Health Care Reform Reminders & Updates

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1 ISSUE 5 August 2014 News Horizon ON THE A P U B L I C AT I O N O F B L U E H O R I Z O N I N S U R A N C E S E R V I C E S in this issue Insurance Audits P.2 401K Investing P.3 Mandator y Sick Pay P.4 Grill Restric tions P.4 11 Fun Things to do this Summer in San Diego Looking for something fun to do this summer in San Diego? Check out U.S. News top 11 things to do in San Diego! Visit Balboa Park Spend the day at Mission Beach Spend the day at Coronado Beach Visit Gaslamp Quarter Visit the San Diego Zoo and Safari Park Hike Torrey Pines State Reserve Hike to the Cabrillo National Monument Visit USS Midway Museum Take a walk through Sunset Cliffs Natural Park Visit the Maritime Museum Spend the day at Sea World San Diego CA/Things_To_Do/ Health Care Reform Reminders & Updates by Jennifer Moses REMINDER: COBRA Notifications to Include Information about Health Insurance Options through the Exchange, Covered California zz Recently, the federal government issued new guidelines about what information employers must give departing employees. In addition to providing them with information about COBRA, employers are now required to let them know about health care options available to employees through the state s Exchange, Covered California. zz If you would like to confirm you are providing the correct information and/or need assistance with updating your COBRA notifications please contact Becky in our office, ext. 16. UPDATE: Small Group Market Segment (Employer groups with 2 50 employees) zz Governor Brown has indicated he will sign a bill allowing some small groups to take advantage of extended transition relief. This change will allow some small groups to keep their current health plan even if it does not meet certain requirements under the Affordable Care Act (ACA). ӹӹ Eligibility to renew their current plan would only apply to small groups that have not yet renewed in 2014 to an ACA compliant plan. zz Non-grandfathered plans that have not already renewed into an ACA compliant plan will now have the option to keep their existing plan(s) for one more year. zz We will keep you updated and informed about your options as we continue to receive and review updates regarding details of this possible option.

2 HR Corner Attention California Employers: On July 1, 2014, the CA Minimum Wage increased to $9/hour. This increase impacts exempt as well as non-exempt employees. California wage exemptions require that exempt employees earn a monthly salary equivalent to no less than two (2) times the state minimum wage. Minimum wage will increase to $10/hour on July 1, faq_minimumwage.htm News on the Horizon Published by : Blue Horizon Insurance Services, Inc Camino Del Rio N #315 San Diego, CA Ron Zappelli, Owner Janette Toth, Managing Editor Contributors to This Issue: Barker Olmstead & Barnier AmCheck Authors: Diane Bell Jennifer Moses Design & Layout: Victoria Vinton CoyotePressGraphics.com Letters to the Editor should be mailed or ed to: Janette Toth 3838 Camino Del Rio N #315 San Diego, CA janettet@bhiservices.com PROPERTY & CASUALTY Insurance Audits by Diane Bell Insurance audits are a marker to allow the insurance carriers to know exactly what the extent of a company s risk is based on the actual exposure to risk. In other words, the more sales or payroll a company has, the more work being performed, the more exposure there is to loss. Many policies are subject to audit, with the most common being General Liability and Workers Compensation policies. An audit may be performed onsite by an auditor or by mail or telephone. When an insurance coverage is quoted, it is based on the estimated exposures for the upcoming policy term. Audits are typically conducted at the end of the policy term in order to obtain the actual exposure for that policy term. The premium would then be adjusted depending on the result of the audit. Generally Worker Compensation premiums can go up or down, but normally General Liability premiums only go up. For example, if the sales for a company are estimated at $1,000,000 and the actual sales for the policy term resulting from the final audit are $1,500,000; the premium based on that $500,000 difference would result in additional premium due the insurance carrier. Be sure to look for minimum premiums, especially on General Liability policies, as that may preclude the company from receiving any return premiums should the exposure be lower than originally estimated. Audits can be confusing and errors can easily be made by either party. Workers Compensation payroll may include salary, over-time, commission, bonuses, room and board, automobile allowances, among other benefits. Subcontractors and independent contractors filed on a 1099 Form may need to be included as employees unless there is a certificate of insurance on file showing that they have their own workers compensation insurance in place. A good rule of thumb is to always request certificates of insurance from your subcontractors or independent contractors. The auditor will request supporting documentation in order to calculate the final payroll or sales figures. In order to avoid a large additional premium at final audit, it is helpful to be as accurate as possible when estimating the sales or payroll for the upcoming policy term. There are times during the year when the exposure may change substantially one direction or the other, such as hiring new employees or obtaining a large customer or job. Most policies can be adjusted mid-term, which will help to avoid any surprises at final audit. When questions arise regarding a company s exposures, policies or audits, the insurance broker can be contacted to see if there is any insight that will help the final audit reflect actual exposures and be as accurate as possible. 2

3 AmCheck s 5 Tips for Smarter 401K Investing When it comes to 401K contributions, some people just don t get it. A recent survey taken by AARP reports just that: Out of the 803 U.S. residents surveyed, more than 71% reported not paying any fees when they actually were, and 6% reported not knowing if they paid any fees. Sure, it seems like a lot of information to take in, which is why most of us choose to make an initial election and forget about it. But take the time to understand how your 401K money can work for and against you and reap the benefits down the road. Five Things You Need to Know About Your 401K 1 Employer match. Some companies nicely match your 401K contribution up to a certain percentage, and when you do have the option, contribute the max. But be mindful of limitations. If there is a 3-year minimum on that match, for instance, and you leave the company before your 3 years is up, there is no employer match to be taken. Make sure you know what limitations your company places on their match and if you don t like what you find, see if there are ways you can work to change that plan. 2 Borrowing fees. It s comforting to think we have the money we ve put away for our 401K available when we need it. But if you re considering a job change or things aren t going so well at your company, you may want to think twice about taking that loan. If you quit, get laid off or are fired, it s likely you ll have to pay the loan back right away. When you borrow from your 401K, the loan is treated as an early withdrawal and you re left owing taxes on top of the 10% penalty. Just make sure you know what you re getting into when you decide to pull money out of your 401K. 3 Tax-advantaged investments. Retirement plans for nonprofit organizations and schools offer tax-deferred investments, such as variable annuities. But since your retirement plan is already tax-deferred, all you get are lower returns and higher costs with a variable annuity. Talk to your employee benefit management services provider about transferring a portion of your account into a 403(b)7 account. Make sure to transfer as a trustee-to-trustee to avoid an early withdrawal penalty. Also, if you have to pay surrender fees, the most you can transfer without a penalty is 10% annually. 4 Contribution rates. 401K contribution limits typically stay in line with inflation rates from year to year. But with the cost of living adjustment (COLA) remaining the same this year as it was in 2010 and 2009, retirement plan limits are also staying the same. For people over the age of 50, it will remain at $16,500 while those under 50 can contribute up to $5,500. Those over 50 are also eligible to add an additional catch-up contribution of $5,500 at the end of the calendar year for a grand total of $22,000. But is it enough? A recent study shows that most retirees (between 60 and 62 years of age) will have less than half of the retirement funds necessary to maintain their current lifestyles. The takeaway? Work toward bulking up your 401K contributions as much as humanly possible to maximize your 401K contributions. 5 Shifting money around. Most of us have spent time moving our investments around online, playing stock broker every now and then. It is, after all, kind of exciting to watch your money grow. But when we start to get curious and make ill-informed decisions, we can get into trouble. You may be tempted to shift investments to last year s top performers but avoid this temptation at all costs! Just because a fund did well in 2010, doesn t mean it will do the same in 2011 economic recoveries move in stages. First, decide where you want to be invested and then choose the cheapest fund that gives you the exposure you re seeking. Consult an employee benefit administration professional if you have questions regarding how to invest your 401K money. 3

4 California Bill Proposes Mandatory Sick Pay (Again) by Barker Olmstead & Barnier Should sick pay remain a discretionary benefit offered by employers, or should the government mandate it? In March, California Assemblywoman Lorena Gonzalez introduced Assembly Bill 1522, which would require employers to provide paid sick leave to employees. If this sounds familiar it is because similar bills have been introduced numerous times, so far without success. Under the Healthy Workplaces, Healthy Families Act of 2014 (AB1522) employees working more than seven days per year would be entitled to paid sick leave. Employees would accrue sick leave at a minimum of one hour for every thirty hours worked and the hours would be eligible for use after the 90th day of employment. Employers could limit sick time to 24 hours, or 3 days per year. The mandated sick pay could be used for the employee s own illness, or for time off to tend to an ill family member, or to take time off related to domestic violence or stalking. The new bill would also impose statutory penalties and attorney s fees on employers that violate the law. A limited number of cities and states around the country are implementing similar laws. In 2007, San Francisco passed an ordinance that required employers to provide paid sick time for all employees, including part-time and temporary employees. Likewise, New York and Connecticut have mandatory paid sick time laws. It is too early in the legislative year to predict whether this bill will fare better than its predecessors. We will monitor the bill and continue to report its progress. 4 It s Time for Summer Barbecues! Everyone wants to have a good time, but please keep in mind the fire hazards that come with barbecuing. Please remind all your residential tenants that barbecues are banned from all balconies and are to be placed more than 10 feet from a building. In 2007, California updated its Fire Code and adopted portions of the 2006 International Fire Code, including sections and These sections clearly ban the use of open-flame cooking devices on combustible decks. This ban was effective January 1, Below are both sections for further reference Open-flame cooking devices. Charcoal burners and other open-flame cooking devices shall not be operated on combustible balconies or within 10 feet of combustible construction. Exceptions: 1. One- and two-family dwellings. 2. Where buildings, balconies and decks are protected by an automatic sprinkler system Liquefied-petroleum-gas-fueled cooking devices. LP-gas burners having an LP-gas container with a water capacity greater than 2.5 pounds [nominal 1 pound LP-gas capacity] shall not be located on combustible balconies or within 10 feet of combustible construction.

5 Landlord/Tenant Qs & As From Kimball, Tirey & St. John LLP; Question: One of my tenants has notified me that she has filed for bankruptcy. She has not paid her rent this month. Can I proceed with an eviction? Answer: Once a tenant files for bankruptcy, he or she will be entitled to an automatic stay of any legal proceedings against him or her. This includes an unlawful detainer action. You will be required to file a motion for relief from stay before serving any notices or bringing an eviction action. Question: At what point does my property require an onsite resident manager? Answer: If your property has 16 units or more, you are required to have a person onsite who represents the owner. Question: My lease states that the rent is due on the first of the month. If the first of the month falls on a weekend, can I require my tenants to pay rent on the weekend if my rental office is open on the weekend. Answer: No. If the rent is due on the first, and the first of the month falls on a weekend or holiday, pursuant to California law, the tenant has until the next business day to pay the rent. Question: I have had numerous problems with residents who smoke tobacco, including complaints from neighbors, damage to the rental unit, etc. Can I institute a policy making my property smoke-free? Answer: Yes, California law permits a landlord to designate their property as smoke-free. Question: Can an owner/property manager require that a tenant secure renters insurance? Answer: Yes, to protect the property and assets, landlords can require the tenant obtain renters insurance as a covenant and condition of the lease. This article is for general information purposes only. Laws may have changed since this article was published. Before acting, be sure to receive legal advice from our office. Ted Kimball is a partner with Kimball, Tirey & St. John LLP. The law firm specializes in landlord/tenant, collections, fair housing and business and real estate, with offices throughout California. Property owner s and manager s with questions regarding the contents of this article, please call Kimball, Tirey and St. John LLP. Refreshing Strawberry & Spinach Salad Ingredients: ¼ red onion, thinly sliced 2 bags of baby spinach 1 container of strawberries 1 package of crumbled blue cheese ½ cup of sliced toasted almonds Bottled red wine vinaigrette Salt and freshly ground pepper Toss all of the red onion, spinach, strawberries, blue cheese, and almonds together. Drizzle red wine vinaigrette and sprinkle with salt and pepper to your liking. Note: If you re up for it, try making the red wine vinaigrette from scratch. Red Wine Vinaigrette Ingredients: ½ cup of red wine vinegar 3 tablespoons of lemon juice 2 teaspoons of honey 2 teaspoons of salt Freshly ground black pepper 1 cup of olive oil Mix the vinegar, lemon juice, honey, salt and black pepper in the blender. Gradually blend the oil in while the machine is running. 5

6 ON News THEHorizon A PUBLICATION OF BLUE HORIZON INSURANCE SERVICES Issue 5 AUGUST Camino Del Rio N #315 San Diego, CA Workplace Humor: How to Reduce Stress with Office Humor and Physical Activity It s been well-documented that humor and laughter can reduce stress and provide many other benefits. And few areas of life are more stressful than the workplace. So, not surprisingly, it s been found that office humor can be a good stress-reliever, reducing job stress, boosting morale, bringing people closer, and perhaps even warding off burnout. Here are some fun ideas of things to do in the office to make someone laugh and to take a short break from your work: zthrow paper airplanes into someone else s office or cubicle z Put a Nerf basketball net in a common area of your office to allow some hoops practice on your break z Place a Whoopie Cushion on a co-worker s chair while they are away from their desk z Throw a soft football around the office z Tell a joke NOTE: Make sure your jokes are inoffensive and do not touch on sensitive issues. Meet Our Newest Team Member Kathryn Gonzalez has joined the Blue Horizon team as an Account Executive. She is a licensed Life and Health Insurance Agent and Covered California Agent with 7 years of experience. Kathryn has a BA in Organizational Business Management from Ashford University and also holds a certificate from San Diego State University in Human Resources Management. Originally from Los Angeles, Kathryn now considers herself a San Diego native having lived here for more than 10 years. We are excited to welcome Kathryn as the newest member of the Blue Horizon Team.