ACA

Affordable Care Act

She’s Not My Employee

Another update from the Jungle….
Rob has a small consulting business that does project-based work. That means Rob needs a flexible work force that can easily gear up when there are lots of clients, but can also gear down when projects are few.

Rob relies on a group of individuals that he classifies as independent contractors. For each project, Rob explains what the client wants, the deadlines that must be met, and the scope of work. The worker can accept or reject any project. Rob’s been happy with his flexible work force.

At a recent networking event, Rob heard that the U.S. Department of Labor (DOL) has decided to ditch its old “control” test for deciding if a worker is an independent contractor (1099) or an employee (W-2). Instead the DOL will use an “economic reality” test. Rob does some quick research at www.dol.gov/whd and finds the document outlining this new test. What he reads makes him reach for a bottle of Gentleman Jack.

After a couple of stiff drinks, Rob thinks he understands the main points of this new test. The
economic reality test says that a worker who is economically dependent on an employer is an employee and not an independent contractor. Rob doesn’t know if his workers are economically dependent on him. He uses them part-time and always believed that they did work for other consulting businesses.

Rob sees that the new test has several factors. The factor that most worries Rob is the one that says if the work performed is an integral part of the employer’s business, then the worker is a W-2 and not a 1099 worker. Rob knows that his consulting business depends on completing projects for his clients which requires the use of skills that his independent contractors have.

After another shot of Gentleman Jack, Rob does some worst case scenario calculations of what will happen if his workers must be converted to W-2’s. He realizes immediately that it wouldn’t be financially possible to convert all of them to employees.

What are Rob’s options?

He can choose a couple of the independent contractors that have the broadest range of skills and offer to convert them to W-2’s who work full-time for him. All the other workers would no longer be eligible to work on his company’s projects.
He can talk to his CPA about cash flow and tax strategies for dealing with the new economic reality test.
He can continue business as usual, including drinking more Gentleman Jack, while he waits to see what DOL will do.

If your company is struggling with HR issues, Corporate Compliance Risk Advisor can help you create HR policies that are appropriate for your company’s size and then serve as a resource to your staff as the policies are implemented.

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School Zones Made Me Late

Another update from the Jungle….
Jane is the HR manager for a company with about 200 employees. The company runs a lean operation which means that Jane is the sole HR person and handles pretty much every situation that arises. Jane likes the variety of issues that she faces because it keeps everything fresh and interesting.

A major problem for the company is time and attendance. The owner of the company is obsessive and compulsive about details and it drives him nuts to see a few employees chronically showing up late. He told Jane to fix the problem.

Jane reviewed the time and attendance policy which clearly states that chronic tardiness may subject an employee to progressive disciplinary action. The policy is included in the employee handbook. Jane checks the personnel files for each laggard employee and finds that each of them has signed the acknowledgement form. That means that each employee received a copy of the employee handbook and promptly tossed it aside without actually reading it.
This week, Jane began meeting individually with each employee who is chronically late. Jane tries not to yawn as she hears the usual excuses. One employee says she was stuck in traffic due to an accident. Another says his dog got out of the fenced-in backyard and he had to find the mutt and lock him in the garage before leaving for work.

Jane’s favorite excuse of the week is the employee who says she was late due to the school zones. The employee recently moved so that her children could attend a more highly rated school. This means the employee must now travel through three more school zones on her route to work. That caused her to be late.

What should Jane do next?

She can explain to each employee that the excuse du jour doesn’t make up for chronic lateness. She can then move to the next step in progressive discipline.
She can encourage each employee to make a greater effort to arrive on time and let them off with a verbal warning.
She can ask herself why she never thought up so many creative reasons for being late to work.

Time and attendance issues are a perennial problem. Perhaps it’s time to think about the underlying reasons for tardiness. Employees who enjoy their work tend to show up on time.

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The Right Person for the Job

Another update from the Jungle….
Wanda owns a small company and she’s preparing for her next round of job interviews. She hates the interviewing and hiring process. It takes a lot of time away from running her business and the results can be iffy.

The last few batches of job applicants she interviewed left much to be desired. One job applicant said that if he was hired, he would need to take time off to fix a “mix up” about his probation. Another asked if a job offer was contingent on passing a drug test. Another applicant candidly admitted he didn’t want the job but had to perform a job hunt in order to keep his unemployment benefits. After that interview, Wanda tottered home and had an extra-large glass of wine
with her dinner.

In the last batch of job applicants the only one showing real promise was a biker dude with prison tattoos. Heshowed up on time, was polite and actually asked relevant questions about the job duties. Even though the biker dude lacked many of the job skills she was seeking, she immediately offered him the job because he seemed willing to learn.

But Wanda knows that she can’t continue such a hit or miss process. She needs to find a better method for hiring new employees.

What are Wanda’s options?

She can reconsider what she’s looking for by ensuring the job description accurately reflects the job duties. It’s difficult to hire the “right” employee with the wrong job description.
She can outsource much of the hiring process which will save her time. Of course, the staffing agency will need an accurate description of the job duties in order to find appropriate applicants for the job.
She can rely more on referrals from friends, family and current employees as they understand her business are more likely to refer suitable candidates for job openings.

Download my FREE eBook today! Click here!

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The ACA is DOA.

Another update from the Jungle….

April Fools!

The ACA is alive and kicking. That means employers must comply with the ACA when offering a group health plan to their employees. Unfortunately, about 30% of employers have no idea what is required of them, according to a recent insurance industry survey. Consider Tony’s situation.

Tony runs a company with about 30 full-time employees who work in the office. His company also has 80 part-time employees who work at various jobsites as needed. Tony has never offered health coverage to the part-timers because it was not financially feasible. Besides many of his part-timers wanted cash and not health coverage while others had health coverage from another source, often a spouse’s employer’s coverage.

Tony recently woke up to the fact that he must include his part-time employees in the headcount to decide if his company is a large employer subject to the employer penalty. A quick estimate that two part-timers equal one full-time employee means that Tony’s workforce is clearly over the 50 employee line at which the employer penalty begins to apply.

What should Tony do next?

He can decide to continue his current practice of not offering coverage to the part-timers. He may calculate that any penalty he owes for not offering them coverage is less than the cost of covering them in the group health plan.
He can decide to offer coverage to his part-timers. If they reject his company’s group health plan, he will not owe the employer penalty.
Before he chooses either of the above options, he can talk to a consultant who can explain the steps his company needs to take to comply with the ACA. Armed with this information, he can make a business decision on what is financially best for his company.

The above scenario is a composite of actual situations faced by clients. In those situations, the clients chose to offer health coverage to their part-timers because it was financially feasible and it boosted employee morale (after employees learned there is an individual penalty for not having health insurance). If you’re confused by the ACA, Corporate Compliance Risk Advisor can help your company understand its obligations and make informed decisions on ACA compliance.

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Visit us: http://www.complianceriskadvisor.com/

Avoidance Is Not Compliance.

Another update from the HR jungle….
Bob runs a company that has 31 full-time employees, 40 part-time employees and a couple of independent contractors. He knew he didn’t have 50 full-time employees so he thought he didn’t need to worry about the Affordable Care Act (ACA).

Recently Bob attended a Chamber of Commerce meeting where he bumped into Sam, a health insurance broker. Bob pretended to listen to Sam while he watched the room for people he really wanted to talk to. Then he realized Sam was saying something about counting part-time employees as full-time equivalents to reach a final head count on the 50 employee line between small and large employers.

Bob didn’t want to admit he hadn’t been paying attention so he nodded wisely at Sam. Later that day Bob did a quick internet search on the ACA and what he learned was disconcerting. He realized that his company is mostly like a large employer subject to the employer penalty which began on January 1, 2015 and he hasn’t done anything to comply with the ACA.

What are Bob’s options?

He can panic, drink some Tennessee sour mash to soothe his nerves, and then forget about the whole mess until a later date when the matter is truly urgent.
He can continue researching to find answers on what he needs to do, although that cuts in to his already limited free time.
He can ask a trusted friend for a referral to someone who can guide him through the ACA compliance maze, which will simultaneously remove the problem from his desk freeing up his time.

In the actual case, my client chose the third option which is how I learned of his predicament. Within three weeks of the initial consultation we had implemented an ACA compliance plan and my client could focus on other issues. If your company is struggling with this issue, Corporate Compliance Risk Advisor can help you mitigate your risks through an ACA compliance program that is appropriate for your company’s size.

Join the HR Compliance Jungle today. Click here!

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The End is Near…for 2015 Open Enrollment.

Another update from the HR jungle….
Walter owns a restaurant and catering business with 25 employees, most of them part-time. The hours can be brutal and the pay is low. Walter wishes he could pay more but in the competitive market he faces that’s not an option.

He can’t afford a group health plan for even his handful of full-time employees. Instead, he has encouraged his employees to sign up for coverage through the Exchange, also called the Marketplace. He thought some of his employees would qualify for a subsidy to help pay their premiums. Last year many of the employees decided not to buy individual health policies for a variety of reasons, including needing the money to pay bills. Now these employees will be assessed the penalty because they also didn’t try to qualify for an individual exemption.

Walter knows that he has no legal obligation to help his employees with health insurance. But he wants to help his employees because it’s the right thing to do. Walter is thinking about how to make one last effort to encourage his employees to sign up for coverage before open enrollment closes on February 15^th.

What options are available to Walter?

Walter can remind his employees that open enrollment closes in about 2 weeks. He can encourage them to go on-line to healthcare.gov or see an insurance agent.
Walter can invite a health insurance agent to his restaurant to meet with his employees before or after their work shifts to sign up for coverage.
Walter can remind his employees that they may be able to qualify for an exemption from the penalty, such as a hardship exemption due to low income.

Need help with HR issues? Corporate Compliance Risk Advisor can help you create HR policies that are appropriate for your company’s size and then serve as a resource to your staff when the policies are implemented.

Join the HR Compliance Jungle today. Click here!

Visit us: http://www.complianceriskadvisor.com/

Boxed in by Box 12 on the W-2

Another update from the HR jungle….
Maryann handles payroll questions for her employer. She and her coworkers have been scrambling for a couple of years to ensure they comply with the Affordable Care Act (ACA). Last year was all about finding a software program that would allow the company to track the hours of its temporary employees.

This year, Maryann is looking at box 12 on the W-2. That’s the box where employers need to plug in the cost of the medical plan for the employee. Filling in this information is mandatory only for employers who filed at least 250 W-2’s in the previous tax year, meaning in 2013. Maryann’s company filed 170 W-2’s in 2013, so they aren’t required to complete box 12 for the 2014 tax year.

She knows that this January her company will issue 200 W-2’s covering the 2014 tax year. She thinks that number will rise to 250 during 2015. Maryann wants to get a head start on figuring out box 12 after some of the past fiascos in trying to comply with the ACA.

What should Maryann consider?

Maryann knows that the “cost” or “value” of health coverage refers to the premium paid for medical coverage in the health plan, known as “major medical”. She needs to verify what other costs, such as FSA contributions and dental and vision premiums, may need to be included.
Maryann can consult her company’s CPA firm for assistance on completing box 12.
Maryann can do some research in the ACA section of the IRS website during her spare time.

Join the HR Compliance Jungle today. Click here!

Visit us: http://www.complianceriskadvisor.com/

Time & Money

Another update from the HR jungle….

Back in December, Sue, the HR director, decided she needed to review the employee handbook to ensure that all the information is still accurate. Now that her rum hangover from her cruise is gone, she’s focusing on this project.

Sue revised individual sections of the employee handbook over the past two years as the laws changed. For example, she changed the definition of employees eligible for health insurance. Under the old criteria, employees had to work at least 32 hours a week to be eligible. But under the Affordable Care Act (ACA), employees who average 30 hours per week are eligible for health coverage.

Of course, this piecemeal approach means that she may have missed something. She also knows that her company added employees since the handbook was last updated and she thinks that the increased number of employees means that additional employment laws now apply to the company. As she surveys the scope of the project, Sue worries about how she’ll manage to review and update the handbook while still keeping up with her regular duties.

What are Sue’s options?

She can research federal and state government websites to collect information about employment laws and regulations that apply to employers with the number of employees that her company has.
She can attend a seminar for HR professionals to learn about recent changes to federal and state employment laws, although the update won’t include existing laws that haven’t been revised and that may apply to her company.
She can convince her employer that it is a better use of her time and their money to outsource this project to a subject matter expert.

Join the HR Compliance Jungle today. Click here!

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Before the R&R…

Another update from the HR jungle….
Sue is the HR director for her company and last week she was working on her year-end checklist. Sue is trying to knock out all the items on her checklist before she checks out for a two week cruise in the Caribbean. Last week’s checklist covered last minute items related to the Affordable Care Act.

This week’s checklist is a general review of her HR domain. It’s good to be in charge, even if she has no minions to obey her every whim. First, she talks with the payroll service to ensure that they have all the information they will need to issue W-2’s in January 2105. This task went on her checklist after a “miscommunication” earlier in the year meant a new hire didn’t get paid on time. Now Sue obsessively re-checks everything.

Sue’s decided to postpone her second checklist item until after her vacation because it will be tedious and time consuming. She needs to review the employee handbook to ensure that all the information is still accurate. She revised a few sections of the handbook over the past two years as the growing workforce meant additional employment laws applied to her company. Now it’s time to do a general cleanup. Sue knows she needs some R&R (rum and more rum) before tackling this task.

Sue’s final checklist item is to complete a status review of the HR department when she returns to the office in January. Now she just needs to deal with any last minute crises before leaving for her well-deserved date with rum and the sea.

Do you have a year-end checklist to keep your HR duties on track? We can’t promise you a Caribbean cruise with (lots of) alcohol, but we’ve love to hear from you.

Join the HR Compliance Jungle today. Click here!

Visit us: http://www.complianceriskadvisor.com/

Are you ready for 2015?

Another update from the HR jungle…

Sue is the human resources director for her company (because she’s the only HR department employee). She is frantically working her way through her year-end checklist so that she can take a two week, rum-infused holiday cruise in late December. Today she’s working on checklist items related to the group health plan.

First on her checklist is a note to update the on-line information about the company’s group health plan to show the new out-of-pocket limits for 2015. Her company has a high deductible health plan (HDHP) with a health savings account (HSA). In 2015, HSA contributions are limited to $3,350 for individuals and $6,650 for families. The maximum out-of-pocket limits are $6,450 for individuals and $12,900 for families. If she posts the information on-line, some employees may actually read it rather than calling her with their questions.

Second on her checklist is to confirm that the new ACA-compliant software is properly tracking the hours of employees. Sue was impressed by the software vendor’s ability to customize the software to track her company’s high turnover employees. Sue’s company is not subject to the employer penalty in 2015 because they met the transitional relief for employers with 50 – 99 employees. But Sue still worries about last minute glitches when new software programs are implemented.

Does your ACA-compliance checklist look like Sue’s? Can you think of any items on your checklist that Sue has forgotten?

Sue’s already dreaming about the rum and fruit drinks she’ll be enjoying on her cruise, but she’ll continue working on her checklist items in next week’s column.

Join the HR Compliance Jungle today. Click here!

Visit us: http://www.complianceriskadvisor.com/

	Mae on Halloween Horror
	Mae on Freedom from Rules
	Genie Herron on Where Is He?
	Norma Shirk on Whose Side Are You On?
	Pat Brewer Hairston on Whose Side Are You On?

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