COBRA Still Flourishes as a Choice for Continuation Health Insurance

Some people seem to believe that the Affordable Care Act (ACA) has replaced the Consolidated Omnibus Budget Reconciliation Act (COBRA). That’s wrong, although the ACA has changed COBRA and the health insurance landscape in recent years.

Obtaining health insurance through an exchange is an alternative to COBRA, but that old workhorse legislation remains viable for employees leaving a company who still want to retain their coverage,

COBRA, along with the Internal Revenue Code and other pieces of legislation, may require employers with a group health insurance plan to offer continued health insurance coverage to a departing employee. The law, administered by the Department of Labor (DOL), applies to private employers with 20 or more employees and state and local government entities. It doesn’t apply to the federal government. As well, many states have enacted comparable laws.

Coverage under COBRA generally is extended to an employee’s spouse, ex-spouse and dependent children when group coverage is lost for certain reasons. To be eligible, employees must have been enrolled in an employer’s health plan that’s still active.

Qualifying Events

Although employers are required to notify employees of their COBRA rights and to offer continued coverage, the cost may be shifted to the departing employee. COBRA premiums can be expensive. COBRA coverage is triggered by one of these qualifying events:

• Employment ends for any reason other than gross misconduct.

 

• Working hours are reduced.

 

• The employee becomes entitled to Medicare.

 

• The employee becomes divorced or legally separated.

 

• The employee dies.

 

• A child loses dependent status under the plan’s rules.

Note: Under the ACA, plans that offer coverage to children on their parents’ plan must make the coverage available until the adult child reaches age 26. Also, ACA offers subsidies to some to help lower their monthly premiums.

COBRA requires coverage to last for 18 or 36 months. The length of time depends on the qualifying event and the plan may provide longer periods of coverage. The rules generally are:

• 18 months when the qualifying event is termination of employment or a reduction of working hours,

 

• 36 months for a spouse and dependents when the event is termination or reduction of hours and the employee became entitled to Medicare less than 18 months before the event, and

 

• 36 months for the other qualifying events.

In certain circumstances, following a single event, if any one of the beneficiaries is disabled and meets certain requirements, all qualified beneficiaries are entitled to an 11-month extension for a total 29 months. The plan can charge qualified beneficiaries an increased premium of as much as 150% of the cost of coverage during the extension.

Employer Responsibilities

If your business has a group plan, it must notify covered employees and their families of their COBRA rights within 90 days of becoming a plan participant. In addition, group health plans must furnish covered employees and their spouses with a general notice describing their COBRA rights — also within the first 90 days of coverage.

As an employer, you must inform the plan within 30 days of termination or reduction of hours, death, entitlement to Medicare, or bankruptcy of your business. Covered employees must notify the plan in the event of divorce, legal separation or a child’s loss of dependent status.

When the plan receives notice, it will give the beneficiaries a notice within 14 days describing the rights to continued coverage and how to make the election for coverage.

Employee Responsibilities 

Employees have at least 60 days to choose the continued coverage. Generally, the qualified beneficiary must pay for the extended coverage, although your business may choose to do so. The amount charged can’t exceed the regular cost to the plan plus a 2% fee for administrative costs.

This is just a brief overview of COBRA as it pertains to both employers and employees. For more information about the rights and responsibilities under this important and still relevant law, consult with your employee benefits adviser.

Losing COBRA Coverage COBRA continuation coverage may be terminated before the end of the maximum period under the following circumstances: Premiums aren’t paid in full on a timely basis, The employer ceases to maintain any group health plan, A qualified beneficiary begins coverage under another group health plan after electing continuation coverage, A qualified beneficiary becomes entitled to Medicare benefits after electing continuation coverage, or A qualified beneficiary engages in conduct that would justify in termination of coverage of a similarly situated participant or beneficiary not receiving continuation coverage (for example an employee commits fraud). If continuation coverage is terminated early, the plan must provide the beneficiary with an early termination notice.

(Source: bisection.com)

Are You a Joint Employer? The DOL Weighs In

Are You a Joint Employer? The DOL Weighs In

If your company is classified as a joint employer with one or more other companies, you may be liable for overtime pay even if you carefully avoid workweeks that exceed 40 hours of work. Why? Because the Department of Labor’s Wage and Hour Division (WHD) states that you and your fellow joint employers share responsibility for compliance with the Fair Labor Standards Act (FLSA).

The WHD fleshed out the details in a recent opinion letter (Administrator’s Interpretation, No. 2016-1). According to this letter, a contract such as an agreement between you and a staffing company doesn’t necessarily determine who the employer actually is. You can contractually delegate a lot of responsibility to a staffing company, including supervision, and still be considered joint employers. That determination, says the WHD, is based on “the economic realities of the working relationship.”

That expansive definition contrasts with common law concepts of employment and joint employment, which look at the amount of control an employer exercises over an employee.

Broad Definitions

According to the FLSA, an employer includes “any person acting directly or indirectly in the interest of an employer in relation to an employee.” And the word “employ” is defined simply as “to allow or permit to work.”

There are two categories of joint employment: horizontal and vertical. The WHD states that a horizontal joint employment relationship exists “when an employee is employed by two or more technically separate but related or overlapping employers.”

An illustration offered by the WHD is a registered nurse who works at one nursing home for 25 hours a week, and another one for 25 hours a week. If the two nursing homes are deemed to be joint employers, she would be entitled to 10 hours of overtime pay since the two 25-hour stints total 50 hours, or 10 hours over the standard 40-hour workweek.

Gauging Economic Reality

Continuing with the example of the nursing homes, the following questions can get at the economic reality of the situation to determine whether the two facilities are joint employers.

• Does one employer own all or part of the other employer, or do they have any common owners?
• Do the two have any overlapping officers, directors, executives or managers?
• Do they share control over operations; for example, hiring, firing, payroll, advertising or overhead costs?
• Does one employer supervise the work of the other?
• Do they treat employees as a pool of employees available to both of them?
• Do they share any clients or customers?

 

The WHD opinion letter adds that it’s not necessary for all or even most of the above factors to be present to indicate joint employment.

Vertical Joint Employers

In a vertical joint employment relationship, there are two layers of employers: 1) The ultimate employer, and 2) An intermediate layer employer, such as a staffing agency. According to the WHD, “There is typically an established or admitted employment relationship between the employee and the intermediary employer. That employee’s work, however, is typically also for the benefit of the other employer.”

Here are some examples of cases in which courts concluded there was a vertical joint employer relationship:

• Garment workers directly employed by an employer who contracted with the garment manufacturer to perform a specific function,
• Nurses placed at a hospital by a staffing agency, and
• Warehouse workers whose labor is arranged and overseen by layers of intermediaries between the workers and the owner or operator of the facility.

 

The situation is clear-cut when the supplier of the labor is actually an employee or economically dependent on the higher level employer. For example, “If a drywall subcontractor is not actually an independent contractor but is an employee of the higher-tier contractor,” says the WHD, “then all of the drywall contractor’s workers are also employees of the higher-tier subcontractor.”

Here are some key factors that the agency would weigh in determining whether a vertical joint employer relationship existed:

• To what degree is the work performed by the employee directed, controlled or supervised by the potential higher-level employer, beyond a “reasonable level of contract oversight?”
• What is the permanency and duration of the relationship? If the employee’s arrangement with the higher-level employer is “indefinite, permanent, or long-term,” that would suggest joint employment status.
• If the employee’s work is an integral part of the higher-level potential joint employer’s business, that suggests a degree of economic dependence indicative of a joint employer relationship.
• Where is the work performed? If it’s on the premises owned by the higher-level potential joint employer, that provides more evidence of a joint employer relationship.
• The more common administrative functions provided by a possible joint employer (payroll, for example), the greater the probability that employees are dependent on the existence of a joint employer relationship. The same is true when facilities, safety equipment, housing or transportation are provided.

 

It must be noted that federal courts have greater authority than the Department of Labor in interpreting laws such as the FLSA. Indeed, the WHD’s opinion letter supports its positions by referencing federal court rulings — and even points out examples where courts have rendered conflicting opinions.

Still, going up against a federal agency by asking a court to overrule the agency is not generally advisable. Therefore, if you think you might be deemed a joint employer, be sure to pay close attention to the number of hours the potential employees are working to steer clear of unexpected overtime pay obligations, or any other requirements of the FLSA.

is classified as a joint employer with one or more other companies, you may be liable for overtime pay even if you carefully avoid workweeks that exceed 40 hours of work. Why? Because the Department of Labor’s Wage and Hour Division (WHD) states that you and your fellow joint employers share responsibility for compliance with the Fair Labor Standards Act (FLSA).

The WHD fleshed out the details in a recent opinion letter (Administrator’s Interpretation, No. 2016-1). According to this letter, a contract such as an agreement between you and a staffing company doesn’t necessarily determine who the employer actually is. You can contractually delegate a lot of responsibility to a staffing company, including supervision, and still be considered joint employers. That determination, says the WHD, is based on “the economic realities of the working relationship.”

That expansive definition contrasts with common law concepts of employment and joint employment, which look at the amount of control an employer exercises over an employee.

Broad Definitions

According to the FLSA, an employer includes “any person acting directly or indirectly in the interest of an employer in relation to an employee.” And the word “employ” is defined simply as “to allow or permit to work.”

There are two categories of joint employment: horizontal and vertical. The WHD states that a horizontal joint employment relationship exists “when an employee is employed by two or more technically separate but related or overlapping employers.”

An illustration offered by the WHD is a registered nurse who works at one nursing home for 25 hours a week, and another one for 25 hours a week. If the two nursing homes are deemed to be joint employers, she would be entitled to 10 hours of overtime pay since the two 25-hour stints total 50 hours, or 10 hours over the standard 40-hour workweek.

Gauging Economic Reality

Continuing with the example of the nursing homes, the following questions can get at the economic reality of the situation to determine whether the two facilities are joint employers.

• Does one employer own all or part of the other employer, or do they have any common owners?
• Do the two have any overlapping officers, directors, executives or managers?
• Do they share control over operations; for example, hiring, firing, payroll, advertising or overhead costs?
• Does one employer supervise the work of the other?
• Do they treat employees as a pool of employees available to both of them?
• Do they share any clients or customers?

 

The WHD opinion letter adds that it’s not necessary for all or even most of the above factors to be present to indicate joint employment.

Vertical Joint Employers

In a vertical joint employment relationship, there are two layers of employers: 1) The ultimate employer, and 2) An intermediate layer employer, such as a staffing agency. According to the WHD, “There is typically an established or admitted employment relationship between the employee and the intermediary employer. That employee’s work, however, is typically also for the benefit of the other employer.”

Here are some examples of cases in which courts concluded there was a vertical joint employer relationship:

• Garment workers directly employed by an employer who contracted with the garment manufacturer to perform a specific function,
• Nurses placed at a hospital by a staffing agency, and
• Warehouse workers whose labor is arranged and overseen by layers of intermediaries between the workers and the owner or operator of the facility.

 

The situation is clear-cut when the supplier of the labor is actually an employee or economically dependent on the higher level employer. For example, “If a drywall subcontractor is not actually an independent contractor but is an employee of the higher-tier contractor,” says the WHD, “then all of the drywall contractor’s workers are also employees of the higher-tier subcontractor.”

Here are some key factors that the agency would weigh in determining whether a vertical joint employer relationship existed:

• To what degree is the work performed by the employee directed, controlled or supervised by the potential higher-level employer, beyond a “reasonable level of contract oversight?”
• What is the permanency and duration of the relationship? If the employee’s arrangement with the higher-level employer is “indefinite, permanent, or long-term,” that would suggest joint employment status.
• If the employee’s work is an integral part of the higher-level potential joint employer’s business, that suggests a degree of economic dependence indicative of a joint employer relationship.
• Where is the work performed? If it’s on the premises owned by the higher-level potential joint employer, that provides more evidence of a joint employer relationship.
• The more common administrative functions provided by a possible joint employer (payroll, for example), the greater the probability that employees are dependent on the existence of a joint employer relationship. The same is true when facilities, safety equipment, housing or transportation are provided.

 

It must be noted that federal courts have greater authority than the Department of Labor in interpreting laws such as the FLSA. Indeed, the WHD’s opinion letter supports its positions by referencing federal court rulings — and even points out examples where courts have rendered conflicting opinions.

Still, going up against a federal agency by asking a court to overrule the agency is not generally advisable. Therefore, if you think you might be deemed a joint employer, be sure to pay close attention to the number of hours the potential employees are working to steer clear of unexpected overtime pay obligations, or any other requirements of the FLSA.

(Source: bisection.com)

Could Your Business Benefit from the Work Opportunity Tax Credit?

Could Your Business Benefit from the Work Opportunity Tax Credit?

If you plan to hire new employees this year, you’re not alone. Employment statistics ended 2015 on a positive note. In addition, roughly 242,000 new jobs were added in February and the unemployment rate fell to 4.9%, its lowest level in eight years. Several recent studies indicate that the hiring momentum will continue in 2016.

Hiring new employees could also earn you a credit on your tax return, if you meet certain requirements. The Work Opportunity tax credit is a tax break for qualified wages paid to new employees from certain targeted groups. This credit has undergone several changes since it was introduced nearly 40 years ago. The most recent extension of this credit — under the Protecting Americans from Tax Hikes (PATH) Act of 2015 — retroactively renews the credit for 2015 and extends it through 2019.

Understand the Mechanics

The Work Opportunity tax credit applies to wages paid to a new hire from a targeted group who works for your business at least 120 hours during the first year. If a new employee works at least 400 hours during the first year, the credit equals 25% of his or her qualified wages, up to the applicable limit. The percentage rises to 40% if the new employee works more than 400 hours.

In general, the credit applies to only the first $6,000 of wages. But there are a number of exceptions, which we’ll discuss a little later. In addition, you may qualify for a credit of 50% of qualified second-year wages (in addition to first-year wages) if you hire someone who’s certified as a long-term family assistance recipient.

Here’s an example illustrating how this credit works: Suppose you hire Fred, a qualified veteran who was unemployed for six months before you hired him. He works for you for nine months and earns $500 per week, which equates to $19,000 in the first year. An added bonus is that Fred falls into a special targeted group of veterans and, based on his circumstances, he qualifies you for a credit on his first $14,000 of wages.

Because Fred worked more than 400 hours at your business, you earn a credit equal to 40% of his wages up to $14,000. In other words, your Work Opportunity credit is $5,600. However, you also must reduce your deduction for wages by the amount of the credit. So, your wage deduction for paying Fred is $13,400, and your credit is $5,600.

Important note. Typically, a credit will provide greater tax savings than a deduction of an equal dollar amount, because a credit reduces taxes dollar for dollar. A deduction reduces only the amount of income that’s subject to tax.

There’s no limit on the number of eligible individuals your business can hire. In other words, if you hire 10 people exactly like Fred, your credit would be $56,000.

Work Opportunity credits generated by pass-through entities, such as S corporations, partnerships and limited liability companies, pass through to the owners’ personal tax returns. If this credit exceeds your tax liability, it may be carried back or forward.

Know the Targeted Groups and Qualified Wage Limits

To determine whether you qualify for this tax break, first determine if a new hire belongs to one of these targeted groups:

• Long-term family assistance recipients,

 

• Qualified recipients of Temporary Assistance for Needy Families (TANF),

 

• Qualified veterans,

 

• Qualified ex-felons,

 

• Designated community residents who live in empowerment zones or rural renewal counties,

 

• Vocational rehabilitation referrals for individuals who suffer from an employment handicap resulting from a physical or mental handicap,

 

• Summer youth employees,

 

• Supplemental Nutrition Assistance Program benefits recipients, or

 

• Supplemental Security Income benefits recipients.

 

Starting in 2016, the list of targeted groups has been expanded to include qualified long-term unemployment recipients, which is defined as people who have been unemployed for at least 27 weeks, including a period (which may be less than 27 weeks) in which the individual received state or federal unemployment compensation.

Special rules apply to summer youth employees, and the first-year qualified wage limit for them is only $3,000. In addition, there are four categories of veterans with qualified wage limits of $6,000, $12,000, $14,000 or $24,000, depending on his or her circumstances. The highest qualified wage limit for veterans ($24,000) goes to those who are entitled to compensation for a service-connected disability and unemployed for a period or periods totaling at least six months in the one-year period ending on the hiring date.

The next step is to evaluate whether a new hire meets the other requirements of the credit. You won’t be eligible for any credit if a new employee:

• Worked for you fewer than 120 hours during the year,

 

• Previously worked for you, or

 

• Is your dependent or relative.

 

You also can’t claim a credit on wages paid while you received payment for the employee from a federally funded on-the-job training program. And you can take the credit only if more than 50% of the wages you paid an employee were attributable to working in your trade or business.

Obtain State Certification

Last but not least, to take this credit, you must be able to show proof from your state’s employment security agency that the employee is a member of a targeted group. In order to do this, you must either:

• Receive the certification from the state agency by the day the individual begins work, or

 

• Complete IRS Form 8850 on or before the day you offer the individual a job and receive the certification before you claim the credit.

 

If you use Form 8850, it must be submitted by the 28th calendar day after the individual begins work. On March 7, the IRS extended the deadline until June 29, 2016, for employers to apply for certification for members of targeted groups (other than qualified long-term unemployment recipients) hired (or to be hired) between January 1, 2015, and May 31, 2016. Qualifying new hires must start work for that employer on or after January 1, 2015, and on or before May 31, 2016.

June 29 is also the extended deadline for employers that hired (or hire) long-term unemployment recipients between January 1, 2016, and May 31, 2016, as long as the individuals start work for that employer on or after January 1, 2016, and on or before May 31, 2016. For long-term unemployment recipients hired on or after June 1, Form 8850 must be submitted by the 28th calendar day after the individual begins work.

The IRS is currently modifying the forms and instructions for employers that apply for certifications for hiring long-term unemployment recipients. But it’s expected that the modified forms will require new hires to attest that they meet the requirements to qualify them as long-term unemployment recipients. Guidance from the U.S. Department of Labor states, “In the interim, employers and their representatives are encouraged to postpone certification requests for the New Target Group until the revised forms are available.”

Timing Is Critical

If you’re planning to hire new employees in 2016, the Work Opportunity credit offers a simple way to lower your tax liability. It doesn’t require much red tape, except for obtaining a timely certification of the employee from your state employment security agency. Your tax adviser can help you determine whether an employee qualifies, calculate the applicable credit and answer other questions you might have. But, if you postpone applying for certification, you could lose out.

(Source: Bisection.com)

Is it Worth Paying Employees Under the Table?

Is it Worth Paying Employees Under the Table?

Let’s face facts, it can get confusing handling a business’s finances. Payroll alone includes having to figure out things like figuring out tax reductions, keeping records, reporting employee’s income, etc and so on. The good news is that there is a way to avoid all of that. You can just pay your employees under the table. For those unfamiliar with the term, paying an employee under the table means they get paid off the record. You give them cash for their time instead of an official paycheck. No taxes, no reporting, and no confusion. This is more commonly found in smaller businesses. There is a catch though, if you are caught paying your employees under the table, a whole world of stress is going to land on your shoulders.

Why do we pay taxes? Because taxes are kind of like the rent we have to pay to live in this country. They pay for our infrastructure, our schools, our government funded programs, and much more. Not everyone likes paying them, but simply put, taxes keep our country in motion. When you don’t pay taxes, you are not doing your part to help keep America moving forward. If that rousing speech didn’t convince you that paying employees under the table isn’t worth the risk, this next part sure will.

Penalties of Not Paying Taxes

You are reliable for the employment taxes that have to be paid for your employees. There is no way around paying them. If you pay an employee a regular paycheck, the taxes will be taken out from what they earn. If you pay an employee under the table and the IRS finds out about it, you are going to have to pay all that money yourself, and then some. Sounds bad right? Well that is just the beginning. It can get far worse than just paying the taxes with your own money. There is also the fact that paying employees under the table is illegal, and carries the same risks as any illegal activity.

Can you really get put in jail for paying employees under the table? Absolutely, in fact it is not an uncommon site to see employers face jail time for it, along with paying fines for it outside the taxes that they owe. Sometimes the jail sentences can be lengthy as well, depending on how long you have been paying employees under the table, and how much tax money wasn’t paid because of it. In Massachusetts, for example, groups found paying their employees faced a possible 57 years in prison.

What Happens to Employees

The part that is worse than what happens to you, is what can happen to your employees. They know they are getting paid under the table, and yet are not reporting it to the IRS. This is kind of like being guilty by association. It gets more severe if they ever get audited. If the IRS finds out they have been getting paid more than they are reporting when they are filing their tax returns, they face fines for the taxes, along with potential jail time. It goes without saying if one gets caught, the other gets caught as well. So if you pay employees under the table and get caught, the employees are likely to go down with you.

Even if you get away with it, you are still hurting your employees more than you are helping them. Because they are getting paid off the record, when they apply for loans for homes, cars, or just in general, there will be no record of pay stubs, something that many loan companies look at. When it comes time to retire, the entire time they were getting paid under the table isn’t going to show up on their social security payments, meaning they might end up with less retirement payouts.

We can understand the temptation of taking a short cut and paying employees under the table, and hopefully you now understand the extreme risks of it. Luckily, there is another way that you can do payroll without worrying about all the complicated parts of it. Vision H.R. has an experienced staff that can handle your payroll effectively, make sure your employees get paid on time, and keep detailed records of your payroll. All you have to do is make the money. Visit Vision-hr.com today for a free quote.

Payroll Services

Vision HR | The Human Resource Experts

Can We Match Our Employees’ Pretax HSA Contributions?

Can We Match Our Employees’ Pretax HSA Contributions?

Question: Under our company’s cafeteria plan, qualifying participants can make pretax salary reduction contributions to their Health Savings Accounts (HSAs). Can our company make matching contributions based on a percentage of participants’ pretax HSA contributions?

Answer: Probably. Some employers’ HSA contributions are subject to strict comparability requirements that effectively prohibit matching contributions because the contributions would trigger a 35% excise tax on the employer. To be comparable, contributions generally must be the same dollar amount or the same percentage of the high-deductible health plan deductible — a standard that matching contributions cannot satisfy.

But the comparability requirements don’t apply to employer HSA contributions that are made “through a cafeteria plan.” Because your company’s cafeteria plan permits eligible participants to make pretax salary reduction contributions to their HSAs, any matching (or other) employer contributions would also be treated as made “through a cafeteria plan.”

IRC Requirements

Instead of comparability, your company’s contributions (as well as participants’ pretax HSA contributions) would be subject to Internal Revenue Code Section 125’s nondiscrimination requirements. Sec. 125 addresses:

• Eligibility,
• Contributions and benefits, and
• Key employee concentration tests.

Generally, these tests provide more flexibility for employers wishing to vary HSA contributions on a nondiscriminatory basis. But even that flexibility has its limits. For example, if nonkey employees make only small contributions or don’t contribute at all, contributions by key employees could cause the cafeteria plan to fail the key employee concentration tests. Thus, any matching contribution should be carefully designed to satisfy the applicable nondiscrimination rules.

ACA Impact

Matching HSA contributions (like other employer HSA contributions) are typically treated as employer-provided coverage for medical expenses under an accident or health plan. Therefore, they’re excludable from a participant’s gross income.

They also will be taken into account when determining whether your company is subject to the Affordable Care Act’s excise tax on high-cost health coverage. Commonly referred to as the “Cadillac tax,” this provision isn’t currently scheduled to take effect until January 1, 2020.

Once your company’s matching HSA contributions are made, they are nonforfeitable. That means they cannot be subject to a vesting schedule or be returned to the employer if the participant terminates employment midyear.

Aggregation a Must

Keep in mind that HSA contributions are subject to annual dollar limitations. All contributions that are made for a year to a participant’s HSA — whether by the participant, your company, or another entity or individual — must be aggregated for purposes of applying these limits. If your company decides to make matching HSA contributions, this should be reflected in the cafeteria plan document, the cafeteria plan summary and other applicable communications (such as open enrollment materials). 

(Source: www.bizactions.com)

IRS Extends Due Dates for 2015 Forms 1094 and 1095

IRS Extends Due Dates for 2015 Forms 1094 and 1095 At the end of last year, the IRS extended the deadlines for the Affordable Care Act’s information reporting on Forms 1094 and 1095 for 2015. Specifically, Forms 1094-B and 1095-B are to be filed by providers of health coverage (mostly insurers, but also some self-insuring employers and others). Meanwhile, Forms 1094-C and 1095-C are to be filed by applicable large employers. The forms provide information to the IRS and individuals for administration of the individual mandate, employer shared responsibility and premium tax credits. Mark Your Calendar The extended deadlines are as follows: Furnishing statements to individuals. The deadline for furnishing Forms 1095-B and 1095-C to individuals is extended by two months — from February 1, 2016, to March 31, 2016.  Filing paper returns with the IRS. The deadline to file paper Forms 1094-B and 1094-C (and accompanying Forms 1095) with the IRS is extended by three months — from February 29, 2016, to May 31, 2016.  Filing electronic returns with the IRS. The deadline to file electronic Forms 1094-B and 1094-C (and accompanying Forms 1095) with the IRS is extended by three months — from March 31, 2016, to June 30, 2016. (Electronic filing is mandatory for entities required to file 250 or more Forms 1095.) Don’t Ask for More These extensions are automatic and supersede any extension requests already submitted for 2015. Any such requests won’t be formally granted. The new deadlines are more generous than otherwise available extensions, so they cannot be further extended. Those unable to meet the extended due dates are still encouraged to furnish and file as soon as possible. The IRS says it will take such furnishing and filing into consideration when determining whether to abate penalties for reasonable cause. Other considerations will include whether: Reasonable efforts were made to prepare for 2015 reporting (such as gathering data and transmitting it to a filing agent, or testing the ability to transmit information to the IRS), and Steps have been taken to comply with the 2016 reporting requirements. Notwithstanding the extensions, the IRS encourages employers and coverage providers to furnish statements and file returns as soon as they’re ready. So Be Ready The extended deadline for furnishing statements to individuals falls just two weeks before the April 15 filing deadline for individual tax returns. The IRS has also provided relief for individuals who will have already filed an individual return before receiving a Form 1095. You might mention to your employees that, generally, they’re not required to file an amended return so long as they keep the Form 1095 with their tax records.

Small Business Owners, Here’s How To Claim Your Credit Just a couple of weeks before extending the deadlines for Forms 1094 and 1095 (see main article), the IRS released the 2015 version of Form 8941. This should be of particular interest to small-business owners, because Form 8941 can be used by eligible small employers to calculate the small business health care tax credit. Generally, this tax break is available to employers that: Have fewer than 25 full-time equivalent employees, Pay average annual wages of less than $50,000 (indexed for inflation), and Contribute a uniform percentage of at least 50% of the premium costs for employee health insurance coverage. The maximum tax credit is generally 50% of premiums paid (35% for tax-exempt eligible small employers, subject to a reduction for sequestration). Once calculated, the credit is claimed as a general business credit on Form 3800 (or, by tax-exempt small employers, as a refundable credit on Form 990-T). The 2015 version of Form 8941 is virtually unchanged from 2014, other than references to the filing year and use of the updated maximum annual wages amount of $52,000. Although the inflation-adjusted threshold for 2015 is $51,600, the rounding rule required for calculating average wages results in $52,000 being the effective limit for purposes of 2015 Form 8941. The instructions identify the information needed to calculate the credit and include worksheets to determine the number of employees and average wages. An additional worksheet helps calculate the average premium for the small group health insurance market for each state where the employer has employees. Finally, the instructions incorporate transitional relief that permits direct enrollment for employers in certain Iowa counties without 2015 Small Business Health Options Program coverage. What’s more, the list of average premiums, by county, for all 50 states plus the District of Columbia has been updated for 2015. These averages are relevant because an employer’s health care tax credit may be reduced if the employer pays premiums greater than the average for the small group market for the state in which its employees work.

(Source: Bisection.com)

Employee Leasing Daytona Beach

Employee Leasing Daytona Beach

             You know that Vision H.R. can help you handle your payroll and human resource management, but did you know they can actually reduce some of your employer liability? Under the Vision H.R. PEO (Professional Employer Organization) business model,  you are not just having Vision H.R. handle payroll and human resource management, you are entering a co-employment agreement, where your employees work for both you, and the Vision H.R. PEO. Although you remain the “Common Law” employer, you can streamline your administrative tasksunder this agreement and Vision H.R. becomes more of a partner sharing risk and liability of your employees, improving the workplace and providing valuable time back to your workforce. 

            How do you benefit from all of this? There are quite a few ways that a co-employment arrangement can work for you. To begin, let’s list what services a Vision H.R. PEO can cover. 

Payroll and payroll tax administration

Unemployment administration

Workers’ compensation

Human Resource Compliance

Policies and best practices

Performance management

Training and development

Employee benefits & 401k

That is quite a bit of weight lifted off your shoulders. So back to the original question, how do you benefit from using Vision H.R. PEO ( Employee Leasing) handling these responsibilities?

• No Need to Hire Payroll and Human Resource Workers: Vision H.R. will fill the role of your payroll department, and human resource department. Simply allow a designated person to submit hours online and compliant, error free payroll can be administered.  Designate someone at your organization who would communicate with our Human Resource Experts and we would offer assistance, guidance and any HR assistance.  This clears up money that would be spent paying additional salary for seasoned experts in the payroll or HR fields, and frees up human capital to be able to grow your business.

 

• Less Liabilities for You: Because your employees would be considered co-employed, you reduce some of the liability of having employees.

 

• You Stay in Control:Just because your employees are co-employed by Vision H.R. PEO, that doesn’t mean you have any less control of your business. Vision H.R. will take care of human resource management and payroll services, but the big decisions about running the business itself still belong to you.As the “common Law Employer, you still hire, manage, direct and terminate employees.  Vision H.R. is there to give you the confidence to make those tough HR decisions and to streamline your administrative tasks giving you back more time.

 

• Better Benefit Packages: Because Vision H.R. will be co-employing your employees, they can often findmore comprehensive benefits packages by customizing your benefits to better fit the needs and budget of your workforce.  

 

            Have more questions about Vision H.R. PEO (Employee Leasing)  and how it can benefit your company? We offer a free quote to help you understand our services and how much they will cost your company before you sign into any arrangement. We understand this can be a big decision, and want you to enter it feeling confident about the results you will get. You can also contact us by calling (877) 641-0012 or by emailing us at sales@vision-hr.com.

Employee Leasing Daytona Beach

Vision HR | The Human Resource Experts

Every Word Counts when Crafting Your Employee Handbook

Every Word Counts when Crafting Your Employee Handbook

A fundamental requirement of the National Labor Relations Act (NLRA) is that employers must not “interfere with, restrain or coerce employees in the exercise of their rights” to organize into labor unions, collectively bargain and engage in similar “concerted activities,” according to § 8(a)(1) of the law.

In general, “concerted activities” occur when at least two employees take actions intended to improve their wages or working conditions. It can also mean action taken by one employee, such as communication with a supervisor. What that actually means in practical terms is spelled out on a case-by-case basis.

The U.S. Court of Appeals for the District of Columbia Circuit recently did just that in the case of Hyundai America Shipping Agency, Inc. v. National Labor Relations Board (No. 11-1351). The litigation began when a terminated employee, Sandra McCullough, complained to the National Labor Relations Board (NLRB) that she’d been fired for engaging in “protected concerted activities.”

Employee Firing Not an Issue

Her allegation was based on activities prohibited in the company’s employee handbook. The NLRB took up her cause. However, an NLRB administrative law judge said in a court ruling that McCullough would’ve been fired “regardless of whether she had violated any of the challenged [handbook] rules.” She was subsequently removed from the case. Even so, the Board maintained its complaint against Hyundai America Shipping Agency on the basis of the contents of its employee handbook.

The NLRB took issue with the first three of the following four handbook rules:

1. The “investigative confidentiality rule,” prohibiting employees from discussing matters under investigation by the company.
2. The “electronic communications rule,” limiting the disclosure of information from the company’s electronic communication system.
3. The “working hours rule,” prohibiting activities other than work during working hours, and
4. The “complaint provision,” urging employees to make complaints to their immediate supervisors rather than to fellow employees.

Implied Restrictions

None of these rules explicitly violates § 8(a)(1) of the NLRA, though that isn’t the only test. If employer rules (or actions) “could reasonably be construed by employees to restrict” protected activity, they would still violate the law, according to the court. “Even in the absence of enforcement, mere maintenance of a rule likely to chill [protected activity] … can amount to an unfair labor practice.”

Investigative confidentiality. The court concluded that the rule did clearly limit the rights of employees to discuss their employment. The court then looked for Hyundai to present a “legitimate and substantial business justification for the rule, outweighing the adverse effect on the interest of employees.” In response, Hyundai pointed out that federal rules require confidentiality when investigations involve allegations of sexual harassment. But because Hyundai didn’t limit the rule to such cases, the court ruled that it was “overbroad” and shot it down.

The electronic communication rule. A similar conclusion was drawn about this rule, which stated: “Employees should only disclose information or messages from these systems to authorized persons.” If the rule had applied only to specific categories of information where there was a clear justification for maintaining confidentiality (such as a hospital’s need to protect patient privacy), it would have been acceptable.

The working hours rule. Hyundai’s employee handbook stated in its working hours rule that performing activities other than company work during work hours would be grounds for discipline or termination.

The problem with the working hours rule was partly in the phrasing. The Board contended that “working hours” includes paid break times such as coffee breaks. The court supported that argument. Under the NLRA, employees are allowed to engage in union-related activities during break time when employees are still paid.

Finally, the court looked at the question of the remaining rule.

The complaint provision rule. This rule reads as follows: “Voice your complaints directly to your immediate supervisor or to Human Resources through our open door policy. Complaining to your fellow employees will not resolve problems. Constructive complaints communicated through all the appropriate channels may help improve the workplace for all.”

The NLRB argued that this policy would prevent employees from discussing their working conditions, a form of concerted activity. However, after a careful review of the language, the court found no fault with this rule.

Conversely, in a similar case, the NLRB took issue with the complaint provision rule implemented by another employer (Guardsmark). However, in the Guardsmark case, the NLRB won. The court said the employer’s company handbook used strict language and included penalties for rule violations. In contrast, the wording in the Hyundai handbook offered alternative actions when violations occur, and left the door open for employees to complain among themselves without penalty.

As this case illustrates, the precise language in employee handbooks is critical. That’s why it’s a good idea to have your handbook and any possible amendments to it reviewed by a qualified labor law attorney.

(Source: www.bizactions.com)

Get Out There and Vote (If You Can)

Get Out There and Vote (If You Can)

As you may have noticed, it’s election time again in America. People are wearing shirts for their favorite candidates, signs are outnumbering yard flamingos, and Facebook is a battlefield of comments and debates, and for good reason. This election year is one for the history books, with some of the most unique candidates an election has ever had. Now we are not here to try and convince you who to vote for, we are simply telling you how you can get out and vote.

The first voting date, where you vote in the Presidential Preference Primary Election, (Where citizens vote on who will be on a party’s nationwide ballot), takes place on March 15th in Florida, which is a Tuesday. Many people work throughout the week, and may want to head to the voting booths even though their job asks them to be at work. If you are one of those people who want to cast your vote, but can’t make it because of the hours you work, what can you do?

Each state has it’s own laws on the matter, with some requiring a company give employees time off to vote, while others don’t. Florida falls under the latter, not requiring business owners to award time off to it’s employees for voting purposes. This doesn’t mean you won’t be able to cast your vote however, just that you have to get permission from your boss to do so. Before you ask your boss to get time off for voting, there are a couple of things you should consider first.

• Do you have time to vote?:Voting can be done between 7:00 A.M. and 7:00 P.M.If your job schedule allows for reasonable free time within that time period, your boss might be less inclined to allow you time off from work to vote. If you have children that you have to drop off or pick up from school and take care of when you are off work, this wouldn’t count as reasonable free time.

 

• What Does your Employee Handbook Say?: Just because the state says your boss doesn’t have to give you time off to vote, doesn’t mean he won’t. Many businesses allow employees time to vote, either letting them come in late, leave early, or take a couple hours off in the middle of the day. Check your employee handbook for your job’s stance on voting leave.

 

If you don’t have enough free time to vote, and your employee handbook doesn’t make any claims on how you can take time off for voting, then the next step is to talk to your boss directly. Most bosses will be understanding, maybe even taking time off themselves to vote, so don’t be nervous asking them for a little time off. When you do talk to your boss, remember these few points.

• Don’t Ask Last Minute: Like asking for any time off, voting or not, ask for time off in advance. This will give your boss time to work out a schedule that allows you, and others, time to vote without disrupting business. There is a good possibility you won’t be the only one wanting to get out and vote, and the job can’t just shut down and let everyone out to the voting booths, so give them an early warning about you wanting to take off.

 

• Explain your Reasons: As we said before, even if you have time off of work during voting times, you might not be able to vote during them due to other obligations. Explain to your boss the only time you would be able to vote is while your children are in school, so you need time off from work to vote, or any other reason why you need time off of work for voting.

 

• Don’t Assume it’s Okay: The worse thing you can do is leave work, come in late, or leave early to vote without telling your boss, or coming in the day of voting and telling them. They might have a plan for the day that you just threw off, and can build general distrust in their ability to rely on you.

 

• Don’t take it as a Break: If your boss allows you time off to vote, don’t take advantage of it. You are being allowed time off to vote, not stop for a quick bite or some shopping afterwards. This doesn’t mean you can’t grab drive-thru on the way back, or ask your boss if it is okay to take a lunch break as well, just don’t take all day to go vote and come back.

 

• Don’t Be Afraid to Vote: While Florida state law doesn’t require business owners to give you time to vote, it does protect you from any discriminatory actions based on your voting. Even if you vote for a candidate that your boss passionately hates, they can not fire you, or take any other disciplinary actions against you for it.

 

The future of America is in your hands, don’t feel like you can’t be a part of it because of your work schedule. Talk to your boss about taking time off of work to vote, so you can make a difference. If you are a business owner, and don’t have an employee handbook already created for your business that states the policies for voting leave, contact Vision H.R. and learn how we can build a comprehensive employee handbook. We help several businesses in Daytona Beach with payroll services, human resource management, and even management training.  To get your company ready for voting day, contact us at (877) 641-0012 for a free quote.

Daytona Beach Voting Leave

Vision HR | The Human Resource Experts

Good News in the New Year: IRS Extends ACA Filing Deadlines

 Good News in the New Year: IRS Extends ACA Filing Deadlines

Employers and other organizations got some good news from the IRS for the start of the new year. The tax agency announced that it’s extending the due dates for filing 2015 Affordable Care Act (ACA) information returns. This gives employers extra time to complete two tasks:

1. Provide the forms to the recipients and

2. File the forms with the IRS.

Background information. Under Internal Revenue Code Section 6055, health coverage issuers, certain employers, and others that provide “minimum essential coverage” to individuals are required to file information returns containing the type and period of coverage. They’re also required to furnish related information statements to covered individuals, beginning with calendar year 2015. If your entity is subject to these reporting requirements, you must file IRS Forms 1094-B, “Transmittal of Health Coverage Information Returns,” and 1095-B, “Health Coverage.”

Code Section 6056 requires applicable large employers (ALEs) to report to the IRS information about the health care coverage, if any, they offered to full-time employees (for example, an individual who is employed on average for at least 30 hours of service per week). This information is needed in order to administer the employer shared responsibility provisions of the ACA and to assist in determining eligibility for the premium tax credit. ALEs are generally defined as employers with at least 50 full-time employees (including full-time equivalent employees) in the previous year.

ALEs are required to file Form 1094-C, “Transmittal of Employer Provided Health Insurance Offer and Coverage Information Returns,” and Form 1095-C, “Employer Provided Health Insurance Offer and Coverage,” with information about the health care coverage, if any, they offered to full-time employees. 

How Much Extra Time Do You Get?

The original deadlines for filing 2015 ACA information returns were the same as for filing W-2 and 1099 forms. In other words, they were required be filed with the IRS no later than February 29, 2016 (March 31, 2016, if filed electronically). Employers could apply for a 30-day extension of the deadline by filing an IRS form.

In addition, employers were originally required to provide 2015 ACA statements to employees no later than February 1, 2016 (because January 31, 2016 is a Sunday). 

If you’re not filing electronically, the IRS has now extended the due date:

• To March 31, 2016 for furnishing to individuals 2015 Forms 1095-B and 1095-C (from February 1, 2016).
• To May 31, 2016 for filing with the IRS 2015 Forms 1094-B, 1095-B, 1094-C, and Form 1095-C (from February 29, 2016). If you’re filing electronically, the deadline is now June 30, 2016 (from March 31, 2016).
  

The IRS is prepared to accept the information returns on Forms 1094-B, 1095-B, 1094-C, and 1095-C beginning in January 2016. However, following consultation with stakeholders, the U.S. Department of the Treasury and the IRS determined that some employers, insurers, and other providers of minimum essential coverage need additional time to adapt and implement systems and procedures to gather and report the required information. 

Will You Be Able to Get Further Extensions after these Deadlines?

In view of the extensions announced recently by the IRS, the provisions regarding automatic and permissive extensions of time for filing information returns and permissive extensions of time for furnishing statements won’t apply to the extended due dates. In other words, there will be no further extensions.

Are There Penalties for Not Filing?

Employers or other coverage providers that don’t comply with the new deadlines will be subject to penalties for failure to timely furnish and file. However, employers and other coverage providers that don’t meet the extended due dates are still encouraged to furnish and file, and the IRS will take such furnishing and filing into consideration when determining whether to abate the penalties for reasonable cause.

In addition, the IRS will take into account whether an employer or other coverage provider made reasonable efforts to prepare for reporting the required information to the IRS and furnishing it to employees and covered individuals. These efforts include gathering and transmitting the necessary data to an agent to prepare the data for submission to the IRS, or testing an employer’s ability to transmit information to the IRS. The tax agency will also consider the extent to which the employer or other coverage provider is taking steps to ensure that it’s able to comply with the reporting requirements for 2016.

What about Individual Taxpayers?

The new IRS notice also provides guidance to individuals who might not receive Form 1095-B or Form 1095-C by the time they file their 2015 personal income tax returns (because their employers took advantage of the extension opportunity).

In these cases, according to the IRS Notice, “individuals who rely upon other information received from employers about their offers of coverage for purposes of determining eligibility for the premium tax credit when filing their income tax returns need not amend their returns once they receive their Forms 1095-C or any corrected Forms 1095-C.” Individuals don’t need to send this information to the IRS when filing their returns but should keep it with their tax records.

Need Help?

Contact your tax adviser if you need more information or assistance to comply with the Form 1094/1095 filing requirements.

(Source: www.bizactions.com)