Deadline Approaches for Employer Reporting Under Healthcare Law

Since its adoption in 2009, the Patient Protection and Affordable Care Act (ACA) has received a lot of attention. The ACA is one of the most complex pieces of legislation ever enacted by the federal government, and many of its required regulations are still being written.

Recently, the executive branch announced that it would delay implementation of the so-called “employer mandate”, the requirement that employers with more than 50 full-time employees either offer employer-subsidized health insurance or face penalties. Many employers thought they were “off the hook” for another year. That would be incorrect!

Section 1512 of ACA included a new section 18B of the Fair Labor Standards Act (FLSA). This is a new reporting requirement for every “covered employer” under the FLSA, which impacts most employers in the U.S. As this article is being written, there is just over one month left to comply.

Section 18B of the FLSA requires all employers to provide written notice to each of their employees, no later than October 1, 2013, of certain information related to health insurance benefits. The notice must be furnished to each employee hired after October 1, 2013. The notice is required whether or not the employer provides insurance to any of its employees. The stated purpose of the notice, according to the U.S. Department of Labor (DOL) is:

Informing the employee of the existence of the Marketplace (referred to in the statute as the Exchange) including a description of the services provided by the Marketplace, and the manner in which the employee may contact the Marketplace to request assistance;

If the employer plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs, that the employee may be eligible for a premium tax credit under section 36B of the Internal Revenue Code (the Code) if the employee purchases a qualified health plan through the Marketplace; and

If the employee purchases a qualified health plan through the Marketplace, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes.

The notice also provides the mechanism for the IRS to determine whether or not an employer is subject to the penalties prescribed in the ACA.

The notice, which must be in writing, can be delivered by first class mail, in person, or electronically if certain requirements are met. The DOL has issued model language to satisfy this requirement, which is available on the DOL website. Employers are not required to use the model reporting language so long as they include all of the required information.

The DOL has also issued Technical Release No. 2013-02 which describes this reporting requirement in more detail.

Employers who offer insurance have probably received information from their insurance carriers or brokers to complete the notice. If you are an employer who does not offer health insurance, you still have time to comply. We are available to provide assistance to employers who need help satisfying this new requirement.

5 Tips How Your Small Company Can Avoid Labor Law Problems in California

(Internet Resources on Employment Compliance for California’s Small Businesses)

California’s labor laws have given it a reputation as a “non business friendly” state that makes life difficult for employers. In my consulting practice we have audited many California small businesses and found most of them to be seriously non-compliant with many state employment standards and regulations.

A business owner could face serious fines or disruption if a government agency finds his or her company in violation of California’s labor code regulations, which are extensive. Disgruntled ex-employees can find “trolling” lawyers who will pay them a fee for insider information that leads to their filing suit against you for even minor infractions. The plaintiff bar attorneys have prospered from this state’s confusion of rules and regulations and have targeted numerous small and medium sized businesses with employment related litigation.

If you are a small California business employer, it is in your best interests to take the steps necessary to ensure you are compliant with the state’s labor laws. The links in this article can assist the small employer in taking the steps he or she needs, using free or inexpensive resources available on the Internet, to avoid labor law compliance problems. The guidelines outlined here are intended for use by employers with under 50 employees. For those firms with over 50 employees, this advice is still valid but there are other major legal requirements that the larger employer must consider to be fully compliant with the labor codes, such as state and federal leave laws and sexual harassment training for your managers. For the smaller business, here are the primary five areas on which you will need to focus.

#1 Update your Employment Law Posters!

The California Department of Labor and the federal government require employers to post information related to wages, hours and working conditions in an area frequented by employees where it may be easily read during the workday. The number of posters required is determined by the size and nature of your business but could total up to 10 or more.

Employers should study and make sure they understand the regulations on these posters to determine which regulations are applicable to their business so they can answer questions from employees.

#2 Be compliant with all Safety and Health regulations – In California, every employer has a legal requirement to provide and maintain a safe and healthy workplace for its employees, according to the California Occupational Safety and Health department standards. As of 1991, each employer must have in place a written, effective Injury and Illness Prevention Program (IIPP). This does not have to be a complex document but must encompass certain elements. In addition to developing a plan, there is a requirement that you train your workers on preventing workplace hazards (and document that training). Your IIPP plan must be updated every time you change your operations where the hazards involved also change. In addition.

#3 Pay close attention to how you pay your employees – In California, most state employment regulations “trump” federal regulations because state standards are usually stricter. Many small business owners make the mistake of paying all or many of their employees a straight salary in order to keep payroll a simple process. This is especially true in businesses which have an office environment. This can be a very perilous approach as you most probably will be in violation of overtime rules which have very stiff penalties.  know the legal requirements for overtime wages, breaks and lunch periods for your workers.

A critical area many small businesses fail to recognize is the proper classification of employees, as they apply to mandatory overtime pay – exempt from overtime or not exempt.

#4 Respect your Employees’ Privacy and secure personnel files – Today the law protects the privacy of employees with some pretty severe sanctions against employers who violate a person’s medical privacy or identity. Separate basic personnel information into two files – a personnel file (with payroll tax forms, or basic job information in it such as training documents, performance reviews and disciplinary or commendation notices) and a separate confidential file with medical, credit, benefits and personal family or dependent information. Supervisors or other interested management must be restricted in their access to the personnel file only. Only the person designated as the human resources record keeper is to be entrusted with the access to the confidential file. Make sure these files are always secured. Protect your employees’ personal information.
#5 Don’t forget to properly verify your employees’ work status – The immigration authorities are under increasing pressure to enforce the laws, and experts agree that enforcement will increase in the coming years as the debate wears on regarding illegal immigration. There have been some well publicized raids all over the country. The I-9 employment form must be completed by every employer on every employee, even US citizens. These documents must be completed properly and kept up to date if certain documents are presented on an employee’s legal status to work in the US.

As a further measure, you should also use the government’s free service to verify that the social security numbers being presented by applicants are valid, which will reduce the chances that you are hiring an illegal alien. This may become a requirement in the near future as the immigration service cracks down on employers. The government is now using tax filings with mismatched or invalid social security numbers to look for employer who knowingly hire workers who are in the US without proper labor authorization.

While this article is not inclusive of every labor code issue employers may face, it does cover the “hot” areas which will give you a running head start to being essentially compliant with California state and the federal laws. It might be a prudent investment for every business owner with more than five employees to have a human resource and payroll audit done periodically by an HR professional. This exercise can help you spot areas of vulnerability and non compliance so that you can address those issues before they become a major crisis and costly disruption of you business.

Common Traffic Tickets Regarding Accidents and Insurance

Everyone knows that speeding or running a red light or stop sign can result in being pulled over and given a traffic ticket for your momentary lapse in judgment. But did you know there are literally hundreds of California Vehicle Code sections you can violate every single time you get in your car? And some, even, that you don’t even require you to be driving? Here is some information on the most common accident and insurance traffic violations.

Proof of insurance

You are required to carry proof that the vehicle you are driving is insured. Anytime you are questioned by an officer for proof of insurance, you must produce it or you may be cited. However, an officer may not pull you over simply for the purpose of asking if you are insured. There are two ways to be cited for breaking this law:

  • If you have insurance but no proof – If you actually do have insurance but merely weren’t carrying the card with you when you were pulled over, this is relatively easy to have dismissed by giving a copy of your current insurance policy or card to the court clerk. Don’t forget to do this, however, as failing to provide proof of insurance is punishable by a fine of over $1,700!
  • If you didn’t have insurance when you were cited – If you are cited for violating this section and you simply do not have insurance, you have a big problem. Fines are extremely expensive for this infraction and if you have no proof that you do have insurance, there is not much you can do. However, if the vehicle you are driving is insured by someone else, such as your employer, it is possible to get this sort of violation dismissed. Never give wrong information to an officer about your insurance. This crime is a misdemeanor and is punishable by an even larger fine and up to five days in jail.

Mandatory Reporting of Certain Accidents

In any accident involving personal injury or damage of at least $750, all drivers must file an accident report and provide evidence of insurance. Failing to do so can result in the suspension of your license for one year. In fact, even if you are driving someone else’s vehicle, you must comply with this section.

Exchange of Information at Accidents

Even if the accident in which you were involved is very minor and less than $750 worth of damage is involved, you are still required by law to exchange information with other drivers involved. If you fail to disclose your name, address, driver’s license number, vehicle identification number, or insurance information, you can be found guilty of an infraction with another hefty fine. However, it is important to realize that this violation must be proved beyond a reasonable doubt.

If you’ve been cited for one of the many violations dealing with accidents and insurance, it could end up costing you thousands of dollars in fines, an increase in your car insurance premiums, and even a suspension of your license. With a skilled criminal defense attorney experienced in defending traffic tickets, like those at Wallin & Klarich, however, you can fight your traffic ticket and win. Often, these sorts of tickets can be reduced to much less expensive violations or even completely dismissed.