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President’s Message

Bright Spot

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Growing the Business: What is the best sales quota frequency?

Onboarding New Hires: Which notices are required?

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In the News: News for federal contractors; IRS issues warning; IRS releases 401(k) guidance; New rules for disability plans; H-1B premium processing suspended

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Compliance Corner: DOL issues compliance program guidance

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Reform Review: ACA news to keep you informed

2017 ACA Reporting: Revised publication is released

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What’s Happening? BLS releases average costs for employee compensation

Of Interest…

TIDBIT: OSHA urges employers to fix top 10 hazards

President’s Message By Marian Carpenter CBC

The new administration’s strategy to repeal and replace the Affordable Care Act was withdrawn on March 24, 2017. No further has been taken on the American Health Care Act since then and so continued adherence to all current ACA provisions, notices, tracking, and reporting remain in place. You may be interested in recent public opinion about repealing and replacing the ACA as shown in a Kaiser Family Foundation infographic on page 5 of this newsletter.

As always, please feel free contact me with any questions.

(952) 746-1258 or mcarpenter@absmn.com

This Month: March 2017

Sales Quota Frequencies: Which is best?

That’s what two researchers at Harvard Business School wondered. Knowing that sales reps generally receive two types of compensation, salary and a monthly bonus tied to meeting quotas, they set out to determine what kind of quota is the most motivating.

Results showed that if the goal is simply to increase the absolute number of sales, then a frequent quota is more effective, especially for boosting performance among the

least effective employees. However, if the goal is to sell high-profit items, then long- term incentives worked better.

While a daily quota increased the number of products sold and dollars earned, the types of products sold were low-ticket items. Even high performers neglected the

higher-margin items under the daily quota expectations. Still, this strategy may provide the most benefit for some businesses.

On the other hand, offering a less frequent quota, based on the length of the sales process, seems to permit sales reps to focus on larger, higher profit sales.

You can read the about this research here. _______________________________________________________________________________________

Onboarding New Hires

Which Notices Should They Receive?

There are several notices you should be distributing to new employees, most pertaining to group health plans. These notices come from the Department of Labor, through ERISA obligations, and other regulations.

Many notices are provided by carriers in group health plan certificates, especially if your plan is fully-insured. Here is a list of the most common notices all new hires should receive:

• Summary of Benefits & Coverage (SBC) • Women’s Health & Cancer Rights Act (WHCRA)

• Marketplace (Exchange) Notice • Family & Medical Leave Act (FMLA)

• Medicare Part D Rx Coverage Notice • Newborn’s Act Disclosure

• HIPAA Notice of Privacy Practices • General Notice of COBRA Rights

Most of these notices can be found as model language on the DOL website: https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/health-plans

Other notice requirements may also be satisfied by using approved posters in the workplace: https://www.dol.gov/general/topics/posters

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GROWING the Business

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For Federal Contractors The Fair Pay & Safe Workplaces executive order issued last year is now revoked. Known as the “blacklisting” executive order, federal contractors will not be required to 1) report alleged labor violations to federal agencies as part of the bid process; 2) implement procedures to comply with required paycheck transparency; and 3) will not be prohibited from entering into mandatory arbitration agreements regarding employee Title VII claims.

IRS Warns of Ongoing W-2 Email Scam The IRS says a dangerous email scam is targeting various groups, including employers and private-sector businesses. Cybercriminals are using spoofing techniques to disguise an email to make it appear as if it is from an organization executive. The email is sent to an employee in payroll or human resources departments requesting a list of all employees and Forms W-2. To report data losses related to this W-2 scam, visit the IRS website.

IRS Issues Guidelines for 401(k) Hardship Distributions An IRS memorandum for its employees who examine 401(k) plans explains guidelines for determining if a plan hardship distribution meets IRC safe-harbor standards. Employers making these distributions must obtain source documents or a summary of the information in the source documents. A Notice, which must contain specified information as outlined in the new memo, must go to any employee requesting a distribution when source docs are provided.

Disability Contracts Now Subject to New Claims Rule For disability claims filed next year, new rules under ERISA will apply. The rules pertain to benefit denials and require 1) notices that fully explain claim denials; 2) any internal rules or other standards relied upon by the plan for a denial; 3) notification of a claimant’s right to access records of a claim, and some other requirements. Although carriers will be responsible for the new rules in most cases, employers, in their role as fiduciary, will want to make sure their disability plans are compliant. Read a Fact Sheet here.

H-1B Petition Premium Processing is Suspended To guarantee a 15-day processing time for certain employment-based petitions, the US Citizenship and Immigration Services has, in the past, accepted a $1,225 premium filing fee. Premium processing is suspended effective April 3, 2017 for H-1B filings under the Fiscal Year 2018 H1-B cap in order to reduce processing for all petitions.

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TIDBIT

OSHA Identifies 10 Most Cited Violations

According to OSHA’s enforcement director, if all employers simply corrected the top 10 hazards, the number of deaths,

amputations and hospitalizations would drastically decline. Consider this list a starting point for workplace safety: 1. Fall protection 2. Hazard communication 3. Scaffolds 4. Respiratory protection 5. Lockout/tagout 6. Powered industrial trucks 7. Ladders 8. Machine guarding 9. Electrical wiring 10. Electrical, general requirements

Read more about these hazards here and learn about the free OSHA On-site

Consultation Program to reduce them.

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April 27, 2017 is

Take our Daughters and Sons to Work Day

For more information, visit

https://daughtersandsonstowork.org.

In the

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Get the Facts!

We offer a network of professionals to

help you remain compliant with employee benefit regulations.

Please contact us with your questions.

(952) 746-1258 info@absmn.com _______________________________

Affordable Benefit Solutions, Inc. does not give tax or legal advice. Please seek the services of a professional

tax or legal advisor if necessary.

Some information for this article is sourced from:

Bradley; Compliance Alert-DOJ Fraud Section Provides Essential Insight into How Corporate Compliance Programs are Evaluated; March 1, 2017; Anna M. Lashley, Brad Robertson, Travis, G. Lloyd, Authors

Dorsey Health Law; DOJ Issues New, Practical Guidance on Effective Corporate Compliance Programs; February 24, 2017; Laura B. Morgan, Author

COMPLIANCE CORNER

DOJ Issues New Guidance for Corporate Compliance Programs

Last month, the Criminal Fraud Section of the U.S. Department of Justice (DOJ) released new guidance regarding corporate compliance programs. The publication, Evaluation of Corporate Compliance Programs, provides important topics and questions encountered by the DOJ in their evaluations of corporate compliance programs and includes these eleven relevant items used by them when assessing the effectiveness of a program:

1. Analysis and Remediation of Underlying Misconduct 2. Senior and Middle Management 3. Autonomy and Resources 4. Policies and Procedures 5. Risk Assessment 6. Training and Communications 7. Confidential Reporting and Investigation 8. Incentives and Disciplinary Measures 9. Continuous Improvement, Periodic Testing and Review 10. Third Party Management 11. Mergers and Acquisitions

More About the Topics Each topic contains sample questions corporations should expect to be asked during an investigation. DOJ also considers the policies and procedures of the compliance program, including design, accessibility and how these features operate together. In addition, DOJ reviews the processes available to review the compliance program, efforts to encourage its compliance as well as corporate structure when evaluating a program’s effectiveness.

Corporate Response is Assessed Although the guidance highlights the importance of policies and procedures within a corporate compliance program, it also emphasizes a corporation’s response to apparent misconduct, including any remediation efforts, incentives and disciplinary actions used.

Compliance Personnel are Included Compliance personnel do not escape assessment during an investigation. Training, procedures to ensure these employees can do their jobs, and corporate reaction to a compliance officer’s concerns are also included in an evaluation of a program.

Business Associates are Included When developing a corporate compliance program, employers are urged to also consider the role of any business associates, suppliers and other third-party providers in their compliance efforts.

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ACA Information Reporting: This month, the IRS revised

Publication 5165: Guide for Electronically Filing ACA Information Returns for Software

Developers and Transmitters.

This publication outlines the communication procedures, transmission

formats, business rules and validation procedures for information returns

transmitted electronically through the AIR System. The procedures in this

publication should be used when the following information returns are

transmitted electronically:

Form 1094-B, Transmittal of Health Coverage Information Returns

Form 1095-B, Health Coverage

Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns

Form 1095-C, Employer--Provided Health Insurance Offer and Coverage

Note: This publication does not contain information or procedures for filing Forms 1095-A.

The transmittal Forms 1094-B and 1094-C provide information about the Issuer of

the ACA Information Returns and the Forms 1095-B and 1095-C provide

information about covered individuals.

Generally, the Forms 1095-B and 1095-C will be submitted with their associated transmittals, Forms 1094-B and 1094-C; however, in certain circumstances, the Form 1094-C can be submitted alone.

After these forms are processed by AIR, the status of each submission and a detailed acknowledgment is made

available to each Transmitter.

Find updated IRS Pub 5165 at https://www.irs.gov/pub/irs-

pdf/p5165.pdf.

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Health Care Reform: News and Reminders about the ACA

American Health Care Act (AHCA) Withdrawn Unable to gain enough support for the AHCA as an ACA repeal and replacement strategy, Congress ended efforts to pass the legislation on March 24, 2017.

Visualizing Health Policy Infographic Released This graphic from the Kaiser Foundation spotlights public opinion on health reform. A portion of the image is reproduced below. To see the entire infographic, visit the Kaiser website.

Source: Kaiser Family Foundation analysis. Original data and

detailed source information are available at kff.org/JAMA_3-29-2017.

HHS Releases “Innovation Waiver” Promotional Letter Affordable Care Act Section 1332 permits states to apply for a waiver from the employer mandate effective for plan years beginning January 1, 2017. Waivers offer states flexibility to create alternate strategies to providing healthcare access. If an innovation waiver is approved, the state may receive funding to help offset some costs for a high-risk pool, state-operated reinsurance or other cost stabilization programs. You can read the HHS letter here.

CMS Extends Transition for Non-Compliant Plans CMS will continue to allow insurers in the individual and small group markets to renew certain health insurance policies that do not meet ACA reforms. However, such policies cannot be extended past December 31, 2018.

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What’s Happening…?

Employer Costs for Employee Compensation December 2016

Earlier this month, the U. S. Bureau of Labor Statistics reported costs for private industry employee compensation in December 2016 averaged $32.76 per hour worked:

• Wages and salaries averaged $22.83 per hour (69.7% of total costs).

• Benefits averaged $9.93 per hour (30.3% of total costs). Benefits include paid leave, supplemental pay, health/other insurance, retirement, and legally required benefits.

Data for the December 2016 period were collected from a sample that included about 6,800 private industry establishments. You can find the

entire report, which details each compensation component, at https://www.bls.gov/news.release/pdf/ecec.pdf.

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Quick Take

► The cost for private industry employee compensation in December 2016 averaged $32.76 per hour worked.

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effort toward accuracy, any errors are honest mistakes.

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