The HR Strategist: March 2015
In this issue:
- The Supreme Court Reviews King v. Burwell
- How HR Can Protect Against Tax-Related Identity Theft
- Many Organizations Unprepared for the Aging Workforce
- Importance of Conducting Review of HR Practices
- Did You Know?
On March 4, 2015, the Supreme Court heard arguments regarding the constitutionality of the legality of using individual premium subsidies under the Affordable Care Act for the 34 states that did not adopt a state-based exchange. The Court's decision could have far-reaching consequences.
The issue in the case is whether the IRS regulation allowing tax subsidies for the purchase of health insurance through a federally-facilitated exchange is valid. The language of the ACA appears to limit those subsidies to coverage purchased through an exchange established by a state.
"Section 1401 of the ACA says the premium tax credits are based on premiums for plans offered through 'an Exchange established by the State.' If the law's opponents have their way, the justices will focus solely on those six words.
The challengers argue that phrase means the subsidies should be available only in states that have set up their own exchanges. The government counters that the phrase is a "term of art" that includes the federally established exchange. When read in context, the government argues, the law is clear in allowing subsidies in all states."
- Lisa Schencker, Modern Healthcare
If the Court rules for the plaintiff, the employer mandate and penalties would not apply to large employers who have full-time employees who get coverage through federal exchanges. In addition, approximately 7 million people who have obtained coverage through a federally-facilitated exchange would lose federal subsidies, making coverage unaffordable for many.
As the number of uninsured people increases, healthcare providers would bear an increased burden of uncompensated care and insurers who over coverage on federal exchanges would lose many of the premiums they expected to receive for coverage sold on those exchanges.
As of today, it is truly unclear what would happen in the Court invalidates the IRS regulation as the current Administration has said that it does not have a "back-up" plan if the Court rules against it.
Tax season is underway, and HR professionals can play a key role in identifying and deterring tax-related identity theft, the most common form of identity theft reported to the Federal Trade Commission (FTC) in 2014 and the previous four years. It occurs when criminals file fraudulent tax returns using other people's Social Security Numbers in order to receive refunds and accounts.
To prevent this ordeal from happening, the FTC suggests HR and employers do the following:
- Secure office documents containing workers' Social Security Numbers and W-2 information
- Limit employee access to sensitive information
- Consider and protect against insider threats
- Educate employees on the strategies to reduce the risk of identity theft
HRi works diligently to ensure the utmost security and confidentiality of our clients' and our client employees' information. Our security architecture is created through a multi-level network security system designed to encompass many facets of our company's technological capabilities and to ensure HIPPA compliance.
For more information, please visit the Federal Trade Commission website.
According to the Bureau of Labor Statistics, workers ages 55 and older are expected to make up approximately 26% of the labor force by 2022. That's up from 14% in 2002 and 21% in 2012.
In 2014, the Society for Human Resource Management (SHRM) and the SHRM Foundation launched the Aging Workforce Project , a three-year initiative highlighting the value of older workers and identifying best practices for employing a aging workforce. The project, which is supported by a grant from the Alfred P. Sloan Foundation, will investigate current workforce demographics and how they are likely to change in the future.
A key component of the initiative is a SHRM survey of HR professionals that aims to assess how aware organizations are of this impending demographic shift and what, if any, actions organizations are taking to prepare for an aging workforce. 36% of respondents said their organizations were beginning to examine internal policies and management practices to address this change. However, one-fifth said their organizations were just becoming aware of this potential change in the ratio of older workers.
Few HR professionals currently believe that the potential loss of talent due to the retirements of aging workers is considered a crisis or even a problem. The lack of concern may be partly due to a lack of information about precisely when and how these changes will take effect within a given industry or organization. Only about half of HR professionals said their organizations track the percentage of employees eligible to retire in the next one to two years, and even fewer forecast workforce demographics beyond that timeframe. About 20% of organizations have conducted strategic workforce assessments involving the loss of workers age 55 and older that identify future workforce needs and potential skills gaps in the next six years and beyond.
- Excerpt from the full SHRM article, "Survey: Many Organizations Unprepared for Aging Workforce"
Finances aren't the only area of your business that should be audited every year. Just as important is an audit of a business' human resources policies and procedures. An HR audit gives organizations the opportunity to identify potentially problematic polices that may not be in compliance with federal or state regulations in an effort to reduce the risk of costly lawsuits or fines.
- The Safety Harbor Resort & Spa in Tampa, FL was required to pay 37 employees over $30,000 in back wages as a result of an investigation conducted by the Wage & Hour Division of the Department of Labor after it was found to have violated several provisions of the Fair Labor Standards Act's (FLSA) overtime, minimum wage, and record-keeping requirements.
- A Kentucky-based company and one of its subsidiaries (Bowlin Group LLC and Bowlin Services LLC) were required to pay 196 employees $1,075,000 in back wages and liquidated damages after an investigation conducted by the Wage & Hour Division of the Department of Labor found that the companies misclassified several employees as independent contractors and violated the FLSA's overtime and record-keeping requirements.
An HR audit may cover many topics, including the organization's employee handbook, record-keeping policies, hiring/termination procedures and even communications like company-wide emails or announcements. Because regulations are always subject to change as a result of new legislation or interpretations, HR audits should be conducted periodically to ensure that organizations are in compliance with the latest federal and state requirements.
Please meet Gayle Flaherty – one of our Client Services Specialists here at HRi. Gayle comes to us with a strong benefits background and has also worked for a PEO in a previous position. She serves as the primary point of contact for a number of our clients and also supports our Benefits Consultant with escalated benefit issues.
Here's a little information to get to know Gayle better:
- Favorite color: Blue
- Favorite book: Catcher in the Rye by J.D. Salinger
- Favorite movie: Forrest Gump
- Favorite sports team: Green Bay Packers