Brokers and HR Compliance Requirements. The true stories of … Manny, Mo, and Mike

Brokers and HRCompliance Requirements

The true stories of …

Manny,

Mo,

and Mike.

• Long Term EmployeeLong Term Employee• Manager because of Manager because of

tenure and dedicationtenure and dedication• Runs the shipping part Runs the shipping part

of the business 10 EEof the business 10 EE• Paid Salary of 50kPaid Salary of 50k• Can hire and fire EEsCan hire and fire EEs• Given Mgr BenefitsGiven Mgr Benefits

• ““Benefits” IncludeBenefits” Include– Fixed SalaryFixed Salary– Designated ParkingDesignated Parking– Vacation PackageVacation Package– Bonus w/ MgmtBonus w/ Mgmt– Set dept. scheduleSet dept. schedule– 4X Earnings Life Ins.4X Earnings Life Ins.– Participates in policy Participates in policy

making for companymaking for company

MannyManny

• FLSA Issues– Fails 541 Tests

Work Tolerance > 50%

– No other exemption– Record keeping– OT Pay– OT on Bonus– Benefits …

• Benefits Issue– Manny dies – Family wants 200k for Life

Insurance Benefit– Audit by Life Carrier

determines benefit to be …

$10,000– Policy Mgr Criteria NOT

MET!

MannyManny

• Single Mom• Marries Employee• No prior health

coverage• Pregnant• $250,000 Birth Bill• Not on company

coverage

• Husband declined coverage

• Coverage not offered again

• Signed Declined on Carrier Form

• Employee took time off for “honeymoon”

MoMo

• HIPAA Issues– Special Enrollment

Rights Notification– Carrier Form not

adequate for Employer Compliance

– Carrier not bound for coverage for mistakes made by ER

• Benefits Issue– Coverage and HIPAA

Enrollment Rights communications violated by ER

– ER must “make the employee whole”

– ER has no recourse with carrier or EE

MoMo

• 5 year employee• Earned two weeks of

sick pay (accrued)• Earned two weeks of

vacation (accrued)• Plays softball• Single / no phone

• Company Policies– 3 days no call, no

show, NO JOB!– Voluntary Quits w/o

notice = Loss of vacation pay

– Sick Pay is never paid on termination

– Final Check Mailed

MikeMike

• EE hurt on Saturday playing softball

• Fails to call or show for work for two months

• Comes back and asks for his job or any job and is refused

• EE was reminded of policies in handbook

• EE had copy and ER had signed receipt

• ER had done this type of discipline many times without question

MikeMike

• FMLA Issues– ER has > 50 EEs– Two Day Notice

Requirements– Incorrect Policy in

Handbook – Managers not trained

and share liability exposure

• Benefit Issues– Health Policy not

reviewed with Company Policy and federal guidelines

– Managers not trained for FMLA issues …

$50,000 settlement

MikeMike

• Employer – Posting, Mailing, and

Notifications.– Documentation of actions

and communications– Reviewing policies and

practices

• Broker / Consultant– Coordination of carrier

contract and practices– Facilitation of

documentation and training for mgrs

– Education of client’s administrative and management staff

Who is Responsible?Who is Responsible?

Increasing Challenges

• Cost of “doing business”– Benefits– Payroll– Regulatory Compliance

• Magnified by Large Competitors– Market Consolidation– Economies of Scale

Specific Issues

• Health Insurance Trend = 20% Annually• Rating / Underwriting for Small Groups• Carriers favor large groups• High expectations for benefits

– Insurance = No Bills– Health care where ever and when ever …– 401(k) = Assured Retirement Income

Employer Issues

• Allocation of $ to Direct and Indirect Comp• Education of Employees• Staff training and system maintenance for:

ADA

ADEA

COBRA

CRA Title VII

DFWA

ERISA

FLSA

FMLA

Handbook

HIPAA

IRCA

JSIA

LMRA

NLRA

OSHA

Policy Provisions

USERRA

WARN

Difficult Obstacles• Multiple vendors for “products”

– No responsibility assigned for coordination– No responsibility assigned for education– No responsibility assigned for managing– No responsibility assigned for:

• System setup

• Maintenance

• Updates

• HR / Payroll Integration

So What About 1987?So What About 1987?

The Consolidated Omnibus Budget Reconciliation The Consolidated Omnibus Budget Reconciliation Act of 1985 (or COBRA) is a law passed by the Act of 1985 (or COBRA) is a law passed by the U.S. Congress on a reconciliation basis.U.S. Congress on a reconciliation basis.

Signed by President Ronald ReaganSigned by President Ronald Reagan

Mandates an insurance program giving some Mandates an insurance program giving some employees the ability to continue health employees the ability to continue health insurance coverage after leaving employment. insurance coverage after leaving employment.

It was the end of Group Insurance …It was the end of Group Insurance …

Just Kidding!Just Kidding!

What Else Has Changed?What Else Has Changed?

Section 125 – 1979Section 125 – 1979

FMLA - 1993FMLA - 1993

HIPAA 1996HIPAA 1996

HDHP's - 1997 HDHP's - 1997

HRA's - 2002HRA's - 2002

PPACA 2010

Passed by Reconciliation ...

Has implementation steps through 2016.

Overlays previously State controlled issues of Medical insurance coverage, participation and eligibility issues.

PPACA Letter Requirements

How did this requirement come about?

The Patient Protection and Affordable Care Act (PPACA) amended the Fair Labor Standards Act (FLSA).

The purpose is to make the employer responsible for the education about the Marketplace, via the mailing requirement.

• This requirement was originally set for March of 2013 and was delayed until October 1, 2013.

• ALL employers must send the letter to ALL employees.

• This requirement was amended to the FLSA and should NOT be paid for by brokers because it is NOT part of the servicing duties for a group carrier contract.

PPACA Letter Requirements

PPACA Letter Requirement

The letter we will send will fully comply with the requirements.

Data will be retained to begin building the database for future reporting.

All images will be accessible 24/7.

Mailing logs will be generated for proof of mailing.

PPACA Letter Requirement

Employer, Navigator, Broker or Marketplace will accept and respond to employee inquiries regarding the Marketplace letters.

Including copies of letters being e-mailed to the employees.

Basic questions about the Marketplace must also be answered.

PPACA Letter Content

On March 23, 2010, President Barack Obama signed into law the Patient Protection and Affordable Care Act(PPACA) designed to reform healthcare in the United States. The law is complex and contains numerousemployer requirements. One mandates that employers notify their employees about Health Insurance "Marketplaces" (or "Exchanges"). These Marketplaces are websites where individuals may purchase or compare medical insurance plans.

PPACA Letter Content

The attached document provides information on Health Insurance Marketplaces as well as medical insurance offered through Sample Company.

PPACA may provide financial assistance in the form of reduced insurance premiums to individuals (meeting certain income levels) as well as employees whose company plan does not meet the "minimum value standard."

PPACA Letter Content

The law defines "minimum value standard" as a group medical plan that:

1) Pays at least 60 percent of the plan's total allowed benefit costs; and

2) Has a premium contribution of less than 9.5 percent of the employee's income.

PPACA Letter Content

The letter will state:

“Upon review of our firm's medical health plan, it has been determined to meet PPACA's ‘minimum value standard’.

This is important for you to know because if you are offered a group plan meeting this standard, you would not be eligible for a tax credit through the Health Insurance Marketplace.”

PPACA Letter Content

PPACA Letter Content

PPACA Letter Content

PPACA Letter Content

PPACA Letter Content

PPACA Letter Content

PPACA Letter Content

PPACA Letter Content

How are we doing?How are we doing?

FLSA Preamble

ALL employees must be paid … Federal Minimum Wage Keep a record of all hours worked And … be paid 1½ times their

Regular Rate for all hours over 40 worked each week, specifically exempted.

Breakdown the statement ...

History of the FLSA

Sam Gompers

John Lewis

Definitions Contained in the FLSADefinitions Contained in the FLSA

Exempt / Nonexempt Not interchangeable with …

Salaried and Hourly Many industry specific “exemptions” Terms are used in carrier contracts Terms and applications are misunderstood Clients use historical practices not FLSA

Coverage Issues for FLSACoverage Issues for FLSA

Frequently used for LTS and GTL Overtime calculations often incorrect Records are poor or absent Ignorant of DOL / Wage Hour Enforcement Look back is 2 years

Review of Exemptions

Four Most Used Exemptions WC Administrative (Almost Never Allowed) WC Executive WC Professional Outside Sales

OT (Premium Pay) includes ...

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