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The Facts

2,000: Average number of employees who sustain job-related eye injuries each working day.

10% – 20%: Percentage of workplace eye injuries that will be disabling due to temporary or permanent vision loss.

Ocular Trauma, Loss of Vision and Blindness: The workplace is the leading cause of these types of injuries.

90%: Percentage of workplace eye injuries that could have been prevented with appropriate protective eyewear.

Inadequate Education: The #1 reason workers report they did not know they needed to wear eye protection or that they were wearing inappropriate eyewear for the job.

Eye Fatigue, Difficulty Focusing and Discomfort: The 3 most common complaints from using computers in the workplace.

20/20/20: When working at a computer, take a break every 20 minutes to look at an object approximately 20 feet away for 20 seconds to help reduce eye strain.

The Details

March is Workplace Eye Health and Safety Month. How can we improve the health and safety of our employees’ eyes?

The first step to keeping eyes healthy and preventing injuries is using eye protection whenever there is a chance that machines or activities could present a hazard from flying objects, chemical splashes, radiation or other dangers. Employees must use safety eyewear marked with “ANSI Z-87” on the frames and an imprint from the lab etched into the lenses. An employer or OSHA inspector can use these measures to assure the eyewear is impact resistant and meets industry safety standards. All employees must be trained on when and how to use safety eyewear. They must also know whether they should use safety glasses or safety goggles. The employees should not have an option – wearing safety eyewear must be mandated!

Next, if employees are having eye discomfort, they should see an eye care professional for a complete eye examination. They may need an updated prescription. In some cases, employees may have to wear specific eyewear when working at a computer. Follow the 20/20/20 rule and be sure to advise your employees to take breaks when working at a computer (every 20 minutes take a 20 second break to look at an object 20 feet away). Other helpful tips for employees who work at computers frequently are: enlarge text, adjust monitor brightness, adjust monitor contrast, adjust the position of your monitor to a level lower than your direct eyesight, and (although it sounds intuitive) don’t forget to blink.

Taking these simple precautions will keep eyes healthy and prevent injuries. So, let’s all brush up on our Personal Protective Equipment requirements and save some eyes. It starts with awareness and education. It starts with you!

The Patient Protection and Accountable Care Act (PPACA) has a number of employer provisions that all seem to fall, generally speaking, under an umbrella called “employer shared responsibility.”

Briefly, the PPACA mandates that large employers, those more than 50 employees including full-time equivalents, offer affordable coverage, which is that the lowest cost option for an employee is less than 9.5 percent of income. The coverage also must carry a minimum robustness — an actuarial value of at least 60 percent — to all eligible employees. If the employer doesn’t follow this, it must pay some kind of penalty.

Smart Business spoke with Tobias Kennedy, vice president of Sales and Service at Montage Insurance Solutions, about how these penalties are triggered, in the first of a three-part series on the employer shared responsibility provision.

How can the employer shared responsibility penalties be triggered?

The penalties are only triggered by an employee of yours receiving a subsidy to purchase an individual policy through the coming exchanges. And, employees are only eligible for a subsidy if they earn less than 400 percent of the federal poverty level and are not eligible for another qualifying coverage like Medicare, Medicaid (Medi-Cal) or a qualified employer plan.

How does the penalty for not offering enough coverage impact employers?

The way this fine is triggered is you, the employer, do not offer insurance coverage to at least 95 percent of your staff. The key words are ‘offer’ and ‘95 percent.’ If they decline, you are not at fault, and at 95 percent there is some minimal leeway. So if you fail to offer coverage to at least 95 percent of your people, and one of them goes to the exchange and gets a subsidy, you are fined. It’s important to note this penalty, like all PPACA penalties, is a non-deductible tax penalty — so finance teams really need to factor that in when evaluating costs.

This penalty’s costs are — pro-rated monthly for each violating month — $2,000 per year multiplied by every single full-time employee you have, which obviously can add up. The bill has a provision where you can, for the purposes of calculating the penalty dollar amount, deduct 30 employees from your full-time equivalent count. In other words, if you have 530 full-time employees, you’re fined on only 500 at $2,000 per person, per year for an annual fine of $1 million.

How does the affordability penalty work?

The second penalty, also non-deductible, centers on affordability. In this case, while you are still fined an annual amount that is pro-rated monthly, the fine is actually $3,000 annually but only assessed on people affected. It also is only up to a maximum of what you would have paid for not offering coverage at all.

It’s important to note that the employer is only going to be penalized on the people for which coverage is unaffordable. In other words, there are going to be times where you want to be strategic about this. You may have a situation where your employee/employer premium split is in compliance for most of your staff — where the dollar amount you ask the employees to pay for premium is less than 9.5 percent of most employees’ incomes. But, a couple of employees actually earn a smaller salary, so they are outside of the 9.5 percent. In this case, the employer needs to know it has a choice: Either raise your employer contribution or pay a fine on those couple of employees. Again, the penalty is only $3,000 per person affected, so it may be less expensive to pay those couple of fines than to completely restructure the way you split premiums.

Next, we’ll address how you know which employees qualify for coverage. A lot of employers have part timers, variable-hour people and project-based staff. So with all of these fines, it’s important to know exactly how you find the safe harbor of which employees qualify and don’t qualify for benefits.

Tobias Kennedy is vice president of Sales and Service at Montage Insurance Solutions. Reach him at 1 (888) 839-2147 or [email protected].

Insights Business Insurance is brought to you by Montage Insurance Solutions

http://www.sbnonline.com/2013/03/how-the-ppacas-employer-shared-responsibility-penalties-work/?full=1&sectionid=business-insurance-insights&edition=los-angeles-editions

Restaurants can be your best friend. They are always there when you need them and they give you everything you want and more. Refueling our bodies is a necessity and many of us simply do not have the desire or time to put forth the effort into preparing our own meals. Restaurants provide the perfect solution: we can walk in, plop down, order exactly what we are craving and our wish is brought to life within a matter of minutes – all while we’re chipping away at our hunger with complimentary appetizers.

Let’s not count our blessings too soon. Restaurants are notorious for creating meals that appeal to our taste buds, but not necessarily our bodies’ nutritional needs. We must outsmart the standard restaurant menu. In order to make healthy decisions, we have to educate ourselves on what to avoid and what to gravitate toward. Use these 20 tips to help you make the right decisions:

When ordering beverages…

1) Opt for water: Keep your body hydrated. Water satisfies the feeling of hunger and it’s beneficial for your body in more ways than you can imagine.
2) Liquids are not freebies: Don’t forget to count the caloric intake of your beverage, which can range from 0 – 1,000+ calories. Steer clear of alcoholic concoctions and dessert-inspired creations.
3) Free refills can be expensive: Water is always your best choice, but if you splurge on a soda or artificial fruit juice be mindful of how many times your cup is refilled. One is already more than enough.

When ordering appetizers…

4) $0 does not mean 0 calories: Simply because bread and chips are free does not mean they are calorie-free. In fact, these are usually mindless, empty calories with no nutritional value.
5) Pass the bread: If a restaurant does offer complimentary appetizers, ask them to take it away. It will reduce the temptation to start mindlessly snacking while waiting for your meal. DID YOU KNOW? One bread stick has approximately 150 calories. Eat three of these and you can quickly pack on 450 calories to your meal!
6) Be prepared: Do not enter a restaurant starving. You will fill-up on whatever arrives first and potentially overeat. Bring a handful of raw nuts or fresh fruit to snack on in lieu of appetizers. Tip: A perfect portion of raw almonds fits great in an empty mint tin!

When ordering soups & salads…

7) Over the rainbow: The different colors of fruits and vegetables indicate their vitamin and mineral content. Try to include various colors of the rainbow for a robust meal.
8) Dark side: Vegetables that have higher color saturation typically have more vitamins, minerals and antioxidants. Tip: Choose fresh spinach or mixed greens over iceberg lettuce.
9) On the side: Request dressing on the side and use a fork to create the perfect balance between taste and nutrition in each bite. Aside from fried meats, dressings are the #1 calorie-killer in salads. Tip: Choose vinegar-based dressings over dressings that are described as “creamy.”
10) Beware of the loaded soup: Choose broth and vegetable based soups (like Lentil, Chicken and Minestrone Soup) as opposed to cream based soups (like Chowders and Cream of Mushroom).

When ordering entrees…

11) Do your homework: Before you even choose a restaurant, research ahead of time. Nearly every restaurant posts their menu online. Mentally pre-ordering your meal limits impulsive decisions based on cravings.
12) Create your own meal: Most restaurants are happy to accommodate your special requests. Take a look at ingredients used in other menu items and make your own creation. Shoot for 45% complex carbohydrates from whole grains and vegetables, 30% lean protein and 20% healthy fats. Here are some healthy options found at restaurants: chicken, salmon, turkey, legumes, spinach, broccoli, squash, carrots, quinoa, brown rice, wild rice and fresh fruit.
13) Not so saucy: Stay away from creamy sauces. Ask your waiter to omit the sauce or replace it with Extra Virgin Olive Oil and use spices to add flavor.
14) Make it dry: Ask for your meats, vegetables and sides to be dry. This means no added butter, oil or sauce.
15) Ditch the skin: When ordering poultry, ask for the skin to be removed (if it isn’t already). The saturated fat found in poultry skin is unhealthy and can cause high cholesterol.
16) Upgrade your combo: A restaurant meal combination typically includes a form of over-processed, high-fat potatoes. Enhance your meal by replacing this portion with a green salad, fresh fruit or nutrient-rich vegetables.
17) Portion control: It is possible to eat too much even when ordering healthy. Pre-determine what should be leftover and place it in a to-go box before you start eating. Don’t know how much is too much? A serving of complex carbs should be about the size of your fist, lean protein should be about the size of your palm and healthy fats should be about the size of your thumb (of course, everyone’s dietary needs vary – figure your needs out ahead of time to help you make the right choice).
18) Take a breath…or two: It takes approximately 20 minutes for your stomach to tell your brain it’s full. The Journal of The American Dietetic Association conducted a study which shows those who take their time eating consume an average of 66 fewer calories than their fast-eating counterparts while feeling like they’ve eaten more. Savor every bite!

When ordering desserts…

19) Save it for later: Let your meal digest before settling on sweets. Go ahead and take a walk after your meal to get your metabolism going. Desserts may sound tasty, but ask yourself if you’re still hungry. Remember to allow your stomach at least 20 minutes to give you an honest answer.
20) Fresh fruit: Try satisfying your sweet tooth with fresh fruit. Fruit has natural sugars that make for a delicious dessert packed with essential nutrients such as fiber, antioxidants and vitamins.

Company Function or Company Malfunction? How to Dress Your Best this Holiday Season

Invites for holiday parties are flying around the office faster than Santa’s sleigh on Christmas Eve. ‘Tis the season for casual gatherings, fancy dinners and lively cocktail hours. Are you ready to set a favorable impression at your company? Use these 6 stylish secrets to wow your colleagues:

1) Plan ahead. Know the dress code ahead of time. If it’s not disclosed in the invitation, use the venue as a source to draw inspiration. Put some thought into it: you would dress differently for a party at your coworkers’ house than you would for a party at a restaurant lounge.

2) Better safe than sorry. When in doubt, dress on the conservative side. Layering is a great way to dress up with the opportunity to dress down. Try topping your outfit off with a classy blazer or an embellished shawl.

3) Texturize. Now is the time of year to spice up your wardrobe with fun textures for the season. Try one of these cozy options: velvet, satin and cashmere.

4) Simple is beautiful. If you’re looking to make a statement, wear a fancy piece and dress the rest down (i.e. if you’re going for the velvet look, wear a velvet blazer with black slacks or velvet skinny jeans with a white chiffon blouse – NOT a velvet blazer with velvet skinny jeans.)

5) Accessorize. Use accessories to complete your look. Opt for a glistening necklace or dangly earrings that frame your face. For a man, try a colorful tie with a stylish tie clip. These items are festive and can be easily removed if you feel over-dressed upon arrival.

6) Suits you. Be yourself! Let your character shine through, yet don’t feel like you have to be somebody else. Make sure you are comfortable in your outfit. If you are not the kind of girl who wears 5-inch heels, now is not the time to test out the look.

There has been reason after reason why employers have pushed off learning about Health Care Reform and the employer intricacies contained within the bill.  And why not?  You’re very busy and the Supreme Court might strike it down?  Well, it cleared that hurdle, but still, the election might change everything.  Well, not true either—and now its time to face the fact that you need to get prepared.

What are we talking about today?
Here today, we want to discuss one very important part of the bill which levies a fine of up to $1,000 for each failure, the SBC (summary of benefits and coverage).

What is an SBC?
It is basically a disclosure-style requirement that creates a new way in which you have to inform your employees of their benefits options so they can have a clearer picture of how the plan designs you offer differ and which best suits them/their families.

When is the mandate effective?
Basically, after a few delays, it was decided that starting with all effective dates of November 1, 2012 and after, the SBCs must be furnished.  In other words, learn it, because it’s effective now.

How do you comply?
Fully Insured:
The good news about this requirement is that for fully insured groups, this is one of the rare instances where you actually get substantial help in compliance.  In the fully insured world you don’t have to create the document—you need only distribute the document.  The insurance carriers will create the SBC and, for the most part, the following instances are when you are required to distribute the document:

Open Enrollment: The SBC must be provided at the same time the open enrollment materials are distributed.

Initial Enrollment: The SBC must be provided to any newly eligible employee (e.g., a new hire or an employee whose hours have increased to full time) at the time their other benefits information is provided.

Upon Request:  If an employee requests one, you must furnish it as soon as possible, but no later than 7 business days.

Automatic Renewal: In general, if your renewal or “reissuance of coverage” doesn’t actually require reapplication, then the SBC must be provided no later than 30 days prior to the first day of the new plan or policy year.  Having said that, the Final Rule explicitly affords some flexibility with the 30 day rule when the terms of coverage are finalized fewer than 30 days in advance of the new policy year.

Self-Insured:
Basically the law dictates a very specific format for the document’s appearance (there is a model notice sample available at http://www.dol.gov/ebsa/pdf/CorrectedSampleCompletedSBC.pdf).  This could be difficult to comply with as an employer because it’s asking for very specific information about how the plan provides coverage for specific medical conditions, and some of this is already covered in the SPD.  Unfortunately, you cannot use the SPD as a stand in for the SBC and must furnish it in all circumstances shown above under the compliance for Fully Insured plans—the only difference here is you are responsible for both distribution and creation.

Fully and Self-Insured plans:
The times you must distribute are the same and discussed above, but it’s also important to note that you may provide the document in hard copy form or electronically (assuming you meet certain criteria) and, in all cases, you must be aware of your duty to provide the document in culturally and linguistically appropriate fashions where necessary.

What happens if you don’t comply?
Government entities have said that regulations, especially in the first year will be soft as long as there is a “good faith” effort to comply.  That being said, the language of the bill allows for fines of up to $1,000 per failure to properly distribute the SBC, so it’s certainly important to be aware of.

This regulation, as with most of PPACA has many moving parts and can be very tricky to understand properly.  As always, Montage clients can be sure we are watching your compliance very closely and ensuring you are within the boundaries of the law.  For readers that do not use Montage Insurance Solutions as benefits consultants, we are more than happy to act as a second set of eyes and are always available for questions—what’s most important is keeping your company free from needless fines.  Happy Healthcaring!

Baby Steps, Big Benefits – How Walking Can Curb Medical Renewal Rates

Many employers believe employees will accomplish more work if they spend more time at their desks, but we may be losing money in this situation.

Our medical insurance renewal rates tell us about the health of our employees – this isn’t new news. In fact, we have known this for years. Coping with (and paying) double-digit renewal rates from our group medical carrier is exhausting. So, what can we do about it?

We should all get up and walk away.
An American Cancer Society study found that sitting for more than six hours a day possibly shortens our lifespan1. Our sedentary lifestyle creates a greater risk of chronic conditions, such as diabetes, obesity and high blood pressure. According to a Health Value Study, health care costs for people with chronic conditions make up the majority of U.S. expenditures on health care2. A deskbound lifestyle triggers higher utilization and claims, which in turn increases the rate at which our medical premiums rise.
One of the best ways to help curb our medical renewal rates is to encourage employees to stop working and get on their feet. A daily routine of regular, brisk walking can considerably improve one’s health. The benefits of this simple and easy routine are extensive:

• Improves circulation
• Improves heart health
• Bolsters the immune system
• Helps prevent osteoporosis
• Helps prevent/control Type 2 diabetes
• Helps control weight
• Lowers LDL (“bad”) cholesterol
• Raises HDL (“good”) cholesterol
• Lowers blood pressure
• Improves mood
• Reduces risk of stroke
• Improves cognitive function3, 4

Walking is the ideal gateway to making sustainable changes for long-term health.
Inspiring our employees to step it up creates a healthier, happier work environment. It is proven that wellness programs are a very cost effective solution toward preventing and managing chronic disease5. In return, we will see a reduction in the rate at which our medical premiums rise. Partner with your insurance broker and medical carrier to sponsor employee awareness and healthy interoffice competitions.
THE STARTING LINE – Relay these 6 tips to your employees to help get them on their feet:

1) Be prepared. Always have a comfortable pair of walking shoes in your car or at your desk. It will be easier to squeeze in power walks throughout the day.
2) Pencil it in. Set yourself a reminder on your computer or cell phone that prompts you to get up at least every hour to take a walk around the office.
3) Skip the Java. When you are feeling sluggish, take a walk! Increasing your heart rate boosts concentration and energy levels.
4) “There is an app for that.” Download an application for your smartphone (such as Walkmeter or MapMyWalk) to record routes, distance and speed. Show off by uploading your results straight to your favorite social media sites.
5) Start small. Begin with a goal of walking 10 minutes each day. Once comfortable, increase your goal – even if it is by 1 minute. You will quickly be on your way to the recommended 2½ hours of moderate physical activity per week.
6) Social Studies – the more, the merrier:
– It’s all in the family. Make it a nightly routine to take a walk around the neighborhood. It is a great way to squeeze in extra steps while building healthy habits. If you have kids, have them add walking to a responsibility chart. Use stickers as points toward a special prize. They will be the ones reminding you to walk.

– “Let’s meet for…a walk?” Yes! Instead of catching up over lunch or a cup of coffee, meet a friend for a walk. Having a stimulating conversation will help keep your mind off of your steps. An added bonus: you will strengthen your respiratory system by walking and talking simultaneously.

– Bring it on! Organize an interoffice competition to see who can take more steps during each month. Use pedometers or body monitoring devices (such as Basis Band or BodyMedia) to keep track of steps. A healthy sense of competition creates healthy lifestyle habits. Just like kids, adults are motivated by rewards. Use a point system and award prizes – such as smoothie bar gift cards or an iPod shuffle – to the winner(s).

1) http://www.usatoday.com/news/health/2010-07-27-sitting-death_N.htm
2) http://www.healthvaluestudy.com/assets/files/papers/Paper–Chronic_Sufferers.pdf (page 9)
3) http://www.mayoclinic.com/health/walking/HQ01612
4) http://www2.cambridgema.gov/~cdd/et/ped/ped_hlth.html
5) http://www.healthystates.csg.org/NR/rdonlyres/E42141D1-4D47-4119-BFF4-A2E7FE81C698/0/Trends_Alert.pdf (page 18)

…PAY OR PLAY

Companies with more than 50 employees that do not offer health insurance as a benefit, and have at least one full-time employee gets a subsidy from the federal government to purchase health insurance on his or her own, must pay a fee of $2,000 for every one of your full-time workers beginning  1-1-2014. (Accountants take note: you could subtract the first 30 of your employees from that assessment)

Pay or Play…example where you choose you’d rather pay the fine:

You have 100 employees and DO NOT offer medical insurance
1 of your employees gets a subsidy to purchase insurance from the exchange
You are fined $2,000 per year, per person who does not have insurance offered
You can subtract 30 employees from your count to calculate your fine
You are fined on 70 of your 100 people at $2,000 a person

Your annual cost is $140,000

Pay or Play…example where you choose NOT to pay the fine:

You have 100 employees and offer medical insurance
You offer a base plan and a couple of buy up options
Your base plan costs $350 per month for employee only
You pay for 50% of the base plan for Employee Only Premium and have your employees buy up to other options if they choose
You are able to write of your premium for State and Federal tax purposes
Your combined State + Federal tax bracket is 38%

Your annual cost is $130,200

Spelling out the math…
The BASE PLAN employee only premium = $350

50% of that is the employer’s responsibility = $175

All 100 of your employees take the plan so you pay 175 x 100 per month = $17,500

Annualized 17,500 x 12 = $210,000

At a State + Federal tax bracket of 38% you wind up with 210,000 x 0.62 =
Your annual cost is $130,200

So, after factoring in the tax treatment, not only is it nearly $10,000 per year cheaper for you to offer benefits but you avoid the soft dollar expenses also…

Consider for a second if you just pay the penalty, your company would also…

Force your employees to fend for themselves in the exchange and figure out plan differences
You cannot say you offer benefits during discussions of employee recruitment and retention
You burden your HR department with the need to understand the 100 different individual plans your employees have if anyone has claims questions
You forego the services of a broker to help your HR team and to advise you on the other fines and employer pitfalls
And, again, it’s costing you $10,000 more for your troubles!

The fine for not offering coverage is $2,000 per year per full time employee.

Even if you do offer benefits, you’re not entirely out of the woods yet with required benefits and keeping away from fines …just in case you thought my $175 employer contribution was too high.

Let’s take the same 100 employee group and walk through the provisions for the “Unaffordable Coverage”.
The fine for non-compliance is actually $3,000 per year, per person affected (not to exceed the would-be fine for not offering coverage at all) and is triggered by an employee receiving a subsidy to purchase coverage through the exchange.

First and foremost, for a plan to be considered “affordable” regardless of what you do to split the premium with an employee, the plan has to maintain an actuarial value of 60%.

In other words, you can’t get away with buying a cheapie plan that forces all of the costs of service onto the member with extra high co-pays or co-insurance rates (which is why we set the base plan at $350, not $150!).

Assuming your plan pays for at least 60% of covered health care expenses for a typical population, and then you need to look to how you set your premium split.

The cost for an employee’s premium cannot exceed 9.5% of his/her annual salary.

In the example from before where the employee’s cheapest option is $175 per month, the employee must be making an annual salary of at least $22,106 for this premium figure to be in compliance.
Assuming the employee works the average 40 hour work week, the lowest hourly rate a person could make working for 52 weeks a year is $10.63/hour for the company to still be in compliance.

Spelling out the math…
If an employee earns $22,106 per year then 9.5% of that is (22,106 x 0.095) $2,100.07.
If $2,100.07 is the most he/she can pay annually, that broken out monthly is (2,100.07 / 12) $175.01.
Thus your $175 is under the maximum allowable premium for this employee and you are complaint.

The fine for unaffordable coverage is $3,000 per year per person with “unaffordable coverage”

PPACA  creates disclosure requirements to help plans and individuals better understand their current health plans as well as other coverage options that might be available.  Under the statute, federal agencies were very specifically tasked with creating a model notice.  It was to be in a font no less than 12-point and be no more than 4 pages long (front and back).  The proposed rule is intended to help consumers make apples to apples comparisons of plan options.  It is required to include an Easy to understand Summary of Benefits and Coverage (SBC) and a uniform glossary of terms commonly used in health insurance.  The SBC will provide a “plain language” explanation of the plan options and will also give coverage samples for benefits provided for 2 common scenarios:

-Having a baby
-Managing Type 2 Diabetes

The rule DOES apply to Grandfathered plans and must be provided in the following instances:

-Initial Enrollment/application
-Renewal/re-enrollment
-Material change
-On request (as soon as possible but no more than 7 days later)

The SBC may be provided in paper or in electronic form, to be included with the Open Enrollment materials and must be given in “culturally and linguistically appropriate” manners, as well as made available in paper form upon request for both participants and beneficiaries (if at a different address).  In the Self-Funded market, the plan sponsor takes on much more responsibility in drafting and distributing the SBC documents, however, in the fully insured market space, responsibility for the preparation of the SBC falls on the insurer with the plan sponsor responsible for the distribution.

Part of the SBC provision includes a requirement that plan sponsors provide a 60-day notice to participants of any material changes to be made.  The requirement applies to changes made DURING the plan year.  It does not apply to renewals of coverage or any modifications made as part of the renewal.

The fine is up to $1,000 per enrollee who does not
receive the SBC.

The IRS wants to emphasize this is for informational purposes only and does not cause excludable employer-provided health coverage to become taxable.  The regulation includes federal, state and local government entities, churches and other religious organizations…even employers that are not subject to the COBRA continuation requirements.

The regulation states that employers must report the cost of all “applicable employer-sponsored coverage” and clearly says the cost of coverage must include BOTH the employer’s AND the employee’s share of the cost.  The cost of coverage is to be reported in Box 12 of Form W-2, using code “DD.”

We are only talking about the medical premium amounts.  This provision does not alter the rest of the W-2, you simply now insert a lump sum in box 12 with code DD for the medical premiums.

Methods to calculate the cost of coverage…

For Self-Funded groups, the “COBRA Applicable Method” under this method, the reportable cost equals the COBRA applicable premium (or a “good faith estimate”  if the employer subsidizes, the  ‘Modified COBRA Premium Method’)

For Fully Insured groups, the “Premium Charged Method” is best where the employer may use the actual premium charged by the insurer.

Interim guidance issued by the IRS in March 2011 provided relief for employers filing fewer than 250 W-2 forms until “further guidance is issued.”

The fine for failure to comply is $200 per form W-2, up to a maximum of $3 million.

These rules were already in place for self-insured plans but the reform bill extended requirements to fully insured groups as well, however, in December of 2010, fully insured plans were given an early Christmas present by the IRS and were informed they need not comply “until further notice.”  According to the language of the bill, when it does go into effect, Grandfathered plans will be exempt and under these rules a plan may not discriminate in favor of highly compensated individuals on things like eligibility to participate in a plan or the premium co-share for a plan.  Individuals are considered highly compensated if they’re:

One of the 5 highest paid officers of a company
A shareholder of more than 10%
One of the highest paid 25% of all employees

The fine for failure to comply is $100 per day, per individual discriminated against.

MLR and REBATES

A “medical loss ratio” or MLR is the ratio of dollars collected versus dollars spent on “medical care” and “quality improvement activities.”  Under this regulation, Insurers must spend specified amounts of collected premium on “medical care and quality improvement activities” to avoid issuing any rebates.

Insurers must maintain a MLR of 80% in the small group and individual market, and 85% in the large group market.  Plans will be reviewed on an annual basis and if they wind up outside of these permissible margins, Insurers must issue rebates.  MLR calculations began in 2011, with the first round of rebates handed out in 2012…rebates must be issued by August 1st each year.

Rebates are based upon aggregated market data in each State and not upon a particular group health plan’s experience.

If you do receive a rebate, there are essentially 4 steps you need to take…
1. Determine the plan to which the rebate applies:
(e.g. is this for my HMO, my PPO or my HSA?
2. Determine the portion of the rebate that relates to employee contributions:
(e.g. The employer pays 80% of the premium for that plan, thus will rebate 20% to employees)
3. Determine which participants to rebate to:
As long as the allocation method is fair and objective the employer can choose to look at the dollar figure that is to be rebated and make a couple of judgment calls including whether or not to allocate to former participants or only current participants and whether it makes sense to just give a flat dollar amount rather than a specific amount that varies to reflect the actual cost of each employee.
4.     Figure out the method of how to rebate:
There are many acceptable ways to give back…remember, if the employee’s premiums were paid on a pre-tax basis, the rebate is taxable
-A refund check back to participants
-Premium reductions/premium “holiday” for participants
-Benefit enhancements (adding a benefit or service)

All employers must provide each employee at the time of hiring (or with respect to current employees, not later than March 1, 2013) written notice informing them of the existence of the health insurance exchanges.  It must include:

A description of the services provided by the exchange
Info on how to contact the exchange
Wording telling them they may be eligible for a premium tax credit

Additional changes coming in 2014:

Waiting periods may not exceed 90 days

If you’re a company with more than 200 employees, and you do offer health insurance, you would have to automatically enroll your workers in the plan… they could opt out of the coverage, but they are the ones that would have to make that decision.

An Executive Summary on the Top 14 Health Care Reform Requirements

• The Pay or Play penalty requires employers of more than 50 full time employees to offer insurance coverage.  The fine for not offering coverage is $2,000 per worker per year and begins 1-1-2014.
• Unaffordable Coverage – Companies with more than 50 employees who do offer insurance also face a potential fine if the coverage is deemed “unaffordable.”  Coverage is considered unaffordable if the cheapest option an employee can get costs 9.5% of their income or more OR if the plan doesn’t offer coverage robust enough that if a general population was on the plan, at least 60% of the bills would be covered by the insurance carrier.  The fine here is $3,000 per worker that falls into this unaffordable class (not to exceed the penalty the employer would have faced for not offering coverage at all) and begins 1-1-2014.
• SBC – You are now required to make sure your employees get an official “Summary of Benefits and Coverage.”  If you’re self funded you need to make and distribute the SBC, if you’re fully insured, the carrier will make it for you, you just need to be sure it’s given to the employees.  The fine for failing to comply is $1,000 per enrollee who isn’t given an SBC and begins 9-23-2012.
• W-2 – Employers must now report the cost of medical coverage on the form W-2.  The fine for failing to comply is $200 per W-2, up to a maximum of $3 million.  For employers issuing more than 250 W-2’s, this begins with the forms furnished 2013.  For smaller employers, the requirement begins “upon further notice.”
• Discrimination – Employers no longer have the ability (on non-grandfathered plans) to discriminate in favor of highly compensated individuals for things like eligibility or premium co-share for a plan.  The fine here is $100 per day per individual discriminated against and also begins “upon further notice.”
• MLR – The carriers now have to comply with margins of profitability known as “medical loss ratios” or MLRs.  Basically, if the carrier spends more than 20% in individual/small group plans or 15% in large group plans on anything not directly related to medical care, they need to issue policy holders a rebate.  If your company gets a rebate, you may have responsibilities to redistribute the money to your employees.  Rebates began getting issued 8-1-2012.
• Exchanges – All employers will be required to inform their employees about the newly (soon to be) formed exchanges as an option for their health insurance coverage.  This goes into effect March 1, 2013.
• Children up to age 26 regardless of marital or student status are eligible for any medical plan that offers insurance to dependents.  This is in effect now.
• Preventative Care – Non-grandfathered plans may not impose cost-sharing requirements (such as deductibles or co-pays) on preventive care services and immunizations that are recommended by governmental agencies. This is in effect now.
• Breastfeeding – Employers must provide breastfeeding workers with “reasonable break time” and a private, non-bathroom place to express breast milk during the workday. This is in effect now.
• FSA – Non-prescribed over-the-counter drugs will no longer be eligible for reimbursement under flexible spending accounts, health reimbursement arrangements or health savings accounts as of January 1, 2011 and contributions to medical flexible spending accounts will be limited to $2,500 effective January 1, 2013.
• Waiting period for enrollment into the insurance plans may not exceed 90 days.  This begins in 2014.
• Automatic Enroll – If you have more than 200 employees, you have to automatically enroll the employees into an insurance plan.  This begins in 2014.
• Small Business Tax Credit: to incentivize small business to get group plans.  If you have less than 10 employees AND average less than $25,000 annual salary, you qualify for the full credit.  Partial credit is available up to 25 employees and up to $50,000 average salary.  This is available now.  For or a better understanding of the small business tax credit, visit:  http://www.irs.gov/newsroom/article/0,,id=252899,00.html

Do you have a select group of employees that you find to be a primary reason for your positive productivity and business successes?  Do you believe that without these key individuals or individual, your business wouldn’t be where it is today due to their expansive knowledge and skill?

With a proper broker partner, many businesses have successfully protected themselves against physical losses and liabilities.  However, have you considered the loss of a human asset?  How might the loss of a key executive or team member affect your business?  There are many things to consider especially since many business owners are unaware that covering this type of asset is even possible!

Ask yourself a few questions to see if protecting yourself against the loss of a human asset would benefit your organization:

• Do I have other team members that can fill these shoes adequately?  Not only CAN they fill these shoes, but do they have enough hours in the day to do so combined with the proper resources?
• Or do you have to train a new team member, how will that affect the company?
• Would this impact my current client base?
• Will this affect the prospect of new sales?

There are a few ways that you can go about protecting against this risk.  Two ways are Key Person Life Insurance & Key Person Disability Insurance

How Key Person Life Insurance works
As there are many different types of plans and policies to implement to protect against this risk, the essential goal and definition of such is as follows.
Key Person Life Insurance is a policy put in place that is owned by a business rather than by a particular individual.  The policy insureds are key employee(s), yet in the event of a passing of a key employee, the death benefit is paid to the business.  The goal of such a policy is to protect the business against the loss of human assets.  The benefit can do multiple things for the business such as paying for the cost of a replacement and training that particular individual to fill those shoes and can also reinforce credit lines of the business.

How Key Person Disability Insurance works
Similar to Key Person Life Insurance, a business can protect themselves against the loss of a key employee.  In this case, an employee has become physically and/or mentally impaired and cannot perform the natural duties of their job.  Upon this disability, the disability monthly benefit is received by the employer rather than the employee.  This income can be used to fund any losses incurred by not having such a key employee at work and can also pay for the training of a replacement employee.

Gauging your immediate need for personal life insurance and disability insurance is one step towards individual financial security.  But what about business financial security, these are your solutions.  They can strengthen company cash flow and credit lines and can aid in the hiring and training of a new employee.  Consider this option!  Sit down with an advisor.

In a landmark ruling with wide-ranging implications, the Supreme Court today announced it will rule to uphold individual mandate, the piece of the legislation requiring Americans to buy health insurance or pay a penalty, a key part of the law which had come under heavy scrutiny.

In a semi-conservative and also slightly technical statement, the court ruled that the mandate IS actually unconstitutional under the Constitution’s commerce clause, but it CAN stay as part of Congress’s power under a taxing clause. The court said that the government will be allowed to tax people for not having health insurance.  Originally the wording “taxing” was avoided to make the bill a little more palatable to legislators to pass, potentially making it fall under the “commerce clause” or ability for the Federal Government to regulate interstate purchasing.

Addressing the concern that this expands the commerce clause so far people could in the future be forced to “buy broccoli” as one argument puts it, Chief Justice John Roberts wrote, “(t)he Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax. Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness,” Chief Justice John Roberts wrote in the ruling.

The country has been in suspense for months, with an announcement at the beginning of the week that the court would hand down its decision today. The ruling is considered a victory for the Obama administration as many had anticipated that at least some of the law would be struck down.

The court’s ruling upholding the main part of Obama’s law means that people must buy health insurance or pay a tax up to several thousand dollars a year. It also means that other popular provisions of the law will stay, including the various employer mandates we have discussed in several seminars.  If you would like to discuss our Health Care Reform expert doing a personal seminar at your location for your Executive Team, please let us know and we will be happy to look into scheduling that.

The vote was ultimately five to four. Roberts, who was appointed by George W. Bush, joined the more liberal four justices in upholding the mandate. Justice Anthony Kennedy who was originally thought to be the liberal swing vote, sided with the conservative bloc.

“Our precedent demonstrates that Congress had the power to impose the exaction in section 5000 A under the taxing power and that section 5000 a need not be read to do more than impose a tax,” Roberts wrote.

Thank you for trusting us to be your source for pertinent information and if you would like to read the entire Court writing, please click the below.

http://www.supremecourt.gov/opinions/11pdf/11-393c3a2.pdf