Ascentis Blog

Information to help HR and payroll managers, recruiters, and compliance officers become more effective.

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Bay Area First in U.S. to Mandate Commuter Benefits

CommuterTransport

The Bay Area of San Francisco, CA is now the first geographic area in the nation to mandate commuter benefits for employers with 50 or more full-time employees.  Implementation of these commuter benefits must be complete no later than September 30, 2014.  The nine counties in the Bay Area impacted are Alameda, Contra Costa, Marin, Napa, San Francisco, Santa Clara, San Mateo, Sonoma, and Solano counties.

 

Assistance is available through Metropolitan Transportation Commission’s (MTC) 511 Regional Rideshare Program to help employers comply with the Commuter Benefits Program. SB 1339 authorizes the Air District and MTC to adopt and implement the Commuter Benefits Program on a pilot basis through the end of 2016.
Four options form the safe harbor under this new mandate, and each employer must offer at least one of these options to their employees in the nine-county area:

 

  • Option 1 – Allow employees to exclude their transit or vanpool costs from taxable income, to the maximum amount, as allowed by federal law (currently $130 per month). Implementing a Section 132 Commuter Benefits Program meets this requirement.
  • Option 2 – Employer-provided transit or van-pool subsidy up to $75 per month.
  • Option 3 - Employer-provided free or low cost bus, shuttle or vanpool service operated by or for the employer.
  • Option 4 - An alternative employer-provided commuter benefit that is as effective in reducing single occupant vehicles as Options 1-3.
We can imagine that this is how employers feel about this new regulation

We can imagine that this is how employers feel about this new regulation

Don’t worry. Ascentis can help.

In addition to setting up the tax-exempt Sec. 132 contributions to be excluded from taxable wages in Payroll, Ascentis can help with other impacts of the new regulations as well.

 

The regulations require that employers notify all affected employees of the commuter benefits they will provide.  Our innovative correspondence wizard  within Ascentis HR and employee self-service are two great options to help employers comply with these regulations.

 

Finally, commuter benefit records documenting the implementation of the program must be provided to Bay Area Air Quality Management District (BAAQMD) and/or the Metropolitan Transportation Commission (MTC) upon demand, so year-to-date reports of the earnings involved and/or employer cost memo deductions will be important to retain and/or generate as needed, to support audits, and Ascentis Payroll can help support this.

The Top Seven Things Every Human Resources Professional Needs to Know About Transitional Reinsurance Fees

Have you heard about the newest provision of the ACA, which began on Jan. 1, 2014?

 

Transitional Reinsurance Fees (TRF’s) are a significant, but somewhat unpublicized funding provision took effect which impacts many employers offering health insurance to their employees. The Transitional Reinsurance Fee (“TRF”) program is, as its name implies, transitional in nature and so far applies only for tax years 2014 through 2016. Self-insured employers must pay careful attention to this new set of rules and be ready to calculate and remit their fees due under the rule later this year.

 

Here are the top seven things you need to know about TRF’s:

 

  1. What it is: The Transitional Insurance Fee (TRF) program was authorized by
    § 1341 of the Affordable Care Act to help stabilize premiums in the individual healthcare market from 2014 through 2016.
  2. Who does it effect: The fee applies to all insured and self-funded “major medical” plans.
  3. Which plans are excluded: Plans excluded are: standalone prescription drug, dental or vision plans; HRA’s and HSA’s (even if integrated into a single HDHP); FSA’s; and employee assistance programs and wellness programs.
  4. Who is counted: Participants in plans are counted (not just employees). This includes spouses and dependents of employees, excluding those enrolled in Medicare.
  5. How is it calculated: There are four methods for calculating the fee: the Actual Count Method, the Snapshot Method, the Snapshot Factor Method, and the Form 5500 Method.
  6. Is it tax deductible: The TRF has been determined to be an ordinary and necessary business expense.  It is therefore tax deductible.
  7. Can employers pass this fee on to plan participants: The fee may be passed along to plan participants, and the safest way to do so is to incorporate the fees directly into your premium rates for 2014.

 

To make this information easier for you to digest, Ascentis is offering you an easy way to learn about TSF’s. Watch our on-demand presentation in this Health Care Reform Master Class Series and download the accompanying bulletin. In addition, you can also download our infographic guide that will help you determine how employers with an HRIS and payroll solution can use technology to comply with these requirements.

 

PPACA: Transitional Reinsurance Fees -  Seven Facts

SCOTUS Strikes Down DOMA – Practical Implications for Health Care Reform and US Employers

This post is a reprint, in its entirety, from Leavitt Group. To view the original post, please click here.

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US Supreme Court Invalidates DOMA and Upholds Constitutionality of Same-Sex Marriage

 

Today (June 26, 2013), the US Supreme Court issued groundbreaking 5-4 decisions in two separate cases involving the rights of same-sex couples. In the Defense of Marriage Act (DOMA) case (Windsor v US) the court held the Defense of Marriage Act unconstitutional on the grounds it violates the Fifth Amendment’s guarantee of equal protection under the law.  In the California case (Hollingsworth v Perry) the court dismissed the case and sent it back to the Ninth Circuit Court of Appeals with instructions to dismiss the appeal.

 

DOMA Case (Windsor v US):

 

What it Means: The Supreme Court’s ruling means that same-sex couples who are legally married under state law will be entitled to equal treatment under federal law.  There is no constitutional basis for denying same-sex couples the right to marry, and they will have the same rights as opposite-sex married couples.  For example, they will be able to file joint federal income tax returns and will be eligible for spousal Social Security benefits on the same basis as opposite-sex couples.  Additionally, what this means for employers and employee benefits is:

 

·  employers will no longer have to impute income on the value of employer-paid benefits for employees’ same-sex spouses

·  employees can use amounts in their Health FSA accounts to pay for health care expenses of their same-sex spouses

·  employers no longer need to bother with Affidavits from employees as to whether their same-sex spouses are also their Tax Code dependents

 

The ruling applies only to same-sex spouses, not to same-sex domestic partners or civil union partners.  One further note:  While the Supreme Court decision requires federal law to recognize same-sex marriages that are valid under state law, the court decision does not require states to allow same-sex marriage.  (That issue was not before the Court.)

 

The Facts:  Edith Windsor, who was legally married to a woman under New York State law, sued the federal government to get the federal estate tax deduction that is available to widowed opposite-sex spouses.  As a result of the court’s ruling, she will be able to claim a $363,000 tax refund that she would not have had to pay had her deceased spouse been a man.

 

How the Justices Voted: The majority opinion is by Justice Kennedy, joined by the four liberal Justices — Ginsburg, Breyer, Sotomayor, and Kagan.

 

California Case (Hollingsworth v Perry):

 

What it Means:   Proponents of Proposition 8 (which banned same-sex marriage) did not have standing, which means the Supreme Court could not reach the merits of the case.  The Supreme Court did not rule on whether state laws that limit the definition of marriage are constitutional, but it appears from the court’s decision in Windsor that if/when that decision does reach the Supreme Court, it will rule that same-sex couples have a constitutional right to marry.

 

The Facts:  Here’s a “plain English” version of the somewhat complicated set of facts in the California case, from SCOTUSblog (http://www.scotusblog.com/ – a blog site on US Supreme Court and its decisions) .  “After the two same-sex couples filed their challenge to Proposition 8 in federal court in California, the California government officials who would normally have defended the law in court, declined to do so. So the proponents of Proposition 8 stepped in to defend the law, and the California Supreme Court (in response to a request by the lower court) ruled that they could do so under state law. But today the Supreme Court held that the proponents do not have the legal right to defend the law in court. As a result, it held, the decision by the U.S. Court of Appeals for the Ninth Circuit, the intermediate appellate court, has no legal force, and it sent the case back to that court with instructions for it to dismiss the case.”

 

How the Justices Voted:  The majority opinion is by Chief Justice Roberts with Scalia, Ginsburg, Breyer, and Kagan.   Kennedy wrote the dissent, joined by Thomas, Alito and Sotomayor.

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Health Care Reform: Are You “Ready to Pay or Play?”

 

Even though most employers won’t face the “pay or play” decision until early next year, if there is any doubt in your mind that you are a “large employer” of 50 employees or more, the record-keeping you need to be doing is right now!

 

Additionally, the absolute “drop-dead” date for starting to track hours to construct a look-back period for variable schedule hourly employees, under most circumstances, is July 1, 2013 – fast approaching!  We need to be doing this for two reasons:  (a.) to calculate FTEs if you have any doubt as to whether you’ll reach large employer status during 2013, and (b.) assuming that you determine that you ARE a large employer (of 50 employees or more), to determine for each variable hour employee whether you’ll be required to offer them health insurance beginning in 2014.

 

Decision Tree Summary: Will You Pay a Penalty in 2014?

 

Ascentis can help!  Ascentis’ May 2013 Health Care Reform Master Class is dedicated to the reporting “building blocks” you need to understand to make the best “pay or play” decision for your organization.  Included within the session will be such topics as:

 

  • Determining large employer status
  • Estimating penalties that might apply to your company
  • Variable hour employees:  what to count, what to exclude, and when to do it
  • How to treat leaves of absence and other breaks in service
  • Special rules for special industries

 

 

Click here to view the on-demand class, or here to download the one-page health care reform bulletin on “hours counting and eligibility.”