hrsimple.com - Safety & Health

Avoiding penalties under the Affordable Care Act

jeff — Fri, 22 May 2015 15:26:02 +0000

The Affordable Care Act (ACA) has been around since 2010 but it is still relatively new to a lot of people, including employers. For employers, it’s really important to be ahead of the curve when it comes to labor law to avoid possibly hefty fines and penalties. So here’s a run-down of the Section 4980H (the “Play-or-Pay” mandate), recordkeeping requirements, and the possible penalties for violating the ACA.

What is the Section 4980H–Employer ‘Play-or-Pay’ Mandate?

As added by the ACA, section 4980H of the Internal Revenue Code requires that all “large” employers (those with 50 or more employees) must provide health care coverage that meets minimum essential benefits requirements to all full-time employees and their children or pay a penalty. The coverage must provide the minimum value to plan participants and must be affordable.

The “minimum value” standard is a health plan that can pay at least 60% of the total cost of medical services for a standard population. The coverage is considered “affordable” – as it relates to the premium tax credit – if the employee’s share of the annual premium for the lowest priced self-only plan is no greater than 9.56% of the annual household income.

What are the requirements for large employers?

All “large” employers are those with 50 or more employees. They must provide the minimum essential coverage (MEC) to at least 70% of their full-time employees (and their children). For determining coverage of the ACA, “employee” is defined either as:

an employee who works 30 or more hours per week
or
a “full-time equivalent” employee, which is counted by dividing the total number of monthly hours worked by part-time employees by 120.

“Part-time” employees are counted towards determining ACA coverage, but are not included for purposes of the “Play-or-Pay” penalties.

Are there any requirements for smaller employers?

Small employers, those with fewer than 50 full-time equivalent employees, are not subject to the “Play-or-Pay” mandate. In order to encourage small employers to offer medical insurance, the ACA provides tax credit to qualifying small employers. To be eligible for a credit, the employer must pay at least 50% of employee health care coverage. Additionally, to be eligible for the credit, a small employer must:

have no more than 25 full-time equivalent employees
and
pay an average wage of less than $50,000 per year.

However, the maximum credit will only be available to employers that:

have 10 or fewer full-time equivalent employees
and
pay an average wage of less than $25,000 per year.

What are the recordkeeping requirements?

The ACA requires employers and/or health insurance issuers to report the IRS information about employer-sponsored health coverage. The Form 1095-C (Employer-Provided Health Insurance Offer and Coverage) is to be used to report the required information with respect to each covered employee, and Form 1094-C is used to transmit the 1095-C return to the IRS. The IRS will use these forms to determine whether the employer owes a penalty under Section 4980-H.

What are the possible penalties for violating Section 4980-H?

Large employers could face two types of penalties, depending on whether or not they choose to offer health care coverage to employees. The two separate penalties are:

Do not offer coverage
Large employers that do not offer coverage and have at least one full-time employee receiving a premium tax credit from the government under the ACA must pay a penalty of $2,000 per full-time employee (excluding the first 30 full-time employees).
and
Do offer coverage
Large employers that do not offer coverage, but have at least one full-time employee receiving a premium tax credit und the ACA because the employer offers coverage that does not meet the “minimum value” or is “affordable,” must pay the lesser of $3,000 per employee receiving a premium credit or $2,000 per full-time employee.

Looking for more details about the Affordable Care Act?

For more information about ACA provisions and future mandates, check out Employee Benefits – An Employer’s Guide as well as your state-specific handbook. We also recommend signing up for our weekly light-hearted employment newsletter, the HR Update. Click here to sign up.

Safety and Health tips

shannon — Mon, 17 Nov 2014 14:42:42 +0000

When you think about workplace safety, you probably picture injuries and accidents, but in reality, safety means much more than that. The hardest aspect of having a safe workplace is thinking about the unexpected threats, the freak incidents as well as the hidden everyday dangers. Employers can be intimidated by the Occupational Safety and Health Act (OSH Act) because a majority of it applies to very specific industries.

This list is meant to help the everyday office become a little bit safer. Take a minute to make sure you are doing all you can to keep your staff safe!

Is the required OSHA “Job Safety and Health Protection” poster displayed in a prominent location where all employees are likely to see it?
Have arrangements been made to retain records for the time period required for each specific type of record? (Some records must be maintained for at least 40 years.)
Are operating permits and records up-to-date for items such as elevators, air pressure tanks, liquefied petroleum gas tanks, etc.?
Do you have an active safety and health program in operation that includes general safety and health program elements as well as the management of hazards specific to your work-site?
Is one person clearly responsible for the safety and health program?
Do you have a safety committee or group made up of management and labor representatives that meets regularly and reports in writing on its activities?
Do you have a working procedure to handle in-house employee complaints regarding safety and health?
Have you considered incentives for employees or workgroups who excel in reducing workplace injury/illnesses?
Is there a hospital, clinic or infirmary for medical care near your workplace or is at least one employee on each shift currently qualified to render first aid?
Have all employees who are expected to respond to medical emergencies as part of their job responsibilities:
- received first aid training?
- had the hepatitis B vaccination made available to them?
- had appropriate training on procedures to protect them from bloodborne pathogens, including universal precautions?
- been trained how to use and have available appropriate personal protective equipment (PPE) to protect against exposure to bloodborne diseases?
Are emergency phone numbers posted?
Are fully-supplied first aid kits easily accessible to each work area, periodically inspected and replenished as needed?
Is your local fire department familiar with your facility, its location, and specific hazards?
Are all fire doors and shutters in good operating condition?
Are all worksites clean, sanitary and orderly?
Are all work surfaces kept dry and appropriate means taken to assure the surfaces are slip-resistant?
Are all aisles and passageways kept clear and marked as appropriate?
Are all exits marked with an exit sign and illuminated by a reliable light source?
Are all the directions to exits, when not immediately apparent, marked with visible signs?
Are all exits kept free of obstructions?
Are there sufficient exits to permit prompt escape in case of emergency?
Are all ladders maintained in good condition, joints between steps and side rails tight, all hardware and fittings securely attached, and moveable parts operating freely without binding or undue play?
Are all tools and equipment (both company and employee-owned) used at the workplace in good condition?
Is there a training program to instruct employees on safe methods of machine operation?
Is there adequate supervision to ensure that employees are following safe machine operating procedures?
Is there a regular program of safety inspection of machinery and equipment?
Are all machinery and equipment kept clean and properly maintained?
Is sufficient clearance provided around and between machines to allow for safe operations, set up and servicing, material handling and waste removal?
Are “NO SMOKING” signs posted on liquefied petroleum gas tanks and in areas where flammable or combustible materials are used or stored?
Is there a current written exposure control plan for occupational exposure to bloodborne pathogens and other potentially infectious materials, where applicable?
Are there areas in the workplace where continuous noise levels exceed 85 decibels?
Do employees who operate vehicles on public thoroughfares have valid operator’s licenses?

For more on safety and required postings, be sure to check out our Workplace Safety and Health Compliance Manual written by Ed Foulke, Jr., a partner with Fisher & Phillips LLP and former head of OSHA, as well as our Federal Compliance Poster.

Wearable Technology

shannon — Tue, 16 Sep 2014 03:46:34 +0000

In the last year, we have seen a rise in wearable technology. From the newly released Apple Watch to the spread of Bluetooth devices, it seems that technology is becoming more integrated into our daily lives than ever. These new advancements are causing people are to view their technology as a permanent accessory and not just a device that is used periodically throughout the day. Many carry their cellphones constantly in their hands, feeling the need to have them easily accessible at moments notice. While this shift towards constant technology use can result in higher productivity and better communication, it can also cause a whole mess of problems for employers. Below are a few issues that can arise out of what experts are calling "wearable technology."

Protecting company information

While convenient and popular with employees, the common practice of allowing employees to use electronic devices throughout the day poses significant risks that require careful management. The practice results in company information residing on devices/networks that the company does not own or control. When the security and protection of the company information is left up the discretion of the employee, information may not be as secure as an employer would like it to be.

Texting during work hours

There are positives aspects to text messaging that can be applied to the workplace. For instance, employees could be in an environment where they cannot make a phone call or send an email. Such an instance may arise in a sales pitch. Sales personnel might need to send a quick message to someone at the home office to verify a calculation. Unfortunately, using a telephone to call or a computer to send an email to someone at the home office would likely not be an option during a sales pitch. Despite the positive aspects of text messages and the sometimes unavoidable reality of text messages, many issues arise as a result of texting in the workplace.

Non working hours

Some supervisors may text their subordinates with a question or assignment after the subordinate has gone home. Requiring nonexempt employees to handle work-related texts without recording their hours worked could result in litigation under the FLSA involving lost wages, liquidated damages and attorneys’ fees. If supervisors frequently text nonexempt employees with work questions or assignments when they are no longer working, the employer could be subject to a FLSA class action.

Safety

Cellphone use is frequently a distraction. In an environment with dangerous equipment, employees could injure themselves if they are distracted by their electronic device and thus open the employer up to workers’ compensation claims and liability under the Occupational Safety and Health Administration Act. Further, employees who drive while texting could cause an accident, again opening the employer up to workers’ compensation claims or tort liability for third parties injured in the accident. Finally, certain states, such as California, prohibit texting when driving altogether. In those states, if employees text while driving, they are not legally compliant.

Document retention

Text message, brief phone calls, and social media use are generally not routed through an employer’s network meaning that unlike email exchanges, employers often have a difficult time tracking and recording for future reference. What is said via these outlets may have important business significance and it is up to the employer to instill policies which prompt employees to make records of such information exchanges.

Alternatively, such exchanges between employees are not documented and if anything illegal or improper transpires employers will have a difficult time getting to the bottom of the matter.