http://youtu.be/O3ICltpSf2s
Is unemployment tax all doom, gloom and writing checks to the government? Staff Accountant Jayne Blazier offers up three positive aspects of unemployment tax and ways you may be able to decrease the amount you pay.
Visit the Servant HR video page to learn more ways to strengthen your HR. If you can’t see the video above, visit http://youtu.be/O3ICltpSf2s.
I am often asked what size company needs a PEO. Is it the right fit for startups as well as big corporations? When does it not make sense? Due to broad issues including health care reform and the nature of the modern workforce, my answer to that question is changing. Here is a by-the-numbers approach to sizing up a PEO for your business. But first, a little about healthcare reform.
In three words, the Affordable Care Act makes answering the question of what size company needs a PEO much more difficult. With healthcare legislation, the importance of a PEO grows as there is an additional layer of compliance related to health benefits. Compared to staff size, the more important question business owners need to ask themselves is: “Who is going to be my expert on healthcare reform?” With many changes on the horizon, businesses need to consider if it makes sense to use a PEO to handle all of those things an internal person doesn’t need to be learning and focusing on.
A PEO model makes a lot of sense for many startup companies with as few as 3-5 people on staff. These businesses are focused on providing a service or product that will help them get off the ground and grow. They aren’t resting on laurels or riding any easygoing waves of revenue growth. A PEO is a good fit because it allows entrepreneurs and small business owners to keep their eyes on the ball doing what they love instead of worrying about benefits, federal regulations and payroll.
Owners of emerging companies and startups typically can see the value of outsourcing their HR. PEOs are good at working with rapidly growing businesses that need to focus on raising money and reinvesting so they can grow. PEOs understand that. As the business grows, a PEO’s service to that business tends to grow as well.
This is a PEO’s sweet spot. When a business has 20-75 employees, a full-service PEO can do everything it is made to do for a client. The PEO can be fully engaged in every aspect of the client’s HR.
This is the kind of business that needs every part of a PEO: HR management, benefits, payroll, risk management and retirement services. They are big enough to feel the growing pains of having employees, yet they aren’t so big that a full-service PEO that carries many of the risks associated with having a staff isn’t the best fit. This category covers most of Servant HR’s current clients.
When a company has 75-200 employees, discussions usually start within its finance department to determine if it makes sense to go out and hire a full-time HR expert. This analysis is legitimate — but requires a complete analysis of the costs and benefits of such a decision.
A company must avoid the misconception that anyone with HR experience can do the job well. If you are going to keep your HR services in house, be sure your hire is a highly qualified expert. When you have an HR generalist or a less experienced person, you are losing out on a PEO’s experience solving HR challenges on a daily basis in many different industries. In many cases, this kind of hire isn’t economically feasible, which brings companies back to the PEO model.
As a company continues to grow, it may be able to pay a professional HR person to handle at least 20 hours of task-oriented HR work as well as more strategic recruitment and training. That makes sense. The question to answer is what happens as the company continues on the upswing and those necessary tasks become too much for one person — at least this highly qualified person you hired to handle all of your HR needs. Does the business owner want this person to focus on payroll and worker’s comp, which have to be done, or more strategic areas such as development and coaching? What is the priority? When this tipping point begins to happen, these are the sorts of things business owners need to consider and a PEO still remains of great value.
Once a company gets past 200 employees, it almost always has internal HR people. Different tax advantages for companies of this size also come in to play when considering whether a PEO is the right choice. Often, it makes sense to move from a PEO model into an ASO (Administrative Services Organization) model. What that means is the HR service provider meets the administrative and HR needs of the client while the client retains all employment-related risks and liabilities.
If you are asking yourself whether a PEO is a good fit for you, contact me, Scott Ingram, at 317-585-1688 to find out more.
http://youtu.be/L6SuxGfWGso
Human resources isn’t what it used to be. If your HR relies on the traditional model, you’re probably missing opportunities for growth. Watch Mike Yoder, Chief Executive Officer at Servant HR, discuss 6 principles that a modern workforce should heed in this video.
Principles include:
Get all 6 principles in the video. Watch more ways to strengthen your HR here. If you can’t see the video above, visit http://bit.ly/WtMkZE.
http://youtu.be/t9DFedWQQ0Q
If you’re a startup business, you have probably already experienced the stress of all of the details you have to manage. You didn’t go into business to become an expert in accounting, insurance or HR. When it comes to HR, there are three critical steps you need to focus on as a startup.
Watch Jeff Leffew, founder and president of Servant HR, deliver his three steps in this video. If you can’t see the video above, visit http://youtu.be/t9DFedWQQ0Q.
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.
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.
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.
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.
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.
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.
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.