Obama signs healthcare tax repeal into law
(Reuters) – President Barack Obama on Thursday signed into law a bill changing his signature healthcare legislation to repeal a tax measure that business groups said would cause an avalanche of paperwork.
“I was pleased to take another step to relieve unnecessary burdens on small businesses,” Obama said in a statement.
“Small business owners are the engine of our economy and because Democrats and Republicans worked together, we can ensure they spend their time and resources creating jobs and growing their business, not filling out more paperwork,” he said.
The law repeals a requirement in last year’s healthcare overhaul for businesses and landlords to file a Form 1099 document with the Internal Revenue Service for purchases of goods and services exceeding $600 a year.
The tax reporting provision was meant to improve tax compliance and help pay for the healthcare law, but small firms and the self-employed complained it would bury them in paperwork.
Obama promised to continue working on that issue.
“I look forward to continuing to work with Congress to improve the tax credit policy in this legislation and I am eager to work with anyone with ideas about how we can make healthcare better or more affordable,” he said.
Annual CHIPRA Notice Reminder
The Children’s Health Insurance Program Reauthorization Act (CHIPRA) passed on February 4th, 2010 requires that employers provide annually a notice to all benefits-eligible employees as to their potential eligibility for premium assistance through either the Medicaid or CHIP programs in participating states.
Currently there are 40 states with qualified programs where these notices are required to be sent if you have employees physically residing in those states. The ten states where notices are not required to be sent in are as follows:
Connecticut, Delaware, Hawaii, Illinois, Maryland, Michigan, Mississippi, Ohio, South Dakota and Tennessee.
Just to clarify, the notices will have to be sent to any benefits-eligible employee that resides in the participating states, regardless of where the company location is based out of. As an example, if your organization is based in Missouri and has only Missouri office/work site locations, but you have an employee working for you that physically resides in Illinois, this employee would not require a notice because they live in a non-qualified state. On the reverse of that, if your organization office is in Illinois, but you have an employee who lives in Missouri, this employee would require a notice to be sent, whereas your Illinois residing employees would not.
These notices can be distributed in a number of ways. You may send them out in the form of payroll stuffers if you like for example. The one stipulation is that the notices must be presented as a separate document, so they are not allowed to be attached to any other information such as payroll information or check details. They can also be included with open enrollment materials provided to employees, although they still must be a separate document and cannot be incorporated into any bound enrollment packets. Additionally, they can be sent out as mailings directly to the employee’s home address if you choose to distribute in this fashion. Posting these documents in a public area is not enough to satisfy the regulation, as they must be individually provided to all benefits-eligible employees, although posting in a public area in addition to providing individually may be a good practice.
Download a Model CHIPRA Notice.
If you have any additional questions, please contact your Power Group Representatives.
Final regulations Americans with Disabilities Act Amendments Act (ADAAA)
On Friday March 25, 2011 the Equal Employment Opportunity Commission (EEOC) published final regulations implementing the Americans with Disabilities Act Amendments Act (ADAAA).
As you may recall, the ADAAA reinforces provisions of the ADA which had been diminished by several court decisions which congress determined were not consistent with the original intent of the ADA. The final regulations issued by the EEOC are largely consistent with the proposed regulations and should not have a great impact. If an employer has made a good faith effort to comply with the proposed regulations, compliance with the final regulations should be quite simple.
You can find the fact sheet on the EEOC’s Final Regulations Implementing the ADAAA here.
If you have any questions regarding the ADA, please contact your Power Group representative.
Senate Passes 1099-Repeal Act
WASHINGTON (courtesy Laurie Kulikowski TheStreet) — Small businesses will soon be free of the onerous 1099-reporting mandate expanded in last year’s health care reform legislation.
The U.S. Senate passed The Small Business Paperwork Mandate Elimination Act, H.R. 4, by a vote of 87-12 on Tuesday.
The bill, now been passed by House and Senate, will go to President Barack Obama to be signed.
The U.S. House of Representatives passed the bill in March.
The bill repeals Section 9006 of last year’s Patient Protection and Affordable Care Act in which business owners, starting next year, were going to be required to use 1099 IRS tax forms to report all transactions greater than $600 each year.
It also repeals a requirement passed in the small-business lending bill in which people getting rental income must distribute and file 1099s on payments made in excess of $600 annually, according to the Small Business & Entrepreneurship Council.
“The universally reviled 1099 provision is almost gone, and with good reason,” council President and CEO Karen Kerrigan says. “Small-business owners are incensed that they would be overwhelmed by mind-numbing paperwork when they are already overburdened by government regulation and compliance costs. The provision made absolutely no sense, and small-business owners are pleased that most members of Congress see it their way.”
Obama had called for the measure’s repeal during his State of the Union address in January.
“Small businesses are the engine of our economy and eliminating the 1099 reporting requirement is the right thing to do,” according to a White House statement issued Tuesday. “As we move forward, we look forward to improving the tax credit policy in this legislation to ensure we protect small businesses and middle-class families.”
Please contact your Power Group representative if you have any questions.
Kansas Workers’ Compensation Act Overhaul
Both the Kansas Senate and Kansas House of Representatives unanimously passed the overhaul to the Kansas Workers’ Compensation Act this past Friday, April 1, 2011.
The Bill will now be sent to the Governor, who is expected to sign it very soon. THE NEW LAW WILL BE EFFECTIVE MAY 15, 2011. Key changes are as follows.
1. Work Disability–Wage loss will be defined as the difference between the average weekly wage the worker was earning at the time of the injury and the average weekly wage the worker IS CAPABLE OF EARNING after the injury. Current statutory language, which gave rise to the Bergstrom v. Spears Manufacturing case, allows for comparison of the wage earned at the time of injury and the wage the worker IS ACTUALLY EARNING after the injury. Under the changes, an appropriate post-injury wage may be imputed to a worker who is not employed, based on his wage-earning capability. If an employee is working, the wage the worker is actually earning will be presumed to be the post-injury wage the worker is capable of earning. Task loss will be calculated using five years of job tasks preceding the date of accident as opposed to 15 years of job tasks. This change will enhance an employer’s ability to verify the job tasks reported by the worker to ensure the worker is not manipulating the task list to inflate task loss percentage. Further, any tasks which the worker would have been deemed unable to perform based on permanent restrictions in place prior to the injury in question cannot be included when calculating the current task loss. In any case, an injured worker would have to prove a minimum of 7.6% Permanent Impairment of Function to the Body as a Whole to be eligible to receive a Work Disability Award. If the worker has prior disability, the Total Permanent Impairment of Function must be equal to or greater than 10% to the Body as a Whole to qualify for a Work Disability Award. We believe this new Work Disability Standard will be far more fair and realistic.
2. Prevailing Factor Test–In order to be compensable, the work accident must be the prevailing factor relative to the injury or disability claimed. An accident will no longer be compensable just because it aggravates, accelerates or exacerbates a pre-existing condition. Rather, it will have to be the Prevailing–meaning primary–factor relative to injury and disability. Further, neutral risks and injuries due to idiopathic causes will no longer be compensable.
3. Future Medical–Instead of Future Medical being left open automatically as occurs now, the Claimant will have to prove it is more probable than not that future medical treatment will be necessary. Further, if future medical is awarded, and then there is a two year gap from the date of the Award or from the date of last treatment from an authorized provider, during which the claimant receives no medical treatment from an authorized provider, the Employer can seek a Hearing to permanently terminate future medical benefits. The employer will be afforded a presumption that no more medical treatment is necessary.
4. Average Weekly Wage –The current calculation for Average Weekly Wage for Full Time Hourly Employees will change from the artificial standard that has allowed workers to multiply their hourly rate by 40, whether they work 40 hours or not. Under the new standard we will look at the 26 weeks of earnings, including bonuses and overtime, prior to date of accident for both full and part-time workers, and average the earnings.
5. Bilateral Parallel injuries will return to pre-Casco status as Body as a Whole Injuries.
6. New caps will be in place–Death Benefits $300,000. Permanent Total Benefits– $155,000. Permanent Partial Benefits–$130,000. Functional Impairment– $75,000. The Functional Impairment cap had been virtually eliminated by the Appellate Courts, but we believe the loophole which allowed that has been closed. Caps had not increased in 17 years and those increases were inevitable.
Please contact your Power Group representative if you have any questions.
