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.
US-based companies expanding abroad are facing a diverse number of challenges right now, including new global economic pressure on state-run systems to shift the burden of health and welfare benefits costs to employers.
Here are three ways for employers to reduce the risks associated with international benefits and global compliance.
Manage Trends In Global Compliance
Similar to defined-benefit employee pension plans in the US, which have migrated to defined contribution 401(k) plans where employees bear most of the risk, many European countries are pulling the reigns in on social and benefits programs once thought to be an entitlement among workforce nationals.
What’s more, Obamacare has introduced a number of new compliance stipulations that impact US expats and in-pats (multinational company employees from a foreign country who take assignments in the US), says Hays Companies Vice President of International Benefits, Anne Terry.
The UK pension reform movement is an example of the way foreign governments have signaled a shift in the way retirement benefits will be accumulated and administered, because the state can no longer afford to fund retirement programs. Employers operating in the UK are now expected to share a significant part of the burden and employees are expected to participate and help fund private 401(k)-type defined contribution plans.
“Historically, US-based companies growing through acquisition have pretty much left the HR and benefits functions of acquired companies to run autonomously. It was thought to be a lot easier, logistically and administratively, to leave things in place, especially where the cost of health care and other benefits was perceived to be lower in the foreign countries concerned. Now, CEOs are more concerned with a global bottom line—they want to know their true exposure from benefits costs everywhere and how to minimize compliance risks abroad,” Terry adds.
Leverage In-Country Expertise
When US companies set up business internationally, HR and benefits administration responsibilities are usually delegated to the HR teams of US-based companies, including talent acquisition and recruiting new hires. Often, these HR teams don’t know where to go to become educated on how to approach each country from a hiring and benefits perspective.
Terry and her Hays Companies associates act as consultant-educators for clients in such cases, offering in-country assistance through a global network of broker-partners with special benefits and compliance subject matter expertise for that particular nation or territory. The brokers, who focus exclusively on US-based companies expanding abroad, work strategically and collaboratively with Terry and her team to close the accountability loop on plan renewals and global compliance.
Solve International Talent Acquisition/New Hire Concerns
Companies who are growing through international expansion don’t hire or add HR people at the same rate they’re building out operations abroad, says Terry, and this is another reason why clients find Hays’ international benefits services to be a good fit.
In addition to international benefit plan changes and global compliance, it can be very difficult for US-based companies to keep with up with emerging markets, changing economies, and unprecedented job growth in the foreign countries where they have operations. For example, Terry references a technology company operating in Singapore, where her client needed to attract new hires in an economy with a 2% unemployment rate among technology workers. She leveraged targeted benchmarking data and in-country expertise to the client’s satisfaction.
Terry concludes: “We view international benefits as an extension of the overall services we provide to our Hays Companies clients based in the US, and this consistently works in our clients’ favor from a cost perspective, as compared to reaching out to another independent international consultant.”
Thanks to Anne Terry & Ross Krasnow for their contributions to this piece.
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.
In the most recent issue of FOCUS, Hays Companies concentrated on Cyber liability and the ever increasing attention it is receiving in the media. This caught the eye of Risk & Insurance magazine, requesting an expert opinion from our Dave Wasson, Cyber Liability Practice Leader with Hays Companies.
In discussing a recent New York Times article, detailing the prevalence of troll attacks from Russia, Risk & Insurance noted that our FOCUS issue spoke to how “brand terrorism” is becoming a new trend in cyber attacks. Troll attacks are “organized disinformation campaigns augmented by social media posts, [that] create an atmosphere of chaos and economic disruption”.
Dave Wasson provided further detail on this phenomenon, stating “The Internet has provided incredible transparency for sharing information on an anonymous basis that can often be viewed as one of the best attributes of the Internet. But that transparency cuts both ways in that the Internet provides an equal transparency for sharing misinformation.”
As our world is increasingly becoming more mobile and connected, the chances of a company experiencing some form of a cyber attack increases as well. Hays Companies has been a leader in the Cyber liability realm and is proud to participate in this piece.
For more information and the entire article, please click here.
Hays Companies, one of the nation’s fastest growing risk management, insurance and employee benefits advisors in the country, recently opened an office in New York, New York. This new location will allow Hays Companies to better serve existing clients and future partners in the Northeastern United States.
“Hays Companies strong, steady growth and our expanding national footprint is a real tribute to the talent of our people,” says Jim Hays, CEO of Hays Companies. “Our consultants have an exceptional ability to work with clients to generate great value.”
The New York City office is a natural extension of Hays Companies Northeast office system, which includes offices in Jericho, NY, Boston, MA, Nashua, NH, Morristown, NJ and Philadelphia, PA. “New York offers a strong platform for developing deeper relationships with a host of current and prospective clients throughout the Northeast. We’re excited to have a greater presence in this large and growing market and look forward to serving a range of new clients,” said Mike Egan, President of Hays Companies.
Hays Companies has been providing risk management services for over twenty years. The company was founded in 1994 through the entrepreneurial spirit of Jim C. Hays and five senior level individuals from major insurance brokerage firms. They were determined to fill the void of customer service and creative new ideas in the marketplace. Today their vision remains alive and well. Hays Companies has grown to become a nationally recognized insurance broker with over 700+ insurance professionals located in 35 offices. In addition, Hays Companies currently ranks as the 18th largest insurance brokerage in the country (as ranked by Crain’s Business Insurance).
For more information contact Andrea Field (email@example.com)
The American Society of Safety Engineers (ASSE) recently honored Hays team member Bruce Hollcroft with the Region I Safety Professional of the Year Award. The prestigious award for the West Region was based upon technical expertise, innovations to advance the safety profession, community involvement and endorsements from within the safety community.
ASSE represents the largest professional safety organization in the world with nearly 40,000 members worldwide. Congratulations Bruce on your significant impact on the safety profession!
Hays Companies announced Steve Topel has joined its Chicago operations as President of Property and Casualty. He will be responsible for spearheading new business development, overall office leadership, and recruiting great people.
“We are delighted to have Steve on board at Hays. His knowledge and experience will add significant depth to our property and casualty and employee benefits capabilities,” said Jim Hays, CEO of Hays Companies. Topel is known for spurring rapid organic growth and developing talented rising stars in the industry.
Topel joins Hays Companies with extensive leadership experience. He served as the President and Chief Sales Officer of The Horton Group, as well as President and Chief Executive Officer of JMB Insurance for seven years. He has successfully run operations in the Illinois marketplace, along with Indiana, Wisconsin and Tennessee. In addition, Topel is active as a Board Director for The Council of Insurance Agents & Brokers, a premier association for the top commercial insurance and employee benefits intermediaries worldwide. He is also involved on the Board of Directors for the Sinai Health System, working to assist populations who have limited access to healthcare.
Topel’s addition to the organization is another example of how Hays Companies is committed to designing a team of the best and brightest who can provide the highest quality products and services to our clients.
Hays Companies is one of the fastest growing, privately-held risk management, insurance and employee benefits advisors in the country. Our philosophy of delivering the highest-quality, customer-focused service has led to significant growth for 20 years. Today the company includes 700+ experienced professionals in more than 35 locations throughout the United States. For more information contact Andrea Trombley (firstname.lastname@example.org).
No matter what form of health strategies an organization offers, there is little chance of success without member engagement, and no chance for member engagement without member awareness. At Hays Companies, we understand while there are many kinds of employer-sponsored wellness programs, all of them present program administrators with the common challenge of effectively communicating to the target population. As anyone who has been involved in employer health initiative knows all too well, it is no simple task to create and sustain a dialogue with a diverse population of employees who may not have much in common in terms of geography, work schedule, or lifestyle choices.
Fortunately, continued advances in technology offer many promising new resources to help employers’ efforts to bring positive changes in the lives of their employees. Many of these new tools take the form of portals, devices, and applications (or apps).
Improvements in portal usability are making wellness programs more accessible than ever to employees and administrators. In just the last few years, wellness vendors have developed new offerings with portals that feature the following:
A seamless transition from an employer’s internal homepage to the external program’s portal.
Online registration by employees for events and programs, which automates response tracking and communications.
Reporting capabilities regarding engagement indicators and health outcome changes.
The ability to sync devices and apps to the assigned wellness portal; allowing for example the secure uploading of exercise data directly to an employee’s personal page.
Innovations in digital health and fitness devices can leverage employee reliance on their phones, tablets and laptops, helping to link the passive activity of using a portable device to active endeavors such as exercise. Taking advantage of these new technologies can help employees to make healthier lifestyle choices and significantly increase positive outcomes. For example, incorporating wearable health-promoting devices such as FitBit, Nike Fuel Band or the Pebble by FitLinx and applications into a wellness program can be a simple and effective way to encourage participation. Many such devices offer new ways to help companies and employees achieve their shared fitness goals.
Downloadable apps can serve as either a complement or an inexpensive alternative to a fitness device. Program administrators can introduce employees to health-promoting apps via the employer wellness portal. Below are six of the most popular options.
Wellness programs that integrate these innovations will serve novice techies as well as tech-savvy staff, because these are technologies most employees already know and use.
All. Together. Simplified.
With the rapidly evolving technology marketplace, Hays Companies has partnered with independent technology consultants to simplify the evaluation, development and implementation process. We can build effective platforms that leverage technology such as portals, devices and apps, as well as care reminders, care access, financial wellbeing, advocacy tools and more. Our goal at Hays Companies is to deliver the best organizational solution for health strategy technology and create efficiencies to enhance the employee’s experience with their benefits.
Make technology your health and wellness program partner. To find out more, email our Director of Health Strategies, Holly Capelle (email@example.com).