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Prepare: E-Verify May Soon Become Mandatory

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With so much focus in Washington on stemming illegal immigration and the erosion of job opportunities for U.S. citizens, chances appear better than ever that the E-Verify system will become mandatory. President Trump’s 2018 budget proposal includes funds to upgrade the system so that it can handle greater capacity, that is, if Congress authorizes requiring businesses to use it.

California’s View of E-Verify

Often following the beat of a different drummer, the state of California has passed its own laws limiting the use of the federal immigration status verification system known as E-Verify.

In 2011, California passed the Employment Acceleration Act, which prohibits state agencies, cities, and counties from requiring private employers to use the federal system in most cases. Exceptions include where the use of E-Verify is mandatory by federal law, or when using the system is a condition necessary to receive federal funds. Previously, in some areas of California, city contractors and businesses within city limits were also required to use E-Verify. Voluntary use for private employers is permitted.

Effective January 1, 2016, Assembly Bill 622 set forth stiff civil penalties of up to $10,000 for each separate occurrence of misuse of the E-Verify system. Violations include actions such as:

- Using the system to verify the status of existing employees,

- Using the system to verify the status of job applicants before an offer of employment has been made, and

Failing to give an individual a Tentative Nonconformation notice, as soon as reasonably possible, when such notice has been received after attempting to verify status.

Given the fact that violations can quickly result in significant penalties, California employers using the E-Verify system should review their practices to ensure compliance.

Background: E-Verify is currently a voluntary federally administered electronic system designed to help employers verify the work eligibility and citizenship status of job applicants and employees. Its purpose is to alert users when the Social Security number supplied by an individual is already in use by someone else. After an initial pilot phase that began in 1996, it became available to employers in all states in 2001.

Where Verification is Mandatory

Today, nine states — Alabama, Arizona, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, and Utah — require that most employers use E-Verify. Federal contractors also must use the system. A handful of other states require that public employers or contractors doing business with state or local governments use E-Verify.

Even so, only about 10% of employers use the system. Of those, 60% do so because they are required to by law. Yet about 90% of employers recently polled by the Society for Human Resource Management (SHRM) said they would support a mandate to use E-Verify or a similar system, subject to certain changes in the existing program.

What Employers Want

High on employers’ wish list of possible changes to the E-Verify system is that using it would take the place of the Form I-9, “Employment Eligibility Verification,” the paper-based system created for the same purpose. Current users of E-Verify are still required to collect I-9s from employees, just like everyone else.

Additional changes sought by employers point to issues they would face now if E-Verify were made mandatory in its current form, including:

A strong “safe harbor” protecting employers from accusations of wrongdoing if they use the system in good faith,
Removal of any potential liability for employment-based discrimination charges in conjunction with its administration of E-Verify, and
Provision of a set time period for resolving work authorization disputes.

Another concern with E-Verify in its present form is that its usefulness is limited. That is, it determines whether information entered into the system — such as name, date of birth and Social Security number — already exists in the government’s database and corresponds to someone who is eligible to work. “What it can’t do is give employers certainty that the people standing before HR are who they say they are,” according to SHRM.

Instead, SHRM proposes the use of a network of “identity verification centers.” These centers are similar to the ones companies use when individuals need to request a new password to gain access to their online accounts. The requester must provide personally identifiable information to prove who they are (such as answers to preset security questions). In an employment setting, employers would be told whether an employee or job applicant has cleared that hurdle.

Also, currently employers that use E-Verify must later verify that the person they just checked out is indeed employed by the company. One reform being proposed is that the system be streamlined by dropping this requirement.

Pending Legislation

The latest version of the “Accountability Through Electronic Verification Act,” was proposed by Senator Charles Grassley (R-Iowa and chairman of the Senate Judiciary Committee) and co-sponsored by nine other senators in January. If passed, it would make E-Verify permanent (though under current law, it must be reauthorized by Congress every two years). It would also address several of the concerns of groups like SHRM.

Here are several of the key provisions of the proposed measure, as described on Congress’ website.

Employers must: (1) use E-Verify to check the identity and employment eligibility of any individual who hasn’t been previously vetted through E-Verify not later than three years after enactment of this Act (2) re-verify the work authorization of individuals not later than three days after their employment authorization is due to expire, and (3) terminate an employee following receipt of a final E-Verify nonconfirmation. The information provided by the employee must then be submitted to DHS, to assist in enforcing or administering U.S. immigration law.
The system may be used to verify the identity of individuals before they are hired, recruited or referred if the individual so consents.
The bill eliminates the Form I-9 process and sets forth the design and operation requirements of the E-Verify system.
U.S. employers must begin to participate in E-Verify within one year of enactment of this Act; and employers using a contract, subcontract or exchange to obtain labor to certify that they use E-Verify.
The failure of an employer to use E-Verify shall be treated as a violation of the Immigration and Naturalization Act requirement to verify employment eligibility. It also creates a rebuttable presumption that the employer knowingly hired, recruited or referred an illegal alien.
The bill increases civil and criminal penalties for specified hiring-related violations, and establishes a good faith civil penalty exemption/reduction for certain hiring-related violations.

State and local governments may not prohibit employers from using E-Verify to determine the employment eligibility of new hires or current employees.

There’s no guarantee that E-Verify will become the law of the land, and if it does, chances are there will be a lag time before it takes effect. Still, it’s a good idea for companies to review their work-status vetting procedures, as well as the possible implications of what a more foolproof E-Verify system might have for your workforce.

(Source: BizActions)

Underperforming Employees May Be Salvageable

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It’s easy to spot underperformance, but correcting it is a different matter. The fact is, effectively managing your workforce, especially problem employees, just doesn’t come naturally to most people. Here’s some guidance to potentially help turn around an employee who is missing the performance mark.

Tackling the Problem

When an employee is underperforming, begin the performance management process with these two steps:

Clearly define the nature and degree of the underperformance.
Determine whether you’ve done the best job possible in helping the employee to be successful. For example, is the employee aware that you consider his or her work subpar? Have you put it in writing as well as had discussions with the employee?

Staff members who aren’t sure whether they’re on the right track often wait for feedback, rather than proactively seeking guidance. That means you need to act at the first sign an employee isn’t meeting expectations, rather than hoping the situation will remedy itself.

If the individual has worked under other supervisors in previous jobs within the company, a quick meeting could be productive, before talking with the employee. Describe the issues you’re having, and ask the previous supervisor whether the same type of problems were present in the past. If the answer is “no,” that may help set the agenda for your discussion with the worker. The conversation might proceed along these lines:

Clearly and specifically state your performance concerns. For example, in a manufacturing plant, you may need to advise an employee that he or she is habitually falling below the daily production goal.
Let the employee know that your objective is to work together to find a solution.
After discussing the specific performance issues, ask how you can help the employee turn around the situation, with some possible suggestions in mind. There may be issues you aren’t aware of, such as tools that are in disrepair or missing, or poor lighting in the employee’s workspace. So be open to his or her input.
Provide the employee with any written materials you may have — or can put together — about the employee’s tasks and expectations. For example, are there manuals, guides and checklists about how to do the job properly?

If the employee attributes the performance concerns to lack of clarity about expectations, or an inability to prioritize tasks, the remedy might be as simple as regular monthly, weekly or even more frequent meetings to go over what needs to be accomplished before the next meeting.

The discussion could also reveal that the employee, while generally qualified for the position, needs some training to fulfill all the requirements of the job.

Accepting Criticism

How well the worker responds to the initial part of the performance discussion will influence how you wrap it up. If he or she is concerned, cooperative and motivated to improve, you can end with the remedial plan you devise. If, instead, the employee is defensive and unrepentant, giving no indication of a willingness to change, it may be time to describe the consequences of a lack of improvement.

The outcome of the meeting needs to be a concrete and detailed performance improvement plan with milestones. The plan itself may be as simple as a schedule for check-ins and progress assessment meetings.

Job Descriptions

To determine the milestones, go back to the written job description to see if it’s clear enough. Depending on the job, measuring progress may be easy, such as by seeking a higher output rate for a standard unit of product or service. Of course, it’s not always that easy, and it may require some serious thought. Whatever you decide, don’t leave this unaddressed. It’s not enough to say “I’ll know good performance when I see it.”

The clearer the job description, the easier it is to hold employees accountable for specific performance metrics. Take a look to see if it provides a framework you can use for measuring progress. If it doesn’t, it should be revised. An example of a metric for progress that’s harder to measure — let’s say, for an office assistant –— might be something like this: Within the first 90 days of employment, complete cross-training with the receptionist so you can efficiently fill that position as needed.

Follow-up discussions to look at performance improvement should be just that — discussions, not lectures. Before offering your assessments, seek the employee’s own opinion of his or her progress. You may see more improvement than the employee does, and that can give you an opportunity to encourage him or her with a little praise.

The worst mistake you can make in an employee turnaround effort is to lay out a detailed remediation plan, then neglect to follow up and review progress with the employee. That’s especially true if you promise adverse consequences for a lack of improvement and then nothing happens. Failing to follow up wastes everyone’s time, and the employee may either conclude you weren’t serious to begin with, or that he or she has improved enough.

When Your Best Efforts Fail

Doing all the right things to try to turn an underperforming employee into a valued worker is no guarantee of success, of course. After you’ve given it your best shot, you may decide the employee just isn’t right for his or her current role. Is there another area in the company that seems like a better fit? If so, explore the possibilities with other managers and then with the worker.

If the employee simply isn’t salvageable to work for your company at all, act promptly. The former employee will probably be better off finding a job that’s more suitable to his or her skills and interests. And in the end, your workforce will likely benefit by higher production and improved morale. Be sure to document all of the steps you took to try and turn the situation around, and consider consulting legal counsel to ensure you’re in compliance with all applicable laws.

(Source: BizActions)

Common Payroll Errors

Payroll is a complicated department to be in. We are trained payroll experts, so if we say that it can be complicated, you can trust that we know what we are talking about. Because it can be such a complicated ordeal, there are a number of errors that are commonly made. Studies show that about 40% of small businesses get fined by the IRS because of common payroll errors involving taxes. With so many small businesses popping up across America, you can imagine just how many are getting fined for this. What are these errors people are making and how can you avoid them?

Deadlines: Timing is an extremely important part of payroll. This goes beyond making sure your employees are paid on time. You have to make sure you file the right paperwork and tax information before the deadline and send important documents to employees. These documents include W-2s and 1099s.

Misclassification: There are several types of employees. There is part time and full time, wage and salary, permanent and temporary, payroll and contract. You have to make sure you properly label each employee and handle their payroll needs accordingly.

Poor Book Keeping: There are a lot of numbers involved in Payroll. It isn’t uncommon that names and social security numbers get mixed up with each other. While this might seem like a small mistake to make, it is one that can be costly in fines and consequences.

Overtime: Overtime is a part of payroll yet has its own list of rules to follow. Different types of employees have different rules for overtime. Wage workers get overtime if they work more than 40 hours, yet salary workers only get overtime if they make less than a certain amount a year. Contract workers don’t qualify as employees so they don’t get overtime pay.

No Back-Up: Payroll doesn’t get to take a break. If you have someone in-house doing payroll and they need to take a sick leave, your other employees still need to be paid and the IRS still needs its paperwork. It is important to have someone capable of doing payroll if the main person is out, and you need a way to always have access to payroll in a case of any technical issues. If your computer goes down, it is good to have either paper printed backups or backups on some form of storage device.

These errors tend to pop up because Payroll never really stops. As a business grows it will gain new employees, lose employees, and change current employee’s payroll status. Employees will get raises, paid holidays and vacation days, take sick leave, all things that need to be handled and recorded. It is a lot to worry about, luckily though there is an easy solution. Simply don’t worry about it at all. That might sound counter-productive, but what we mean is you can outsource your payroll to a company trained in every aspect of payroll management. You get all of the benefits that an in-house payroll department offers without any of the stress. If you are ready to get rid of errors in your company’s payroll, contact Vision H.R. today.

Common Payroll Errors

Vision H.R. | The Human Resource Experts

Mental Health and Days Off

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One of the most important aspects of any job is being mentally healthy. What does that mean exactly though? It doesn’t mean being free from mental health problems, it means having your health be in the right mindset. Our mind has a lot it has to handle, more than we tend to give it credit for. We might not realize it, but our moment is active all the time, even when we are not thinking about it. There is a good chance that you are wearing clothes right now, yet you don’t feel them do you? Your mind is filtering that unimportant feeling out. Unless you are staring at a wall, there is most likely multiple things in front of you, yet you hardly notice most of them. That is because your mind is deciding what is important and what isn’t. There are other things it’s doing like making sure you are breathing. Before I said that, I bet you weren’t aware that you were breathing in and out. It is more of a background process the mind does for us.

On top of all of these automated processes, it also has to deal with the manual input as well. It has to work overtime sometimes to make sense of what you are working on. It has to constantly shift gears as you change activities. It has to go from finishing a project before the deadline to where to get lunch to that meeting you have at 1 with the client. So it’s important to keep your mind in good shape and in good health. The problem is it can be difficult to do this when you work all the time.

Enough stress without break can lead to mental health issues. Especially if there were mental health problems already present. The real problem is that these mental health issues are often times overlooked. There is no argument that the Brain and the Heart are the most vital organs in the human body, yet we can’t take the time to heal when our brain gets overloaded?

If your employee benefits include paid sick days or sick days in general, it might be time to consider both physical and mental health issues. Just offering the option can help give some employees a little relief knowing they have the option. A few of the benefits of allowing employees to take mental health days include:

Less Stress: They get to lower their stress level, making them more focused and positive in the workplace.
More Productivity: Stress and mental anguish can lower productivity. When they come back from their mental break, they will be more refreshed and more productive.
They Can Tackle Personal Projects: We have lives outside of the office. With a mental health day, we can get out of the office, clear up that to-do list, and have less on our mind when we go back.
Better Employee Relations: If an employee knows their managers and employers are taking their mental health seriously, they will feel more appreciated and cared for.
Impersonal Way to Help: Everyone has their own problems, some more severe than others. Mental health days are a good way to help with these problems without getting personally involved with your employees.

It’s not just for employees though, it’s for you too. You have a lot of your plate, making sure your company is running smoothly. You can use a mental break from it all too. At the very least, you can reduce the amount of stress you have to deal with. Any reduction of stress is beneficial to the mind and body. Vision H.R. can help a little with that aspect by taking over your payroll responsibilities. Never stress about your payroll department again when you outsource it to our team of payroll experts. We take care of your employees getting paid on time and their benefits such as paid sick days and vacation days. To learn more about how we became the trusted Daytona Beach Payroll Services company our clients have come to count on, request a free quote here.

Daytona Beach Payroll Services Company

Vision H.R. | The Human Resource Experts

Learn To Worry Less

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How many things do you worry about in one single day? The average person has quite a few worries to deal with. Sometimes they are minor worries like, “Is that person going to pull out and cut me off?” and sometimes they are major things like paying bills or keeping a job. The good news is that most of those worries are never going to happen. According to a study performed in 2015, it was found that:

A: 85% of people’s worries never manifested

B: Of the 15% left, 79% of the worries that did manifest was less severe than expected.

That means that 85% of the things people in the study worried about happening never happened, and the 15% that did happen wasn’t nearly as bad as people worried it would be. That doesn’t mean we’re not going to worry, rather it shows us that we are worrying most likely over nothing. The problem now is that while the worry might never actually manifest into anything, it is still there causing us stress. Stress has plenty of negative consequences that we don’t want to deal with.

You could always try and live a worry free lifestyle. Sadly I can say that it’s not quite that simple though. There is a major difference between trying to stay stress-free and actually being stress-free. That doesn’t mean there are not ways to reduce the amount of stress you deal with though. There are plenty of things both big and small that you can do to keep the stress of owning a business down. Some of them are personal things such as taking time out of the day to connect with nature or taking up a hobby. Spending time in nature does all kinds of good for the mind, including reducing stress.

There are also things in the office you can do as well. The best part is that if it reduces your stress there is a good chance it is making the office more effective. At the very least it is making your job a little bit easier. Some things that you can do can also benefit employees and raise their morale. A happier office is a happier business owner. To really make the office happy, productive, and effective you could make your payroll department more productive and effective by outsourcing it to a Daytona Beach Payroll Company. This ensures that your employees keep getting paid on time. It also ensures that your payroll is done right while being overseen by a team of specialized payroll personnel who’s entire job is making sure our client’s payroll is done effectively and on time.

We also open the way for more payroll options such as employee benefits. We can connect your company with insurance companies to create benefit packages that are tailored to you and your company. We also make the payroll simple to keep track of for you. We supply detailed reports on a regular basis so you can know exactly how payroll is going and where the money is going.

Daytona Beach Payroll Company

Vision H.R. | The Human Resource Experts

Don’t Trust Just Anyone

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Payroll is one of those concepts that might seem like a simple job, yet in reality can be pretty complicated. It’s not just paying employees every 1 or 2 weeks, you also have to handle their taxes and other legal aspects of payroll. Without someone who knows how to take care of a company’s payroll properly, you could run into legal issues that come with heavy fees. Another problem is that regardless of who is handling the payroll department, the company as a whole is the one that suffers if it is not done properly. This is why it is extremely important to get it right the first time. What is the best way to make sure it is being done right though?

You could hire someone in-house, but then you only get one pair of eyes on the payroll. The possibility of human error will always be a concern that needs to be handled before it can become a problem. Because even though they are the one responsible for your payroll, they are not the one who has to face the consequences if it is done wrong. The one who does have to deal with it is you.

You could hire a whole department in-house to handle it, which would eliminate a lot of the chances of a human error occurring. When there are more eyes on a project, there is less chance a mistake will make it to the final product. That means you have to both create a department with their own designated work area along with finding the people to fill the department with. While it is a better option, it’s not the best option. There is one more possibility for your payroll that solves most if not all of the problems you might encounter when trying to organize your payroll.

When you outsource your company’s payroll, you get a whole team of payroll professionals working on your payroll. You don’t need to designate a work area for them, you don’t need to train them, and you don’t have to worry about them doing the job right. That last part is important because even though they are their own company that is working on your payroll, the rule remains the same. Any mistakes they make will have consequences on your company, not them. For this reason, it is best not to just outsource to any company out there. Make sure the company has a trustworthy track record like Vision H.R. Along with a free quote, we are happy to show you testimonials from other clients who actively use our services.

Payroll is a big part of a business. You shouldn’t just trust anyone with it, so let us give you a reason to trust Vision H.R. All you have to lose is a few minutes of your time when you fill out the form to request a free quote.

Payroll Professionals

Vision H.R. | The Human Resource Experts

Better Than Facebook

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Sometimes it seems like the best news channel in the world is Facebook. Just scroll through your timeline and you will find tons of articles on all kinds of subjects. From recent terrorist activity to the newest innovation in smartphones, you can stay up to date by simply flicking your finger across the screen a few times. Even CNN cannot fully compete with Facebook and all they do is talk about news. That’s not even counting the trending news stories on the side of the screen that helps you know the biggest things going on in the world at any given time. While it is great to be able to see all of the world news in one easy to access place, and to have them separated by pictures of cats, dogs, and baby pictures, there are some problems with Facebook being a center for news stories.

For one, there are quite a few fake news stories on Facebook that you have to look out for. Some of them are rather obvious to tell they are fake. If it has anything to do with a politician in secret meetings with Martians you can rest assure it’s fake. Sometimes though they do make a convincing story and leak it as truth. You have to be careful not to get tricked into believing one of these stories and spreading the fake news around even further. The other problem that you will run into is some of the news that is important to you might not get posted. For instance, if you own a business it’s not a typical thing to see news on payroll and human resource changes being put into effect.

There is also the problem that if any of your friends do post news articles about these things, they might get lost in the cascade of other stories and posts that your other friends put on Facebook. Don’t miss out on these important news stories because it got buried in photos of your neighbor’s cats, let someone else find these stories for you and even implement them for you. You can go on Facebook without worrying about missing an important story because you have a company searching for those stories instead.

A Sanford Payroll company stays on top of any changes in your payroll that need to be implemented, how to best implement them, and when they need to be implemented by. This makes sure you are not just aware of the changes but make them in the easiest way possible. Without someone to guide you through the changes they might seem confusing. Payroll involves a lot of numbers and you already have enough numbers to worry about with sales and other expenses. Why complicate the whole process further? Get a Sanford Payroll Company to handle it instead. They will give you the important numbers you need and take care of the rest of it for you.

So why not see what a Sanford Payroll Company can do for you by getting a free quote from Vision H.R. and see what they can do for you?

Click Here to request a free quote or contact us today at (386) 255-7070

Sanford Payroll Company

Vision H.R. | The Human Resource Experts

Preparing for the American Health Care Act

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If you keep up with the news, you might have seen several changes that are working on being passed around the country. One of these changes is to the American Care Act, also known as the American Health Care Act. What does this mean exactly? The basic description given on Trumpcare.org, which has information about the American Health Care Act, is to “completely repeal Obamacare (Affordable Care Act)”. While there has been no real talk on how this will affect businesses, it is still important to take notice of it. It may not talk about how it will affect jobs that offer health benefits to their employees but that doesn’t mean it won’t later on. The problem with keeping up with the changes is that healthcare isn’t always the easiest thing to understand. Especially when you have a company to run. That’s when you want to look at hiring a Deland Payroll Company.

The bigger problem however is not keeping up with any new changes that might occur. They can lead to legal consequences that can cost you even more money. It can also trickle down to causing issues for your employees that get healthcare through your company. Even if it doesn’t create any legal issues than it might still cost them money by not opening up new options that might be available. One word that floats around a lot is free market meaning more options for people with health care and prescriptions.

There are two bits of good news about this however. The first is that any changes made will take time to take effect. They usually give at least a few months to make the required changes to your health benefits for employees. The other bit of good news is that you don’t have to handle it on your own. Like we said above, you can have a Sanford Payroll Company handle your payroll, human resource management, and employee benefits, making the required changes as they occur while keeping you informed on them. While we are talking about health care, there are other changes that could be coming such as minimum wage increases that need to be watched for as well.

This isn’t too surprising of course, with each new President of the United State comes new changes. While it has been some time since the last election it takes time for changes to be made and take effect. There are also changes that come outside of the new President in government. The regulations placed on all areas of the work force are in almost constant change. As times change so must everything else. Sometimes this changes can be minor and barely worth noticing while other times they might require some noticeable changes. Talk of drastic changes to the minimum wage are in the air again and you will have to make sure you make the right changes to stay on top of them. If they are changed you need to know how long before they take effect and make sure your payroll is up to date before they do. Are you ready for these healthcare and minimum wage changes? Should they change, be ready to for the transition when you hire Deland Payroll Company Vision H.R. to handle your payroll department and employee benefits.

Deland Payroll Company

Vision H.R. | The Human Resource Experts

Health Savings Account Limits for 2018

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With Health Savings Accounts (HSAs), individuals and businesses buy less expensive health insurance policies with high deductibles. Contributions to the accounts are made on a pre-tax basis. The money can accumulate year after year tax free, and be withdrawn tax free to pay for a variety of medical expenses such as doctor visits, prescriptions, chiropractic care and premiums for long-term-care insurance.

Participating employers can also contribute to accounts, on behalf of their employees.

Here are the 2018 limits for individual and family coverage, which were announced by the IRS in Revenue Procedure 2017-37. They are determined after the IRS applies cost-of-living adjustment rules, and the changes in the Consumer Price Index for the relevant period.

HSA Contribution Limits. The 2018 annual HSA contribution limit for individuals with self-only HDHP coverage is $3,450 (up from $3,400 for 2017), and the limit for individuals with family HDHP coverage is $6,900 (up from $6,750 for 2017).
High-Deductible Health Plan (HDHP) Minimum Required Deductibles. The 2018 minimum annual deductible for self-only HDHP coverage is $1,350 (up from $1,300 for 2017) and the minimum annual deductible for family HDHP coverage is $2,700 (up from $2,600 for 2017).
HDHP Out-of-Pocket Maximums. The 2018 maximum limit on out-of-pocket expenses (including items such as deductibles, co-payments and other amounts, but not premiums) for self-only HDHP coverage is $6,650 (up from $6,550 for 2017), and the limit for family HDHP coverage is $13,300 (up from $13,100 for 2017).

For more information about HSAs, contact your employee benefits and tax advisor.

The Benefits of an HSA

You can claim a tax deduction for contributions you, or someone other than your employer, make to your HSA even if you don’t itemize your deductions on Form 1040.
Contributions to your HSA made by your employer (including contributions made through a cafeteria plan) may be excluded from your gross income.
The contributions remain in your account until you use them.
The interest or other earnings on the assets in the account are tax free.
Distributions may be tax free if you pay qualified medical expenses.
An HSA is “portable.” It stays with you if you change employers or leave the work force.

Qualifying for an HSA

To be an eligible individual and qualify for an HSA, you must meet the following requirements:

You must be covered under a high deductible health plan (HDHP), described later, on the first day of the month.
You generally have no other health coverage except what is permitted under regulations. (Exceptions include dental, vision, long-term care, accident and specific disease insurance.)
You aren’t enrolled in Medicare.
You cannot be claimed as a dependent on another person’s tax return.

— Source: The IRS

(Source: BizActions)

What Coverage Must We Offer To Avoid ‘Play or Pay’ Liability?

Question: Our company recently grew to become an applicable large employer (ALE) under the Affordable Care Act (ACA). As the ACA remains in effect for the time being, could we get a refresher on what health care coverage must be offered to our employees?

Answer: Of course. There are two types of penalties under the employer shared responsibility provisions of Internal Revenue Code Section 4980H — also known as the ACA’s “play or pay” provision. What health coverage must be offered depends on the type of penalty.

Each penalty may be triggered if a full-time employee buys coverage on a Health Insurance Marketplace (also known as an “exchange”) and receives premium tax credits. And only an ALE may be subject to penalties. As you’re no doubt aware, an ALE is generally an employer that employed 50 or more full-time employees, including full-time equivalents, during the previous calendar year.

Distinguishing Between Penalties

Under Sec. 4980H(a), an ALE may be subject to a monthly penalty for failure to offer enough (generally, at least 95%) of its full-time employees and their dependents the opportunity to enroll in minimum essential coverage (MEC). Such coverage includes most employer-sponsored group health plans, but not excepted benefits such as limited-scope dental and vision benefits. The play-or-pay penalty is assessed based on the number of full-time employees for the month — including those that received a MEC offer.

Under Sec. 4980H(b), an ALE may be subject to a monthly penalty if it offers MEC to the required number of full-time employees (and their dependents), but the coverage offered to full-time employees doesn’t provide “minimum value” or isn’t “affordable.” This penalty is assessed only with respect to full-time employees who actually receive a premium tax credit, so the ALE’s potential exposure is much less under the Sec. 4980H(b) penalty.

A plan provides minimum value if its share of the cost of benefits is at least 60% and provides substantial coverage of inpatient hospital services and physician services. Employer-sponsored coverage is considered affordable if the employee’s cost for self-only coverage doesn’t exceed 9.5% (indexed for inflation) of the employee’s household income for the taxable year.

Defining Dependents

Notably, for purposes of a potential penalty under Sec. 4980H(b), the offer of minimum value, affordable coverage is required to be made only to eligible full-time employees. Dependents need only be offered an opportunity to enroll in MEC for purposes of avoiding both play-or-pay penalties, and such coverage needn’t provide minimum value or be affordable.

For this purpose, “dependents” means an employee’s children, as defined under Internal Revenue Code Section 152(f)(1), who are under 26 years of age. (It doesn’t include stepchildren or foster children.) An ALE isn’t required to offer any coverage to an employee’s spouse in order to avoid play-or-pay penalties.

Regarding Compliance

One interesting wrinkle to all of this is that, earlier in the year, the President signed an Executive Order saying that the play-or-pay penalties may not be enforced. Nonetheless, as of this writing at least, these provisions remain in place and employers shouldn’t consider compliance optional.

(Source: BizActions)