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Business Challenges with Human
Resources in 2014Jumping into the Year
Presented by Laura Kerekes, SPHR
Chief Knowledge Officer
ThinkHR Corporation
A Live Webinar Event:
ThinkHR Confidential 3/27/2014 2
What We’ll Cover Today
You’ll get the inside scoop on:
• Health Care Reform: What employers need to plan for and know
• Fair Labor Standards Act compliance with employee classification for
overtime and independent contractor status
• Immigration compliance and E-Verify
• National Labor Relations Board decisions, including employment-at-
will and social media policies
• Affirmative Action and OFCCP
• PLUS: Some practical advice regarding attracting and keeping your
best and brightest employees
ThinkHR Confidential 3/27/2014 3
Health Care Reform
• Grandfathered Health Plans
• Review the triggers that would cause your plan to lose
grandfathered status in 2014
• Increase in percentage of cost-sharing (co-insurance)
requirements
• Increase in deductible or out-of-pocket maximum by amounts
exceeding medical inflation plus 15%, increase in co-pays by
more than $5 or medical inflation plus 15%, decrease in
employer’s contribution rate by more than 5%, elimination of all
or substantial benefits to diagnose or treat a particular
condition. All changes must be measured from March 23, 2010.
• Make sure the Notice of your plan’s intent to remain grandfathered
is included in all plan materials.
ThinkHR Confidential 3/27/2014 4
Health Care Reform
• Annual Limits on Essential Health Benefits: Ensure
the plan and plan documents have no annual limits for plan
years beginning on or after January 1, 2014.
• Advance Notice of Benefit Changes
• Provide written notice of mid-year material plan
modifications at least 60 days in advance to all eligible
individuals.
• For ERISA plans, provide Summary Material Modification
(SMM) notice within 60 days of any material reduction in
covered services or benefits under a group health plan.
• Provide 30 days written notice of changes to your plan in
connection with renewal.
ThinkHR Confidential 3/27/2014 5
Health Care Reform
• Review Waiting Periods for Health Plan Coverage
• Ensure they do not exceed 90 days (applicable to all health
plans) – some states have shorter periods
• Eliminate Pre-Existing Conditions Language from all
health plans for 2014
• Amend FSA Plan Documents as needed
• Summary of Benefits and Coverage (SBC)
• Ensure that all eligible new hires are offered initial enrollment
into the health plan.
• Ensure that SBCs are provided during open enrollment or at
least 30 days before renewal of coverage.
ThinkHR Confidential 3/27/2014 6
Health Care Reform
• Notice Of Public Marketplaces (Exchanges)
• Provided to existing employees on or before October 1, 2013, and
to new hires within 14 days of hire on an ongoing basis
• Should be provided to all employees regardless of whether they
are eligible for coverage under the health plan.
• Patient-Centered Outcomes Research (PCOR) Fee
• PCOR fees are paid once a year in connection with IRS Form 720,
Quarterly Federal Excise Tax Return
• For insured plans: Due by July 31st following the close of the policy
year from the insurer(includes the fee in premiums)
• For self-funded plans: Due by July 31st of the calendar year following
the plan year end
ThinkHR Confidential 3/27/2014 7
Health Care Reform
• Transitional Reinsurance Fee
• Annual fee beginning in 2014 through 2016, for all fully-insured and
self-funded health plans.
• The fee is based on covered lives, and is estimated to be $63 per
covered life for 2014; payable by the insurer for fully-insured plans
and the plan sponsor, through its TPA, for self-funded plans.
• The insurer or plan sponsor must report the number of covered
lives to HHS by November 15, 2014 for the 2014 calendar year,
and will receive an invoice from HHS by December 15 that is
payable within 30 days.
ThinkHR Confidential 3/27/2014 8
Health Care Reform
• MLR Rebate (Imposed on Insurers and Payable to
Policyholders and Subscribers)
• Large group insured plans (over 100 employees) must
spend at least 85% of premiums paid on medical claims.
• Small groups (100 or fewer employees) and individual
markets must spend at least 80% on medical claims.
• If not, a rebate is owed to the policyholder and subscriber,
based on pre-established pools.
• Policyholders and subscribers must be notified by
September 30, 2014 for the 2013 reporting year.
ThinkHR Confidential 3/27/2014 9
Health Care Reform
• Prepare for the Shared Responsibility Employer
Provision – delayed until plan years beginning in
2015 for large employers with 100+ full-time
employees and to 2016 for employers with 50 – 99
full-time employees
• Determine whether you are a Large Employer subject
to the mandate for 2015:
• Add your full-time (those working over 30 hours per week)
and part-time employees to determine this.
• Use special rules for counting seasonal employees.
ThinkHR Confidential 3/27/2014 10
Health Care Reform
Large Employers (100+ employees) for 2015
• Offer coverage to all employees scheduled to work 30 or
more hours per week or 130 hours per month within 90 days
of hire to avoid the risk of an excise tax.
• Establish a look back measurement/stability period to review
ongoing variable/seasonal employees.
• Count all hours worked, but also hours in which an
employee is paid but does not work, such as vacation,
holiday, sick leave, disability leave, layoff, military duty or
other paid leave of absence. Include certain unpaid leave,
such as FMLA, jury duty or USERRA.
• Establish an initial look back measurement/stability period
for newly-hired variable employees (those who may be
seasonal or hired to work less than 30 hours per week). This
period may be between 3 and 12 months.
ThinkHR Confidential 3/27/2014 11
Health Care Reform
Large Employers – How is a Penalty Triggered?
• Offer minimum essential coverage (MEC) to at least 70% of full-
time employees
• Must be affordable and meet a minimum value standard
• Excise tax triggered if an employee qualifies for a premium credit or
cost sharing through the marketplace.
• No Coverage Penalty: Calculated monthly using the number of
full-time employees (minus the first 30) multiplied by $166.67
(equivalent to $2,000 per year)
• Unaffordable Penalty: Calculated by taking the lesser of the
number of employees receiving premium credit multiplied by
$250 (equivalent to $3,000 per year) OR the number of full-time
employees (minus the first 30) multiplied by $166.67
(equivalent to $2,000 per year).
ThinkHR Confidential 3/27/2014 12
Health Care Reform
ACA Provisions Beyond 2014 – Waiting for
Further Guidance:
• Employers With 200 or More Employees Must Provide
Automatic Enrollment in Health Plans
• Non-Discrimination Rules for Insured Plans (we are
assuming that these will be similar to the Section 105
self-insured rules)
• Cadillac Tax – Excise Tax on Rich Health Plans: 40%
non-deductible excise tax on the value of high cost
employer-sponsored health coverage (plans spending
more than $10,200 per employee or $27,500 per family)
• Includes employer and employee-paid premiums and contributions
to HSAs and FSAs
• Indexed for inflation
ThinkHR Confidential 3/27/2014 13
Worker Classification - FLSA
• The federal Fair Labor Standards Act (FLSA) is the major wage-hour law
covering employers
• Last year was a record year for compliance audits and decisions surrounding
worker misclassification for purposes of pay and overtime AND employee
versus independent contractor status
• The number of lawsuits in the past decade and compliance audits in the
current administration have skyrocketed
• DOL is making this a continued emphasis in the next term – the recovery of
back wages and taxes
ThinkHR Confidential 3/27/2014 14
Immigration and E-Verify
• Immigration reform initiatives continue
• In 2013, 45 states and the District of Columbia enacted 437 measures dealing with immigration, a 64% increase over the previous year
• For employers, this includes strengthening the I-9 employment eligibility verification system
• Form I-9
• Enhanced workplace enforcement efforts
• Federal E-Verify system
ThinkHR Confidential 3/27/2014 15
Labor Relations and the NLRB
• The Administration’s decisions and rulemaking favored
organized labor and trend expected to continue
• Section 7 of the National Labor Relations Act protecting
workers engaged in “protected concerted activities”
• Social media
• “At-will” status
• Electronic communications
• Investigations
ThinkHR Confidential 3/27/2014 16
Affirmative Action and OFCCP
Issues
• The size of the Office of Federal Contracts Compliance
(OFCCP) budget has increased for 2014
• Strategic goals: Increasing litigation of cases from 22% to 24%
• Special emphasis targets include disability, veterans and sex
discrimination issues
• Greater emphasis will also be placed on Affirmative Action
compliance
• Tips for employers: Review employment, training and pay
actions, document the business reasons for actions that might
invite EEOC scrutiny; ensure managers are well-trained and
support the company’s EEO policies
ThinkHR Confidential 3/27/2014 17
Tips for Keeping Your Best and
Brightest
• Recent major employer surveys indicate that many employees will seek other opportunities as the market rebounds
• The challenge for 2014 is to ensure we don’t lose our best employees
• Ensure that your compensation and benefits packages are competitive and administered fairly
• Provide opportunities for employees to upgrade skills and share their knowledge with others
• Listen to employees’ ideas, communicate with them often, and involve them in decisions affecting them, as this shows respect
• Communicate goals, roles and responsibilities
• Provide performance feedback and praise results
• Enable employees to balance work and life
• Celebrate successes and milestones
•
ThinkHR Confidential 3/27/2014 18
Thanks for Attending!
• We’ve got a host of management and
human resources challenges this year!
• Need more information or assistance? Give us a call or log in to
our HR library website and post a question or find your answers.
• We’re here to help and will keep you informed on the legislative
and regulatory issues as they are finalized.
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