Category: Blog

IRS Issues Final Regulations on Small Business Health Credit

Although many payroll and other employment provisions of the Affordable Care Act (ACA) are only just taking effect — or will go into effect soon — at least one significant element of the law has been kicking around for several years, but not without some difficulty. Under the ACA, a qualified small business can claim a tax credit for providing health insurance to eligible employees. But numerous questions have dogged this credit since its inception in 2010. Now the IRS has issued final regulations on the credit that should make the law clearer. These regulations, which adopt and add regulations proposed in 2013, are effective as of June 30, but employers have the option of still applying the proposed regulations...

IRS Increases ACA’s Affordability Percentages for 2015

On July 24, 2014, the IRS released Revenue Procedure 2014-37 to index the Affordable Care Act’s (ACA) affordability percentages for 2015 under the employer mandate. The IRS also adjusted upward the income level under which employees are exempt from the ACA’s individual mandate. Employer Mandate Adjustment applicable large employer’s health coverage will be considered affordable for plan Years beginning in 2015 under employer mandate if the employee’s required contribution to the plan does not exceed 9.56 percent of the employee’s household income for the year, up from 9.5 percent. This increase also applies to the three safe harbors that the IRS created in the regulations. The reason for the increase is that the employer mandate was originally meant to take effect in 2014 but was subsequently delayed until 2015 or 2016, depending on...

Supreme Court Weighs in on ESOP’s

Employee stock option plans (ESOPs) were conceived to be a “win-win” for businesses, under the right circumstances. The premise is, when employees have an equity stake in the company they work for, their interests will be aligned with owners because they actually become owners themselves. Congress established tax benefits for ESOPS to help business owners overcome possible concerns about the administrative complexity involved in establishing and maintaining an ESOP. Approximately 7,000 companies now sponsor ESOPs. Small employers often use these plans as an exit strategy, and happily sell their company over to the ESOP and, by extension, their employees. About 13.4 million workers are covered by employee stock option plans, whose combined assets total approximately $940 billion, according to the Employee Benefit Research Institute. For roughly one-third of the companies which sponsor...

FMLA Enforcement Initiative Are you Ready?

The Department of Labor is extremely busy in launching on-site FMLA compliance investigations this year. As reports of more 2014 DOL audits surface, employers grow more afraid of failing an investigation for non-compliant FMLA policy and procedures, as well as providing insufficient paperwork including notices, certifications and records. A recent headline in the news pointed out how easily an employer can fail a DOL Investigation. An employee of a Texas-based electrical corporation just won nearly $47,000 in back wages and damages after their complaint triggered the DOL to conduct an on-site investigation where the court, in fact, found the company in violation of FMLA. Employers are not the only ones frightened by increased enforcement from the DOL. Benefit advisers are becoming more attuned to the importance of discussing FMLA compliance with their...

Are employee assistance programs subject to COBRA?

Provided by Larry Grudzien Are employee assistance programs subject to COBRA? An employee assistance program  (“EAP” ) can include any of a variety of employer-sponsored programs that seek to prevent or mitigate personal or family problems that could adversely affect an employee’s productivity.  For most EAPs , a third-party vendor is involved, with certain benefits (usually counseling) provided by the EAP  vendor and other benefits provided through referral to qualified individuals outside the EAP  vendor, as provided in DOL Advisory Opinion 88-04A. In determining if COBRA has to be offered, the critical issue for the EAP is whether it provides medical care. If it does, the EAP will be considered a group health plan. One common practice is to staff an EAP with trained counselors (whether internally or through an outside service provider) who provide...