Author Archive

Which Pays First – Medicare or Private Insurance?

Tuesday, December 16th, 2014

The post below is a guest blog from W. Hunter Walton who serves as Principal, Health & Welfare Consultant for CAI’s employee benefits partner Hill, Chesson & Woody.

Picture1As we go through Medicare Open Enrollment for this year, it’s important to remember some basics about how Medicare interacts with traditional private medical insurance plans. Many individuals who are entitled to Medicare benefits are still actively working and eligible for employer sponsored health insurance. When a person has multiple insurance plans, coordination of benefits takes place.This determines which payer (insurance company) pays first.

In most instances where group health insurance is involved, Medicare is the secondary payer. That means that the group plan will pay first, paying the amount that its maximum coverage allows, and then Medicare will be asked to pay the remainder. This is important, because when you determine your potential liability, you don’t want to exclude members who may be on Medicare and assume that your group plan will not be responsible for any claims.

Check out the details in our on-demand webinar on Medicare Secondary Payer.

It’s also important to remember some prohibitions that come with Medicare and employer-sponsored group health plans. It is illegal to incentivize employees off of the group plan and onto Medicare. While some feel that this could improve their demographics and potentially eliminate some high cost claimants, the government makes it clear that penalties can be assessed for each time an incentive is offered, whether it is verbal or written.

Another consideration is when your company offers a High Deductible Health Plan paired with a Health Savings Account (HSA). Those who are entitled to Medicare, meaning both eligible and enrolled, cannot contribute to an HSA on a tax-preferred basis. If this is the only plan option your company offers, your Medicare entitled employees may not be able to take advantage of the full benefit of the plan design. Employees who carry a balance in an HSA that was accumulated prior to enrolling in Medicare may still use those funds for Medicare premiums and out of pocket expenses.

If you have any specific questions about Medicare, CMS has a variety of detailed resources.

Delivering Great New Employees – Part 3

Tuesday, December 2nd, 2014

In today’s video blog, CAI’s Vice President of Membership, Doug Blizzard, shares his last installment of advice for hiring great new employees. Doug starts the video by describing a triangle that represents a pool of job candidates. He says the 80 percent of candidates that are at the bottom of the triangle are aggressively searching for a new job. The five percent of candidates at the top of the triangle are not open to new opportunities. However, Doug says the actual challenge is to attract the 15 percent in the middle who aren’t looking but might be open to a better opportunity.

To uncover those 15 percent, Doug offers several tips in the video. His first tip is to engage employees. He suggests telling your employees about current openings at the company and asking them to tell their friends, as well as post about the jobs on Facebook and LinkedIn. His second tip is to encourage employees to brag about the cool things your company is doing, such as blood drives or food drives. His last tip is to ask employees questions like “why do you enjoy working for our company” or “what makes our company different from our competition.” Doug says to use their answers in campaigns and ads to target and attract new employees.

Doug’s overall message is to train your employees to be good talent scouts for your organization. Please call our Advice and Resolution Team at 919-878-9222 or 336-668-7746 for additional ways to attract new talent.

 

Affirmative Action – Revised Audit Scheduling Letter for 2014

Thursday, November 20th, 2014

CAI’s Manager for Affirmative Action Services, Kaleigh Ferraro, shares information on affirmative action plans from the OFCCP. Make sure you are compliant.

Kaleigh Ferraro, Manager, Affirmative Action Services

Kaleigh Ferraro, Manager, Affirmative Action Services

On September 30, 2014, the Office of Federal Contracts Compliance Programs (OFCCP) released an updated audit Scheduling Letter. The OFCCP indicated they would begin issuing a new audit scheduling letter on October 15, 2014 for contractor audits.  Outlined below are the significant changes from the previous scheduling letter and itemized listing and the newly approved one.

  • The Itemized listing requires companies to submit 22 items versus the 11 previously required.
  • Employment Activity data (applicants, hires, promotions, terminations) must be submitted including race subgroups not just minority totals. Information on applicants with “unknown” race and gender must also be included.
  • Compensation data must be submitted at the employee level and not aggregated as previously required. Data for all employees includes: race, gender, hire date, job title, EEO-1 category, job group, hours worked, base pay or rate plus additional compensation such as bonuses, commissions, merit pay, etc. Compensation date should be submitted electronically.
  • Copies of reasonable accommodation policies, requests and resolutions.

 

The revised scheduling letter and itemized listing also incorporates new items related to the revised regulations for Section 503 of the Rehabilitation Act and Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA). This newly requested information includes:

  • Evaluation results of effectiveness of outreach and recruitment efforts for individuals with disabilities and protected veterans.
  • Documentation of actions taken to comply with audit and reporting system requirements.
  • Submittal of data collected regarding number of applicants, applicants who identified as veterans or individuals with disabilities, number of hires and those that identified as veterans or disabled and job openings and jobs filled.
  • Documentation on hiring benchmarks for veterans and analysis on utilization goals for individuals with disabilities. Results of most recent assessments on personnel processes, including date performed, actions taken and date of next scheduled assessment.
  • Recent assessments of physical and mental qualifications, including date performed, actions taken and date of next scheduled assessment.

Contractors should review the revised Scheduling Letter as well as their affirmative action program and data to ensure they are properly capturing and maintaining requested information. Contractors only have 30 days from receipt of the letter to gather and submit the requested information.

For more information on affirmative action and the recent changes within it, please be sure to sign up for our free webinar Affirmative Action 101: The Basics on December 2, 2014.

For helpful tips and information on preparing your next affirmative action plan, please sign up for our next affirmative action class AAP: What it Takes To Prepare a Compliant Affirmative Action Plan on December, 12, 2014.

Employers Need To Be Prepared For The Cadillac Tax

Tuesday, November 18th, 2014

The post below is a guest blog from Mike Beck who serves as Principal, Health & Welfare Consultant for CAI’s employee benefits partner Hill, Chesson & Woody.

cadillac taxWhile most employers are focused on managing through 2015 and the upcoming employer mandate, the Cadillac Tax will present another significant challenge for many in 2018 and deserves attention.

The Cadillac Tax is an excise tax on health coverage deemed to be high cost.  The tax begins in 2018, and levies a 40 percent excise on the value of health insurance benefits exceeding the threshold of $10,200 for individual coverage and $27,500 for family coverage (indexed to inflation) on an annual basis. The thresholds increase for individuals in high-risk professions e.g. police officers/fireman and for employers that have a disproportionately older population.

While these thresholds seem high for some, when most evaluate their current premium and apply three years of  a trend increase to it, it is easy to see how in  2018 many employers will be  close to hitting or even exceeding the thresholds.  Industry estimates show that nearly 50% of employers will be impacted in 2018.  Making matters worse, it is not just the cost of health insurance that goes into the calculation.  Employer or employee contributions to a health flexible spending accounts must be included as well as employer contributions health savings accounts and health reimbursement accounts (HRAs).

The outcome is that employers will likely have to reduce the value of the plan they are offering, reduce the limit of their Flexible Spending Account, and eliminate any employer contributions to an H.S.A. or a combination of these tactics in an effort to avoid the tax.

The tax will apply to employers regardless of plan funding (fully insured or self insured) and is scheduled to begin in 2018 and go into perpetuity.  The tax is non deductible for employers so many employers may experience an increased tax burden due to the loss of deductibility.  The Congressional Budget Office estimates the tax will raise $80 billion between 2014 and 2023.

Employer reaction has been mixed with many taking a wait and see attitude and delaying a decision as long as possible.  In a recent survey of 333 large employers by the National Business Coalition on Health and the Benz Corp, according to the results, “the Cadillac Tax is currently not driving major benefit change.”  Of the employers surveyed, 30 percent have not made any decisions around their course of action with 46 percent of employers keeping benefit coverage the same.

Since the inception of the Affordable Care Act (ACA) there has been wide talk that the Cadillac Tax would be repealed.  Pundits proclaimed that large employers and unions would not stand for it.  As the ACA marches on, the Cadillac Tax is becoming more and more of a reality.  Congress is counting on the tax to be a major source of revenue so repealing the Tax could be unlikely.  There is a possibility that the Cadillac Tax could be redesigned or some form of compromise reached.  The long term impact to employees will most likely be reduced benefits and higher out of pocket costs which may create morale and retention issues.

Employers need to plan now and estimate what the potential costs of the Cadillac Tax to be for their organization and determine a strategy moving forward.

 

 

I Scribbled on a BMW with a Sharpie®

Tuesday, November 11th, 2014

pink carThe following post is from CAI’s Marketing Design Specialist, Vanessa Laster.

Actually, there were ten of us from CAI. We all did it. And we didn’t get caught or arrested or even yelled at.

One recent Monday in October (Breast Cancer Awareness month, in case you’ve been under a rock), the Sales and Marketing team of CAI took several hours out of our busy schedules to volunteer for a greater cause. We divided into groups and each group manned a pink car – a “Hope Mobile” to be precise. Crown Automotive of Greensboro has wrapped six different cars with pink graphics to raise awareness and money for research benefiting Earlier.org – Friends for Earlier Breast Cancer Test®. Julie Newcomb, CAI’s Triad Member Solutions Manager, is very passionate about the cause and serves on the Board of this organization, and she arranged for our team to help out.

So we donned our best pink attire and gathered around our respective cars in busy intersections and corners in the middle of the High Point Furniture Market (insanity!). We asked passersby from all over the world to give just one dollar and sign the car to raise money that Earlier.org will use to help identify an earlier test for breast cancer. One hundred percent of the funds raised are given directly to Earlier.org for research grants.

Though some folks just ignored our pleas – we think perhaps they just didn’t speak English – but most people were excited to support our efforts. Many of them even took pictures with the cars. It was inspiring and humbling to learn firsthand that people from all over the globe have had similar experiences with breast cancer in their lives. Some gave over $1. One of our teams even received a $100 bill!

At the end of the day, we raised $625 for Earlier.org. Our three groups were very competitive, really. What else do you expect from the Sales and Marketing Team? So who won? Team Volvo, Team BMW or Team Acura? The winner is every woman and man (yes, men can get it too) who will ever need a test to determine if they have breast cancer.

Support the cause. Visit www.earlier.org for more information.

 

Is There a Good Termination?

Tuesday, November 4th, 2014

The following post is by Bruce Clarke, CAI’s CEO and President. The article originally appeared in Bruce’s News and Observer Column, The View from HR.

Bruce Clarke, President and CEO

Bruce Clarke, President and CEO

The best job terminations resemble resignations. The issues are clear, and efforts were made to improve. Dignity is preserved.

The truth is, most firings happen under difficult conditions. A manager dropped the ball, or the employee behaved badly. How can a difficult firing be better?

The firing manager usually controls the “terms of the termination” and can make a difficult situation better. There is discretion on basic terms like time off payouts, future references, how an unemployment claim will be handled, and even a written release of legal claims. There is discretion on what others are told and what the employee record reflects. There is even discretion on the last day of work and whether the employee will stay to finish some projects. The facts vary widely.

A much more complicated and misunderstood category of discretion is how the employee is fired. Call it the “human treatment” option. It is much more powerful than you might think.

The key to “human treatment” is whether the employee views the termination process itself as fair, not whether the decision was correct.

Some questions that could come up:

Was my treatment on the way out the final insult in a long line of insults, or was it something quite different?

Did it recognize my humanity, my need for dignity, my need to tell others why I was fired, and my need to leave this group of work friends without a sudden and public divorce?

The most important way a manager can make the process fair is to tell the truth. “This is why we are firing you. This is how the decision was made. This is how we investigated the facts. Yes, we value the work you did for us on that, but the failures on this led to your discharge.”

This is not the time to say everything that is true, nor the time to debate, but it can often be a time to establish the basic fairness of the decision process itself. It is also not the time to destroy the last shred of an employee’s dignity.

The most important way a fired employee can encourage “human treatment” is to be capable of handling his or her end of the bargain. Can you as an employee depersonalize this firing? Can you disagree or agree on a point without coming unglued? Can you show you are ready to move on if the exit makes that possible? Can you set out your ideas for internal communication and future references, or say goodbye to your team without making matters worse? Can you be trusted?

Research by a Duke professor and his team found that employees who perceived the process as fair were much less likely to make claims against employers, even if they disagreed with the discharge. Employees who saw the process itself as unfair became vindictive and made legal claims at a much higher rate.

Giving no reason for firing is not perceived as fair! Fairness in the termination process itself may be a better predictor of future legal problems than whether the actual reasons for termination were valid or not.

You can make a difficult termination better or worse by how the exit is handled. Your choice.

Delivering Great New Employees – Part 2

Tuesday, October 28th, 2014

In today’s video blog, CAI’s Vice President of Membership, Doug Blizzard, continues the conversation from his last video blog in which he discussed employer recruiting efforts. His tip to employers is to stay out in front of top talent long before you have an opening.

Doug mentions that there are many factors that can attract a job candidate to your company, such as career advancement or working with industry thought leaders. You may offer enticing employee benefits, but Doug asks, “Does anyone know about them?”

He offers up action items employers can take to make top job candidates aware of their company and the benefits offered. One of the many items he shared in the video included having your team members present at events or activities where top candidates in the specific industry you’re looking in hang out, such as associations or industry-related conferences.

Doug encourages employers to try the tips he shared in the video and see how they attract interest from quality job seekers. Make sure to look out for the third installment of this video series next month.

For additional recruiting tips, please call a member of our Advice and Resolution team at 919-878-9222 or 336-668-7746. The team is now available 24 hours each day throughout the week! Please give us a call!

How Can Staffing Firms Manage The Employer Mandate?

Thursday, October 16th, 2014

The post below is a guest blog from Jay Lowe who serves as Principal, Health & Welfare Consultant for CAI’s employee benefits partner Hill, Chesson & Woody.

hcw 10 16 14Be sure your staffing firm is ready to be part of the solution, not part of the problem.

Many companies use staffing firms to fill placement needs within their organizations. The placements can be for short-term coverage needs or longer term work assignments. Under the Employer Mandate portion of the Patient Protection and Affordable Care Act (PPACA), these temporary employees must be classified just as any other permanent employee based on their job description or role within the company. The classification determines whether or not this temporary employee should be offered health coverage. Improper classification and failure to offer health coverage to a full-time but temporary employee could result in significant tax penalties levied against the client employer.

The Problem

When PPACA was initially enacted, the rules around staffing firms were not clearly defined. There was some speculation that these entities would not be subject to the Employer Mandate or penalties and that companies who use staffing agencies would not be required to offer their ”staffed” or “temporary” employees coverage. Earlier in 2014, however, the IRS and the Department of Labor issued clarification around this and deemed that the Common Law Employer is to be responsible for providing coverage to staffed employees and will receive the penalty if out of compliance with the Employer Mandate.

The Common Law Employer may or may not be the staffing agency and is to be determined using the IRS 20 factor test. This determination would be made regardless of any agreement or contract between the staffing agency and the client employer. Additionally, the issuing company of an employee’s Form W-2 is not determinative of who is responsible for offering coverage. In many cases, the Common Law Employer is the client employer who receives the temporary employees from the staffing firm. When the client employer is the Common Law Employer, the burden of offering coverage (and the risk of penalty) lies with the client employer.

The Solution

The Employer Mandate final rules provide some relief to companies using staffing firms, by allowing a staffing firm to make an offer of coverage on behalf of the Common Law Employer. A compliant offer of coverage for staffed employees releases the Common Law Employer (i.e., the client employer) of the Employer Mandate obligations for those employees procured through the staffing agency. The rules around this are simple:

  1. First, the offer of coverage must be made by the staffing firm. The coverage will consist of a medical plan that meets or exceeds the 60% actuarial value limit set by law and be affordable to the employee (total annual premium cost to the employee of no more than 9.5% of their W-2 income).
  2. Second, the plan that is offered is a group health plan established or maintained by the staffing firm.
  3. Third, the fee paid to the staffing firm by the client employer is higher for those temporary staffers who enroll in the plan than it is for those temporary staffers who choose not to enroll. Basically, the staffing company is required to pass along a portion of the cost of insurance to their client employer.

What should you do now?

Employers who use temporary employees should ask their staffing firms questions about how they are complying with the PPACA regulations, as that could have a significant impact if penalties are triggered. Conversely, staffing firms must be prepared to answer the questions they will receive from their clients.

Questions that should be asked and answered are:

  1. How do you plan to comply with PPACA in 2015?
  2. Do you plan to offer MEC to full‐time employees?
  3. Will the MEC be of minimum value (i.e., 60% plan value)?
  4. Will you be charging a different fee for employees enrolled in the plan than for employees not enrolled in the plan?
  5. If yes, what will the differential be?
  6. Will you obtain and maintain waivers for those employees who waive coverage?

Ultimately, there is a vital necessity for any company that uses temporary employees to have an open channel of communication with their staffing firm. Employers must educate their staffing firms on types of employees they need with respect to their classification. Conversely, staffing firms must educate their employer clients on how they plan to manage the Employer Mandate and what to expect regarding pricing and coverage on the employees they place. Staffing firms and their employer clients must work together to develop a plan to reduce and/or eliminate the exposure to penalties.

Prepare for Difficult Conversations with Employees

Tuesday, October 14th, 2014

In today’s video blog, Renee’ Watkins, HR Advisor on CAI’s Advice and Resolution team, shares how to have difficult conversations with employees by offering a few steps to follow when delivering difficult news.

Renee’ starts by explaining that the key to delivering bad news is to lead the conversation with respect and sensitivity. She then offers several steps to make these conversations positive and productive experiences.  Some examples Renee gave in the video include: be specific and avoid generalities, show employees your willingness to listen, and allow employees the opportunity to give their side.

She says having these difficult conversations will make the difference between success and failure for a valued employee. By following the steps in the video, you can improve the lives of many of your team members.

For more information on having difficult discussions with employees, or if you have any questions, call a member of our Advice and Resolution team today at 919-878-9222 or 336-668-7746. The team is now available 24 hours each day throughout the week! Please give us a call!

Stereotyping and Discriminating Based on Sex and Sexual Orientation, and the Related Federal Laws

Thursday, October 9th, 2014
Robin Shea, Partner at Constangy, Brooks & Smith

Robin Shea, Partner at Constangy, Brooks & Smith

The post below is a guest blog from Robin Shea who serves as Partner for Constangy, Brooks & Smith, LLP, CAI’s Partner for the 2014 Triad Employment Law Update. This post originally appeared on her blog Employment and Labor Insider.

The Employment Non-Discrimination Act is dead again. Is there any federal law on same-sex harassment or discrimination? If so, what is it? Here are some scenarios that may be helpful in picking through this crazy extremely complex and rapidly transitioning area of the law. (Answers are provided after Scenario 6, below.)

 

Scenario 1. Joe has a huge crush on John. Joe makes lewd and unwelcome comments to John, and tries to corner him to make sexual advances to him. John has made it clear to Joe that he is not interested, but Joe doesn’t listen.

Under federal law, is there a problem?
pollcode.com free polls

 

Scenario 2. Bill interviews Lester for a job. Lester is huge, hairy, and masculine looking. When Bill offers him a job, Lester says he is thrilled but will have to discuss it that evening with his “better half,” Jim. Bill immediately withdraws the offer and hires a less-qualified heterosexual man.

Has Bill violated federal law?
pollcode.com free polls

 

Scenario 3. Bill interviews Charlie for a job. Charlie is married (to a woman) and has four kids. However, he’s “thin and neat,” and he speaks with a sibilant “s.” Bill thinks Charlie will catch too much grief from Bill’s “rough” work crew, so he hires a less qualified guy who he thinks is more “manly.”

Has Bill violated federal law?
pollcode.com free polls

 

Scenario 4. Mary has short hair, doesn’t wear makeup or nail polish, and she wears “men’s” pants and flat shoes. The women she works with gossip about her behind her back and play mean jokes on her. The female supervisor sees all of this and thinks it’s funny and harmless.

Might the company be liable under federal law?
pollcode.com free polls

 

Scenario 5. Anne has long, lustrous, beautiful hair, and is perfectly dressed and made up every day, right down to her shell-pink ruffledy chiffon dress and her seven-inch stiletto heels. One day, Anne tells her boss that she and her partner are planning to adopt a baby. While the boss is ecstatically planning Anne’s baby shower, Anne mentions that her partner’s name is Marie. The boss starts writing Anne up for performance issues (all bogus), and eventually fires her.

Might the company be liable under federal law?
pollcode.com free polls

 

Scenario 6. Marsha (formerly Marshall) is a biological male who is going through the gender-reassignment process. Marsha has not had surgery yet, but she’s started hormone treatments and, on the advice of her physician, has begun dressing and living as a woman. Marsha’s supervisor, Staci, fires Marsha for coming to work five minutes late — once — when there was a horrendous accident on the interstate that made everyone else late, too. (No one else is even written up.)

Has Staci put her company in jeopardy under federal law?
pollcode.com free polls

 The answers, with no ENDA, and assuming none of these employers are federal contractors, are 1-D, 2-A, 3-D, 4-C, 5-B, and 6-C.

Huh? Seriously?

Crazy Extremely complex and rapidly transitioning, I know! Title VII prohibits discrimination based on sex but not sexual orientation. However, Title VII does prohibit discrimination based on sex stereotyping. (Why? Because the Supreme Court said so, that’s why.) So if the discrimination or harassment has something to do with stereotyping — in other words, the individual is being picked on because he doesn’t fit the picture of what a “man” should be, or she doesn’t fit the picture of what a “woman” should be, the individual could have a valid federal claim. As in this case.) On the other hand, if the individual is picked on “only” because he or she is perceived as being gay, then there is no valid federal claim.

Of course, many states and local governments have their own laws prohibiting discrimination and harassment based on sexual orientation. In addition, in any state, a person who is harassed because of sexual orientation may (depending on the circumstances) have common-law tort claims for intentional or negligent infliction of emotional distress, assault and battery, or false imprisonment, and one who is fired or “forced” to quit could have a claim for wrongful discharge.  So employers should not think that the lack of a federal law means they can act with impunity.

Robin Shea is presenting at the 2014 Triad Employment Law Update on November14th at the Grandover Resort in Greensboro. In addition to sharing information on gender identify and new protected classes,  attorneys from Constangy, Brooks and Smith, LLP will provide you with the most recent updates in state and federal employment law. Register today at www.capital.org/triadlaw.