Employers Can Get $16,500 to Set Up Retirement Plans: Secure Act

A budget group says the spending package as a whole will add $2 trillion in federal debt.

By Allison Bell | December 23, 2019 at 02:36 PM

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President Donald Trump signed the legislation creating the Further Consolidated Appropriations Act, 2020, Friday.

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The president’s signature brought the “Setting Every Community Up for Retirement Enhancement Act of 2019″ (Secure Act) to life, and it set legislative analysts poring through the 1,773 pages of the PDF to see what’s really in there.

Retirement Plan Tax Credits The old tax credit was a maximum of $500 per year for three years for setting up a retirement plan — or a total of $1,500 over three years.
An employer can now get up to $5,000 per year for three years for setting up a plan, and $500 per year for three years for including an automatic enrollment feature. That means the total tax credit, over three years, could be $15,500.
To get the maximum possible tax credit, an employer has to make 20 non-highly-compensated employees eligible for the new retirement plan.

The Kiddie Tax

Legislative analysts are also giving more attention to a Secure Act provision that eliminates the “Kiddie Tax” — a provision in the Tax Cuts and Jobs Act of 2017 (TCJA) that changed the tax treatment of children’s unearned income.
Drafters included the provision to counter wealthy family’s tax planning strategies. But the provision ended up leading to dramatic increases in tax bills for low-income and moderate-income students using scholarships to pay for college.
Marc Cadin, chief executive officer of the Associated for Advanced Life Underwriting, and AALU members worked to point out that the provision has also hurt the children of service members who have died in combat. Families ended up having to pay more taxes on the benefits the children received as a result of the deaths of their parents.

Industry Reactions

Some companies and groups sent out celebratory announcements after Congress completed work on the FCAA 2020 package, and before the president signed it.
Some waited until right before, or right after, the president signed the legislation to celebrate.
Here’s a look at excerpts from some of the statements that came out right around the signing time:
John Carter, president of Nationwide Financial

“With record low unemployment rates making it harder for small businesses to retain top talent, paired with America’s growing retirement preparedness challenge, the Secure Act offers a solution for making workplace retirement plans easier to offer: open multiple employer plans (MEPs). MEPs allow small businesses to pool their resources to offer a workplace retirement plan that is cost effective and administratively simpler….
I“Nationwide is a strong supporter of enhancements to our retirement system that enable and protect the future for Americans and small businesses.”
Paula Nelson, president, retirement at Global Atlantic

“We view the Secure Act as the most comprehensive retirement security legislation in more than a decade and are pleased that it’s been signed by the President. At Global Atlantic, we would like to see all Americans achieve their retirement income goals, and we believe this will help by providing more access for working Americans to obtain guaranteed income products in their workplace retirement plans. Along with some of the Secure Act’s other provisions, this will help retirees ensure that they do not outlive their savings.”
Graham Cox, executive vice president and head of retirement and income solutions group at MetLife

“This legislation modernizes the nation’s retirement system by expanding access to solutions that will help workers live more confidently in retirement. It’s no longer enough that employees save for retirement — they need help understanding how to generate a steady level of income. Through the provisions of the Secure Act, employees can better understand the potential danger of outliving their savings and reduce the risk that they run out of money in retirement.”
Susan Neely, president of the American Council of Life Insurers

“We commend President Trump for signing the Secure Act into law as part of the spending package. And we applaud the bill’s bipartisan champions in the House and Senate and the leadership of Chairman Richard Neal and Ranking Member Kevin Brady and Chairman Chuck Grassley and Ranking Member Ron Wyden. Their determination made good public policy that’s been in the works for a decade become law.

“The Secure Act expands access to retirement plans for millions of Americans and allows older workers to contribute more to their IRAs. It also makes it easier for small businesses to band together to provide retirement plans for employees — leading to at least 700,000 new savers.

“As consumers’ retirement needs evolve, we look forward to working with policymakers on additional bipartisan solutions to help all Americans position themselves to achieve financial security in retirement.”

Implementer Reaction

Human Interest is one of the 401(k) plan investment advisers that’s been publishing detailed analyses of the Secure Act all along.
Diana Torzewski, the company’s senior manager of customer experience, said the increase in the Small Employer Plan Start-Up Credit, to $15,000 over three years, from $1,500, will prompt many more employers to offer retirement plans.
Torzewski called the extra tax credit for employers that set up plans with automatic enrollment features “a hidden gem.”
“We find that when a small business automatically enrolls its teammates and provides some level of match, 92% of employees take advantage,” Torzewski said. “This has huge potential to impact the 86% of small business employees who don’t have access to this fundamental wealth-building benefit.”

What do Employees want ?

Employee Benefits: What Do Your Employees Really Want?

By Rieva Lesonsky | In: Compensation & Benefits

What kinds of employee benefits does your small business offer? If you’re only giving your employees the bare minimum—or not even that—you’re not doing your business any favors.

In a survey from Kelton Global commissioned by QuickBooks Payroll, 44% of small business employees say companies that don’t offer health or dental insurance, paid vacation and sick days, or retirement plans are cheap and don’t care about their employees. 

More than one-third say these companies are “behind the curve,” while 41% say they wouldn’t want to work there.

The survey of more than 1,000 U.S. small business employees has some other insights into what benefits employees care about, what they’re actually getting, and how your business stacks up. Here’s a closer look.

What are the most common employee benefits?

The good news: 93% of employees in the survey say their employer provides at least one benefit, with paid time off being the most common. However, while 57% get paid vacation, just 48% get paid sick days and only 37% get paid personal days. New parents fare the worst—just 14% say they get paid parental leave.
Two-thirds of survey respondents get health insurance benefits from their employer: 56% get health insurance, 41% receive dental insurance, and 35% get vision insurance.
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Just 41% are offered a retirement plan such as a 401(k), and retirement benefits are more likely to be offered to employees age 39 and up than to younger employees. Retirement plans for even the smallest businesses are available at reasonable costs, and this is one of the most desirable benefits for employees. Not only are retirement benefits essential to attracting older workers, they can also help make your business a more appealing employer for millennial and Gen Z workers—two demographics that are already concerned with their financial futures.

It’s the little things

Beyond the essential employee benefits mentioned earlier, the more discretionary employee benefits—such as free food in the office—are less common. About one-third (36%) of small businesses provide food and drinks to employees; 23% offer flexible work hours and just 13% let employees work remotely.
While free snacks are nice (and 61% of small business employees say they feel “cared for” by employers who provide such benefits), flexible or remote work is arguably a more meaningful benefit. Being able to work from home or adjust work hours around a child’s schedule has a significant impact on an employee’s daily life far beyond a free latte or granola bar. Flexibility can make all the difference when an employee is weighing a job at your business versus a job elsewhere.
Of course, if you own a retail store, restaurant, or other business where employees must be on-site to do their jobs, this isn’t an option for you. But for more and more businesses today, work can be done from anywhere, making it easy to offer flextime and let employees work remotely.

The benefits of benefits

Employee benefits are good for your staff, but they can also benefit your business by improving employee satisfaction and loyalty. Good benefits can also help a small business stand out and compete with bigger companies for qualified workers.

Employee Benefits: What Do Your Employees Really Want?

By Rieva Lesonsky | In: Compensation & Benefits

In this area, small businesses still have a way to go. Almost four in 10 (39%) survey respondents are dissatisfied with their employee benefits; 29% say their company only does the “bare minimum” when it comes to benefits.
In addition, just 39% say they have better benefits than most of their peers, and only 6% say their company’s benefits are “above and beyond” the norm.

5 possible effects of the ACA ruling

  5 possible effects of the 2019 Mandate ACA ruling

 

 

By Allison Bell | December 23, 2019 at 09:01 AM | The original version of this story was published on ThinkAdvisor

A three-judge panel at the 5th U.S. Circuit Court of Appeals kept suspense about the entire Affordable Care Act legislative package alive this week by ruling that the ACA’s individual coverage mandate provision is an unconstitutional requirement to buy a private product, but that it’s not clear whether killing the provision really kills all of the ACA.

The 5th Circuit panel ruled, in the Texas v. USA case, that a district court judge in Texas should take another look at whether killing the ACA individual mandate provision kills just that provision, just some of the ACA individual major medical insurance pricing and underwriting rules, or, really, all of the thousands of pages of the ACA.

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Even some harsh critics of “Obamacare” say they simply want to repeal some of the ACA health insurance underwriting, pricing and benefits rules, not kill the many other, separate ACA provisions, such as the ACA provision that’s phasing out the hole between when ordinary Medicare Part D drug plan benefits end and catastrophic benefits start, or the ACA geriatric care provider training provisions.

Other ACA critics say they really do want to get all of the ACA thrown out, and that, because the ACA contains no “severability” provision, a court ruling declaring any of the ACA unconstitutional should kill all of the ACA.

For a look at what four health care policy players are saying about the ruling, see the quote cards in the slideshow above. (Wiggle your pointer over the first slide to make the control arrows show up.)

Here are five possible effects of the new ruling:

1. The current system could be more likely to muddle along, roughly as is, until after the November 2020 presidential elections.
The Supreme Court could rule on a 5th Circuit ruling in June 2020. If the Supreme Court wait to see what the district court in Texas does, and proceedings proceed at an ordinary pace, the Supreme Court might not take up the Texas v. Azar case until June 2021.

2. The uncertainty might increase all kinds of vendors’ wariness of doing business with the federal government, or participating in new federal programs.
The administration of President Donald Trump wants health insurers to help consumers cope with high major medical insurance costs by offering more short-term health insurance policies and new types of association health plans and health reimbursement arrangements. The Texas v. Azar fight might raise company concerns about what the next government led by Democrats might do to the companies with major short-term health insurance policy, AHP or HRA programs.

3. The uncertainty could increase in genuinely bipartisan approaches to policymaking.
Even though creating bipartisan coalitions appears to be more difficult than it was, insurance ratings analysts at S&P Global Insurance Ratings are speculating that some policymakers may come to see bipartisanship as a defense against the possibility that the government will try to crush existing health finance programs, or other programs, whenever control of Congress or the White House passes from one party to another.

4. States could put more effort into establishing their own laws.
Many insurers have said they would like to see states apply more uniform insurance rules. But, today, some states are rushing to pass laws designed to minimize the effects of the ACA. Other states are trying to pass laws that will keep ACA health insurance rules in place in those states even if the ACA itself goes away.

5. People may be more interested in hearing what you have to say about health insurance.
Compensation problems have chased many financial professionals out of the ordinary major medical insurance market. People have gotten somewhat used to how the ACA system works, and somewhat used to the idea that it will creak along. The ACA open enrollment period for 2020 coverage glided along without getting much attention, good or bad.

But now, the idea that chaos is just one Supreme Court ruling away is back. If you can somehow explain what is (or isn’t) going on, your email open rates and social media interaction rates may rise.

 

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GET YOUR Flu Shot !

About National Influenza Vaccination Week

CDC established National Influenza Vaccination Week (NIVW) in 2005 to highlight the importance of continuing flu vaccination through the holiday season and beyond.

NIVW 2019 was observed from December 1-7

NIVW Timing

Previous flu vaccination coverage data have shown that few people get vaccinated against influenza- after the end of November.

• CDC and its partners choose December for NIVW to remind people that even though the holiday season has begun, it is not too late to get a flu vaccine.
• As long as flu viruses are spreading and causing illness, vaccination should continue throughout flu season in order to protect as many people as possible against flu.
• Vaccination efforts should continue through the holiday season and beyond. It’s not too late to vaccinate.
• While vaccination is recommended before the end of October, getting vaccinated later can still be beneficial during most seasons for people who have put it off.
• Even if have already gotten sick with flu, you can still benefit from vaccination since many different flu viruses spread during flu season and most flu vaccine protects against four different flu viruses.

The burden of flu

Flu isn’t a “bad cold” and can result in serious health complications, such as pneumonia, bacterial infections, and can lead to hospitalization. Flu can sometimes even lead to death.

• Most people who get flu will recover in several days to less than two weeks, but some people will develop serious flu complications
• All people are at risk of developing serious flu complications and certain groups are at higher risk. For people at higher risk, flu is more likely to lead to serious flu complications that can result in hospitalization or even death.
• People at high risk of serious flu complications include young children, pregnant women, people with certain chronic health conditions like asthma, diabetes, heart disease or lung disease, and people 65 years and older.
• Anyone who gets flu can pass it to someone at high risk of severe illness, including children younger than 6 months who are too young to get a flu vaccine.

The Many Benefits of Flu Vaccination

There are many reasons to get an influenza (flu) vaccine each year. Below is a summary of the benefits of flu vaccination, and selected scientific studies that support these benefits.

• Flu vaccination can keep you from getting sick with flu.
  • Flu vaccine prevents millions of illnesses and flu-related doctor’s visits each year. For example, during 2017-2018, flu vaccination prevented an estimated 6.2 million influenza illnesses, 3.2 million influenza-associated medical visits, 91,000 influenza-associated hospitalizations, and 5,700 influenza-associated deaths.
  • During seasons when the flu vaccine viruses are similar to circulating flu viruses, flu vaccine has been shown to reduce the risk of having to go to the doctor with flu by 40 percent to 60 percent.
• Flu vaccination can reduce the risk of flu-associated hospitalization for children, working age adults, and older adults.
  • Flu vaccine prevents tens of thousands of hospitalizations each year. For example, during 2017-2018, flu vaccination prevented an estimated 91,000 flu-related hospitalizations.
  • A 2014 studyexternal icon showed that flu vaccine reduced children’s risk of flu-related pediatric intensive care unit (PICU) admission by 74% during flu seasons from 2010-2012.
  • In recent years, flu vaccines have reduced the risk of flu-associated hospitalizations among older adultsexternal icon on average by about 40%.
  • A 2018 study showed that from 2012 to 2015, flu vaccination among adults reduced the risk of being admitted to an intensive care unit (ICU) with flu by 82 percent.
• Flu vaccination is an important preventive tool for people with chronic health conditions.
  • Flu vaccination has been associated with lower rates of some cardiac eventsexternal icon among people with heart disease, especially among those who had had a cardiac event in the past year.
  • Flu vaccination can reduce worsening and hospitalization for flu-related chronic lung disease, such as in persons with chronic obstructive pulmonary disease (COPD).
  • Flu vaccination also has been shown in separate studies to be associated with reduced hospitalizations among people with diabetesexternal icon and chronic lung diseaseexternal icon.
• Flu vaccination helps protect women during and after pregnancy.
  • Vaccination reduces the risk of flu-associated acute respiratory infection in pregnant women by about one-half.
  • A 2018 studyexternal icon that included influenza seasons from 2010-2016 showed that getting a flu shot reduced a pregnant woman’s risk of being hospitalized with flu by an average of 40 percent.
  • A number of studies have shown that in addition to helping to protect pregnant women, a flu vaccine given during pregnancy helps protect the baby from flu for several months after birth, when he or she is not old enough to be vaccinated.
• Flu vaccine can be life-saving in children.
  • A 2017 study was the first of its kind to show that flu vaccination can significantly reduce a child’s risk of dying from flu.
• Flu vaccination has been shown in several studies to reduce severity of illness in people who get vaccinated but still get sick.
  • A 2017 study showed that flu vaccination reduced deaths, intensive care unit (ICU) admissions, ICU length of stay, and overall duration of hospitalization among hospitalized flu patients.
  • A 2018 studyexternal icon showed that among adults hospitalized with flu, vaccinated patients were 59 percent less likely to be admitted to the ICU than those who had not been vaccinated. Among adults in the ICU with flu, vaccinated patients on average spent 4 fewer days in the hospital than those who were not vaccinated.
• Getting vaccinated yourself may also protect people around you, including those who are more vulnerable to serious flu illness, like babies and young children, older people, and people with certain chronic health conditions.

Important to know: Observation or Admitted ?

Even if you understand the observation status rules, you need to know how to act on that knowledge.

By Margie Barrie | December 09, 2019 at 12:22 AM

(Credit: Thinkstock)

This information could be the best holiday gift you can give your clients.
Here’s why: If your clients are on Medicare, this advice could save them thousands of dollars.

I wrote the first draft of this article from my mother’s hospital room in Sarasota.
My mother, who is 98, was taken by ambulance to the emergency room because she was having trouble breathing.
In a previous article, I explained how the new changes in Medicare affect long-term care, and, specifically, the situation of admitted versus observation status.
(Related: When Your Older Client, or Loved One, Goes to the Hospital)
Here’s what I wrote: If you go to a hospital emergency room, and if it is determined that you need care and if you are moved to a hospital room . . .
You must ask this question about your status: Am I admitted or am I here for observation?
If you are classified as being there for observation, and then need to go to a nursing home, Medicare will not pay.
You must be admitted to the hospital for at least three days. True story: A woman was in the hospital for 10 days but was never “admitted.”
I had no idea that I was going to personally encounter this situation so quickly.
Here is the sequence of events.
My mother, Maxine, arrives in the emergency room with congestive heart failure. She is put on oxygen.
Several hours later, we are told that she will be moved to a hospital room. I then ask, “What is her status: admitted or observation?” The nurse says she will find out.
Next, Betty, a hospital employee, arrives holding a clipboard with several papers for my mother to sign. She explains they are all routine forms.

• The first paper is about authorizing Medicare to pay the hospital bill.
• The second paper — and this is done very smoothly — states that my mother understands she will be in the hospital on observation status for 24 hours.

As my mother is handed the paper to sign, I shout, “Mom, don’t sign it!”
Betty is shocked when I tell her we refuse to sign it. “This is just routine, and she has to sign it,” she says. (My mother looks at me like I’m crazy, but she does stop signing her name.)
Betty then says she will send the social worker.
Ann Marie, the social worker, arrives to explain why the paper must be signed and hands me a brochure titled “A Patient’s Guide to Observation Status.” On the last page of the brochure, and at the bottom, Question 14 is “Does Outpatient Services care count toward my three-day hospital stay for skilled nursing care?”
The answer is: “No, your time in Outpatient Observation Services does not count toward the three-day (consecutive) hospital stay required by Medicare before it will pay for services at a skilled nursing facility. If your status changes from Outpatient with Observation Services to inpatient, your three-day hospital stay begins from the time you become an inpatient.”
We still refuse to sign the form.
Dr. B the hospitalist (floor doctor) arrives to review my mother’s condition.
I tell him we need to change her status to admitted. He says that he is not authorized to do so, and that the case manager makes that decision.
After Dr. B leaves, the case manager calls me on my cell phone and insists that we sign the form. I reply that we need the status to be changed to admitted. She says it is the responsibility of the admitting doctor. I explain that the admitting doctor said it was her responsibility. At that point, I mention that I write a column in a national newsletter that has a large circulation.
The case manager then starts telling me about the Medicare requirements for admitted status, and that my mother doesn’t meet them. She says, “If she was on oxygen, I could help you.”
I reply that she is on oxygen, and there is stunned silence from the case manager. She says, “Let me check with the floor nurse, and I will call you back.” I reply, “No, we are going to take care of this right now,” and I walk to the floor nurse and hand her my phone.
Ten minutes later the paperwork has been completed, and my mother’s status is now admitted.
When my mother is moved to a hospital room, I check with the nurse to make sure that the status is now admitted.

Here’s What I Learned

Be persistent. Know these rules so that you can challenge them if appropriate. This discussion must occur in the emergency room. The reason is that when the patient leaves the emergency room, you cannot get the status changed.

Here’s Why I Wrote This

As a long-term care planning specialist and a thought leader in this industry, I feel that I have a responsibility to keep you informed about these types of changes. My mother did go to a skilled nursing facility for physical therapy and rehab following her hospital stay and will probably be there for several weeks. If I hadn’t insisted that her status be changed, we would be charged $650 day for her care.