by admin | Mar 20, 2019 | Compliance, Human Resources
Even when you proactively anticipate all the people risks that have the potential to impact your workplace, it’s easy to convince yourself there is no risk to you — that it will never happen here.
You may think no one at your workplace will harass anyone, no one will sue you over an honest mistake made in administering workers’ comp, no one will accidentally cause a data breach, or no one will ever bring a weapon to the office. You might think managing people risk is extremely time consuming and not worth the effort. Rationalizations like this may lead you to believe you don’t need to do anything to prevent these risks.
However, these risks are very real and can happen anywhere, at any time. It’s imperative you cover all of your bases, and it’s actually very straightforward, especially if you have a partner on your side.
Ideally, you will integrate people risk management (PRM) with your business practices so it’s not something extra to do; it’s a way of doing things you already do. PRM can be a lens through which you look through when evaluating your policies, procedures, and other aspects of how you run your company.
Acknowledging and Preventing Risk: A Four-Step Plan
When you are anticipating risk, you are thinking about what might happen. Then you need to look at what you should do when something actually happens and it’s time to acknowledge the risk.
Maybe a law passes or regulation is finalized, you realize your pay policies are not in compliance with the law, or an employee informs you they have been prescribed medical marijuana but you have a very strict drug use policy. What tools to do you have to deal with that?
Once you acknowledge the risks inherent in these issues, there are four steps to putting a plan of action into place to prevent the risks from causing damage to your company’s bottom line, its reputation, or to its level of employee engagement:
- Understand when and how the risk will impact you. If it’s a law or regulation, when does it go into effect? Is it an ongoing issue or something that can be addressed and then set aside? What are the potential penalties or pitfalls presented by the risk?
- Determine the best course of action. Does the situation require simple changes to operations or a more complicated approach? Where do changes need to be implemented — in handbook policy updates, procedural documentation, or new training programs?
- Craft communication strategies around the risk. Who needs to know what, and how much information should be given to people at each level? What information should be held back to preserve confidentiality? What information is only relevant to a handful of people (such as when an OSHA report is due) and what information is relevant to everyone (such as who needs sexual harassment training in your state)?
- Decide what change management activities are required to get buy-in. It’s one thing to decide to do something but getting people ready to embrace the change is another thing. If change management is good, then the changes will take hold, the implementation will be smooth, and the risks will be lower.
by Larry Dunivan, CEO of ThinkHR
Originally posted on ThinkHR.com
by admin | Mar 5, 2019 | Compliance, Human Resources
We are all drinking from a firehose of news and information — all day, every day. With this deluge of information, it can be difficult to determine what’s truly important to know. But being reactive is not acceptable. You need to know what’s coming, what affects you, and how it affects you.
Take, for example, legislative changes — 80 percent don’t require your attention, but the 20 percent you need to act on can easily get lost in the noise. It’s the 20 percent that expose your business to risk, but how do you know which 80 percent of information you can safely ignore?
Paying attention to the right information at the right time and setting the rest aside – knowing what you need to know – is essential to anticipating and understanding risk.
Where People Risk Management Comes In
People risk management starts with anticipating and understanding what presents risks to your business. It’s the idea you can look at something, understand it, digest it, and know if and how you need to act on this information. It’s a complicated sequence that no one has time to do, which is why you need a trusted and knowledgeable partner who:
- Knows what’s in the pipeline, such as newly-introduced bills that have the potential to become law.
- Keeps an eye on at what’s actually happening that may affect employers, such as when bills pass, agencies issue directives, or courts rule on cases.
- Determines what presents any type of risk to employers – such as litigation, noncompliance, or reduced employee engagement – and what doesn’t require action.
- Communicates promptly, consistently, and effectively, so you can use this knowledge to update your policies, stay on top of compliance requirements, and incorporate best practices in a way that reduces risk for your unique business.
Understanding People Risks: An Example
Often, when we think about risks to employers, we focus on insurable risks because they are well understood and easily quantifiable. It’s important to address these risks with solid prevention plans and insurance products, but it’s the uninsurable categories of risks, particularly people risks, that can catch us off guard and unprepared.
People risks can result not just in financial loss, but damage to employee engagement and company culture. They tend to be more subject to interpretation and can be very abstract.
Take, for example, the consequences of hiring the wrong employee or losing a valued employee. When this happens, you bear the cost of lost productivity and the time and money invested in recruiting, hiring, and onboarding. You also risk litigation if policies are not adequately documented, communicated, and followed should the employee claim discrimination, harassment, or disability accommodation is to blame for their separation from the company.
Hiring the wrong employee or losing a valued employee also carries the risk of negatively affecting employee engagement, which is a well-documented predictor of business outcomes. If it happens regularly, or there is even one instance handled poorly, your employment brand can be tarnished. For example, it could result in bad reviews on recruiting sites, chipping away at your recognition as an employer of choice.
Be in the Know
Whether it’s knowing how legislative changes affect your business or what risks are inherent in day-to-day employee management issues, people risk management starts with a solid knowledge base that evolves continuously to keep up with the latest employment trends, news, regulation, and information.
by Larry Dunivan, CEO of ThinkHR
Originally posted on ThinkHR.com
by admin | Jan 17, 2019 | Benefit Management, Compliance, FMLA
You’re ready when the call comes in. Your client’s employee was seriously injured on the job. You reassure the client that your team has them covered, and you outline their workers’ compensation policy provisions, administrative claim filing process, and accident site investigation protocols.
You check in later in the week. As a result of the accident site investigation, the employer’s worksite processes are updated, equipment is modified, and employees are being trained to prevent future accidents like this one. Employee training records are updated, the OSHA injury/illness logs are completed, and the safety team is monitoring the new processes and systems.
The employee is not back to work, but is progressing well with medical treatment and is receiving wage replacement provided by the policy. Everything is well documented so that the client is ready in the event of an OSHA or state safety audit/inspection.
The client appreciates the extra service and professional advice you’ve given to make the best of the unfortunate accident. You’re satisfied that this situation is under control and make a note to follow up with them in the next few weeks. Your job on this claim is done … or is it?
Important Leave Details Cannot be Overlooked
Your goal is to advise your clients of all risks affecting their business, and it’s likely you haven’t spent much time thinking about the impact of uninsurable HR-related business risks or opportunities to mitigate them. In this situation with an injured worker, there are other employment laws and benefits considerations besides state workers’ compensation rules that your client should factor in when managing time off and return to work.
Although workers’ compensation eligibility, coverage, and benefits rules vary from state to state, most employees are covered when the occurrence is job-related. Depending upon the employer size and type of injury or illness suffered by the employee, the employee also may be entitled to medical and/or disability-related protections under two federal laws: the Americans with Disabilities Act (ADA) and the Family and Medical Leave Act (FMLA). To make things even more complicated, some states have enacted their own disability and family and medical leave laws, some of which provide greater amounts of leave and benefits than the federal rules. Failure to look at the entire situation and take these laws into consideration can prove costly to your client.
Counsel your client to consider the following:
- If the employee has a serious health situation requiring time off the job, then FMLA may apply.
- If the employee is disabled, the ADA may apply.
The bottom line is that when employees need time off because of a medical or disability-related issue, it is important to remember that they may have rights under all of these laws at the same (or different) times for the same illness or injury. Each situation needs to be reviewed very carefully, so that the right amounts of time off to manage the condition are provided, and that benefits, compensation, notifications, and other protections are managed.
Avoidable Mistake #1
The most common mistake that employers make with work-related employee injuries/illnesses: Not considering and/or designating FMLA leave concurrently with a workers’ compensation claim. This can result in legal claims for failure to provide benefits, as well as additional costs to the business.
For the claim you just handled, let’s say that the injured employee is off work on temporary total disability for 16 weeks. His doctor then releases him to return to light-duty work, and your client offers him a light-duty job. If they had not properly designated that employee’s time off as FMLA leave, the employee may be able to reject the offer of light-duty work and then be entitled to up to 12 additional weeks of unpaid FMLA leave. Additionally, your client would also be required to keep the employee on their health insurance through those 12 additional weeks of unpaid leave and return him to his former job when he finally returns to full-duty work.
If the client had designated the leave concurrently at the time of the injury, the FMLA job and benefits protections would terminate after the first 12 weeks, while the employee was still on temporary total disability. The employee would then have four more weeks of workers compensation temporary disability, without FMLA protections for additional time off or benefits continuation beyond the wage replacement and benefits provided under workers compensation.
Here’s why: FMLA is a federal law that provides employees up to 12 weeks of unpaid leave per year for specific reasons, including a serious health condition due to a work-related injury or illness. FMLA applies to:
- Private employers with 50 or more employees working within 75 miles of the employee’s worksite; and
- All public agencies and private and public elementary and secondary schools, regardless of the number of employees.
Employees are eligible to take FMLA leave if they have:
- Worked for their employer for at least 12 months;
- Worked for at least 1,250 hours over the 12 months immediately prior to the leave; and
- There are at least 50 employees working within 75 miles of the employee’s worksite.
Note: The 12 months of employment do not need to be consecutive, which means that any time previously worked for the same employer can be used to meet the requirement unless the break in service lasted seven years or more. Some exceptions apply.
Within the context of a work-related injury or illness, the most common serious health conditions that qualify for FMLA leave are:
- Conditions requiring an overnight stay in a hospital or other medical care facility; and
- Conditions that incapacitate the employee for more than three consecutive days and have ongoing medical treatment (either multiple appointments with a healthcare provider, or a single appointment and follow-up care such as prescription medication).
Generally, basic first aid and routine medical care are not included unless hospitalization or other complications arise.
Employers must also consider compliance with state “mini-FMLA” laws that cover an employee’s serious health condition. California, Connecticut, Maine, Oregon, Rhode Island, Vermont, Washington, Wisconsin, and the District of Columbia have enacted medical leave laws impacting private employers. Massachusetts medical leave law provides for leave benefits beginning January 2021, with proposed regulations to be published in March 2019. Other states are considering similar laws.
Avoidable Mistake #2
The second common mistake that employers make with work-related employee injuries/illnesses: Not considering the ADA requirements for entering into an interactive process for reasonably accommodating an employee’s return to work.
The ADA is a federal law that prohibits covered employers from discriminating against people with disabilities in the full range of employment-related activities. Title I of the ADA applies to employers (including state or local governments) with 15 or more employees and to employment agencies, labor organizations, and joint labor-management committees with any number of employees.
The ADA protects individuals with a disability who are qualified for the job, meaning they have the skills and qualifications to carry out the essential functions of the job, with or without accommodations. An individual with a disability is defined as a person who:
- Has a physical or mental impairment that substantially limits one or more major life activities;
- Has a record of such an impairment; or
- Is regarded as having such an impairment.
The ADA does not set out an exhaustive list of conditions covered by the law, making it more difficult for employers to determine with certainty what conditions actually are considered a disability. These conditions require medical interpretation of the severity of the condition by the employee’s healthcare provider, and it is always a best practice to work with medical and legal experts when in doubt. A good rule of thumb to use in reviewing ADA issues is to look at the medical condition in its entirety. Generally, conditions that last for only a few days or weeks and are not substantially limiting with no long-term effect on an individual’s health — such as basic first aid, broken bones, and sprains — are not considered disabilities under the Act.
The ADA does not specifically require employers to provide medical or disability-related leave. However, it does require employers to make reasonable accommodations for qualified employees with disabilities if necessary to perform essential job functions or to benefit from the same opportunities and rights afforded employees without disabilities. Accommodations can include modifications to work schedules, such as leave. There is no set leave period mandated because accommodations depend on individual circumstances and should generally be granted unless doing so would result in “undue hardship” to the employer.
One of the most common questions — and one of the most difficult to answer — is the definition of what is considered a reasonable accommodation.
In the real world, the definition of what is a reasonable accommodation varies and is based on several factors. Examples include: making existing facilities accessible; job restructuring; part-time or modified work schedules; acquiring or modifying equipment; changing tests, training materials, or policies; providing qualified readers or interpreters; or reassignment to a vacant position. Determining what is reasonable and does not cause undue hardship to the business can be difficult, so be sure to consult with experts and provide documentation regarding why an accommodation would be unreasonable for the business.
The Department of Labor (DOL) suggests that every request for reasonable accommodation under the ADA should be evaluated separately to determine if it would impose an undue hardship, taking into account:
- The nature and cost of the accommodation needed;
- The overall financial resources of the company, the number of employees, and the effect on expenses and resources of the business; and
- The overall impact of the accommodation on the business.
There are two issues that arise with returns to work that are risky for employers: (1) 100 percent healed policies and (2) light-duty rules.
Regarding 100 percent healed policies, employers cannot require an employee to be completely healed before returning to work because those rules violate the ADA’s requirements to allow workers to use their right to an accommodation. Even if the employee is not 100 percent healed, he or she could possibly still work effectively with an accommodation.
Employers may create light-duty positions as a reasonable accommodation under the ADA or as part of the return-to-work plan from workers compensation. The goal is to get employees back to work at 100 percent of the productivity that they had before the injury, and there are times when a light-duty position might be the next step, with lighter physical requirements and reduced productivity expectations.
Caution your clients to design the light-duty position to meet the physical requirements of the partially healed worker, so that there will be no physical reason for the employee to refuse the light-duty position.
Under most workers compensation plans, an employee’s refusal to return to work in a light-duty position that meets his or her medical restrictions can result in termination of workers compensation benefits. Additionally, the ADA does not allow an employee to refuse work that meets the physical requirements of the accommodation.
Without that careful look at the duties of the position as they pertain to the employee’s medical needs, however, the employee can refuse the position and continue to collect benefits until he or she is able to perform the requirements of the position.
Steps for Success
While these laws have different goals, medical circumstances create overlaps between them. It is important to understand the rules and benefits in order to manage them correctly and avoid the risk of legal challenges and more expensive or longer leaves.
Advise your clients to:
- Designate FMLA leave for eligible employees concurrently with the workers compensation claim.
- Keep in touch with injured or ill employees throughout their leave.
- Manage pay and benefits according to each situation.
- Carefully evaluate requests for intermittent time off, light duty, or other modified work.
- Consult with your legal advisors and insurance carriers regarding special situations.
- Handle returns to work and reinstatement of benefits in accordance with the laws.
by Laura Kerekes
Originally posted on ThinkHR.com
by admin | Dec 5, 2018 | ACA, Compliance, IRS
On November 29, 2018, the IRS released Notice 2018-94 to extend the due date for employers to furnish 2018 Form 1095-C or 1095-B under the Affordable Care Act’s employer reporting requirement. Employers will have an extra month to prepare and distribute the 2018 form to individuals. The due dates for filing forms with the IRS are not extended.
Background
Applicable large employers (ALEs), who generally are entities that employed 50 or more full-time and full-time-equivalent employees in 2017, are required to report information about the health coverage they offered or did not offer to certain employees in 2018. To meet this reporting requirement, the ALE will furnish Form 1095-C to the employee or former employee and file copies, along with transmittal Form 1094-C, with the IRS.
Employers, regardless of size, that sponsored a self-funded (self-funded) health plan providing minimum essential coverage in 2018 are required to report coverage information about enrollees. To meet this reporting requirement, the employer will furnish Form 1095-B to the primary enrollee and file copies, along with transmittal Form 1094-B, with the IRS. Self-funded employers who also are ALEs may use Forms 1095-C and 1094-C in lieu of Forms 1095-B and 1094-B.
Extended Due Dates
Specifically, Notice 2018-94 extends the following due dates:
- The deadline for furnishing 2018 Form 1095-C, or Form 1095-B, if applicable, to employees and individuals is March 4, 2019 (extended from January 31, 2019).
- The deadline for filing copies of the 2018 Forms 1095-C, along with transmittal Form 1094-C (or copies of Forms 1095-B with transmittal Form 1094-B), if applicable, remains unchanged:
- If filing by paper, February 28, 2019.
- If filing electronically, April 1, 2019.
The extended due date applies automatically so employers do not need to make individual requests for the extension.
More Information
Notice 2018-94 also extends transitional good-faith relief from certain penalties to the 2018 employer reporting requirements.
Lastly, the IRS encourages employers, insurers, and other reporting entities to furnish forms to individuals and file reports with the IRS as soon as they are ready.
by Kathleen Berger
Originally posted on ThinkHR.com
by admin | Nov 14, 2018 | Compliance, Hot Topics
The Department of the Treasury (Treasury), Department of Labor (DOL), and Department of Health and Human Services (HHS) (collectively, the Departments) released their proposed rule regarding health reimbursement arrangements (HRAs) and other account-based group health plans. The DOL also issued a news release and fact sheet on the proposed rule.
The proposed rule’s goal is to expand the flexibility and use of HRAs to provide individuals with additional options to obtain quality, affordable healthcare. According to the Departments, these changes will facilitate a more efficient healthcare system by increasing employees’ consumer choice and promoting healthcare market competition by adding employer options.
To do so, the proposed rules would expand the use of HRAs by:
- Removing the current prohibition against integrating an HRA with individual health insurance coverage (individual coverage)
- Expanding the definition of limited excepted benefits to recognize certain HRAs as limited excepted benefits if certain conditions are met (excepted benefit HRA)
- Providing premium tax credit (PTC) eligibility rules for people who are offered an HRA integrated with individual coverage
- Assuring HRA and Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) plan sponsors that reimbursement of individual coverage by the HRA or QSEHRA does not become part of an ERISA plan when certain conditions are met
- Changing individual market special enrollment periods for individuals who gain access to HRAs integrated with individual coverage or who are provided QSEHRAs
Public comments are due by December 28, 2018. If the proposed rule is finalized, it will be effective for plan years beginning on or after January 1, 2020.
by Karen Hsu
Originally posted on ubabenefits.com
by admin | Nov 7, 2018 | ACA, Compliance, Human Resources, IRS
On November 5, 2018, the Internal Revenue Service (IRS) released Notice 2018-85 to announce that the health plan Patient-Centered Outcomes Research Institute (PCORI) fee for plan years ending between October 1, 2018 and September 30, 2019 will be $2.45 per plan participant. This is an increase from the prior year’s fee of $2.39 due to an inflation adjustment.
Background
The Affordable Care Act created the PCORI to study clinical effectiveness and health outcomes. To finance the nonprofit institute’s work, a small annual fee — commonly called the PCORI fee — is charged on group health plans.
The fee is an annual amount multiplied by the number of plan participants. The dollar amount of the fee is based on the ending date of the plan year. For instance:
- For plan year ending between October 1, 2017 and September 30, 2018: $2.39.
- For plan year ending between October 1, 2018 and September 30, 2019: $2.45.
Insurers are responsible for calculating and paying the fee for insured plans. For self-funded health plans, however, the employer sponsor is responsible for calculating and paying the fee. Payment is due by filing Form 720 by July 31 following the end of the calendar year in which the health plan year ends. For example, if the group health plan year ends December 31, 2018, Form 720 must be filed along with payment no later than July 31, 2019.
Certain types of health plans are exempt from the fee, such as:
- Stand-alone dental and/or vision plans;
- Employee assistance, disease management, and wellness programs that do not provide significant medical care benefits;
- Stop-loss insurance policies; and
- Health savings accounts (HSAs).
HRAs and QSEHRAs
A traditional health reimbursement arrangement (HRA) is exempt from the PCORI fee, provided that it is integrated with another self-funded health plan sponsored by the same employer. In that case, the employer pays the PCORI fee with respect to its self-funded plan, but does not pay again just for the HRA component. If, however, the HRA is integrated with a group insurance health plan, the insurer will pay the PCORI fee with respect to the insured coverage and the employer pays the fee for the HRA component.
A qualified small employer health reimbursement arrangement (QSEHRA) works a little differently. A QSEHRA is a special type of tax-preferred arrangement that can only be offered by small employers (generally those with fewer than 50 employees) that do not offer any other health plan to their workers. Since the QSEHRA is not integrated with another plan, the PCORI fee applies to the QSEHRA. Small employers that sponsor a QSEHRA are responsible for reporting and paying the PCORI fee.
PCORI Nears its End
The PCORI program will sunset in 2019. The last payment will apply to plan years that end by September 30, 2019 and that payment will be due in July 2020. There will not be any PCORI fee for plan years that end on October 1, 2019 or later.
Resources
The IRS provides the following guidance to help plan sponsors calculate, report, and pay the PCORI fee:
Originally posted on thinkhr.com
