The end of 2015 brought more Affordable Care Act (ACA) guidance. On December 16, 2015, the IRS issued IRS Notice 2015-87, providing further guidance on the application of certain ACA group health market reforms. Many of the changes are applicable to plan years beginning on or after December 16, 2015, however, some of these changes are retroactive. Some of the key areas addressed in the Notice include:
The 4980H(a) employer penalty for failure to offer minimum essential health coverage to substantially all full-time employees will be adjusted for inflation, from $2,000 to the following levels:
$2,080 for 2015 and
$2,160 for 2016
The 4980H(B) penalty (the penalty that applies if coverage offered is unaffordable, or does not meet minimum value) will be indexed as well, from $3,000 to $3,120 for 2015 and $3,240 for 2016.
The affordability safe harbor percentages for employer-sponsored health coverage will be increased, from 9.5% for purposes of the W-2, Federal Poverty Line or Rate of Pay safe harbor. The adjusted percentages will be 9.56% for 2015 and 9.66% for 2016, to mirror the individual shared responsibility affordable coverage threshold.
Notice 2015-87 supplements previous guidance addressing health reimbursement arrangements (HRAs) and employer payment plans (group health plans under which an employer pays for an employee’s individual health insurance premiums).
In addition to ACA guidance, we received further guidance regarding mass transit limits. Following an increase in the mass transit limit provided in the federal budget bill signed into law on December 18, 2015, the IRS issued Notice 2016-6 on Jan. 11, 2016 providing guidance on how the tax limit increase for mass transit applies for 2015. In summary:
The tax limit for transit benefits is now permanently equal to the limit for parking benefits; the monthly tax exclusion for transit benefits was previously $130, while the exclusion for parking benefits was $250;
Employers are not required to provide additional transit benefits to their employees for 2015 due to the retroactively increased limit;
Employees may not retroactively increase their compensation reduction for 2015 to take advantage of the increase in the excludable amount for transit benefits; and
Employees may not reduce their compensation by more than $255 per month in 2016 in order to receive any permissible reimbursement for transit expenses incurred in 2015.
Today the Internal Revenue Service presented employers with an early holiday gift.
The IRS released Notice 2016-4 to delay the due dates for the 2015 information reporting required by the Affordable Care Act (ACA). Specifically the notice extends the due dates for:
Furnishing the 2015 Forms 1095-B and 1095-C to individuals, from Feb. 1, 2016, to March 31, 2016; and
Filing the 2015 Forms 1094-B, 1095-B, 1094-C and 1095-C with the IRS, from Feb. 29, 2016, to May 31, 2016, if not filing electronically, and from March 31, 2016, to June 30, 2016, if filing electronically.
Filers are not required to submit any request or other documentation to the IRS to take advantage of the extended due dates provided by Notice 2016-4.
Despite the delay, employers and other coverage providers are encouraged to furnish statements and file information returns as soon as they are ready.
For more information on Section 6055 and 6056 reporting, penalties for reporting failures and impact on individuals, you may download our comprehensive compliance report here.
Hays Companies recently welcomed Dain Jorgenson as Vice President of Business Development in the Hays Power & Utility practice. He has over 14 years of experience in conventional utilities, merchant power, upstream energy and the renewable energy industries.
Dain has recently been elected President of the Iowa Wind Energy Association. Prior to being elected President of the Association, Dain served on the finance committee and in the role of Treasurer.
The Iowa Wind Energy Association is comprised of utilities, wind project owners, developers and suppliers supporting wind energy and its development and expansion. Current membership stands at over 150 members representing all aspects of the wind industry.
Hays Power & Utility is our national specialty practice devoted to serving the focused needs of electric, gas & water utilities, wholesale electric power generators, coal mining/fuel supply providers and other diversified energy companies.
Aviation insurance companies have worked rapidly to create policies that meet the needs of the industry. Companies such as AIG, Allianz, Global Aerospace and USAIG have been leading the market.
One of the challenges for insurers is to properly underwrite and price policies based upon a limited collection of loss data. It further complicates matters considering the wide array of uses in which drones could be utilized.
A policy can be written for the drone operator to cover both physical damage to the drone and liability exposures stemming from third-party bodily injury or property damage. If you elect to contract drone services to a third-party, a nonowned aviation liability policy to include drones should be purchased. It is also recommended to only contract with drone operators who have obtained the Section 333 exemption.
The cost of these policies can vary from a few hundred dollars to a few thousand, and depends on several factors such as; type of drone, scope of use, operator experience, and desired liability limit(s).
The non-aviation insurance industry will normally exclude all coverage for drone operations. It is vitally important to partner with an experienced insurance broker who understands the aviation industry, has direct access to the marketplace, and recommends the coverage you need.
If you have any questions about obtaining coverage for your drone or non-owned drone exposure, please contact Alison Wynne, firstname.lastname@example.org, or Christopher Fostiak, email@example.com from the Hays Aviation Practice. If you would like to learn more about drones please view our complete issue of FOCUShere.
How big a problem are cyber attacks for businesses today?
Consider this — last October, while appearing on CBS’s 60 Minutes, FBI Director, James Comey said, “there are two kinds of big companies in the United States…those who have been hacked by the Chinese and those who don’t know they’ve been hacked by the Chinese.” Which are you?
In the last 18 months some of the country’s most revered brands have been targets of cyber attacks. No one knows exactly who is responsible for the cyber attacks on Neiman Marcus, Target, Home Depot, and Dairy Queen. But according to Trustwave, a cyber security firm, large retail brands, banking, insurance and manufacturing are especially vulnerable.
The growing number of attacks and costs are staggering. In several instances, cyber security firms with sophisticated tracking equipment and expertise are working to pinpoint potential customer and revenue damage for major brands who have been successfully hacked, but the bottom line is – it’s extremely difficult to detail the full extent of the losses, except to underscore that it was huge.
Equally alarming, customers have been slow to return. Thus, leaving the companies attacked with the arduous task of rebuilding consumer loyalty, trust and revenue.
If you were to calculate the net worth of your company, how much is the reputation of your brand worth?
Big successful brands are built over time with investments totaling billions of dollars.They’re also built upon trust and performance, as there’s an invisible brand promise every customer has with the brands they choose. When that promise is fulfilled, loyalty, advocacy and brand equity occurs. But when the brand promise is broken, when trust comes into question, the damage to the brand’s reputation is immense.
While hacking used to be more about individuals stealing money, now many cyber attacks are the work of foreign governments. Their intent is to steal intellectual property and create an environment of chaos and economic disruption. This produces constant national media coverage and analysis about the potential impact and damage of the attack. All of which causes a firestorm of negative publicity and a hemorrhaging of the brand’s customer base and stock price.
The net result — a huge loss of revenue and a tarnished reputation that can’t be measured in mere dollars and cents. Which begs the question — how can companies like yours protect against this new age of brand terrorism?
Research indicates that 95% of all data breaches are attributed to some kind of human error.
It used to be that businesses protected themselves from hackers with firewalls, intrusion detection and the ever-evolving availability of anti-virus software. Yet today, employee mistakes have become a huge concern.
Not huge mistakes, either, but simple errors such as not using appropriate passwords, or responding to an email that contains a virus that attacks your cyber security, which is called phishing often occur. Other mistakes include transferring corporate data outside of the company or not deleting data, thus leaving it vulnerable to data leaks that are costly to your organization
No matter what business category you’re in, you can’t ignore the increased risk of cyber terrorism. Thus, sophisticated cyber security is a must.
The best defense against cyber attacks and data breaches may be your employees. A diligent training effort will help prevent carelessness, breaches, and help reduce costs. Here’s a short list of best practices:
Reaffirm to employees how important confidentiality is and train them on how to handle it.
Investigate what’s available in data loss prevention technology to protect sensitive data.
Commit to employing and actively using encryption and multi-factor authentication solutions.
Make a plan with specific steps–including client notification–in the event of an incident.
If you have any questions or need additional information on cyber security, please contact one of our Hays Cyber Specialists: Dave Wasson, firstname.lastname@example.org or Michelle Carter, email@example.com.
Authored by Brandon Schuh, VP and Product Liability Professional at Hays Companies
Product liability is an area that can rapidly change from the period of time when a company first launches to when they’ve truly penetrated the marketplace. With consumer products, the reach is to a very large audience. When the masses begin using a product, especially products that have more inherent risk, claims and litigation follow quickly regardless of how well the product is manufactured.
This scenario creates problems for manufacturers and importers of consumer products because they are not ready for the influx of claims. Claims are the biggest driver of premium costs. If your claims are low or non-existent, your premium will likely be small or inconsequential. If you have an inherently more dangerous product: ladders, power tools, trampolines, sporting goods, outdoor equipment or even office furniture, claims will occur and your premium increases as a result.
This is an unwelcome surprise, suddenly claims are an everyday event and there is a new expense item on the budget. Many companies, when they first start their business, buy very basic insurance policies with very small deductibles. Small deductibles are attractive because of the limited financial risk for the manufacturer. They simply transfer their risk to the insurance company. The problem with small deductibles in a high frequency claims environment is that insurance becomes something that you use every day instead of something for a worse case scenario. This is accentuated by the rapid growth of the organization; the more products in the hands of consumers, the more potential for accidents. When a policy is used frequently, the premium increase year over year become dramatic. The premium increase is further inflated by high allocated expenses driven by the carrier hiring counsel that are not experts in defending consumer product litigation. Thereby settling claims rather than denying or defending. This has a downward spiraling effect if not properly contained.
Total Cost of Risk (TCOR) is a term that’s overused in the insurance industry, however, consumer goods product liability is one area it is truly necessary. Your risk cannot be summarized in one line item on your P&L. The cost of insurance is not your only cost of risk. A manufacturer of inherently dangerous consumer products should always take retained risk (i.e. they should always have skin in the game). You know your product better than anyone, therefore you should have more control over the defense of those products with experts that specialize in this area. This is accomplished by maintaining a larger deductible or Self Insured Retention (SIR) where you, as the owner of the company, take a part in the cost of defense. This creates another line item (defense costs) and should be added to your calculation of TCOR.
The benefit to doing it this way is eliminating some of the carrier losses and doing your part to keep loss runs clean of nuisance claims and litigation. Again, claims drive the premium; if you positively influence claims by disposing of some yourself, you are in a far better position to keep your premium costs down.
Naturally, this process requires a strong team of legal practitioners, insurance and supporting players. Defense strategies, policies and procedures are also crucial to effectively producing good results. However, the end result is dramatically more economical than continuing to pay the premium for a low deductible/high claim frequency fueled by growing sales. With control over the process, you are in a far better position to affect positive cost savings.
Code 6055, Code 6056…The administrative requirements of the Affordable Care Act continue to “roll-out.” On March 5, 2014 the Internal Revenue Service (IRS) issued final regulations on the employer information reporting requirements. Final forms 1094-C and 1095-C for 2014 have been released by the IRS and now we have draft forms for 2015. Now is the time to determine how your organization will comply with this new administrative burden. The webinar will cover:
1. Background and effective date
2. Employers subject to reporting
3. Delivery and filing requirements
4. General reporting method and required information
5. Reporting codes
Hays Companies has scheduled a one hour webinar to cover these issues and more. We are presenting this webinar four times over four different days to allow you to pick the time and date that best fits your schedule.
Ben Graves, Director of Research & Compliance and Nicholas Karls, Associate Director of Research & Compliance, both of Hays Companies, will be presenting this complimentary webinar.
For the fifth straight year, Hays Companies of Wisconsin has been named as one of southeastern Wisconsin’s Top Workplaces by the Milwaukee Journal Sentinel.
The Journal Sentinel invited over 1300 companies to participate in this survey. Each participant’s employees were polled on their overall job satisfaction in a myriad of areas. Each company is then ranked based upon their responses and individual comments. Here are just a few of the comments that helped Hays Companies of Wisconsin earn this status in 2015:
“It offers me the opportunity to help people learn in a positive, professional environment.”
“Our principals do really care about each employee as a person first. I feel that we all succeed because the environment fosters team work.”
At Hays Companies, we’ve created a synergy between teams that’s unmatched in the industry. Our employees thrive within the innovative environment that our founding partners helped to cultivate, providing a rich and meaningful workplace that ultimately best benefits our clients.
Hays Companies is one of the fastest growing property & casualty and employee benefits advisors in the country. As a privately held company owned by its managing employees, there are no outside interests or agendas to distract our employees from the business of insurance and risk management. We focus exclusively on meeting the goals established by our clients. Hays Companies is built to be flexible and we collaborate with clients to find business efficient solutions that can be improved upon incrementally over time. Our 700+ team represents a dynamic, entrepreneurial assembly of the best and brightest in the industry.
Cyber attacks are a serious global problem. The number of successful attacks has risen drastically to an average of 138 per week.* The constant national media coverage of high profile data breaches has brought cyber insurance into the spotlight. Companies hacked have the arduous task of rebuilding consumer loyalty, trust and revenue.
In this issue of FOCUS, we tackle the question of how companies can protect themselves against this new age of brand terrorism to stave off a cyber attack or lessen its impact. We also explore how the government is attacking cyber and why the underwriting cycle might be different this time based upon market performance and trends.
At Hays Companies, we know the risks and concerns facing companies in the food and agribusiness industries. Something such as an E. coli contamination incident and subsequent product recall can leave your company reeling and scrambling to save your reputation. Our expert team at Hays is here to provide the assistance you need to stay on top of your industry. Watch how we act as an extension of your risk management team in our client story: