Supreme Court Ruling

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Today the Supreme Court of the United States upheld the constitutionality of the individual mandate provision of the Patient Protection and Affordable Care Act (PPACA). Accordingly, PPACA’s current health insurance reform provisions will remain in force and we will continue implementing the law, as applicable.

Background

PPACA became law on March 23, 2010. Shortly thereafter, 26 states and the National Federation of Independent Business (NFIB) sued the federal government, claiming that PPACA’s “individual mandate” provision (which requires all individuals to have “minimum essential” health coverage beginning in 2014 or be subject to a penalty) was unconstitutional.

Implications

There will be no impact on implementation of PPACA for employers and plan sponsors, which will need to continue the process of activating the various provisions, including the employer mandate, which will go into effect in 2014.

Client Spotlight

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We are delighted to have the National Brian Tumor Society as one of our clients.  Did you know that this year alone, more than 210,000 Americans will be diagnosed with a brain tumor?

National Brain Tumor Society (NBTS) is fiercely committed to finding better treatments, and ultimately a cure, for people living with a brain tumor today and anyone who will be diagnosed tomorrow. This means effecting change in the system at all levels. Learn more about NBTS’s initiatives in research, public policy and advocacy, and how you can get involved.

Workers Compensation

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Do your employees travel to states other than where your business is domiciled? Do your employees perform work in other states? Understanding how Workers Compensation laws respond to interstate operations is important to ensure that you are in compliance with state employment laws.

Workers Compensation insurance is regulated at the state level. Benefit schedules for claims, interpretation of laws, rates and requirements will vary from state to state. Considerations for establishing where an employee is domiciled include:

Where does the employee live?

Where does the employee primarily work?

In what state was the employee hired?

Extraterritorial coverage issues arise when employees travel and work in a state that is not listed on the Workers Compensation policy. In general, domestic short term business trips to other states should not present a coverage problem. However, a number of states, such as NY and NH, are requiring that they be listed on the Workers Compensation policy even if the work only lasts a few days. Noncompliance with these requirements could open you up to a possible fine.

ND, WA, OH, and WY are “monopolistic” states. Workers Compensation coverage for employees located in one these four states is only available through the respective state agency. For example, a Workers Compensation policy would have to be purchased directly through www.ohioBWC.com for an Ohio based employee.

International travel presents additional complications for Workers Compensation. It is likely that your carrier will not have the resources to respond to an employee injured in a foreign location. Traditional Workers Compensation may not apply if the employee was injured during the trip but not engaged in employment related activities. International insurance policies are available to provide 24 hour protection for workers travelling on an overseas business trip.

Understanding how state laws impact your Workers Compensation coverage is important for compliance issues as well as ensuring that your employees are protected. We encourage you to discuss with us any questions you may have regarding your inter-state operations.

At Cleary, we will evaluate your business exposures and work with you to develop a comprehensive plan to safeguard your business. Give us a call today at 617-723-0700.

Employee Handbooks

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An employee handbook serves as a vital communications tool between a company and its employees. When well prepared, it informs employees about their employer’s mission, its employment policies and perks, and the consequences of not following the rules-all in a tone appropriate to the reading audience. A comprehensive, clearly written employee handbook also can be a protective shield for an employer to use in a lawsuit or less formal employee confrontation situation.

Set the tone for your handbook by opening with a bit of history about your company, its goals and mission, and how employees fit in to this. Your employees, and the products they produce or services they provide, are the face of your company, and your handbook should inspire them to strive for excellence, both individually and as a team. Review the process for employee evaluation and opportunities for employee advancement.

Your handbook should summarize the benefits provided to employees. Briefly describe the health, disability, life, other insurance and retirement benefits plans your company offers, along with work/life programs, absence, vacation and leave policies, and government-mandated benefits. Only brief summaries are appropriate, as the employee handbook is not intended to provide the level of detail found in a summary plan description.

Safety in the workplace is important for all companies, regardless of industry, and guidelines ensuring this belong in an employee handbook. Rules regarding building security, drugs and alcohol, weapons, and workplace violence should be covered, along with issues specific to the line of work your company is in that impact safety, such as workplace chemicals, protective gear, etc. Also let employees know the procedures to follow in case of an emergency.

Your employee handbook should also cover workplace rules that comprise what amounts to an employee code of conduct. These include, for example, policies on harassment, discrimination, any dress code, and the like.

The handbook is also the place to inform employees of the consequences of not following company rules, whether they be regarding attendance, company property, workplace decorum or job performance. Clearly spell out grounds for firing, along with procedures for disciplinary action, including warnings, probationary periods and termination.

Advances in technology (and its availability in the workplace) have added new layers to employee handbook content. In addition to the topics covered above, today’s employee handbook needs to address appropriate uses of technology in the workplace, and what employees can and can’t do while on the job (blogging, visiting Facebook and Twitter, online shopping, etc.). Parameters of email communications also should be addressed, including transmission of chain mails and links to inappropriate Web sites.

The process of writing the handbook can be farmed out to a firm specializing in employee communications, or undertaken in house. Templates are available that can be used for this purpose; they contain the basic information common to most employee handbooks, and beyond this can be customized to your company. If using the template approach, be sure to run the finished product past your company legal counsel or human resources professional for a final review.

At Cleary, we know how important a comprehensive benefits package can be to your continued success. Give us a call today at 617-723-0700 and we will work with you to create a plan that meets your business objectives, takes into account state and federal laws, and capitalizes on incentives and innovative solutions now being offered.

Inland Marine Policies

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Inland Marine policies, as compared to Ocean Marine policies, are meant to cover non ocean related property that is under construction, moves from place to place or is of special or high value. These features usually do not make them good candidates to be insured by standard business property policies.

The term “Inland Marine” covers policies that have many different names to describe what they cover. When you see a building under construction, it would be insured under a Builders Risk policy. Cargo in transit would be insured by a Cargo policy. Contractors Equipment would be insured under an Equipment policy. Jewelry stores inventory is covered by a Jewelers Block policy.

What are some of the benefits of insuring property under an Inland Marine Policy form?

  • Most of them have broader coverage than standard property policies
  • Most use a rate structure that is more advantageous to the insured
  • Many insure the property in question under a “stated” value, meaning the stated value of the property insured is what you would receive if it were destroyed or lost as compared with Actual Cash Value which is a depreciated value

These coverages can be written as a stand-alone policy or added to a commercial property policy by endorsement. The industries where you typically see Inland Marine coverage are construction, warehousing and transit and where there is a “bailee” exposure, such as a dry cleaner. Loss to the property of others in their possession is covered under an Inland Marine form.

If you think that you may have an Inland Marine exposure or if you have coverage but are not sure if it is sufficient, please call Mike Regan at Regan Cleary Insurance.

At Cleary, we will evaluate your business exposures and work with you to develop a comprehensive plan to safeguard your business. We are members of the National Association of Surety Bond Producers (NASBP), the professional organization for agents that also specialize in surety bonding. Give us a call today at 617-723-0700.

Summer Activities

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Liability risk is everywhere: at home, on the road, on vacation. It’s an unfortunate fact that accidents can stem from everyday activities and lead to costly lawsuits. Do you:

  • Own a pool or trampoline?
  • Entertain?
  • Have excited pets?
  • Spend time behind the wheel?
  • Have a teen driver in the household?
  • Own a recreational vehicle or boat?
  • Have staff in your home (gardeners, nannies, housekeepers)?

These are all factors that increase your risk for a lawsuit. Therefore it is important to make sure you understand the risks you face and the options you have to manage those risks.

In today’s litigious society, every family with significant assets faces the risk of lawsuits that could significantly impact their net worth. That’s why we recommend you consider the need for an Excess Liability policy. Financial planners suggest that clients should have excess liability coverage at least equal to their net worth.

Personal Excess Liability policies, more commonly known as Umbrella policies, are very important to your financial well-being and the cost is minimal: usually about $300 annually for the first $1,000,000 in coverage.

Umbrella policies pick up where your homeowner and auto policies leave off. For example, if you are in a car accident and your auto policy provides $500,000 in coverage, and someone is seriously injured, you could be sued for much more than $500,000. The umbrella policy would then take over. The policy would pay for medical bills and in the event of a lawsuit, pay legal fees and the settlement – up to the limits of your policy.

Contact us today so we can customize a policy that balances your assets and risks to provide you with peace of mind.

Concerned about your personal insurance coverage? At Cleary, our experienced Personal Lines department will work with you to evaluate your insurance needs, identify exposures and create a customized insurance portfolio. Give us a call today at 617-723-0700.

Federal Service Contracts

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The U.S. Department of Labor issued a Final Rule implementing Executive Order # 13495, Nondisplacement of Qualified Workers under Service Contracts, signed by President Obama on January 30, 2009. The Order and the final rule require contractors and subcontractors who are awarded a federal service contract to provide the same or similar services at the same location to, in most circumstances, offer employment to the predecessor contractor’s employees in positions for which they are qualified.

Where the successor contract is a contract subject to the Order and the final rule, the contracting officer (or designee) will ensure that the contractor provides written notice to the eligible employees of the predecessor contractor of their possible right to an offer of employment. Such notice may either be posted in a conspicuous place at the worksite or may be delivered to the employees individually. An offer of employment may be for any position for which the employee is qualified; the offer need not be for the same position that the employee previously held.

The effect on Contractors is outlined below:

  • With limited exceptions, the contractor will be compelled to initially offer employment to the predecessor contractor’s employees. The contractor’s workforce will be comprised of the predecessor company’s employees rather than employees selected or employed by the contractor.
  • If the predecessor workforce is unionized, the successor contractor will be required to recognize the union under the National Labor Relations Act successorship rules.
  • Additionally, if the predecessor’s workforce was in the process of unionizing, then those organizational efforts will continue with the new Employer.
  • The Final Rule’s effective date will probably be before year end when the Federal Acquisition Council issues companion regulations implementing the Executive Order.

Health and Welfare Changes

Effective June 17, 2012 the new SCA health and welfare benefit increased to $3.71 per hour. We encourage all contractors to not pay the new fringe benefit until it has been authorized by your Contracting Agency with a modification date.

At Cleary, we know how important a comprehensive benefits package can be to your continued success. Give us a call today at 617-723-0700 and we will work with you to create a plan that meets your fringe benefit obligations and provides your employees with valuable benefits.

Personal Finance 101

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With their college degrees in hand, it’s time for the recent graduates in your life to take on the responsibilities that come with the rewards of financial independence. And given today’s economic challenges, it’s critical for them to establish good money management habits from the outset. Here are some key personal financial tips you can give them along with your graduation gift — the tips may even turn out to be the most valuable gift they receive.

Watch your spending

As a new graduate, this may be your first experience with significant, steady cash flow. It can be tempting to spend all of your newfound money, but tread carefully until you’ve evaluated exactly how much you earn and how much you spend.

To start out on the right financial foot, make a budget and stick to it. Determine your monthly expenses and monthly income (after taxes), and then calculate how much you have left over. As you create your budget, be realistic about your spending — you may be surprised, for example, how much you spend on ATM fees, cab fare or take-out food.

Make retirement savings a priority

Find a prominent place in your budget for retirement savings, and treat your contribution as one of your monthly bills. If you have access to a 401(k), 403(b) or other tax-deferred retirement plan at work, make contributions to the plan a priority in your budget. These plans let you put aside money, pretax, which then can grow tax-deferred. So you’re reducing your tax bill while saving for your future. Alternatively, your employer may have a 401(k)-type plan with a Roth option that may be even better for a young person.

If your employer doesn’t offer a retirement plan, consider opening up an IRA. If you choose a traditional IRA, you can deduct your contributions when you file your tax return next year. If you choose a Roth IRA, you can’t deduct your contributions, but the withdrawals you make at retirement will be tax free.

Whatever retirement plan you have, the most important factor isn’t how much you contribute, but that you start contributing as soon as you can. If at age 22 you begin contributing $150 per month to a Roth IRA account that earns 8% annually, you’ll accumulate $676,000 by age 65. But if you wait until age 30 to start contributing, you’ll need to save twice as much for the rest of your working life to catch up.

If your retirement plan offers an employer match, though, try to at least contribute the amount necessary to get the maximum match. If you don’t, you’re throwing away free money!

Bear in mind that if you withdraw funds from your retirement plan before age 591/2, you’ll be subject to current income taxes and an additional 10% tax penalty.

Manage debt wisely

Many college grads leave school with some form of debt, usually from student loans or credit cards. It’s important to develop a favorable credit history, especially in times of tight credit, because lenders want to see that you’re a good risk. Damage to your credit rating can impair your ability to qualify for a car loan or mortgage at an attractive rate.

So pay off your credit card bills in full every month. If you do have credit card debt, transfer the balance to a low interest-rate card and pay more than the minimum each month. If you pay only the minimum, it could take you years to pay off the card. Even with a low interest-rate card, that could add up to hundreds, if not thousands, of dollars of nondeductible interest.

If you’re having trouble making student loan payments, consider consolidating multiple loans to extend your repayment timeline and reduce monthly payments, or look into getting a deferment. Make sure the rest of your finances are in order before you start attacking your student loan bills too aggressively. Give priority to credit card and other debts with higher interest rates.

Plan for future expenses

In addition to contributing to a retirement plan and paying off your debts, get in the habit of saving for short-term to middle-term expenses. First, save for emergencies — build up enough to cover at least a few months’ worth of living expenses. Even if you have a good job, you never know what the future will hold, especially in a stressed economy.

Once you’ve built up your emergency fund, save for other goals. You’ll be rewarded with a growing nest egg that may enable you to fund a car, home, wedding or other big items down the road.

Finally, you aren’t too young to benefit from the guidance of a professional financial advisor, who can provide specialized advice for your individual situation.

Insure yourself

If your health insurance expired at graduation, make sure that you get covered — either through your new employer or through an individual policy. A health emergency can significantly deplete your funds. Fortunately, you’ll find that you’re likely relatively cheap to insure because most recent grads are young and generally healthy.

In addition, don’t overlook other insurance needs, such as renter’s and auto insurance, to make sure that large, unforeseen expenses don’t disrupt your finances too greatly. Be sure to shop around for competitive rates.

Presented by John Steiger, ChFC, AEP Certified Financial Planner

At Cleary, we are committed to a holistic approach of protecting and preserving our clients’ financial assets. Give us a call today at 617-723-0700 and let us know how we can help you.