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Business Challenges with Human

Resources in 2014Jumping into the Year

Presented by Laura Kerekes, SPHR

Chief Knowledge Officer

ThinkHR Corporation

A Live Webinar Event:

ThinkHR Confidential 3/27/2014 2

What We’ll Cover Today

You’ll get the inside scoop on:

• Health Care Reform: What employers need to plan for and know

• Fair Labor Standards Act compliance with employee classification for

overtime and independent contractor status

• Immigration compliance and E-Verify

• National Labor Relations Board decisions, including employment-at-

will and social media policies

• Affirmative Action and OFCCP

• PLUS: Some practical advice regarding attracting and keeping your

best and brightest employees


Health Care Reform

• Grandfathered Health Plans

• Review the triggers that would cause your plan to lose

grandfathered status in 2014

• Increase in percentage of cost-sharing (co-insurance)

requirements

• Increase in deductible or out-of-pocket maximum by amounts

exceeding medical inflation plus 15%, increase in co-pays by

more than $5 or medical inflation plus 15%, decrease in

employer’s contribution rate by more than 5%, elimination of all

or substantial benefits to diagnose or treat a particular

condition. All changes must be measured from March 23, 2010.

• Make sure the Notice of your plan’s intent to remain grandfathered

is included in all plan materials.


Health Care Reform

• Annual Limits on Essential Health Benefits: Ensure

the plan and plan documents have no annual limits for plan

years beginning on or after January 1, 2014.

• Advance Notice of Benefit Changes

• Provide written notice of mid-year material plan

modifications at least 60 days in advance to all eligible

individuals.

• For ERISA plans, provide Summary Material Modification

(SMM) notice within 60 days of any material reduction in

covered services or benefits under a group health plan.

• Provide 30 days written notice of changes to your plan in

connection with renewal.


Health Care Reform

• Review Waiting Periods for Health Plan Coverage

• Ensure they do not exceed 90 days (applicable to all health

plans) – some states have shorter periods

• Eliminate Pre-Existing Conditions Language from all

health plans for 2014

• Amend FSA Plan Documents as needed

• Summary of Benefits and Coverage (SBC)

• Ensure that all eligible new hires are offered initial enrollment

into the health plan.

• Ensure that SBCs are provided during open enrollment or at

least 30 days before renewal of coverage.


Health Care Reform

• Notice Of Public Marketplaces (Exchanges)

• Provided to existing employees on or before October 1, 2013, and

to new hires within 14 days of hire on an ongoing basis

• Should be provided to all employees regardless of whether they

are eligible for coverage under the health plan.

• Patient-Centered Outcomes Research (PCOR) Fee

• PCOR fees are paid once a year in connection with IRS Form 720,

Quarterly Federal Excise Tax Return

• For insured plans: Due by July 31st following the close of the policy

year from the insurer(includes the fee in premiums)

• For self-funded plans: Due by July 31st of the calendar year following

the plan year end


Health Care Reform

• Transitional Reinsurance Fee

• Annual fee beginning in 2014 through 2016, for all fully-insured and

self-funded health plans.

• The fee is based on covered lives, and is estimated to be $63 per

covered life for 2014; payable by the insurer for fully-insured plans

and the plan sponsor, through its TPA, for self-funded plans.

• The insurer or plan sponsor must report the number of covered

lives to HHS by November 15, 2014 for the 2014 calendar year,

and will receive an invoice from HHS by December 15 that is

payable within 30 days.


Health Care Reform

• MLR Rebate (Imposed on Insurers and Payable to

Policyholders and Subscribers)

• Large group insured plans (over 100 employees) must

spend at least 85% of premiums paid on medical claims.

• Small groups (100 or fewer employees) and individual

markets must spend at least 80% on medical claims.

• If not, a rebate is owed to the policyholder and subscriber,

based on pre-established pools.

• Policyholders and subscribers must be notified by

September 30, 2014 for the 2013 reporting year.


Health Care Reform

• Prepare for the Shared Responsibility Employer

Provision – delayed until plan years beginning in

2015 for large employers with 100+ full-time

employees and to 2016 for employers with 50 – 99

full-time employees

• Determine whether you are a Large Employer subject

to the mandate for 2015:

• Add your full-time (those working over 30 hours per week)

and part-time employees to determine this.

• Use special rules for counting seasonal employees.


Health Care Reform

Large Employers (100+ employees) for 2015

• Offer coverage to all employees scheduled to work 30 or

more hours per week or 130 hours per month within 90 days

of hire to avoid the risk of an excise tax.

• Establish a look back measurement/stability period to review

ongoing variable/seasonal employees.

• Count all hours worked, but also hours in which an

employee is paid but does not work, such as vacation,

holiday, sick leave, disability leave, layoff, military duty or

other paid leave of absence. Include certain unpaid leave,

such as FMLA, jury duty or USERRA.

• Establish an initial look back measurement/stability period

for newly-hired variable employees (those who may be

seasonal or hired to work less than 30 hours per week). This

period may be between 3 and 12 months.


Health Care Reform

Large Employers – How is a Penalty Triggered?

• Offer minimum essential coverage (MEC) to at least 70% of full-

time employees

• Must be affordable and meet a minimum value standard

• Excise tax triggered if an employee qualifies for a premium credit or

cost sharing through the marketplace.

• No Coverage Penalty: Calculated monthly using the number of

full-time employees (minus the first 30) multiplied by $166.67

(equivalent to $2,000 per year)

• Unaffordable Penalty: Calculated by taking the lesser of the

number of employees receiving premium credit multiplied by

$250 (equivalent to $3,000 per year) OR the number of full-time

employees (minus the first 30) multiplied by $166.67

(equivalent to $2,000 per year).


Health Care Reform

ACA Provisions Beyond 2014 – Waiting for

Further Guidance:

• Employers With 200 or More Employees Must Provide

Automatic Enrollment in Health Plans

• Non-Discrimination Rules for Insured Plans (we are

assuming that these will be similar to the Section 105

self-insured rules)

• Cadillac Tax – Excise Tax on Rich Health Plans: 40%

non-deductible excise tax on the value of high cost

employer-sponsored health coverage (plans spending

more than $10,200 per employee or $27,500 per family)

• Includes employer and employee-paid premiums and contributions

to HSAs and FSAs

• Indexed for inflation


Worker Classification - FLSA

• The federal Fair Labor Standards Act (FLSA) is the major wage-hour law

covering employers

• Last year was a record year for compliance audits and decisions surrounding

worker misclassification for purposes of pay and overtime AND employee

versus independent contractor status

• The number of lawsuits in the past decade and compliance audits in the

current administration have skyrocketed

• DOL is making this a continued emphasis in the next term – the recovery of

back wages and taxes


Immigration and E-Verify

• Immigration reform initiatives continue

• In 2013, 45 states and the District of Columbia enacted 437 measures dealing with immigration, a 64% increase over the previous year

• For employers, this includes strengthening the I-9 employment eligibility verification system

• Form I-9

• Enhanced workplace enforcement efforts

• Federal E-Verify system


Labor Relations and the NLRB

• The Administration’s decisions and rulemaking favored

organized labor and trend expected to continue

• Section 7 of the National Labor Relations Act protecting

workers engaged in “protected concerted activities”

• Social media

• “At-will” status

• Electronic communications

• Investigations


Affirmative Action and OFCCP

Issues

• The size of the Office of Federal Contracts Compliance

(OFCCP) budget has increased for 2014

• Strategic goals: Increasing litigation of cases from 22% to 24%

• Special emphasis targets include disability, veterans and sex

discrimination issues

• Greater emphasis will also be placed on Affirmative Action

compliance

• Tips for employers: Review employment, training and pay

actions, document the business reasons for actions that might

invite EEOC scrutiny; ensure managers are well-trained and

support the company’s EEO policies


Tips for Keeping Your Best and

Brightest

• Recent major employer surveys indicate that many employees will seek other opportunities as the market rebounds

• The challenge for 2014 is to ensure we don’t lose our best employees

• Ensure that your compensation and benefits packages are competitive and administered fairly

• Provide opportunities for employees to upgrade skills and share their knowledge with others

• Listen to employees’ ideas, communicate with them often, and involve them in decisions affecting them, as this shows respect

• Communicate goals, roles and responsibilities

• Provide performance feedback and praise results

• Enable employees to balance work and life

• Celebrate successes and milestones

•


Thanks for Attending!

• We’ve got a host of management and

human resources challenges this year!

• Need more information or assistance? Give us a call or log in to

our HR library website and post a question or find your answers.

• We’re here to help and will keep you informed on the legislative

and regulatory issues as they are finalized.