“Servant HR is like Peanut Butter to my Jelly. They are masters of their domain and they love Jesus.”
January 30th, 2013 by Jeff Leffew
Even if leaders are born and not made, none is born ready to be their most successful. Jeff Leffew, founder and president of Servant HR, has worked with lots of business leaders through the years. Here are three characteristics he has noticed the most successful ones possess as they are faced with HR challenges and tasks.
November 20th, 2012 by Jeff Leffew
Through 2018, business owners will have new requirements to fulfill as part of the Obama administration’s healthcare reform or Affordable Care Act (ACA). The law spans 2,409 pages. In my experience with business owners, they typically aren’t interested in reading thousands of pages of legal details and spending an inordinate amount of time to learn the ins and outs of a reform. But it can be difficult for growing businesses to stay compliant because of the overwhelming bureaucracy, and triggers spurred by increasing employee numbers.
To keep things relatively simple, for 2013, here are three major HR-related requirements business owners need to fulfill to avoid getting into hot water.
1. Beginning March 1, 2013, employers must provide employees with written notice about their state’s health insurance exchanges.
If you follow the news at all, you have heard about health insurance exchanges. Just last week, the federal government extended individual state’s deadlines to make a decision about who would be setting up their exchanges: the individual state or the feds.
The tricky part about the ACA’s deadline, as you may have guessed, is that these exchanges likely won’t be in place by March 2013.
The exchange is a virtual marketplace that allows individuals or small businesses to purchase health insurance. It’s mandated that each state have its own exchange. If a state sets it up on its own, it is responsible for vetting out prospective private carriers to become part of the exchange. This calls for a review of each carrier to make sure they meet and maintain the required standards. Individuals can then go on the online site and get quotes for insurance.
The debate around exchanges is especially because the ACA says states have to carry out the health insurance exchange projects out of their own pockets. Many states have said they weren’t going to do it. Indiana, for one, is struggling with the choice.
2. On 2012 W2s filed in 2013, employers must report the value of employer-sponsored healthcare coverage for each employee.
For example, say I’m a dependent. My company pays $X and I pay $Y into my employer-sponsored benefits plan. The total value ($X+$Y) must now be included on a W2 starting next year.
No clear reason as to why we have to report this has been given. But a few things are sure. With this new requirement, insurance premiums will be more traceable, which relates to the tax value. The government currently knows our pre-tax contributions, but it doesn’t know the amount an employer is paying.
This requirement comes into play more clearly in 2014 when the so-called “play or pay” penalty takes effect. Essentially, if an employer of 50 or more employees doesn’t provide minimum health coverage and also a minimum employer contribution, the employer will pay a penalty. The W2 number in theory enables government regulators to make sure people are staying legal.
Employers of small businesses don’t need to be concerned with this rule — for now. Employers filing fewer than 250 W2s the prior year are exempt from further notice.
3. Flexible Savings Account limits to no more than $2,500 is effective on Jan. 1, 2013.
An FSA is an IRS-created program that allows employees enrolled in a qualifying high-deductible health plan (HDHP) to save for and pay for health-related things such as unreimbursed medical expenses. With an FSA, employees set money aside for impending medical expenses that may incur through regular contributions from their paychecks. When they spend money from their FSA, it is tax free. For example, an employee can choose to save $1,500 at the beginning of the year for their FSA. When that employee goes to the doctor’s office or pharmacy and uses the FSA card, they don’t’ pay taxes on the expense.
Currently, there is no limit on the amount an employer may contribute to an FSA, and generally the employee either uses the money or loses it.
The big advantage of FSAs for employers is they provide a tax shelter. With the cap on the amount that can be contributed, this tax shelter is diminished. In general, a disadvantage of FSAs for employers is that if an employee used the maximum amount of his FSA amount within the first few months of the calendar year and then quit his job, the employer is the big loser. On the flip side, if the employee elects $1,500 and just uses $500 for an entire year, the employer wins by enjoying the tax shelter FSAs provide.
Broader repercussions for employers
Because of healthcare reform and its Medical Loss Ratio provision, there’s a push by insurance carriers to lessen or eliminate commissions for their brokers. With the MLR, health plans have to provide rebates to employees if employers’ percentage of premiums spent on reimbursement does not meet the minimum standards for a given plan year. If an employer gets caught spending less than the standard, they have to reimburse by actually writing checks to the employees.
As a result, carriers are looking for ways to cut costs. In the near future, commissions for brokers are going to look a lot different and, in some cases, are going away. The danger for employers is if you don’t have someone consulting or advising you and your employees, you are the one who is at risk. And with tougher, different rules, you need someone to hold your hand and guide you through the implementation of the healthcare reform.
Unique thing about Servant HR is we automatically have all the data we need to take the steps required to satisfy the ACA requirements. A traditional broker, for example, doesn’t have access to payroll. He can’t do the pay-or-play analysis. We have much more access and abilities.
In the future, we will also see a shift to moving full-timers to part-time work. There will be a huge part-time market develop as employers begin to feel the pains of ACA rules and discover ways to avoid them. Employers have to figure out how to migrate through this landmine.
Watch this video to see Servant HR’s Leah Elms cover “Three Things Every Employee Should Know About Healthcare Reform.”
January 27th, 2012 by Jeff Leffew
By Jeff C. Leffew, Founder and President
It’s that fascinating time of the year when we start thinking about what we want to achieve in the coming year. Many of us go through the well-worn process of stating the weight we want to lose and how many more hours per week we want to spend with our families. On the business front, we talk about revenue goals and tightening up our belts on overhead expenses. More aggressive types may expound upon their plans for expansion. There is no end to what we may say is our focus for the coming year, perhaps even incorporating these into vision statements or business forecasts.
Semantics can get in the way of progress. Is it important to decide whether the door is scarlet, paprika or plain old red when all you need to do is open it? But when it comes to goals and resolutions, a better understanding of their meanings can be important
A goal is “the purpose toward which an endeavor is directed; an objective.” A resolution is something that you “make a firm decision about.” In other words, to set a goal is to purpose yourself to move in a certain direction, whereas to make a resolution is to decide your desired endeavor will come to pass because you will it to be. A resolution, by definition, is much more definitive than a goal. I think it is important to understand the difference between these terms before rattling off a list that will supposedly guide how you improve yourself and your business each year. Ask yourself whether you will be effective by setting a goal or by making a firm decision. The choice is yours.
My primary resource for developing my goals each year is the Bible, specifically Joshua 3:5 and Luke 14:28. I use these two verses to motivate and give me purpose behind why I set goals. They remind me that I need to be prepared to be used by God and to give my all to Him. Thinking about a new year, I also hearken back to Brian Tracy’s Eat That Frog!: 21 Great Ways to Stop Procrastinating and Get More Done in Less Time. This book always reminds me to get the “hard things” done sooner rather than later.
Regardless of whether you are a goals person or a resolution person, the more important issue is that you take time to evaluate, plan and prioritize what you hope to achieve in the coming year. Just wishing it will happen generally gets you to the same place you are now.
August 20th, 2011 by Jeff Leffew
By Jeff C. Leffew, Founder and President
Remember the posters you had in your room when you were growing up? Not to be outdone by Star Wars characters, famous quarterbacks and rock bands, your federal and state governments are continually working hard to make sure you have plenty of posters hanging on your walls. Required notices about minimum wage, anti-discrimination laws and various other regulations frequently change, requiring new or modified posters. Do you have the right posters?
- In 2010, there was a major change related to the federal GINA law that required new language — and for many, a new poster. The Genetic Information Nondiscrimination Act of 2008 prohibits genetic information discrimination in employment.
- Effective January 31, 2012, new posters relating to unions and the National Labor Relations Act are required. If your company has a website, you will also be required to provide a web link to the poster on your site.
- There are also often new state-specific requirements that you may need to address. Servant HR stays on top of these state-by-state issues. If you have any questions about your specific requirements, please contact us.
We aren’t promising they’ll be as popular as your Star Wars posters, but rest assured that Servant HR will be working with its partner employers to ensure compliance with the new posting rules.
July 25th, 2011 by Jeff Leffew
By Jeff C. Leffew, Founder and President
Renewal can mean a fresh start, self improvement, even the coming of spring. But if you’re a business owner or involved in human resources, renewal can also mean double-digit rate increases, tough questions and unwelcome legal surprises. Before you get in too deep in the healthcare plan renewal process this quarter, here are answers to some questions to make it a more positive experience — or at least a more informed one.
Will my rates increase from last year?
Unless you have three wishes from a magic genie, the answer is yes. So many factors go into determining how much your healthcare plan will be. But the bottom line is there is always an increase if you stick with your plan, supplying the same benefits to your employees year after year. It is our job at Servant HR to stay on top of benefits-related trends, canvassing carrier communications, CPA firm data, law firm releases and government information. All roads point to higher rates.
How will healthcare reform affect my renewal?
The effects of the Affordable Care Act are ongoing and will continue to be felt by employees and employers as changes roll out over the next few years. Not until a group goes through a renewal will it see the impact of those changes. There are many things that health care reform has done and will do. Four key elements for business owners include the following:
1. Dependent children can now be on their parents’ plans up to age 26. This can be good for a young adult but costly for a business owner. Adding more people onto a plan means actuaries have to try to figure out potential added risk.
2. Insurance companies no longer can recognize any preexisting conditions for anyone up to age 19. That means they can’t deny or modify coverage. Eventually, this rule will be applied to everyone. It can be an emotionally charged issue from any point of view. Under this new rule, the underwriter has to take on all risk on anyone up to age 19. For example, if a 16-year-old girl had back surgery, any sort of ongoing repercussions such as therapies or additional surgeries aren’t directly factored in when an actuary is estimating the financial impact of insuring the girl. For the girl and her family, that can be a big relief. On the other hand, one result is that the actuary will factor in a cushion to help cover any potential risk not directly divulged by an individual. As you can see, that can lead to higher rates for all.
3. Preventative care is covered at no cost. Health screenings, vaccines and many other services are now part of a built-in mandatory cost. For folks who are taking responsibility for their own health, that’s a good thing. It’s also a win for employers who want their employees to be healthy — and working. One downside to this required cost is that many employees won’t take advantage of the benefits. They will miss annual checkups, skip tobacco cessation interventions and ignore medical recommendations. These people will affect healthcare costs because many of them will need care down the road for problems that could have been prevented.
4. There is no out-of-pocket maximum. Typically in the past, there was a limit on how much an individual could be required to pay out of pocket, usually a $2 million or $5 million lifetime cap. That cap is now gone. Lifetime dollar limits are now removed on essential health benefits so underwriters are estimating real risk with no limits.
In a nutshell, these new requirements and mandated coverage areas are causing premiums to increase because new coverage is required. During your renewal period, this will become more evident when you see your rate increases.
How do I stack up against other employers?
Across the United States and right here in Indiana, employer contributions to group health programs are decreasing. The poor state of the economy is the main culprit. Employers are required to pay at least 50 percent of the a plan’s employee-only portion or premium, but only the unhealthiest employees will sign up for a program in which 50 percent is paid.
Employers can decide how much beyond the 50 percent they want to contribute, but they are getting so squeezed that contributions are falling. Employees are also dealing with higher deductibles as well. All of this leads to decreased participation.
What does decreasing participation mean for me?
When employees don’t take advantage of health insurance, they are willing to risk it. They assume they will just figure out what they need to do when the time comes. It isn’t uncommon for young, healthy, single males to fall into this category. They think they are invincible. Others who don’t enroll in some sort of benefits program may consider it too expensive. As premiums go up, healthy people are willing to risk it. When a smaller group of people are paying in, premiums go up. It’s a bad cycle.
This sounds like a big headache. What is Servant HR doing to make sure I am making smart decisions during renewal season?
The previous Q-&-A covers the main factors employers will be hearing about increased rates from their insurance companies this fall. Here at Servant HR, we are in the throes of renewal season, and if you’re a client of ours, rest assured that we are doing our due diligence to be sure they are in the best possible position during renewal time.
For each of our clients, we are evaluating their current plans and recommending any needed changes. We are analyzing where and how our clients are spending their dollars to see if they are using them in an equitable manner based on the company’s goals and values. For example, if a client wants to be considered a cream-of-the-crop employer, it has to have a high-quality health plan and pay in a lot to help its employees.
We are looking at plan designs to see if they are consistent with market trends. In the current market, the traditional $500 deductible is no longer standard. Now we’re seeing deductibles of at least $1,000. So a company moving from $500 to $750 would still make them a premium employer. If you are more concerned with saving money, we may recommend that you put less emphasis on the plan and more emphasis on saving money for employees’ health down the road, a concept commonly referred to as “consumerism” for health care dollars.
Other possible recommendations include going with a higher deductible so premiums are lower. Or we might take you to market, essentially taking your information to other carriers to check out better rates. Servant HR considers every angle that could affect a business before recommending a company renew of change plans. Healthcare benefits are not one-sided coin. Clients are confused and frustrated when it comes to health care plans. Rest assured SHR is positioning them in the best possible position in light of what we do know about health care reform.
For more information on our process, please contact us. For further research, visit HealthCare.gov, Anthem’s health care reform site at MakingHealthcarereformwork.com or its employee-focused site at healthychat.com.
May 11th, 2011 by Jeff Leffew
By Jeff C. Leffew, Founder and President
In the business world, what is focus? Is it important? Does better focus result in more success? Maybe you have asked yourself these same questions and have come to the same conclusions as I, or maybe it means something entirely different to you. Regardless of what “focus” you need to gain in your life, realize that the only way you will find it, is if you’re intentional about finding it.
As a perfectionist personality type, aka “anal-retentive,” sometimes I get caught up in trying to control every aspect of my business. Of course, this is not possible in today’s business climate. (Certainly not if you want to have more than just a self-made job!) Therefore, I realized that I need to gain more focus. I decided that I need to get rid of, or outsource my non-core, yet essential, operational functions.
This journey to excellence and better focus began with getting an outsourced or part-time controller. Thanks to Tim Garrison and his team at The Controllership Group, we have a second -to-none financial structure that we would have never gained on our own — not without an immense amount of stress and distraction from our core focus. Our next move was to outsource our marketing to Raquel Richardson and her team at Silver Square. These folks live and breathe marketing; not me, we are HR people! Let the experts shine, pay them what their worth and then capitalize on your newfound focus to capture more market share in your industry.
What are you focusing on? Certainly, the result of more focus can be more time, time to work on that “wish list” set of projects that seems to always elude you, but could have the potential to revolutionize your company for the future. More focus could mean you have the opportunity to be more intentional about what you do in your work — you know, having more days you control than they control you! Focus may mean a clearer mission and vision for your staff to embrace. Or, it can mean a clearer picture for your client prospects as they try to better understand what makes you distinctive in the marketplace. And for many, better focus might mean more time at home enjoying the truly important things in life, things we will be remembered for long after our businesses have disappeared.
At Servant HR, our tagline is “Creating Freedom to Focus.” We create this freedom by becoming a full-service outsourced human resource department for small to mid-sized companies. What we do is not rocket science, but it is essential and can yank you off the success ladder if not done right. The freedom we hope to create beyond just helping eliminate HR administration headaches is great. We free our clients from the off-the-charts stress that comes with limitless business risk. We gladly share some of that risk.
The freedom to focus concept understands that different people will value this in different ways. Some of our clients came to us because they wanted a single-source organization to manage all HR administration — eliminating their need to deal with the hassle of multiple vendors. Others were dealing with a specific need such as payroll or employee document management and now they enjoy a full-service solution. Still others bought HR administration and stay because of our HR coaching and counseling. Imagine if you had skilled HR people that understand entrepreneurship and the struggles of business, coaching you on how best to coach your staff to success, without paying extra! Many have told us that this is freedom to focus. Be sure you’re focusing on your top priorities. It’s the only way to grow.
March 23rd, 2011 by Jeff Leffew
By Jeff C. Leffew, Founder and President
A new client recently told our CEO, Mike Yoder, in a sales meeting, “I just let go my key manager and now I need a ‘buffer’ between my staff and me. Can Servant HR do that?” This owner has a unique personality that requires someone in the middle to be the buffer or “translator” between him and his staff. He did not want to bring in another manager until he could get a better grip on his staffing needs. In the meantime, he knew he needed a better HR solution than what he currently had, which was managing multiple vendors in a non-core, yet critical, area of his business.
This client took a chance that we could be both buffer and advisor. As a result, we became a key liaison between him and his staff. In addition, since this business owner didn’t have the time or expertise to handle employment issues such as payroll, benefits administration, and human resources, we were able to alleviate this headache as well. He can now rest assured that someone else is handling these tasks.
If employers are preparing to let key employees go, they need a strategy. This plan should include, at the least, guidance for letting the employee go and steps to ensure his or responsibilities will be handled until more permanent measures can be put into place. They should also have an internal and external communication plan for relaying the news to staff and clients or customers, and all the necessary documentation for a smooth exit. That’s the tip of the iceberg. If you are preparing to make staff changes and need help, please call us.
March 6th, 2011 by Jeff Leffew
By Jeff C. Leffew, Founder and President
The other day, I was chatting with a friend and business associate who works in the auto-painting business. He told me that he referred us to a client in southern Indiana. When I asked him what piqued the interest of his client, he said that the guy’s time, energy and focus were spread too thinly.
“I’m the point guy for everything!” the business owner told my friend. To paraphrase his frustrations, he said a little something like this: “Yes, in reality, I make money when I run my business, you know, focusing on getting more work in and out of the shop. What I’m not is an HR/benefits/payroll/workers’ compensation/risk management guy! There has to be someone who can handle this junk.”
One man’s junk is another man’s business, I suppose. All that stuff is what we do at Servant HR. We handle those details that come with having employees so business owners can focus on growing their businesses. If you’d like to find out how your HR “junk” can be better handled, call us.