Roger Vozar

One of the worst things to say to customers is “no.” Instead of responding that you don’t have a product in stock or provide a service, always provide some other option, says Rick Voigt, president of Today’s Business Products.

“If it’s something you don’t sell, suggest an equivalent product. Mention that you have this alternate item, and ask if that would work for the customer,” Voigt says. “The answer is never no, even when it’s really no. There’s always an option you can present.”

Smart Business spoke with Voigt about customer service mistakes, and how to ensure they don’t occur at your business.

Can you provide another example of how to turn a “no” into a “yes?”

Every week we get a call from someone who needs a product today, and the deliveries already went out. Depending on the location, it can be taken to the customer; you can ensure it’s waiting for them if they send someone over; or, if it’s an item not in stock, check with another facility and have it sent out from there.

Even when the answer is technically no, there are options to make it yes. Maybe they can’t get a product exactly when they want it, but at least the customer is presented with alternatives.

It’s also important to empower your employees to make decisions, within reason.

What are some other big customer service mistakes?

In order to have good customer service, it’s essential to answer your phones. People don’t want to call, get a voicemail tree and have to push buttons.

Another big mistake is not returning phone calls and emails. Never leave at the end of the day without returning an email or phone call. Even if you don’t have the answer to the question, tell the customer that you’re still doing research. If you told a customer that you’re going to get back to them by the end of the day, show the respect to contact them even if you don’t have the answer yet — ‘I don’t have the solution for you. I didn’t want to leave you hanging while I’m waiting for the owner to get back,’ etc.

When you get back to them, let them know what options are available. If a manufacturer is closed, tell the customer that the manufacturer is closed and you can get an answer in the morning and get back to them.

Always be on the offense, which never puts the customer on the defense. Be proactive rather than reactive. We have a policy that if something is backordered, we call or send an email and give the customer options so we can fulfill their order. A customer wants to know something has been backordered, in case it’s something that is needed right away.

If a customer has warranty issues, don’t just tell them to call an 800 number. Everyone knows how frustrating it can be to call those numbers. Contact the manufacturer and have a conference call with the customer. Make sure that the customer is taken care of by the manufacturer.

Is there always a solution to make the customer happy?

There will always be people who you can’t reason with, but most people are reasonable. The important thing is that you treat people the way you want to be treated — with respect.

When I bought my first car, I walked into an Oldsmobile dealership in shorts and a T-shirt. The salespeople snubbed their noses and pointed at one guy to take care of me. I bought a car from him, my brother bought a car from him that same day, and I bought two more cars from him. Every time I walk into the dealership he smiles because he received business no one else wanted.

The old adage is that an unhappy customer will tell 10 people, while a happy customer will tell two. It’s all about the experience they receive and putting a smile on the customer’s face.

Rick Voigt is president at Today’s Business Products. Reach him at (216) 267-5000 or

Insights Customer Service is brought to you by Today’s Business Products

In February, the IRS issued some final regulations relating to the Affordable Care Act (ACA), basically delaying full implementation. One major change was allowing employers with 50 to 99 employees until Jan. 1, 2016, to comply with the mandate to either provide health insurance or pay excise taxes in certain circumstances.

“In effect, smaller employers have another year to determine how they are going to approach this,” says Ted Ginsburg, CPA, J.D., a principal at Skoda Minotti.

Smart Business spoke with Ginsburg about the recent changes to the ACA regulations and how they affect small and midsize companies.

What significant changes have occurred?

For companies with 100 or more full-time equivalent (FTE) employees, the IRS diminished the level of coverage required. If you have 100 or more FTEs, instead of having to cover 95 percent of your full-time employees, you only have to offer health insurance to 70 percent of your full-time employees in 2015. So companies still have to comply with the ACA effective Jan. 1, 2015, but this helps them begin to get into compliance with the law.

There also were minor changes on how you count FTEs and hours to determine if an employee is full time. A person who is a FTE might not be a full-time employee — so that person would count in the calculation of whether you are subject to the ACA, but might not be a person who you would need to offer insurance to.

But employers have to recognize that they need to deal with this — the ACA is not going away. The issues remain the same — do you offer what is deemed affordable health insurance that provides a minimum level of coverage? If you don’t, you might be subject to an excise tax of $2,000 per employee, subject to some limits.

If you provide coverage, but it doesn’t meet ACA minimum standards and/or isn’t affordable, you face a $3,000 excise tax for each employee who goes to the exchange, purchases insurance and receives a government subsidy.

What steps should employers be taking now?

If you have fewer than 100 FTEs, make sure that’s correct and you will not be subject to the employer mandate on Jan. 1, 2015. Companies with 100 FTEs or more need to realize that the decision about whether to offer health insurance needs to be made well ahead of Jan. 1. The decision date is really when you start open enrollment for health insurance, usually in September or October.

What strategies are companies formulating?

There are many, but they all revolve around two issues — finances and HR.

On the numbers side, some are deciding not to provide insurance, letting employees purchase it through a broker or the exchange, and maybe providing some wage increases to compensate. The problem with that approach is that it’s not tax-effective because the money goes on employees’ W-2 forms before health insurance premiums are paid, so they pay additional taxes. The employer also pays additional FICA and other payroll taxes. That approach is a knee-jerk reaction of frustration with the ACA.

Other employers are evaluating using a professional employer organization (PEO) to handle payroll and benefits. PEOs have buying power with insurance companies and can negotiate for better rates. This strategy generally works for companies with 30 to 200 employees. After that point, it’s more cost-effective to have an internal HR group.

We also see clients trying to change employee’s schedules and cut back hours so they don’t have to provide insurance. For companies facing the mandate in 2015, that needs to be done now because the ACA looks back to what was done in 2014.

But this approach also gets into HR issues. A client planning to cut employees back to 29 hours would have to add 33 percent more employees to have the same number of hours worked by the employee group, making it difficult for management, and risk losing employees who can’t support themselves on reduced pay from a shorter work week. Some employers want to avoid the ACA at all costs, but don’t consider costs of an operational nature such as employee turnover.

Most large employers are already ACA compliant. But many smaller ones, those with less than 500 employees, haven’t started thinking about it and need to be prepared.

Ted Ginsburg, CPA, J.D., is a principal of Skoda Minotti. Reach him at (440) 449-6800 or

Insights Accounting & Consulting is brought to you by Skoda Minotti

“Friends and family are still the largest source of capital for companies in the early stages of development, but the current funding market presents several additional options for young companies. Be open-minded and investigate numerous sources of capital,” says Thomas C. Armstrong, corporate attorney at Berliner Cohen and a FINRA registered investment banker.

Smart Business spoke with Armstrong about the financing options available to startups and emerging enterprises.

What are the choices when it comes to raising equity capital?

  • Friends and family. When starting a company, many times they are the primary source for capital. That’s true even in Silicon Valley, where you read about all of the angel investors and venture capitalists.
  • Angel investors. These are wealthy individuals who provide financing, advice and connections. The investment is usually in the form of equity or possibly a convertible note that converts to equity when the company obtains a larger round of financing. There also are angel groups that will analyze the company and make a determination whether to invest. The process tends to be somewhat more formal and can take longer than what the entrepreneur may anticipate.
  • Venture capitalists. Conventional wisdom is that they are looking for 10 times return on investment, so it’s for high-growth companies. Quite honestly, there are many companies that don’t fit that model. It doesn’t mean that they’re bad companies; it is just that they don’t fit the criteria for venture capital funds.

No matter what type of investor you’re making a pitch to, it’s important to present them with a credible exit plan or strategy. A lot of companies talk about how they’re going to grow and be the next big thing, but never clearly explain how the investor is going to get liquid on their investment and exit the company.  If you’re taking outside financing, investors want a clear and credible exit strategy.

Why should debt financing be considered?

Often overlooked as a financing option, debt may be an option or part of an overall financing package.  Banks are trying to be more creative and there’s been renewed interest in so-called revenue loans.  Of course, for revenue loans the company has to have revenue — so it’s not for pure startups — but it can be a relatively modest amount of revenue. Revenue lenders will lend a certain percentage of your gross revenue, and a percentage of your monthly gross revenue goes to pay the loan. That payment amount goes up or down as your gross revenues go up or down. The good news is that they’re not asking for personal guarantees with these loans.

The downside is the interest rate is higher than for traditional bank loans. Your cost of capital, however, may ultimately be less than if you raised equity from angel or investor groups because you’re not giving up any ownership in the company.  Of course, don’t forget about grant money if that is something the company may be able to apply for.

What problems can companies encounter if they don’t choose the financing route that’s best for them?

If they go to the wrong places for capital, they risk giving up too much of the company with a bad valuation or losing valuable time in their search for capital.

Another consideration is the expectations of investors. What is their time horizon? Are they patient or impatient money? Do they want to see distributions or just capital appreciation?

Entrepreneurs also need to think about whether these investors are going to be involved in the business. Some business owners may want that, while others don’t want to deal with people that are too meddlesome.

There also are legal ramifications to consider. Any time you are issuing securities in the company you have to comply with federal and state securities laws.

That’s a broad topic, but essentially you have to ensure that investors understand their investment and have been given sufficient disclosure about the company and the risks associated with investing in it. In particular, there are rules and regulations regarding who can invest and how much.

Under the recently passed Jobs Act, the government has tried to make it easier for companies to raise capital and the emergence of crowdfunding and the internet are opening up new avenues for raising capital. But again, you still need to comply with securities laws. The important thing for entrepreneurs is to look into all sorts of capital sources. 

Thomas C. Armstrong is of counsel at Berliner Cohen. Reach him at (408) 286-5800 or

Insights Legal Affairs is brought to you by Berliner Cohen

Ohio’s shale gas region has slated capital projects valued at more than $12 billion, with the industry expected to add 66,000 jobs and $5 billion annually to the state economy starting this year, according to economists at Cleveland State University.

More than 3 million acres have been leased for drilling, with gas and oil companies pouring nearly $7.5 billion in bank accounts for the right to drill. The oil and gas industry, and the legal issues surrounding it, are going to have a profound economic impact on Ohio.

That activity has led to disputes about ownership of oil, gas, and mineral interests.

“There’s a developing area of law regarding the Dormant Mineral Act of 1989, which was amended in 2006,” says Christopher F. Swing, a partner at Brouse McDowell, with more than 22 years of experience in real estate law and litigation, focusing on title, land, mineral interests, and oil and gas disputes.

Smart Business spoke with Swing about the Dormant Mineral Act and how courts are addressing it in cases involving ownership.

What is the Dormant Mineral Act, and how was it changed in 2006?

Ohio’s Dormant Mineral Act operates to ‘abandon’ sub-surface mineral rights, in favor of the surface owner, in instances where the surface and sub-surface rights previously were severed. Under the 1989 version of the statute, as originally enacted, owners of oil, gas and mineral interests must take some action to enforce or preserve those rights within a 20-year period, or the interests may be deemed abandoned. Under the 1989 version, therefore, abandonment may occur based upon nonuse alone. The 2006 amendment, on the other hand, requires notice to potential mineral rights owners, and a mechanism for recording notices and affidavits, so that a potential mineral interests’ owner first is made aware of any intent to declare those interests abandoned.

Two predominant issues have emerged, creating uncertainty in the statute’s interpretation and application: first, which version of the statute applies in a given set of circumstances? And second, is the 20-year window ‘static’ or ‘rolling’? For example, there is case law that says you need not apply the 2006 version of the statute (provide notice, among other things) if the mineral interests already may be deemed abandoned, based upon nonuse alone, under the 1989 version.

How have courts applied the legislation?

Although cases have interpreted and applied the legislation differently, the case that appears to most thoroughly explain the proper public policy and legislative rationale, in both interpreting and applying both versions of the statute, is a case decided last fall in Carroll County, Dahlgren v. Brown Farm Properties. In Dahlgren, the Honorable Judge Richard M. Markus ruled that, under the 1989 version of the statute, an actual abandonment claim, based upon nonuse alone, must be made prior to the effective date of the 2006 amendment for the mineral rights to be declared abandoned under a static 20-year look-back period contained in the 1989 legislation. Markus applied the 2006 version of the statute, because there was no actual claimed abandonment prior to the 2006 enactment, notwithstanding the undisputed nonuse of the mineral rights in the preceding 20 years.

Markus also found that, unlike the 1989 version, the 2006 amendment contemplates a rolling 20-year savings window, calculated from the date the mineral rights owner receives notice of intent to declare those rights abandoned. Interestingly, he adopted the nonuse feature in the original act, and the notice and recording features in the amendment, suggesting their combination would pass federal constitutional due process scrutiny.

While the case is on appeal, what makes the opinion potentially attractive, ultimately, to the Ohio Supreme Court is that the judge accounted for the need to have an effective means of clearing land title (so as to encourage the development of these natural resources), employing an interpretation and application of the statute that addresses three key issues: nonuse, recording and constitutionality.

Christopher F. Swing, Esq., is a partner at Brouse McDowell. Reach him at (330) 535-5711 or

Insights Legal Affairs is brought to you by Brouse McDowell

Companies that have health insurance plans with low deductibles can save money by increasing the deductible, and then use some of the savings to ensure employees aren’t harmed by the change.

“If you go from a fairly rich deductible of $250 to $2,500, the insurance carrier will provide you discounts of 25 to 35 percent in premium reductions,” says Dan Wilke, Vice President of Underwriting and Statistical Analysis at Benefitdecisions, Inc.

“But if you tell employees their plan changed from a $250 to a $2,500 deductible, that’s a PR nightmare. Instead, you can create a health reimbursement account (HRA) or health savings account (HSA) to reimburse them under that deductible,” he says.

Smart Business spoke with Wilke about the advantages and differences with HRA and HSA plans.

How does the reimbursement strategy work?

In essence, you make the employee whole all the way back to their original deductible liability. If their deductible was $250, then you’ll reimburse employees for any deductible incurred after the first $250. This works because in 90 percent of the cases we’ve done, the amount of premium savings — the 25 to 35 percent reduction the insurance carrier gives — is more than enough to cover the claims reimbursement the company has promised employees.

Doesn’t that involve some risk for the employer?

Yes, but our studies show that 53 percent of individuals incur $0 to $100 of claims on an annual basis. Even when you increase the amount to $250, it’s 63 percent of employees on the medical plan. So the company will have minimal reimbursement on 63 percent of employees. We haven’t had a situation where reimbursements have been more than the premium savings. It can happen; but our findings are that 10 to 20 percent of employees incur 80 percent of the claims.
The vast majority of employees don’t incur much in claim dollars. Employers should accrue an average of what they expect to reimburse, and that will add up to more than what is paid out. Over time, they’ll save money while giving employees the same coverage.

What are the differences between HRAs and HSAs? Which is better for employers? 

The HRA is a promise to pay. If an employee has claims, the company will give the employee money that has been set aside. Under an HSA, the company pays money into the account regardless of whether the employee ever goes to the doctor. If you raise the deductible to $2,500 and put $1,500 into an HSA, the company has incurred a fixed expense of $1,500. In essence, employees earn a $1,500 bonus that goes into a health retirement account they can take with them when they leave.

If you’re putting the premium 
savings into HSAs, you’re not really seeing any cost savings. You’re not pulling any costs out of the medical plan. Employees prefer HSAs because that’s money the employer is putting into a personal account. There also are tax advantages to the employee regarding any contributions made on an individual basis.

With an HRA, companies can cover the employee exposure from changing to a low-deductible to a high-deductible plan without giving up as much of the savings. Depending on your plan design, you can also issue debit cards to employees so that when they go to the pharmacy or doctor’s office they can have expenses paid upfront and they don’t have to pay up front out of pocket expenses.

Employees like that 
because the first thing they’re concerned about when switching to a higher deductible is having to pay a $2,500 bill and waiting to be reimbursed. This strategy is likely to continue to provide savings because you’re compounding premium increases on a lower amount. If rates go up 10 percent next year, a plan costing $500 with the $250 deductible would increase by $50, while the plan costing $375 with a $2,500 deductible costs $37.50 more. 
When employers see the compounding effect on three to five years of increases, they realize that it’s a way to curtail the trend seen over the last 10 years.
Dan Wilke is Vice President of Underwriting and Statistical Analysis at Benefitdecisions, Inc. Reach him at (312) 376-0437 or
Insights Employee Benefits is brought to you by Benefitdecisions, Inc.
Year-end audits can be headaches for companies, as management takes time from busy schedules to gather information required by auditors. But a little preparation can make for a much smoother audit process.

“The first quarter is as busy for management as it is for us,” says Kami Refa, a partner at Moss Adams LLP. “But if the right control processes are in place throughout the year, the preparation for year-end audits become relatively easier, since the majority of the auditor’s requests should already be prepared as part of the company’s annual closing process.”

Smart Business spoke with Refa about year-end audits and steps you can take to prepare.

What preparations often get overlooked?

Getting big-ticket items out of the way ahead of time makes the actual audit fieldwork go smoother.  
That includes adopting new accounting pronouncements or changing over to the new Committee of Sponsoring Organizations of the Treadway Commission framework. Goodwill impairment analysis, which management is required to perform at least annually, is another example I frequently mention to clients.

This analysis can be done 
before the end of the year — there’s no need to wait for final numbers. Another area management and auditors can tackle prior to year-end revolves around onetime items, such as acquisitions.
Accounting for a significant acquisition can be a complex and time-consuming area. I encourage my clients to prepare the acquisition-related work papers as soon as the transaction closes and have us audit them right away. This can usually get done during non-busy times for both management and the auditors.
Should auditors be meeting regularly with management?

One approach is to have a continuous audit, which works well with public companies due to their quarterly review requirements. For private entities, auditors and management should meet regularly so the auditors can be brought up to speed as to the company’s operations, and management can learn of any new accounting or tax literature that may impact the company’s financials.

will avoid surprises at audit time. In addition to ongoing regular meetings, management and the auditors should hold planning meetings when there are significant events, such as an acquisition. U.S. Generally Accepted Accounting Principles requires that the assets purchased and liabilities assumed during an acquisition be recorded at fair value at the time of the transaction.

For software-as-
a-service companies, which tend to have large deferred revenue balances, the fair value of deferred revenue tends to be quite lower than the book value. Management needs to be aware of that fact when forecasting revenues and setting covenants. Management often relies on the amortization of the ‘book value’ deferred revenue when forecasting or setting covenants, which is wrong and can have costly consequences.

A lot of companies have debt and related debt covenants. If they’re close to violating those covenants and have set them without taking into account the impact of the fair value adjustments noted earlier, they could end up needing to reset the covenants or risk violating them. Bottom line is that if the auditors and management have discussions on a continuous basis, management has time to get a waiver or have the covenants reset.

What are the consequences of audits not being completed on time? 

Public companies have regulatory deadlines, and many private companies need to meet deadlines set by banks or investors. Failing to meet these deadlines could have dire consequences, such as delisting or impact on stock value for public companies, and lack of access to funds for private companies. If good preventive and detective controls are in place, it shouldn’t take a long time to prepare for an audit.

For example, account 
reconciliations should be done monthly, with one person preparing them and another reviewing them. If this is done, part of the year-end audit package is already complete. Part of the internal review for the audit should also be ensuring that documents are tied to the general ledger. A lot of this goes back to putting the right internal controls in place — not because of the year-end audit but because it’s good practice and helps both operationally and financially.
Kami Refa is a Partner with Moss Adams. Reach him at (949) 623-4161 or
Insights Accounting is brought to you by Moss Adams LLP

The Small Business Investor Tax Deduction, new this tax season, allows individuals to save thousands of dollars in taxes on business income — if their tax preparer knows it’s available.

“Your CPA can help you with this deduction, but they may need to do some research since it’s new. The software used by many tax preparers is not yet fully functional in terms of this deduction, so it’s more dependent on what individual CPAs know,” says Joseph Popp, J.D., LLM, manager of tax at Rea & Associates.

Smart Business spoke with Popp about the purpose of the deduction and who can take advantage of it.

Why was the deduction established?

In Ohio, C corporations pay a commercial activities tax, and that’s it. There is no other income tax paid on earnings. But if you have a partnership, LLC, S corporation or some other pass-through entity, individuals also pay personal income tax on earnings. So for those entity types, there are two layers of tax.

One of the reasons for the small business deduction is to reduce that double layer of tax. This is in keeping with Gov. John Kasich’s other initiatives to make Ohio a better business environment.

What is the amount of the deduction and who can apply for it?

It’s a 50 percent deduction on up to $250,000 of Ohio source business income. It’s called a small business deduction, but that’s not really an accurate description. It’s really a small deduction for someone who has Ohio business source income.

As long as you have business income, the source doesn’t matter. It could come from a partnership, S corporation or a sole proprietorship. It could even come from an oil and gas well you hold interest in or a rental property, if they are business income sources for you.

The deduction isn’t tied to any types of business entities, or even owning a business. It’s more about the character of the income, whether it’s business income or nonbusiness income like capital gains on a stock sale, for example.

It was passed as part of Ohio’s budget last summer. It’s a permanent addition to the tax code; there’s no sunset date set. So the deduction will be available again next year unless the legislature decides to remove it.

Is it worth the effort required to file for the deduction?

Tax rates of individual investors vary, but Ohio’s rate is in the 5 percent range, so savings would be a little more than $6,000 if you get the maximum benefit. Most people would be happy with $6,000 more in their pocket.

But there are challenges to filing, one being that software companies haven’t fully implemented it yet, especially if you have more complex facts — there isn’t a button to push and get a calculation. Calculations have to be made manually, so it takes more time and costs the taxpayer more. In addition, some people might not have the data required to take the deduction or decide it’s too burdensome or impossible to get it.

The form itself is one page. If you have 10 or 20 K-1 partnerships that you’re using to get to that $250,000 of income, however, you have to fill out a separate form for each.

It’s also a challenge to fill the form out completely. If you’re a multistate business, Ohio uses an algebraic calculation (an apportionment) to determine the portion of income that should be taxed here. That formula is based on property, payroll and sales. When you add those together using the formula, the idea is that you get an accurate picture of how much Ohio should be able to tax. As an investor, you might not have this data from your business, but you need it for the form.  

If you’ve already filed your taxes or don’t have time to take this deduction before the April 15 filing deadline, you can always request a filing extension or amend your filed return. This could mean an extra few thousand dollars in cash, which would make it worth another visit to your CPA.

Joseph Popp, J.D., LLM, is a manager of Tax at Rea & Associates. Reach him at (614) 889-8725 or

Insights Accounting is brought to you by Rea & Associates

Companies looking to expand overseas may experience a different business culture and need to be aware of the legal issues they may face.

“It’s important to prepare beforehand and ensure you’re complying with all of the different EU and German laws that come into play,” says German native Katja Garvey, an associate at Kegler, Brown, Hill + Ritter.

Smart Business spoke with Garvey about legal issues to consider when doing business in Europe, and particularly in Germany.

What are the main concerns when expanding a business in Europe?

First, a U.S. company needs to decide what type of business entity it is going to establish. German business structures are fairly similar to the U.S. and have certain requirements, such as minimum capital investment, that need to be taken into account. For example, Germany has an LLC equivalent called GmbH. The law is the same in each of Germany’s 16 states, which makes it easier for new businesses to establish themselves in multiple states without making substantial modifications to their business objectives. Other critical concerns are the protection of intellectual property rights, employment issues and tax considerations.

How can intellectual property (IP), including trademarks, be protected in Europe?

It’s crucial to protect your company’s IP before you commence business. To protect their IP, companies are advised to register any trademarks or patents in the European countries that are or could be important markets. Registration in the U.S. does not protect your IP rights in any other jurisdiction. U.S. companies have the option to register their patents and trademarks with the Office of Harmonization in the Internal Market or the World Intellectual Property Organization, designating the EU as a preferred option if they desire to be protected in several countries, and not just in Germany.

What adjustments need to be made regarding employee policies and procedures?

A company should first decide if it will hire local workers or bring employees from the U.S. German labor laws are more favorable toward employees than laws in most U.S. states, especially in regards to providing statutory protection for hiring and firing. To dismiss an employee, there are statutory requirements to provide notice periods, which vary depending on the duration of employment. For example, four months’ notice is required if an employee has been employed for 10 years.

The Mutterschutzgesetz (mother protection law) provides important labor protections for female workers in Germany. Female workers are entitled to paid maternity leave for the first year (and up to three years total before the child’s eighth birthday). The obligation of an employer is limited to paying for the six weeks leading up to the birth and eight weeks after.

What else do businesses need to consider?

Tax implications should be an important consideration. Companies should structure their transactions in accordance with the U.S.-Germany Tax Treaty, the provisions of which minimize double taxation.

Germany has certain tax incentives available in an effort to build industry in the eastern part of the country, which is still less developed than the west. There is an initiative to create a Silicon Valley-like industry in the Dresden area, called Silicon Saxony. It has succeeded in attracting high-tech industry and could be an appealing option for high-tech Ohio companies to consider as their location in Germany.

Germany might not be the best location for some labor-intensive, manufacturing businesses because wages tend to be high compared to emerging markets. However, for a U.S. company in a high-tech industry, requiring skilled workers, Germany would be an attractive destination. Most importantly, Germany has been the driving force behind the European economy and is a stable location for U.S. companies looking to do business in Europe.

The importance of the German market to U.S. companies cannot be overstated. According to, Germany is the largest European trading partner of the U.S. and the sixth largest market for U.S. exports. According to JobsOhio, Germany is second in terms of foreign direct investment in Ohio.

Katja Garvey is a German native and lawyer at Kegler Brown Hill + Ritter. Reach her at (614) 462-5490 or

Insights Legal Affairs is brought to you by Kegler Brown Hill + Ritter

The Treasury Department made it a little easier for companies to comply with the Affordable Care Act (ACA) by delaying the employer mandate to provide health insurance for companies with 50 to 99 employees.

Those businesses will have until January 2016 before facing potential penalties, while companies with 100 or more full-time equivalent (FTE) employees still face a Jan. 1, 2015, compliance deadline.

“Some of it was about giving companies time to come into compliance, but they also don’t know yet how penalties will be enforced or collected. The law doesn’t allow the IRS to collect any penalties, so they have a real challenge trying to figure out how to collect the money,” says William F. Hutter, CEO of Sequent.

Smart Business spoke with Hutter about changes in the ACA and what they mean for employers.

What break have companies with 100 or more employees been given regarding the first year of the employer mandate?

For 2015 only, instead of being required to extend coverage to 95 percent of employees they have been granted a grace period and only need to offer coverage to 70 percent of employees.

But plans still have to meet minimum essential coverage standards and have to be affordable.

While companies are getting that break, one of the most difficult aspects of the ACA is the complexity of the reporting and tracking requirements for companies. Most companies with 100 or more employees are already meeting these criteria, but it’s really a challenge for companies with variable-hour workforces.

It can be pretty challenging for retail and hospitality businesses. When you have 70 full-time employees and 50 part-time employees, tracking those variable-hour employees to get your FTE count can be pretty challenging.

What do businesses need to be doing now?

A lot of the administrative details — creating your policy, and your measurement, administrative and stability periods — need to be done now. Make sure your HR and payroll systems can handle the necessary reporting because it’s going to be virtually impossible to track it with a pencil. You need a way to extract that data from your system in a way that matches the reporting criteria.

For larger companies — 100 employees or more — their look-back period to determine employee eligibility for coverage starts this year, correct?

Yes. A large retailer based in Columbus, Ohio, decided a few months ago that employees would either be full time and eligible or part time, never working more than 27 hours a week. More companies will adopt that tactic because it’s easier. They don’t want to worry about who might become eligible in such a volatile environment as retail.

Almost every company has part-time employees who could become eligible based on the measurement period. Let’s say they work 40 hours a week during peak season, are offered and take benefits, then drop back to 20 hours a week. Normally under IRS code, going from full-time to part-time status would create an open enrollment period. But the ACA says they’re still an eligible employee because they met the criteria during the measurement period, and the change to part-time status no longer produces an open enrollment opportunity because of the stability period.

We’re trying to figure out if there’s a nuance in the ACA that address this issue, but haven’t found it. The IRS says you entered into a contract for benefits until the next open enrollment period or change in family status. So the employer would still have to provide coverage and the employee would have to pay his or her share, even if it’s too expensive on a part-time salary.

That’s one of the challenges with the ACA — it’s constantly changing and evolving. Once you digest and understand the implications of it from a business operational standpoint, it changes again. Because of the latest delay, businesses with 50 to 99 FTE employees don’t need to worry about it for a while and can probably wait until things calm down.

William F. Hutter is the CEO of Sequent. Reach him at (888) 456-3627 or

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When considering what to showcase for the new “Uniquely Philadelphia” feature in Smart Business Philadelphia, the Mütter Museum instantly came to mind. It’s known worldwide and certainly has many items that can be considered unique.

But, as Communications Director J. Nathan Bazzel is quick to point out, the Mütter Museum at the College of Physicians of Philadelphia is much more than a collection of oddities that attracts curiosity seekers.

“People assume that there’s one type of person that comes to the museum. And nothing could be further from the truth,” Bazzel says.

Sharing the human experience

Not everyone has an interest in art, so some people wouldn’t want to visit an art museum. But everyone has an interest in what it means to be human, he says.

“That’s what the museum is about. It’s not about the macabre. Yes, it’s about medicine. But more so, it’s about what it means to be human,” Bazzel says.

Plenty of celebrities have been among the museum’s visitors and Bazzel shared some of what they considered to be the top attractions.

“Teller, of Penn and Teller, would probably tell you it was the Hyrtl skulls, while Penn Jillette would probably say the giant. Anthony Bourdain was very attracted to the giant colon,” he says. “That’s the thing — when people visit, they bring their own life experiences with them.”

Opening access

Attendance at the Mütter Museum has grown to 140,000 visitors annually, which Bazzel says is the result of being accessible and letting the public know it exists.

That includes a YouTube channel that has more than 4,000 subscribers, making it more popular than The Louvre’s and on par with the British Museum.

“We also have more views than the Guggenheim in New York. So we’re very active on social media. People can connect with us from anywhere in the world. And not just connect with our words, but they can view our collections,” he says.

The museum has been featured on television, as well as in The New York Times, USA Today and The Washington Post.

“I don’t know of any news agency that has not, in some way, covered something here at the Mütter Museum,” Bazzel says.

Furthering medical science

As fascinating as it is to see a plaster death cast of conjoined twins Chang and Eng or the tallest skeleton on display in North America, the Mütter Museum hasn’t strayed from its original purpose of advancing the cause of health.

Bazzel says the importance of that mission has only increased as health care has grown to encompass 19 percent of the gross domestic product.

“It’s probably going to be at 21, 22 percent pretty soon. So we all have an interest in health care. Part of the interest of the museum is how far we have come in health, and how what used to be considered untreatable is now handled routinely,” Bazzel says.

“Who knows, maybe someone will walk out of here and take a little better care of themselves. That might help lower our GDP.”

Roger Vozar is associate editor at Smart Business Philadelphia. If you have an interesting story to share about a person or business making a difference in Philadelphia, please sent an email to

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