Tag Archives: Health Insurance

2017 New Year’s Resolutions for Employers

At the beginning of each year, I encourage my business clients to make some New Year’s resolutions to achieve better compliance with the myriad employment laws. Based on what many of my clients are telling me and what the courts and enforcement agencies have on their agendas, here are the employment matters that you could improve in 2017:

  • Immigration compliance: President-Elect Trump has promised strong enforcement of the immigration laws. Many of those enforcement efforts will affect employers, such as mandatory use of the E-Verify system to double-check the legal status of every new hire. Even before that requirement is put in to place, resolve to correctly complete the mandatory new I-9 form for every new hire. The best way to make sure the I-9 is correctly completed: consult the government-published Employer’s Guide to the I-9, particularly the color pictures that show you exactly what a valid permanent resident card, for example, looks like. Also, be prepared that some of your employees may lose their work eligibility under the new administration, including young people (known as the Dreamers) who became eligible under the Deferred Action for Childhood Arrivals (DACA) program in 2012.
  • Market rate on salaries: Texas’ unemployment rate was sitting at 4.6% at the end of November 2016. Amarillo’s rate was 3.0%. Economists consider 3% to be full employment, meaning you as an employer maybe finding it difficult to attract and keep the talent that you need. I am always surprised therefore when my clients don’t keep up with the market data on salaries. Resolve in 2016 to tap into the data available on the Bureau of Labor Statistics for your industry and your location to really analyze whether your salaries are sufficient. Employees will also be looking at Salary.com and Payscale.com, so you need to do the same.
  • Improve your PTO offering: I am amazed when I am drafting or revising my client’s employment handbooks how little paid time off many local employers offer. Many don’t give an employee any vacation, sick leave, personal days or other paid time off during the first year and then rarely allow more than five days per year after that. This will not attract top talent or create long-term loyal employees, I promise you. Particularly if you are hiring millennials or need an educated workforce, you need to up your game on PTO. My 22-year-old son was hired in 2015 by a consulting firm in Washington, D.C., right out of college (with a degree in economics and a master’s degree in business analytics) and offered three weeks of PTO that started accruing immediately. After one promotion, employees at his company get four weeks of PTO. I’m not arguing that every job merits that much PTO, but resolve in 2017 to at least consider that two weeks per year should be the minimum to improve your hiring, increase your retention, rejuvenate your employees every year and allow your employees to deal with the inevitable ups and downs of life. As an employment lawyer, I know that most employee lawsuits arise after the worker leaves your employ. Keeping your staff reasonably happy and loyal by providing better PTO will provide you with other benefits too, but I like it because you will spend less time with me in court and instead we can just have lunch and talk about more pleasant topics.
  • Health Reimbursement Accounts: None of us know what the new administration will create to replace the Affordable Care Act, so I can’t give you much advice yet about your group health insurance offerings. However, employers with less than 50 employees who don’t offer group health insurance should resolve to consider using Health Reimbursement Accounts in 2017 because of the bipartisan 21st Century Cures Act that sailed through Congress and the President’s signature in December. That act included permission for small employers to now use HRA’s to pay for qualified out-of-pocket medical expenses for their employees and to fund individual health insurance premiums. In other words, employers can use pretax dollars to help employees to purchase their own insurance on the open market while capping the employer’s contribution at a reasonable amount. There are, of course, many restrictions associated with this opportunity, but it is worth consideration by smaller employers in 2017.
  • Good Documentation: Every employment lawyer would like for you to add this to your resolution list each year. Memories fail and managers move on, so written documents are often an employer’s only evidence of the nondiscriminatory reasons that certain employment actions were taken. Understand and resolve that performance reviews, reasons for bonuses and merit increases, violations of policy, attendance problems, changes in job duties and disciplinary actions will be well-documented in 2017. I’ll help with any of kind of documentation, but I highly recommend that you get me involved whenever the documentation is of disability or religious accommodations, FMLA, harassment claims, overtime or other compensation problems, egregious policy violations, demotions, final warnings, layoffs and terminations.
  • Gratitude: Resolve that you will say “thank you” more often to your employees in 2017. Studies have repeatedly shown that this one action can enhance employee engagement and loyalty even more than raises and promotions. Gratitude can also make your workplace so much more enjoyable for all of your employees.

 

Affordable Care Act is the Law

The United States Supreme Court confirmed today that the Affordable Care Act (“ACA”) is the law and is here to stay. In deciding King v. Burwell, the Court for the second time upheld the health care law that was passed by Congress in 2010.

What does King v. Burwell mean for employers? Not much. As an employer, you just have to keep soldiering on to make the ACA work in your business, just as you have been doing for the last several years.

Of course, how big an issue the ACA is to you as an employer depends on the size of your workplace. To apply the ACA, you as the employer have to count your employees and determine how many “full-time equivalents” that you employ. Under the ACA, a full-time employee is one who is employed an average of at least 30 hours per week.

The Affordable Care Act’s mandate, requiring employers to provide health insurance to employees or face a penalty, does not apply to employers with less than the equivalent of 50 full-time employees. This is the small business exemption to the mandate and means that small businesses can choose whether to provide health insurance at all.

If you have between 50 and 99 full-time equivalent employees, you have been getting ready for the Affordable Care Act this year, since 2016 is the year that you are required to provide your full-time employees with affordable health insurance coverage or pay a potentially substantial penalty.  You are probably still working out the kinks in your system of counting hours, determining who is full-time, setting measurement periods. Next year you will be getting employees signed up and answering endless questions from your employees about their coverage.

If you have 100 or more full-time equivalent employees, then 2015 is the first year you have been required to  provide health insurance to your employees or pay a penalty. The penalty is imposed if at least one of your full-time employees receives a subsidy to purchase coverage in the individual Marketplace. So the subsidies that the Supreme Court upheld in King v. Burwell today will determine if you as an employer get penalized.

But at least you have a little margin for error this year if you employ 100 or more people. In 2015, you only have to offer coverage to at least 70 percent of full-time employees, rather than 95 percent which will begin in 2016.

There are other changes on the horizon for you as an employer in dealing with the ACA. Continue reading Affordable Care Act is the Law