by GBS

The American Recovery and Reinvestment Act (ARRA) provided a COBRA premium reduction for eligible individuals who were involuntarily terminated from employment through the end of May 2010. Due to the statutory sunset, the COBRA premium reduction under ARRA is not available for individuals who experience a qualifying event of involuntary termination of employment after May 31, 2010. However, individuals who qualified on or before May 31, 2010 may continue to pay reduced premiums for up to 15 months, as long as they are not eligible for another group health plan or Medicare.

On July 6, Assistant Secretary of Labor Phyllis C. Borzi issued a statement regarding the COBRA premium reduction under the American Recovery and Reinvestment Act (ARRA): For a copy of Assistant Secretary Phyllis Borzi’s statement, click on the following link:
http://www.dol.gov/ebsa/newsroom/2010/ebsa070610.html

The Unemployment Compensation Extension Act of 2010 signed by the President on July 22, 2010, did not include an extension of the COBRA premium reduction.

A model general notice and a model election notice for individuals with a qualifying event after May 31, 2010 can be obtained from the COBRA section on the DOL’s website at:
http://www.dol.gov/ebsa/COBRA.html

These notices are virtually unchanged from the pre-ARRA models provided by the DOL in 2004.

Alexandria, Va. (March 12, 2010) — Wisconsin’s small business owners and other small employers who have come to depend on the outsourced employment solutions of professional employer organizations (PEOs) for payroll, benefits, risk management and human resources are guaranteed tax credits and other economic incentives remain with them under passage of Senate Bill 504 this session.

The bill was unanimously passed by both the Senate and Assembly and updates the provisions of Wisconsin Act 189, which established the original regulatory framework for PEOs. The PEO market has grown substantially since passage of the statute in Wisconsin in 2007. The average PEO serves approximately 200 business clients and 4,000 workers.

“PEOs assume a wide variety of significant employer responsibilities for these small employers, including the delivery of risk management services, said Michael Gotzler of Madison headquartered QTI Human Resources Inc. “They also pay the wages of worksite employees, manage payroll tax payments and compliance, improve compliance with federal and state labor regulations, share human resource management best practices and sponsor many employee benefit programs including health care and retirement savings plans. Ironically it is this shared or co-employment arrangement that lead to the need to clarify that tax credits and economic benefits offered by local government belong to the client and not the PEO.”

Melinda Heinritz, executive director of the Wisconsin Historical Foundation and long-time PEO client of QTI Human Resources, explained, “We rely heavily on the services and expertise of QTI to help us effectively navigate all aspects of human resources management. Doing so allows the Foundation to focus time and energy on fulfilling our mission and executing our core competencies in marketing, membership and fundraising on behalf of the Wisconsin Historical Society.”

Gotzler worked with the PEO industry’s trade association, the National Association of Professional Employer Organizations (NAPEO) and the Department of Regulation and Licensing to ensure the original intent of the act provided a layer of safeguards and oversight for small business owners and their employers in PEO outsourcing arrangement. Under the original law, PEOs were wrongly classified as temporary help agencies leading to some of the administrative confusion.

As in 34 other states, PEOs in Wisconsin are required to maintain minimum financial standards, file annual audited financial statements, and register with the Department of Regulation and Licensing.

NAPEO says the concept of regulating PEOs is not a new one. The provisions contained in this bill are based on model legislation. “Over the past 25 years, these standards and requirements have been tested and refined to strike the balance of the need for responsible regulation,” said Milan Yager, president and CEO of NAPEO. NAPEO represents the $68 billion industry, which has experienced double digit growth for the past five years.

The bill was sponsored by Senator Bob Wirch and led through the Assembly by Representative Steve Hilgenberg, who introduced companion legislation Assembly Bill 716.

About NAPEO

As the recognized Voice of the PEO Industry,® NAPEO represents nearly 400 professional employer organizations (PEOs). The PEO industry has matured to $68 billion with double digit growth annually since 2004. As NAPEO enters its 25th year, the potential market remains promising with high client retention rates, a projected increase in revenues for 2010, and the current untapped market now serving 300,000 business owners and 2 to 3 million workers. PEOs allow clients to “reduce costs and free up time to devote to revenue generating activities, improvements that can be instrumental to gaining competitive advantage,” according to research by the Society of Human Resource Management Foundation. To learn more about how PEOs contribute to small businesses’ success, visit the NAPEO Web site at www.napeo.org.

About Staff One

Founded in 1988, Staff One is a leader in the Human Resources
Outsourcing industry with an ESAC accredited and bonded PEO service
offering. The Company is a preferred provider of outsourced human resources
management services that include, benefits and payroll administration,
health and workers compensation insurance programs, personnel records
management, employer liability management, employee performance management
and employee training and development services to small and medium-sized
businesses. Staff One is headquartered in Durant, Okla., with offices
in Dallas, Little Rock, Ark., Nashville, Tenn., and Tulsa, Okla. For
more information, visit www.staffone.com.