Tag Archive | "small businesses"

Steering Clear of Obamacare’s Hidden Hurdles

The Patient Protection and Affordable Care Act, better known as Obamacare, does not have to be a bitter pill for small-business owners to swallow. But as we enter the second year under the main provisions of the law, there some critical things to keep in mind, reported The Washington Post.

For starters, companies with fewer than 50 full-time equivalent employees – the majority of small businesses – are not required by the law to offer health insurance to employees. Still, attracting the best employees often requires offering much more than a hefty salary; benefits such as health insurance can make the difference when recruiting top candidates and building an elite team.

So, even if a company has fewer than 50 employees, many employers may still want to provide an employee health benefits program — and if so, that plan will have to be in harmony with the new rules under Obamacare. What are those new rules?

Here are some of the less-discussed provisions to know about:

By far the biggest impact of Obamacare on small group health plans is the new provision for age-based rates. Individuals are now charged differently according to their age; the younger you are, the less you pay. For example, a 23-year-old employee might be charged $275 per month while a 63-year-old employee is charged $825 for the same coverage.

Premiums for spouses and dependents are also age-based. Fortunately, though, certain carriers are now offering small group policies with composite rates in both the single and dependent categories.

Another potential stumbling block for small businesses is a shorter waiting period for employees to become eligible for health-care benefits. Employers can be fined if their waiting period for coverage is longer than 90 days.

In addition, Obamacare dusted off a rarely enforced, 40-year-old compliance requirement from the 1974 Employee Retirement Income Security Act, which requires employers to provide certain information to workers about their health and retirement accounts.

In a nutshell, the Labor Department, which enforces the law, now plans to audit employers to make sure health benefit plans are in complete compliance with requirements of ERISA. Employers who are not in compliance are subject to fines ranging from $110 a day to more than $1,000 a day. To step up Title I enforcement, the department has added 1,800 new auditors.

How do steer clear of these potential stumbling blocks?

Here are my top five suggestions for small businesses to help minimize Obamacare-related headaches:

Make sure that your new hire eligibility period is less than 90 days following the date of hiring. By making the eligibility date the first of the month following 60 days on the job, for example, you can avoid any risk of being fined. That’s a simple step every employer should take immediately.

Consider moving to a high-deductible plan using an employer-sponsored health reimbursement arrangement or health savings account. Not only will this minimize costs to the company, but it will also make employees more accountable and aware of the cost of their health care.

If possible, to simplify the administrative work for your human resources team and to increase the likelihood of obtaining composite rates from insurance carriers, place all of your employees in one health plan. In most cases, if you can get a composite rate from a carrier, it will not change during the year when you hire an older worker.

Make sure you’re complying with ERISA by asking your broker to create what’s known as a Wrap Plan Document and Summary Plan Description for all of your company’s benefit plans. These documents essentially outline participants’ and beneficiaries’ rights and obligations under your health plan.

Finally, to reduce health risks, cut costs and improve employee productivity in the long term, consider implementing a variety of annual or year-round wellness opportunities for your employees. These could include health classes, health coaching, wellness challenges, smoking cessation programs and “de-stressing” activities such as yoga classes. These programs can help you build a happier, healthier and more productive workforce.

Joseph Appelbaum is founder and president of Potomac Cos., an employee benefit brokerage and consulting firm based in Rockville.

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Small Business Hiring Roars Back in October

Small business owners cranked back up their hiring engines last month, eclipsing the six-figure threshold for only the second month in the past year, new data show, reported The Washington Post.

Small employers added 102,000 jobs in October, up from an upwardly revised 93,000 the month before, according to the latest employment report released by payroll processing firm ADP. While that’s still down from a peak of 133,000 positions added in June, it marks the second straight month of improvement after a slump to close the summer.

Hiring by small businesses continues to mirror that of the overall economy, as employers of all sizes added 230,000 positions in October, representing the second largest monthly output in the past year, too.

“Employment continues to trend upward as we begin the last quarter of 2014, driven mostly by small to mid-sized companies,” ADP CEO Carlos Rodriguez said in a statement.

In fact, it was the nation’s smallest businesses that for the third consecutive month contributed more openings than their slightly larger counterparts. Companies with fewer than 20 employees added 53,000 jobs, while companies with between 20 and 50 workers added 49,000 positions in October.

An even more consistent trend is the overwhelmingly large contribution from service-producing businesses, which were responsible for 91,000 of the 102,000 positions added by small companies last month. Notably, the contribution last month by goods-producing businesses was revised from an already-low 6,000 jobs to absolutely zero new jobs added.

One day earlier, Intuit, another payroll processing company, released its own hiring index showing that companies with fewer than 20 workers added 15,000 new jobs in October. That helped lift its monthly small-business index to its highest point since 2009 — further indication of a rebound on Main Street.

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Mid-Sized Businesses Still Very Concerned About (and Unprepared for) Obamacare

Health care costs and the Affordable Care Act represent the biggest concerns right now for owners of mid-sized businesses, a newly released survey shows, reported The Washington Post. In part, that may be because, now four years after the legislation was passed, most of them are still uninformed about and unprepared for the rules in the health care law.

More than two-thirds (69 percent) of mid-sized business owners say they are very or extremely concerned about the costs of health coverage and other benefits, while more than half (54 percent) say they are particularly concerned with the health law, according to an annual study conducted by the research institute at payroll firm ADP.

Some of that concern, the authors of the study note, may stem from that fact that fewer than half of mid-size businesses (firms that have been 50 and 999 employees) have put formal plans to manage the changes implemented under the health care law. Additionally, more than three-fourths of their owners say they aren’t confident that they completely understand the new rules.

On the whole, confidence among mid-size business owners is lacking. Only half of the roughly 750 respondents expect the industry in which they work to strengthen in coming year, while far fewer — 15 percent — believe the broader economy will improve.

In their report, the researchers point out that owners of mid-sized businesses often find themselves in a difficult position, in that they are “expected to operate with the agility of smaller businesses but abide by many of the same regulations that govern larger enterprises.” And perhaps nowhere is that more evident than in the health law.

Under some of most important provisions of the law, companies with more than 50 employees are considered large businesses, even though many would be considered small by other federal standards (the Small Business Administration’s definition generally includes firms with up to 500 workers). For example, they are not permitted to apply for small-business tax credits, shop for coverage on new employer insurance marketplaces or seek a small-business exemption to rules requiring companies to offer health coverage.

“A changing landscape, coupled with heightened responsibility, can take a toll on the confidence of mid-sized business owners,” the authors of the study wrote. “In 2014, they seem to be struggling to find it.”

It isn’t just health care concerns that are weighing heavily, though. More than half of respondents said they are very or extremely concerned with the number of government regulations. A third said they have been hit by unexpected fines or expenses in the past year resulting from noncompliance with government rules.

“In 2013 alone, there were more than 19,000 proposed changes to laws and regulations that impact how businesses manage employees,” Anish Rajparia, an ADP executive, said in a statement about the report. “So it comes as little surprise that the level and volume of government regulation made our list of top concerns three years running.”

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How Saying ‘No’ Can Help You Grow

When you really look for it, there is opportunity all around you. It’s easy to fall into the trap of inviting too much opportunity into your life, only to find out that it sucks up your time, leaving you feeling drained and unfocused, reported Inc.

When you say “yes” to too many things, you overcommit yourself. Rather than being laser focused, your attention is split into smaller, less important tasks that keep you busy, but not very productive. Multitasking is “the art of doing many things poorly”.

If you find yourself too busy to think, then you may want to take a step back and look at the big picture. Saying “no” can feel contrary to your growth objectives. It’s easier to say “no” to things that cost you money than it is to say “no” to things that pay your bills. Saying “no” to a client or a sale is a lot harder than saying “no” to a vendor or asset purchase. But when the client or sale is not aligned with your company’s mission or purpose, this is precisely the time to say “no” so that you can say “yes” to something more relevant.

Saying “no” is not a weakness. Saying “no” is a key strength to growing your business. Knowing what to say “no” to means that you have clearly identified your objectives, mission and purpose. By not chasing after every opportunity, you have time to succeed at the few important things that drive your business.

When “No” Means “Yes”

It was Alexander Graham Bell who said, “When one door closes, another opens; but we often look so long and so regretfully upon the closed door that we do not see the one which has opened for us.” To avoid wasting time regretting what you say “no” to, spend more time defining what your priorities are and clearly identify your business goals. Anything that doesn’t fit should be rejected so that you remain focused and can attract even more of what fuels your growth.

We once had a client who was incredibly rude and obnoxious to one of our employees. He was shocked when I “fired” him as a client. I said “no” to his business at a time when it represented a good percentage of our revenue. That action had two important benefits that I could not have foreseen at the time: (1) It emboldened my team to double their efforts to grow our business and (2) It avoided attracting similarly hostile clients into our company (as “birds of a feather flock together”).

Saying “no” to a hostile client meant that I was saying “yes” to a more positive and inviting work environment for our team. It also meant I was saying “yes” to current and future clients our team wanted to work hard for to ensure their success. One committed “no” meant several new opportunities we could say “yes” to. And that has made all the difference.

What are you willing to say “no” to? By answering this question, you can better define your fastest path to sustainable growth. Knowing what your company is NOT is arguably more important than defining what your company is all about.

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Learn to Identify Resume Red Flags and Green Lights

“Reviewing resumes is an art, not a science,” says Cathleen Faerber, managing director at search firm Wellesley Group Inc. in Buffalo Grove. Ms. Faerber and Lori Kleiman, managing director at HR Topics in Glenview, tell how to spot red flags and green lights in that pile of resumes, reported Chicago Business.


Sloppiness. Typos and half-baked thoughts are “the first thing I look for,” Ms. Faerber says. “You question the person’s communication skills if they can’t construct a thought and put it on paper.”

Stagnation. “If someone’s been at the same company for 15 years, I want to see that they’ve been promoted,” Ms. Kleiman says. “But if they’ve been a customer service rep for 15 years, you’re probably getting someone who’s complacent.”

A hop-scotch career path. Times have changed and people no longer stay in jobs for years on end. Still, “when you see successive job changes from day one of their career, that’s a red flag,” Ms. Faerber says.

The applicant lives way out of state. Relocating to Chicago from Detroit or Milwaukee is one thing; from Miami or Seattle, quite another. “They’d have to explain why in the cover letter,” Ms. Kleiman says.

Geographic job-hopping. “Are they chasing the dream and that’s why they’re moving all over?” Ms. Kleiman says. “That’s a big red flag.”


Short and sweet. “I’m absolutely crazy about one-page resumes,” Ms. Kleiman says.

Foreign-language skills. “You might not need them today, but you never know,” Ms. Kleiman says.

Steady career progression. “Someone whose job titles show progression of promotion, at the same or different companies—they’re constantly tapped and they’re interested in going to the next level,” Ms. Kleiman says.

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Small Businesses Help Workers Buy Health Plans

NEW YORK — When Monty Hagler learned his employee insurance premiums could rise as much as 38%, the small business owner decided he couldn’t afford coverage that complies with the health care overhaul, reported USA Today.

He considered a variety of plans from different carriers, but they were too expensive or bare-bones.

“Unless we dramatically changed our plan and went with the most basic plan, I said, ‘this is not sustainable,'” says Hagler, owner of RLF Communications, a Greensboro, North Carolina-based marketing company.

So Hagler told his 12 staffers he would give them money starting in May to buy their own insurance, coverage likely to be better than what he could offer. He joined a growing number of small business owners who are forgoing coverage and paying staffers more to compensate for the lost benefits.

Health insurer Wellpoint said last month its roster of small businesses has shrunk by 12% so far this year. Nearly 3% of 1,600 small businesses surveyed by the Society for Human Resource Management plan to give employees subsidies next year so they can buy their own coverage on private insurance exchanges.

Losing coverage at work

Insurance brokers are getting more inquiries about individual coverage, a sign to them that many people are losing coverage at work. The brokerage HealthMarkets has had a 40% pickup in applications for individual insurance since the open enrollment period for insurance ended March 31. Spring and summer are normally a slow period for policy purchases.

“We’re seeing this happen with increasing frequency and we’re believing we’ll see it with greater frequency this fall,” says Ken Fasola, CEO of HealthMarkets, based in North Richland Hills, Texas. If policy cancellations do rise this fall, it would likely be due to the fact many small businesses renewed their coverage before Jan. 1, 2014, when policies were required to comply with the health care law. As those policies come up for renewal, owners will have to decide whether to buy the new insurance.

Owners like Hagler aren’t required to offer insurance. The health care law exempts companies with fewer than 50 workers. But many of these owners provided coverage because insurance is a benefit that helps retain staffers and recruit top talent. But workers may get a better deal on government-run health insurance exchanges, especially if they qualify for government subsidies that will lower premium costs for individuals and families. The government will subsidize coverage on the exchanges for individuals earning up to $45,960. The income limit for a family of four is $94,200.

About half of Hagler’s employees bought their insurance on the North Carolina exchange, while others got insurance through their spouses’ plans or bought it privately.

Kim Sink, the company’s director of projects and production, says she’s grateful Hagler gives her a stipend that covers two-thirds of her $711 monthly premium.

“I’m tickled that he still helps me. Most employers don’t in this day and time,” she says.

Giving workers extra compensation to help buy insurance can result in higher income tax for the employees, and it can also mean employers will owe payroll tax on the money. Benefits attorneys and accountants recommend owners talk to a tax professional to see what their options are.

Some owners bring in insurance brokers or benefits consultants to help workers find new insurance.

“We explained to them, you probably are going to come out ahead. You will get a stipend and a subsidy and coverage will be better than what you were going to get with the group plan,” says Ashley Hunter, owner of HM Risk Group, an insurance brokerage based in Austin, Texas.

The coverage now available to individuals in Texas is more comprehensive than the insurance Hunter provided her own staffers under a group plan. And it’s cheaper. Hunter paid 80% of premiums under the plan she dropped as of this month. Under the plan, an employee paid $140 a month. But with the stipend and government subsidy, the employee is paying $24.12 a month, Hunter says.

Many of Hunter’s small business clients are also dropping coverage for their workers.

Workers can do better on their own because they have more options than businesses, says John O’Donnell, president of Insurance Consultants of Central Florida, a broker based in suburban Orlando, Florida.

“Small groups have to pick from two or three plans, whereas employees can go to the individual market, exercise more flexibility and have more autonomy,” O’Donnell says. He estimates 10% of his company’s small business clients have ended insurance and given their workers money for coverage or are seriously considering it.

Laura Adamski was looking at a nearly 30% increase for a policy that was up for renewal Sept. 1 and also chose to end her coverage. She’s still working with her accountant on a plan to compensate the 12 employees of her Aurora, Illinois-based advertising and design business, Cygnet Midwest. Right now she’s not sure how those payments will be structured.

“It’s hanging over me,” she says. “I have the three months to work on that.”

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