PPACA ALERT: Change in Employer Mandate Affects All Employers in 2015

There has just been another PPACA delay to the employer mandate (also known as the “pay or play” mandate) that was slated to begin on January 1, 2015. As you may recall, this was originally effective as of 2014, but postponed last July. The employer mandate is the component of the law that will fine employers for not providing coverage (or not meeting the affordability or minimum value requirements) to their full-time employees (those working 30+ hours per week, on average). Here are the newest delays to be aware of as they affect all employers with at least 50 full-time equivalent employees:

Employers with 50-99 full-time equivalent employees: Delay of the employer mandate until 2016. Therefore, no penalty in 2015 if you don’t offer coverage, however you still must begin reporting details about your insurance coverage to the federal government in 2015.
Be aware, you will need to certify eligibility for this transition relief and meet other requirements, including not reducing your workforce to qualify for transition relief and maintaining previously-offered coverage.

Employers with 100+ full-time equivalent employees: You must offer coverage to at least 70% of your full-time employees (working 30+ hours) in 2015, then to at least 95% in 2016. You will also be required by to report details to the federal government next year.
Other transition relief contained in the proposed regulations were also extended, including the ability to use a short timeframe (at least 6 months) to determine whether an employer is large enough to be subject to the mandate, a delay in the requirement to provide coverage to dependent children to 2016 (as long as the employer is taking steps to arrange for such coverage to begin in 2016), and the permitted use of a short measurement period in 2014 to prepare for 2015.

WHAT DOES ALL OF THIS MEAN TO ME?

Employers still need to analyze their exposure and employee population. If you are under 100 employees, there is more relief for you however you still have compliance and reporting requirements (to be released over the coming months) that must be reviewed and prepared in time for 2015. If you have more than 100 employees, you will need to review your workforce to determine which employees need to be offered coverage in 2015. While you only have to ensure that 70% of that population is offered coverage, you will need to identify them and ensure you are in compliance with nondiscrimination rules as they apply. Even though this delay appears to provide some relief, it still requires a full analysis and review of your workforce and compliance with some mandates in 2015.

REFERENCE MATERIALS:

The final regulations are available here: https://s3.amazonaws.com/public-inspection.federalregister.gov/2014-03082.pdf
An IRS Q&A is available here: http://www.irs.gov/uac/Newsroom/Questions-and-Answers-on-Employer-Shared-Responsibility-Provisions-Under-the-Affordable-Care-Act#Liability

Employee in the News

We are very proud of our own Deborah Corcoran.  If you have ever had the pleasure of working with Deb, then you know she strives to exceed expectations!

In her free time during the summer and fall months Deb knits hats and mittens for two charity organizations.  This past December she donated 32 sets of them to Caps for Kids and Pathways for Children.  Her donations are always a huge hit and loved by the children who receive them.

Caps For Kids is an organization that provides hand made hats, mittens, scarves, and sweaters to Boston children every holiday season.  Please click here to read an article featured in the Boston Globe.

Pathways for Children are leaders in early education and work to strengthen the family unit.  Please click here to read more about them.

Client Spotlight: The Edge Sports Center

We are pleased to spotlight our client The Edge Sports Center which was founded and is managed by Scott Fusco. Scott graduated from Harvard University in 1986 where he was a two time All-American hockey player, the career scoring leader, and the Hobey Baker award winner in that year. Scott was also was a member of the US Olympic Hockey Team in 1984 and 1988.

The Edge was the primary training facility for the 2014 US Olympic Women’s Hockey Team.  In a recent press conference, the women complimented the facility and thanked Scott for skating with them as a practice player!

In addition to hockey, the athletic facility has two outdoor turf athletic fields with one field enclosed for the winter months, a state of the art training center, and a health club facility.

Please click here to read more about The Edge athletic facility and sports complex.

Data Breach Risk Management

Data breaches have been an all too common topic.  Recent breaches at Target, Neiman Marcus and Yahoo have impacted millions of consumers.  These recent examples are high profile incidents but there are many more experienced by small and mid-sized businesses every day.  For example, the Massachusetts Office of Consumer Affairs was notified of 1,555 data breaches reported by businesses in 2013, a 30% increase over the previous year.

Forty-six states have passed data breach notification laws.  While the specifics of these laws vary, a common theme requires businesses to notify individuals who have been potentially affected by a breach exposing their personal information as well as state regulators.  Examples of personal information include name, social security number, date of birth, driver’s license number, and credit card number.  Some of these laws will require that the business offer credit monitoring services to the impacted individuals in addition to the notification.  Failure to comply with data breach laws could result in sizable penalties.

There are many risk management approaches that businesses can take to reduce the threat of data breaches.  Best practices regarding how digital and paper records are handled to safeguard from a cyber threat should be developed.  Consultation with a firm specializing in computer security is critical.  The Ponemon Institute (www.ponemon.org) is an excellent resource for cyber security issues.  Ponemon and Symantec have developed an online Data Breach Calculator (https://databreachcalculator.com) to help you evaluate your exposure to loss.

Cyber Risk Insurance is an important consideration for the risk management process.  These policies can provide first and/or third party coverage.  First party coverage addresses expenses associated with customer notification, credit monitoring and public relation expenses.  Third party coverage would respond to litigation that results from a breach.  Businesses with a particular need for this type of insurance include medical, legal, financial and retail operations.

Those of us impacted by the Target breach have seen components of Cyber Risk Insurance first hand.  The public relations initiatives and credit monitoring services are both examples of first party coverage available through Cyber Risk insurance policies.  Credit monitoring services can cost $50 per customer and is often required by state regulations.  Target’s third party exposure will be responding to the litigation that is likely to come their way as a result of the breach.  The third party component for a Cyber Risk policy will defend the law suits and pay damages if awarded.

Please click here to view an example of a Traveler’s application for this product.  In most cases we can obtain premium information when you provide a few pieces of basic information.  Please feel free to contact your representative to explore possible insurance solutions relating to data breach or cyber issues.

Why Provide Disability Insurance?

As a business owner, you naturally want to be able to justify every dollar that goes out the door. It’s a competitive market out there for your product or service, and every little advantage helps.

Most successful entrepreneurs, however, are keenly aware that the market for talented employees is also keenly competitive – and there’s a big difference in productivity between experienced, knowledgeable employees who have been with your company for years on one hand, and the new hire off the street, on the other hand.

If you want to keep your best talent, you need to be competitive with the market, of course. But you also want to protect your own best interests at the same time. In today’s market, providing quality protection against the threat of disability makes good sense not just for your employees, but for any business that cares to retain the best, most talented and productive workers.

Workers View Benefits as Important

Many surveys have demonstrated that employees place significant value on benefits. For example, according to the Glassdoor Employment Confidence Survey, 76 percent of employees rate their overall health insurance coverage as the most important employee benefit, beating even retirement plans in importance.

In addition, according to the Society for Human Resource Managements’ 2013 Employee Benefits report, more and more employers are offering long and short-term disability plans as part of their employment package. As of last year, 77 percent of employers provided long-term disability protection, while 68 percent provided full-time workers with short-term disability protection.

Outlook

The momentum is clear: Group disability protection is rapidly becoming a standard offering for full-time employees. Meanwhile, as the Affordable Care Act takes hold, health insurance is going to become less and less of a marketplace differentiator for employers. Workers with pre-existing conditions don’t rely on their group plans to be able to get any kind of coverage at all, thanks to the prohibition on underwriting based on pre-existing conditions. And as the employer mandate kicks in, all employers except the very smallest will be forced to provide major medical, or pay big fines.

That leaves other insurance benefits, such as disability, at the top of the list of non-wage differentiators that keep applicants coming, and keep talent from walking away.

Benefits of Group Disability to the Employer

The opening paragraphs, above, make the case for a robust benefits package in general. Why is disability vital? For several reasons:

First, almost every worker who’s been around a few years knows someone who has been affected by an injury or illness that prevents them or a loved one from earning a living. In some cases, you can make the case with people in your firm – former employees who have had their lives disrupted by accidents or illnesses, and who have had to leave their jobs.

It’s therefore easy to “sell” the value of these benefits to your workforce, because workers can very easily see themselves in need of important income protection.

Second, providing a disability plan can help ensure your employees are at their most productive when working on your dime. Workers with access to a good short-term disability plan are less likely to show up to work already hurt, or to try to work through injuries because they need the money. Employees who work sick or hurt run the risk of further injuring themselves and in some cases endanger other employees.

For example: If a worker has no disability insurance, they may feel they have no choice but to show up to work – even if they are taking powerful medications such as codeine or oxycontin, both strong prescription painkillers – for an injury or illness they sustained off the job, and therefore not covered by workers compensation.

If they have an accident at work, however, they endanger you, your other employees, and themselves, and they certainly risk forcing your insurance premiums up.

If you provide a good short-term disability plan, that worker taking narcotic pain medication has the option to stay home and recover, without endangering anyone else.

Additional Supports

Most people think of disability insurance as just a policy that replaces part of a workers income if he or she is injured or sick and can’t work. And that’s true, but that’s just the tip of the iceberg. Disability insurance companies routinely provide case managers and assistance to get an injured worker back on the job as quickly as possible. By coordinating therapies and advising both the worker and employer on adaptive technologies and reasonable accommodations, a disability insurance provider can be a valuable partner with a business in getting a productive, invaluable employee back on the job as quickly as possible.

In some cases, your case manager can help you design a solution so that an injured employee can work at home – minimizing time lost. This can also be important to protect a worker whose immune system has been compromised by chemotherapy, for example.

Disability vs. Workers Compensation

Remember, disability insurance and workers compensation insurance are different things. Workers compensation covers injuries incurred on the job, or as a direct result of work. Anything else is not protected by workers compensation. Your employees are vulnerable to all manner of illnesses and injuries on their own time – and small businesses frequently suffer when these workers do get hurt.

Best Practices

Buy Quality. The most successful disability insurance programs have been robust. Invest in quality benefits to build and maintain employee morale. Once one employee benefits, the others in the workplace will hear about it. Get the best benefits you can afford.

Educate Workers. Employees can’t value what they don’t know they have. Make a disability presentation part of your company orientation. And go over their benefits in regular training sessions and reviews.

Model Healthy Living. You can’t control what employees do in their off time. But you can point them in the right direction. Get good, healthy options in vending machines. Make healthy lunch options available. Have leadership model good eating habits. Provide access to one or more wellness programs, such as a gym membership.

At Cleary, we know how important a comprehensivee benefits package can be to your continued success. Give us a call today at 617-723-0700 and we will work with you to create a plan that meets your business objectives, takes into account state and federal laws, and capitalizes on incentives and innovative solutions now being offered.

Who Can Drive Your Commercial Vehicles?

By Michael Regan

Commercial auto insurance provides protection for any vehicle designated for business use against both property damage and liability. Whether your employees drive a vehicle that is for dedicated business use or drive a personal vehicle for business, it is important to have commercial auto insurance, as those vehicles will not be covered under a personal auto policy.

Who can drive your vehicles? I get this question from a lot of clients. The bottom line is that anyone you authorize to drive your vehicle is able to, provided the insurance company approves them. You should always list employees who regularly drive your vehicles. If you have employees that may be temporary drivers then ask your broker or insurance company if it covers those drivers as long as they have your permission to operate the vehicle.

Commercial carriers ask for a list of drivers and their license numbers when a policy is written or at the time of renewal, so that they can properly underwrite the risk. It is surprising the number of times we hear from the carriers that some of the drivers provided have a suspended license, recent DUI’s or horrendous driving records. The carriers can and do mandate in certain circumstances that specific drivers are not allowed to drive the insured vehicles.

A “vehicle safety” program is an integral part of the recommended safety and loss control procedures for our insured’s. Not only does it address vehicle maintenance and safe operations, but also driver protocols; including new employee license review, driving training on the company vehicles, probationary driving periods and operating violation penalties. That is, for any accidents or infractions there are written warnings of potential employment termination and that a third accident or infraction would result in termination.

Having safe drivers and a robust safety program not only helps to prevent claims, but also shows the carriers that you are serious about safety. This leads to more carriers vying for your business which may result in lower premiums.