Archive for the ‘Business Owner News’ Category

As a member with Colorado State Association of Health Underwriters, I was pleased when we had our annual symposium recently to see Denis Storey, Editor for BenefitsPro and Benefits Selling magazine in the audience.  He had taken the time to come to Denver to witness our agents at their best.

He stated in an article, “I think we’re finally seeing some real “let’s get to work” acceptance here in Denver.”  With Health Care Reform implementing many regulations beginning January 1, 2014 with the Exchange, new “pay or play” rules for large groups (50+), brokers have been very proactive in educating their clients, attending meetings on a regular weekly basis.

One of the comments made that made us reflect was 3 years ago, we wondered if we would have a job?  Two years ago, the question was “Will my clients still need me?”  Now, it’s how will the exchanges pay me?

We should applaud ourselves and our clients.  Insurance is about a relationship and advisement, not just throwing a dart at a dartboard and hoping you get close to the center.  Online capabilities are great, but when it comes to wanting to sit down to discuss what you are looking for to get the advice needed, professional insurance brokers are still the solution.


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At long last, the U.S. Citizenship and Immigration Services (USCIS) has published the revised Employment Eligibility Verification Form I-9 in the Federal Register.  The use of the new form is effective immediately.

The new Form I-9 is now two pages, not one, and has six pages of instructions.  So much for the Paperwork Reduction Act!  The good news is the format is easier to follow and fewer mistakes should be made using the new form.  Key revisions on the new form include:

* Adding data fields, including the employee’s foreign passport information (if applicable) and telephone and email addresses.  My recommendation is to have the new hire use his or her work email address and telephone number.  We feel personal email information is not necessary for employment eligibility verification purposes.

* The layout of the revised Form I-9 has a cleaner, easier to follow format.  Hopefully, this will result in fewer mistakes going forward.

To print a copy of the new form, go to www.uscis.gov.  The form has an expiration data of 3/31/2016.  Destroy all copies of the form that expired August 31, 2012 and do not use going forward.  You may also request us to send a copy to your company.

Note:  Do not go back and complete the new form on employees already hired by your company.  Only use the new form for persons hired going forward.

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According to a recent CareerBuilder survey, 43% of hiring managers and human resource professionals are concerned top workers will leave their organizations this year.

Workers are leaving companies for other opportunities.  It’s no wonder retention is a concern for many organizations today. 

In addition to retention worries, the inability to fill open positions presents another worry for hiring managers. 

Biggest staffing challenges:

  • Being able to retain top employees (35%)
  • Being able to provide competitive compensation package (35%)
  • Worker burnout (32%)
  • Maintaining productivity levels (29%)
  • Being able to provide upward mobility (26%)
  • Can’t find high-skilled applicants (24%)
  • Don’t have the budget to recruit (13%)

Solutions may include:

  • Good work culture
  • Career advancement opportunities
  • Flexible schedules
  • Communication to employees

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Did you know:

22% of employees are expected to respond to work email when they are not at work.

50% of employees check work email on the weekends.

46% check work email on sick days.

34% check work email while on vacation.

In recent cases, non-exempt employees have sued their employers for unpaid overtime compensation because the employer required them to check communication on their smart phone when not on duty.  The cases revolved around the question of whether the act of checking communications constitutes compensable work.

The Fair Labor Standards Act (FLSA) governs minimum wage and overtime.  It entitles employees to whom the law applies to receive overtime compensation for “time spent working” beyond the 40-hour workweek.  Both the minimum wage and overtime provisions of FLSA generally do not apply to workers in executive, administrative, professional and outside sales employees who are paid on a salary basis.  Requiring these “exempt” employees to check their smart phone would not subject employers to overtime claims.

As phone records are easily accessible, employees who use them off hours can provide solid evidence for their overtime claims.  To avoid claims for unpaid overtime, employers can limit use of company cell phones to exempt employees only, or limit their use by non-exempt employees to work hours only.

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(MyHealthGuide Source: Milliman, Inc., 5/11/2011, www.milliman.com Seattle)

 Milliman, Inc., a premier global consulting and actuarial firm, released the results of the 2011 Milliman Medical Index, which measures the total cost of healthcare for a typical family of four covered by a preferred provider organization (PPO). The 2011 MMI cost is $19,393, an increase of 7.3% over 2010, which is the lowest annual rate of increase in more than a decade. Yet even though the rate of increase is the lowest in recent memory, the increase in total dollars–$1,319 in 2011–is the highest in the history of this study. “In 2002, American families had healthcare costs of $9,235, and those costs have now doubled in fewer than nine years,” said Lorraine Mayne, Milliman principal and consulting actuary. “As costs continue to grow–and even as the cost trend decelerates–the total cost of care for American families constitutes a larger and larger portion of the household budget.” Of the $1,319 total cost increase, employers bore $641 while employees shouldered the rest–$403 in payroll contributions and $275 in additional cost sharing. “As has been the case in four of the last five years, employees are paying a larger share of the cost increase than their employers,” said Scott Weltz, consulting actuary at Milliman. “That said, in absolute dollars, both employers and employees have shouldered approximately the same amount of additional costs since 2006, with employers absorbing $3,023 and employees absorbing $2,988.” In addition to looking at costs on a nationwide basis, the Milliman Medical Index also examines 14 geographic areas. “This year, six of the fourteen cities we studied exceeded $20,000 in total costs for a typical family of four,” said Milliman principal and consulting actuary Chris Girod. “But we still have several cities, Phoenix, Atlanta, and Seattle, with less than $19,000 in total costs for the typical family. These cost differences result from variation in local practice patterns and from differing costs for healthcare goods and services.” This years Milliman Medical Index also helps put healthcare reform changes in perspective, and includes various analyses of how healthcare reform is (or is not) contributing to the underlying cost of care. The report also looks at how healthcare reform changes may affect the typical family of four represented in this analysis.

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The Senate voted on February 2nd to repeal the 1099 reporting requirements.  Now, the House must vote.  This is good news, as this would have created a paperwork nightmare!

The new 1099 requirements are part of Health Care Reform. In the 2000 page document, someone decided to insert this language and viola, here we are with a law that does not make sense for most day-to-day services we receive; i.e., Staples, Costco, etc. These are large firms that we all do business with. What I think the law was pushing for was to provide the government with documentation for those smaller vendors who are perhaps contract labor, sole proprietors and sometimes do not use proper tax reporting.

The law has gone back for appeal now twice, but at this point nothing has changed in the law other than it has been moved to 2012.

In 2012, a 1099 form will be required to all vendors making $600 or more. The new 1099 ruling applies to both individuals and businesses.

The government hopes the changes in 1099 reporting will generate additional tax revenue on income that has previously gone unreported. This part of the law is in the Health Care Reform bill because that revenue could potentially pay for some of the bill’s potential costs.

We think every business/individual should be prepared and begin setting up their books, but Congress may have more conversations about the amount of paper this will generate and additional staff hours to handle this reporting process. Some of the provisions just do not make sense!

We will keep you updated on pertinent information as it comes up. Several of the provisions have already been moved back, and we hope the government powers will continue to do this until they have a law that makes sense!

“Small enough to know you; large enough to serve all your benefit needs”

Jacquie Healy

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I read a recent article at www.theHRSpecialist.com  that made me call my husband immediately and read it to him.  As a “lead” for his employer, who is required to travel and live in hotels constantly, he’s often encourage to do his paperwork “off the clock” while back at the hotel rather than on the job site and quite frankly, rarely has time during the normal work day to tackle it. On site safety is obviously an issue as well as supervision of his team and he always feels good doing it since his company constantly praises him for his time management and work ethic however, this could be an issue going forward for a lot of us. 

           We all love an employee who gives extra effort – the type who will come in early or stay late to finish projects and get ahead on paperwork.  But, as this new case shows, managers should be careful about praising hourly employees for their off-the-clock efforts. Workers can use those comments in an overtime-pay lawsuit as proof that the company not only knew of the unpaid extra hours, but also condoned them.

RECENT CASE:  A group of Los Angeles County public safety employees filed a lawsuit for unpaid overtime. The hourly workers claimed they weren’t paid for extra time they worked before and after their shifts when they checked e-mail, had briefings and completed reports. 

The county claimed it had no idea about the work …. but performance evaluations told a different story. The employees had regularly been praised for their extra (unpaid) work.  That was enough for the court to conclude the violations might be willful, extending the back pay claim from two years to three.

Top 3 overtime mistakes (per the US Department of Labor)

  1. Incorrect classification.  The most common mistake is wrongly labeling employees as exempt from overtime pay.
  2. Working off the clock.  E-mail and smartphones have helped blur the lines on what is “compensable” work time.
  3. Regular pay for OT time.  Some employers pay the regular hourly rate, not the required time-and-a-half, for hours exceeding 40 in a workweek.

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1.  The health care reform law includes a provision that restricts the use of annual limits on the dollar value of essential health benefits. But plans can apply for a waiver if complying with the provision would:

  • significantly decrease the access to benefits, or
  • significantly increase premiums 

This provision applies to grandfathered and nongrandfathered group plans.

2.   Individuals can continue to use health care spending account funds for OTC medicine or drugs as long as they have a prescription written by a doctor in the state where the medicine or drugs are purchased. This rule does not apply to insulin. This change starts January 1, 2011, for all plans regardless of the plan year dates. 

 3.  Money removed from an HSA or MSA and not used on qualified medical expenses will be taxed 20%. That’s an increase of 10%. This change begins for disbursements made during tax years starting on or after January 1, 2011.

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The Chicago Tribune (9/26, Japsen) reported, “Workers can expect to pay hundreds of dollars more for their healthcare coverage next year,” because “in 2011, the combined average of premium and out-of-pocket costs for healthcare coverage for an employee is projected to climb to $4,386, according to an annual study by Hewitt Associates to be released this week. That’s a 12.4 percent increase, or $486, over this year.” Employers, “meanwhile, will see their health insurance costs go up nearly 9 percent, to an annual tab of $9,821 per employee, or double the employer’s annual worker tab from nine years ago, according to Lincolnshire-based Hewitt.” The report also said that “overall healthcare costs continue to rise 6 percent to 8 percent annually, primarily because advances in medical technology and the increasing use of medical services by an aging population.”


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Employers hiring new employees after February 3, 2010 and before January 1, 2011 may receive a tax break of 6.2% Social Security tax (up to $1,000). A new employee is identified as not having been employed for more than 40 hours during the 60-day period ending on the date employment begins, is not hired to replace another employee unless the other employee separated from employment voluntarily or for cause (including downsizing); and the new employee is not related to the company owner(s). Employers can take this credit on their 2011 tax return. See IRS Form W-11 for details.

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