Every year is a busy year for human resources professional—but 2010 is starting off fast for anyone who administers or manages employee benefits.

If your company has employees and provides benefits as part of their compensation package, then the Federal Government says that you must inform them of ERISA, COBRA, FMLA and EEOC changes.

Human resources experts are needed

If you do not have an on-staff human resources manager, it’s essential that you have an expert to help you administer and communicate changes to employee benefits.

Don’t make the mistake in believing that your payroll services company will keep you compliant. There are many regulations that have to be followed and businesses are required under the law to inform employees of these changes. Your best course of action is to rely on a human resources specialist.

There are many ways to communicate, from staff meetings, updated pages in Employee Benefit policies, letters and posters that inform employees of their legal rights. If you do not have a formal plan to communicate to employees, call a human resources expert and create a plan to administer the changes to stay compliant with federal regulations.

ERISA Changes

The Pension Protection Act of 2006 requires that pension plans permit non-spouse beneficiaries who received death benefits to roll the plan distributions into another eligible retirement plan.

The Worker, Retiree and Employer Recovery Act of 2008 makes the non-spousal rollover (trustee-to-trustee transfers) mandatory for plan years beginning after December 31, 2009. This means that plans must offer this rollover alternative.

COBRA Subsidy

Employees who were involuntarily terminated through February 28, 2010 will be eligible for the federal COBRA premium subsidy. The 2010 Defense Appropriations Bill includes provisions extending the period for involuntary terminations would allow eligibility, and the time the benefits can be received.

The subsidy provides eligible individuals with 65% subsidy of their premiums for continued coverage under a group health plan for 15 months from the original date of the involuntary termination.

EEOC

Federal regulations require companies to post an updated version of the Equal Employment Opportunity saying that the company does not discriminate based upon genetic information.

In addition to posting this information, you must also provide training to managers and supervisors, and you must also check application and other forms to make sure that none of the questions are requesting information about your applicant’s and employee’s family medical history.

FMLA

The change to the Family Medical Leave Act covers eligible employees and their spouse, son, daughter, parent who are active service members undergoing medical treatment, therapy, recuperation or who are on the temporary disability retired list for a serious injury or illness.

The Defense Authorization Act for 2010 allows for extended military caregiver leave.

Human resources specialists keep you compliant

New Federal regulations say that this information must be communicated to your employees immediately. And, you must be prepared today to apply all of these standards to employees.

Human resources expertise will help you to get all of the policies in order and explain them to your employees.

Our national government has made healthcare reform a reality. With the passage of two different bills in the House and Senate, and the recent State of the Union Address, the President and congressional body have declared that healthcare reform is a priority.

Although all of the details will be worked out in a special committee who will be appointed by the President, we know that this law will require most employers to offer health insurance and entrepreneurs to carry health insurance. There is no implementation date yet—but it’s wise to plan ahead to avoid mistakes that could cost you in fines and headaches.

Get ready for Human resources changes

If you currently provide health insurance for your employees, at the very least there will be additional paperwork to complete. Either your firm will sign up for the government’s plan or confirm that your firm offers employees insurance that meet the legal limits.

If you do not currently offer your employees health insurance, you must know if you are required to do so under the new law. Your Human Resources Manager or a Human Resources Specialist will need to advise you on the new regulations as soon as the law is passed.

If you’re required to offer employees insurance, you’ll need to offer the government plan or an alternate plan that at least meets the minimal requirements within the timeframe stipulated by the new law. If not, then you’ll likely have to provide documentation that proves that you are not required to carry insurance.

Human resources experts can keep you legal

The new law will require complete knowledge of the statutes to know whether you’re in compliance. Even if the implementation date is a year or two in the future, early planning will help you avoid last-minute mistakes; and cost projections prevent you from being surprised with new expenditures. This additional time allows you to compare plans and select the right plan for your firm and employees.

Then, you must communicate coming changes to your employees. This allows you to manage reactions and expectations. Pre-enrolling staff in a new plan helps you to get all of the changes completed well before the due date.

If you do not have a human resources expert on staff, it’s a good idea to hire a human resources specialist, or better yet, an ASO or PEO (employee leasing company) to help you comply with this complex new law and much more. Plan and take action early to avoid the stress and expense of last-minute changes.

Healthcare reform is a reality, with both the House and Senate recently passing different bills. Now, the President and a committee from each of the legislative bodies now have the task to reconcile the two bills before it’s signed into law.

Healthcare reform has been considered for many years because the number of U.S. citizens who can afford good health care is decreasing. As medical and pharmaceutical costs continue to climb, so does the cost to employers offering heath insurance to employees. Consequently, many employers have discontinued health care coverage, or reduced the services covered to save money.

What is the impact of reform? Most U.S. employers will be compelled to offer health insurance to employees or face a fine. Even self-employed workers are required to carry health insurance. The cost and whether an employer qualifies as a firm required to provide insurance for employees is still to be determined.

The bottom line is all U.S. workers will be covered under health insurance—whether it’s a private plan or the “less expensive” government plan.

What about my current health plan?

Employers will have the choice of carriers. If your employer opts to keep your current insurer, you will be able to keep your coverage and doctors under that plan.

If your employer decides to switch to the government plan, you may have to switch providers.

Will my deductibles and co-pays change under the new law?

The idea behind the new law was to make health care more affordable for individuals and employers. The new law probably will not increase co-pays and deductibles immediately.

I have a pre-existing condition. How will healthcare reform handle that?

Under the new law, you can not be denied health coverage because of a pre-existing condition.

How a human resources firm can help

Insurance coverage and health care reform are complicated issues. If you are an employer who needs guidance on how to integrate the changes in the new law, a local human resources specialist can help.

Human resources firms will have a greater understanding of how to make certain that employers can prepare for the coming reform, comply with the legislation and avoid fines due to non-compliance.

If your firm administers its own 401(k) retirement fund, there is important news to share with staff regarding 2010 contributions.

Employees who are 50 or older who were hoping to ‘catch up’ by taking advantage of higher limits for 401(k) and IRA retirement funds in 2010 may be disappointed that 401(k) and IRA pre-tax limits will remain at 2009 levels.

The limits for 2010 are:
401(k)–$16,500, with the maximum catch-up contribution of $5,500 for employees 50 and older
IRA–$5,000, with the maximum catch-up contribution of $1,000 for employees 50 and older.

In 2001, the Restoring Earnings to Lift Individuals and Families (RELIEF) Act was passed to allow individuals and families to catch up on 401(k) contributions and build their retirement funds faster.

In recent years, the pre-tax contribution limits climbed until they’ve reached today’s current limit of $16,500 and $5,500 catch-up.

Because the limits remain at 2009 levels, there is no opportunity for employees to use their IRAs and 401(k)s to bolster their retirement services pre-tax.

Contributions and employer-match contributions are exempt from taxes under a certain limit. If that’s the case, you must inform staff that taxed contributions also have a limit. Total contribution allowed to a 401(k) plan is $49,000 and 100% of compensation, whichever is less.

Taxed contributions allow employees to build their retirement nest egg, minus the tax advantages.

No such ‘after-tax’ contribution exists for IRA accounts, but there is nothing stopping individual investors from creating a long-term savings plan as an additional retirement measure.

Employers can educate employees to help them see the benefit of contributing to their own retirement, pre- and post-tax. Vehicles for post-tax contributions include mutual funds, CDs and bonds.

Mandatory IRAs?

President Obama’s 2010 budget may feature an automatic IRA requirement for companies who have been in business two or more years and have 10 or more employees. This means that companies who qualify must enroll their employees in an IRA plan with an option for the employee to opt-out.

Some may complain that a mandatory IRA would be a burden for companies who do not currently offer an IRA. It would also impose payroll costs on a company’s payroll system. However, the benefits of financially secure employees outweigh the burden.

Outsourcing IRA and 401(k) administration to payroll services and human resource firm

There are many rules and regulations that must be followed and communicated to employees when it comes to IRA and 401(k) accounts. If your small firm is having trouble keeping up with changes, or perhaps you don’t have a fund because it’s too time-consuming, consider outsourcing.

A reputable human resources firm with payroll services can administer your retirement plan, which includes taking contributions, adding company match funds and adjusting employee’s payroll checks accordingly.

And, many payroll services firms with human resource specialization can provide employee training to keep everyone informed.

Christine Nichols, Human Capital Strategies’ Human Resource Manager has been honored as a finalist for the HR Director of the Year. The award, from AZ Big Media, recognizes outstanding human resource professionals throughout Arizona (http://www.hcscando.com).

Recipients of the award are chosen among the state’s outstanding HR directors, outstanding departments, CEOs and leaders who work in the HR services and support industries.

Ms. Nichols is recognized in the 501 – 1,000 employee category.

“This is a great honor for Christine and Human Capital Strategies,” explains Jason Knight, Founder and Principal of Human Capital Strategies. “We are dedicated to providing an outstanding level of professionalism, innovation and service to our clients and no one exemplifies those values more than Christine.”

AZ Big Media publishes Arizona Business Magazine, Arizona Commercial Real Estate Magazine, Ranking Arizona and other magazines.

The Human Resources Awards will be awarded on Wednesday, December 2 at a dinner and reception at the Ritz Carlton in Phoenix. Arizona Business Magazine will publish a special feature highlighting all of the finalists and winners in the December edition of their magazine.

As a small business owner, you may feel as if you have to do it all. As the founder and principal for Human Capital Strategies, I get it. I’m responsible for many areas of my human resources and payroll business—just like you are.

The same may be true of your key employees. Don’t negatively impact their performance by weighing them down with tasks that are outside of their expertise.

When you examine a typical day, could you make better use of your time? Wouldn’t you agree that focusing on building your business is much more important than handling tasks that can be completed by employees or contractors?

Fortunately, I have great employees that I can rely on to do their jobs and make great decisions. I also have several contractors that I can call on when I need them.

In my world, I constantly educate about reducing time, stress and liability through the use of payroll and human resource outsourcing or employee leasing. Outsourcing presents tremendous advantages to small business owners. You don’t have to provide benefits and you only have to utilize our services when they’re needed. This saves you money!

Occupations that Offer the Best Outsourcing Value

Are some tasks more easily outsourced than others? Absolutely. A receptionist might be necessary for a business with lots of visitors and on-site meetings. But, some technology positions are not as essential.

Here are my top five jobs to outsource: IT, Copywriting, Internet Marketing, Recruiting and Sales Training.

IT
Once an intranet or Web site is completed, there aren’t many tasks that need be done daily. Unless your business requires cutting edge technology, an IT expert is only needed sporadically. One of my favorite IT companies is Catalyst Computer Technologies at
http://www.catalystcomputertechnologies.com.

Copywriter
A great writer is essential, but you probably don’t need writing services every day. Build an on-going relationship with a copywriter who can write your marketing and sales materials, on-line Web content and e-mail and print correspondence and hire them when they’re needed. Winning Words Copywriting is a great resource at 480-201-2926.

Internet Marketing Consultant
An internet marketing specialist can boost your Web site visibility and help you gain more online market share. The benefits are clear, but the steps to keep you at the top of search engines don’t have to be taken daily. Set up a monthly, bi-monthly or quarterly agreement with your online marketing specialist. Local Marketing Mastery has outstanding online marketing expertise. Check them out at: LocalRev.com.

Recruiter
A recruiter is essential for a large company that needs lots of employees with specialized degrees or certifications. But, small businesses may only need the services of a recruiter when they expand or need to replace an employee. Peak Solutions recruiters have helped me out tremendously. Their Web address is: http://www.peaksolutionsaz.com.

Sales Training
Keeping your top sales people sharp and on top of their game is a good investment—you want them to be great at bringing in new business. A full time sales trainer isn’t necessary for most small- and medium-sized businesses; just bring one in when your staff’s sales skills need a tune-up. My sales trainer is Dave Cooke, the Sales Cooke. His web address is: http://www.salescooke.com.

Now that I’ve shared my top five jobs to outsource, please tell us which jobs you like to outsource, and why.

Keep an eye out for future “Smart Small Business” posts. I have a passion for small business owners—I’m one myself—and I’d like to help you be more profitable and operate more efficiently. You can make the information even more valuable by sharing your ideas.

An employer finds itself the target of an EEOC disability discrimination lawsuit after denying medical leave to an employee during a busy season. What happens when reasonable requests are made when employers are busy? (read more)

 

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