Health Insurance Strategies

Beginning in 2014 the principal part of the Patient Protection and Affordable Care Act, the health insurance requirement, will go into effect.  On January 1st of next year Americans will be required to obtain health insurance from an employer provided plan, or from an exchange or pay a tax/penalty.  Business owners with more than 50 employees will be faced with a similar question; to either provide health insurance or facing a $2000.00 penalty/tax per employee.  (For help in determining your full time equivalent employees as defined under the Affordable Care Act click here). 

Small Business Tax Credit

When deciding if you should offer health insurance there are a variety of things to consider.  Some companies have decided to get out of the health insurance game altogether.  Beginning 2014 these employers will offer a stipend allowing employees to go out and choose their own level of coverage.   The idea is that employees are better consumers and will choose better individual solutions for themselves while companies can limit their exposure to unpredictable swings in health insurance costs.  Another thing to consider is the recruiting and retention of employees.  In many professions offering health insurance coverage is a given while in others it is almost non-existent.  When formulating a strategy for 2014 keep in mind what your competitors are doing. 

Employers Under 50 Employees:

If you have determined that you will be under 50 employees and therefore not subject to the tax/penalty there are still a few things to consider.  Take a look at your employee count.  If you have fewer than 25 employees you may qualify for a tax credit.  Estimate the costs of providing health insurance, any tax credits and other factors to estimate your costs with each scenario.  Keep in mind your personal cost of non- compliance under the individual mandate. 

Employers close to 50 Employees:

For those just under 50 employees there will be the temptation to remain below that number. Remember that just because you are subject to the overall tax the first 30 employees still remain tax exempt.  The marginal cost of the 51^st employee is $42,000 not $102,000.

Over 50 Employees:

For employers that do not offer health insurance with a significant number of employees over 50 the coming year is causing increasing trepidation.  Many business owners are looking to see if their competitors will be passing on costs to consumers or trying one of the many strategies to lowers their costs under the Affordable Care Act.  Temporary employees are being considered more frequently as the temporary employees are counted under the temporary employer’s number of employees for the tax/penalty.  Another strategy has been to increase the number of employees and cut hours per employee.  For example a large restaurant chain signaled that they were planning on making as many of their part time employees truly part time as defined by the ACA.  Reclassifying employees as part time was accomplished by restricting the number of hours a part time employee can work to fewer than 30 hours per week.  Another time honored route to avoid payroll taxes, workers’ compensation and the like is to try and turn employees into independent contractors.  The Affordable Care Act is another reason some businesses will be looking at classifying people as 1099 independent contractors.   Enclosed is a link to the State of Oregon’s rules on independent contractors. http://www.oregon.gov/IC/pages/05-qanda02.aspx  If you go this route review your plan with someone like a CPA or attorney as there are a variety of pitfalls.  For example, the Internal Revenue Service, Oregon Employment Department and the Oregon Department of Revenue do not completely agree on the definition of an independent contractor. Other businesses are looking at breaking up their entities into groups smaller than 50 employees.   The Affordable Care Act has provisions to treat multiple businesses as one entity.  Structuring your businesses in such a manner that will not be considered as combinable is something you should review with an expert in this arena.  If you are considering this option here are links to the IRS website on controlled groups for you and your attorney and/or CPA to review.

Applicability to the PPACA - http://www.irs.gov/pub/irs-drop/n-11-36.pdf

Guidance on controlled groups-  http://www.irs.gov/pub/irs-tege/epchd704.pdf 

 A twist on independent contractors and non-combinable entities is outsourcing employees to another organization to keep your number of core employees closer to 50. Outsourcing non-core functions – from HR to accounting to shipping is easier than ever.

The Affordable Care Act is a complicated piece of legislation.  Review your options.  Put estimated price tags on each option. Evaluate what other are doing or ask your trade association. Doing so now will help avoid a scramble in the final quarter of 2013.

Arin J. Carmack

VP of Risk Management

Gossip in the Workplace

What is gossip?
There are two reasons for sharing social information. One is that the exchange of useful information helps us survive and prosper. In early years, it would have increased your chance of survival if you had an ability to learn useful information such as where the rains are falling, where the food is abundant and where the predators are. The second is to establish alliances within our group; to determine the people we trust and those that we need be careful with.

Negative Consequences of Gossip
Here are some negative consequences to consider about workplace gossip:

• Gossip damages trust and morale.
• Interferes with productivity and efficiency.
• Truths or assumptions are more likely to be distorted.
• Privacy may be violated.
• Hurt feelings and damaged reputations.
• Decreased employee satisfaction.
• Employee may be passed up for a promotion due to unprofessional behavior associated with gossip.

How to Avoid Gossip:
You may have decided that you don't want to participate in gossip, but aren't sure how to get out of the situation. Here are some ideas that may help.

• Be honest about your thoughts and feelings.
• Focus on yourself. Use “I” statements when communicating.
• Remember KISS. “Keep it Simple Silly” when confronting the behavior
• It's okay to leave the room. If it's only two people in the conversation, it's impossible for the other to keep going without you.

Here are some examples of what to say in an uncomfortable gossip situation:

I have to be honest, I don't think that talking about the problems that ______ is having behind her/his back is going to help her/him.”

“I am uncomfortable discussing this and I think it's inappropriate. I know that my feelings would be hurt if I knew my friends (co-workers) were talking about my personal problems and spreading things around.”

Why HR & Social Media Don't Mix

You may have been told that "everyone" is using Facebook as a screening tool. This may have been true for a short time, but the HR profession has thought twice about the risky practice.

In 2011, a SHRM study found that 71% of HR managers surveyed said their organization had never used or had discontinued using social networking websites to screen job candidates due to the legal risk of revealing protected characteristics, such as age, race, religious affiliation, and marital/family status. Survey respondents were also concerned about the reliability of the information found on social media sites, as well as the lack of relevance to work-related potential or past performance of the candidates.

You have probably seen those lists of interview questions NOT to ask prospective employees. They read something like:

• How many kids do you have?
• How do you spend your Sunday mornings?
• How old are you?
• Do you have any medical issues?
• Etc.

See what the NLRB says...

Now think of the kinds of information people disclose on their Facebook pages. They typically include things like:

• How many kids they have.
• How they spend their Sunday mornings.
• How old they are.
• Full summaries of their medical issues.
• Etc.

Remember, it doesn't matter if you are just "taking a peek" or don't end up using the protected information in making a hiring decision. Merely looking at a job applicant's site is enough to raise a  presumption that your hiring decision was influenced by the content of the site — after all, why else would you have looked in the first place? And remember, you can't unsee what you've seen.

To Pay or Not to Pay Overtime

How Should My Employee Be Classified?

It is important to ensure that jobs are appropriately categorized as either Exempt Status positions or Non-Exempt Status positions. The Fair Labor Standards Act's (FLSA) Exempt Status applies to employees who meet specific exemption criteria delineated in the Act. Exempt employees are typically salaried and are paid for the job performed rather than the number of hours of labor. Exempt Status employees are not eligible for overtime pay.

Questions? Ask Your HR Expert.

Top Tips – Meals and Breaks

 

• 10 Minute Rest Breaks
• 15 minutes if under 18 yrs;
• For every major part of a 4 hour segment; midway if possible;
• In addition to, and separate from, meal times.

30 Minute Meal Breaks

• For shifts of 6 hours or longer;
• Unpaid, no interruptions;
• Between the 3rd & 6th hour if shift is longer than 7 hours; otherwise between the 2nd & 5th hour.

Note: Certain tipped food and beverage employees can voluntarily waive meal periods by completing the appropriate BOLI form.
Exception to 30 minute Uninterrupted Meal Break:
If you can show “undue hardship”, you must provide adequate time to consume a meal, rest, and use the restroom, and pay employees for this time. Effective March 16, 2009, employers must provide a notice to each affected employee on a BOLI form. Retain a copy of the notice for a minimum of six months after employment termination.
“Undue hardship” means: “significant difficulty or expense when considered in relation to the size, financial resources, nature or structure of the business.”
Employers with 25 or more employees must also provide “reasonable rest periods” (no less than 30 minutes during each 4-hour work period or major part thereof) to accommodate an employee who needs to express milk.

• You must pay the employee for the usual 10-minute rest period; the other 20 minutes may be unpaid.
• You can allow the employee to work before/ after her normal shift to make up the time used during the unpaid portion of the rest periods.
• You cannot require her to use paid leave time of she does not want to work before or after her shift to make up the unpaid time.
• You must make a reasonable effort to provide a private location in close proximity to the employee’s work area.