Simco Blog

You likely have heard about the upcoming 2024 total solar eclipse. In the United States, Mexico and Canada, the solar eclipse will take place today: Monday, April 8, 2024. You may have questions about when it will occur, where you can see it and how to view it safely. If you are planning to view the solar eclipse, safety should be the number one priority. This article provides information about the 2024 solar eclipse, including how to stay safe and how you can learn more. The details provided are compiled from the National Aeronautics and Space Administration (NASA). What Is a Total Solar Eclipse? A total solar eclipse happens when the moon passes between the sun and Earth, completely blocking the face of the sun. People viewing the eclipse from locations where the moon’s shadow completely covers the sun, known as the path of totality, will experience a total solar eclipse. The sky darkens, similar to a normal dawn or dusk. The 2024 total solar eclipse will only last for two to four minutes, depending on the viewer’s location. However, the full experience will last over an hour from the initial partial eclipse to the conclusion of the event. If weather allows, viewers along the path of totality will see the sun’s corona, or outer atmosphere, which is usually obscured by the face of the sun. Where Can I See the Total Solar Eclipse? In the United States, the path of the solar eclipse will extend from Texas to Maine, crossing through Oklahoma, Arkansas, Missouri, Illinois, Kentucky, Indiana, Ohio, Pennsylvania, New York, Vermont and New Hampshire. Depending on your location , the total eclipse will take place between 12:23 p.m. and 3:02 p.m. CDT and between 1:59 p.m. and 4:40 p.m. EDT. An estimated 31.6 million people live in the path of totality this year, and an additional 150 million people live within 200 miles of the path of totality. Millions more are expected to travel to prime viewing locations over the weekend. Even if you don’t live directly on the path of totality, you may be able to see a partial eclipse. NASA estimates that 99% of people in the country will be able to see a partial or total eclipse from where they live. The solar eclipse will also be viewable online. NASA will be showing a live stream on Monday, April 8, from 1-4 p.m. EDT. The live stream will be available for viewing here . Is This Different Than the Solar Eclipse That Happened in 2017? The total solar eclipse that took place on Aug. 21, 2017, and this year’s total solar eclipse are similar events. However, the path of the 2017 eclipse was narrower than what will take place during the 2024 total solar eclipse. On April 8, 2024, the total solar eclipse will be visible to more people in the United States and last longer. How Often Does a Total Solar Eclipse Happen? Total solar eclipses happen, on average, once every 18 months across the globe. In North America, a total solar eclipse occurs only six times between 2001 and 2050. After the 2024 solar eclipse, there will be one that is viewable from some parts of Alaska in 2033. A total solar eclipse will be viewable by some northwestern states in 2044, followed by one that broadly reaches the U.S. in 2045. How Can I Stay Safe? During the total solar eclipse, looking directly at the sun without specialized eye protection for solar viewing is not safe. According to NASA, the exception is during the brief total phase of a total solar eclipse, when the moon completely blocks the sun. Here are safety tips to consider: Avoid looking at the sun directly. Viewing any part of the sun through a camera lens, binoculars or a telescope without a special-purpose solar filter secured over the front of the optics will instantly cause severe eye injury. Use safety protection. When watching the partial phases of the solar eclipse—which happens before and after totality—directly with your eyes, you must always look through safe solar viewing glasses (“eclipse glasses”) or a safe handheld solar viewer. You can also use an indirect viewing method, such as a pinhole projector. Learn more about safe solar viewers and filters here .  Don’t use viewing devices that are not approved for use during the solar eclipse. Use only approved devices. NASA specifically advises against wearing standard sunglasses during the solar eclipse. Wear sunscreen. If you are outside for hours, you may be subject to ultraviolet rays from the sun. It’s important to properly apply SPF for your skin safety. Prepare for large crowds. If you are viewing the eclipse in or near any city on the path of totality, you should expect more traffic and crowds than normal. Plan ahead for longer transportation times and bring water and anything else you’ll need to stay comfortable. There are ways to experience this event while staying safe. NASA provides more information about safety during the total solar eclipse. Learn More If you plan on viewing this event, create a plan to prepare for and stay safe during the total solar eclipse. This is a once-in-a-lifetime experience for many viewers, but it can create safety risks for participants who don’t take precautions. Check out resources from NASA’s website to learn more.

A new report released by family health benefits platform Ovia Health by Labcorp (Ovia) uncovered U.S. workers’ preferences for family-friendly workplace benefits. American employees are looking for company benefits and policies that support their families, and nearly three-quarters (73%) would leave their current jobs to find them. Respondents also expressed widespread dissatisfaction with available family-friendly benefits. Many (62%) employees don’t consider their employer family-friendly, and almost half (43%) graded their benefits a “C” or lower. Overwhelmingly, working parents seek longer and more pay during parental leave, stronger flexibility policies and child care support. Furthermore, parental leave is generally associated with the birth of a baby, but respondents expressed a need to expand that thinking regarding benefits. In fact, 10%-20% of pregnancies end in miscarriage, validating the employee demand for better maternity management support (to identify risk and intervene) and pregnancy loss support. Along with fertility benefits, there is a growing demand for family-building offerings, including adoption, foster and surrogacy support. One-third (38%) of respondents said family-building benefits are important, but only 5%-14% of employees can access them. Today’s workers want and need unbiased support and alternative family planning support, including adoption and surrogacy. “Pregnancy among people in their 30s and 40s is on the rise, and thankfully, same-sex couples are able to speak more openly about their intentions to build their families. There's more of a need for alternative family-planning support.” - Dr. Jenny Carrillo, president of Ovia Employer Takeaway The Ovia report stated that if an organization values retention, productivity and engagement, it should prioritize fostering a family-friendly culture in 2024 and beyond. To round out a great family benefits package and contribute to holistic wellness, employers can also incorporate nutrition, health screenings and menopause support. An organization can promote a family-friendly culture by making its commitment to its workforce’s health obvious. More workers today are looking for a company culture that inclusively supports their families, assists with various paths to parenthood and helps them navigate life’s journeys. Employers should continue to monitor workers’ desires and adjust their health benefits strategy as needed. Contact Simco today for more information.

Highlights The final rule’s changes are intended to help consumers differentiate between comprehensive health coverage and certain types of coverage that are not subject to the ACA’s consumer protections. These changes: Amend the federal definition of STLDI to reduce the initial contract period to no more than three months; Prohibit a practice known as “stacking” that allows issuers to evade the duration limits for STLDI; and Expand a consumer notice requirement to apply to fixed indemnity excepted benefits coverage sold in the group market. On March 28, 2024, the U.S. Departments of Labor, Health and Human Services, and the Treasury (Departments) released a final rule on certain types of health coverage that are not subject to the Affordable Care Act’s (ACA) consumer protections, namely short-term, limited-duration insurance (STLDI) and fixed indemnity coverage. This rule finalizes some of the changes included in a proposed rule from July 2023. The Departments are making changes to STLDI and fixed indemnity coverage to help consumers distinguish them from comprehensive health coverage and increase consumer awareness of coverage options that include the ACA’s consumer protections. These protections include, for example, the prohibition of discrimination based on health status, the prohibition of preexisting condition exclusions, and the prohibition of lifetime and annual dollar limits on essential health benefits. STLDI STLDI is a type of health insurance coverage designed to fill temporary gaps in coverage when an individual transitions from one plan or coverage to another. STLDI is specifically exempt from the definition of “individual health insurance coverage” and, therefore, is not subject to the ACA’s requirements for comprehensive coverage. Currently, STLDI is defined as coverage with an initial contract period of less than 12 months and a maximum total duration of up to 36 months, which includes renewals and extensions. Effective for coverage periods beginning on or after Sept. 1, 2024 , the final rule limits the length of the initial contract period to no more than three months and the maximum coverage period to no more than four months , taking into account any renewals or extensions. In addition, the final rule: Prohibits a practice known as “stacking,” where the same insurer issues multiple STLDI policies to the same policyholder within a 12-month period; and Amends the consumer notice requirement to further clarify the differences between STLDI and comprehensive coverage and identify options for consumers to obtain comprehensive coverage. The notice must be prominently displayed on the first page of the policy, certificate or contract of insurance—including for renewals and extensions—and included in any marketing, application and enrollment (or reenrollment) materials. The final rule also includes a reminder that coverage sold to individuals through a group trust or association, other than in connection with a group health plan, is not group coverage for purposes of federal law and must meet the federal definition of STLDI or it is subject to the federal consumer protections and requirements for comprehensive individual health insurance coverage. Fixed Indemnity Excepted Benefits Coverage Certain categories of coverage—called “excepted benefits”—are not subject to certain federal consumer protections, including the ACA’s requirement for comprehensive coverage. Fixed indemnity coverage is exempt from these protections because it is designed to provide a source of income replacement rather than full medical coverage. Effective for plan years beginning on or after Jan. 1, 2025 , the final rule requires a consumer notice to be provided when offering fixed indemnity excepted benefits coverage in the group market to ensure that consumers can distinguish between this coverage and comprehensive medical coverage. Health plans and issuers must prominently display the notice in marketing, application and enrollment (and reenrollment) materials. In the July 2023 proposed rule, the Departments proposed new standards regarding the payment standards and noncoordination requirement for fixed indemnity excepted benefits. The Departments are not finalizing these proposed standards at this time , but they intend to address the issues in future rulemaking after additional study and consideration. Tax Treatment of Fixed Indemnity Health Coverage In the July 2023 proposed rule, the Departments proposed to clarify that payments from employer-provided fixed indemnity health insurance plans are not excluded from a taxpayer’s gross income if the amounts are paid without regard to the actual amount of any incurred medical expenses and where the premiums or contributions for the coverage are paid on a pre-tax basis. This rule also proposed to clarify that the taxpayer must meet substantiation requirements for reimbursements for qualified medical expenses from any employer-provided accident and health plan to be excluded from the taxpayer’s gross income. To provide more time to study the issues and concerns raised by commenters, the Departments are not finalizing these proposed changes at this time.

Highlights The CDC has dropped the five-day isolation recommendation for COVID-19-positive individuals. People are now advised to stay home until they have been fever-free for 24 hours and symptoms are improving. Not all COVID-19-specific employee leave laws have expired. Federal and state family and medical leave laws, and state and local sick leave laws, will often apply to employees with COVID-19. Important Date March 1, 2024: The CDC revised its isolation recommendations for people with COVID-19. The Centers for Disease Control and Prevention’s (CDC) new guidance that individuals no longer need to isolate from work for five days following a positive COVID-19 test may raise questions with employers about what leave they are required to provide to employees with the virus. The revised guidance, issued March 1, 2024, advises that people who are sick with COVID-19 or another respiratory virus stay home and away from others. However, isolation is not necessary if an individual with COVID-19 has been fever-free for at least 24 hours without medication and their symptoms are improving. The guidance states that the period people should stay home and away from others could be shorter, the same or longer than the previous guidance for COVID-19 isolation. The new guidance is not applicable to health care settings, which have their own CDC recommendations . From an employee leave perspective, employers should note that while most COVID-19-specific employee leave laws have expired, some—like New York state’s—are still in effect. Moreover, state and local paid sick leave laws that are not specific to COVID-19 apply to illness generally, including for a worker experiencing COVID-19 symptoms like fever. Some of these laws have specific provisions concerning communicable disease. In addition, sick workers may be eligible for leave for their own illness or to care for an ill family member under the federal Family and Medical Leave Act or similar state family and medical leave laws. Action Steps Employers should familiarize themselves with any remaining state or local COVID-19 leave laws that apply to them. They should also ensure compliance with non-COVID-19 federal, state and local leave law mandates, as they may apply to workers with COVID-19.

Employers of all sizes continue to face attraction and retention challenges. Successful efforts to win over workers can require significant time and carry high costs, but failing to attract talent or losing existing employees is particularly costly for small businesses. Unfortunately, small businesses often don’t have the excess resources to invest in attraction and retention efforts in today’s labor market, making it difficult to compete with larger organizations. Along with the costs associated with recruiting, hiring and training, attraction and retention struggles can significantly impact workplace operations and culture, especially in a smaller environment. For these reasons, small businesses cannot afford to ignore their attraction and retention efforts. This article outlines talent challenges faced by small businesses and practical strategies to overcome them. Attraction and Retention Tips Economic pressures continue to make it challenging for small businesses to hold on to their best talent and appeal to other top-tier workers. Regardless of size, employers are straining to keep up with workers’ compensation expectations and demands. Furthermore, rising health care costs are stressing employees and employers alike. Workers are looking for robust health care coverage and affordable and quality care options from their employers, while employers consider ways to move away from cost-shifting to employees. Aside from expense concerns, employers are also experiencing a growing skill gap as many workers join organizations without all the desired skills. However, there are ways that small businesses can overcome these hurdles in the race for talent. Consider the following attraction and retention strategies: Select the right benefits. Health insurance is valued highly by workers. Simply offering health insurance can give small businesses a competitive edge against those that don’t. However, health insurance is just one component to consider as part of a benefits package; small businesses should tailor their benefits offerings to meet the specific demands of current and prospective employees. The best benefits vary for each organization, but they can be used to attract and retain employees. In general, some popular benefits include competitive health insurance, leave benefits, performance benefits, retirement planning and professional development opportunities. Embrace technology and generative artificial intelligence (AI) tools. Small businesses often have limited resources for recruiting, hiring and onboarding practices, so it’s important to be as efficient as possible. Leveraging cost-effective technology, such as applicant tracking systems and digital tools, can help small businesses improve these practices. Generative AI can also help workers spend less time on tedious tasks, such as manual data entry. In turn, employers’ costs may be reduced, and they can focus on finding new employees rather than dealing with time-consuming and tiresome recruiting tasks. Expand recruitment reach. If an employer isn’t receiving the number of quality candidates they desire, it’s worth strategizing to grow their talent pool. Expanding an organization’s online presence is a good start. This may include creating and maintaining multiple online profiles, posting content regularly and informing prospective workers of job opportunities. Focus on developing employees. Attraction and retention challenges aren’t always about bringing enough employees through the doors; today, many small businesses face skills gaps. Recruiting specific skills may close these gaps, but this solution overlooks existing employees. As such, small businesses should consider how they can bridge skills gaps in-house. Some strategies may include providing career pathing plans, creating mentorship programs, offering microlearning workshops to focus on specific skills, or paying for employees to attain certifications or further their education outside the workplace. Offer a flexible work environment. Many of today’s employees worked remotely during the COVID-19 pandemic and would prefer to work from home. Flexible work arrangements, such as work-from-home arrangements and hybrid or flexible schedules (including flex time or days), can help small businesses maintain a competitive edge over employers who don’t offer such flexibility. Create a strong workplace culture. Small businesses should aim to foster a desirable workplace. A healthy company culture can help retain employees and, in turn, create an environment that’s attractive to applicants. Many small businesses are currently focusing on creating a strong workplace culture by training managers to identify employee burnout, designate fair workloads and support workers’ needs. Summary Like many organizations, small businesses face several challenges with attracting and retaining the employees they need. Fortunately, small businesses can leverage these strategies to help them compete in today’s talent market. Contact Simco today for more small business guidance.

Despite employers’ best efforts to offer competitive health care benefits to workers, many employees struggle with medical debt. According to a new survey commissioned by Goodroot, a community of health care companies, more than 4 in 10 employees report having experienced medical debt. “When employees are struggling with a massive, unpayable medical bill, it not only puts tremendous stress on their family but also harms their ability to be productive and contribute to company culture.” - Goodroot CEO Mike Waterbury Medical Debt in the United States In 2023, employers spent an average of $17,393 for family coverage per employee, a 48% increase since 2013. Although employers increasingly invest in their sponsored health care benefits, employees still face medical debt. Consider these key findings from the Goodroot survey: Medical debt remains the leading cause of bankruptcy in the country. Half (52%) of Americans in medical debt owe more than $2,500. Medical debt impacts employees’ ability to cover daily living expenses. At some point, nearly 4 in 10 people have been unable to afford rent, groceries or utilities due to medical bills. People are delaying health care in anticipation of high costs. The majority of Americans (86%) who have experienced medical debt delayed care due to the expected cost. Younger workers are more likely than older ones to experience medical debt, and their debts are larger. Of employees aged 42 or under with medical debt, 59% owe more than $2,500, compared to 45% of workers aged 43 or older. Goodroot stressed that employees often are unaware that financial help is available. Hospitals are federally mandated to offer “community benefits, including free or discounted urgent and medically necessary care to patients unable to pay.” However, each health system has its own financial assistance policy, eligibility criteria and application form, which can be confusing for patients. Employer Takeaway Medical debt is taking a toll on many Americans. Employers can help their workers by integrating hospital financial assistance into health benefits. In addition to health care benefits, some employers are also exploring providing a health-cost navigator who will work directly with employees to help them understand and use their benefits effectively by comparing pricing, reviewing bills and negotiating costs. Employers should continue to monitor health care and benefits trends. Contact us for more resources.

Keeping up with compliance developments can be difficult and time-consuming. This quarterly update highlights recent legal developments to help your organization stay on top of new requirements and minimize its compliance risks. Recent Federal Developments  DOL Issues Independent Contractor Final Rule On Jan. 10, 2024, the U.S. Department of Labor (DOL) issued a final rule, effective March 11, 2024, revising its guidance on how to analyze who is an employee or independent contractor under the Fair Labor Standards Act (FLSA). The DOL’s new rule reinstates the multifactor and totality-of-the-circumstances analysis, which is generally viewed as more employee-friendly. As a result, the new rule will likely lead to more workers being classified as employees. DOL Updates Model Employer CHIP Notice The DOL has released a new model employer Children’s Health Insurance Program (CHIP) notice with information current as of Jan. 31, 2024. An employer is subject to this annual notice requirement if its group health plan covers participants who reside in a state that provides a premium assistance subsidy under a Medicaid plan or a CHIP, regardless of the employer’s location. The DOL’s model notice, which employers may use for this disclosure, is updated periodically to reflect changes in the states that offer premium assistance subsidies. Employers Must Use New Form I-9 As of Nov. 1, 2023, employers are required to use the newest version of the Employment Eligibility Verification form (Form I-9). The new Form I-9 includes updated instructions and many notable changes, including alternative remote verification procedures that employers enrolled in E-Verify can use to comply with their Form I-9 obligations. Employers should ensure they are using the new Form I-9, as continuing to use the outdated Form I-9 can trigger penalties. NLRB Issues New Joint Employer Final Rule On Oct. 27, 2023, the National Labor Relations Board released a final rule establishing new, broader criteria for determining joint-employer status. Joint employment situations can happen when two or more employers share personnel hiring, supervision and management practices. When a joint employment status exists, joint employers are equally responsible for compliance with applicable laws and regulations. The final rule had been set to take effect on Feb. 26, 2024. However, on Feb. 22, 2024, a federal judge in the U.S. District Court for the Eastern District of Texas delayed the implementation of the final rule to Mar. 11, 2024. DOL Increases Civil Penalty Amounts for 2024 On Jan. 11, 2024, the DOL released its 2024 inflation-adjusted civil monetary penalties that may be assessed on employers for violations of a wide range of federal laws, including the FLSA, ERISA, the Family and Medical Leave Act, and the Occupational Health and Safety Act. For example, the maximum penalty for failing to file a Form 5500 for an employee benefit plan increased from $2,586 to $2,670 per day. Employers should periodically review their pay practices, benefit plan administration and safety protocols to ensure compliance with federal requirements. EEOC Increases Enforcement Activity The U.S. Equal Employment Opportunity Commission (EEOC) is a federal agency responsible for enforcing federal employment discrimination laws, such as Title VII of the Civil Rights Act, the Americans with Disabilities Act and the Pregnant Workers Fairness Act. The EEOC experienced several noteworthy changes in 2023, including new leadership, structural changes and an increased budget. It also multiplied its enforcement efforts; at the end of fiscal year 2023, the agency reported a 52% increase in lawsuit filings from the previous year. These efforts are likely to continue in 2024. Recent State Developments New York Increases Salary Threshold for Exempt Employees On Sept. 15, 2023, New York State amended its Labor Code to increase the salary threshold executive, administrative and professional (EAP) employees must meet in order to qualify for the state’s exemptions from pay frequency laws. Beginning March 13, 2024, EAP employees who earn less than $1,300 per week (up from $900 per week) will be subject to the same wage payment protections as other nonexempt employees. For more information on these topics, please contact Simco.

Employee handbooks are important tools for establishing employee expectations, addressing workplace issues and defending against potential lawsuits. Failing to update the employment policies in these handbooks regularly can make employers vulnerable to legal risks and liabilities, resulting in costly fines, penalties and attorneys’ fees. Employment laws are often complicated, and employers must be aware of new regulatory developments that may impact their organizations and workforce. The start of the year provides employers with an excellent opportunity to review and update their policies. To assist with this effort, this article explores five employment policies employers should consider reviewing in 2024. 1. CROWN Act In 2023, many states and localities enacted laws prohibiting discrimination based on an individual’s hair texture and style associated with a protected class, such as race. As of September 2023, 23 states had passed the Creating a Respectful and Open World for Natural Hair (CROWN) Act. Additionally, the U.S. Virgin Islands and more than 40 localities have passed CROWN laws. Many states that have not passed a CROWN Act have filed or pre-filed similar legislation. CROWN laws generally forbid discrimination based on hair textures or protective hairstyles commonly associated with a protected characteristic, such as race, national origin and ethnicity. Looking ahead, the U.S. Equal Employment Opportunity Commission (EEOC) has signaled that it will pursue discrimination claims related to hair texture and style. As many states and localities adopt hair discrimination laws, employers must ensure their workplace dress code policies are current and comply with state and local laws. It is critical to review existing policies to ensure they accommodate different hairstyles by not banning or restricting certain hair textures and styles that are associated with race, national origin and ethnicity. 2. Pregnant Workers Fairness Act The Pregnant Workers Fairness Act (PWFA), signed into law on Dec. 29, 2022, became effective on June 27, 2023. Under this law, employers with at least 15 employees must provide reasonable accommodations to workers with known limitations related to pregnancy, childbirth or related medical conditions unless the accommodation will cause the employer an “undue hardship.” The EEOC has started accepting charges under the PWFA for situations occurring on June 27, 2023, or later. The number of lawsuits claiming employers failed to accommodate pregnant workers will likely increase in 2024. As such, employers should review and familiarize themselves with this law. Savvy employers will look at the EEOC’s final PWFA regulations and consider including a policy in their 2024 employee handbook that explicitly addresses PWFA accommodations. Moreover, forward-thinking employers will increasingly engage in the interactive process with covered employees and applicants who require accommodations under PWFA. 3. Noncompete Agreements In January 2023, the Federal Trade Commission (FTC) proposed a rule banning most noncompete agreements. The FTC is expected to vote on this rule in April 2024. Additionally, about six months after the FTC announced its proposed rule, the National Labor Relations Board stated that most noncompete and nonsolicitation agreements violate the National Labor Relations Act. Many states have also passed noncompete bans or taken action to ensure noncompetes are unenforceable. Due to the shifting legislation surrounding these policies, employers need to ensure their noncompete agreements are tailored to the state and locality where their employees work. Moreover, employers can consider limiting or eliminating noncompete agreements and policies to avoid potential litigation and unnecessary enforcement hurdles. 4. Form I-9 In 2023, the U.S. Department of Homeland Security’s (DHS) Citizenship and Immigration Services published an updated Employment Eligibility Verification form (Form I-9) and instructions. The DHS also issued a final rule that will amend agency regulations to allow for the authorization of alternative document examination procedures, such as remote documentation verification and examination. Employers had to start using the new form as of Nov. 1, 2023, to avoid penalties. Complying with Form I-9 requirements is often challenging and places a significant administrative burden on employers. Failing to complete and retain Forms I-9 for all employees can be extremely costly. Form I-9 violations often can lead to additional fines and penalties from other government agencies. While the required timelines for completing Forms I-9 for employees haven’t changed, the updated form will likely force employers to make some changes to their Form I-9 operations and processes. Therefore, employers should familiarize themselves with the updated form and establish a plan for implementing the required changes. Savvy employers will also train employer representatives and communicate with employees about plan updates. Due to the complexities of complying with Form I-9 requirements, employers are encouraged to seek legal counsel to discuss specific issues and concerns. 5. FLSA Overtime and Minimum Wage Exemptions On Aug. 30, 2023, the U.S. Department of Labor (DOL) announced a proposed rule to amend current requirements that executive, administrative and professional employees must satisfy to be exempt from the Fair Labor Standards Act’s (FLSA) minimum wage and overtime requirements. With this rule, the DOL proposes increasing the minimum salary level from $684 to $1,059 per week (from $35,568 to $55,068 per year) and from $107,432 to $143,988 per year for highly compensated employees. The rule would also enable the DOL to update salary levels automatically every three years without relying on the rulemaking process. The final overtime rule is expected to be released in April 2024. While the proposal doesn’t impose any new requirements on employers until the rule is published, proactive employers will review the FLSA’s proposed rule and evaluate the changes needed to remain compliant with the new law. This may include reviewing employee compensation, auditing exempt employees’ job duties and revising workplace policies to ensure compliance. Summary Outdated policies can often expose organizations to unnecessary legal risks. Regularly reviewing and updating employment policies is an effective and cost-effective way for employers to protect themselves. By understanding the most important rules and regulations to study in 2024, employers can take steps to ensure their employment policies are current and reflect the most recent regulatory developments.  For more workplace resources, contact Simco today.

New York law requires written contracts and timely payment for freelance workers.  On Nov. 22, 2023, the state of New York enacted the Freelance Isn’t Free Act (the Act) to strengthen protections for freelance workers by requiring written contracts, timely payment and non-retaliation. The Act takes effect on May 20, 2024 , and generally mirrors the New York City Freelance Isn’t Free Act (the NYC Act) that took effect in 2017. Freelance Workers Defined A “freelance worker” includes any natural person or single-person organization that is hired or retained as an independent contractor by a nongovernmental hiring party to provide services in exchange for compensation of at least $800 or $800 in the aggregate during the preceding 120 days. The definition of “freelance worker” does not include sales representatives, attorneys, licensed medical professionals, construction contractors or any workers hired as employees. Written Contract Requirements The Act requires the hiring party and freelance worker to enter into a written contract for services, a copy of which must be provided to the freelance worker. The hiring party must also retain a copy of the contract for six years. At a minimum, the contract must include the name and mailing address of each party, an itemization of services to be provided, the value of such services, the rate and method of compensation, the date of payment (or mechanism by which such date will be determined), and the date by which the freelance worker must submit a list of services rendered to ensure timely payment. The New York Department of Labor (NYDOL) will provide model contracts on its website for use by the general public at no cost. Timely Payment The hiring party must pay freelance workers no later than the date specified in the contract or, if a date is not specified, no later than 30 days after the completion of services. Once a freelance worker begins to render services, the hiring party may not require that the freelance worker accept less than the agreed-upon compensation as a condition of timely payment. Non-Retaliation The hiring party may not threaten, intimidate, discipline, harass, deny a work opportunity, discriminate against or take any other action to retaliate against freelance workers for or deter them from exercising their rights under the Act. Penalties and Other Remedies Freelance workers may file a complaint with the NYDOL alleging violations of the Act, and the NYDOL may award civil or criminal penalties. Freelance workers may also file a civil action for damages, including double damages, injunctive relief and attorneys’ fees (for nonpayment or underpayment), statutory damages equal to the contract price (for retaliation), or statutory damages equal to $250 (for failure to enter into a written contract). If there is reasonable cause to believe that a hiring party has a pattern or practice of violations, the New York attorney general may bring a civil action on behalf of the state and seek fines of up to $25,000 and other appropriate relief. Hiring Party Considerations The Act does not apply to contracts entered into before May 20, 2024. However, hiring parties should review their existing contracts and payment practices now and make any necessary changes to ensure compliance by this date. Moreover, the Act does not provide a determination about the legal classification of any freelance worker as an employee or independent contractor, so hiring parties should ensure that such workers are properly classified.

Employee benefits are the cornerstone of a thriving organization. Perks and benefits are pivotal in enhancing job satisfaction, attraction and retention rates, employee well-being and overall workplace morale. While some organizations may feel constrained by budget limitations, there are numerous low- and no-cost benefits that can significantly impact employee happiness and productivity. This article highlights 15 budget-friendly employee benefits. Affordable Benefits That Employees Want Many of today’s most popular benefits come at little to no cost for employers. As the race for talent remains tight, employers may consider offering the following affordable employee benefits to appeal to workers: 1. Flexible work arrangements —Many of today’s workers desire flexible work hours or the option to work remotely. This flexibility can greatly improve work-life balance and reduce stress levels. Remember that flexible work arrangements require clear policies and communication to ensure accountability and consistency among workers. 2. Flexible vacation policies —Instead of rigid vacation accrual systems, more employers are implementing unlimited or flexible vacation policies. Trusting employees to manage their time off can lead to greater autonomy and responsibility and help reduce burnout. However, flexible policies require trust and accountability from employees and may entail additional coordination to manage leave schedules. 3. Wellness programs —Popular wellness initiatives include yoga classes, meditation sessions or health challenges. Promoting physical and mental well-being can lead to healthier, happier employees. Wellness programs are trending as a way to foster positive company culture, but it’s important to keep in mind that they often require commitment and resources for planning and implementation. 4. Family-friendly policies —The path to and journey of parenthood are unique. Employers can offer attractive family-friendly policies, such as parental leave, flexible child care arrangements, generous nursing breaks or assistance with adoption expenses. Supporting employees in their family responsibilities can improve loyalty and morale. 5. Professional development opportunities —Today’s workers value learning and development programs for their career growth. Investing in employee professional growth opportunities, such as online courses, workshops or conferences, demonstrates a commitment to their long-term success. 6. Employee recognition programs —Emotional salary, which comprises non-monetary components contributing to an employee feeling adequately rewarded at work, contributes to higher levels of job satisfaction. Frequent recognition is one such factor of emotional salary that can help keep workers happy. When employees feel valued, recognized and appreciated for their contributions, they are more likely to enjoy their work and find it fulfilling. Therefore, employers can establish a system for publicly acknowledging and rewarding outstanding performance. Recognition doesn’t always have to come with a monetary reward; a simple “thank you” can go a long way. 7. Employee assistance programs (EAPs) —These programs can help employees save on health care expenses, provide tax benefits and promote financial wellness. While such programs require administrative setup, the payoff can be worth it, as EAPs provide confidential support for employees dealing with personal or work-related issues. 8. Flexible spending accounts (FSAs) or health savings accounts (HSAs) —Even if an organization can’t afford to provide comprehensive health care benefits, offering FSAs or HSAs allows employees to set aside pre-tax dollars for medical expenses, which may reduce their financial burden. 9. Financial education workshops —More workers want guidance to increase their financial literacy. To meet this desire, employers can provide resources or workshops on personal finance management, budgeting and retirement planning. Empowering employees with financial literacy can alleviate stress and improve overall well-being. 10. Mentorship programs —Mentorship can facilitate knowledge transfer, boost career development and employee engagement, and strengthen the company’s talent pipeline. By offering mentoring resources or pairing junior employees with experienced mentors within the organization, a company can foster professional growth, skill development and a sense of belonging. A mentorship program can easily be scaled based on employees, roles and organization. 11. Paid volunteer time —Employers can encourage community engagement by granting paid time off for employees to volunteer with charitable organizations. Giving back to the community fosters a sense of purpose and fulfillment and may even enhance team bonding. 12. Casual dress code —Relaxing the dress code policy can make employees feel more comfortable and increase morale. This option could entail casual Fridays or more lax requirements during summer. The dress code policy should be clearly defined to avoid confusion. 13. Summer hours —To help boost employee morale and satisfaction during the summer months, employers can offer summer hours, such as closing an hour or two early on Fridays. This perk demonstrates flexibility and trust from the employer and can ultimately help improve employees’ work-life balance during vacation season. 14. Employee discount programs —Employers can offer discounts that appeal to workers’ interests and needs. This perk allows employees to save money on their everyday purchases, which can improve their financial literacy and boost company loyalty. Keep in mind that exclusive discounts hinge on partnerships and negotiation, and they may not be equally beneficial to all employees, depending on their interests and preferences. 15. Health and wellness resources —It may be beneficial to provide access to resources such as mental health hotlines, virtual counseling sessions, or fitness and meditation apps. Prioritizing employee well-being sends a clear message that their health is valued. Summary Offering employee benefits doesn’t have to come with a hefty price tag. These low- or no-cost benefits that workers value can enable employers to create a supportive and fulfilling work environment that, in turn, attracts and retains top talent. Investing in employee satisfaction not only boosts morale and productivity but also strengthens the overall success and reputation of the organization. Contact Simco for more information.

Each year, group health plan sponsors are required to complete an online disclosure form with the Centers for Medicare & Medicaid Services (CMS), indicating whether the plan’s prescription drug coverage is creditable or non-creditable. This disclosure requirement applies when an employer-sponsored group health plan provides prescription drug coverage to individuals who are eligible for coverage under Medicare Part D. CMS Disclosure Deadline The plan sponsor must complete the online disclosure within 60 days after the beginning of the plan year . For calendar year health plans, the deadline for the annual online disclosure is Feb. 29, 2024 (since 2024 is a leap year). In addition to the annual disclosure requirement, the disclosure to CMS must be made whenever any change occurs that affects whether the coverage is creditable. More specifically, within 30 days after any change in the plan’s creditable coverage status or after the termination of a plan’s prescription drug coverage. Online Disclosure Method Plan sponsors are required to use the online disclosure form on the CMS creditable coverage website. This is the sole method for compliance with the disclosure requirement unless the entity does not have internet access. The disclosure form lists the required data fields that must be completed in order to generate the disclosure notice to CMS, such as types of coverage, number of options offered, creditable coverage status, period covered by the disclosure notice, number of Part D-eligible individuals covered, date the creditable coverage disclosure notice is provided to Part D-eligible individuals, and change in creditable coverage status. CMS has also provided guidance and instructions on how to complete the form. Action Steps To determine whether the CMS reporting requirement applies, employers should verify whether their group health plans cover any Medicare-eligible individuals (including active employees, disabled employees, COBRA participants, retirees, and their covered spouses and dependents) at the start of each plan year. Employers that are required to report to CMS should work with their advisors to determine whether their prescription drug coverage is creditable or non-creditable. They should also visit CMS’ creditable coverage website , which includes links to the online disclosure form and related instructions. Important Dates Feb. 29, 2024 The deadline for sponsors of calendar year plans to complete an online disclosure form with CMS. Oct. 14, 2024 The deadline for group health plan sponsors to provide creditable coverage disclosures to Medicare-eligible individuals.

In the complex world of business insurance, proper classification on your general liability and workers' compensation policies is not just a bureaucratic necessity – it's a critical component that can significantly impact your bottom line and overall business success. Being properly classified means accurately categorizing your business based on factors such as industry type, business size, and the level of risk associated with your operations. It ensures that you pay the right amount for your insurance coverage, comply with regulatory requirements specific to your industry, and have the appropriate coverage to protect your business from potential risks. In this article, we'll explore why being accurately classified is so vital and delve into the potential implications of being incorrectly categorized. Why Proper Classification Matters 1. Accurate Premiums: Proper classification ensures that you pay the right amount for your insurance coverage. Insurance premiums are calculated based on factors such as industry type, business size, and the level of risk associated with your operations. Incorrect classification can result in either overpaying for coverage you don't need or being underinsured, leaving your business exposed to unforeseen risks. 2. Compliance with Regulations: Adhering to regulatory requirements is a fundamental aspect of running a business. Different industries have specific rules and regulations governing insurance coverage. Being properly classified ensures that your business is compliant with these regulations, reducing the risk of fines or legal repercussions. 3. Accurate Coverage: Proper classification ensures that you have the right coverage for potential risks associated with your industry. In the event of a claim, having the correct classification means that your insurance policy is more likely to cover the damages or liabilities, providing the financial protection your business needs. Implications of Incorrect Classification 1. Financial Consequences: Incorrectly classified businesses may face financial consequences on multiple fronts. Overpaying for unnecessary coverage strains resources, while being underinsured can result in significant out-of-pocket expenses when a claim arises. 2. Legal Complications: Misclassification may lead to legal challenges, especially in workers' compensation cases. If an employee is injured on the job and your classification doesn't accurately reflect your operations, you may find yourself in legal battles, facing potential lawsuits, fines, and increased insurance costs. 3. Damage to Reputation: Inaccurate classification can harm your business's reputation. Inconsistent or incorrect information can lead to mistrust among clients, partners, and employees, potentially impacting your ability to secure contracts or attract top talent. Proper classification on your general liability and workers' compensation insurance policies is not just a matter of administrative convenience – it's a strategic decision that can significantly impact the financial health, compliance, and reputation of your business. Taking the time to ensure accurate classification is an investment in the long-term success and resilience of your enterprise. Regularly reviewing and updating your insurance policies to account for any changes in your business operations will help you stay ahead and mitigate potential risks effectively.

The Securing a Strong Retirement Act of 2022 (SECURE 2.0) has emerged as a significant milestone to improve small businesses’ access to retirement benefits. SECURE 2.0 builds on the initial 2019 SECURE law. The act focuses on retirement savings, such as 401(k) and 403(b) plans and individual retirement accounts (IRAs). The comprehensive rule was enacted on Dec. 29, 2022, and many of its provisions apply specifically to small businesses with 100 or fewer employees. A survey by ShareBuilder 401k revealed that only one-quarter (26%) of small businesses offer 401(k) plans. Many respondents stated that they didn’t offer plans because they thought their business was too small to qualify, they couldn’t afford to match contributions, and retirement plans were too expensive to set up and manage. Fortunately, by embracing new provisions offered through SECURE 2.0, small businesses can better support workers’ retirement plans. This article explores key aspects of SECURE 2.0 that small businesses should be aware of and suggests how they can use them to their advantage. Understanding SECURE 2.0 Provisions Congress’s passing of SECURE 2.0 is meant to improve small businesses’ access to retirement benefits, improve retirement rules and encourage more retirement savings. The act contains more than 90 retirement-related provisions, so consider these seven favorable provisions impacting small businesses: 1. Startup credit —The startup credit will cover 100% (up from 50%) of administrative costs up to $5,000 for the first three years of plans 1. established by employers with up to 50 employees. Small businesses joining a multiple employer plan (or MEP) are also eligible for the credit. The tax credit offering incentivizes employers by limiting the administrative burdens of establishing and managing retirement plans. 2. Starter 401(k) plans —Starting in 2024, employers who don’t already offer retirement plans can offer a starter 401(k) or safe harbor 403(b) plan to employees who meet age and service requirements. The starter plan provides an ideal first step for small businesses since employers aren’t required to match contributions. With this provision, even the smallest businesses can offer their employees something to help with retirement. Through this provision alone, the American Retirement Association estimates that 19 million workers will gain access to a workplace retirement plan. 3. Automatic enrollment —Beginning in 2025, many 401(k) and 403(b) plans will be required to enroll eligible participants automatically; however, employees may opt out of coverage. Remember, there’s an exception for small businesses with 10 or fewer employees and new businesses under 3 years old. The expansion of automatic enrollment is meant to help workers—especially younger and lower-paid workers—save for retirement. 4. Required minimum distribution (RMD) —At a certain age, savers must start withdrawing a minimum amount from specific retirement accounts, including 401(k) and traditional IRAs. Since Jan. 1, 2023, a provision for later-stage savers increased the RMD age to 73—and, in 2033, the RMD age will increase to 75. Furthermore, starting this year, Roth contributions won’t be included when calculating the RMD. 5. Part-time worker offerings —Starting in 2025, employers will be required to allow part-time employees with more than 500 hours per year after two consecutive years of service to participate in their retirement plan. Employees exceeding 1,000 hours of service will be included in plans after one year of service. This will increase the number of workers eligible to contribute to employer-sponsored retirement plans. 6. Student loan matching —Individuals with student loans can balance saving for retirement and repaying student loans instead of choosing one or the other. Starting in 2024, when a borrower makes a qualified student loan repayment, their employer may match that amount by contributing to a 401(k) plan, 403(b) plan or SIMPLE IRA. 7. 529 plans —A 529 plan (or college savings account) is a tax-advantaged plan used to pay for education expenses. Starting January 2024, 529 beneficiaries can roll up to $35,000 to a Roth IRA from a 529 plan if it’s been open for at least 15 years. Previously, 529 accountholders faced taxes and penalties for nonqualified withdrawals, so this change allows beneficiaries to roll leftover 529 funds (e.g., unused educational funds) to the beneficiary’s Roth IRA to help save for retirement. SECURE 2.0 changes may help American workers save for retirement while balancing current expenses. In turn, these changes also allow small businesses to support their employees with retirement savings, which can improve their attraction and retention efforts. Summary With most American workers employed by small businesses, employers must be empowered with the tools and resources to offer workers retirement options. Although complex, SECURE 2.0 presents many opportunities for small businesses to strengthen their employee benefits and support the overall financial well-being of their workforce. It’s critical for employers to stay informed on SECURE 2.0 changes and be proactive in their adoption. Contact us today for more workplace guidance.

Artificial intelligence (AI) garnered attention from every industry in 2023, revolutionizing the way organizations operate and make decisions. Many employers adopted this technology to streamline operations, enhance workflows and improve customer experience. Looking ahead, organizations are expected to adopt AI at an even more rapid pace. According to Grand View Research, AI has an expected annual growth rate of 37.3% between 2023 and 2030, indicating the growing impact of AI technology in the coming years. In 2024, employers are expected to increasingly rely on AI to make critical business decisions and improve productivity. Savvy employers will stay current on evolving legal, ethical and transparency issues surrounding the heightened adoption of AI in the workplace. This article discusses four key impacts AI will have on workplaces in 2024. 1. Enhanced Decision-making Capabilities In 2023, many employers adopted AI to streamline HR and managerial functions such as hiring, onboarding, training and open enrollment. As this technology advances, employers will likely increasingly rely on AI to support HR professionals and managers in areas where they are inexperienced or burnt out. For example, in 2024, AI may be used to create thoughtful performance reviews and career coaching and identify internal growth opportunities for employees, empowering organizations to grow and upskill their workforce. In addition, as employers place more trust in AI’s decision-making capabilities, organizations may rely on this technology for cybersecurity. In this capacity, AI’s ability to rapidly sift through large amounts of information, gain insights and create business strategies may proactively identify and mitigate potential cyberthreats to protect company data. 2. Increased Productivity Chatbots and virtual assistants showed significant potential in 2023, with the ability to enhance the employee experience, respond to customer inquiries, and perform mundane and repetitive tasks. These capabilities can free employees to focus on solving more complex issues more efficiently. A 2023 report by management consulting company Mckinsey & Company found that current generative AI and other technologies can potentially automate work activities that take up 60% to 70% of employees’ time today. As AI capabilities advance, these technologies may also create workplace-specific algorithms to identify project misalignments and tasks requiring immediate attention. Thus, this year, these algorithms will be increasingly used to bolster employee productivity and ensure customers receive timely and personalized feedback on complex queries. 3. Greater Focus on Legality, Ethics and Transparency AI legislation is beginning to evolve, with various states and cities—such as Illinois, Maryland and New York City—creating laws regarding its use. The U.S. Equal Employment Opportunity Commission has also prioritized the enforcement of applicable federal laws concerning AI in employment. These regulations are expected to expand further as lawmakers face growing pressure to regulate its use. As such, remaining abreast of legal developments regarding AI will be crucial for organizations this year. Failing to comply with applicable regulations could result in costly lawsuits, fines and penalties, as well as reputational damage. Employers may also focus more on ensuring that AI systems are fair and transparent. This will include understanding the sources used to train AI, potential biases in these datasets and the ethical implications of AI-powered decisions. Employee training will also be critical to ensuring safe and ethical use. A recent survey by social networking platform FishBowl found that just 32% of individuals who use AI tools at work do so with their boss’s knowledge. Moreover, according to the Josh Bersin Company, only 4% of organizations have a defined strategy for AI in HR. In 2024, employers are expected to prioritize creating formal AI policies to meet evolving legal, ethical and transparency standards. 4. Heightened Focus on Skills-based Hiring Increased adoption of AI is expected to change the qualities employers look for in employees in 2024 and beyond. There will likely be a greater focus on hiring employees with behavioral skills, such as data analysis, AI literacy and the ability to work alongside AI systems. “Human” soft skills, such as problem-solving and communication, that AI can’t replicate, will also be in high demand. Additionally, as generative AI takes over certain workplace tasks, it will also create the need for new job roles and requirements. For example, AI ethicists, data curators and algorithm trainers may become emerging professions. AI proficiency may become a popular requisite on job postings as employers create more AI-centric business strategies. As such, the 2024 workforce will likely be defined by the ability to learn and work productively with AI technology. Conclusion The prevalence of AI in the workplace is a trend that isn’t going away. As this technology advances, employers will increasingly integrate AI into everyday operations and decision-making processes. However, the relative newness of this technology has the potential to create legal and ethical issues for organizations that adopt AI without proper protocols in place. Employers can stay ahead by monitoring AI trends impacting the workplace in 2024 and beyond.  Contact us today for more information.

Attracting and retaining employees has challenged employers since the onset of the COVID-19 pandemic. In 2024, the labor market is expected to cool slightly; however, competition for talent will remain. As such, employers must remain agile and adapt to developing labor and market trends that will shape the market in 2024. In particular, current labor challenges are forcing employers to find ways to balance rising health care costs and inflation while providing employees with benefits they value and need. Understanding this year’s key employee benefits trends can help employers attract and retain talented individuals in an evolving labor market. This article discusses seven key employee benefits trends in 2024. 1. Managing Health Care Costs High inflation, provider shortages, an increase in serious chronic conditions and deferred care due to the pandemic continue to drive health care costs. According to several industry surveys and reports, employers anticipate health care costs to grow between 6% and 8.5% in 2024, the largest increase in more than a decade. This year, employers may struggle to mitigate skyrocketing health care costs while keeping benefits affordable for employees. Thus, many employers will plan and implement multiple cost-saving strategies in 2024 to mitigate rising health care costs, such as: Modifying health plan designs Incorporating health care analytics Using artificial intelligence to streamline administrative workflows, help employees make informed benefits decisions and decrease costs Implementing pharmacy management strategies Maintaining full coverage of recommended prevention and screening services Tailoring benefits to meet employees’ specific needs Expanding voluntary benefits offerings Improving employee health care literacy Investing in more virtual health opportunities Incentivizing employees to seek cost-effective care options Revisiting cost-sharing arrangements 2. Increasing Personalization and Flexibility The modern workforce is comprised of four or five generations of workers from various backgrounds. In 2023, many employers struggled to find a benefits plan that satisfied their entire workforce. According to the Life Insurance Marketing and Research Association’s 2023 Workforce Benefits Study, nearly a third of all employers said that meeting the needs of their multigenerational workforce was a primary challenge. In 2024, employers will increasingly offer personalized and flexible benefits to address the unique needs and expectations of individual employees. The following are popular options for benefits customization: Flexible spending accounts Flexible work arrangements Customized retirement plans Convertible paid time off Domestic partner benefits Broader medical coverage Expanded leave Diverse wellness programs Personalized learning and development opportunities 3. Prioritizing Employee Mental Health Employee mental health is a priority for many employers in 2024. Countless employees are experiencing a combination of mental health concerns, including stress, lack of motivation and reduced focus. High inflation and widespread financial stress are exacerbating these issues, impacting workplace productivity, retention and morale. Given the impact employees’ mental health can have on an organization, employers are considering employees’ mental health while making important business decisions in 2024. To this end, savvy employers will continue prioritizing employee mental health in 2024 with the following methods: Finding specialized mental health treatment from chosen vendors Providing meditation and mindfulness resources Expanding employee assistance programs to address burnout and other mental health challenges Offering virtual therapy sessions Providing managers with training to recognize employee behavioral issues Expanding mental health service offerings Investing in programs that build resiliency and improve coping strategies Conducting anti-stigma behavioral campaigns 4. Focusing on Belonging While more employers invested in diversity, equity and inclusion (DEI) initiatives in 2023, many employees—especially those from underrepresented and marginalized groups—continue to feel excluded. These emotions can undermine work performance, inhibiting creativity, participation and willingness to collaborate. They can also increase the risk of burnout and stress, leading to increased turnover and higher rates of absenteeism. In 2024, employers are expected to address belonging to bridge the gap between existing DEI initiatives and the impact felt by employees. With that in mind, many employers are more often focusing on the factors that impact workplace belonging, such as organizational culture, leadership behaviors and personal relationships among employees. Others are introducing initiatives to foster belonging, such as: Encouraging supervisors to check in with employees Promoting social bonds within the organization Encouraging open-door policies Creating time for employees to connect socially Facilitating trusting relationships (e.g., mentorships) Celebrating employee achievements Involving employees in critical business decisions Creating fair and transparent compensation and promotion practices 5. Expanding Family-building and Reproductive Health Benefits Reproductive health care benefits became a key issue for employers in 2023 after the U.S. Supreme Court’s Dobbs v. Jackson Women’s Health Organization decision ended federal protections for abortion rights and permitted states to implement their own regulations. Numerous employers will continue to expand reproductive health benefits in 2024 to meet employee needs and remain competitive. Additionally, more employers are offering family-building benefits, as they have proven to be highly valued among employees who are looking to start or build their families. The impact of these benefits also often extends beyond affected individuals to make employees feel welcomed and supported in the workplace, improving engagement, productivity and retention. In the next year, many employers are expanding benefits offerings to include the following: Paid parental and adoption leave Child care subsidies Flexible scheduling and remote and hybrid work options Surrogacy benefits Family planning assistance High-risk pregnancy care Pregnancy, lactation, postpartum and menopause support Testosterone deficiency treatments Employers providing legal reproductive care benefits should assess the implications of these offerings as reproductive health care laws continue to evolve. 6. Balancing Flexibility With Return-to-Office Mandates Many employers responded to 2023’s tight labor market by offering remote and flexible work opportunities. As some employers begin issuing return-to-office mandates in 2024, organizations that are rigid in their policies may risk losing talented individuals and DEI efforts. They may also struggle to attract new employees from a smaller talent pool. As such, in 2024, proactive employers will focus on balancing employee expectations and needs with the benefits of having employees in the office. For instance, they may offer hybrid work options as a compromise for employees who are happier and more productive with flexible work arrangements. Additionally, employers are increasingly focusing on creating safe, empathetic and transparent workplace environments to promote employee well-being as they return to the office. Some employers are also offering incentives for in-person employees, such as: Commuter benefits Child care benefits Catered meals 7. Prioritizing Preventive Care Services In 2023, record-high inflation and skyrocketing medical care costs prevented numerous employees from seeking necessary preventive care for fear of incurring medical debt. However, avoiding medical care can worsen long-term health outcomes and increase costs for both employers and employees by preventing the early detection of serious illnesses. As employers struggle to mitigate rising health care costs in 2024, many will focus on keeping employees healthy and providing benefits education to help guide them on their journeys to be educated health care consumers, maximize their benefits and understand the importance of routine care. Summary Although every workplace is different, employers who understand current benefits trends will be better equipped to provide employees with the benefits they desire and need. In an evolving labor market, an attractive benefits plan is critical to maintaining a healthy, happy and productive workforce, which can ultimately impact organizational productivity, engagement and revenue. Contact us today for more benefits resources.

In 2024, leap day will occur on Thursday, Feb. 29. A leap year can create administrative and compliance challenges for organizations every four years. For example, a leap year can impact payroll processing or tax reporting obligations by adding an extra payday to the year. This can increase the number of pay periods from 26 to 27 for employees paid biweekly or from 52 to 53 for employees paid weekly, potentially altering how employees are paid. As a result, it’s essential that employers understand their compliance obligations and assess how an extra day in 2024 may impact any compliance requirements and deadlines. This article explores how the 2024 leap year can impact compliance deadlines and how employers can proactively prepare and navigate any potential changes. However, the compliance considerations presented in this article are only examples. Employers should consult with their legal counsel to address any specific issues. Payroll Considerations Adding an extra day in February 2024 can create an additional pay period for employees who are paid on a weekly or biweekly basis. In 2024, there will be 53 Mondays and 53 Tuesdays. Therefore, weekly or biweekly salaried employees paid on either of these days will have an extra pay period. However, salaried employees paid monthly or semimonthly and employees paid hourly will not be impacted. When faced with an extra pay period, most employers decide not to change how they pay employees each pay period despite the additional cost. As a result, impacted employees receive an additional pay period for the year, resulting in slightly higher salaries. Other organizations may opt to change their pay frequency or date to account for a leap year. Some employers may decide to keep employees’ total annual salary the same but spread it out over the entire year. Employers can do this by counting the number of pay periods that will occur during the year and adjusting employee paychecks to account for an extra pay period. However, because of the extra pay period, employees would receive slightly less each paycheck, even though their total annual salary will remain the same. This can create confusion or negatively impact employees unless employers explain ahead of time why workers will receive slightly less each pay period, allowing employees time to prepare. Additionally, employers can explain that an extra pay period may impact employee deductions for benefits and contributions to retirement or health savings plans. IRS tax withholding requirements do not change when there’s an additional pay period during the year. Therefore, employers must adjust their withholding calculations to ensure they withhold sufficient federal, state and local income taxes. To help avoid errors and ensure accurate payroll calculations, employers can review their payroll systems to ensure they can address leap-year payroll correctly. This can include accounting for an additional pay period, if applicable; withholding taxes correctly; and reviewing pay dates so employees are paid on time. Organizations can also prepare for an additional pay period by ensuring proper budgeting and cash flow to avoid any issues. Benefits Considerations Health plan deductions are typically determined by the number of pay periods. As a result, a leap year may force employers to recalculate health plan deductions. Additionally, a leap year can impact employee contributions to 401(k)s, health savings accounts and flexible savings accounts, requiring employees to adjust how much is deducted from each paycheck to ensure they contribute the maximum amount by the end of the year. Therefore, it’s important employers communicate how a leap year may impact employee contributions and allow employees sufficient time to adjust. The IRS recently finalized reporting regulations under the Affordable Care Act that established a permanent 30-day automatic extension from Jan. 31 for employers to furnish Form 1095-C to employees. According to IRS guidance, applicable large employers must furnish Forms 1095-C to their employees no later than March 2. However, because of the 2024 leap year, the deadline this year is March 1, 2024. Moreover, the Medicare Modernization Act requires organizations whose health care policies include Medicare prescription drug coverage to notify Medicare-eligible policyholders whether their prescription drug coverage is creditable. These entities must report the credible coverage status of their prescription drug plan to the Centers for Medicare (CMS) no later than 60 days from the beginning of a plan year. If a plan year starts at the beginning of the year, employers typically have until March 1 to report to the CMS. In 2024, however, the reporting must be done by Feb. 29. Employer Compliance Considerations The 2024 leap year may also impact certain employer compliance requirements. Employers should review their compliance obligations to ensure they avoid any potential violations. While many laws are silent on the impact of a leap year, employer obligations are not altered. For example, the Fair Labor Standards Act (FLSA), which establishes minimum wage, overtime pay, recordkeeping and youth employment standards, does not specifically address leap-year considerations. However, since a leap year can create 27 or 53 pay periods (rather than 26 and 52), an employee’s weekly salary may drop below the federal or state-exempt salary threshold in certain circumstances. If this occurs, that employee would lose their FLSA exempt status, which could result in wage and hour violations if not properly addressed. Calculating any pay period adjustments at the start of the year can help employers prepare and avoid potential FLSA overtime and meal and rest break violations that may occur if employees lose their FLSA exempt status due to the additional pay period. Additionally, employers can review offer letters and other compensation-related documents, including collective bargaining agreements, to determine how best to account for any extra pay periods. In some instances, these documents may state how frequently employees must be paid (e.g., weekly, biweekly). Reviewing these documents can help organizations comply with their legal obligations when determining how to adjust employee compensation during a leap year. Summary The additional day in 2024 may present various administrative and compliance challenges for some organizations. Understanding how a leap year impacts compliance requirements can enable employers to prepare and help them avoid costly mistakes. By taking a proactive approach and reassessing timelines, employers can help ensure they meet any compliance requirements and mitigate any potential legal risks.  Contact us today for more workplace guidance.

The Department of Labor (DOL) has released its 2024 inflation-adjusted civil monetary penalties that may be assessed on employers for violations of a wide range of federal laws, including: The Fair Labor Standards Act (FLSA) The Employee Retirement Income Security Act (ERISA) The Family and Medical Leave Act (FMLA) The Occupational Safety and Health Act (OSH Act) To maintain their deterrent effect, the DOL is required to adjust these penalties for inflation, no later than Jan. 15 of each year. Key penalty increases include the following: The maximum penalty for violations of federal minimum wage or overtime requirements increases from $2,374 to $2,451 per violation. The maximum penalty for failing to file a Form 5500 for an employee benefit plan increases from $2,586 to $2,670 per day. The maximum penalty for violations of the poster requirement under the FMLA increases from $204 to $211 per offense. Action Steps Employers should become familiar with the new penalty amounts and review their pay practices, benefit plan administration and safety protocols to ensure compliance with federal requirements.

Employers subject to Affordable Care Act (ACA) reporting under Internal Revenue Code Sections 6055 or 6056 should prepare to comply with reporting deadlines in early 2024. The following employers are subject to ACA reporting under Sections 6055 and 6056: Employers with self-insured health plans (Section 6055 reporting); and Applicable large employers (ALEs) with either fully insured or self-insured health plans (Section 6056 reporting). ALEs are employers with 50 or more full-time employees (including full-time equivalent employees) during the preceding calendar year. Reporting Deadlines The following chart provides the ACA reporting due dates for 2023 calendar year reporting. Note that there are no reporting obligations for non-ALEs without a plan or non-ALEs with fully insured plans (because non-ALEs are not subject to Section 6056 reporting and the carrier will complete Section 6055 reporting).

As the workplace landscape continues to evolve, so does the understanding of employee wellness. In 2024, organizations are embracing innovative strategies to prioritize their workforce's physical, mental and financial health. While organizations may have already expanded their mental health support in past years, some are now pivoting and embracing a holistic approach to employee well-being. This article highlights five employee wellness trends to look out for in 2024. 1. Supporting Employee Burnout Employers shouldn’t expect employee burnout to disappear anytime soon. A 2024 trends report from wellness portal provider MediKeeper notes that toxic workplaces, long hours, understaffing, lack of recognition, interpersonal conflict and unclear or inexplicable workplace policies are contributing to employee burnout. As such, organizations may prioritize strategies to prevent and alleviate burnout. Flexible work arrangements, realistic workload expectations and designated downtime are being implemented to help employees maintain a healthy work-life balance. Moreover, companies could encourage open communication channels that allow employees to voice their concerns and seek support as needed. On a related note, many employers will renew their focus on mental health in 2024 as they acknowledge the impact of mental health on employees’ overall well-being. Employee assistance programs (EAPs), counseling services and stress management workshops are increasingly becoming key components of workplace wellness initiatives. More employers are also investing resources to destigmatize the topic of mental health (e.g., anti-stigma campaigns, mental health literacy training and EAPs) and foster a culture where employees feel comfortable seeking mental health support. 2. Integrating Technology Technological advancements will shape a new employee wellness landscape that incorporates digital health platforms, wearable technology and artificial intelligence (AI) solutions. More employers will explore these types of technology to understand how to integrate them into wellness or employee-focused programs. Technology can enable real-time health monitoring, personalized wellness plans and immediate 24/7 access to health resources and services. Virtual health platforms can help overcome barriers to health care access. In 2024, apps are expected to go beyond fitness tracking and feature mindfulness exercises, nutritional guidance and personalized wellness plans. Despite their limitations, AI-driven approaches have the potential to promote preventive health care and detect or manage health issues. Personalized data allows employees to understand their health better and make informed decisions about their health or lifestyle. Employers are leveraging technology to tailor and improve their employees’ well-being experiences. 3. Expanding Financial Wellness Programs Money is a top stressor for employees and concerns have been exacerbated by prolonged inflation pressures throughout 2023. Financial stress can significantly impact an individual's mental and emotional health. In 2024, employers are expected to extend their wellness programs to include financial education and support to help contribute to a more secure and stable workforce. Employers can consider the following common personal financial goals as they design their financial support efforts: Building an emergency savings Navigating cashflow changes Managing debt Choosing proper health insurance and benefits Preparing for significant life events Saving for retirement Many organizations employ a multigenerational workforce, which means employees often face unique financial stressors. To provide relief, some employers offer financial wellness programs that vary in complexity but can include virtual personal financial planning meetings, tuition reimbursement and seminars. EAPs can also help employees navigate financial challenges. The idea is to provide a wide variety of services for the workforce. Employers can help reduce employee financial stress by exploring financial wellness resources and support options and offering attractive programs for current and prospective employees. Financial wellness is a critical component of well-being and can be a competitive offering. 4. Taking a Holistic Approach to Wellness The days of compartmentalizing physical, mental and emotional well-being are over. In 2024, organizations are adopting a holistic approach that considers the entire employee. For example, holistic wellness programs encompass nutrition, fitness, mental health and stress management. An integrated approach aims to create a work environment that nurtures every aspect of an employee's well-being, fostering a sense of balance and resilience. This renewed focus on holistic wellness is not just a trend; it's a fundamental shift in how companies approach employee care. Organizations can create a supportive culture that encourages education, open conversations and utilization of available resources by prioritizing mental and financial well-being in health and wellness initiatives. 5. Cultivating a Company Culture of Care Perhaps the most transformative trend is the conscious effort to cultivate a culture of care within organizations. This goes beyond workplace policies and programs; it's about fostering an environment where employees feel seen, heard, valued and supported. Team-building activities, mentorship programs and leadership training focused on empathy and emotional intelligence are becoming integral components of organizational efforts. Additionally, psychological safety is a growing priority for employers. Being psychologically safe means employees feel secure in talking and being vulnerable in front of others. Organizations benefit when employees feel comfortable asking for help, sharing ideas or challenging the status quo without fear of negative consequences. Leaders play an essential role in nurturing psychological safety in the workplace, so it starts at the top. Employers can foster a psychologically safe work environment by reflecting on leadership styles, accommodating dispersed employees and demonstrating concern for employees. Employee wellness initiatives play perfectly into this. Employers can proactively train employees and managers on psychological safety to raise awareness and teach supportive behaviors and practices that foster trust and transparency around health and wellness topics (e.g., burnout and stress). Remember that psychological safety is a key work dynamic that takes time to build but just moments to destroy. It comes down to employers creating opportunities for open feedback and dialogue so employees can be themselves in the work environment. Summary Employee wellness is taking center stage in 2024, with organizations recognizing the interconnected nature of physical, mental and financial health. More employers are paving the way for a holistic approach to workplace wellbeing. As these trends evolve, employees can expect a more supportive and nurturing work environment that values their overall health and happiness. Organizations can start by evaluating current wellness initiatives and thinking about ways to improve them. To ensure offerings and investments resonate with the workforce, it can be helpful to survey employees first and see what they find most valuable and necessary for their overall well-being. Contact us for more wellness-related workplace guidance.

Auto insurance costs can be a perplexing landscape, especially with the growing popularity of Electric Vehicles (EVs). Understanding the dynamics behind insurance expenses for EVs and traditional vehicles is crucial for making informed decisions. In this article, we delve into the surprising realities of insuring EVs and the broader considerations for popular vehicles. Electric Vehicle Insurance Expenses The cost of insuring electric vehicles (EVs) often exceeds expectations, with rates generally higher than those for traditional gas vehicles. This increase is attributed to the elevated average cost of EVs, standing at $52,345 according to Cox Automotive, impacting collision and comprehensive insurance expenses. To provide context, this surpasses the average costs for other vehicle types: $31,992 for a mid-size gas car $35,542 for a compact gas SUV $46,100 for a mid-size gas SUV Factors such as the complexity of repairs, necessitating specialized professionals, contribute to higher insurance costs for EVs. Additionally, the extra weight of EVs due to battery components can lead to more substantial damage in collisions with lighter vehicles, resulting in elevated liability insurance payouts. Understanding Insurance Costs for Popular Vehicles The choice of your vehicle significantly influences your car insurance expenses. The potential damage your car can cause to others impacts your liability insurance costs, covering damage or injuries to others or their property. The value of your vehicle and its repair costs play a role in determining the expenses for collision and comprehensive coverage. Car insurance companies consider the historical claims associated with your vehicle make and model when determining your auto insurance rates. As you navigate the terrain of auto insurance costs, whether for EVs or popular gas vehicles, being informed is your best ally. The intricacies involved highlight the need for tailored insurance that comprehensively addresses the unique features and potential risks associated with your chosen vehicle. By understanding these nuances, you can make well-informed choices that align with both your budget and coverage needs.

Traveling during severe winter weather can be daunting and poses potential dangers. According to research by the AAA Foundation for Traffic Safety, winter storms contribute to nearly half a million crashes and over 2,000 road deaths annually. To ensure safety during winter road emergencies, it's crucial for drivers to be well-informed. Here are key tips for driving in snowy and icy conditions: Cold Weather Driving Tips Keep a supply of cold-weather essentials in your car, including extra food, water, warm clothing, a flashlight, a glass scraper, blankets, medications, and more. Ensure your tires are properly inflated and have sufficient tread. Maintain at least half a tank of fuel at all times. Never warm up a vehicle in an enclosed area, like a garage. Avoid using cruise control on slippery surfaces such as ice and snow. Tips for Driving in the Snow Stay home if possible; venture out only when necessary. Drive slowly and adjust your speed for lower traction on snow or ice. Accelerate and decelerate slowly to avoid skids. Increase your following distance to five to six seconds for added safety. Familiarize yourself with your brakes and apply firm, steady pressure. Avoid unnecessary stops; if possible, maintain a slow roll until traffic allows you to proceed. Refrain from powering up hills; gain inertia on flat ground before tackling an incline. Don't stop when going uphill; maintain momentum to navigate icy roads. Tips for Long-Distance Winter Trips Be prepared by having your vehicle checked by a AAA Approved Auto Repair facility. Check the weather along your route, and if possible, delay your trip in anticipation of bad weather. Stay connected by informing others of your route, destination, and estimated time of arrival. If You Get Stuck in the Snow Stay with your vehicle for temporary shelter. Avoid overexertion when digging out your vehicle. Enhance visibility by using brightly colored items to signal distress. Clear the exhaust pipe to prevent carbon monoxide leaks. Stay warm using available insulation like floor mats, newspapers, or blankets. Conserve fuel by running the engine and heater only when necessary. Simco wishes you safe travels!

The hiring and onboarding processes are crucial to ensure employees feel welcome and included. Onboarding sets the tone for an employee’s tenure with the company, laying the foundation of their work experience. Effective hiring and onboarding practices can make employees feel seen and valued from their first job day, impacting retention, engagement and productivity. An inclusive work environment is also highly attractive to workers and may help employers gain a competitive advantage in the labor market. Research from the American Psychological Association’s 2023 Work in America survey found that 94% of employees say it’s somewhat or very important to them that their workplace is somewhere they feel they belong. This article provides guidance to employers on how to create and evaluate inclusive hiring and onboarding policies. Creating Inclusive Hiring and Onboarding Practices Some employers may focus more on preparing new hires to contribute and be productive rather than helping them settle in. Unfortunately, this can lead to exclusive hiring and onboarding practices. Employees who don’t feel welcomed or accepted by their employer may leave an organization quickly in search of a more inclusive employer. In fact, nearly 40% of U.S. employees would switch jobs to be part of a more inclusive workplace culture, according to a survey by QuestionPro Workforce and EQ Community. As employees’ first impressions of an organization are typically formed during their first few months, it’s vital that organizations implement inclusive hiring and onboarding practices, such as the following: Assess job descriptions. Employers’ use of language in job descriptions can significantly impact how job candidates feel about an organization. Exclusive language can discourage talented job applicants from applying for open positions. For example, phrases like “must be a native English speaker” can discourage people who speak English as a second language from applying. Employers should evaluate their job postings for unintentionally exclusive language and rewrite them as needed. Emphasize diversity, equity, inclusion and belonging (DEIB) during hiring and onboarding. Job candidates and new hires want to know what their employers value. The hiring and onboarding processes are an opportunity for employers to emphasize the importance of DEIB and share how their organization strives to create a more inclusive environment. This may include providing resources on how to get involved in workplace DEIB efforts (e.g., employee resource groups). Prepare the team for new hires. Adding a new employee to a team will inevitably affect team dynamics. It’s crucial that every team member understands their responsibility to create an inclusive and welcoming environment. Managers can prepare their teams for new hires by establishing clear expectations and responsibilities for existing employees. Employers can also provide new hires with a mentor or advisor to ensure they don’t feel neglected or overlooked during onboarding. Establish inclusive self-identification policies. Employees want to feel valued and respected as their authentic selves at work. For employers, this means respecting the way employees self-identify. Employers can create an inclusive environment for new hires by asking for their preferred pronouns, encouraging employees to use their pronouns in their email signatures and educating existing employees when needed. Personalize the onboarding process. While certain aspects of the onboarding process may need to remain uniform (e.g., mandatory forms and company policy), employers can help new hires feel welcome by personalizing certain aspects. Personal touches, such as introductory meetings with co-workers and managers, can help employees feel welcomed after joining an organization. Maintain open communication. Employers should continue to check in with recent hires after the initial orientation process. This can help relieve employee anxieties, make new hires feel welcome and provide employees with a resource for any questions or issues. Evaluating the Hiring and Onboarding Process A strong first impression can help employers attract and retain employees from various backgrounds, cultivating a work environment that appeals to today’s talent. This can help employers be more productive and gain a competitive advantage over similar organizations. Employers can evaluate their hiring and onboarding processes and consider the following practices: Enable individuals to report issues. Employers that allow applicants and employees to report accessibility issues with their website or job descriptions (e.g., providing a form or link) can quickly respond to improve the user experience. This shows potential job candidates that the organization cares about their experience and is committed to providing an inclusive experience for all users. Ask for employee feedback. Employee feedback is essential to create inclusive hiring and onboarding experiences. Employers can ask new hires to share their experiences through multiple channels (e.g., in-person or anonymously) to improve their understanding of the onboarding experience and how to improve for future hires. Evaluate critical metrics for success. Standard measures of positive hiring outcomes typically include employee performance, job satisfaction and organizational loyalty. Employers can assess critical metrics, such as retention rates and employee competency, to evaluate the success of inclusive hiring and onboarding practices. Employers may need to reevaluate and start again if inclusive measures don’t yield expected improvements. Conclusion Employers that make the extra effort to create inclusive hiring and onboarding practices may be more successful at creating diverse, productive and welcoming workplaces. This can boost attraction, improve workplace culture, strengthen employer branding, increase employee loyalty and ultimately impact an organization’s bottom line.  Contact Simco today for more workplace resources.

The American workforce has gotten older, with people staying in school longer and others delaying retirement. According to the U.S. Department of Health and Human Services, nearly 70% of 65-year-olds will need long-term care (LTC) in their lifetimes. As such, LTC insurance has become a crucial component of financial planning, offering a safety net for individuals facing extended periods of health care and assistance needs. As the workforce ages, employers should recognize the importance of offering comprehensive benefits. This article explores the significance of LTC insurance, outlines the potential benefits and drawbacks of offering such coverage as a sponsored benefit, and offers best practices for employers to consider when incorporating these policies within their voluntary benefits offerings. Overview of LTC Insurance LTC refers to a wide array of medical care, personal assistance and social support services for people who are physically or mentally unable to independently care for themselves for an extended period. This care can be provided in a nursing home, an assisted living facility or one’s home. Individuals needing LTC usually require assistance performing basic activities for daily living or have severe cognitive impairment. Generally, the conditions that necessitate LTC are caused by accidents, illnesses or advanced age. Unfortunately, LTC often carries substantial costs. That’s where LTC insurance can help. Such coverage can protect individuals against incurring large out-of-pocket expenses for LTC in the future through affordable monthly premiums now. There are two different types of LTC insurance policies available, including the following: Individual LTC insurance Group LTC insurance Individual policies are generally purchased by people whose employers do not offer group policies, or by those who feel they need to supplement their employer-provided policies to obtain the most coverage possible. On the other hand, some employers and associations offer LTC insurance to employees in the form of group policies. In these cases, such coverage may not offer the same level of protection afforded by individual policies. Before purchasing group policies, comparing the level of protection offered and the level of protection guaranteed in comparable individual policies is wise. LTC insurance policies should also clearly state whether they are individual or group policies. Pros and Cons of LTC Insurance More employers are expanding their voluntary benefits offerings, including LTC insurance. This coverage augments a medical plan and helps protect employees’ retirement savings. Employers can offer LTC insurance to their employees as a voluntary benefit, allowing them to choose to enroll in the plan and pay the premiums themselves. Alternatively, some employers may contribute to the cost of LTC insurance premiums as part of their benefits packages. If employers are considering offering LTC insurance as a sponsored benefit, they may start by weighing the pros and cons of doing so. Employee benefits have the potential to impact staff attraction, retention and well-being. As the workforce ages, employees are placing greater importance on benefits that address long-term health and financial security. Specific advantages of providing LTC insurance as a sponsored benefit include the following: Financial security —LTC insurance can help protect employees’ assets and savings from being depleted by the high cost of extended health care services. This financial security can contribute to a more stable and engaged workforce. Tax advantages —In some cases, both employers and employees may benefit from tax advantages associated with LTC insurance premiums. Employers should explore these potential tax incentives to make the benefit even more attractive. Workforce support —With many employees delaying retirement, employers are faced with an aging workforce. LTC insurance can be a proactive solution for companies looking to support the changing needs of their employees and foster a culture of care and concern. There are also potential drawbacks of offering LTC insurance as a sponsored benefit, such as the following: Cost concerns —One of the primary drawbacks for employers may be the cost associated with offering LTC insurance. Striking a balance between providing valuable benefits and managing expenses is crucial. Employers should assess their budgetary constraints and explore different insurance options for the most cost-effective solution. Employee misunderstanding —LTC insurance can be complex, and employees may not fully understand its importance. Employers should invest in educational resources and communication strategies to ensure employees grasp the value of this benefit. Employer Best Practices When providing LTC insurance as a sponsored benefit, employers should note that employee education is critical. Simply offering LTC insurance as a voluntary benefit isn’t enough to encourage employee enrollment. Benefits, and insurance policies especially, are complex and require some education so employees can better understand these offerings and determine which ones are a good fit for their lives and budgets. Here are some additional strategies for employers to consider when adding LTC insurance to their benefits offerings: Switch to off-cycle enrollment. LTC insurance is complex, so off-cycle enrollment (outside the annual open enrollment period) can give employees more time to review this benefit and understand how it could meet their health care and financial needs. Offer educational opportunities. When employees understand the risks associated with LTC, they may be more willing to start planning for this care and purchase coverage at a younger age. Educational workshops, seminars, team lunches and emails can help educate employees about the significance of LTC insurance. Bringing in insurance experts to explain the intricacies of this coverage and answer employees’ questions can demystify the process. Personalize the experience. Personalized consultations with insurance representatives can help employees make informed benefits decisions based on their unique needs. A one-on-one approach can address specific concerns and boost employee confidence in chosen coverage offerings. Communicate clearly. Employers should provide clear and concise communication materials, including brochures, FAQs and online resources, to help employees understand the key features and benefits of LTC insurance. Employers should keep in mind that some states have begun mandating LTC insurance, so it’s best to consult with legal counsel before making any benefits changes. Summary Employers have an opportunity to make benefits offerings convenient and economical for their employees, and that includes offering LTC insurance as a voluntary benefit. LTC insurance can provide employees with a sense of security, knowing that they have a financial cushion in place should they require extended medical care. This can contribute to reduced stress levels and improved overall well-being, positively impacting productivity and job satisfaction. However, group LTC insurance, like any type of offered benefit, may not be the right choice for all employers. Contact Simco for more information about LTC insurance.

On Dec. 20, 2023, the IRS issued Notice 2024-2 , providing guidance in the form of questions and answers with respect to various provisions of the legislation known as the “SECURE 2.0” Act. Background The Consolidated Appropriations Act of 2023 was signed on Dec. 29, 2022, which is an omnibus bill that includes the SECURE 2.0 legislation, referred to as such because it builds on the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019. The legislation is intended to increase employees’ retirement savings and makes numerous important changes that employers should be aware of. A section-by-section summary of the legislation can be found here . Plan Amendments Under Section 501 of SECURE 2.0, the plan amendment deadline for SECURE Act and SECURE 2.0 Act provisions is the last day of the first plan year beginning or after Jan. 1, 2025 (or Jan. 1, 2027, in the case of certain collectively bargained or governmental plans). The new guidance extends the plan amendment deadlines under Section 501 . Section Summary In addition to extending plan amendment deadlines under Section 501, Notice 2024-2 addresses issues under the following sections of the SECURE 2.0 Act: Section 101 (expanding automatic enrollment in retirement plans); Section 102 (modification of credit for small employer pension plan startup costs); Section 112 (military spouse retirement plan eligibility credit for small employers); Section 113 (small immediate financial incentives for contributing to a plan); Section 117 (contribution limit for SIMPLE plans); Section 326 (exception to the additional tax on early distributions from qualified plans for individuals with a terminal illness); Section 332 (employers allowed to replace SIMPLE retirement accounts with safe harbor 401(k) plans during a year); Section 348 (cash balance); Section 350 (safe harbor for correction of employee elective deferral failures); Section 601 (SIMPLE and SEP Roth IRAs); and Section 604 (optional treatment of employer contributions or nonelective contributions as Roth contributions). The Treasury Department and the IRS invite comments and suggestions on the guidance, which should be submitted on or before Feb. 20, 2024 .

Employers subject to Affordable Care Act (ACA) reporting under Internal Revenue Code Sections 6055 or 6056 should prepare to comply with reporting deadlines in early 2024. For the 2023 calendar year, covered employers must: Furnish statements to individuals by March 1, 2024 (an alternative method of furnishing statements to covered individuals is available in certain situations); and File paper returns with the IRS by Feb. 28, 2024 , or April 1, 2024 , if filing electronically. Beginning in 2024, employers that file at least 10 returns during the calendar year must file electronically. Penalties may apply if employers are subject to ACA reporting and fail to file returns and furnish statements by the applicable deadlines. Individual statements for 2023 must be furnished within 30 days of Jan. 31, 2024. Because 2024 is a leap year, the deadline for individual statements is March 1, 2024. In addition, electronic IRS returns for 2023 must be filed by March 31, 2024. However, since this is a Sunday, electronic returns must be filed by the next business day, which is April 1, 2024. Covered Employers The following employers are subject to ACA reporting under Sections 6055 and 6056: Employers with self-insured health plans (Section 6055 reporting) Applicable large employers (ALEs) with either fully insured or self-insured health plans (Section 6056 reporting) ALEs are employers with 50 or more full-time employees (including full-time equivalent employees) during the preceding calendar year. Note that ALEs with self-funded plans are required to comply with both reporting obligations. However, to simplify the reporting process, the IRS allows ALEs with self-insured plans to use a single combined form to report the information required under both Sections 6055 and 6056. Section 6055 and 6056 Reporting Section 6055 applies to providers of minimum essential coverage (MEC), such as health insurance issuers and employers with self-insured health plans. These entities generally use Forms 1094-B and 1095-B to report information about the coverage they provided during the previous year. Section 6056 applies to ALEs­­—generally, those employers with 50 or more full-time employees, including full-time equivalents, in the previous year. ALEs use Forms 1094-C and 1095-C to report information relating to the health coverage that they offer (or do not offer) to their full-time employees. Employers reporting under both Sections 6055 and 6056—specifically, ALEs with self-insured plans—use a combined reporting method by filing Forms 1094-C and 1095-C. Annual Deadlines Generally, forms must be filed with the IRS annually, no later than Feb. 28 (March 31, if filed electronically) of the year following the calendar year to which the return relates. Employers may receive an automatic 30-day extension to file with the IRS by completing and filing Form 8809 by the due date of the return. Additional extensions of time to file may also be available under certain hardship conditions. In addition, a reporting entity must furnish statements annually to each individual who is provided MEC (under Section 6055) and each of the ALE’s full-time employees (under Section 6056). Individual statements were generally due on or before Jan. 31 of the year immediately following the calendar year to which the statements relate. However, beginning with the 2021 calendar year, the IRS has provided an automatic extension of 30 days to furnish statements (Forms 1095-B and 1095-C) to individuals under Sections 6055 and 6056. Because the extension is automatic, reporting entities do not need to formally request an extension from the IRS. Under this deadline extension, statements furnished to individuals will be timely if furnished no later than 30 days after Jan. 31 of the year following the calendar year to which the statement relates. If the extended furnishing date falls on a weekend or legal holiday, statements will be timely if furnished on the next business day. New Electronic Filing Threshold There is a new electronic filing threshold for information returns required to be filed on or after Jan. 1, 2024, which has been decreased to 10 or more returns (originally, the threshold was 250 or more returns). Specifically, the instructions for 2023 returns (filed in 2024) provide the following clarifications and reminders: The 10-or-more requirement applies in the aggregate to certain information returns. Accordingly, a reporting entity may be required to file fewer than 10 of the applicable Form 1094 and 1095, but still have an electronic filing obligation based on other kinds of information returns filed (e.g., Forms W-2 and 1099). The electronic filing requirement does not apply to those reporting entities that request and receive a hardship waiver; however, the IRS encourages electronic filing even if a reporting entity is filing fewer than 10 returns. The formatting directions in the instructions are for the preparation of paper returns. When filing forms electronically, the formatting set forth in the “XML Schemas” and “Business Rules” published on IRS.gov must be followed rather than the formatting directions in the instructions. For more information regarding electronic filing, see IRS Publications 5164 and 5165 . Alternative Method of Furnishing Under Section 6055 As of 2019, the individual mandate penalty has been reduced to zero. As a result, an individual does not need the information on Form 1095-B to calculate their federal tax liability or file a federal income tax return. The IRS has provided an alternative manner for a reporting entity to furnish statements to individuals under Section 6055 , which applies for all years when the individual mandate penalty is zero. Under this alternative manner of furnishing, the reporting entity must post a clear and conspicuous notice on its website stating that responsible individuals may receive a copy of their statement upon request. The notice must include an email address, a physical address to which a request may be sent and a telephone number to contact the reporting entity with any questions. For 2023 statements, reporting entities must post the notice by March 1, 2024 , and must retain the website notice through Oct. 15, 2024. ALEs offering self-insured health plans are generally required to use Form 1095-C, Part III, to meet the Section 6055 reporting requirements, instead of Form 1095-B. A self-insured ALE may use this relief for employees who are enrolled in the ALE’s self-insured plan and are not full-time employees of the ALE, as well as for nonemployees (e.g., former employees) who are enrolled in the self-insured plan. However, an ALE may not use the alternative method of furnishing for full-time employees who are enrolled in the self-insured plan. Important Dates Feb. 28, 2024 Paper IRS returns for 2023 must be filed by this date. Reporting entities can file up to 10 returns on paper under the new filing threshold. March 1, 2024 Individual statements for 2023 must be furnished by this date. An alternative method of furnishing Forms 1095-B is available. April 1, 2024 Electronic IRS returns for 2023 must be filed by this date. Most employers must file electronically beginning in 2024. Individual Statements Furnishing Deadline The IRS extended the deadline for furnishing statements to individuals. The due date for filing with the IRS is unchanged. Furnishing Under Section 6055 The IRS has provided an alternative method for furnishing statements to individuals under Section 6055. This alternative method generally requires statements to be provided upon request only.

On Dec. 11, 2023, the U.S. House of Representatives passed landmark bipartisan legislation to lower the cost of health care and increase pay transparency for patients. The Lower Costs, More Transparency Act, which passed by a vote of 320-71, takes an initial step toward curbing Americans’ skyrocketing health care spending. However, this bill will likely face strong opposition from hospitals and other industry groups. The bill would have to pass the Senate and be signed by the president before becoming law. “By requiring nearly every corner of our health system to publicly disclose their prices, the Lower Costs, More Transparency Act will empower patients and create incentives to lower prices across the board. “ - House Ways and Means Committee Chair Jason Smith If enacted into law as written, this act could help patients in the following ways: Increase price transparency to reveal the cost of prescription drugs by empowering patients and employers to make informed health care decisions, making price information available publicly, and requiring health insurers and pharmacy benefit managers to disclose negotiated drug rebates and discounts. Address the cost of prescription drugs by lowering out-of-pocket costs for seniors who receive medication at hospital-owned outpatient facilities, expanding access to affordable generic drugs and equipping employer health plans with the information they need to make informed decisions about drug prices. Support patients, health care workers, community health centers and hospitals by fully paying for expiring health care programs that support community health centers, supporting training programs for new doctors in communities, preserving Medicaid for hospitals that care for uninsured and low-income patients, and extending funding for research to improve treatments and cures for diabetes. Next Steps Heightened health care costs are likely to continue impacting employers and employees for the foreseeable future. To combat rising costs, employers are focusing on improving employee health outcomes, reducing unnecessary services, and prioritizing prevention and primary care. Additionally, employers may benefit from improving benefits education and employee communication to help workers understand their benefits and the best ways to utilize and maximize them. Employers should continue to monitor the progress of this bill, as it could significantly impact health care costs. We’ll keep you appraised of any notable updates.

On Dec. 14, 2023, the IRS announced the 2024 optional standard mileage rates, which are used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. The 2024 standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be: 67 cents per mile driven for business use, up 1 ½ cents from the rate for 2023; 21 cents per mile driven for medical purposes or for moving purposes for qualified active duty members of the Armed Forces, down one cent from the rate for 2023; and 14 cents per mile driven in service of charitable organizations. The rate is set by statute and remains unchanged from 2023. Under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses, unless they are members of the Armed Forces on active duty moving under orders to a permanent change of station. Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. Taxpayers can use the standard mileage rate, but they must opt to use it in the first year the car is available for business use. Then, in later years, they can choose either the standard mileage rate or actual expenses. Leased vehicles must use the standard mileage rate method for the entire lease period (including renewals) if the standard mileage rate is chosen.  Important Dates Dec. 14, 2023: IRS announced the standard mileage rates for use in 2024. Jan. 1, 2024: New standard mileage rates go into effect.

Pooled Employer Plans (PEPs) have emerged as a game-changer in the retirement savings landscape, offering businesses and employees a streamlined and cost-effective approach to retirement planning. This article aims to demystify the concept of PEPs, exploring their structure, advantages, and the potential impact they can have on the retirement readiness of employees. What is a Pooled Employer Plan? A Pooled Employer Plan is a type of retirement savings arrangement established by the Setting Every Community Up for Retirement Enhancement (SECURE) Act in 2019. The SECURE Act introduced PEPs to encourage more small and medium-sized businesses to offer retirement benefits to their employees. PEPs enable unrelated employers to join a single retirement plan, sharing the administrative and fiduciary responsibilities, which can lead to significant cost savings. Key Features Multiple Employers, One Plan: PEPs allow unrelated employers to participate in a single retirement plan. This consolidation of resources is designed to make retirement benefits more accessible to a broader range of businesses. Administrative Efficiencies: By pooling resources, employers in a PEP can achieve economies of scale. This means shared administrative costs and responsibilities, reducing the burden on individual businesses and potentially lowering overall plan costs. Fiduciary Oversight: A PEP typically designates a pooled plan provider, responsible for assuming the role of the named fiduciary. This provider takes on certain administrative and fiduciary responsibilities, relieving employers of some of the legal obligations associated with offering a retirement plan. Benefits for Employers Cost Savings: PEPs offer the advantage of reduced administrative and operational costs. Sharing these expenses among multiple employers can result in considerable savings compared to maintaining individual retirement plans. Reduced Administrative Burden: Employers participating in a PEP can offload much of the day-to-day administrative tasks to the pooled plan provider. This allows businesses to focus on their core operations while ensuring employees receive valuable retirement benefits. Access to Expertise: PEPs are often managed by experienced professionals, providing a level of expertise that might be challenging for individual small businesses to secure. This can enhance the overall quality of the retirement plan. Benefits for Employees Enhanced Investment Options: PEPs, with their larger asset pools, may offer a more diverse range of investment options for participants. This can empower employees to tailor their investment strategy based on their individual preferences and risk tolerance. Increased Portability : As employees move between employers participating in the same PEP, they can maintain continuity in their retirement savings. This portability is especially beneficial in today's dynamic job market. Simplified Decision-Making: With the administrative aspects managed by the pooled plan provider, employees can enjoy a simplified and user-friendly experience when it comes to enrolling, managing contributions, and accessing information about their retirement plan. PEPs versus Traditional 401(k)/403(b) Compared to traditional 401(k) or 403(b) plans, PEPs offer a distinct advantage by consolidating administrative tasks. Traditional plans for individual employers often come with higher administrative burdens and costs, making them less feasible for smaller businesses. PEPs, with their shared responsibilities and reduced costs, level the playing field, allowing a broader spectrum of businesses to provide robust retirement benefits. Another notable difference lies in fiduciary responsibilities. In a PEP, a pooled plan provider assumes many fiduciary duties, alleviating individual employers from some of the legal obligations associated with managing a retirement plan. This shift in responsibility can be particularly advantageous for businesses with limited resources or expertise in retirement plan administration. In essence, while traditional plans continue to be a staple in the retirement benefits landscape, PEPs introduce a modern, collaborative approach that addresses the evolving needs of both employers and employees. The decision between a PEP and a traditional plan hinges on the specific requirements and circumstances of each employer, emphasizing the importance of a tailored approach to retirement planning. Contact Simco today for more information.

2024 Minimum Wage Rates By State Under federal and state laws, employers must compensate their employees with one and one-half their regular rate of pay for any hours of overtime work. However, under these laws, employees who work in an executive, administrative or professional (EAP) capacity are exempt from overtime pay if they satisfy, among other things, the salary level requirements for their exemption. Under federal law, the salary level requirement for the EAP exemption is $684 per week on a salary or fee basis. For highly compensated employees, the salary level is $107,432, which includes at least $684 per week paid on a salary or fee basis. Important Dates Jan 1., 2024: The minimum wage rate is expected to increase in 25 states. July 1, 2024: The minimum wage rate is expected to increase in the District of Columbia, Nevada, and Oregon. These rates will likely be published during the first half of 2024. Sept. 30, 2024: A new minimum wage rate is expected in Florida. Poster Requirements New minimum wage rates may require employers to visit individual states' department of labor websites to update their wage and hour notices. LINKS AND RESOURCES: U.S. Department of Labor table of minimum wage by state U.S. Department of Labor federal minimum wage page

On Nov. 15, 2023, the Centers for Medicare and Medicaid Services (CMS) released the maximum limits on cost sharing for 2025 under the Affordable Care Act (ACA). For 2025, the maximum annual limitation on cost sharing is $9,200 for self-only coverage and $18,400 for family coverage . This represents an approximately 2.6% decrease from the 2024 limits of $9,450 for self-only coverage and $18,900 for family coverage. Out-of-Pocket Maximum The ACA requires most health plans to comply with annual limits on total enrollee cost sharing for essential health benefits (EHBs). These cost-sharing limits are commonly referred to as an out-of-pocket maximum. Once the out-of-pocket maximum is reached for the year, the enrollee cannot be responsible for additional cost sharing for EHBs for the remainder of the year. Under the ACA, EHBs must reflect the scope of benefits covered by a typical employer plan and must include items and services in ten general categories, including emergency services, hospitalization, prescription drugs, pediatric services, outpatient care and maternity and newborn care. CMS annually adjusts the ACA’s out-of-pocket maximum for inflation and publishes the limits by January of the year preceding the applicable benefit year. The ACA’s cost-sharing limits apply to all non-grandfathered health plans, including self-insured health plans, level-funded health plans and fully insured health plans of any size. Any out-of-pocket expenses required by or on behalf of an enrollee with respect to EHBs must count toward the cost-sharing limit. This includes deductibles, copayments, coinsurance and similar charges but excludes premiums and spending for noncovered services. Health plans that use provider networks are not required to count an enrollee’s expenses for out-of-network benefits toward the cost-sharing limit. Also, the ACA requires health plans to apply an embedded out-of-pocket limit for everyone enrolled in coverage. Each enrollee must have an individual out-of-pocket limit on EHBs that is not higher than the ACA’s out-of-pocket maximum for self-only coverage. Limits for 2024 and 2025 For plan years beginning in 2024, the out-of-pocket maximum is $9,450 for self-only coverage and $18,900 for family coverage. For plan years beginning in 2025, the limits are $9,200 and $18,400, respectively. Employers should review the plan designs each year to ensure they comply with the ACA’s cost-sharing limits.

Educational institutions are well-established sources of high-quality talent. Recent graduates can bring creativity, energy and strong digital skills to the workforce. They’re also likely to be loyal to organizations that provide them with learning and growth opportunities, which can improve employee retention rates and boost morale. Employers that successfully engage, recruit and hire individuals from college campuses—a strategy known as campus recruiting—can secure talented young employees with the potential for growth in their careers and create a pipeline of talented individuals. Depending on their unique needs, employers can connect with job candidates from various educational establishments, including trade schools, technical schools, liberal arts schools and community colleges. Technology plays a crucial role in the success of a campus recruiting strategy. College students are typically tech-savvy and more likely to rely on social media and online resources for information about an organization. Furthermore, the lead time for campus recruiting is often longer than traditional recruiting, which gives employers the opportunity to leverage technology to build their brand on campus, improving recruiting efforts. This article explains how employers can use technology to attract, engage and recruit individuals from college campuses. Utilizing Technology for Campus Recruiting Skilled graduate talent is in high demand. Employers can leverage technology to boost their campus recruiting efforts with the following practices: Use social media. Research by business services company Experian found that 98% of college-aged students are on social media. Employers can capitalize on this trend by ramping up social media efforts, sharing organizational and employee successes on social media and building an online presence that will improve employer brand. Additionally, employers can involve employees in social media campaigns and fully complete company and brand pages on employment websites. Recruit on popular job sites. According to LinkedIn data, 86% of small businesses get a qualified candidate within the first 24 hours of posting a job on LinkedIn’s platform. Posting open roles and opportunities on job sites is crucial for recruiting recent graduates. Many of these individuals rely solely on employment sites, such as Handshake or LinkedIn, for information on job postings. Recruit virtually. Many colleges or universities don’t have a centralized campus. According to Forbes, nearly 2.8 million students enroll at online colleges and universities. This accounts for almost 15% of all U.S. postsecondary learners. Organizations can reach these students by leveraging online platforms, such as social media and virtual information sessions. Video interviews are another way employers can connect with students. Many students prefer virtual interviews and find them less intimidating, helping employers form relationships. Employers can also use online portals, such as Handshake, to connect with students and begin personalized recruiting conversations. Attend virtual recruiting events. Educational institutions may offer virtual recruitment sessions or career fairs to improve access for students who have financial or transportation obstacles and are unable to meet recruiters on campus. These events may include virtual presentations or webinars focused on particular industries, professions or geographic areas. Participating in these events can help employers connect with college students and find candidates with specific skills (e.g., computer science or engineering majors). Use mobile-friendly apps. College students rely heavily on their mobile devices for online activities. This includes searching and applying for jobs. Employers can boost engagement among college students and recent graduates by creating mobile-friendly experiences, including mobile-friendly job postings and a user-friendly application process.  Benefits of Using Technology for Campus Recruiting In today’s digital age, employers whose campus recruiting efforts are limited to in-person fairs will likely miss out on opportunities to engage and connect with talented individuals online and through social media. The benefits of incorporating technology into campus recruiting efforts include the following: Provide a holistic view. Employers that are recruiting applicants across multiple educational institutions can use technology, such as candidate sourcing and candidate evaluation software, to schedule interviews, track return on investment and store notes, data and other information that will provide clarity during the recruiting and hiring process. This can lead to better acceptance and retention rates. Broaden reach. Employers can’t be everywhere at once. Job sites, such as LinkedIn and Handshake, can help employers reach students in new and remote locations. Furthermore, employers can use technology to connect virtually with job candidates, host webinars and hold virtual interviews. Build employer branding. Online platforms can help employers build brand awareness and share organizational values with a broad range of potential candidates. This is especially important when recruiting younger individuals, who tend to be more value-driven when making career decisions. Therefore, organizations that show candidates their values may have more recruiting success. Employers can leverage technology to promote company culture online via social media or employment websites. Save time. Recruiting technology can help employers quickly scan resumes and filter out candidates who don’t have the necessary qualifications. This allows employers to dedicate more time to evaluating top job candidates. Conclusion Employers that utilize technology effectively may experience a competitive advantage when it comes to engaging and recruiting tech-savvy college students. Campus recruiting technology can also help employers spread information quickly, filter out candidates, reach passive candidates, save money and find job candidates who are a good culture fit. This can improve attraction, branding and hiring outcomes. Contact us today for more workplace resources.

In fast-paced and demanding work environments, the importance of mental health cannot be overstated. Employees who are mentally well are more productive, engaged and satisfied with their jobs. Mental health treatment, including therapy, medication and self-care, can help people who are experiencing mental illness. However, taking that first step toward recovery or seeking help can be challenging. The National Alliance on Mental Illness (NAMI) reports that the average delay between the onset of mental health symptoms and treatment is 11 years. A myriad of factors, such as cost, access and stigma, can hold workers back from receiving the mental health support and treatment they need. Employers can help employees overcome these barriers, understand available treatment options and start their recovery journey. This article explores barriers to mental health care and ways employers can help break them down to support employees holistically. The Importance of Mental Health Benefits Before delving into the strategies, it’s crucial to understand why mental health benefits are so essential in the workplace: Improved employee well-being —Mental health benefits help employees manage stress, anxiety and other mental health issues, which can lead to improved overall well-being and happiness. Increased productivity —Employees with access to mental health support are more likely to be productive, as they can better manage work-related stress and challenges. Reduced absenteeism —Mental health benefits can help reduce absenteeism caused by mental health issues, leading to employer cost savings. In fact, the U.S. Centers for Disease Control and Prevention reports that depression alone causes an estimated 200 million lost workdays each year, costing employers $17 billion to $44 billion. Enhanced employee engagement —Employees who feel supported in their mental health are more engaged and committed to their jobs and the company. Talent attraction and retention —Offering robust mental health benefits can make an organization more attractive to potential employees and help retain current talent. While more employers may focus on their businesses’ bottom line, mental health support is not to be overlooked as it can have ripple effects. A 2023 study by mindfulness app Calm found that for every $1 invested in employees’ mental health, employers can save $2-$4 on other expenses, such as health care costs—that’s a win-win in today’s economic climate. Employee mental health is more important than ever before, and employers are in a position to offer resources and support their employees. Removing Benefits Barriers More employers recognize the significance of promoting mental well-being in the workplace and offer a range of mental health benefits to support their employees. However, barriers can still prevent employees from accessing these essential benefits. To address the numerous barriers to mental health care, employers can consider the following strategies for increasing access to proper care and normalizing mental health support: Review benefits offerings. One way to address employee mental health is by ensuring mental health is incorporated into health care offerings. These are some popular benefits or policies: Inclusive health insurance plans with mental health coverage Employee assistance programs Flexible work arrangements Paid caregiving leave Mental health days Educate about available benefits. In addition to educating employees about available mental health benefits and resources, employers can explain how to leverage other benefits to make mental health treatment and services more attainable or offset out-of-pocket expenses. For example, funds from health savings and flexible spending accounts can generally be used to pay for mental health therapy. Reduce the stigma. Employers can build trust with employees by showing them they won’t be fired or punished for mental health issues. They can do this by openly discussing mental health in the workplace, encouraging self-care and allowing flexible scheduling for employees to get mental health treatment. Additionally, employers can educate employees on improving their mental health with in-office training on self-care, stress management and mental health issues. Promote work-life balance. Employees who feel they have a good balance between their jobs and personal lives are likelier to be healthy, happy and productive workers. Organizations can foster a healthy work-life balance among workers by providing them the time and flexibility they need for a flourishing personal life, requiring them to take minimum vacation time, and encouraging them to unplug from their jobs when not in the office or outside of working hours. Additionally, flexible work schedules can allow employees sufficient time to seek and obtain mental health services. Support caregiver responsibilities. The COVID-19 pandemic put caregiving in the spotlight, illuminating the mental health challenges that they can face. While caregivers often focus on others, they should also care for their mental health. Support employee wellness. Exercise, healthy eating and good sleep habits are crucial for mental health and resilience. Employers can boost employees’ mental health by encouraging healthy behaviors through wellness programs and offering employee incentives, such as healthy lunches and free gym memberships. Employers should also consider offering employee assistance benefits (e.g., free counseling or therapy) to help employees struggling with mental health or other problems. Summary Mental health challenges are prevalent in the workplace. Fortunately, employers can be impactful by supporting and facilitating mentally healthy workplaces. They can boost employee mental health and overall wellness by creating open and trusting work environments and providing employees with mental health resources and support. Contact us for more employee benefits resources.

While some industries are busy due to holiday shopping and seasonal employment, recruiting often slows during the winter months—especially after the winter holidays. However, winter is also when many job candidates are setting goals and making plans for the coming year, which may include searching for new jobs and opportunities. Additionally, less recruiting activity means employers seeking to attract and hire employees during the winter may experience a competitive advantage over similar organizations. Simultaneously, many employers struggle to keep employees engaged during the winter months. Employers may notice decreased workplace productivity and morale associated with the cold, dark weather and stress of the holidays and winter months. Left unaddressed, a winter slump can negatively impact employee satisfaction and retention, leading to increased turnover rates and other employment challenges. Savvy employers can use winter employment challenges as opportunities to attract talented job candidates and re-energize the workforce. This article provides guidance for winter attraction and retention. Winter Attraction Tips Many individuals have more free time around the holidays. This provides an opportunity for employers to boost their recruiting efforts at a time when potential candidates have more free time and lenient schedules. Employers can consider the following strategies to improve winter attraction: Ramp up social media efforts Launch an employee referral program Share organizational and employee successes on social media Schedule interviews while candidates have free time around the holidays Build a talent pipeline to take advantage of the reduced hiring competition Recruit college or university students who graduated during the fall semester Use employment websites to improve branding and candidate outreach. Create a mobile-friendly application process Be quick and transparent with all candidate communications. Winter Retention Tips During the winter, employees often get less physical activity, spend less time outdoors and see their friends more infrequently. Additionally, many individuals experience a post-holiday slump, which refers to a period of mental fatigue or depression due to the emotional, financial and physical stress of the holiday season. This can negatively impact employees’ mental health and workplace performance. Employers can consider the following practices to boost employee engagement and retention during the winter months: Recognize and reward employees for good work and accomplishments Encourage goal-setting at the team, department and individual level Train employees to ensure they’re well-equipped to handle their workplace responsibilities Host active work breaks, such as 10-minute stretching or exercise options around the office Offer employees flexibility on days of severe winter weather Promote idea sharing and collaboration. Check-in with employees on a personal and professional level. Design a comfortable workspace (e.g., soft lighting and lounge chairs). Celebrate and encourage employees’ personal successes (e.g., birthdays and weddings). Encourage employees to take work breaks together. Offer holiday bonuses and other incentives (e.g., gift cards or prepaid cards). Encourage employees to take paid time off. Conclusion Winter can create employment challenges for employers looking to attract and retain talented individuals. Employers that adopt a proactive approach to attraction and retention during the winter months can combat employment challenges that might otherwise contribute to low morale, decreased productivity and high turnover rates.  Contact us today for more workplace resources.

Each year, the Kaiser Family Foundation conducts a survey to examine employer-sponsored health benefits trends. This article summarizes the main points of the 2023 Employer Health Benefits Survey . Health Insurance Premiums In 2023, the average premiums for employer-sponsored health insurance were $8,435 for single coverage and $23,968 for family coverage. The average single and family premiums increased by 7% over the last year, which was faster than the previous year (2% and 1%, respectively). Premiums for 2023 were expected to increase more in recent years since many 2022 premiums were locked in months before inflation became a significant concern. Additionally, the Kaiser report notes an increase of 5.2% in workers’ wages and inflation of 5.8%. The average premium for family coverage has risen 22% over the last five years, compared with a 27% increase in workers’ wages and 21% inflation. Premiums under high deductible health plans with savings options (HDHP/SOs) were still lower than the average premium. HDHP/SOs’ annual premiums for single and family coverages were $7,753 and $22,344, respectively. Conversely, on average, the premiums for workers enrolled in preferred provider organization (PPO) plans were higher than others. The average PPO premium was $8,906 for single coverage and $25,228 for family coverage in 2023. Worker Contributions The average worker contribution toward the premium was 17% for single coverage and 29% for family coverage in 2023, similar to 2022 percentages. In terms of dollar amounts, workers contributed $1,401 and $6,575 toward their premiums for single coverage and family coverage in 2023, respectively. Once again, these numbers were similar to 2022 figures but greater than five years ago. Plan Enrollment Enrollment figures were reasonably similar to last year’s. The following were the most common plan types in 2023: PPOs: 47% of workers covered HDHP/SOs: 29% of workers covered Health maintenance organizations (HMOs): 13% of workers covered Point-of-service (POS) plans: 10% of workers covered Conventional (indemnity) plans: 1% of workers covered Self-funding In the past few years, self-funded plans have become more popular. Many large organizations self-fund or pay for some or all health services for their workers directly from their own funds rather than purchase health insurance. In 2023, 65% of covered workers—including 18% at small firms and 83% in large firms—are enrolled in self-funded plans. The percentage of covered workers in self-funded plans in 2023 was similar to 2022. Employee Cost Sharing Most workers must pay a share of their health care costs, and the average deductible for single coverage was $1,735 in 2023, similar to last year’s number. The average annual deductible has increased 10% over the past five years and 53% over the past decade. The percentage of covered workers with a general deductible of $2,000 or greater for single coverage has increased by 5% over the last five years. Beyond deductibles, most workers cover some portion of the costs of their health care services. For example, 63% of covered workers had coinsurance, and 10% had a copay for hospital admissions. The average hospital admission coinsurance rate was 20% in 2023; the average payment amount is $404. In addition, nearly all workers are covered by a plan with an out-of-pocket maximum (OOPM), but the costs vary considerably. Among covered workers with single coverage, 13% had an OOPM of less than $2,000, and 21% had an OOPM of $6,001 or more. Availability of Employer-sponsored Coverage While nearly all large firms (those with 200 or more workers) offer health benefits to at least some workers, small firms (three to 199 workers) are significantly less likely to do so. In 2023, 53% of all firms offered some health benefits, which was similar to last year’s percentage (51%). Although the vast majority of workers are employed by firms offering health benefits, many aren’t covered by their employers. Some are not eligible to enroll, while others choose not for various reasons. Overall, 79% of workers are eligible for health benefits at firms that offer coverage, and 75% of eligible workers take up the organization’s offer. That works out to be 59% of workers at firms that offer health benefits enrolling in coverage. Among firms that offer health benefits and firms that do not, 53% of all workers were covered by health plans offered by their employer. This is similar to last year’s percentage. Health Promotion and Wellness Programs Many firms have programs that help workers identify health issues and manage chronic conditions. The 2023 Kaiser report highlights the following programs: Health risk assessments —Among organizations offering health benefits, 36% of small firms and 54% of large firms provided workers the opportunity to complete a health risk assessment, similar to last year. Among large firms that offer a health risk assessment, 59% used incentives or penalties to encourage workers to complete the assessment, higher than the percentage (50%) in 2022. Biometric screenings —Similar to last year’s trend, in 2023, workers at 15% of small firms and 42% of large firms were given the opportunity to complete a biometric screening. Among large firms with a biometric screening program, 67% use incentives or penalties to encourage workers to complete the assessment. Although this is a larger share than last year (57%), it is not significantly different. Health and wellness promotion programs —Organizations offer such programs to help employees improve their lifestyles and avoid unhealthy habits. Most employers—62% of small and 80% of large—offered a program in at least one of these areas: smoking cessation, weight management, and behavioral or lifestyle coaching. These figures are similar to those of last year. Disease management programs —Among organizations that offer health benefits, 36% of small firms and 64% of large firms offer disease management programs to improve employee health and reduce enrollees’ costs for certain chronic illnesses. These programs aim to educate workers about their disease and suggest treatment options. Telemedicine Large firms are more likely than small firms to cover telemedicine services. In 2023, 91% of large employers with 50 or more workers covered health care services through telemedicine in their largest health plan, similar to last year. While small firms are more likely than large firms to provide telemedicine services only through their health plan, large firms are more likely to provide telemedicine services through a specialized telemedicine provider. Since the COVID-19 pandemic officially ended, medical services are now generally available in person, and many employees have partially or fully returned to their workplaces. The Kaiser report highlighted how employers with 50 or more enrollees felt about the importance of telemedicine going forward. Overall, 28% of organizations believe telemedicine will be “very important” in providing access to enrollees in the future; another 32% say it’ll be “important.” While 41% of organizations say telemedicine will be “very important” in providing access to behavioral health services in the future, an additional 30% say it will be “important.” Fewer organizations feel that primary and specialty care—27% and 16%, respectively—will be “very important” in providing health care access. Abortion Services The U.S. Supreme Court decision in Dobbs v. Jackson, overturning Roe v. Wade, and subsequent state activity to regulate abortion has increased interest in coverage for abortion services in employer plans. In the 2023 survey, 32% of large firms (those with 200 or more workers) offering health benefits said that legally provided abortions are covered in most or all circumstances, and 18% said legally provided abortions are only covered under limited circumstances (e.g., rape, incest, or health or life endangerment of the pregnant enrollee). The majority of employers (40%) answered “Don’t know” to the prompt, perhaps reflecting the complexity of the issue and the changing landscape of state laws. A small percentage (7%) of large firms offering health benefits provide or plan to provide financial assistance for travel expenses for enrollees who travel out of state to obtain an abortion if they do not have access near their home. Conclusion As expected, the average annual premiums for both single and family coverage significantly increased in 2023 as the economy impacts health benefits. Looking ahead, inflation and wages are projected to moderate over the next two years. Employers should begin identifying tools and resources to offset higher premiums and offer robust mental health support. For more information on benefits offerings, contact us today.

The Internal Revenue Service (IRS) has released Notice 2023-75 , containing cost-of-living adjustments for 2024 that affect amounts employees can contribute to 401(k) plans and individual retirement accounts (IRAs). 2024 Increases The employee contribution limit for 401(k) plans in 2024 has increased to 23,000 , up from $22,500 for 2023. Other key limit increases include the following: The employee contribution limit for IRAs is increased to $7,000 , up from $6,500. The IRA catch‑up contribution limit for individuals aged 50 and over remains unchanged at $1,000 for 2024 (despite this limit now including an annual cost‑of‑living adjustment because of legislation enacted at the end of 2022, referred to as “SECURE 2.0”). The employee contribution limit for SIMPLE IRAs and SIMPLE 401(k) plans is increased to $16,000 , up from $15,500. The limits used to define a “highly compensated employee” and a “key employee” are increased to $155,000 (up from $150,000) and $220,000 (up from $215,000), respectively. The annual limit for defined contribution plans (for example, 401(k) plans, profit-sharing plans and money purchase plans) is increased to $69,000 , up from $66,000. The annual compensation limit (applicable to many retirement plans) is increased to $345,000 , up from $330,000. The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan remains unchanged at $7,500 . Therefore, participants in these plans who are 50 and older can contribute up to $30,500 , starting in 2024. The income ranges for determining eligibility to make deductible contributions to traditional IRAs, contribute to Roth IRAs and claim the Saver’s Credit (also known as the Retirement Savings Contributions Credit) also increased for 2024. More Information The IRS’s news release contains more details on the cost-of-living adjustments for 2024.

On Oct. 26, 2023, the National Labor Relations Board (NLRB) announced a final rule that establishes new criteria to determine joint-employer status. Joint employment situations can happen when two or more employers share personnel hiring, supervision and management practices. When a joint employment status exists, joint employers are equally responsible for compliance with applicable laws and regulations. Update as of Nov. 20, 2023: On Nov. 16, 2023, the National Labor Relations Board (NLRB) announced it would push the effective date of the new joint-employer rule to Feb. 26, 2024. The final rule was initially set to become effective on Dec. 26, 2023. However, the agency has delayed the effective date by two months to facilitate the resolution of legal challenges regarding the new rule. Notice of the extension will be published in the Federal Register. Joint Employment Whether joint employment is by design or unintentional, joint employers are equally: Liable for unfair labor practices committed by other joint employers; Required to bargain with the union that represents jointly employed workers; and Subject to union picketing or other economic pressure if there is a labor dispute. To determine whether a joint-employer relationship exists, employers must evaluate the degree of control they exert over “essential terms and conditions of employment.” Essential terms and conditions of employment include wages, benefits, hours of work and employee hirings, discharges, discipline, supervision and direction. 2020 Joint-Employer Standard The NRLB adopted the current joint-employer standard on April 27, 2020. This standard applies to labor issues related to the National Labor Relations Act . The current standard considers the “substantial direct and immediate control” employers have over essential terms and conditions of employment for individuals who are employed by another organization. Specifically, the 2020 joint-employer standard indicates that a business is a joint employer of another employer’s employees only if the degree of joint control is of sufficient magnitude to lead to the conclusion that the joint employer meaningfully affects matters relating to the employment relationship. In addition, under the 2020 rule, other evidence may suggest (but not prove) the existence of joint-employer status, particularly when the evidence points to indirect control or the right to exert control through contract or agreement (especially when control is never exercised). Overview of the 2023 Rule The new rule rescinds the 2020 joint-employer standard and: Clarifies the definition of “essential terms and conditions of employment,” Identifies the types of control that are necessary to establish joint-employer status and the types that are irrelevant to the joint-employer inquiry; and Describes the bargaining obligations of joint employers. Employers should pay particular attention to the fact that the 2023 rule was drafted to be more inclusive than the 2020 rule. This means it will become easier for employers to be classified as joint employers. The 2023 rule created this more inclusive standard for determining joint-employer status by removing the requirement that joint employers must “possess and exercise … substantial direct and immediate control” over essential terms and conditions of employment. In addition, the new standard more faithfully grounds the joint-employer rule in established common-law agency principles. Specifically, the rule considers the alleged joint employers’ authority to control essential terms and conditions of employment, regardless of whether such control is exercised. Finally, the NLRB has also stated that “the new rule also provides extensive guidance to parties regarding their rights and responsibilities in situations where joint-employer status has been established.” Terms and Conditions of Employment The final rule limits terms and conditions of employment to: Wages, benefits and other compensation; Hours of work and scheduling; The assignment of duties to be performed; The supervision of the performance of duties; Work rules and directions governing the manner, means and methods of the performance of duties and the grounds for discipline; The tenure of employment, including hiring and discharge; and Working conditions related to the safety and health of employees. Impact on Employers Employers, particularly contractors and subcontractors, should become familiar with the new rule and determine whether a more inclusive joint-employer standard would reclassify them as joint employers in their operations by the rule’s effective date. Employers affected by the new standard should also take precautionary steps to ensure other joint employers comply with regulations regarding labor and employment laws for joint employees.

A recent survey by management consulting company Gallup found that nearly three-quarters of the U.S. workforce are not engaged. Learning and development (L&D) opportunities provide employees with a purpose, encourage community and foster curiosity, all of which can contribute to increased employee engagement. Furthermore, these programs show employees their development is valued, which can boost morale and improve attraction and retention. In fact, educational technology company LinkedIn Learning found that three of the top five reasons employees search for new jobs relate to their desire to learn, grow and develop new skills. Successful L&D programs can also help employers reduce skills gaps and drive operational excellence. Yet, traditional learning opportunities aren’t always compatible with a modern workforce. For example, employers with a multi-generational workforce, a significant number of remote or semi-remote employees, or employees with a wide range of learning styles may find that conventional learning practices create unequal growth and learning opportunities within an organization. Therefore, finding an effective means for online training, such as a learning management system (LMS), is a critical aspect of many L&D programs. This article explains how LMSs can be used to further L&D programs and outlines potential benefits and drawbacks. LMS Overview An LMS is a software application or web-based technology employers can use to plan, design, implement and evaluate their L&D programs. They’re often used to store e-learning content and automate employee learning processes. LMSs can have basic functionality or be highly advanced technology that can gamify learning, advance social and mobile learning, and use artificial intelligence. The following are common functions of LMSs: Oversee training and e-learning Store, organize and distribute courses Track individual progress Set employee goals Communicate with individuals Provide detailed analyses Identify skills gaps Indicate individuals in need of additional support Benefits of Using LMSs LMSs can benefit organizations that want to provide self-paced learning opportunities or have a widely dispersed workforce. They can help organizations evolve, accelerate growth and address talent shortages. Using an LMS for L&D programs may be advantageous, as it may achieve the following: Reduce cost. Over the long term, e-learning can be a cost-effective learning solution. With LMSs, employers don’t need to pay for travel, instructors, vendors or other materials (e.g., training manuals), which can reduce total training costs. Save time. These systems allow employers to build complete courses quickly. These courses can continually reused and revised, reducing the time needed to onboard or retrain employees. Furthermore, LMSs lessen the administrative burden by automating much of the learning process. They also allow employees the opportunity for self-paced learning, which can reduce the amount of time employees spend away from work training. Promote a learning culture. Giving employees a tool for continual and self-driven learning with LMSs can enable employers to create a culture of growth and learning. This can benefit both employers and employees by providing individuals with access to updated training and upskilling programs that can reduce skills gaps within an organization. LMSs also allow organizations to understand how effective their training programs are by measuring learning outcomes and connecting them to organizational performance. Ensure compliance. Many organizations are required to provide employees with certain mandatory training (e.g., anti-harassment or health and safety training). LMSs track and store information proving that employees took and understood the required training. This can benefit employers in case of an audit or accident. Boost engagement. Employers can create innovative and meaningful content to boost employee interest and engagement in L&D. Many LMSs allow for gamification, in which employees can unlock higher skill levels by gaining certain features, such as trophies and badges. This can motivate employees to reach new levels of learning and achievement, increasing engagement and improving the user experience. Provide flexible learning. LMSs can easily be scaled up or down to meet the needs of an organization. Employers may choose from a wide variety of learning formats, including videos, webinars and e-learning modules. Personalized learning paths can also be created to meet individual needs, providing employees with an effective learning experience suited for them. Increase accessibility. Using an online learning system can help employers provide all employees with equal access to onboarding and learning opportunities. This can help ensure that employees won’t be held back from professional growth due to location, schedule availability or learning styles. Drawbacks of LMSs As a software system, an LMS may not be right for every organization. Before purchasing an LMS, employers should consider the following potential disadvantages: Set-up time — There is a significant upfront time commitment to implementing an LMS. After researching different LMS options, employers must learn how to create courses and implement the system, which may require administrators to undergo system training before launching the course. Additionally, coding and IT knowledge may be required to customize the courses. User-friendliness —Employees who aren’t tech-savvy may initially struggle to adapt to online learning. As a result, it may take more time for some individuals to adapt to the new technology. Employers can help by selecting LMSs with simple and engaging features to improve employee engagement and use. Associated costs —Although LMSs are generally a cost-effective learning solution, there are necessary expenditures, such as purchase fees and implementation, training, security and maintenance costs. These can quickly exceed an employer’s L&D budget. Employers may also find that they must hire additional third-party platforms to boost compatibility and functionality. Limited options for personalized learning —The ability to individualize learning to meet employee needs is a crucial benefit of LMSs. However, some LMSs may provide limited opportunities for personalization, which can make employee learning and engagement less effective. User issues —If LMS support fails to meet the needs of an organization, it can dramatically impact the functionality of an LMS and cause decreased employee engagement. For example, if an LMS only provides basic tutorial information, administrators and users may struggle with the functionality of courses. Furthermore, e-learning may not be right for all learning styles or all types of training (e.g., physical skills). It also lacks human connection, which some individuals may need or desire for optimal learning. Lack of enforceability —Unlike in-person training, which is easy to enforce, LMSs require employees to be self-disciplined and follow through with their training with minimal oversight. As a result, employees may fail to complete essential training. They may also be able to cheat their way through LMS courses, which can undermine the effectiveness of L&D programs. Conclusion Employee L&D is a long-term investment that can contribute to organizational success by lowering turnover, reducing skills gaps and improving employee satisfaction. As organizations navigate the diverse needs of a modern workforce, learning technology such as LMSs may help ensure that all employees have equal access to L&D opportunities. Contact us today for more workplace resources.

The U.S. Equal Employment Opportunity Commission (EEOC) recently released its Strategic Enforcement Plan (SEP) for fiscal years (FYs) 2024-28. The SEP establishes the agency’s subject matter priorities as it works to prevent and remedy discrimination in the workplace. In particular, the SEP updates and refines the commission’s subject matter priorities to reflect progress in achieving its goals of equal employment while recognizing the challenges that remain in reaching those goals. This plan will help guide the EEOC’s work, including outreach, education, technical assistance, enforcement and litigation. The EEOC’s subject matter priorities for FYs 2024-28 include the following: Eliminating barriers in recruitment and hiring Protecting vulnerable workers and individuals from underserved communities from employment discrimination Addressing selected emerging and developing issues, such as protections for workers affected by pregnancy, childbirth or related medical conditions; employment discrimination associated with the long-term effects of COVID-19 symptoms; and technology-related employment discrimination Advancing equal pay for all workers Preventing and remedying systemic harassment Preserving access to the legal system by addressing employment waivers, releases, and nondisclosure and nondisparagement agreements Employer Takeaways As the SEP will guide the agency’s enforcement priorities for the next five years, employers should consider reviewing the plan to determine how it may impact their organizations. We will keep you apprised of any notable updates.

The IRS has released final 2023 forms and instructions for reporting under Internal Revenue Code Sections 6055 and 6056: 2023 Forms 1094-B and 1095-B (and instructions ) will be used by providers of minimum essential coverage, including self-insured plan sponsors that are not applicable large employers (ALEs), to report under Section 6055. 2023 Forms 1094-C and 1095-C (and instructions ) will be used by ALEs to report under Section 6056 as well as for combined Section 6055 and 6056 reporting by ALEs who sponsor self-insured plans. Draft versions of these forms were released in July, and draft instructions were released in September. No major substantive changes were made to the final forms and instructions for 2023 reporting. Final Instructions Address New Electronic Filing Threshold The 2023 instructions include information on the new electronic filing threshold for information returns required to be filed on or after Jan. 1, 2024, which has been decreased to 10 or more returns (originally, the threshold was 250 or more returns). Specifically, the instructions provide the following clarifications and reminders: The 10-or-more requirement applies in the aggregate to certain information returns. Accordingly, a reporting entity may be required to file fewer than 10 of the applicable Form 1094 and 1095, but still have an electronic filing obligation based on other kinds of information returns filed (e.g., Forms W-2 and 1099). The electronic filing requirement does not apply to those reporting entities that request and receive a hardship waiver; however, the IRS encourages electronic filing even if a reporting entity is filing fewer than 10 returns. The formatting directions in the instructions are for the preparation of paper returns. When filing forms electronically, the formatting set forth in the “XML Schemas” and “Business Rules” published on IRS.gov must be followed rather than the formatting directions in the instructions. For more information regarding electronic filing, see IRS Publications 5164 and 5165 . Action Steps Employers should become familiar with these forms and instructions for 2023 calendar year reporting and begin to explore options for filing ACA reporting returns electronically (e.g., they may be able to work with a third-party vendor to complete the electronic filing). Reporting entities that may be in a position to perform their own electronic reporting can review the IRS’ ACA Information Returns (AIR) Program webpage .

When a plan participant or beneficiary has Medicare and other health insurance, such as group health plan insurance, retiree coverage or Medicaid, there can often be confusion as to which insurance pays first on claims. Coordination of benefits (COB) rules, which are specified in plan documents or insurance policies, decide which insurance pays first. One plan is considered the primary payer that covers most expenses, while the secondary plan covers any remaining allowable expenses not covered by the primary plan. The COB allows health plans to provide health or prescription drug coverage to individuals receiving Medicare to determine their payment responsibilities. This helps ensure that the total amount paid by all insurance plans does not exceed the total costs of the health care expenses for Medicare-covered services and items. This article provides a general overview of COB rules under Medicare. How Does Medicare Work With Other Insurance? There are many important facts to remember regarding how other insurance works with Medicare-covered services and items, such as the following: The primary payer pays first and up to its coverage limits. The secondary payer only pays if there are costs the primary payer doesn’t cover. The secondary payer, which may be Medicare in certain situations, might not pay all the uncovered costs from the primary payer. If a group health plan or retiree coverage is the secondary payer, the individual may need to enroll in Medicare Part B before that insurance would pay. If a Medicare-covered individual’s other health insurance is the primary payer and fails to promptly pay a claim, typically within 120 days, that individual’s doctor or service provider may bill Medicare. Medicare can make a conditional payment for the individual’s claim, recovering any payments the primary payer should have paid at a later date. What’s a Conditional Payment? A conditional payment is a payment Medicare makes for services for which another payer may be responsible. Medicare makes this payment, so the plan participant or beneficiary won’t have to pay the claim. The payment is conditional because it must be repaid to Medicare if the Medicare-covered individual receives a settlement, judgment, award or other payment later. Who Pays First? When an individual has Medicare and other insurance, there are rules for whether Medicare or the other insurance is the primary payer for Medicare-covered services and items. Medicare is typically the primary payer for Medicare-covered services and items in the following circumstances: An individual is covered by only Medicare and Medicaid. An individual covered by Medicare refuses group health coverage. Medical services or supplies are not covered under a group health plan but are covered under Medicare. A Medicare-covered individual is covered by a group health plan but has exhausted their coverage under the group health plan. A Medicare-covered individual is 65 or older and covered by a group health plan (because the individual or their spouse is still working) offered by an employer with fewer than 20 employees. A Medicare-covered individual is 65 or older and covered by an employer group health plan after retirement. A Medicare-covered individual is 65 or older (or disabled) and covered by Medicare and the Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage. A Medicare-covered individual is disabled and covered by a large group health plan offered by an employer with fewer than 100 employees. A Medicare-covered individual has end-stage renal disease and is enrolled in a group health plan or COBRA (after 30 months of eligibility or entitlement to Medicare). A Medicare-covered individual has only Medicare and TRICARE coverage unless the individual is on active duty and receives services and items from a military hospital, clinic or other federal health care provider. For a complete list of situations where Medicare is the primary payer, visit Medicare.gov or review the Centers for Medicare and Medicaid Services’ guide, Medicare & Other Health Benefits: Your Guide to Who Pays First . How Does Medicare Know if an Individual Has Other Coverage? COB permits an individual’s Medicare eligibility information to be shared with other payers and sends Medicare-paid claims to secondary payers for payment. The Benefits Coordination and Recovery Center (BCRC) does the following on Medicare’s behalf: Collect and manage information on other types of coverage an individual with Medicare may have. Determine whether an individual’s other coverage pays before or after Medicare. Pursue repayment when Medicare makes a conditional payment. Medicare doesn’t automatically know if a Medicare-covered individual has other health insurance; however, insurers are required to notify Medicare when they’re responsible for paying first for Medicare-covered services and items. In some instances, the individual’s health care provider, employer or insurer may ask them about their current coverage so they can report that information to Medicare. Additionally, insurers must report coverage changes to Medicare. Summary Understanding COB rules is vital to ensuring that a Medicare-covered individual’s claims are paid correctly. While COB rules can be complex, they can help Medicare plan participants and beneficiaries make the best use of their health care coverage. For more health care resources, contact Simco today.

Insurance audits are a fundamental aspect of the insurance industry, serving to determine accurate premium rates and ensure that policyholders are paying the correct amount for their coverage. These audits are a collaborative effort between the insurance provider and the policyholder. In this article, we will delve into what insurance audits entail and the essential responsibilities of policyholders to guarantee their accuracy. What is an Insurance Audit? An insurance audit is a review of a policyholder's financial records to confirm that the premium paid aligns with the actual risk exposure and operational changes within the policy period. It's a mechanism employed by insurers to establish accurate premium rates, especially for policies with variable factors such as worker's compensation or general liability insurance. Why Are Insurance Audits Necessary? Insurance audits are vital for maintaining the integrity of the insurance system. They ensure that policyholders are appropriately charged based on the level of risk associated with their business or personal circumstances. Here's why they are necessary: Premium Accuracy: Audits help prevent overpayment or underpayment of premiums, ensuring fairness for both the insurer and policyholder. Risk Assessment: Businesses evolve, and operational changes can affect insurance requirements. Audits allow insurers to adjust coverage to match a company's evolving needs. Legal Compliance: Many insurance policies require audits to ensure compliance with regulations and contractual obligations. Responsibilities of the Policyholder Policyholders play a crucial role in the insurance audit process. Here are their key responsibilities: Accurate Record Keeping: Maintain detailed and accurate financial records, including payroll, revenue, certificates of insurance for all vendors or subcontractors, and any other information pertinent to your policy. Timely Reporting: Notify your insurance provider of any significant changes in your business operations, such as new hires, additional locations, or changes in job classifications. Timely reporting ensures that your policy remains up to date. Cooperation: Cooperate with the auditor when they visit your premises or request information. This includes providing access to financial records, employee records, and any other documents necessary for the audit. Transparency: Be transparent about your operations. Hiding or misrepresenting information can lead to costly consequences and potential policy cancellations. Ask Questions: If you're uncertain about any aspect of the audit, don't hesitate to ask questions. It's essential to have a clear understanding of the process and its implications. Review the Audit: After the audit is completed, carefully review the auditor's findings to ensure accuracy. If you have any concerns or discrepancies, address them promptly with your insurance provider. Insurance audits are a collaborative process that benefits both policyholders and insurance providers. They help ensure accurate premiums, compliance with regulations, and alignment of coverage with changing business needs. As a responsible policyholder, maintaining accurate records, reporting changes promptly, and cooperating with auditors are essential steps to ensure the process goes smoothly and accurately reflects your insurance needs. By fulfilling your responsibilities, you can help maintain a fair and transparent insurance system that benefits everyone involved.

October is Cybersecurity Awareness Month, making it the perfect time to safeguard your business against the rising tide of cyber threats. Learn how to defend your company's digital assets and ensure long-term security. Businesses, both large and small, are increasingly reliant on the internet for daily operations, creating attractive and potentially lucrative targets for cyber criminals. With such heavy use of and reliance on computers and the internet by both large and small organizations, protecting these resources has become increasingly important. Learning about cyberattacks and how to prevent them can help you protect your company from security breaches. Cyberattacks Compromise Your Company Cyberattacks include many types of attempted or successful breaches of computer security. These threats come in different forms, including phishing, viruses, Trojans, key logging, spyware and spam. Once hackers have gained access to the computer system, they can accomplish any of several malicious goals, typically stealing information or financial assets, corrupting data or causing operational disruption or shutdown. Both third parties and insiders can use a variety of techniques to carry out cyberattacks. These techniques range from highly sophisticated efforts to electronically circumvent network security or overwhelm websites to more traditional intelligence gathering and social engineering aimed at gaining network access. Cyberattacks can result directly from deliberate actions of hackers, or attacks can be unintentionally facilitated by employees—for example, if they click on a malicious link. According to historical claim data analyzed by Willis Towers Watson, 90 percent of all cyber claims stemmed from some type of employee error or behavior. The high-profile Equifax, Snapchat and Chipotle data breaches were all caused by employee error or behavior. A breach in cyber security can lead to unauthorized usage through tactics such as the following: Installing spyware that allows the hacker to track Internet activity and steal information and passwords Deceiving recipients of phishing emails into disclosing personal information Tricking recipients of spam email into giving hackers access to the computer system Installing viruses that allow hackers to steal, corrupt or delete information or even crash the entire system Hijacking the company website and rerouting visitors to a fraudulent look-alike site and subsequently stealing personal information from clients or consumers Cyberattacks may also be carried out in a manner that does not require gaining unauthorized access, such as denial-of-service (DoS) attacks on websites in which the site is overloaded by the attacker and legitimate users are then denied access. The Vulnerable Become the Victims The majority of cyber criminals are indiscriminate when choosing their victims. The Department of Homeland Security (DHS) asserts that cyber criminals will target vulnerable computer systems regardless of whether the systems belong to a Fortune 500 company, a small business or a home user. Cyber criminals look for weak spots and attack there, no matter how large or small the organization. Small businesses, for instance, are becoming a more attractive target as many larger companies tighten their cyber security. According to the industry experts, the cost of the average cyberattack on a small business is increasing exponentially and shows no signs of slowing down. Nearly 60 percent of the small businesses victimized by a cyberattack close permanently within six months of the attack. Many of these businesses put off making necessary improvements to their cyber security protocols until it is too late because they fear the costs would be prohibitive. Simple Steps to Stay Secure With cyberattacks posing such a prominent threat to your business, it is essential to create a plan to deal with this problem. Implementing and adhering to basic preventive and safety procedures will help protect your company from cyber threats. Following are suggestions from a Federal Communications Commission (FCC) roundtable and the DHS’s Stop.Think.Connect. program for easily implemented security procedures to help ward off cyber criminals. These suggestions include guidelines for the company as well as possible rules and procedures that can be shared with employees. Security Tips for Your Company Cyber security should be a company-wide effort. Consider implementing the following suggestions at your organization: Install, use and regularly update anti-virus and anti-spyware software on all computers. Download and install software updates for your operating systems and applications as they become available. Change the manufacturer’s default passwords on all software. Use a firewall for your internet connection. Regularly make backup copies of important business data. Control who can physically access your computers and other network components. Secure any Wi-Fi networks. Require individual user accounts for each employee. Limit employee access to data and information, and limit authority for software installation. Monitor, log and analyze all attempted and successful attacks on systems and networks. Establish a mobile device policy and keep them updated with the most current software and anti-virus programs. Security Tips for Employees Use strong passwords, change them periodically and never share them with anyone. Never repeat a password across accounts. Protect private information by not disclosing it unless necessary, and always verify the source if asked to input sensitive data for a website or email. Don’t open suspicious links and emails; an indication that the site is safe is if the URL begins with https://. Scan all external devices, such as USB flash drives, for viruses and malicious software (malware) before using the device. Securing Your Company’s Mobile Devices Gone are the days when contact names and phone numbers were the most sensitive pieces of information on an employee’s phone. Now a smartphone or tablet can be used to gain access to anything from emails to stored passwords to proprietary company data. Depending on how your organization uses such devices, unauthorized access to the information on a smartphone or tablet could be just as damaging as a data breach involving a more traditional computer system. The need for proper mobile device security is no different from the need for a well-protected computer network. Untrusted app stores will continue to be a major source of mobile malware which drives traffic to these stores. This type of “malvertising” continues to grow quickly on mobile platforms. Most importantly, stay informed about cyber security and continue to discuss internet safety with employees. Don’t Let it Happen to Your Company According to the DHS, 96 percent of cyber security breaches could have been avoided with simple or intermediate controls. Strengthening passwords, installing anti-virus software and not opening suspicious emails and links are the first steps toward cyber security. In addition to the listed tips, the FCC provides a tool for small businesses that can create and save a custom cyber security plan for your company, choosing from a menu of expert advice to address your specific business needs and concerns. A data breach could cripple your small business, costing you thousands or millions of dollars in lost revenue, sales, damages and reputation. Contact SimcoHR today. We have the tools necessary to ensure you have the proper coverage to protect your company against losses from cyberattacks.

Employers continue to struggle with rising health care costs and providing employees with affordable and quality care options. Unfortunately, employers expect health care costs to increase significantly in 2024, according to several industry surveys and reports. These findings revealed that employers anticipate health care costs to grow between 6.5% and 8.5% in 2024, the largest increase in more than a decade. As a result, employer-sponsored health care plans may cost more than $15,000 per employee. For the most part, employers have avoided shifting increasing health care costs onto employees due to the tight labor market and ongoing attraction and retention challenges. Despite employers’ reluctance to shift the burden of rising costs onto employees, workers will likely pay more for health care as overall medical expenses increase. Health insurance costs are already among the biggest expenses for American families; therefore, employees will likely feel increasingly stressed and burdened financially as they are forced to pay more for care. As such, employers have an opportunity to support their workers by helping them navigate rising costs. This article provides guidance to help employers discuss increasing health care costs with their workers and aid employees in mitigating these expenses. Why Are Health Care Costs Rising? Health care costs have increased relatively slowly over the last few years, in part due to decreased utilization during the COVID-19 pandemic and because insurer contracts typically are not renegotiated annually. However, several market conditions have recently led to steep increases in health care costs. For example, health care utilization has rebounded, resulting in medical plan costs returning to pre-pandemic levels. Utilization has especially increased for catastrophic claims and among individuals with chronic health conditions. Inflation is also causing health care costs to rise. Hospitals and medical providers are increasing prices to address rising employee wages and supply costs. Additionally, consolidation among hospitals, physician practices and commercial insurers has resulted in higher health care prices for insurers. Other reasons why health care costs are expected to increase in 2024 include the following: Specialty and costly prescription drugs, especially the high demand for diabetes and obesity drugs Cell and gene therapies Technological advancements Workforce shortages These market conditions started affecting insurance rates and contracts in 2023, and their impact is only expected to grow in 2024. As a result, increases in health plan expenses are expected to impact all employers, regardless of size and whether they are fully or self-insured. How Employers Are Responding to Rising Costs While some employers may pass increasing health care costs onto their employees, many employers are expected to absorb most of the higher costs to remain attractive to top talent and retain their workforce. Instead, these employers are expected to embrace cost control initiatives, such as requiring prior authorization, utilizing disease management and adding nurse advice lines. Other strategies employers will likely implement to manage rising health care costs include wellness programs; plan design initiatives (e.g., offering high deductible health plans, requiring spousal surcharges or carve-outs and conducting dependent eligibility audits); and offering telemedicine, price transparency tools and centers for excellence. Helping Employees Navigate Rising Health Care Costs Even though most employers will not pass rising health care costs onto employees, how employers communicate changes and information related to increasing medical costs is critical. It presents employers with an opportunity to build trust, strengthen employee loyalty and reduce the risk of turnover. Employers should consider the following strategies for communicating with employees about rising health care costs. Establish Key Messaging How employers communicate about rising health care costs and any benefits changes to employees can often impact whether they are understood and accepted. By keeping key messaging simple and clear, such as focusing on new or updated benefits offerings, employers can better ensure that employees understand any changes. Clear and simple messaging can be repeated often, helping to distribute important health care and benefits information to the entire workforce. If changes to benefits plans result in increased costs or reduced offerings for employees, employers can find ways to communicate not only takeaways but also givebacks (e.g., increasing employee premium contributions but adding certain supplemental benefits, such as transportation benefits). This allows employers to demonstrate to employees what they are doing to address rising health care costs and that they are mindful of employees’ financial burden due to increasing costs. This can help organizations get employee buy-in for any benefits changes and build loyalty and trust with their workforce, which can help improve productivity and attraction and retention efforts. Communicate Changes to Employees As organizations make changes to their health insurance plans and offerings to address increasing medical costs in 2024 and beyond, it’s important to clearly communicate those changes to employees. Failing to do so may result in employees paying for expensive and, in some cases, unnecessary care. This may include employees going needlessly out of network to receive care, resulting in increased medical costs. With this in mind, effective employee communication can help employers with implementing cost control measures. Select Appropriate Communication Channels Since every workplace is different, selecting multiple communication channels that are engaging and relevant to the workforce is essential. Leveraging technology can help employers communicate frequently and effectively with employees about changes to health care costs, benefits and offerings rather than simply relying on in-person or physical communication methods. Digital channels allow employees to access information when and where they need it. Still, in-person communication, on-site meetings and physical mailers can play an important role in communicating increasing costs and benefits changes to employees as well as ensuring these changes are understood and received. Educate Employees About Health Care Costs Employers can educate employees on the current state of the health insurance industry and how to effectively use their health plans to avoid unnecessary or high-cost care. By focusing on educating employees about any changes and rising costs, organizations can enhance the overall effectiveness of their communication methods and increase the likelihood that employees will accept them. Employers can also give employees a breakdown of total health care premiums and the portions paid by each party to help workers understand how medical costs impact a company’s bottom line as well as the total value of the benefits provided to employees. Additionally, employers can provide tools to help employees make the most cost-effective health care decisions. Employer Takeaway Helping employees navigate rising health care costs is an ongoing process, but it’s essential that workers feel properly informed about medical expenses, benefits options and mitigation strategies. Establishing strategies to communicate important information regarding increasing health care costs and benefits changes is vital to the health and well-being of an organization’s workforce. As health care costs will likely increase for the foreseeable future, employers who act now to address workers’ concerns regarding rising health care costs and provide actionable solutions can improve employee retention, increase productivity, strengthen staff morale and gain a leg up on their competition. For additional employee benefits resources, contact us today.

On Tuesday, Aug. 29, the Biden administration unveiled the first 10 prescription drugs subject to Medicare price negotiations. Medicare provides health insurance coverage to 65 million Americans, including 57 million seniors. More than 60% of the 65 million people on Medicare take prescription medication, and 25% take at least four prescriptions, according to a Kaiser Family Foundation survey. Under the Inflation Reduction Act, the Medicare Drug Price Negotiation Program allows the federal government to negotiate directly with drug manufacturers to improve access to some of the costliest brand-name drugs. Many Medicare Part D enrollees depend on medications to treat life-threatening conditions, such as diabetes and heart failure, but may not be able to access them due to costs. The following Medicare Part D drugs will be the first ones subject to these negotiations: Eliquis , for preventing and treating blood clots Jardiance , for treating diabetes and heart failure Xarelto , for preventing and treating blood clots; risk reduction for patients with coronary or peripheral artery disease Januvia , for treating diabetes Farxiga , for treating diabetes, heart failure and chronic kidney disease Entresto , for treating heart failure Enbrel , for treating rheumatoid arthritis, psoriasis and psoriatic arthritis Imbruvica , for treating blood cancers Stelara , for treating psoriasis, psoriatic arthritis, Crohn’s disease and ulcerative colitis Fiasp/Novolog , for treating diabetes These 10 drugs are among the highest costs in total spending in Medicare Part D. In fact, Medicare enrollees taking these drugs paid a collective $3.4 billion in out-of-pocket costs in 2022 to obtain them. Due to the high costs of these prescriptions, many Americans are forced to choose between paying for vital medications or food and other necessities. What’s Next? The Medicare Drug Price Negotiation Program is the Biden administration’s latest effort to combat rising health care costs. As such, Medicare drug price negotiation aims to lower out-of-pocket costs for millions of seniors and offer savings for taxpayers. The first round of Medicare Part D drug negotiations will begin this year, with the new prices becoming effective in 2026. Over the next four years, Medicare plans to negotiate prices for up to 60 Part D and Part B drugs—and up to an additional 20 drugs every year after that. Employers should continue to monitor health care trends, utilization and spending. Contact us today for more information.

New York State’s Pay Transparency Law (New York State Labor Law Section 194-b) requires employers with four (4) or more employees to include a range of pay for all advertised job, promotion, or transfer opportunities. This fact sheet is intended to help employers navigate the new law and meet its requirements. NYS PAY TRANSPARENCY LAW As of September 17, 2023, the New York State Pay Transparency Law requires all job, promotion or transfer opportunities advertised by an employer to include a salary, hourly rate, or range of pay. This law applies to employers with four (4) or more employees. This applies to all job, promotion or transfer opportunities that will be physically performed, at least in part, in New York State. The law also applies to opportunities performed outside New York State that report to a supervisor or office in New York State. Any remote or telecommuting opportunities that will report to a supervisor, office or worksite in the state of New York are covered by this law, regardless of whether the employee will be working from home outside New York State. If an employee’s physical presence in New York State is only for occasional work-related purposes, such as a meeting, a conference, or communicating with employees based in New York State, that would not be enough activity to be considered a job performed in New York State. Under this law, employers are prohibited from retaliating against employees who discuss their compensation with coworkers. ADVERTISEMENTS COVERED BY THIS LAW Advertisements require a range of pay regardless of how or where they are posted. This law covers any job posting shared with more than one person and made available internally or to the public. Covered posting mediums include but are not limited to: newspaper ads, printed flyers, social media posts, website postings, anything sent to an electronic mailing list, and emails sent to a pool of more than one applicant. Opportunities are covered whether posted by the employer directly or on the employer’s behalf by a third-party such as through a job-listing website. Employers are not responsible for any postings that are re-posted or “scraped” by a third-party website without their consent. If an employer requires more space to include full range of pay information, they may post it in a separate location, as long as the information is still available free of charge and easily accessible. For instance, posting on social media with a link to the full job posting on the company’s website. HOW TO DRAFT A PAY RANGE A pay range must include a minimum and maximum annual salary or hourly rate of compensation for a job, promotion, or transfer opportunity that the employer in good faith believes to be accurate at the time of the posting. If the employer does not plan to offer a range, but instead plans to offer a single fixed rate, such as $30 an hour, the fixed rate must be listed. A pay range cannot be open-ended. For example, “$20+ an hour” is not allowed. A range of pay cannot include other forms of compensation or benefits such as employer provided insurance, paid leave or retirement savings. However, employers are encouraged to disclose such benefits separately. If compensation for an opportunity is completely commission based, employers must state that clearly when advertising the opportunity. The law specifies employers must make a good faith effort to determine range of pay. GOOD FAITH EFFORT A good faith pay range is one that an employer legitimately believes they are willing to pay at the time of the advertisement’s posting. Employers should consider factors such as the job market, current employee pay levels, hiring budget and the experience/education levels they are willing to accept from the candidate in determining a good faith range of pay. An employer may adjust the range of pay in an advertisement after collecting additional information during the hiring process. HOW TO DRAFT A POSTING FOR MULTIPLE LOCATIONS OR OPPORTUNITIES A range of pay must be for single opportunity and location/region. Postings that include multiple possible locations or multiple opportunities at different levels of seniority must include a separate pay range for each location or opportunity. For example, if an employer is using one post to seek three Plant Manager positions in three different counties, the employer must post a range for each location: PLANT MANAGER LOCATION RANGE OF PAY Westchester County $100,000 - $125,000 Erie County $75,000 - $90,000 Clinton County $75,000 - $90,000 TEMPORARY HELP FIRMS This law does not apply to temporary help firms seeking to hire workers to perform work or services for other organizations. Employers seeking to hire workers through a temporary help firm must include a range of pay. However, any advertisement for an opportunity to work directly for the temporary help firm, for instance as the Executive Director, must include a range of pay. JOB DESCRIPTIONS All postings for a job, promotion or transfer opportunity must contain a job description when available. An employer must create a job description except in the limited circumstance where the title conveys the job duties. When the job title clearly conveys the duties for the job, for instance, dishwasher, a job description is not required. WHAT THIS LAW DOES NOT DO This law does not require employers to create a posting for every available job, promotion, or transfer opportunity. This law does not require employers to use a specific medium for advertisements.

Many employees need help with open enrollment. This is particularly true among younger workers, who typically have less experience selecting benefits than older generations that have been in the workforce longer. A study by insurance and employee benefits provider MetLife found that 26% of Generation Z (Gen Z) employees are insecure about making benefits decisions. Employers who successfully educate young employees about open enrollment are likely to find that workers are more satisfied with their benefits packages, make better financial decisions and are more likely to recommend their organization to other people. Such positive outcomes can significantly influence an organization’s overall financial performance. To this end, employers can implement several strategies for educating young employees to help them navigate open enrollment. Educating Young Employees Clear communication is crucial to ensure workers understand the open enrollment process and the benefits they’re signing up for. Employers should consider the following strategies for educating younger employees on open enrollment: Prioritize internal communications. Young employees may be unfamiliar with the open enrollment process. Inform employees about the upcoming open enrollment through multiple channels (e.g., emails, flyers and meetings). Ensure every employee knows when open enrollment begins, the last day to complete enrollment and the consequences of failing to enroll in time.  Create multiple avenues for communication. Ensure young workers know how to ask questions about open enrollment and feel comfortable speaking to HR and their managers about the upcoming enrollment. Encourage these employees to discuss their benefits plans with their friends, family and more experienced coworkers. Provide educational resources. Give workers the information they need to make informed benefits decisions during open enrollment. To target young workers, employers should provide digital resources such as online webinars, videos, social media posts and articles. Explain benefits options. Employees are likely to think primarily of health insurance during open enrollment and may overlook voluntary benefits that could be useful to them. Employers should provide information about employee benefits choices (e.g., pet insurance, student loan repayment assistance and employee assistance programs) so that young employees don’t forgo benefits they may want later in the year. Cater to employee needs. Young generations of workers have different benefits needs than older generations. For example, they’re more likely to prioritize mental health resources and student loan assistance over life insurance or financial planning for retirement. Employers should capitalize on the wants and needs of younger generations to educate them on benefits they care about. Encourage young employees to take their time. Rushing through open enrollment can cause workers to forgo crucial benefits. This is especially true of young workers, who may feel stressed or unsure of the open enrollment process. Give employees ample time to research and select their benefits and encourage them to ask questions. Communicate all year round. Benefits education should be more than a flurry of activity during the open enrollment window. Employers should provide employees with the resources they need to understand and maximize their benefits all year round, highlighting the direct financial impact benefits decisions can have on employees. This can help young workers understand the importance of open enrollment and the impact that rushing through the process can have on their financial well-being, increasing the likelihood that they’ll make informed benefits decisions when the time comes. Conclusion Open enrollment can be a nerve-wracking period for all employees. The stress of selecting benefits is often most keenly felt by younger workers with less experience selecting benefits. Employers can use open enrollment as an opportunity to increase communication and trust with young workers by educating them on the process and their benefits choices. This may increase younger generations’ satisfaction with their benefits packages and jobs, improving organizations’ employee attraction and retention and ultimately their bottom lines. Contact us today for more information.

On Aug. 30, 2023, the U.S. Department of Labor (DOL) announced a proposed rule to amend current requirements employees in white collar occupations must satisfy to qualify for an overtime exemption under the Fair Labor Standards Act (FLSA). The FLSA white collar exemptions apply to individuals in executive, administrative, professional, and some outside sales and computer-related occupations. Some highly compensated employees may also qualify for the FLSA white collar overtime exemption. To qualify for this exemption, white collar employees must satisfy the standard salary level test, among other criteria. This salary level is a wage threshold that white collar employees must receive to qualify for the exemption. The DOL is proposing to increase the standard salary level from: $684 to $1,059 per week ($55,068 per year); and $107,432 to $143,988 per year for highly compensated employees. Action Steps The proposal does not impose any new requirements on employers at this time. However, employers should become familiar with the proposed rule and evaluate what changes they may need to adopt if the rule is implemented as proposed. OVERVIEW 1. What is the purpose of the Department’s proposed rule? This rulemaking proposes to update and revise the regulations for determining whether certain white-collar salaried employees are exempt from minimum wage and overtime requirements under section 13(a)(1) of the Fair Labor Standards Act (FLSA). Employees are exempt if they are employed in a bona fide executive, administrative, or professional (EAP) capacity as those terms are defined in the Department of Labor’s regulations at 29 CFR part 541. This exemption from the FLSA is sometimes referred to as the “white-collar” or “EAP” exemption. 2. What is “overtime?” Unless specifically exempted, an employee covered by the FLSA must receive pay for hours worked in excess of 40 in a workweek at a rate not less than one and one-half their regular rate of pay. This is referred to as “overtime” pay. 3. What determines if an employee falls within the EAP exemption? Currently, to fall within the EAP exemption, an employee generally must: Be paid a salary, meaning that they are paid a predetermined and fixed amount that is not subject to reduction because of variations in the quality or quantity of work performed (the “salary basis test”); Be paid at least a specified weekly salary level, which is $684 per week (the equivalent of $35,568 annually for a full-year employee) in the current regulations (the “salary level test”); and Primarily perform executive, administrative, or professional duties, as provided in the department’s regulations (the “duties test”). Certain employees are not subject to either the salary basis or salary level tests (for example, doctors, teachers, and lawyers). 4. When did the Department last revise the exemption regulations for EAP workers? The Department last updated the EAP exemption regulations in 2019. That update, which included setting the standard salary level test at its current amount of $684 per week (equivalent to a $35,568 annual salary), has been in effect since January 1, 2020. 5. Why is the Department proposing to revise the exemption regulations for EAP workers? The Department is committed to keeping the earnings thresholds up to date for the benefit of both workers and employers. Four years have passed since the 2019 rule, during which time salaried workers in the U.S. economy have experienced a rapid growth in their nominal wages, which lessens the effectiveness of the current salary level threshold. Through this rulemaking, the Department seeks to update the salary level test to more effectively identify who is employed in a bona fide executive, administrative, or professional capacity and ensure that the FLSA’s intended overtime protections are fully implemented. In addition to updating the salary level to account for increased wages, the Department’s proposal would ensure that the salary level effectively performs its historic function of screening nonexempt employees from the overtime exemption and would more effectively account for the switch from a two-test to a one-test system. 6. What is the Department proposing to change about its exemption regulations for EAP workers? In this rulemaking, the Department proposes to: Increase the standard salary level to the 35th percentile of earnings of full-time salaried workers in the lowest-wage Census Region (currently the South), which would be $1,059 per week ($55,068 annually) based on current data; Apply the standard salary level to Puerto Rico, Guam, the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands, and increase the special salary levels for American Samoa and the motion picture industry; Increase the highly compensated employee (HCE) total annual compensation requirement to the annualized weekly earnings of the 85th percentile of full-time salaried workers nationally, which would be $143,988 per year based on current data; and Automatically update these earnings thresholds every 3 years with current wage data to maintain their effectiveness. 7. Is the Department proposing any changes to the current duties test? The Department is not proposing changes to the standard duties test, consistent with its approach in both the 2016 and 2019 rules. At this time, the Department favors keeping the current standard duties test, which is well known to employers and employees. As long as it is paired with an appropriate salary level requirement, the standard duties test can appropriately distinguish bona fide EAP employees from nonexempt workers. 8. Where can I review, and how can I comment on, the Department’s proposed changes to the exemption regulations for EAP workers? The Department's Notice for Proposed Rulemaking (“NPRM”) is available at www.regulations.gov. The Department encourages all interested parties to participate in the rulemaking process by submitting written comments regarding the NPRM within 60 days from the publication date in the Federal Register. FLSA Basics 9. What does the FLSA do? The FLSA establishes minimum wage, overtime pay, recordkeeping, and youth employment standards for employees in the private sector and in federal, state, and local governments. Covered nonexempt workers are entitled to a federal minimum wage of not less than $7.25 per hour. Overtime pay at a rate not less than one and one-half times the regular rate of pay is required after 40 hours of work in a workweek. 10. Who is covered by the FLSA? Generally, employees of enterprises that have an annual gross volume of sales made or business done of $500,000 or more are covered by the FLSA. In addition, employees of certain businesses are covered by the FLSA regardless of the amount of gross volume of sales or business done. These businesses include hospitals; establishments providing medical or nursing care for residents; schools (whether operated for profit or not for profit); and public agencies. Employees of employers that are not covered by the FLSA on an enterprise basis may still be entitled to its protections if they are individually engaged in interstate commerce. 11. Does the FLSA and the Department’s proposed rule apply to state or local government workers? Yes, state and local government employers are subject to the FLSA and the Department’s proposed regulations concerning EAP employees. 12. Is there a small business exemption from the FLSA or the Department’s proposed rule for EAP workers? The FLSA does not provide an exemption for small businesses. Generally, the FLSA and the proposed rule apply to employees of enterprises that have an annual gross volume of sales made or business done of $500,000 or more, and certain other businesses. The FLSA creates a level playing field for businesses by setting a floor below which employers may not pay their employees. 13. Is there an exemption for nonprofit organizations from the FLSA or the Department’s proposed rule? There is no exemption for nonprofit organizations under the FLSA or in the proposed rule. Thus, the proposed rule may impact nonprofit organizations that have an annual dollar volume of sales or business done of at least $500,000. In determining coverage, only activities performed for a business purpose are considered. Charitable, religious, educational, or similar activities of organizations operated on a nonprofit basis where such activities are not in substantial competition with other businesses are not considered. Employees of employers that are not covered by the FLSA on an enterprise basis may still be entitled to its protections if they are individually engaged in interstate commerce. 14. How is overtime pay determined? Unless exempt, an employee covered by the FLSA must receive overtime pay for all hours worked over 40 in a workweek at a rate not less than one and one-half times their regular rate of pay. For guidance in determining an employee’s “regular rate of pay” when calculating overtime pay, refer to WHD Fact Sheet #56A or the Department’s regulations at 29 CFR part 778. 15. What is the FLSA’s EAP exemption? Section 13(a)(1) of the FLSA exempts individuals employed in a “bona fide executive, administrative, or professional capacity” from the Act’s minimum wage and overtime requirements. Certain computer professionals and outside sales employees are included in the exemption and therefore excluded from the minimum wage and overtime requirements. The FLSA instructs the Department to issue regulations that define and delimit the EAP exemption; those regulations are located at 29 CFR part 541. 16. I'm paid a salary and my job title is manager. Am I exempt from overtime pay? Job titles do not determine exempt status, and the fact that a white-collar employee is paid on a salary basis is not alone sufficient to exempt that employee from the FLSA’s minimum wage and overtime requirements. For an exemption to apply, an employee’s specific job duties and salary must meet all of the applicable requirements provided in the Department’s regulations. 17. What if a state has its own laws about who is entitled to overtime pay? The FLSA provides minimum standards and does not preempt a state from establishing more protective standards. If a state establishes a more protective standard than the provisions of the FLSA, the higher standard applies in that state. This would include, for example, exemption criteria for EAP employees under state law with higher earnings thresholds than those provided in the Department’s federal regulations. Earnings Thresholds 18. What are the current earnings thresholds needed for the EAP exemption? Under the current regulations, an executive, administrative, or professional employee generally must be paid at least $684 per week (equivalent to $35,568 annually for a full-year employee) to be exempt from the FLSA overtime protections. This $684 per week threshold is the standard salary level. A computer professional may be exempt if they are paid at least $684 per week or at least $27.63 an hour, if paid on an hourly basis. There is no salary level test required to qualify as an exempt outside sales employee. Certain professionals including doctors, lawyers, and teachers are also not subject to the salary tests. Finally, the current regulations also contain a less restrictive duties test for certain highly compensated employees who receive total annual compensation of $107,432 or more and are paid at least $684 per week. 19. What is the proposed standard salary level? The Department is proposing to set the standard salary level at the 35th percentile of weekly earnings of full-time salaried workers in the lowest-wage Census Region (the South). Using 2022 data, the proposed salary amount would equal $1,059 per week (which is $55,068 annually for a full-year worker). 20. Why is the Department proposing to set the standard salary level at the 35th percentile of weekly earnings of full-time salaried workers? In updating the standard salary level, the Department seeks to more effectively identify who is employed in a bona fide executive, administrative, or professional capacity. The proposal updates the standard salary level to account for earnings growth since the 2019 rule and adjusts the salary level methodology based on the lessons learned in recent rulemakings. 21. What salary levels have the Department proposed to apply in U.S. territories? This proposal would restore the Department’s longstanding policy prior to 2019 of only setting special lower salary levels for employees in those U.S. territories that are not subject to the full federal minimum wage (currently $7.25 per hour). Accordingly, the Department proposes to apply the standard salary level ($1,059 per week) to employees in Puerto Rico, where the federal minimum wage has applied since 1996; Guam, where the federal minimum wage has applied since at least 1957; the U.S. Virgin Islands, where the federal minimum wage has applied since 1989; and the CNMI, where the federal minimum wage has applied since 2018. The Department proposes to set a special salary level for employees in American Samoa equal to 84 percent of the standard salary level ($890 per week, based on a proposed standard salary level of $1,059 per month), since American Samoa remains subject to special minimum wage rates below the federal minimum wage. American Samoa is scheduled to increase its minimum wage rates until they equal the federal minimum wage. The Department proposes that 90 days after the highest industry minimum wage for American Samoa equals the federal minimum wage, the full standard salary level would apply for all EAP employees in all industries in American Samoa. 22. Is the Department proposing to change the special base rate for employees in the motion picture industry? The current regulations permit employers to exempt employees in the motion picture industry who are paid a specified base rate per week (or a proportionate amount based on the number of days worked), so long as they meet the duties test for the EAP exemption. Consistent with its practice in recent rulemakings, the Department proposes to increase the required base rate in proportion to the proposed increase in the standard salary level test, resulting in a proposed base rate of $1,617 per week (or a proportionate amount based on the number of days worked). 23. Is the Department proposing to increase the salary level for highly compensated employees? The Department is proposing to set the Highly Compensated Employee (HCE) annual compensation level equal to the 85th percentile of earnings for full-time salaried workers nationwide. Based on current data, the proposed HCE threshold would be $143,988 per year, of which at least $1,059 per week (the proposed standard salary level) would have to be paid on a salary or fee basis. The Department believes that its proposed methodology results in an HCE level that is low enough to not restrict the use of the HCE test for employers in low-wage regions and industries, and high enough to guard against the unintended exemption of workers who are not bona fide executive, administrative, or professional employees in higher-income regions and industries. Future Updates 24. Does the proposed rule address future updates to the earnings thresholds provided in the EAP exemption regulations? The Department is proposing a mechanism to automatically update the earnings thresholds every three years to ensure that they remain effective tests for exemption. If finalized, this proposal would ensure that the Department can timely and efficiently update the earnings thresholds in future years to reflect current wage data. Experience has shown that the salary level test is a strong measure of exempt status only when it is up to date. Left unchanged, the test becomes substantially less effective as wages for overtime-protected workers increase over time. Automatically updating the salary level and HCE total annual compensation requirement using the most recent data will ensure that these tests continue to accurately reflect current economic conditions. 25. How is the Department proposing to automatically update the salary level and HCE total compensation levels? The Department is proposing to update the standard salary level and the HCE total compensation requirement every three years to reflect current earnings data. Specifically, the Department is proposing to update the standard salary level by adjusting it to remain at the 35th percentile of weekly earnings of full-time nonhourly workers in the lowest-wage Census Region (currently the South). The Department is proposing to update the HCE total annual compensation requirement to remain at the annualized weekly earnings of the 85th percentile of full-time nonhourly workers nationally. The Department proposes to update both of these thresholds using the most recent available four quarters of data, as published by BLS, preceding the publication of the Department’s notice to automatically update the thresholds. Because the proposed special salary level for American Samoa and the base rate for the motion picture industry are set in relation to the standard salary level, those earnings thresholds would also reset at the time the standard salary level is updated. At least 150 days before the date of the update of the standard salary level and the HCE total annual compensation requirement, the Department would publish in the Federal Register a notice with the new earnings levels described above. 26. Does the proposed rule include any special exceptions where the earnings thresholds would not be automatically updated? The Department’s proposal includes a provision allowing the Department to temporarily delay a scheduled automatic update where unforeseen economic or other conditions warrant. This feature would afford the Department added flexibility to adopt to unforeseen circumstances without sacrificing the benefits provided by automatic updating. Impact 27. What are the estimated costs, benefits, and transfers of the proposed rule? The Department estimates that in Year 1, the proposed rule would impose $1.2 billion of direct costs on employers, including $427.2 million in regulatory familiarization costs, $240.8 million in adjustment costs, and $534.9 million in managerial costs. The Department estimates that the proposed rule would result in a Year 1 income transfer of $1.2 billion from employers to employees, predominantly from new overtime premiums, or pay raises to maintain the exempt status of some affected employees. Beyond these wage transfers, the proposal could reduce the risk of misclassification, increase worker productivity, reduce employee turnover, and increase personal time for workers. 28. How many employees would be impacted by the proposed salary level increase? In the first year, the Department estimates that 3.4 million workers exempt under the current regulations who earn at least the current weekly salary level of $684 but less than the proposed salary level of $1,059 would, without some intervening action by their employers, become newly entitled to overtime protection under the FLSA. Similarly, the Department estimates that an additional 248,900 workers who earn at least $107,432 per year (the current HCE total annual compensation level) and who meet the minimal HCE duties test but not the standard duties test, would, without some intervening action by employers, become eligible for overtime if the HCE total annual compensation level were increased to the proposed level of $143,988 per year. Source: U.S. Department of Labor – Frequently Asked Questions for the Notice of Proposed Rulemaking: Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees