Deferred Action for Childhood Arrivals (DACA) Changes

Question: With the recent Executive Order rescinding DACA, do we need to do anything different for our employees who are enrolled in the program?

Answer: Given the recent news headlines around immigration, a lot of employers may wonder which changes, if any, affect them. As stated in the memorandum by the Department of Homeland Security, current Deferred Action for Childhood Arrivals (DACA) recipients will keep their work permits and deferred action grants until they expire. DACA applications and associated applications for Employment Authorization Documents (EADs) that have been accepted or are pending as of September 5, 2017 will be processed. However, new initial DACA requests and associated applications for EADs filed after September 5, 2017 will not be accepted. Lastly, DACA renewal requests and associated applications will not be accepted unless they were pending prior to September 5, 2017.

What employers need to know is that unless Congress provides a legislative remedy, many workers will lose their work authorization over the next two and a half years. You should treat these workers normally and should accept their unexpired work authorization documents as satisfactory evidence of work authorization to complete or re-verify an I-9 form.

For more information, refer to the Department of Homeland Security.

Advertisements

Breaking News: Costly Overtime Rule Struck Down

September 1st, 2017

 

On August 31, 2017, Federal District Court Judge Amos Mazzant overturned the Fair Labor Standards Act (FLSA) Final Overtime Rule that would have doubled the annual salary level to qualify for exemption from overtime from $23,660 to $47,476. The same judge issued an injunction stopping implementation of the final rule nine months ago, and the Trump administration did not challenge the decision.

In granting summary judgment invalidating the overtime rule for plaintiffs in a lawsuit filed by several business groups and 21 states, Judge Mazzant stated, ““The Department has exceeded its authority and gone too far with the Final Rule,” he ruled. “Nothing in [FLSA] Section 213(a)(1) allows the Department to make salary rather than an employee’s duties determinative of whether a ‘bona fide executive, administrative, or professional capacity’ employee should be exempt from overtime pay.”

This may not be the end of the issue. Earlier, Labor Secretary Alex Acosta requested public comments on the rule and indicated that his department planned to review and possibly adjust the salary thresholds for exemption. The Department of Labor could also appeal the ruling.

For now, employers that have already made changes to their compensation plans can determine if they want to continue with the changes, suspend the changes, or roll back those changes pending new developments. These decisions should be made in accordance with any applicable state or local laws.

ThinkHR and Benefit Administration Group will monitor this issue and provide you with more information as it becomes available.

Source

When to Say Goodbye to Your Benefits Broker

For many businesses, the process of choosing and administering a health insurance benefits program is a daunting one. They often turn to benefits brokers to help them select and implement plans.

Traditional benefits brokers offer assistance in choosing plans, but typically lack the technological systems and solutions that help companies operate more efficiently and save money. In contrast, technology-backed brokers can use a variety of resources to not only aid in the selection of a health insurance plan, but to administer it and provide year-round support. Ultimately, a benefits broker should make the job of a company’s human resources (HR) department easier. If a broker is not achieving this goal, it may be time to investigate options for a new broker.

What Is A Broker?

Benefits brokers are licensed professionals who assist companies, small business owners, individuals and families in choosing and administering health insurance plans. Using their health insurance expertise, they help businesses choose health insurance networks and plans that fit their needs and budget. In many cases, brokers have long-standing relationships with their clients and can assist them with paperwork, compliance, and annual renewals.

What A Broker Should Be Doing

Establishing a comprehensive health insurance package for employees can be a challenging task for any business owner. With a seemingly endless array of choices, complicated enrollment procedures, and ever-changing legal requirements, even seasoned HR professionals may find the task overwhelming. For this reason, many companies turn to a benefits broker. Taking advantage of a broker’s expertise in plan options, procedures, and rules is a smart choice for business owners. A good benefits broker will make sure that a client has the best benefits package for their needs and budget, and will reduce the workload for an HR department by handling the plan’s administration and paperwork. Part of this process is helping to ensure that you are aware of the types of plans and costs that your competitors are employing, as a part of the benchmarking process.

Utilize Technology Systems and Solutions Appropriately

One of the ways that brokers should be assisting their clients is through the use of technology solutions and systems. Utilizing technology to select and administer a benefits program can streamline the process, ensure compliance with rules, and verify that plan information is readily accessible to both the client and its employees.

A benefits broker should use innovative technology to help clients compare and select plans, educate employees about plan options, send customized open enrollment communications, and comply with all applicable rules and regulations. Specialized programs and applications can reduce paperwork and provide easy access to necessary information.

Provide Help Throughout the Year

Brokers should also be available to their clients throughout the year, offering support for problems or questions that arise about health insurance plans. A good broker will have sufficient staff to provide year-round assistance to clients—not only when it is time to renew a plan. If a company has an employee with a major health problem or life event, for example, a benefits broker should be available to discuss these issues – as well as assisting with other routine questions, and employee education related items.

Provide Assistance in Selecting Health Insurance Programs

When it comes to selecting a health insurance programs, a broker should have access to a variety of products and plans offered by a number of carriers to meet a business’ needs and budgets. Brokers with limited options often cannot respond to their clients’ requirements, leaving companies with health insurance plans that are too expensive or that just do not meet employees’ needs. A top ranked broker brings more to clients by way of leverage – including the ability to help troubleshoot challenging situations that may arise throughout the year.

Explain and Support Compliance

Finally, because the rules and regulations surrounding health insurance plans are complicated, a good benefits broker should protect their clients on all applicable compliance and regulatory issues. This includes making sure that the plan complies with all federal and state laws and regulations, that it is offered to all eligible employees and filing the required paperwork with the IRS and other government agencies. These tasks are important and necessary but may overwhelm an HR staff. A benefits broker should take on this work for clients, easing the burden of administering a health plan – including the tools, and invaluable resources, often through on-staff HR professionals to assist with local, federal, and ACA compliance support.

Is It Time for a New Broker?

A benefits broker should be doing a variety of things to meet client needs, including offering technology-based systems and solutions, offering a range of plan options, providing year-round support, and protecting clients on regulatory and compliance issues. If a broker is not doing any of these tasks, companies should consider finding a broker who can meet their needs.

Companies who are not adequately supported by their brokers may find that their business is negatively impacted. HR professionals may feel stressed and overworked if a broker is not providing assistance in administering a health insurance program, which may ultimately lead to a high turnover rate.

Without technology-backed solutions, plan administration may be over costly and time-consuming. Employees may also be dissatisfied if they do not have their preferred health insurance options, or if they feel that they do not have access to the information that they need and want about their benefits.

If a broker is not offering a range of plans and carrier options, a company may not even be aware of lower-cost plans or plans that meet their needs better. If a broker is not assisting a business with compliance, the company may be penalized through fines and penalties for not filing the correct forms with state or federal government, or even through missed opportunities to lower their tax burden.

The Advantage of Technology-Backed Brokers

When it comes to selecting and administering a health insurance plan, using the proper technology is key. The world of health insurance is a fast-changing one, with evolving laws and market conditions that make it hard for the average business owner to keep up with the changes.

A good benefits broker should deliver expertise on a broad variety of topics, from compliance with the Affordable Care Act (ACA) to tax matters and benefits administration. A good broker should also stay on top of changing regulations and premium rates for their clients. Given the complex nature of health insurance benefits, brokers which provide ease of access to technology-backed systems and solutions offer many advantages over traditional brokers.

Compliance Needs

One such advantage of working with a broker can be seen in how brokers handle compliance with the ACA. While health care reform has provided more affordable insurance options for individuals and employers, it has also brought many rules and regulations. Employers need to determine how many full-time employees they have, ensure that their health insurance plans have the minimum value, determine what they have to report to the IRS, and then make sure that the proper paperwork is filed in a timely manner.

Failing to comply with these regulations can trigger compliance violations, resulting in penalties and missed tax savings. Traditional brokers do not provide support to their clients on these matters, leaving businesses on their own when it comes to navigating this complicated system. However, a technology-backed broker may be able to provide valuable resources to their clients to ensure compliance and help avoid any potential penalties. These tools can help employers save time and money, and allow companies to focus on what is really important—running their business smoothly and profitably.

HR Needs

Beyond compliance, technology-backed brokers may also be able to assist employers with their human resources needs. Traditional brokers are not seasoned in the field of human resources, leaving clients on their own to create their own HR policies and draft an employee handbook. They often do not provide HR support for their clients, and cannot answer questions on thorny HR issues.

In contrast, technology-backed brokers may give their clients access to a wealth of information and resources to assist their human resources team. This could include topical articles on issues that are relevant to employers, forms, sample employee handbooks and communications tools. Utilizing these tools could help an employer avoid claims of wrongful termination, discrimination, and harassment. Technology-backed brokers may also offer support on HR issues to help their clients successfully handle any problems that arise. In this way, technology-backed brokers have a distinct advantage over traditional brokers.

Pre-Renewal Planning Ahead of the Curve

When it comes to providing support, most traditional brokers limit their client contact to renewal time. Employers are left to navigate compliance and HR issues on their own, with little to no ongoing support from their brokers. Unlike traditional brokers, technology-backed brokers understand how important year-round support is to companies.

They may help clients develop strategic plans to lower costs, such as designing employee wellness programs or encouraging healthy employee behavior and habits. Technology-backed brokers may help clients choose the best benefits and support them through the open enrollment process, offering customized communications and education to increase employee participation in the plan. They understand that benefits are about more than just complying with the law; benefits can be a valuable recruiting tool and a way to improve employee satisfaction and retention. With that in mind, technology-backed brokers may provide year-round support and compliance information, ensuring that clients are never left to struggle with plan administration on their own.

Comprehensive Open-Enrollment Support

The advantages of working with a technology-backed broker can be seen in one of the most stressful parts of plan administration for HR professionals: open enrollment. A technology-backed broker may be able to set up an automated enrollment process, which eliminates the expense and hassle of distributing and collecting paper enrollment forms.

It also improves the overall efficiency and accuracy of the process. Using online enrollment typically shortens the enrollment cycle, as employees can learn about their benefits options, compare costs and coverage, and pick plans based on their eligibility for different options.

Employees can complete the enrollment process independently, finding answers to questions directly on the enrollment site, and can review their benefits information and report life changes at any time, without the involvement of the HR department. Online enrollment also simplifies plan administration, with elections, applies directly to employee records. Employees can readily view and update their records and plans, and the HR department can check enrollment status in real time. Depending on the program used, they may also be able to generate detailed reports on the cost of employee benefits.

Plan Designs and a Discerning Benchmark Analysis

Technology-backed brokers also have an advantage when it comes to initial plan selection. Traditional brokers will research plans, provide quotes and negotiate rates, but they often fail to do a deeper analysis to help companies design a competitive health insurance plan. Having a health plan that is comparable or superior to what other companies in a given industry or region is critical to recruitment and retention of top employees.

A technology-backed broker could perform a benchmarking analysis to determine what others in a given industry or area are providing for their employees, which can help companies choose plans that will give them a competitive advantage. Technology-backed brokers may also utilize programs to project the impact of medical, vision and dental plan changes, estimated renewal cost and streamline the selection process for employees.

Using the right technology to choose and implement a health insurance program through a benefits broker should help a company offer a competitive, cost-effective benefits package to its employees.

Data Analysis and Plan Comparisons

Finally, technology-backed brokers may utilize online systems to analyze clients’ plan data to determine how to adjust plans to save money. These programs may also be able to model recommended changes so that clients can see how suggested changes could save money or provide better benefits for employees. In contrast, traditional brokers do not have the analytical tools or technology to dig into plan data and identify areas for improvement.

Employers who use traditional benefits brokers will never see how their plan data compares to others in the industry, and may waste money. In this manner, technology-backed brokers may help their clients tighten their benefits budget.

In Conclusion

When it comes to selecting and administering a health insurance plan, a benefits broker should make life easier for clients. If a company is not receiving year-round support and access to technology to manage their health benefits, it may be time to look for a new broker. An experienced, knowledgeable, and highly dependable technology-backed broker such as those working at Business Benefits Group is a fantastic option for most companies—offering a range of services to help save our clients time and money, and allow them to focus every effort on running their business. Contact Benefit Administration Group to learn more.

 

What are pay-per-use Health Insurance plans?

Level Funding

As health care costs continue to rise, level funding and self-funding are becoming a more and more attractive option for smaller companies. Technically speaking Benefit Administration Group uses level funded health insurance and insurance captives as the funding mechanisms for each pay-per-use health plan. In more simple terms, here is what that means for customers like you:

  1. Each plan has fixed monthly premiums and no change in monthly costs regardless of how many claims are incurred each month.
  2. Instead of your premium rates being determined by community rates set by your employees’ age and zip code, premium rates are determined by proper underwriting and the actual risk (demographics and health history) of your employees. This is accomplished through the use of a simple online health questionnaire and allows many companies to get far lower rates than they would otherwise from regular fully insured products.
  3. At the end of each year, if you incurred fewer claims than expected, your company gets a refund for the unused claims dollars.
  4. You have stop loss insurance fully baked into your plan rates so that if you incur more claims than expected during any given month, or throughout the year, you still never pay more than the fixed monthly premiums.
  5. If at any time you don’t like your plan, or you don’t like your renewal rates you can always leave and go back to your old carrier or a new one.

Human Resources Q & A of the Day

Question:

We’ve hired a new employee and have agreed to reimburse their COBRA premium until they become eligible for our insurance. They provided us with proof (copies of checks and invoices) that they paid a 3rd party administrator for their COBRA coverage. Is this reimbursement taxable to the employee when processing through payroll?

 

Answer:

An employer could choose to offer to pay for COBRA for some period of time but keep in mind that COBRA premium payment arrangements while sometimes convenient, can expose an organization to potential liability so we also recommend discussing any arrangements with legal counsel to ensure compliance. Specifically, any agreement in writing to pay for COBRA should be reviewed in partnership with legal and be explicit in terms of the boundaries of what will be provided and for exactly how long. Paying the COBRA fees directly to the employee is not unusual but it has different tax implications than paying the insurance carrier directly or paying the employee based on substantiated expenses (i.e. receipts).

Below is a link to a copy of IRS Information Letter 2006-0042 (INFO 2006-0042) discussing a particular case. In that case, the employer paid its former employee’s COBRA premiums. The IRS determined that the payments were excludable from gross income (thus exempt from income taxes and employment taxes) provided that the employer either (a) paid the insurer directly, or (b) paid the employee based on documented expenses. If, however, the employee had the discretion to use the funds for any other purposes (i.e. he or she just got a lump sum cash “COBRA” payment from the employer) the amount would be taxable income. Please note that we cannot provide tax advice to clients and recommend seeking guidance from a tax professional where appropriate.

Human Resources Q & A of the Day

download

Question:


Should an employee’s background check, interview notes, and benefit information be kept separate from the personnel file?

Answer:


As a best practice (and in certain instances it is legally required), employers should keep certain employee records and information in a confidential file separate from the personnel or employee file. Below is general best practice guidance regarding personnel and confidential files and recordkeeping you may find useful.

Personnel Files

A personnel file may contain documents that fall into one of the following categories of records (note that a Social Security number should not be accessible via the personnel file and is a good indicator that the document should be filed elsewhere):

  • Basic Information. This category includes personal information such as the employee’s full name, address, and emergency contact information.
  • Hiring Documents. Many employers retain documents related to the hiring process, including signed job descriptions, employment applications, and resumes. (Note that other recruiting documents are typically retained in a recruitment file along with information about other candidates, indicating why one candidate was selected over others as well as other information regarding the hiring process.)
  • Job Performance and Development. This is a broad category that may encompass documents such as performance evaluations and supervisory or management notes regarding performance issues; corrective action or disciplinary letters; awards, nominations, and other commendation letters; promotion records; and records of trainings or education.
  • Employment-Related Agreements. Any aspect of the employment relationship which is governed by an agreement between the parties, such as an employment agreement, union contracts, noncompetition agreement, confidentiality or nondisclosure agreement, should be kept in the personnel file.
  • Compensation. This category includes documents related to compensation and relevant changes to an employee’s pay and position for future reference. (Payroll records should be retained by the payroll department or in a separate file along with Forms W-4, garnishment documentation, time records, absences, etc.).
  • Termination and Post-Employment Information. Information related to an employee’s termination should be kept on file should a dispute later arise. Compile all documents and retain in archive including exit interview forms (if applicable) and any final employee performance appraisal, as well as a record of documents provided to the employee along with the final paycheck (e.g., termination letter, benefits notices, unemployment compensation forms, etc.).

Confidential Files — Keep Separate from the Personnel File

As stated previously, it is a best practice (and in certain instances a legal requirement) to keep certain employee records and information in a confidential file separate from the personnel file, such as the following:

  • Medical benefit records and documents that relate to an injury or disability.
  • Material relating to workers’ compensation claims.
  • Family and medical leave documents.
  • Employment verification information.
  • Wage garnishment documentation.
  • Forms W-4, if not maintained in payroll.
  • Documents pertaining to sensitive matters, such as harassment investigation records or any information pertaining to an employee’s religion (such as a request for Jewish holidays off as a reasonable accommodation).
  • I-9 documents must be maintained in a separate file or binder for all active and inactive employees until appropriate destroy dates are met.

Some employers may also retain aptitude test scores, background check results, and credit reports in the employee’s confidential file, though it is recommended that documents relative to a hiring decision should also be retained in the recruiting file, yet still maintain protection of private information (i.e. date of birth and Social Security number).

 

Human Resources Q & A of the Day

download

Question:
We recently made some changes to our handbook policies regarding benefits offered to employees and have a disclaimer stating, “The Company reserves the exclusive right to change or terminate any benefits or related policy at any time in accordance with applicable law.” Are we required to have employees sign a new acknowledgment of the handbook because of these recent changes?

Answer:
Yes, employees should be required to sign an acknowledgment noting that they are aware of any new policies or changes to existing policies.

Any new or changed policy should be provided to employees through the distribution of a new handbook accompanied by a brief memo directing the employees to the locations of the changes and requesting an updated acknowledgment signature. Without distributing and getting proof of receipt, the changed policies may be difficult to point to when correcting, disciplining, or terminating an employee. Most employers update their handbooks every one to two years. If there is a major change to an integral policy, that may be distributed separately and added to the handbook as an addendum until the next revision.

While not required, handbooks are a best practice in order to minimize risk. Clearly articulated and distributed handbooks can supplement a defense against many compliance issues such as, but not limited to, claims of sexual harassment, wrongful termination, and discrimination.

Handbooks are a general overview of policies and procedures. Key handbook policies include:

Definitions of commonly used terms.
Explanation of to whom the Handbook and its policies apply.
At-will employment policy.
Disclaimer that handbook is not a contract and the right to change policies without notice.
Antiharassment Policy.
Equal employment opportunity/discrimination/accommodation policies.
Leave of absence and family and medical leave policy (if applicable).
Maternity leave policy.
Drug-free workplace policy.
Standards of conduct.
Timekeeping and overtime.
Paid time off/vacation/sick leave policies.
Lastly, because a handbook is not legally mandatory, it may contain whatever information an employer wishes to impart to its employees. In addition, handbooks are traditionally separate from benefits summaries and other health and welfare plan materials, although the handbook may discuss employee status (full time, part-time, etc.) and may refer employees to benefit plan materials. Further, handbooks do not need to outline company job positions or titles; this can be maintained separately in the job descriptions.

As a best practice, we recommend reviewing new or modified policies with counsel prior to implementation.