San Francisco, and Washington D.C. have already voted to make their cities require employers to provide sick days.  Those opposing these mandates state that they discourage people from opening new businesses and that employers are already struggling as it is.  Those in support of the new mandates state that the U.S. currently ranks behind other nations and this would give relief to working families.  For example:

The U.S. is one of only four countries out of 173 that does not guarantee some form of paid maternity leave; the other countries are Liberia, Swaziland, and Papua New Guinea.  Sixty-six other countries ensure that fathers either receive paid paternity leave or have a right to paid parental leave.

At least 145 countries provide paid sick days, with 136 providing a week or more annually, while the U.S. has no federal law providing for paid sick days.