by admin | Feb 6, 2018 | Benefit Management, Employee Benefits, Group Benefit Plans
As we head into the second month of 2018, companies have already begun the arduous task of submitting budgets and finding ways to cut costs for the new year. One of the most effective ways to combat increasing health care costs for companies is to move to a Self-Funded insurance plan. By paying for claims out-of-pocket instead of paying a premium to an insurance carrier, companies can save around 20% in administration costs and state taxes. That’s quite a cost savings!
The topic of Self-Funding is huge and so we want to break it down into smaller bites for you to digest. This month we want to tackle a basic introduction to Self-Funding and in the coming months, we will cover the benefits, risks, and the stop-loss associated with this type of plan.
THE BASICS
- When the employer assumes the financial risk for providing health care benefits to its employees, this is called Self-Funding.
- Self-Funded plans allow the employer to tailor the benefits plan design to best suit their employees. Employers can look at the demographics of their workforce and decide which benefits would be most utilized as well as cut benefits that are forecasted to be underutilized.
- While previously most used by large companies, small and mid-sized companies, even with as few as 25 employees, are seeing cost benefits to moving to Self-Funded insurance plans.
- Companies pay no state premium taxes on self-funded expenditures. This savings is around 1.5% – 3/5% depending on in which state the company operates.
- Since employers are paying for claims, they have access to claims data. While keeping within HIPAA privacy guidelines, the employer can identify and reach out to employees with certain at-risk conditions (diabetes, heart disease, stroke) and offer assistance with combating these health concerns. This also allows greater population-wide health intervention like weight loss programs and smoking cessation assistance.
- Companies typically hire third-party administrators (TPA) to help design and administer the insurance plans. This allows greater control of the plan benefits and claims payments for the company.
As you can see, Self-Funding has many facets. It’s important to gather as much information as you can and weigh the benefits and risks of moving from a Fully-Funded plan for your company to a Self-Funded one. Doing your research and making the move to a Self-Funded plan could help you gain greater control over your healthcare costs and allow you to design an original plan that best fits your employees.
by admin | Jan 26, 2018 | Compliance, Human Resources
This is a reminder that from February 1 through April 30, 2018, impacted employers are required to post a copy of their 2017 Form 300A (Summary of Work-Related Illnesses and Injuries) in a common area where employee notices are usually available.
This annual requirement may not apply to certain employers that are partially exempt from routinely keeping Occupational Safety and Health Administration (OSHA) injury and illness reports. Partially exempt employers are those:
Partially exempt employers may have to maintain illness and injury reports at the request of OSHA, the Bureau of Labor Statistics (BLS), or a state agency operating under the authority of OSHA or the BLS. Additionally, pursuant to 29 CFR § 1904.39, all employers, even those that are partially exempt, must report to OSHA any workplace incident that results in a fatality, in-patient hospitalization, amputation, or loss of an eye.
Originally Published By ThinkHR.com
by admin | Jan 24, 2018 | Hot Topics, Human Resources, IRS
WHD Revises Test for Unpaid Internships
On January 5, 2018, the U.S. Department of Labor’s Wage and Hour Division (WHD) released a Field Assistance Bulletin (FAB No. 2018-2) establishing that the primary beneficiary test, rather than the six-point test, will determine whether interns at for-profit employers are employees under the federal Fair Labor Standards Act (FLSA).
The primary beneficiary test requires an examination of the economic reality of the intern-employer relationship to determine which party is the primary beneficiary of the relationship. The following seven factors are part of this test:
- The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee — and vice versa.
- The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
- The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
- The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
- The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
- The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
- The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job after the internship.
According to the WHD, under the primary beneficiary test, no one factor is dispositive and every factor is not required to be fulfilled to conclude that the intern is not an employee entitled to the minimum wage. The primary beneficiary test is a distinct shift in analysis because per the six-part test every intern and trainee would be an employee under the FLSA unless his or her job satisfied each of six independent criteria. Courts have held that the primary beneficiary test is an inherently “flexible” test and whether an intern or trainee is an employee under the FLSA necessarily depends on the unique circumstances of each case.
The WHD announced it will conform to the federal court of appeals’ determinations and use the same court-adopted test to determine whether interns or students are employees under the FLSA.
Read the field bulletin
Increased Penalties for Federal Violations
On January 2, 2018, the U.S. Department of Labor (DOL) announced in the Federal Register that penalties for violations of the following federal laws have increased for 2018:
- Black Lung Benefits Act.
- Contract Work Hours and Safety Standards Act.
- Employee Polygraph Protection Act.
- Employee Retirement Income Security Act.
- Fair Labor Standards Act (child labor and home worker).
- Family and Medical Leave Act.
- Immigration and Nationality Act.
- Longshore and Harbor Workers’ Compensation Act.
- Migrant and Seasonal Agricultural Worker Protection Act.
- Occupational Safety and Health Act.
- Walsh-Healey Public Contracts Act.
These increases are due to the requirements of the Inflation Adjustment Act, which requires the DOL to annually adjust its civil money penalty levels for inflation by no later than January 15.
These increased rates are effective January 2, 2018.
Read the Federal Register
OSHA Penalties Increased
On January 2, 2018, the U.S. Department of Labor announced in the Federal Register that Occupational Safety and Health Administration (OSHA) penalties will increase for 2018 as follows:
- Other-than-Serious: $12,934
- Serious: $12,934
- Repeat: $129,336
- Willful: $129,336
- Posting Requirement Violation: $12,934
- Failure to Abate: $12,934
These increases apply to states with federal OSHA programs; rates for states with OSHA-approved State Plans will increase to these amounts as well; State Plans are required to increase their penalties in alignment with OSHA’s to maintain at least as effective penalty levels.
These new penalty increases are effective as of January 2, 2018 and apply to any citations issued on that day and thereafter.
Read the Federal Register
Agencies Release Advance Copies of Form 5500 for Filing in 2018
The Employee Benefits Security Administration (EBSA) the Internal Revenue Service (IRS), and the Pension Benefit Guaranty Corporation (PBGC) released the advance informational copies of the 2017 Form 5500 and related instructions. For small employee benefit plan reports, advance short form copies of 2017 Form 5500-Short Form (SF) and 2017 Instructions for Form 5500-SF were also released with supplemental materials including schedules and attachments.
Read about and download the Form 5500 Series
Originally Published By ThinkHR.com
by admin | Jan 19, 2018 | Compliance, Human Resources, IRS
On January 2, 2018, the U.S. Department of Labor (DOL) published updated, inflation-adjusted penalties for violations of various laws regulated by the DOL and its internal components or divisions, including the Occupational Health and Safety Administration (OSHA). The DOL is required to adjust the level of civil monetary penalties for inflation by January 15 each year pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Inflation Adjustment Act).
Because of the Inflation Adjustment Act, rates for OSHA penalties have increased three times in the last 17 months (August 1, 2016, January 13, 2017, and January 2, 2018). Therefore, for violations occurring after November 2, 2015, the penalty amounts incurred by employers will depend on when the penalty is assessed, as follows:
- If the penalty was assessed after August 1, 2016 but on or before January 13, 2017, then the August 1, 2016 penalty level applies.
- If the penalty was assessed after January 13, 2017 but on or before January 2, 2018, then the January 13, 2017 penalty level applies.
- If the penalty was assessed after January 2, 2018, then the current penalty level applies.
The applicable January 2, 2018 penalty levels for violations of the Occupational Safety and Health Act of 1970 (OSH Act) are as follows:
- Willful violations: $9,239 – 129,936 (up from $9,054 – $126,749 after January 13, 2017 and $8,908 – $124,709 after August 1, 2016)
- Repeated violations: $129,936 (up from $126,749 after January 13, 2017 and $124,709 after August 1, 2016)
- Serious violations: $12,934 (up from $12,675 after January 13, 2017 and $12,471 after August 1, 2016)
- Other-than-serious violations: $12,934 (up from $12,675 after January 13, 2017 and $12,471 after August 1, 2016)
- Failure to correct violations: $12,934 (up from $12,675 after January 13, 2017 and $12,471 after August 1, 2016)
- Posting requirement violations: $12,934 (up from $12,675 after January 13, 2017 and $12,471 after August 1, 2016)
These increases apply to states with federal OSHA programs and states with OSHA-approved state plans. Violations occurring on or before November 2, 2015 are assessed at pre-August 1, 2016 levels.
Employers are encouraged to familiarize themselves with these increased penalties and consult counsel if they have questions about the penalty level applicable to a potential violation.
Originally Published By ThinkHR.com
by admin | Jan 17, 2018 | Human Resources, IRS
On January 11, 2018, the Internal Revenue Service released its income tax withholding tables for 2018 reflecting changes made by the December 2017 tax reform legislation. The updated withholding information provides the new rates for employers to use during 2018. Employers are encouraged to use these tables as soon as possible but must use them by no later than February 15, 2018. Employers should continue to use the 2017 withholding tables until they implement the 2018 withholding tables.
According to the U.S. Treasury, an estimated 90 percent of paycheck recipients are likely to see an increase in their take-home pay by February. However, when employees see these changes in their paychecks depends on how quickly the new tables are implemented by their employers and how often they are paid (usually weekly, biweekly, or semimonthly).
To help individuals identify the correct amount of withholding, the IRS is releasing a revised withholding calculator by the end of February, which will be posted on IRS.gov. The IRS encourages taxpayers to use the calculator to adjust their withholding once it is released.
Changes for 2018 and Looking Forward
The new law makes many changes for 2018 that affect individual taxpayers, including an increase in the standard deduction, repeal of personal exemptions, and changes in tax rates and brackets. In relation to Form W-4, these new withholding tables are designed to work with employees’ current W-4, as filed with their employer; so, there are no steps employees must currently take regarding the new tables and law.
The IRS is also working on revising the Form W-4 to reflect the newly available itemized deductions, increases in the child tax credit, the new dependent credit, and repeal of dependent exemptions. However, there is no set release date for the revised form.
Once released, employees may use the new Form W-4 to update their withholding in response to the new law or changes in their personal circumstances in 2018, and by workers starting a new job. Until a new Form W-4 is issued, employees and employers should continue to use the 2017 Form W-4.
For Now
At this time, employers should be reviewing these new tables and implementing necessary changes. For 2019, the IRS has said that it anticipates making even more changes involving withholding. But don’t despair; the agency provides FAQs, which employers and employee may find useful, and pledges to work with the business and payroll community to encourage workers to file new Forms W-4 next year while sharing information on changes in the new tax law that impact withholding.
Stay tuned though, because 2018 has only just begun.
Originally Published By ThinkHR.com
