August 2012
Welcome
We hope you are enjoying the summer! We have spent the last several months working to update your HR Support Center. In just a few days, an exciting new interface will launch and allow you greater ease of use – including the ability to access the HR Support Center on most tablets or mobile devices. So, here’s to site enhancements and this final month of summer. Cheers!
HR Alerts
Medical Loss Ratio (MLR) Rebates. No later than August 1, 2012, insurance companies that do not satisfy Medical Loss Ratio (MLR) standards must provide their policyholders a rebate for the difference. The Patient Protection and Affordable Care Act (PPACA) requires health insurance companies to spend 80% – 85% of premium dollars on health insurance claims and clinical activities for improved healthcare quality.
OSHA Final Rule on Whistleblower Provisions. On July 10, 2012, the Occupational Safety and Health Association (OSHA) issued a final rule implementing the whistleblower provisions of the Consumer Products Safety Improvement Act (CPSIA). The provisions provide employees with protections against retaliation by employer manufacturers, private labelers, distributors, or retailers when an employee engages in one or more protected activity.
OSHA Heat Safety App. The Occupational and Safety Health Administration (OSHA) agency launched a new heat safety tool. The heat safety tool is a smartphone app which allows supervisors and workers to calculate the heat index for their worksite, displays risk levels to outdoor workers, and provides information on protective measures to reduce employee exposure to heat-related illness.
July 2012 HR Advisor Correction: Please note that the HR alert titled “Proposed Federal Minimum Wage Increase” had an incorrect political party reference. The alert should have read: “On June 6, 2012, Representative Jesse Jackson Jr. (Democrat) introduced the Catching Up to 1968 Act of 2012, a bill to raise the federal Fair Labor Standards Act (FLSA) minimum wage from $7.25 per hour to $10.00 per hour (beginning 60 days after enactment). The bill also proposes that the federal government increase the minimum wage each year based on inflation as measured by the federal Consumer Price Index (CPI). The bill would also increase the minimum wage for tipped employees to $5.50 an hour. Stay tuned for additional updates as they are released by the governing agencies. Currently, the status of the bill remains “Referred to Committee.”
The Implications of the U.S. Supreme Court Ruling on PPACA for Employers
On Thursday, June 28, 2012, the U.S. Supreme Court issued a ruling that essentially upheld the constitutionality of the Patient Protection and Affordable Care Act (PPACA), also known as the Health Care Reform Act.
As part of the ruling, the Supreme Court stated that Congress did not have the constitutional authority to mandate that everyone buy health coverage. They did, however, have authority to impose a tax if an individual did not comply with the mandate. Therefore, the individual mandate has been deemed constitutional by the Supreme Court if instituted as a tax. The employer-centered requirements were designed to support the individual mandate by making it easier for working Americans to obtain affordable healthcare. In addition, Congress can impose conditions on the states to receive federal funding for Medicaid coverage expansion, but may not threaten to remove any existing funding.
What does the High Court ruling mean for employers? The Act’s numerous provisions that impact employers remain intact. While some of the mandates already have been in effect, many more will become effective in 2013 and 2014. Employers sitting on the sidelines in anticipation of a complete repeal or significant changes to the PPACA must catch up in order to be compliant by 2014. Thus, employers must proceed with the Act’s provisions or prepare to pay penalties.
In terms of offering health insurance, PPACA identifies three employer categories – those with:
Fewer than 50 employees: “Small-size” employers do not need to provide employees health insurance coverage. On the other hand, if a small employer chooses to provide employee health coverage, starting in 2014, states are required to establish health insurance “exchanges” for employers who choose to provide health care to employees though a group health insurance policy.
50 – 199 employees: “Mid-size” employers must offer “affordable” health insurance coverage to their employees or be subject to penalties. If an employer chooses not to offer employee health coverage or offers an overly expensive coverage plan, then the employer will be subject to penalties.
200 or more employees: “Large-size” employers must automatically enroll all new employees in their health insurance plan beginning in 2014. If an employer chooses not to offer employee health coverage or offers an overly expensive coverage plan, then such employers also will be subject to penalties.
While further guidelines and explanations are expected from government agencies, immediate employer actions for the remainder of 2012 include, but are not limited to:
- Assessment of the Act’s effect on the business
- Determination of redistribution or usage of Medical Loss Ratio (MLR) rebates
- Distribution of Summaries of Benefits and Coverage (SBC) in time for the next open enrollment
- Reporting of group health plan coverage costs on 2012 Forms W-2
- Revisions to company cafeteria plans to reflect employee contribution limits on health care Flexible Spending Accounts (FSA)
- Stay tuned for more updates from the HR Support Center.
Question & Answer
Reference Checks
Q. We are considering hiring a new employee who was laid off from a previous employer (received severance package). We plan on contacting the former employer as a reference. Are we legally allowed to ask the former employer if the employee signed a non-compete agreement?
A. It is permissible to get all the information you can when conducting a reference/background check provided the information is not discriminatory nor will be used in a discriminatory manner. This type of information would be things related to protected classifications such as ethnicity, age, sexual orientation, etc. Determining whether the applicant is covered under a non-compete agreement that may hinder their ability to do the job with your organization certainly would be helpful and is permissible under the law. However, getting former employers to release information about their employees can be somewhat problematic in that many employers do not want to release anything except for hire date, separation date and position(s) held.
Unemployment Claims: Fighting to Winning
“You’re fired!” If you have ever said that to an employee (unless you are Donald Trump and filming the reality show “The Apprentice”), you should be prepared to pay for your now former employee’s unemployment claim. If an employee walks out and therefore terminates employment voluntarily, you may still be required to pay for unemployment. Confusing? You bet.
Terminations are part of the employment life-cycle. A voluntary termination results when an employee chooses to resign. An involuntary termination results when an employer fires, discharges, or lays off (due to budget, workforce reduction, or business closure issues) an employee.
If employers do involuntarily terminate, they should determine if unemployment benefit claims may apply and prepare to defend accordingly if the benefits are granted. Eligibility criteria impacts how unemployment benefits may be awarded. Some of the criteria for eligibility for unemployment benefits includes whether the terminated employee:
- Became unemployed through no fault of his or her own (e.g. job elimination or reduction in force)
- Earned sufficient wages with the company or during the claimant’s base year
- Is available for new work
- Is actively seeking work
An individual may become disqualified for unemployment benefits if he or she:
- Was fired for misconduct or a clear violation of company policy
- Quit without good cause (e.g. walking off the job because of a disagreement with a colleague)
- Returned back to the same job to work
- Turned down a suitable job offer during the unemployment period
- Participated in a strike or work stoppage caused by a labor dispute
- Received Social Security benefits, severance pay, workers’ compensation payments, state disability benefits, or a private pension
- Made false claims or omitted information on his or her unemployment claim
In addition, the weekly benefit amount is generally determined by the total wages paid to the employee by his or her employer(s) during the “base” period. The base period typically consists of a minimum amount of work completed within the last five quarters of a calendar year prior to the initial filing for benefits and the amount of earnings during the base period.
Sometimes, employers futilely try to avoid addressing unemployment insurance claims. Now, if you know the employee was discharged through no fault of his or her own, save some time and do not appeal the claim. In other situations, it may be worthwhile to appeal a claim when the employee was terminated for issues such as misconduct, policy violations, or a general unwillingness to perform work. The benefit to employers in defending the claim may result in the employer tax rate being lowered or not increased. Your employer unemployment tax rate is directly impacted by the number of successful claims charged to your account. If you do opt to dispute an unemployment claim, ensure you have gathered all records that may influence the denial or awarding of an unemployment claim, such as performance management evaluations, disciplinary notices/letters, individual complaints, investigation information (if theft, harassment, or workplace violence was an issue), witness statements if applicable, etc. Ensure all paperwork is also ready for the state unemployment agency in a timely manner. If paperwork is delayed, there is a chance the former employee may end up winning the battle by default or forfeiture.
Tool of the Month:
Benefits Compliance Guide
The Benefits Compliance Guide addresses regulatory requirements relating to current benefit items and issues employers should review for compliance with state and federal regulations. Some areas covered include:
- Summary Plan Description (SPD)
- Summary of Benefits and Coverage (SBC)
- Consolidated Omnibus Budget Reconciliation Act (COBRA)
- Family Medical Leave Act (FMLA)
- Employee Retirement Income Security Act (ERISA)
- And much more!
HRCast of the Month
Top 3 Action Items All Employers Must Do Now for PPACA
Out of all the health care reform provisions and requirements of the Patient Protection and Affordable Care Act (PPACA), what are the top three action items your company should focus on? This month’s HRCast explores this question and provides listeners with insightful answers and helpful tips.
On August 15th, be sure to visit the HR Support Center, and listen to this month’s HRCast to learn more.
HR Tip of the Month
Are you Prepared for an Emergency?
Emergencies and disasters can take various forms including violence at the workplace as demonstrated on July 20, 2012. In one of the deadliest mass shootings in recent U.S. history, a gunman entered a Denver-area theater during a crowded midnight movie screening and killed or injured numerous people. Our condolences go to all the victims as well as the families, friends and employers of the victims. Without warning, a disaster can strike and it is your responsibility to have a plan in place to protect your employees. Use the Workplace Evacuation Preparedness Checklist (available in the HR Support Center) to be proactive versus reactive in the case of an emergency.
Did you know?
92%
According to a Social Recruiting Survey conducted in June 2012, 92% of U.S. companies are using social networks and media to find talent in 2012, up from 78% five years ago. (Source: Jobvite)
Quote of the Month
“Management is efficiency in climbing the ladder of success; leadership determines whether the ladder is leaning against the right wall.”
-Stephen R. Covey
A Look Ahead
August 5:
Friendship Day
August 26:
Women’s Equality Day
Contact Us
Paragon Business Services, Inc.
7610 N Stemmons Frwy
Suite 600
Dallas, TX 75247
Additional Contacts
Phone: 866-444-4615
Fax: 214-951-1920
Legal Disclaimer: This message does not and is not intended to contain legal advice, and its contents do not constitute the practice of law or provision of legal counsel. The sender cannot be held legally accountable for actions related to its receipt.
Paragon Business Services, Inc 