The Vita Blog January 2018

This article has been published in partnership with ThinkHR.

Question: We would like to include the following statement in our job postings: “We are interested in every qualified candidate who is eligible to work in the United States. However, we are not able to sponsor visas.”  Would this be considered a discriminatory practice?

Answer: The anti-discrimination provisions of the Immigration and Nationality Act (INA) do not bar employers from limiting employment to individuals with the legal right to work in the United States and stating in recruitment materials that immigration or work visa sponsorship will not be provided as long as the no-sponsorship policy is applied in a nondiscriminatory fashion regardless of race, gender, ethnic origin, or any other classification protected by law. 

This legal right to work status applies to U.S. citizens, U.S. nationals, recent lawful permanent residents, refugees and asylees. Other types of nonimmigrants may lawfully be excluded from the recruitment process if the exclusion practices do not involve discrimination based on protected class status or other prohibited conduct, such as document abuse in the I-9 verification process. 

In the event that an applicant overlooks the no-sponsorship statement in the recruitment materials, the Department of Justice has indicated employers may lawfully ask:

1. Are you legally authorized to work in the United States on a full-time basis?
2. Will you now or in the future require sponsorship for employment visa status?

Consequently, employers may lawfully reject applicants for advertised positions who are not U.S. citizens, U.S. nationals, recent lawful permanent residents, asylees, or refugees. If an applicant’s immigration status is unclear during the recruitment and selection process, consult with legal counsel.

On Monday, January 22, Congress passed and President Trump subsequently signed bill H.R. 195 to fund the government through February 8, 2018. As part of the bill, the implementation of the Cadillac Tax on high-value health insurance plans will be delayed for two years, from 2020 to 2022. The bill also implemented a one-year moratorium of the Health Insurance Tax (HIT), effective for 2019 only. It's important to note that the HIT is in effect for 2018. 

In addition, funding for the Children's Health Insurance Program (CHIP) was renewed for six years and a two-year delay (2018-2019) of the Medical Device Tax was also implemented. 

Regardless of your health plan design – whether it’s a High Deductible Health Plan (HDHP) or a traditional PPO medical plan – the best way to manage your out-of-pocket expenses when seeking care is to behave like a consumer. When you use your consumer skills, you will be more successful in choosing care that fits both your personal and financial needs.

Below is an illustration of the various medical care delivery models and the typical cost associated with each model, expressed in dollar signs. On the left side of the spectrum are your non-urgent or low level health care needs, and on the right side of the spectrum are your higher-level, life threatening health care needs.

Virtual Visits
These are most appropriate for non-urgent or low level health care needs where a hands-on physical examination is not necessary. With a virtual visit, you do not have to waste time driving to and waiting in your doctor’s office, and you save gas money! Appointments are on demand and physicians are able to prescribe medications.

Convenience Care Clinic
These are health clinics found in retail outlets such as, CVS, Target or Rite Aid, and typically staffed by a Nurse Practitioner or M.D. While not predominant in California, this type of health clinic is popular in the rest of the country, especially in more rural areas. Access to care is easy, as extended hours are common and an appointment is not required.

Office Visit
This is the most popular way to seek care for non-emergency situations that require a hands-on examination. Visits are typically covered with a copayment and require an appointment within the doctor’s normal business hours.

Urgent Care
These are more popular in California than Convenience Care Clinics and often associated with medical groups and staffed by M.D.s. These clinics provide a higher level of care for injuries and illnesses that require a hands-on examination, and offer extended office hours. They are typically covered at a higher copayment than an office visit.

Emergency Room
Visit the emergency room when immediate, highly skilled care is needed for the alleviation of acute pain, or for life threatening situations. Available 24 hours a day, this is the most expensive health care delivery option.

By better understanding the various delivery models above, you can take charge of your health care and choose the delivery method that best fits your needs.  Now you are a consumer!

Comments:

The Tax Cuts and Jobs Act includes a new federal tax credit for employers that provide paid family and medical leave (FML) to their employees.

To be clear, the Act does not require employers to provide paid leave. However, eligible employers are allowed a tax credit based on wages paid to employees on FML. If the employer provides paid leave as vacation leave, personal leave, or medical or sick leave, then that leave will not be considered FML for purposes of the tax credit.

The tax credit would apply to employers who have a written policy that provides:

• Qualifying full-time employees with at least two weeks of annual paid FML;
• Qualifying part-time employees with an annual paid FML amount that is at least proportionate to the full-time employees' annual paid FML amount; and
• A rate of pay not less than 50 percent of the wages normally paid to employees for services performed.

The tax credit would apply to an employer's qualifying employees who are:

• Employees as defined under Section 3(e) of the Fair Labor Standards Act of 1938, as amended;
• Employed by the employer for one year or more; and
• Not compensated in excess of 60 percent of the amount for highly compensated employees for the preceding year (for example, in 2018, employers may only apply the credit toward employees who earn less than $72,000).
  

For employers who meet the above criteria and who pay 50 percent of wages, they may claim a tax credit of 12.5 percent of wages paid for up to 12 weeks of FML annually. For each percentage point increase above 50 percent of wages paid, the employer may increase the tax credit by a 0.25 percentage point (not to exceed 25 percent).

The tax credit would apply to wages paid to employees on FML in taxable years beginning after December 31, 2017, and before January 1, 2020.

Who does this apply to?
Employers who offer benefit plans to their employees.

What action must I take? 
There is no immediate employer action required, other than to note the increased penalty amounts for non-compliance with various employee benefit regulations.

Overview
In 2015, legislation was enacted by Congress that required an initial "catch-up" adjustment to specified penalty amounts, followed by annual adjustments. Regulations were then issued in 2016 that established catch-up amounts and required future adjustments be made by January 15 of each year, starting in 2017. The 2018 adjustments are effective for penalties assessed after January 2, 2018, with respect to violations occurring after November 2, 2015.

Highlights of Changes

• Form 5500 – The maximum penalty for failing to file Form 5500 increases from $2,097 to $2,140 per day that the form is late.
• Group Health Plans – The maximum penalty for failing to provide the summary of benefits and coverage (SBC) increases from $1,105 to $1,128 per failure. The penalty for violations of the Genetic Information Nondiscrimination Act (GINA) increases from $112 to $114 per participant per day. 
• 401(k) Plans – For plans with automatic contribution arrangements, the penalty for failing to provide the ERISA § 514(e) preemption notice to participants increases from $1,659 to $1,693 per day. The penalty for failing to provide blackout notices or notices of diversification rights increases from $133 to $136 per day. The maximum penalty for failing to comply with the ERISA § 209(b) recordkeeping and reporting requirements increases from $28 to $29 per employee.
  
  

Conclusion
The team at Vita is dedicated to keeping your benefit plans fully compliant, so while knowing these penalties is important, we expect that you will never actually experience them.

Expanding your company’s scope internationally, whether it’s just one employee traveling or an entire division relocating, can be a very complex project to manage. The checklist below can help you get a handle on some key considerations.

1. Investigate your current policies to verify how your current coverage handles care abroad
Group medical plans typically offer international coverage for emergency care only. You may find that your disability insurance has a travel assistance benefit or “add-on” that also helps to coordinate emergency medical evacuations or care abroad.

2. Consider business travel accident (BTA) and medical benefits abroad (MBA) coverage
If your organization has historically experienced low business travel needs, you can definitely expect to see a significant increase in business travel abroad as you expand your international presence. BTA policies can supplement any existing accidental death and dismemberment benefits currently in force; MBA policies ensure that both emergency and routine care is covered for employees on international assignments shorter than 6 months.

3. Determine the number of expatriates you will have and the duration of their relocation
For employees traveling more than six months, or an expatriate, a better choice may be an individual international health insurance policy. These policies are guaranteed renewable and easy to obtain, but may contain pre-existing condition limitations.

4. Identify need for Group Expatriate Health Insurance
If you have five or more expatriates, you may be eligible to purchase a group/blanket policy for them. A group policy provides consistency in plan design and renewal periods, typically do not have pre-existing condition exclusions, and tend to be more comprehensive than individual plans. 

5. Explore a Global PEO (aka GEO: Global Employment Organization)
These organizations may be attractive to companies with a handful of employees in a handful of countries. Unlike the United States (in which a PEO is a “co-employment” arrangement), global PEOs are the true employer of record with 100% employer liability. Global PEOs will provide payroll, HR, and benefits services to streamline your international processes and give you peace of mind in limiting your organization’s local compliance risks.

6. Develop a long-term international benefits philosophy
Developing a strategic philosophy doesn’t have to be a detailed or time-consuming process, however, it’s important that your organization’s key stakeholders are aligned with a broad approach. Additionally, it’s important to understand that the idea of duplicating benefits or designing an “equal” benefits package across international borders, while seemingly simple and straightforward, may be problematic.  Instead, consider adopting an international strategy based on statutory requirements or in relation to benchmark standards.

Lastly, be sure to work with a trusted advisor who will help you evaluate the best options for your specific situation.  Each organization’s needs and priorities are different, so don’t hesitate to ask questions, explore new options, and create the right framework for your international population.