Archive for July 2013

The Use of Payroll Cards is Raising Legal Issues

If the New York Attorney General investigates payroll cards, does the rest of the country hear the noise?

As if employers did not have anything else to worry about, New York Attorney General Eric Schneiderman has begun an investigation into the practice of employers paying their employees through prepaid payroll cards (http://www.ballardspahr.com/alertspublications/legalalerts/2013-07-11-ny-attorney-general-investigates-use-of-payroll-cards.aspx).

What exactly is a prepaid payroll card?

Prepaid payroll cards are like a bank debit card that is given to an employee and when payroll is dispersed money is automatically deposited to the card and the employee can use it just like any other debit card to pay their bills. In most cases this is a great service that simplifies life for everybody concerned. However, the cards are also open to a great deal of abuse in the forms of excessive fees by the firms issuing the cards.

A total of 16 U.S. senators have sent notice to federal regulatory bodies using the term “shocking” in regard to the amount of money taken from some employees’ payroll through these fees.  While I do not want to diminish the egregious nature of the violation if the card company is taking excessive fees, I would also caution you not to assume the entire industry does that.

So you might ask: What should you look for if you are using prepaid payroll cards?  The Senators in their letter indicated, “mandating the use of a particular payroll card, with no available alternative, seems clearly to violate federal law.” I would also add that if you are not offering alternatives to payroll cards and extensive education to point out the availability of the alternatives, you might well be in trouble.

 

As with all employer legislation it is a good idea to check your practices (especially as they relate to payroll) and make sure they are clearly outlined in whatever format you notify employees.

For more information contact Bill Weaver, Focus Benefits Group, 602-381-9900!

 

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The Health Insurance Marketplace – What is Fact and What is Myth?

Last week the Department of Health and Human Services released the final rules on how eligibility will be determined for the Health Insurance Marketplaces which will be opening on October 1, 2013.  The final rules stated the federal government would be scaling back the law’s requirements that the new exchanges would be verifying consumer’s income and health insurance status until 2015, when stronger verification systems are in place. 

In a memo dated July 9, 2013, Marilyn Tanner, Administrator for the Centers of Medicare and Medicaid Services (CMS), stated there have been “some mischaracterizations of these regulations and confusion about how the Marketplace will work when it opens later this year.”

 

MYTH:

There will be a delay in opening the Marketplace.

FACT:

We are on track to open the Marketplace on October 1, 2013, when individuals, families and small businesses will be able to shop for quality, affordable health insurance options.

 

MYTH: 

The Marketplace won’t check income information submitted by individuals.

FACT:  

No matter which type of Marketplace is operating in a state, the Marketplace will always check the income information submitted by individuals against electronic income data sources such as tax filings, Social Security data, and current wage information.

 

MYTH:  

There is a delay in verifying offers of employer-based coverage.

FACT:    

The federally-facilitated Marketplace will perform sample-based reviews as planned, which will provide sufficiently representative data to enable HHS to evaluate the verification process and propose changes for subsequent years if necessary.  The final rule only differs from the approach in the bulletin and proposed rule in that State-based Marketplaces can decide whether and how to conduct such verifications in the first year of operations.  

 

In the midst of all this “mischaracterization” about the exchanges, the Obama administration announced on July 2, 2013 that the Affordable Care Act employer mandate would be delayed until 2015.  Although this may seem like great news to employers, they have to remember that the only thing that has been delayed is the employer penalties associated with the employer mandate, the employer mandate law is still on the books.

Do you think the exchanges will open October 1, 2013?  Will the systems be in place to verify individual’s income and health insurance status?  Send us a message at bweaver@focusbenefits.com or give us a call at (602) 381-9900.

 

 

 

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