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September 30, 2013

Model Notices Need Not Be Provided To Former Employees Who Have Elected COBRA Coverage

Model Notices Need Not Be Provided To Former Employees Who Have Elected COBRA Coverage
Under the Patient Protection and Affordable Care Act, also known as the Affordable Care Act Under the Patient Protection and Affordable Care Act, also known as the Affordable Care Act or Obamacare, most employers are required to provide one of two notices to all employees. Guidance was provided to employers by the US Department of Labor (DOL) in Technical Release No. 2013-02, Guidance on the Notice to Employees of Coverage Options under Fair Labor Standards Act §18B and Updated Model Election Notice under the Consolidated Omnibus Budget Reconciliation Act of 1985.

Notice Not Required for Former Employees Who Have Elected COBRA Coverage

Although all employees, regardless of plan enrollment status or availability, must receive a notice, the DOL in Technical Release No. 2013-02 clarifies that “[e]mployers are not required to provide a separate notice to dependents or other individuals who are or may become eligible for coverage under the plan but who are not employees.” Therefore, former employees eligible for coverage need not be notified.

Contact Vision Payroll for Further Information

Contact Vision Payroll if you have further questions on the notice to employees of coverage options required under the ACA.

September 29, 2013

Use DOL Online Tool to Determine if Your Company Is Subject to the FLSA

A Cashier Who Uses an Electronic Device That Authorizes a Credit Card Purchase Is Considered Engaged in Interstate Commerce
Under the Patient Protection and Affordable Care Act, also known as the Affordable Care Act or Obamacare, most employers are required to provide one of two notices to all employees. Guidance was provided to employers by the US Department of Labor (DOL) in Technical Release No. 2013-02, Guidance on the Notice to Employees of Coverage Options under Fair Labor Standards Act §18B and Updated Model Election Notice under the Consolidated Omnibus Budget Reconciliation Act of 1985.

Employers Required to Provide the Notice

Employers subject to the Fair Labor Standards Act (FLSA) are subject to the notice requirements. The DOL offers an online tool to help employers determine if they are subject to the FLSA. One of the criteria is that employees who are engaged in, or produce goods for, interstate commerce are subject to the FLSA.

Examples of Covered Employees Who Are Engaged in Interstate Commerce

The DOL online tool provides the following examples of employees who are engaged in interstate commerce:

  • An employee such as an office or clerical worker who uses a telephone, facsimile machine, the US mail, or a computer E-mail system to communicate with persons in another state.
  • An employee who drives or flies to another state.
  • An employee who unloads goods which came from an out of state supplier.
  • An employee such as a cashier or waitress who uses an electronic device which authorizes a credit card purchase.

Examples of Covered Employees Performing Support Work

The DOL online tool provides the following examples of employees who perform support functions for instrumentalities of interstate commerce that are so closely related to interstate commerce that they are also considered to be engaged in interstate commerce:

  • A security worker at an airport.
  • A custodian who works for a janitorial contractor which cleans a bus terminal.
  • A laborer or mechanic who performs maintenance or repair work on machines used in the production of goods for interstate commerce or improvements to a city street.

Examples Are Not an Exclusive Listing

The above examples are not intended to be an exclusive listing. Other employees who don’t perform these tasks may still be considered to be engaged in interstate commerce.

Contact Your Labor Law Attorney for Further Information

Vision Payroll strongly recommends that employers consult with a qualified labor law attorney to determine if they are subject to the provisions of the FLSA.

September 28, 2013

Employee Notice of Coverage Options Need Not Be Provided To Dependents

Model Notices Need Not Be Provided To Dependents
Under the Patient Protection and Affordable Care Act, also known as the Affordable Care Act or Obamacare, most employers are required to provide one of two notices to all employees. Guidance was provided to employers by the US Department of Labor (DOL) in Technical Release No. 2013-02, Guidance on the Notice to Employees of Coverage Options under Fair Labor Standards Act §18B and Updated Model Election Notice under the Consolidated Omnibus Budget Reconciliation Act of 1985.

Separate Notice Not Required for Dependents

Although all employees, regardless of plan enrollment status or availability, must receive a notice, the DOL in Technical Release No. 2013-02 clarifies that “[e]mployers are not required to provide a separate notice to dependents or other individuals who are or may become eligible for coverage under the plan but who are not employees.”

Contact Vision Payroll for Further Information

Contact Vision Payroll if you have further questions on the notice to employees of coverage options required under the ACA.

September 27, 2013

Question of the Week: Can We Deliver Our Notices of Coverage Options by E-Mail?

Can We Deliver Our Notices of Coverage Options by E-Mail?
This week’s question comes from Heather, an HR director.

Heather asks:

I know that we our required to deliver our Obamacare notices (Notice to Employees of Coverage Options under Fair Labor Standards Act §18B) by October 1, 2013. Can we deliver our Notices of Coverage Options by e-mail?

Answer: The Notice to Employees of Coverage Options under Fair Labor Standards Act §18B may be delivered electronically as long as the safe-harbor requirements of 29 CFR 2520.104b-1(c) are met.

29 CFR 2520.104b-1(c)

(c) Disclosure through electronic media

(1) Except as otherwise provided by applicable law, rule or regulation, the administrator of an employee benefit plan furnishing documents through electronic media is deemed to satisfy the requirements of paragraph (b)(1) of this section with respect to an individual described in paragraph (c)(2) if:

(i) The administrator takes appropriate and necessary measures reasonably calculated to ensure that the system for furnishing documents—

(A) Results in actual receipt of transmitted information (e.g., using return-receipt or notice of undelivered electronic mail features, conducting periodic reviews or surveys to confirm receipt of the transmitted information); and

(B) Protects the confidentiality of personal information relating to the individual’s accounts and benefits (e.g., incorporating into the system measures designed to preclude unauthorized receipt of or access to such information by individuals other than the individual for whom the information is intended);

(ii) The electronically delivered documents are prepared and furnished in a manner that is consistent with the style, format and content requirements applicable to the particular document;

(iii) Notice is provided to each participant, beneficiary or other individual, in electronic or non-electronic form, at the time a document is furnished electronically, that apprises the individual of the significance of the document when it is not otherwise reasonably evident as transmitted (e.g., the attached document describes changes in the benefits provided by your plan) and of the right to request and obtain a paper version of such document; and

(iv) Upon request, the participant, beneficiary or other individual is furnished a paper version of the electronically furnished documents.

(2) Paragraph (c)(1) shall only apply with respect to the following individuals:

(i) A participant who—

(A) Has the ability to effectively access documents furnished in electronic form at any location where the participant is reasonably expected to perform his or her duties as an employee; and

(B) With respect to whom access to the employer’s or plan sponsor’s electronic information system is an integral part of those duties; or

(ii) A participant, beneficiary or any other person entitled to documents under Title I of the Act or regulations issued thereunder (including, but not limited to, an “alternate payee” within the meaning of section 206(d)(3) of the Act and a “qualified beneficiary” within the meaning of section 607(3) of the Act) who—

(A) Except as provided in paragraph (c)(2)(ii) (B) of this section, has affirmatively consented, in electronic or non-electronic form, to receiving documents through electronic media and has not withdrawn such consent;

(B) In the case of documents to be furnished through the Internet or other electronic communication network, has affirmatively consented or confirmed consent electronically, in a manner that reasonably demonstrates the individual’s ability to access information in the electronic form that will be used to provide the information that is the subject of the consent, and has provided an address for the receipt of electronically furnished documents;

(C) Prior to consenting, is provided, in electronic or non-electronic form, a clear and conspicuous statement indicating:

(1) The types of documents to which the consent would apply;

(2) That consent can be withdrawn at any time without charge;

(3) The procedures for withdrawing consent and for updating the participant’s, beneficiary’s or other individual’s address for receipt of electronically furnished documents or other information;

(4) The right to request and obtain a paper version of an electronically furnished document, including whether the paper version will be provided free of charge; and

(5) Any hardware and software requirements for accessing and retaining the documents; and

(D) Following consent, if a change in hardware or software requirements needed to access or retain electronic documents creates a material risk that the individual will be unable to access or retain electronically furnished documents:

(1) Is provided with a statement of the revised hardware or software requirements for access to and retention of electronically furnished documents;

(2) Is given the right to withdraw consent without charge and without the imposition of any condition or consequence that was not disclosed at the time of the initial consent; and

(3) Again consents, in accordance with the requirements of paragraph (c)(2)(ii)(A) or paragraph (c)(2)(ii)(B) of this section, as applicable, to the receipt of documents through electronic media.

Contact Vision Payroll for Further Information

Contact Vision Payroll if you have further questions on the Notice to Employees of Coverage Options under Fair Labor Standards Act §18B.

September 25, 2013

Tip of the Week: Deadline Looms for Notice To Employees of Coverage Options

Deadline Looms for Notice To Employees of Coverage Options
Under the Patient Protection and Affordable Care Act, also known as the Affordable Care Act or Obamacare, most employers are required to provide one of two notices to all employees. Guidance was provided to employers by the US Department of Labor (DOL) in Technical Release No. 2013-02, Guidance on the Notice to Employees of Coverage Options under Fair Labor Standards Act §18B and Updated Model Election Notice under the Consolidated Omnibus Budget Reconciliation Act of 1985.

Employers Required to Provide the Notice

Employers subject to the Fair Labor Standards Act (FLSA) are subject to the notice requirements. US DOL Wage and Hour Division (WHD) Fact Sheet #14 provides information on who is covered by the FLSA.

All Employees Must Receive Notice

All employees, including part-time employees and employees not eligible to participate, must receive a notice.

Two Model Notices Are Available

The DOL has prepared and made available two model notices, one for employers that offer health insurance to their employees and one for employers that do not offer health insurance to their employees. An employer would only provide one type of notice to all employees, regardless of whether the individual employee is eligible for health insurance.

Deadline is October 1, 2013

Employers must provide the notice on or before October 1, 2013 to all current employees hired before October 1, 2013. Employees hired after September 30, 2013 must be provided the notice at the time of hiring. For 2014, the DOL will consider notices provided within fourteen days of an employee’s start date as provided at the time of hiring.

Multiple Delivery Methods Available

Employers  may hand deliver the notices, mail them by first-class mail, or by e-mail if the requirements of the DOL’s electronic disclosure safe harbor at 29 CFR 2520.104b-1(c) are met.

Contact Vision Payroll for Further Information

Contact Vision Payroll if you have further questions on the notice to employees of coverage options required under the ACA.

May 31, 2013

Question of the Week: How Will the Provisions of Obamacare Impact my Business in 2014?

Surviving ObamacareThis week’s question comes from Stephen, a small-business owner.

Stephen asks:

I know that some provisions of Obamacare will impact my business starting 2014. How will the provisions of Obamacare impact my business in 2014?

Answer: There are many provisions of The Patient Protection and Affordable Care Act, commonly known as Obamacare, which will take effect in 2014. To begin preparing, business owners will need to know:

  • How to minimize the impacts of the law.
  • Are you covered by the “Pay or Play” insurance coverage mandates?
  • Legal considerations to help employers decide whether to “Pay” or “Play”.
  • Important aspects of health insurance exchanges, safe harbor provisions, employee classifications, tax credits, automatic enrollments, and much, much more!

Attend a Free Seminar to Learn More

Joseph T. Bartulis, Esq. and Patrick C. Tinsley, Esq. of the law firm of Fletcher Tilton will be presenting a two-part seminar that you won’t want to miss. In addition to covering all of the above topics, the attorneys will be available for a question-and-answer session after the seminar.

Two Dates and Locations to Choose from

Part One will be presented June 12, 2013 at The Verve, Crowne Plaza, Natick, MA and also June 18, 2013 at Cyprian Keyes, Boylston, MA. Part Two will be presented September 24, 2013 at The Verve, Crowne Plaza, Natick, MA and also October 2, 2013 at Cyprian Keyes, Boylston, MA.

Register Today for Helpful Tips on Surviving Obamacare for Your Business

There is no cost to attend, but preregistration is required. Click here to learn more and to register.

June 22, 2012

Question of the Week: What Is the Additional Medicare Tax?

What Is the Additional Medicare Tax?
What Is the Additional Medicare Tax?
This week’s question comes from Savannah, a corporate controller.

Savannah asks:

Some of our employees are asking us about the Additional Medicare Tax and when we will start withholding it. What is the Additional Medicare Tax?

Answer: The Additional Medicare Tax was enacted as part of the Patient Protection and Affordable Care Act. The Additional Medicare Tax is effective for tax years beginning after December 31, 2012. The rate of the Additional Medicare Tax is 0.9% on wages subject to Medicare Tax that are in excess of an individual’s threshold based on the individual’s filing status for federal income taxes.

Railroad Retirement Tax Act (RRTA) Compensation Is Subject To Additional Medicare Tax

All RRTA compensation that is in excess of the applicable threshold for an individual’s filing status is subject to additional Medicare Tax if it is subject to Medicare Tax.

Individuals Liable for Additional Medicare Tax at Certain Thresholds

If an individual (or individual and spouse, if filing jointly) have qualified income in excess of the threshold for that individual’s filing status, the individual is labile for Additional Medicare Tax. Qualified income is wages, other compensation, and self-employment income.

Thresholds for Different Filing Statuses in 2013

The thresholds in 2013 are as follows:

Filing StatusThreshold
Married Filing Separately$125,000
Single$200,000
Head of Household with Qualifying Person$200,000
Qualifying Widow or Widower with Dependent Child$200,000
Married Filing Jointly$250,000

More Information on the Additional Medicare Tax Will Be Forthcoming

Over the next few weeks, Vision Payroll will be providing more information on the Additional Medicare Tax. Be sure to check back regularly for further updates.

October 31, 2011

IRS to Present Webinar on Reporting of Employer Healthcare Coverage on Form W-2

Today at 2 pm, EDT, the Internal Revenue Service (IRS) will present a webinar titled, Reporting of Employer Healthcare Coverage on Form W-2

Several Topics to Be Covered in Form W-2 Webinar

The Reporting of Employer-Sponsored Health Plan Coverage on Form W-2 (Affordable Care Act Provision 9002) webinar will explain what employers and employees need to know about the provision including:

  • What changes employees will see in their Form W-2
  • When employers must begin reporting the benefits on the Form W-2
  • Transition relief for certain employers, plans, and situations
  • Which employers need to include the benefits on the Form W-2
  • How employers report the benefits on the Form W-2
  • What valuation methods employers can use to determine the amounts to report on the Form W-2

Systems Must Meet Certain Minimum Requirements

The IRS has certain minimum requirements for operating system, screen resolution, browser, Flash, Windows Media Player, connection, and audio. The IRS is recommending that interested parties browse to http://www.visualwebcaster.com/event.asp?id=82090 from their computer ahead of time to be sure it meets minimum system requirements.

Webinar Archive Is Available on the IRS Video Portal

Interested viewers may view an archive of the webinar by clicking here.

October 28, 2011

Question of the Week: Do We Have to Report Health Insurance on Our W-2s?

Do We Have to Report Health Insurance on Our W-2s?
Do We Have to Report Health Insurance on Our W-2s?
This week’s question comes from Maria, an HR director.

Maria asks:

I keep hearing from our employees that we have to report the cost of health insurance on the Forms W-2 this year and that the employees will be taxed on it. Do we have to report health insurance on our W-2s?

Answer: As announced by the Internal Revenue Service in Notice 2010-69 and Notice 2011-28, reporting of the cost of health insurance has been postponed to at least 2012 for some employers and beyond that for the rest.

Notice 2010-69 Postponed Effective Date for All Employers

As previously reported, in Notice 2010-69 the Internal Revenue Service (IRS) postponed the requirement that health insurance be reported on Forms W-2. Originally, under the Patient Protection and Affordable Care Act of 2010, reporting was to begin on the 2011 Forms W-2, which are distributed to employees in January 2012. In order “to provide employers with additional time to make any necessary changes to their payroll systems or procedures in preparation for compliance with the reporting requirement,” the IRS postponed the reporting requirement until the 2012 Forms W-2, which are distributed to employees in January 2013.

Notice 2011-28 Further Postponed Deadline for Many Employers

In Notice 2011-28, the IRS further postponed the deadline for employers who are required to file less than 250 Forms W-2. Employers who are required to file fewer than 250 Forms W-2 for calendar year 2011 will not be required to report health insurance on Form W-2 in 2012. Furthermore, until further guidance is issued by the IRS, any employer required to file fewer than 250 Forms W-2 in a calendar year will not be required to report the health insurance on Form W-2 for the following year.

Notice 2011-28 Does not Cause Excludable Employer-Provided Health Care Coverage to Become Taxable

According to Notice 2011-28, nothing in §6051(a)(14), Notice 2011-28, or the additional guidance that is contemplated under §6051(a)(14), causes or will cause otherwise excludable employer-provided health care coverage to become taxable.

Contact Vision Payroll Today

Contact Vision Payroll today if you have further questions on 2011 Form W-2 reporting for health coverage.

July 2, 2011

Massachusetts Releases Employer-Provided Health Care Benefits Update

Navjeet K. Bal, Commissioner, Massachusetts DOR
Navjeet K. Bal, Commissioner, Massachusetts DOR
The Massachusetts Department of Revenue (DOR) has released Technical Information Release (TIR) 11-5, Employer-Provided Health Care Benefits Update. This TIR updates TIR 07-16, Personal Income Tax Treatment of Employer-Provided Health Insurance Coverage for an Employee’s Child, to reflect a Massachusetts statutory change to the personal income tax enacted in response to the federal Patient Protection and Affordable Care Act. The general effect of the Massachusetts change is to conform to the federal income exclusion rules for health care benefits that are in effect for each year, notwithstanding the general Massachusetts tie-in to federal income and exclusion rules as of January 1, 2005. The Massachusetts change is effective for tax years beginning on or after January 1, 2010.

Massachusetts Law Generally Conforms To 2005 IRC

In general, Massachusetts individual taxpayers must follow the Internal Revenue Code (IRC) in effect as of January 1, 2005. As a result of a recent law change in Massachusetts, taxpayers now follow the federal law for IRC §105 and §106 for exclusions from gross income for employer-provided health care benefits. This change is retroactive to January 1, 2010.

Amended Form W-2 May Be Required

Employers who imputed income for amounts that are now excluded from income may need to file Form W-2C, Corrected Wage and Tax Statement. Such a filing would be required if any 2010 or 2011 Forms W-2 have been provided to employees with such imputed income included. If a 2011 Form W-2 has not already been provided to affected employees, employers can simply adjust the 2011 Form W-2 when prepared. Employees who have already filed a 2010 Form 1, Massachusetts Resident Income Tax would need to file an amended return to reflect the Form W-2C. Employees who have yet to file can simply incorporate the Form W-2C figures into their return when they file.

Contact Vision Payroll for Assistance with Form W-2C

Contact Vision Payroll today if you have affected employees and need to file Form W-2C.

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