Client Spotlight: Butler-Dearden

We are pleased to spotlight Butler-Dearden in our winter newsletter.  They are a family owned and operated wholesale distributor headquartered in Boylston, Massachusetts.

Butler-Dearden has been providing superior quality, service and value to their customers since 1882. They began as a twine and packaging store and grew into offering janitorial supplies, office papers, packaging materials, and food service supplies.  Their state of art facility allows for an efficient operation so they can deliver and maintain the quality customer service they are known for.

They continue to be successful by keeping their core ideal that excellent customer service is the most important product they deliver!

Click here to learn more about them!

Public Private Partnerships

More frequently known as 3-P’s (PPP), Public Private Partnerships are becoming more prevalent as a way to finance, engineer, construct, and operate infrastructure projects across the United States. They have been used in other countries for some time now. For example the EU has had over 260 Billion Euro’s worth of 3P projects since 1990.

PPP involves a contract between a public sector authority and a private party in which the private party provides for a public project and assumes substantial financial, technical, and operational risk of the project. In some cases those end uses of the project bear the cost of of the project rather the the taxpayer. Toll roads are an example of this.

There are a few reasons why these have now taken hold in the United States. First, it is a way for government entities to harness the engineering and technical efficiencies of the private sector to bring projects on line. Second, it allows for the project to be done “off balance sheet” of the government entity. The funding is arranged for by the private sector vehicle implementing the project, although they can sometimes be done “on balance sheet” where the government entity compensates over time but gains substantial deferred cash flows.

As you can guess, the formation and structure of a PPP can be very very complex, daunting, costly, and time consuming for all parties involved. The jury is still out as to their overall success or failure. There haven’t been enough of them in the United States to conclude their viability. However, they aren’t going away any time soon.

Retirement Planning Basics

Items to consider when creating a retirement plan:

With average life expectancy now in the 80s it is likely that you could experience a retirement period that lasts 20-30 years. Your plan must be flexible enough to account for a long retirement.

Expenses and Inflation
Inflation is always a powerful enemy in any retirement plan, especially for a retirement that could last multiple decades. Your living expenses could increase multiple times over a long retirement. And, certain expenses such as medical expenses could easily outpace inflation.

Any extra income, whether from part-time work or from delayed retirement, could make a substantial difference in your retirement income. Your selected social security start date can also make a meaningful difference.

Almost everyone will need to augment their retirement income with withdrawals from their portfolio assets. Many recent studies have indicated the importance of reasonable and sustainable withdrawal rates. A generally accepted withdrawal rate is 4%, but every case is different.

Asset Allocation
It is always important to have a reasonable asset allocation, but it is especially important in or near retirement since your time horizon to recoup any losses is shorter. For instance, you can allocate a portion of earnings in investments like a gold IRA or similar retirement plans after taking financial advice from your trusted advisor or websites that can give proper knowledge and reviews of investment plans. A proper allocation that balances income needs with growth needs is critical. Asset allocation does not guarantee a profit or protect against a loss in a declining market.

Other Goals
Other financial goals (purchasing a vacation home or subsidizing your parents’ care for example) will impact your retirement. This analysis will take into account any other goals you have defined.

Snow and Ice: What is Your Liability?

Commercial property owners need to be concerned about potential liability issues involving ice and snow. While the level of landlord and property owner responsibility varies by state, a consistent duty of responsibility exists to ensure that sidewalks, driveways and parking lots are maintained. Some states, such as Massachusetts, have increased the level of landlord responsibility for the removal of ice and snow. A Massachusetts Supreme Court ruling in 2010 applied a “reasonable care standard” that requires landlords to take reasonable steps to keep their property free from dangerous conditions such as the accumulation of ice and snow. Landlords and property owners must therefore act as a “reasonable person” to make sure snow and ice are removed to make conditions safe.

The following are a sample of management considerations for dealing with snow and ice removal from public areas such as parking lots and sidewalks:

  • Develop and implement a written plan to define issues such as frequency of removal.
  • Designate someone to monitor weather conditions, walking surfaces and effectiveness of removal practices.
  • Record removal activities in a log that includes date, time, weather condition and action.
  • Use a professional snow removal contractor. Be clear about performance standards and make sure contractor carries appropriate and sufficient insurance.
  • Be aware of melting and refreezing.

Many cities and towns have passed ordinances that specify property owner requirements for maintaining adjacent sidewalks. For example, the City of Boston requires commercial property owners to clear sidewalks within three hours of snowfall ending or three hours after sunrise if it snows overnight. Worcester has a similar requirement but dictates sidewalks must be clear within 10 hours after snow ceases to fall. Violators are susceptible to a daily fine. Check with your city or town for specific snow clearing responsibilities. Examples of ordinances for some local communities can be found below:

Boston: Snow Removal
Worcester: Snow Emergency Guidelines
Somerville: Shoveling Regulations and Information
Quincy: Be a Good Neighbor
Cambridge: The Works Property Owner Responsibility

At Cleary, we will evaluate your business exposures and work with you to develop a comprehensive plan to safeguard your business. Give us a call today at 617-723-0700.

Winter Storm Weather Preparation

With severe winter weather in the forecast, it’s important to take some time now to be sure you’re prepared. Here’s a list of items to have on hand before the storm begins.

Check your food and water supplies

  • Water-at least a three-day supply; one gallon per person, per day
  • Food-at least a three-day supply of non-perishable, high-energy, easy-to-prepare foods
  • Baby formula and food
  • Pet food

Tip #l
Set your refrigerator and freezer to the coldest settings in case the power goes out.

Prep your heating and lighting sources

  • Have on hand extra blankets to stay warm
  • Generator, and gas to run for 24+ hours
  • Candles
  • Flashlights and extra batteries
  • Check your alternate heating methods, such as fireplaces or wood- or coal-burning stoves
  • Fire extinguisher

Tip #2
Never use a generator inside and be sure it’s placed outside where exhaust fumes can’t enter through windows, doors or cracks. Always take safety precautions.

Be smart about electronics

  • Ensure your carbon monoxide detectors are fully functioning. Most detectors have a ten year life, have you checked the date on your detectors?
  • Fully charge your cell phones,tablets, etc.
  • Find your battery-powered or hand-crank radio
  • Have extra batteries on hand

Tip #3
Tempted to play games on your phone during the storm? Save the charge in case there’s an emergency.

Be ready to clear snow and ice

  • Shovels and tools for clearing snow and ice
  • Sand, rock salt or non-clumping kitty litter to make walkways and steps less slippery
  • Snow blower gassed (start it to ensure it’s ready)

Tip #4
A roof rake that can be used to remove snow from your roof can help prevent structural and water damage to your home.

Check medical and personal hygiene supplies

  • Medications – have at least a seven-day supply
  • Medical items – hearing aids with extra batteries (you can check this related site here to compare best ones), glasses, contact lenses, syringes, etc.
  • Sanitation and personal hygiene items
  • Baby diapers and wipes
  • First aid kit

Tip #5
If you are low on medications, visit your pharmacy to ensure you have enough for one week. And,don’t forget hand sanitizer.

Keep important information and extra money handy

  • Family and emergency contact information Local emergency contacts
  • Copies of personal documents
  • Extra cash – in case there is no power (no ATM)

Tip #6
Be sure to have the phone numbers of your insurance company as well as Cleary Insurance should you need to file a claim.

Sources: Red Cross, National Fire Protection Association, The Hanover Risk Management

Concerned about your personal insurance coverage? At Cleary, our experienced Personal Lines department will work with you to evaluate your insurance needs, identify exposures, and create a customized insurance portfolio. Give us a call today at 617-723-0700.

New Spending Bill Delays Cadillac Tax

On Dec. 18, 2015, President Barack Obama signed a $1.1 trillion year-end spending agreement into law that prevented a government shutdown and funds the federal government through the 2016 fiscal year.

Among its many provisions, the new legislation affects three major Affordable Care Act (ACA) taxes. The first, and perhaps the most controversial, is the “Cadillac tax,” which would levy a 40 percent excise tax on employer health plans that are deemed to be overly generous. This tax would affect health plans that cost more than $10,200 for an individual and $27,500 for a family.

The Cadillac tax is intended to help slow health care spending and finance the expansion of health coverage under the ACA. However, many politicians across party lines oppose the tax because they believe it will force employers to shift more health care costs onto employees, many of whom are already facing high out-of-pocket costs. Politicians have also experienced significant push back from unions and employers regarding the tax.

The Cadillac tax was slated to take effect at the beginning of 2018; however, the new legislation delays its implementation another two years (until 2020). The new law also makes the Cadillac tax a tax-deductible expense for employers, which could help alleviate the tax’s burden.

The future of the Cadillac tax remains uncertain, especially with the upcoming presidential election. Republican and Democratic presidential candidates alike have stated that they support a repeal of the Cadillac tax—putting its future into jeopardy.

Despite this recent delay and the uncertainty surrounding the tax, employers would be wise to review their health plans to determine if they could be held liable if the tax is implemented as well as identify any cost-saving strategies that can be taken in the meantime.

In addition to the Cadillac tax, the law also includes a two-year suspension on the ACA’s medical device tax, which requires manufacturers and importers to pay a 2.3 percent excise tax on certain medical devices. The medical device tax initially took effect in 2013, but under the new law, it is suspended until the end of 2017. The new law also suspends a tax on health insurance providers for the 2017 calendar year.

Final ACA Market Reform Rules Released
On Nov. 18, 2015, the Departments of Labor, Health and Human Services and the Treasury (Departments) issued final regulations regarding a number of ACA market reform requirements, including annual limits, dependent coverage up to age 26 and patient protections.

While this final rule largely reaffirms proposed interim final rules, there are a few measures to be aware of. For example, the final rule clarifies that lifetime and annual dollar limits on essential health benefits (EHBs) are generally prohibited, regardless of whether care is provided in network or out of network.

In regards to dependent coverage, the final rule confirms that a plan or issuer cannot deny or restrict coverage based on a child’s financial dependency, residency, student status or employment. The term “child” refers to a son, daughter, stepson, stepdaughter, adopted child or eligible foster child. Plans are not required to make coverage available to grandchildren.

The final rule also addresses patient protection requirements, including clarifying that a plan or issuer may not require a female participant (of any age) to obtain an authorization or referral for obstetric or gynecological care provided in network. Plans and issuers, however, are allowed to apply reasonable and appropriate geographic limitations with respect to participating primary care providers.

In the final rule, the IRS declined to define the term “primary care provider.” Instead, this term should be determined under the terms of an employer’s plan or coverage and in accordance with state law.

These are just a few of the provisions outlined in the final rule. Other topics covered include grandfathered plans, per-existing condition exclusions, recessions, and internal and external appeals.

The final rule is effective for plan years beginning on or after Jan. 1, 2017. For a more complete understanding of the final rule and what it means for you, contact Cleary Insurance, Inc. today.

ACA Automatic Enrollment Requirement Repealed
On Nov. 2, 2015, President Obama signed into law the Bipartisan Budget Act of 2015, which includes a provision repealing the ACA’s automatic enrollment requirement.

Previously, under the ACA, certain large employers would have been required to automatically enroll new employees and re-enroll current employees in one of the employer’s health plans, subject to a permissible waiting period. This requirement would have applied to employers subject to the Fair Labor Standards Act (FLSA) with more than 200 full-time employees.

Some experts opposed the automatic enrollment requirement because they believed it would cause administrative issues for employers, such as having an employee enrolled in the employer’s coverage who is also covered by a spouse’s plan. The requirement was intended to take effect once final regulations were issued and an effective date was set.

Under the new law, though, employers will not be required to automatically enroll employees in coverage. In certain cases, however, employers can choose to create an automatic enrollment process if employees are provided enough notice and the opportunity to opt out of the plan. Employers should also be aware of any applicable wage withholding laws in their state, which may require an affirmative election for employees before any payroll deductions can be legally made.

For more information about setting up an automatic enrollment option, contact Cleary Insurance, Inc.

The information contained in this newsletter is not intended as legal or medical advice. Please consult a professional for more information.

© 2015 Zywave, Inc. All rights reserved.

At Cleary, we know how important a comprehensive 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.

Recent Department of Labor Investigations

Presented by Al Corvigno

J&J Snack Foods
Two federal investigations have found that temporary production line workers at J&J Snack foods Corp., were cheated out of their wages by the company and two staffing firms. The DOL found that J&J Snack Foods in N.J. did not properly pay their employees the minimum hourly wages and overtime. As a result they were fined $ 2.1 million for back wages and liquidated damages to 677 workers.

The department’s most recent investigation found 465 workers at J&J’s Swedesboro facility provided by staffing firm Sebastian and Sebastian LLC were paid straight time for overtime hours worked beyond 40 in a work week, which is in violation of federal law. In response, J&J agreed to pay a total of $1,260,254 in back wages and liquidated damages to the impacted workers.

In addition, the department assessed a $20,000 civil penalty for the willful, repeat nature of the violations found in the New Jersey investigation. Earlier in the year, the department found that J&J and Pennpak, a staffing firm that provided workers at the J&J facility in Chambersburg, Pennsylvania, failed to pay their workers at least the federal minimum wage and overtime. In that case, J&J agreed to pay 212 temporary workers $920,000 in back wages and liquidated damages.

DOL Sues Benefit Plan Providers
The U.S. Department of Labor filed a lawsuit in the U.S. Disrict Court of Maryland against Chimes District of Columbia, Inc., affiliated companies, company executives and employee benefit plan providers over allegations that an employee benefit plan sponsored by Chimes paid millions of dollars in excessive fees.

DOL investigations found that Chimes violated the Employee Retirement Income Security Act (ERISA ) when they caused a health and welfare plan to pay excessive fees. They included those paid to the plan’s third-party administrator, FCE Benefits Administrators, Inc. and another company, Benefits Consulting Group (BCG).

The lawsuit also alleged owners Gary Beckman and Stephan Porter, caused the plan to engage in transactions for their own benefit and exercised control over the plan’s contracts with other service providers to increase FCE’s compensation through undisclosed commissions and fees. All of these actions are violations of ERISA.

FCE and BCG pledged $330,000 to the Chimes Foundation, and during 2009 – 2014 paid another $400,000 while BCG also pledged $282,500. In addition, FCE employed a child of Chimes and had BCG’s owner provide discounts to Chimes on other non-plan work. In connection with those payments and other benefits FCE and BCG were retained as service providers for the health and welfare plans, which violates federal law. Both companies are liable for profits earned as a result.

It is troubling that service providers made substantial payments to the plan sponsor, and not surprising that those services were overpriced. The DOL will act vigorously to protect plans where the integrity of the service provider is compromised by unlawful payments to plan fiduciaries. In addition to having the companies pay back any profits including penalties, DOL is asking for the removal of FCE, Beckman, Porter and BCG as fiduciaries or service providers for any ERISA covered plan in the future. All company officers may also face prison time, depending on the legal outcome.

Investigations are time consuming and complicated. It is imperative your personnel are properly trained in the fundamentals of the SCA and how to handle DOL audits and investigations. If you have any questions or would like additional information, please do not hesitate to contact us.

At Cleary, we know how important a comprehensive 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 fringe-benefit obligations and provides your employees with valuable benefits.

Frozen Pipe Prevention

Turn up the heat! Set the thermostat to the same temperature day and night. If you live in an old house built over an uninsulated crawl space turning up your thermostat will increase the air temperature in the crawlspace by projecting heat energy through the floor into the space. Plan on insulating and air sealing the space.

Open the kitchen and bathroom cabinet doors to allow warm air to circulate around plumbing. It’s not unusual for plumbing running to a kitchen sink on an exterior wall to be extremely vulnerable because the wall is not insulated. Open the cabinet doors along that wall to project heat into the space.

Check around the home for other areas where water supply lines are located in unheated areas. Look in the basement, crawl space, attic, garage, and under kitchen and bathroom cabinets. Both hot and cold water pipes in these areas should be insulated.

You can keep unprotected pipes above freezing by simply placing an electric heater near them. Remember, the goal is not to make the space toasty warm and comfortable. It’s to keep the water in the pipe above freezing. Remember to never leave a space heater unattended.

Consider installing specific products made to insulate water pipes like a “pipe sleeve” or installing UL-listed “heat tape,” “heat cable,” or similar materials on exposed water pipes.

If you have an attached garage, keep the doors shut. Wind and cold air drafts increase the likelihood of a frozen pipe.

Turn off the water. In the worst case, turn off the main water valve while the house is unoccupied (such as a vacation home) or while you sleep. If a pipe freezes and breaks, the spillage is limited only to the water in the pipe. If you are going away, shut off the water supply line to your washing machine.

Drain and shut off all outside spigots.

Please refer to the link below if you would like additional information:

American Red Cross Preventing and Thawing Frozen Pipes