To prevent identity theft at work you need to know where the thieves will go

Identity thieves can steal personal information from you at work, in public, online or even from your home (a place that so many of us think is a safe haven). The first step to protecting your information in all these places is knowing where the thieves will go to get their hands on it.

Let’s start off by looking at the workplace.

Personal information in any given workplace is vulnerable to the prying eyes and hands of permanent staff, temporary and contract workers or even the after-hours custodial staff that comes in and cleans the building every night.

If there’s an identity thief lurking in and around your workplace, chances are they’ll go for one of the following.

• Unattended Personal Belongings: This includes both unattended purses and wallets as well as easily accessible personal documents employees may either keep at work of bring with them to work.
• Employee personnel files: Any employee with access to the personnel files that are kept in HR has easy access to employees’ Social Security Numbers and DOB’s as well as a host of other data ID thieves may use to commit fraud. 

Data in personnel files is especially vulnerable to threats from within an organization. A disgruntled employee or even a temp worker could steal employee personal information, sell it to an identity thief or use it themselves to commit fraud.

Effective monitoring is the key:

The information above goes to show that employers should carefully monitor access to all employee personal information. Certain vital details such as who has access to this information, how long they have access to it and what precise business or compliance need their access to this information will fulfill should be spelled out clearly in your Written Information Security Plan required by Massachusetts law 201 CMR 17.00 (which is enforceable the first of next month).

On top of this, employers should communicate to employees the importance of consistently monitoring all accounts they have in their name, checking for any unauthorized activity or the presence of any new accounts that they didn’t open themselves.  

Individuals who steal your identity or credit card numbers depend on you not to look too closely at your bills and ensure that every charge on them was actually yours. “Small” charges of under $100 are often less scrutinized than larger amounts and thieves know this. That’s why you should never just “excuse away” unfamiliar and unauthorized charges, just because they appear small.

Deadline for Massachusetts Identity theft law 201 CMR 17.00 is just a week away:

One week from today, all businesses that “own, license, store or maintain” personal information on any Massachusetts residents must be fully compliant with the Commonwealth’s identity theft law 201 CMR 17.00. Is your company compliance-ready, and can you prove it to the auditor who may come knocking at your door?

To help Massachusetts businesses get compliance-ready, Universal Benefit Plans has partnered with local employment law firm Foley and Foley to offer a complimentary 30 minute compliance review for qualifying companies. Call us at 617-859-1777 to learn more and see if your company qualifies.

New report from Attorney General sheds light on main health care cost driver in Massachusetts

Just last Friday, Massachusetts Attorney General Martha Coakley released a report pinpointing the main driver of the Commonwealth’s rapidly spiraling health care costs—the market clout of highest paid providers. Simply stated, Massachusetts insurance companies are paying certain doctors and hospitals significantly more than others for the same patient care.

Coakley’s year-long investigation leading up to this report revealed that a small group of roughly 10 hospitals statewide commanded anywhere from 10 to 100 percent higher payments than their competitors for similar work.

The study also found no evidence that this higher pay was due to better quality of patient care or treatment of more complex cases. In fact, the study revealed that:

• Eight in 10 of the best paid hospitals in one insurer’s network were community hospitals. These hospitals tend to have less complex cases than teaching hospitals and also do not have the added cost of training future doctors.
• One major teaching hospital that treats some of the Commonwealth’s sickest patients is paid significantly less than dozens of other hospitals that treat healthier patients.

Coakley’s team did discover that the hospitals commanding higher payments were able to do so because of market leverage from factors such as brand-name recognition and geographic isolation.

What the investigation has done:

At the end of the day, Coakley’s investigation had one major accomplishment. It shed light on the true cause of Massachusetts’ health care cost increases.  Over the past several years, it was revealed that provider rate increases, not higher patient utilization rates, were the main contributors to higher health care costs.

The Attorney General’s office will release the above as well as other related findings in a series of reports over the next several weeks.  From March 16 through the 31^st, hearings will be held on the issue and state officials will ask hospitals, physicians, insurers, employers and consumer groups to testify on factors contributing to health care cost increases and what could be done to make health care affordable.

As the reports are released and hearings go under way, we’ll make certain to keep you up-to-date on all findings and developments you’ll need to know.

One very costly ERISA mistake most 100+ employee companies are making

Most U.S. employers with 100 or more workers don’t comply with ERISA regulations, which can result in some very steep federal fines that add up fast.

The Employee Retirement Income Security Act (ERISA) has strict requirements for employers that sponsor 401(k), group life, medical, dental and disability plans to report certain financial information on these plans to the Department of Labor (DOL) using Form 5500.

However, public records reveal that of the approximately 110,000 businesses that employ 100+ individuals, roughly 60,000 (or 55%) have not filed Form 5500.  These findings are according to a study done by Atlanta-based ERISA Pros.

What this means for employers:

If your company is one of the many that fails to file Form 5500 on time, the DOL can fine you up to $1,100 for every day that it’s late. This $1,100 applies separately for each of your benefit plans, is not subject to the statute of limitations and is not tax deductible. In other words, you could end up owing a lot of money.

For instance, an employer that sponsors a 401(k), medical plan, dental plan, group life and disability plan could owe the DOL over $100,000 for filing Form 5500 just 30 days late.

Also, beginning in 2010, employers are required to file all Plan Year 2009 and subsequent Form 5500s electronically using the Department of Labor’s EFAST2 system. This will make it a lot easier for the DOL to ensure compliance and enforce penalties.

Summary Plan Descriptions:

Last but not least, as many employers know, ERISA requires all employers sponsoring any of the benefit plans mentioned above to disclose benefit-related information to Plan participants via Summary Plan Descriptions.  Many ERISA specialists believe that the rate of employer compliance for this requirement is even lower than that of filing Form 5500.

The Department of Labor is slated to hire 1,000 new employees for 2010, 678 of whom will be investigators. So employers, start taking all the necessary steps for ERISA compliance now before the DOL comes knocking at your door.

IRS dollar limits for 2010, what changes and what remains the same

The new year is fast approaching and it will bring on many new changes for employers and employees both. However, the following are two things you can count on to stay the same.

1. Maximum contribution levels for 401(k) and other defined contribution plans: Due to the falling cost-of-living index, maximum retirement plan contribution rates will be the same in 2010 as they were in 2009. This means that plan participants will be able to contribute up to $16,500 to the plans in 2010. Also, the dollar limitation for catch-up contributions to an employer defined contribution plan for individuals ages 50 and older will stay the same at $5,500. 
2. Annual dollar limits to employer-provided transportation plans: As was the case in 2010, the IRS has set $120 per-month as the maximum value of excludable benefits under a qualified commuter benefits plan and $230 as the monthly limit for qualified parking benefits.

These two mentioned above, and virtually all of the IRS’ other annually indexed limits, will remain unchanged for 2010 with a few exceptions.

• The 2010 out-of-pocket maximum limit for HSA (Heath Savings Account) qualifying high deductible health plans will be $5,950 for individuals (up $150 from 2009 limits) and $11,900 for families (up $300 from 2009 limits)
• The 2010 maximum excludable amount on an employer-provided adoption assistance program will go up slightly as well to $12,170 (up $20 from last year).

We all know that as employers, you have a lot of minimums, maximums and rules to keep track of to make sure all the benefits you offer comply with all state and Federal regulations. You can count on us to keep you posted if anything changes for the upcoming year.

Share this with your employees:

Employers, feel free to copy and customize this blog for distribution to your employees. You may want to add additional financial information that’s specific to your company, such as the amount or timing of your retirement plan contributions.

Employees will find this useful at the beginning of the year as they review their past finances for tax purposes, plan for the upcoming year and set New Year’s resolutions about money.

New defense bill extends COBRA subsidy and subsidy eligibility

Inside the new $626 billion dollar defense bill that Congress just passed (and the President is expected to sign) is a provision extending the American Recovery and Reinvestment Act (ARRA) COBRA subsidy.

For assistance eligible individuals (AEIs), the new legislation will:

• Extend the eligibility for the 65% COBRA subsidy from December 31, 2009 to February 28, 2010 (making workers whose COBRA eligibility begins on or before 2/28/2010 now eligible for the subsidy)
• Adds 6 months to the 9 month period during which the federal government would pay the 65% subsidy to Assistance Eligible Individuals’ COBRA premiums

Also, the legislation will give beneficiaries whose subsidy ran out and who did not pay the full COBRA premium, a second chance to opt for coverage. For example, if an AEI’s subsidy eligibility ran out on November 30, 2009 and they did not pay the regular, unsubsidized COBRA premium for December, they could opt to pay their 35% share of the premium in January and get coverage for December.

What employers need to do:

Provided that President Obama signs this bill into law, employers will need to do the following:

• Notify current and future COBRA beneficiaries of the new 15 month subsidy
• Notify current and future COBRA beneficiaries of the subsidy’s new deadline of February 28, 2010

 The ARRA Act COBRA subsidy has greatly increased the number of terminated employees who take COBRA.

As employers, you should expect a high percentage of those who elected COBRA under the subsidy plan and have not found employment yet to continue COBRA under this extension. So don’t be guilty of failure to notify them about this benefit.

H1N1 and FLSA, are your sick leave policies compliant?

When struck with a pandemic flu outbreak, many companies will do one of the following:

• Continue working short staffed while employees are out with the flu
• Close their businesses for a day, or two, or several
• Send everyone home to “telework” in an effort to stop the flu from spreading

For employers, getting hit with a pandemic flu is one thing but getting slapped with a labor law violation on top of it for noncompliant sick leave policies can make things go from bad to worse.

To ensure that your company stays compliant with the Fair Labor Standards Act while still doing as much as you can to maintain “business as usual” during a flu pandemic, employers should consider the following:

1. Employees can do work outside of their job descriptions: When employees are out sick, employers may require healthy employees who are at work to pick up some of their ill colleagues responsibilities (even if they fall outside of the employees’ job descriptions). Just as long as the employees in question are 18 years of age or older, the FLSA places no limitations on the type of work they may be required to perform.
2. Employees must be paid the same hourly rate, regardless of whether they work on site or from home: To control the spread of a pandemic infection, employers may require employees to work from home. If your company decides to make these requirements, you, the employer must pay all hourly workers the same rate for all hours they worked from home as you would if they had worked these hours on-site.  Also, all salaried employees must be paid their full salary for any week in which they performed any work (subject to certain exceptions).
3. Employees who are required to work from home but cannot do not need to be paid: In the event that you shut down your workplace, thus requiring all employees to telecommute, you are only required to pay employees who are able to perform their job duties from home. The FLSA only requires employers to pay employees for hours they actually worked (whether at home or on site). That said, you should ask yourself if this will have an adverse impact on certain groups of employees. For example, if working at home requires a computer and internet access, is one group of employees much more likely to have these and thus be able to work at home? What can you as the employer do to help give equal access to the opportunity to work at home?
4. Letting employees “volunteer” during a personnel shortage can cause you a lot of trouble: This is because the FLSA has very strict requirements governing when you can and cannot allow nonexempt employees to volunteer time. Generally, all nonexempt hourly employees working for private sector, for profit companies, must be paid at least a minimum wage for all hours they work.

DOL ‘s new COBRA subsidy guidelines and what they mean for workers laid-off in December 2009

The American Recovery and Reinvestment Act (ARRA) COBRA subsidy President Obama signed back in February will soon come to an end for those who aren’t already qualified.  To clear up any confusion that may arise from this, the Department of Labor (DOL) released two FAQs  to guide employers on determining eligibility.  

The first FAQ states that in order for employees to be eligible for the 65% COBRA subsidy, they must satisfy two conditions:

1. They must have been involuntarily terminated between September 1, 2008 and December 31, 2009
2. They must have been eligible to receive COBRA during that period

The second condition is where the confusion lies.

Many employers allow laid-off employees to remain on the company’s health insurance up until the end of the month in which they were terminated. As a result, they don’t become eligible for COBRA coverage until the first day of the month after their termination. 

So, an otherwise Assistance Eligible Individual (AEI) who is laid-off on any day in December 2009 would not be eligible for the 65% COBRA subsidy—that is, if his or her company allows employees to stay on their health plan through the 31^st.

The second FAQ states that AEI’s whose COBRA eligibility begins in December 2009 or earlier are eligible to receive the subsidy for up to nine months as long as they remain qualified. So, an employee who’s laid-off in November may be eligible to receive the COBRA subsidy all the way up through August 2010 as long as they’re qualified.

Although bills have been proposed in Congress to lengthen the COBRA subsidy for AEIs, lengthen the time period for COBRA eligibility, and up the amount of the subsidy from 65 to 75 percent; no changes to the COBRA law have been made to date. However, as soon as any new laws are passed, you can count on us to keep you posted.

New genetic non-discrimination law GINA took effect December 7, 2009

Title II, the employment-related provision of the Genetic Information Non-Discrimination Act of 2008 (GINA) took effect yesterday, December 7, 2009.

This provision prohibits employers from:

• Using genetic information to make decisions in “hiring, promotion, discharge, pay, fringe benefits, job training, classification, referral, and other aspects of employment” for all employees and/or job applicants
• Requesting or requiring employees and/or job applicants to undergo genetic testing

 According to the EEOC, genetic information includes the following:

• Information about an individual’s genetic tests
• Genetic tests of an individual’s family member
• Family medical history (Do any of your insurers ask if you are aware of employees whose family history includes certain diseases?)

Genetic information does not include:

• Information about the age and gender of an individual and his or her family members
• Information that an individual currently has a disease or disorder
• Tests for alcohol or drug use

In addition to prohibiting genetic testing requirements, GINA also comes with confidentiality requirements for any genetic information that an employer possesses.

To comply with GINA, employers must do the following two things:

1. Post a notice with GINA information: The EEOC has released a poster to help employers comply with the new GINA requirements.
2. Update their nondiscrimination policies to include GINA’s employer provisions.

 

House bill could extend Federal COBRA subsidy by 6 months

The House of Representatives introduced a new bill that would extend the ARRA Act’s COBRA premium subsidy 6 months. The bill would also extend COBRA subsidy eligibility to a new group of laid off workers.

COBRA Subsidy Recap:

As you may already know, the government passed a law giving employees who  were  “involuntarily terminated” between September 1, 2008 and December 31, 2009, a 65% COBRA health care premium subsidy.  The COBRA subsidy became available to these Assistance Eligible Individuals (AEIs) March 1, 2009. AEIs could collect the subsidy for 9 months or until their COBRA eligibility ran out, whichever came first.  

If the House’s proposed bill becomes a law, here’s what would happen:

1. The COBRA subsidy would be available to AEIs for 15 months.
2. Individuals who were laid off between January 1, 2010 and June 30, 2010 would become eligible for the subsidy.

COBRA subsidy doubles election rate:

In the time since the ARRA Act’s COBRA subsidy became effective, the number of Assistance Eligible Individuals (AEIs) opting for COBRA coverage doubled to 38%. This is a clear message that people want health insurance and will pay for it when the premium becomes more affordable. The Obama administration is currently looking into whether or not the subsidy should be extended. 

As of now, we don’t know if it will be extended or if more workers will become eligible, but you can definitely count on us to keep you posted.

Will the CLASS Act make long-term care affordable or just make people believe it is?

The CLASS (short for Community Living Services and Support) Act, if passedwould create government-run long term care insurance available to anyone (even those who are already disabled). Currently, more than 10 million Americans need long-term care, and this number is only expected to go up as the Baby Boomer generation ages.

Here’s how the proposed plan would work.

Individuals would be automatically enrolled unless they opted out. While still actively working, they’d pay premiums in exchange for a cash benefit of at least $50 per-day in the event that they become disabled. Individuals could use this benefit to cover home care  and  adult day care services as well as assisted living and nursing home care services.

The goal of this program is to save Medicaid money and also to help seniors in need of nursing home care afford it. as The cost of nursing homes average $70,000 per-year and Medicaid only covers temporary stays.

But can we afford this?

The Congressional Budget Office estimates that the CLASS Act’s program would be fiscally solvent over a 75 year period. This is based on initial monthly premium rates of $123 (which would be adjusted for inflation as time goes on) and a $75 per-day benefit.  Individuals would need to have been paying premiums for 5 years before they could access this benefit. 

The program would begin taking premiums immediately but would not pay out any benefits until2016. Because of this, congressional budget analysts forecast that over the program’s first 10 years, it would actually reduce the Federal budget deficit on paper by $73 billion. This makes it especially attractive for lawmakers concerned with the cost of President Obama’s massive healthcare overhaul. However, with Congress voting  in 1965 to use Social Security tax revenues for purposes other than making payments to  eligible SS recipients, there are those who worry that CLASS ACT revenues may be similarly diverted. The frightening prospect of Social Security  “running out of money”  and not paying those who have been paying their taxes for years,  feeds similar fears about the Class Act program.   

And is it really a good idea for our seniors?

Or will it just confuse them? The American Council of Life Insurers says this program would do the latter.

A spokesperson for the group cited that most people already believe Medicare will cover their long-term care needs. Having a new long-term care insurance option would only add tothis false sense of security and possibly leave them financially unprepared for the real costs of care.

Supporters of the plan say that elders can use it as a base policy and buy up by adding private long-term care coverage. Just like people don’t want to live on Social Security alone, people don’t want to finance their long-term care needs with a government plan alone.

If this plan is passed, will employees no longer see the need to purchase a richer, private long-term care plan? Do they know the costs of home care, nursing home care, etc. in your city (especially in the Boston area where everything costs more than the national average)?

One thing HR professionals can consider is educating employees on the future cost of care that they’ll incur in the event that they become disabled as they age. That way they’ll know how much they’ll either need to set aside or buy in insurance.