Sunday September 14, 2008
Can employers be forced to offer health insurance
to their employees? The answer seems to be yes. Last year, a law mandating health coverage for all took effect in Massachusetts
, shifting much of the burden to employers. Now more states are taking a look at how things have progressed and are considering similar legislation to increase health employee benefits.
In Colorado, an initiative will be on the ballot this fall allowing voters to choose whether they want Amendment 56 passed. If passed, employers with 20 or more employees would be required to offer some sort of health care coverage to their employees. The specifics of this law would force employers to pay a minimum of 80% of the premium cost for employees and a minimum of 70% of premium costs for employee dependents. Employers could either provide health insurance through an insurerís group plan or through a new state authority that will contract with private plans.
For businesses with employees in Colorado, this is something to watch carefully. With premiums rising every year, paying upwards of 80% may be a cost-prohibitive option. Now may be the time to review the plans available to see whatís the best fit quality-wise and price-wise.
Thursday September 11, 2008
Monday September 8, 2008
If you offer your employees a 401(k) plan
, hereís something else you should let them know. Anyone who does not withdraw money from their retirement account
by age 70 Ĺ are subject to taxes on the account amounts
. This doesnít mean retirees have to withdraw all their money. They just need to withdraw a required minimum distribution, or RMD. If not, they can face a hefty penalty, of as much as 50 percent.
This rule not only applies to 401(k)s but to IRAs as well.
This isnít widely known, nor is it broadcast in places where seniors with these accounts would easily find this information. Banks and financial institutions are supposed to let account holders know this information, but often itís buried in with other information. So how do we let seniors know about the RMD?
There are a couple of things you can do. Once an employee retires, you can send them a letter letting them know about TMD and their responsibility to withdraw a portion of their retirement money every year. Additionally, if you offer a group Medicare plan, RMD notices can be sent with Medicare information, though you need to be careful which notices you bundle it with. Medicare follows HIPA compliance rules, and you have to be careful not to jeopardize a current or former employeeís personal health information. Alerting everyone to the penalties for not withdrawing retirement money can help them save on being taxed.
Friday August 22, 2008
While employee benefits are truly appreciated by employees, sometimes it really does come down to compensation. With a sinking American economy, it can be tempting to cut raises for the upcoming year. But with inflation at the highest rate itís been in years, employee salaries just arenít going as far.
You may be thinking of keeping salaries trim but according to Watson Wyatt, companies are planning to raise pay an average of 3.5%. This still doesnít keep up with inflation, which rose 5% in June alone. For now, with the weakening economy, many workers are staying put. As long as pay cuts arenít taking place, workers are willing to put up with a raise that doesnít quite match the cost of living.
The one thing to keep in mind is not to cut back too much. Your staff knows what employee benefits and compensation is available to them. Once the economy starts to recover, workers that feel that they are getting the short end of the stick wonít be as willing to stick around as workers who know their company went out of the way to offer them a decent raise with a good employee benefits program. Donít fall into the pitfall, thinking your employees will stay with you indefinitely. If you can afford it, try to keep ahead of the compensation and employee benefit trend.