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Our news articles are posted on a regular basis to give our clients relevant and timely information about matters pertaining to our financial services. Browse through our current and archived articles to learn more.

Category: Group Health Benefits

Healthcare & Benefit Services :: Guidance Issued on Notice of Exchange


Open enrollment for health insurance coverage through the Exchange (now referred to as the Health Insurance Marketplace) begins October 1, 2013. The Affordable Care Act creates a new Fair Labor Standards Act (FLSA) section that requires employers to provide each employee at the time of hiring, as well as current employees, a written notice that includes information regarding the new Health Insurance Marketplace. Earlier materials referred to this notice as the “Exchange Notice,” however, it is now referred to as the “Notice of Coverage Options.”

The notification requirement was initially effective March 1, 2013; however, the Department of Labor delayed it until after guidance is issued. The DOL just released Technical Release 2013-02, containing temporary guidance and model notices. Employers may use the model notices and may rely on this guidance prior to the October 1, 2013 applicability date.

Who is Required to Provide the Notice?

All employers subject to the FLSA are required to provide the Notice of Coverage Options, regardless of whether a health plan is offered by the employer. Employers subject to the FLSA include employers that employ one or more employees who are engaged in, or produce goods for, interstate commerce. For most firms, a test of not less than $500,000 in annual dollar volume of business applies. Other entities covered by the FLSA and subject to this notification requirement include hospitals, schools, federal, state and local governments. Employers will need to determine if they are subject to the FLSA. General guidance relating to the applicability of the FLSA (which includes an internet compliance assistance tool to determine applicability of the FLSA) can be found through the Department of Labor’s Wage and Hour Division ( elaws/esa/flsa/scope/ screen24.asp).

It is important to note that employers must provide the Notice of Coverage Options – insurance carriers and third-party administrators of group health plans are not responsible for providing the Notice on behalf of an employer.

Who Must Receive the Notice?

The Notice must be provided to each employee, regardless of plan enrollment status or of part-time or full-time status. Employers are not required to provide the Notice to spouses or dependents who are not employees.

When and How Must the Notice be Provided?

For new hires, employers must provide the Notice to each new employee at the time of hiring beginning October 1, 2013. For 2014, the DOL will consider a Notice to be provided at the time of hiring if the Notice is provided within 14 days of an employee’s start date.

For employees who are current employees prior to October 1, 2013, employers must provide the Notice no later than October 1, 2013.

The Notice is required to be provided automatically, free of charge.

The Notice is required to be provided in writing in a manner calculated to be understood by the average employee. It may be provided by first class mail, but also may be provided electronically if the requirements of the DOL’s electronic disclosure safe harbor are met.

What Must the Notice Provide?

The Notice must inform employees of the existence of a new Marketplace, as well as contact information and a description of the services provided by a Marketplace. The Notice must also inform the employee that the employee may be eligible for a premium tax credit if the employee purchases a qualified health plan through the Marketplace. Additionally, the Notice must include a statement informing the employee that 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.

COBRA Model Election Notice

Some qualified beneficiaries may want to consider and compare health coverage alternatives to COBRA continuation coverage that are available through the Marketplace. The DOL’s model COBRA election notice has been revised to help make qualified beneficiaries aware of other coverage options available in the new Marketplace. As with all earlier model notices, in order to use this model election notice properly, the plan administrator must complete it by filling in the blanks with the appropriate plan information. Use of the model election notice, when appropriately completed, will be considered by the DOL to be good faith compliance with the election notice content requirements of COBRA.

Model Notices

The DOL provides two model Notices that will satisfy this requirement. One Notice applies to employers who offer a health plan to some or all employees. The other Notice applies to employers that do not offer a health plan. Employers will need to complete Part B of the applicable notice with the requested information. If the employer offers a health plan, the employer must provide some basic information about the health plan coverage, including who is eligible for coverage and whether the coverage satisfies minimum value and is intended to be affordable based upon employee wages. The model Notices can be found as follows:

• Model Notice for employers who offer a health plan to some or all employees:

• Model Notice for employers who do not offer a health plan:

• Revised COBRA Model Election Notice (which includes a redline version of the May 2013 changes):


This document is designed to highlight various employee benefit matters of general interest to our readers. It is not intended to interpret laws or regulations, or to address specific client situations. You should not act or rely on any information contained herein without seeking the advice of an attorney or tax professional.

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Healthcare & Benefit Services : Health Reform 2014 HSA Limits

Healthcare Reform Image

The 2014 limits for HSAs have been released by the IRS in Revenue Procedure 2013-25. The HSA contribution limits and high deductible health plan out-of-pocket maximums are up slightly over 2013. The HDHP minimum required deductibles have stayed the same.

Minimum Annual Deductibles
For 2014, the minimum annual deductible for a plan to be considered a “high deductible health plan”, or “HDHP” is still $1,250 for single coverage and $2,500 for family coverage (no change from 2013 levels).

Out-of-Pocket Maximums
The maximum out-of-pocket maximums for HDHPs for 2014 will increase to $6,350 for single coverage and $12,700 for family coverage (2013 levels are $6,250 single/ $12,500 family).

Annual Individual Contribution Limit
The maximum permitted contribution to the HSA on behalf of an individual increases slightly to $3,300 for an individual with single coverage and $6,550 for an individual with family coverage (2013 levels are $3,250 single/ $6,450 family).

Catch-Up Contributions
For those age 55 or older, the catch-up contributions will continue to be $1,000. In cases where the HDHP renewal date is after the beginning of the calendar year, any required changes to the annual deductible or out-of-pocket maximum may be implemented as of the next renewal date.

Contact G.R. Reid Healthcare & Benefit Services for more information.

This article is designed to highlight various employee benefit matters of general interest to our readers. It is not intended to interpret laws or regulations, or to address specific client situations. You should not act or rely on any information contained herein without seeking the advice of an attorney or tax professional.



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Healthcare & Benefit Services :: Coverage Examination



For more information and to schedule a consultation, contact G.R. Reid Healthcare & Benefit Services.


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Accounting & Tax :: Employees May Be Eligible for Retirement Savings Tax Credit

It’s not too early to start planning for the 2013 tax year. Employees who make eligible contributions to an employer-sponsored retirement plan, such as a 401(k), or to an individual retirement arrangement (IRA) may be eligible for a tax credit. Below are five guidelines that can help employees learn more about the Saver’s Credit.


1. Credit Amount. The credit reduces income tax owed. Employees may be able to take a credit of up to $2,000 (for married couples filing jointly) or $1,000 for single taxpayers. The lower an employee’s income, the higher the credit rate.

2. Income Limits. Eligibility for the credit depends on an employee’s income and filing status. For 2012 tax returns, the credit applies to employees with a filing status and income of:

  • Single or married filing separately, with income up to $28,750
  • Head of household, with income up to $43,125
  • Married filing jointly, with income up to $57,500

3. Eligibility Requirements. An employee must be at least 18 years of age to be eligible for the credit. In addition, the employee cannot have been a full-time student in 2012, nor claimed as a dependent on someone else’s tax return.

4. Deadline for Contributions. Contributions to a qualified retirement plan must be made by the due date of an employee’s tax return in order to claim the credit. The due date for most people is April 15th.

5. Other Tax Benefits. The credit is in addition to other tax benefits which may result from the retirement contributions. For example, an employee may be able to deduct all or part of his or her contributions to a traditional IRA. Contributions to a regular 401(k) plan are not subject to income tax until withdrawn from the plan.


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H/R Services :: 7 Topics to Cover During New Employee Orientation

HRPeopleNew employee orientation (also called onboarding) introduces new employees to the workplace and familiarizes them with some of the company’s basic practices. Onboarding should be conducted as soon after an employee’s start date as possible. Some of the topics you may wish to cover include:

1. Welcome
Give your new employee a brief tour of the workplace and introduce managers and co-workers. Be sure the employee’s work station is neat and organized to make him or her feel welcome.

2. New Hire Paperwork
Orientation is a good time to collect and complete any necessary paperwork, such as Form I-9 (employee must complete no later than the first day of work for pay), Form W-4 and any required state income tax withholding forms.

3. Compensation and Benefits
Provide details on pay periods, direct deposit, payroll deductions, health insurance and any other benefits to which your new employee may be entitled. Prepare a benefits packet ahead of time to give to the employee and let him or her know who can answer questions.

4. Attendance and Leave
Review the employee’s expected hours of work, as well as the company’s policies regarding absenteeism, meal and break periods, and time off (including notice required).

5. Employee Conduct
Make sure the employee understands the rules regarding dress code, telephone and computer use, and other expectations. If your policies are explained in an employee handbook, be sure the employee receives a copy.

6. Safety and Security
Explain necessary safety and security procedures and distribute building keys, employee identification, and parking passes as appropriate.

7. Required Training
Schedule training sessions as soon as possible so the employee can learn about the technology, safety, and any other special skills necessary to perform his or her job.

Regardless of whether you distribute a full employee handbook, it’s a good idea (and in some instances may be legally required) to inform employees in writing of your company’s policies. Remember to follow-up with your employee during the first several weeks to address any concerns and answer any questions that may come up. For more information about how your company can benefit by working with G.R. Reid’s Human Resource Services, contact us.

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Healthcare & Benefit Services :: Top 3 Health Care Reform FAQs

Last month marked the 3-year anniversary of the Affordable Care Act (Health Care Reform). While changes continue to be made to the requirements for employers and group health plans, here’s a look at three of the most common questions and answers over the past few years:

medical finances

1. Are all companies required to provide health insurance to employees?
Under Health Care Reform, small employers are not penalized for choosing not to offer coverage to any employee. Beginning in 2014, large employers–generally those with at least 50 full-time employees and full-time equivalents–may be required to pay a penalty if they do not offer affordable health insurance that provides a minimum level of coverage to their full-time employees.

2. What notices must be provided to employees under Health Care Reform?
Employers and group health plans are required to provide a number of informational notices to employees and other individuals eligible for benefits under the plan. Some of the key notices include:

  • Disclosure of Grandfathered Status (grandfathered plans only)
  • Notice of Patient Protections (non-grandfathered plans only)
  • Summary of Benefits and Coverage or SBC (grandfathered and non-grandfathered plans)

In addition, future guidance is expected to establish the new compliance date for all employers to provide employees with notice regarding Health Insurance Exchanges (currently delayed). Additional notice requirements may apply depending on an employer’s plan or when specific events occur.

3. How does a plan maintain ‘grandfathered status’ and why is it significant?
A ‘grandfathered plan’ is a group health plan in existence as of March 23, 2010 (the date Health Care Reform was signed into law) that has not made certain significant changes that either reduce benefits or increase out-of-pocket costs for individuals covered under the plan. Grandfathered group health plans are not required to comply with certain requirements under Health Care Reform, such as coverage of preventive services without cost-sharing.

In addition to not making any prohibited changes that reduce benefits or increase costs, in order to maintain status as a ‘grandfathered plan,’ a group health plan must make specific disclosures in its plan materials, as well as maintain certain records necessary to verify, explain, or clarify its status as a grandfathered health plan.


For more information, contact G.R. Reid Healthcare & Benefit Services.



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Healthcare & Benefit News :: Health Care Reform: New Guidance on “Pay or Play,” Annual Limit Rules, and More

A new wave of final rules and FAQs provides guidance for employers and group health plans on a number of upcoming requirements under Health Care Reform.

The following are key highlights:

Determining Minimum Value for Employer “Pay or Play”
Beginning in 2014, certain large employers (generally those with at least 50 full-time employees and full-time equivalents) may be required to pay a penalty if they do not offer full-time employees affordable health coverage that provides “minimum value.”

A final rule outlines acceptable methods for plans to determine minimum value, including a Minimum Value Calculator (now available for informal external testing) for use by employer-sponsored group health plans that are not in the individual or small group market.As an alternative to using the calculator, an employer-sponsored plan will be able to use a number of safe harbor checklists (not yet available) to determine whether the plan provides minimum value without the need to perform any calculations.

Guidance on Integrated vs. Stand-Alone HRAs for Compliance with Annual Limit Rules

A new set of FAQs provides guidance regarding the distinction between integrated and stand-alone HRAs for purposes of compliance with the upcoming prohibition on annual dollar limits with respect to coverage of “essential health benefits.” In general, HRAs that are “integrated” with other coverage as part of a group health plan that itself has no annual limits will be deemed to comply with the requirement to eliminate annual limits, while “stand-alone” HRAs will violate the rules.

The FAQs clarify that:

  • An HRA is not considered integrated with primary health coverage offered by the employer unless the HRA is available only to employees who are covered by primary group health plan coverage provided by the employer and meeting the annual limit requirements.
  • An employer-sponsored HRA cannot be integrated with individual market coverage or with an employer plan that provides coverage through individual policies.
  • An employer-sponsored HRA may be treated as integrated with other coverage only if the employee receiving the HRA is actually enrolled in that coverage.
  • Future guidance is expected to provide that unused amounts credited before January 1, 2014, consisting of amounts credited before January 1, 2013 and amounts credited in 2013 under the terms of an HRA as in effect on January 1, 2013, generally may be used after December 31, 2013 to reimburse medical expenses in accordance with those terms without causing the HRA to fail to comply with the annual limit rules.

Standards for Essential Health Benefits and Limits on Cost-Sharing

Also beginning in 2014, non-grandfathered health plans offered in the individual and small group markets will be required to cover “essential health benefits” and meet certain actuarial values (the percentage of total average costs for covered benefits a plan will cover), detailed in the final rule.

In addition, non-grandfathered group health plans will need to ensure that cost-sharing under the plan for such coverage does not exceed certain limitations, including limits on both out-of-pocket maximums and deductibles. Under the final rule and FAQs:

  • The annual limitation on out-of-pocket expenses applies generally to all non-grandfathered group health plans, and is tied to the enrollee out-of-pocket limit for high deductible health plans in connection with health savings accounts (HSAs); and
  • Non-grandfathered plans in the small group market must comply with the annual limitation on deductibles, which may not exceed $2,000 (for self-only coverage) or $4,000 (for non-self-only coverage) for plan years beginning in calendar year 2014. Contributions to flexible spending arrangements (FSAs) are not taken into account when determining the deductible maximum.

Guidance on Coverage of Preventive Services
A new set of FAQs addresses a number of issues related to the requirement that non-grandfathered group plans cover recommended preventive services without cost-sharing, including clarification regarding coverage of over-the-counter recommended items and services and preventive services for women.

Guaranteed Availability of Coverage and Limits on Premium Variations

A final rule has been issued regarding the requirements related to guaranteed availability of coverage and fair premiums for issuers offering non-grandfathered health insurance coverage in the individual or small group market.

  • For plan years beginning on or after January 1, 2014, issuers are required to accept every individual and employer in the state that applies for coverage, subject to certain exceptions.
  • In addition, issuers will be allowed to vary premiums only based on age (within a 3:1 ratio for adults), tobacco use (within a 1.5:1 ratio for adults and subject to wellness program requirements in the small group market), family size, and geography.

Contact G.R. Reid Healthcare & Benefit Services for more information regarding these updates and to stay on top of changes.

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Healthcare & Benefit Services :: Deadline Postponed for Employers to Provide Notice Regarding Health Insurance Exchanges

The U.S. Department of Labor (DOL) has delayed the original March 1 deadline for employers to comply with the new requirement under Health Care Reform to provide employees a written notice explaining certain information related to Exchanges. The timing for distribution of the notices is now expected to be late summer or fall of 2013.

Notice Delayed Pending Further Guidance
The law originally contemplated that employers would need to begin providing the notice to new employees at the time of hire beginning on March 1, 2013, and to current employees not later than March 1. However, a new set of FAQs makes clear that employers are not required to comply until further guidance is issued.



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H/R News :: Employee Pay & Attendance Issues When Bad Weather Strikes

It’s that time of year again, when snow and slippery conditions may make it difficult for your employees to travel to work. Consider the following guidelines that can help your company be prepared when bad weather strikes.


1. When an employee misses work due to bad weather conditions, whether the employee is entitled to be paid for the absence may depend on the employee’s exempt or non-exempt status.
Under the federal Fair Labor Standards Act (FLSA), employers are not required to pay non-exempt employees for hours they did not work, including when the office is closed due to bad weather.

Exempt employees generally must be paid their full salary amount if they perform any work during a workweek. However, an employer that remains open for business during a period of bad weather may generally make deductions, for full-day absences only, from the salary of an exempt employee who chooses not to report to work because of the weather. Deductions from salary for less than a full-day’s absence are not permitted.

If the business is closed for the day as a result of inclement weather, the employer may not deduct the day’s pay from the salary of an exempt employee. The general rule is that an employer who closes operations due to a weather-related emergency or other disaster for less than a full workweek must pay an exempt employee the full salary for that week, if the employee performs any work during the week. This is because deductions may not be made for time when work is not available.

2. Some states require employers to pay employees for showing up even if no work is available or there is an interruption of work and the employee is sent home.
Although payment for time not worked may not be required for non-exempt employees under federal law, some states do require that employees be paid for a minimum number of hours for reporting to work, even if there is no work that can be performed (such as when the office is closed) or the employee is sent home early, for instance, due to an impending storm.

Often called “reporting time pay,” these laws may apply to specific industries (e.g., manufacturing) or certain employees only, so it is important to check with your state labor department for requirements that may apply to your company before implementing any policy.

3. Plan ahead so your employees know what is expected of them and to help minimize disruption to your business.
Make it a priority to notify all of your employees, both exempt and non-exempt, of your company’s policy regarding employee attendance and pay during periods of inclement weather. Your policy should include information on how your employees can find out whether the office is open or closed, such as by email, radio broadcast, calling in to hear a recorded message, or other methods that all employees can access. Be sure to apply your policy consistently and fairly to all employees.

It’s also prudent to remind employees to use their best judgment and not to put their safety at risk when it comes to traveling to work during or after a storm. If possible, see if you can arrange for employees to work remotely from home on days when the weather makes travel dangerous.

Learn more about G.R. Reid Human Resource Management Services.



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2013 Health Care Reform Checklist

Pills & billsThe New Year brings new requirements under Health Care Reform. The following checklist highlights key changes that may affect employers and insured group health plans this year.

Please Note:
This list is for general reference purposes only and is not all-inclusive. The information is subject to change based on new requirements or amendments to the law. If you have questions regarding your responsibilities, please contact a knowledgeable employment law attorney, benefits advisor, or your carrier.

1. Evaluate Grandfathered or Non-Grandfathered Status of Plan
A grandfathered plan is one that was in effect on March 23, 2010.

If a plan loses its grandfathered status, it may no longer be exempt from certain requirements under Health Care Reform.

  • Determine whether any changes to the plan that reduce benefits or increase costs to employees and dependents enrolled in coverage result in a loss of grandfathered status.
  • To maintain grandfathered status, provide a statement indicating the plan believes it is a grandfathered health plan, along with contact information for questions and complaints, whenever a summary of benefits under the plan is provided to participants and beneficiaries.

2. Review Plan Documents for Required Changes to Plan Benefits
Certain requirements apply on a plan year basis, meaning the changes take effect when a group health plan begins a new plan year. As a result, compliance deadlines may vary.

  •  Annual limits on “essential health benefits” are being phased out according to the limits set by law (no lower than $2 million for plan years starting between September 23, 2012 and January 1, 2014).
    ◦ Note: Stand-alone HRAs in effect prior to September 23, 2010, which are automatically exempt from the rules concerning annual dollar limits until January 2014, must distribute an annual notice to participants and subscribers stating that the plan has restrictive coverage and includes low annual limits.
  • For plan years beginning on or after January 1, 2013, salary reduction contributions to health FSAs are limited to $2,500 annually, indexed for inflation for subsequent plan years. Written cafeteria plans must be amended by December 31, 2014 to reflect this change.
  • Except for grandfathered plans, coverage of additional women’s preventive services such as well-woman visits, breastfeeding support, domestic violence screening, and contraception is provided without cost-sharing requirements, starting with plan years beginning on or after August 1, 2012.

3. Provide Required Notices to Employees and Dependents
Please contact your carrier or employment law attorney if you have questions about these notices.

  • Summary of Benefits and Coverage (SBC). Starting with plan years and open enrollment periods beginning on or after September 23, 2012, provide participants and beneficiaries a summary of benefits and coverage at specified times during the enrollment process and upon request.
    ◦ Note: Insured group health plans may satisfy this requirement if the issuer provides a timely and complete SBC to the participant or beneficiary.
  • Notice of Plan Changes. Additionally, if any material modification is made in any of the terms of the plan or coverage that would affect the content of the SBC, that is not reflected in the most recently provided SBC, and that occurs other than in connection with coverage renewal or reissuance, the plan or issuer must provide notice to enrollees not later than 60 days prior to the effective date of the change.
  • Availability of Health Insurance Exchanges. Beginning March 1, 2013, provide each new employee at the time of hiring (and each current employee no later than March 1) a written notice containing certain information about a Health Insurance Exchange.
    ◦ Note: The DOL is expected to issue a model notice that employers may use to satisfy this requirement along with regulations, which may delay the March 1 compliance deadline.

4. Report Employer-Provided Health Plan Coverage on Forms W-2This requirement does not apply to employers that were required to file fewer than 250 Forms W-2 for the preceding calendar year, unless and until the IRS publishes further guidance giving at least 6 months’ advance notice of any changes.

  • Beginning with calendar year 2012 Forms W-2 (required to be furnished to employees in January 2013), employers that provide a group health plan to their employees are generally required to report the cost of the coverage provided to each employee annually.

5. Other Action Items for 2013
The following additional items may be of significance for certain employers and group health plans.

  • Additional Medicare Tax for High Earners. Employers are required to withhold Additional Medicare Tax  (at a rate of 0.9%) on wages or compensation paid to an employee in excess of $200,000 in a calendar year, for taxable years beginning after December 31, 2012.
  • Medical Loss Ratio (MLR) Rebates. Employers who receive rebates, as a result of insurance companies not meeting specific standards related to how premium dollars are spent, may be responsible for distributing the rebates to eligible plan enrollees. Rebates are due to employer-policyholders by August 1 each year.
  • Simple Cafeteria Plans. If eligible, consider whether your company could benefit from establishing a simple cafeteria plan, which may be treated as meeting certain IRS nondiscrimination requirements.
  • Small Business Health Care Tax Credit. Determine if your company qualifies for the small business health care tax credit. For tax years 2010-2013, the maximum credit is 35% for small business employers.

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