Brokers and HR Compliance Requirements

1. Brokers and HR Compliance Requirements

2. The true stories of … Manny, Mo, and Mike.

3. Long Term Employee Manager because of tenure and dedication Runs the shipping part of the business 10 EE Paid Salary of 50k Can hire and fire EEs Given Mgr Benefits “Benefits” Include Fixed Salary Designated Parking Vacation Package Bonus w/ Mgmt Set dept. schedule 4X Earnings Life Ins. Participates in policy making for company Manny

4. 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! Manny

5. 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” Mo

6. 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 Mo

7. 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 Mike

8. 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 Mike

9. 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 Mike

10. 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?

11. Increasing Challenges Cost of “doing business” Benefits Payroll Regulatory Compliance Magnified by Large Competitors Market Consolidation Economies of Scale

12. 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

13. 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

14. 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

15. So What About 1987? The Consolidated Omnibus Budget Reconciliation Act of 1985 (or COBRA) is a law passed by the U.S. Congress on a reconciliation basis. Signed by President Ronald Reagan Mandates an insurance program giving some employees the ability to continue health insurance coverage after leaving employment. It was the end of Group Insurance … Just Kidding!

16. What Else Has Changed? Section 125 – 1979 FMLA - 1993 HIPAA 1996 HDHP's - 1997 HRA's - 2002

17. PPACA 2010 Passed by Reconciliation ... Has implementation steps through 2016. Overlays previously State controlled issues of Medical insurance coverage, participation and eligibility issues.

18. 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.

19. PPACA Letter Requirements • 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.

20. 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.

21. 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.

22. 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 numerous employer 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.

23. 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."

24. 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.

25. 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.”

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34. How are we doing?

35. 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 ...

36. History of the FLSA

44. Sam Gompers John Lewis

45. Definitions 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

46. Coverage 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

47. Review of Exemptions Four Most Used Exemptions WC Administrative (Almost Never Allowed)‏ WC Executive WC Professional Outside Sales OT (Premium Pay) includes ...

48. Let Us Hear It! www.prnHR.com Help@MoneyWiseSolutions.com Voice and Fax 888.994.9392 www.MoneyWiseSolutions.com