Businesses with many variable-hour and part-time employees are developing new strategies to address the employer mandate in the Patient Protection and Affordable Care Act (PPACA).
Although implementation of the mandate has been delayed until 2015, companies continue to work on ways to avoid penalties when enforcement kicks in, says Daniel Meracle, a partner at Benefitdecisions, Inc.
“We’re seeing four variable-hour strategies that employers are using,” Meracle says. “Some may be against the spirit of what Congress intended when they passed PPACA, but they are within the guidelines of the law.”
Smart Business spoke with Meracle about these latest strategies for meeting PPACA requirements for variable-hour employees.
What are businesses with variable-hour employees doing to meet the PPACA mandates?
First, employers need to measure whether employees worked 30 hours a week or more, and would be considered full time for the purposes of mandatory health care benefits. The PPACA gives the ability to look back 12 months to determine if an employee has worked an average of 30 hours a week. If he or she did, the employer would be required to provide health insurance that has a minimum value and is affordable.
In the hospitality industry — restaurants and hotels — businesses historically have turnover rates of 90 percent or more within 12 months. Most employees will leave during the 12-month look back period, so employers will not have to offer health care insurance to them.
Basically, it’s a matter of tracking the hours, and several technology programs are available to manage that task. Certainly payroll companies can provide that service, as well.
Three other strategies being utilized are:
- Reducing hours below 30.
- Slash and share.
- Providing minimum essential coverage plans.
What is slash and share?
Businesses are sharing employees. A restaurant owner cuts an employee’s hours below 30 and then might share that employee with another franchise owner, who also might employ that person for less than 30 hours.
They have to be two different franchise owners; it can’t be two restaurants owned by the same person or company. It could be that one is Hardee’s and one is Jack in the Box, and the person works for 20 hours a week at each.
How does the minimum essential coverage strategy work?
Insurance companies have realized that under the strict guidelines of the PPACA minimum essential coverage is nothing more than preventive care. So businesses are offering what are nicknamed ‘skinny’ plans to employees. Making these plans available allows the business to avoid the $2,000 penalty per employee for not providing coverage.
Skinny plans cost about $40 to $50 a month, and all of that cost could be paid by the employee. If an employee declines the coverage, he or she would be subject to the $95 penalty under the individual mandate. But a young, healthy person would rather pay $95 than buy health insurance because there are no restrictions regarding pre-existing conditions. When you can join the exchange at any time, why not wait until you are sick to get coverage?
Most of these minimum essential coverage plans also are self-funded, which gets around a lot of PPACA regulations.
However, there are two caveats to taking this approach — these plans are probably not within the spirit of the law, so this option could go away with the issuance of a release from the Internal Revenue Service or Department of Health and Human Services. Also, employees can still go to the health care exchanges and get a subsidy because the plan does not provide minimum value.
If an employee gets a subsidy, the employer would pay a $3,000 penalty for that person. Still, it allows you to avoid paying $2,000 on all employees.
Of course, implementation of all of these strategies might be delayed because the employer mandate has been pushed back until 2015. But these are ways businesses are dealing with their variable-hour employees right now.
Daniel Meracle is a partner at Benefitdecisions, Inc. Reach him at (312) 376-0433 or email@example.com.
Website: To learn more about health care reform and other employee benefits issues, visit our resource center at www.benefitdecisions.com/resources.aspx.
Insights Employee Benefits is brought to you by Benefitdecisions, Inc.
Everyone makes mistakes, including lawyers and businesspeople drafting contracts. Usually, a simple typographical or grammatical mistake will not change the meaning of the agreement in a significant way — but what if it does?
“While Illinois courts protect the sanctity of the written word, they also recognize that people make mistakes, and they are willing to reform or rewrite the contract to conform to the parties’ agreement in certain circumstances,” says Rebekah Parker, an associate at Novack and Macey LLP.
Smart Business spoke with Parker about what to do when writing fails to reflect the parties’ agreement.
What is contract reformation?
Contract reformation is an equitable remedy that changes the language of a contract so that it conforms to the agreement actually reached by the parties but not accurately reduced to writing because of a mistake. Contract reformation cannot be used to change the terms of the deal; rather, it merely fixes a mistake so that the writing better expresses the bargain the parties reached.
Can any mistake be reformed?
No. Reformation is most appropriate for scrivener’s or drafting errors, such as erroneous numerical figures, incorrect dates or errant commas that change the meaning of a sentence.
If all contracting parties agree that a mistake has been made, they may — but do not have to — seek court intervention to reform their agreement. Or, they can voluntarily reform the contract themselves. This can be accomplished by, among other things, correcting the language on the original contract and having each party initial the revision; executing a rider to the agreement that identifies and corrects the mistake; or executing a new version of the contract that clearly states that it is intended to reform the parties’ prior agreement.
Courts encourage voluntary reformation and will usually enforce the reformed agreement should a dispute later arise.
What if the parties disagree about whether a mistake was made?
If a mistake advantages one party and disadvantages the other, it is not unusual for them to disagree as to whether a mistake was made. The disadvantaged party may need to bring a legal action for reformation, which can be combined with a claim for breach of contract — even if the breach of contract claim depends upon the contract being reformed. It is important that such a claim be brought as soon as possible after the mistake is discovered, because laches — unreasonable delay accompanied by prejudice — is a common defense to reformation.
The party seeking reformation bears the burden of proof, and it is a heavy one. In Illinois, there is a presumption that a written instrument reflects the true intention of the parties. Overcoming that presumption generally requires ‘clear and convincing evidence’ — a higher burden than the usual preponderance of the evidence standard.
Even if the party seeking to reform a contract fails to meet its heavy burden, it can still succeed on its breach of contract claim if the court finds the agreement to be ambiguous. In that case, the parties can introduce extrinsic evidence of their actual intent, and the court will interpret, rather than reform, the contract following ordinary canons of contract interpretation and applying ordinary standards of proof.
Do you have any advice for avoiding drafting errors in the first place?
Given the difficulty in reforming written contracts, it is vital to ensure that important contracts are mistake-free. Most drafting errors can be avoided by following these three tips: First, be cautious when creating a new contract from an old template. Sometimes stock language conflicts with a term agreed to by the parties.
Second, always have someone review the final draft, such as an outside counsel or businessperson, especially one who was involved in negotiating the deal or whose area of business is impacted by it.
Third, beware of grammar. Several headline-grabbing contract disasters involve something as simple as a misplaced comma. Most people do not know how to use commas properly, so keep sentence structure simple, and avoiding modifying clauses as much as possible.
Rebekah Parker is an associate at Novack and Macey LLP. Reach her at (312) 419-6900 or firstname.lastname@example.org.
Video: See a video of Novack and Macey’s recent network news coverage at www.novackandmacey.com/novack-and-macey-in-the-news.
Insights Legal Affairs is brought to you by Novack and Macey LLP
Workplace contentment, fulfillment or wellness may be intangible, but it will affect the growth and success of your business. When it’s present, there are obvious, unmistakable signs, says Satinder Dhiman, Ph.D., Ed.D., associate dean of the School of Business, chair and director of the MBA Program and professor of management at Woodbury University.
“When you go into an organization, you can almost smell it,” he says. “Being highly fulfilled takes a conscious decision; it’s not something that just comes about.”
Businesses have less absenteeism, turnover and stress leave when employees have a sense of belonging, enhanced contribution, and more engagement and trust.
Smart Business spoke with Dhiman about how to encourage highly fulfilled employees.
Why do executives need to be concerned with workplace contentment?
A recent Gallup survey found that 47 percent of employees feel disengaged, and when that’s the case it will affect the bottom line. People just going through the motions are more likely to be absent and leave the company. There also are about, depending on the survey, 17 to 20 percent of employees who are positively disengaged.
Organizations are not just numbers, and you don’t want to pursue profits in an unbridled manner. Remember that businesses are about people.
What are the characteristics of highly fulfilled employees?
These employees have a sense of ownership and commitment. They focus on what is right, are generally more appreciative and concentrate on making things work. They are aware of their contribution to the organization and know how it adds to the bigger picture.
This then leads to high emotional intelligence. They are in better control of their own feelings, so they are better equipped to deal with the feelings of others. And better interaction leads to greater trust, which is the glue holding things together.
Research shows corporate communication failure happens not because the message was wrong, but because it was interpreted wrong. There was distrust of the messenger.
How can management increase workplace contentment?
A great employer will inspire employees through actions, not just words or slogans. To achieve this, approach employees in a holistic manner, appreciating all skills and abilities. There’s a joke that at his retirement party, an employee said, “For 40 years you paid me for my hands; you could have had my brain for free.” Also, strive to create a culture of appreciation. Instead of catching people doing something wrong, catch people doing something right.
Fulfillment engages the body, mind and spirit. So, take a genuine interest in employees’ well-being and what is happening with their emotional makeup. You want to help employees attain their dreams — send a few staff members to a local conference, provide tuition reimbursement or be flexible on hours to allow them to go to class.
If employers support employee education, many fear employees will gain skills and leave. However, in addition to being more productive while working for you, think of the economy as a whole. You hire people who have been trained elsewhere. Your employees gain skills and go elsewhere. There is no real gain or loss.
Of course, bonuses and pay raises don’t hurt in terms of building trust and appreciation.
Why is personal fulfillment so important?
Workplace fulfillment is more likely when employers and employees are fulfilled in their own lives. It trickles down.
Attaining personal wellness comes from self-knowledge or understanding your purpose in life, as well as selfless service. Once those two pillars are in place, certain mental habits or gifts contribute and help create a sense of self-fulfillment. They are:
- Pure motivation.
- Taking a vow of harmlessness.
By focusing on each of these habits, you can create personal fulfillment. And, by sharing it with your employees, achieve organizational well-being.
Satinder Dhiman, Ph.D., Ed.D., is an associate dean, School of Business; chair and director, MBA Program; and professor of management at Woodbury University. Reach him at (818) 252-5138 or email@example.com.
Book: More on this subject can be found in Satinder Dhiman’s new book, “Seven Habits of Highly Fulfilled People: Journey from Success to Significance.” Find it on Amazon.com.
Insights Executive Education is brought to you by Woodbury University
For the first time in modern U.S. history, companies are employing four generations of workers. Four generations in the workplace can mean more opportunity for success or more problems, depending on how an organization deals with the generational differences.
“We’ve never had four generations working side-by-side, a 20-year-old working with colleagues that may be 50 years older. In order to work together, you have to honor those differences, and you can’t expect everyone to act and think like you do,” says Terri Walker, principal human capital consultant at TriNet, Inc.
Smart Business spoke with Walker about the ways various generations view their jobs and how to manage employees to create a happier, more productive workplace.
What challenges come with having four generations of workers?
An older, more experienced worker (born before 1946) or baby boomer (1946-1964) may have different values than someone coming to the workplace for the first time. Those employees likely expect a level of respect that a Generation X (1965-1977) or Generation Y/millennial (1978 and later) employee wouldn’t automatically give just based on age. The younger workers value the knowledge and achievements you bring to the workplace more than just the fact you’ve been there a long time.
Additionally, there are differences in how generations communicate. Frequently, Gen X/Gen Y workers prefer instant messaging (IM) or email, whereas other workers might value meeting face-to-face and going to a person’s desk to have a conversation. Older workers may feel it’s rude to IM or send a text when you’re in the same building, while the younger worker thinks you’re bothering them by taking time to walk to their desk.
No one way is right or wrong; they’re just different. When you understand and respect these differences, you’ll have a more productive workplace. You don’t have to agree with each other’s values, but you have to respect them.
What are the risks of managing everyone the same?
You’re going to have employees who are not satisfied with their work environment because policies are too loose or too stringent. Employees generally know and understand work duties, but management style is what drives them toward other opportunities. High turnover brings costs in recruiting, management time and loss of productivity. The last thing you want is churn because of the work environment.
It’s up to management to bring everyone together, to find what motivates employees and tailor rewards that keep employment interesting for all. Someone who’s been with the company for years may be waiting for that gold Rolex watch at retirement, while a younger employee wants an immediate — though smaller — reward for a job well done, maybe a Starbucks gift card.
Most of us grew up with the golden rule that you treat others the way you want to be treated. However, a new rule has come into play, the ‘titanium rule’ — treat others the way they want to be treated. That involves understanding what motivates them and treating them accordingly.
How can a company bring people together?
First, look at and understand your employee base. What are the different generations? Does one generation dominate your workforce or management team? How well do they work together? What methods does your organization use to communicate? How is technology being utilized? How are managers communicating with employees? Also, look at turnover to see if there are peaks in a particular department, which could indicate a problem with communication or work style.
Once you’ve conducted an analysis, work with executive management to find the gaps where you could be doing better. Make sure managers, supervisors and all employees feel they are valued. This approach creates a robust, productive workplace where everyone is engaged and respected, which brings real benefits in dollars and cents.
Ensure that your leaders have the knowledge and skills to communicate and work effectively with all employees. It takes flexibility and open-mindedness, a willingness to look at different ways of doing things. Successful organizations and managers incorporate these elements into their structure and practice them daily.
Terri Walker, SPHR, is a principal and human capital consultant at TriNet, Inc. Reach her at (510) 352-5000 or firstname.lastname@example.org.
Insights Human Resources Outsourcing is brought to you by TriNet, Inc.
Social, technological and political changes, a global business environment and evolving regulatory demands have put increased emphasis on organizations to proactively identify and treat risks that impact their performance and even their survival. Yet efforts to initiate enterprise risk management (ERM) programs often result only in frustration.
“In many cases, ERM has consisted of creating a list of risks, prioritizing those risks and developing loose plans to mitigate them. The problem is that managers and executives often observe that the risks ‘identified’ had been known and adequately addressed,” says Marc I. Dominus, ERM Solutions leader at Crowe Horwath.
Smart Business spoke with Dominus and Jim E. Stempak, a principal at Crowe Horwath, about moving past identifying risks to implement an ERM program that produces results.
How is ERM defined?
One definition is from the Committee of Sponsoring Organizations of the Treadway Commission: ‘Enterprise risk management is a process, effected by an entity’s board of directors, management and other personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the entity, and manage risk to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives.’ The basic elements of ERM programs include:
- Understanding risk and developing a repeatable process to establish acceptable levels of strategic risk; identifying, analyzing and prioritizing risks that are critical to achieving business objectives; and communicating the guidance necessary to allow management of risks that fall within accepted parameters.
- A governance structure that aligns responsibility for oversight with responsibility for escalation.
- Information systems to support decisions, monitoring and communication.
- Recognition of how an organization’s culture affects its risk profile.
Why is an ERM program important?
A well-constructed program provides collective responsibility for risk management and produces a resilient organization protected from negative consequences of unexpected events. Timely and meaningful risk intelligence also allows leaders to make impactful strategic decisions that incorporate intentionally taking risk to achieve rewards.
Where do organizations fail in terms of implementation?
They generally start off well, identifying and prioritizing risks, but the executives and boards responsible for the programs may not provide clear guidance to the organization regarding how to apply the results. There’s no clear path toward implementation, and there may not be adequate initiative to support the culture shift necessary to sustain an effective process. The keys to successful ERM transformation include:
- Confirm and refresh risk assessment results. Executive and management team members need to agree on the results, the definition of each risk and the criteria being applied to assess the risks. The risk inventory must be continuously updated.
- Develop and monitor consistent risk treatment plans and processes. For each high-priority risk, uncover the root cause; establish a management strategy, such as to avoid, reduce or share the risk; and create a treatment plan.
- Establish an enterprise risk policy, which articulates the program’s value and outlines the responsibilities, reporting requirements, methodologies and risk governance criteria.
- Establish risk governance practices and structure, which guide how risk is prioritized and resources are allocated, based on risk culture, appetite and tolerance, and management capabilities.
- Communicate and report information. Management, process owners and employees need to regularly receive ERM risk information to help oversee administration. Transparency is essential.
Once in place, an ERM program needs to evolve continuously with experience and experimentation. Today’s business conditions require flexibility and adaptability. A fully developed program provides a competitive advantage by allowing organizations to improve and protect their performance by confronting, exploiting and managing risk.
Marc I. Dominus is an ERM Solutions leader at Crowe Horwath. Reach him at (214) 777-5213 or email@example.com
Jim E. Stempak is a principal at Crowe Horwath. Reach him at (214) 777-5203 or firstname.lastname@example.org.
Social media: To learn more about Crowe Horwath’s risk services, find us on Twitter: @Crowe_Risk.
Insights Accounting is brought to you by Crowe Horwath LLP
Small Business Administration (SBA) loans are particularly popular in challenging economic times, when traditional lenders are less willing to provide funding. Program changes, including increasing the maximum loan size from $2 million to $5 million, are attracting more businesses. In the fiscal year ending Sept. 30, 2012, the SBA approved 39,442 loans for a total of $15.25 billion, and in the first nine months of fiscal year 2013 the SBA has approved 39,063 loans for $16.25 billion.
“In down times, the SBA programs become more important and fill a vital need for small businesses,” says Raymond Monahan, senior vice president and group manager of SBA Lending at Bridge Bank.
Smart Business spoke with Monahan about the types of SBA loans that are available and recent changes to the program.
What types of SBA loans are available?
The 7(a) is most commonly used; 75 percent of the loan is guaranteed by the government and money can be used for working capital, inventory, equipment, debt repayment (in certain instances) or real estate.
The 504 loan program is less well known. It’s more structured and is generally for real estate acquisitions. A borrower typically provides 10 percent down; a real estate mortgage pays 50 percent of the project cost; and the SBA guarantees a debenture for the remaining 40 percent through a Certified Development Company (CDC).
What are the benefits to SBA loans versus traditional loans?
The most obvious advantage is that there is a guarantee backing the loan. It’s also easier to qualify. Some businesses that are new, don’t have a certain profit level or don’t have the necessary down payment for traditional financing can get an SBA loan. Generally, you may need only a 10 percent down payment, whereas a bank will want 25 to 30 percent down if you’re buying real estate.
Another nice aspect is a longer amortization period. Most commercial real estate loans have a 25-year amortization period, but a 10-year maturity rate. That means you need to refinance at some point. With an SBA program, the loan is fully amortized over 25 years and you never have to worry about refinancing. Non-real estate loans can be financed for up to 10 years.
Although SBA loans aren’t subsidized by the government, the guarantee may be able to get you a better rate.
Are there disadvantages as well?
With 7(a) loans, there is a prepayment penalty in the first three years if the maturity is more than 15 years. Because 504 loans are financed through bond sales, they have longer prepayment penalties on those.
The SBA also may require additional collateral. You might put 10 percent down, but the SBA could want a house or other collateral to further secure the credit.
Finally, there also are fees. The 7(a) program has a guarantee fee of 1.7 to 2.8 percent of the total loan amount — the percentage goes up as the loan size grows. With a 504 loan, there’s a fee of about 3 percent of the CDC portion — the 40 percent financed through the SBA plus any fees charged by the first mortgage lender.
What recent changes have been made?
In addition to increasing the maximum loan amount from $2 million to $5 million, the definition of a small business has expanded. Instead of having different standards based on industry, the new alternate threshold is that the net worth of a company cannot exceed $15 million and profits over the last two years cannot exceed an average of $5 million. They have also loosened restrictions on line of credit programs.
There are two further changes being considered — simplifying the affiliation rules and eliminating personal liquidity tests.
The SBA has many cumbersome rules about what constitutes affiliate companies, and they’re attempting to simplify that so you have to own a majority of the business in order for it to be considered an affiliate. Someone might own 40 percent of a business with an SBA loan and not be able to qualify to get a loan for another business.
As for liquidity, the SBA has rules that you can’t have more than a certain amount of liquidity to be eligible for a loan. They’re looking to get rid of that test and just focus on whether it is a small business.
The changes are about helping more businesses that might need financing, which is the goal of the SBA.
Raymond Monahan is a senior vice president, group manager SBA Lending, at Bridge Bank. Reach him at (408) 556-8384 or email@example.com.
Insights Banking & Finance is brought to you by Bridge Bank
California Proposition 65 — the Safe Drinking Water and Toxic Enforcement Act of 1986 — has spawned a cottage industry that profits from putting businesses on notice that they have products containing chemicals on the list of potentially hazardous substances.
But the mere presence of a chemical in a product doesn’t mean that there has been a violation, and there are steps you can take to protect your business when you receive a notice, says Thomas H. Clarke Jr., partner at Ropers Majeski Kohn & Bentley PC.
“Everyone seems to lose sight of what Prop 65 is about because the plaintiffs want you to see a list of chemicals in your product and think you’re a bad person. But the law is not about the chemical being present, it’s about exposure,” Clarke says.
No exposure above a specified level, no violation.
Smart Business spoke with Clarke about what you should know about Prop 65.
What is the main flaw with Prop 65?
The burden is placed on the defense. A plaintiff only needs to show that the chemical is present and there’s a reasonable exposure pathway. Then the burden shifts; the defendant must prove the exposure is below the warning threshold. If plaintiffs were required to prove exposure, all of the games go away because frequently the only exposure scenarios they present have nothing to do with product usage.
For example, a client was selling a keepsake binder and one of the plaintiff’s scenarios involved the binder being on the floor, and a baby crawling over and licking it. The regulations state that an exposure is determined by normal use by an average consumer. The thesis that babies licking binders happens frequently is ludicrous.
Plaintiffs exaggerate so that you are intimidated and will not contest the case. They want a settlement that pays them substantial sums. To justify their fees, they will impose some reformulation standard, but quite often there’s no evidence the reformulation has any beneficial affect on exposures.
Why do businesses agree to settlements rather than go to trial?
Plaintiffs know what it costs to defend these lawsuits and are clever about making a settlement offer. If it’s going to cost $150,000 to defend, they’ll seek $80,000 to $90,000.
Upon receipt of a 60-day notice that a lawsuit will be filed, be proactive — model the use of the product. Such evidence is not cheap. In the case of the binder, about $8,000 was spent to prove the exposure was under the threshold. Such evidence changes the dynamics of the case.
How should a business react when it receives a warning letter?
When a business receives a 60-day warning letter, it should take immediate steps to assess the product. Probably 90 percent of these notices are tossed. No one worries about them; it’s only when a lawsuit is filed that they realize they have a potential problem.
After assessing whether there is an exposure, you know if the case is defensible. If it is, that’s the posture to take. If not, then you need to settle, and one of the things you’ll need to do is change the composition of the product. If you assess early, then this process is in your control, not the plaintiffs.
What is being done to solve the ‘greenmail’ problem?
Assembly Bill 227 addresses the kind of shakedown lawsuits that get a lot of publicity. Plaintiffs review public records for violations, like allowing smoking near an ATM machine. Then they fire off letters stating the business is in violation of Prop 65, and demand money.
AB 227 covers those activities that are frequently exploited. If it passes, someone receiving one of these shakedown notices can cure the problem immediately because usually the only requirement is a warning sign. There is a small penalty provision, but most of the money goes to the state.
However, if you really want to eliminate abuse, demand that the law be amended to put the burden of proof on the plaintiff. There’s nothing wrong with warning people, but to associate the presence of a listed chemical in a product with an actual threat of real harm lacks merit.
Insights Legal Affairs is brought to you by Ropers Majeski Kohn & Bentley PC
One mistake companies make with cash management is getting too comfortable banking the same old way and not exploring new and improved processes available, says Suzy Frazier, Senior Vice President and Manager of Treasury Management Sales at ViewPoint Bank.
“You may not be getting the services you need or you could be paying for services you don’t need. A thorough review of bank services after the first 90 days, followed by annual relationship reviews, will ensure the needs of the company are being met,” Frazier says.
Smart Business spoke with Frazier about how to select a bank for your cash management needs.
What does treasury management entail?
Whether it’s called treasury or cash management, it’s the basic services that help businesses run more efficiently. It’s managing the cash going in and out of the business and streamlining the process through automation.
Treasury management services include:
- Access to account information through Internet banking.
- ACH (Automated Clearing House) and wire transfer processing.
- Remote deposit processing.
- Lockbox processing with remittance detail reporting.
- Fraud management and account reconciliation services.
- Automated sweep solutions for investment and loan transactions.
- Corporate and purchasing card services.
What mistakes do companies make when setting up treasury management systems?
One mistake is staying with the status quo and not taking advantage of the newer technologies. People have a tendency to just do things the way they’ve always been done.
Another mistake is expecting all services to be free. There is a cost for technology, automation, and all the bells and whistles. Do the legwork, investigate the offering, make sure it meets your needs and understand the price.
Finally, communicate regularly with your bank partner, the good and the bad. They cannot improve products and processes if they are unaware of the problems.
How can you compare bank service?
It’s still a people business and often you need to speak with someone to resolve issues. It’s important to know whom to call — don’t waste time rummaging through business cards or automated phone systems. When you have a need, you want it handled quickly and correctly. Being able to reach someone knowledgeable who can make a decision is critical to moving on to the next task.
Today, the Internet and mobile apps provide the flexibility to handle day-to-day business from anywhere you can connect. But technology has its challenges, and banks with good backup solutions keep your business moving.
Challenge your bank partner to be your advocate and consultant when it comes to your business. They can help you build your business and your customer base through their connections and other bank clients. It can be a win-win for everyone.
What fraud prevention is available?
Banks are constantly trying to stay one step ahead of fraudsters. It’s important to discuss the products available to prevent fraud with your banker.
Traditional positive pay has been around for more than 15 years, but the ability to provide payee information and clear exceptions quickly are just two of the newer enhancements.
Another prevention tool is for electronic transactions, known as ACH blocking. With this service, the company has the ability to designate the transactions to clear the account while rejecting all others.
The Internet and various platforms available today are changing the landscape for companies of all sizes — enabling them to conduct business from anywhere and at anytime. Not everything is a rush; there are steps to follow and safeguards that must be in place. Being able to do business remotely is here to stay, and providing access to information to make informed decisions about your business, securely and in a timely manner is the key. Banking should be quick, easy and secure so owners and company personnel can promote their business.
If not, maybe it’s time to make a phone call to your bank.
Suzy Frazier is senior vice president and manager of Treasury Management Sales at ViewPoint Bank. Reach her at (214) 217-7026 or firstname.lastname@example.org.
Website: To learn more about ViewPoint Bank’s Treasury Management Services, visit www.viewpointbank.com.
Insights Banking & Finance is brought to you by ViewPoint Bank
California’s health care exchange may see a flood of customers when it opens in 2014 — not only from people who have been uninsured but also many previously covered under employer-sponsored plans.
“What the policymakers are saying is different from what we’re hearing from businesses,” says DeVon Wiens, a partner in the Health Care Practice at Moss Adams LLP. “Policymakers don’t anticipate a big shift among employers away from providing coverage and toward letting employees go to the exchanges to purchase their own insurance.”
That’s likely true for larger employers with 1,000 employees or more who have enough critical mass to self-insure, he says. But it’s not the case with smaller businesses.
“Many employers may be sending up the white flag,” Wiens says. “Instead of spending $8,000-plus a year per employee, they’ll give them an equivalent increase in compensation and let them buy their own health insurance through the exchange. Some studies show that there won’t be a huge shift, but we see it more often than not among our clients.”
Smart Business spoke to Wiens about the Affordable Care Act (ACA) provisions and how businesses are responding.
Why do you anticipate many people will buy insurance from the exchange?
Many small to midsize companies are waiting and watching — they don’t want to be the first to go to the exchange, but they’re not going to be last either. Once one or two companies in the same industry go to the exchange, the others will follow suit. This will only accelerate now that the employer mandate has been delayed a year. Essentially, it means businesses can drop coverage and send employees to the exchange without facing a penalty. This is more likely in industries that do not require a professional level workforce or for which current levels of available qualified candidates to fill open positions are hard to find.
Insurance companies clearly expect more people to flock to the exchange because they’re purchasing providers. United Healthcare through its affiliate, Optum Heathcare, and Humana recently acquired large medical groups in the California market, as well as others around the nation. If groups opt to go into the exchange, their commercial insurance business shrinks and insurance profits drop dramatically. They want to offset the loss by having more control over physicians and other providers, with closed networks similar to Kaiser Permanente. This consolidation will likely lead to access-to-care problems later for those not covered by commercial insurance, employer-sponsored plans or Medicare.
Will the exchanges be ready by 2014?
In 1982, California counties responsible for indigent care established the County Medical Services Program. They basically set up their own HMOs, and the program struggled mightily at first. Today most are well-run organizations.
It will be the same with the health care exchanges. After a few years, the exchanges likely will learn how to operate and more effectively administer the insurance products offered. They’ll probably have to reduce the number of coverage options to be efficient.
Over time a switch to a single-payer system is likely. Approximately 20 percent of the cost of health care is because we don’t have one system, one way to pay a claim. The lack of centralized control drives up costs. However, a single-payer system also adds costs by taking competition out of the insurance market. Still, pure economics dictate a shift to a single-payer system eventually, especially with a slow economy.
Will the exchanges lower health care costs?
They may bend the cost curve, but they won’t reduce costs. If you look at health care spending, the freight train coming at us isn’t the uninsured; it’s our aging population.
Regulation and market forces drive the health care market, and right now market forces are moving faster. But the ACA is here to stay, and the market will adjust to it. The smartest thing the government can do is outsource the work of the exchanges, like it does with Medicare, one of the smaller federal government departments. Medicare outsources most claims processing and auditing to private industry. If they approach the exchanges in the same way — set the ground rules for how health plans play, and let the private sector participate — over time they’ll figure out how to make this work.
DeVon Wiens is a partner, Health Care Practice, at Moss Adams LLP. Reach him at email@example.com.
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Much of the discussion about oil and gas production in Ohio has focused on hydraulic fracturing used to facilitate production. But fracking, as it’s often called, is only part of the process that takes the oil and gas from the ground to consumers.
“The wells are just one part of the overall industry. You can drill a well and be prepared to produce gas and natural gas liquids, but these materials have no place to go until you have a pipeline and processing facilities,” says Scott Doran, director, Kegler, Brown, Hill & Ritter Co., L.P.A.
Smart Business spoke with Doran about the various stages in the production of oil and gas, and the permits and regulations that govern them.
What permits are required for oil and gas production operations?
In addition to the drilling permits, you generally need permits for the pipelines that will take the gas from the well pad to collection and processing points. The Ohio Department of Natural Resources (ODNR) manages drilling permits; The Ohio Environmental Protection Agency (EPA) has authority to issue air permits. The Ohio EPA, the U.S. Corps of Engineers and other agencies are involved in pipeline projects. Construction of the pipeline may necessitate impacts to streams or wetlands, and you have to consider historical preservation and endangered species issues.
You have to delineate every resource along the expected path of the pipeline, which means sending engineers or field personnel to identify streams, wetlands, historic properties and potential endangered species habitats. Of course, that also involves getting easements and permission from landowners. Those field people prepare voluminous reports, and you identify the best path for the pipeline that achieves project objectives while avoiding as many resources as possible.
If a project does impact streams or wetlands, you can apply for and obtain a permit authorizing the project, but you also have to mitigate those impacts by restoring the streams or wetlands at the site or somewhere else, or buying wetlands mitigation credits. It’s expensive, but there are a number of mitigation options to compensate for these unavoidable impacts.
Why are air permits needed?
Air emission of certain natural gas occurs during the drilling process, and the U.S. EPA and Ohio EPA have established strict permitting requirements regarding how to manage emissions during and after drilling. After drilling, there are emissions associated with the transfer and storage of materials.
It used to be that companies commonly flared off excess gas — they didn’t want to or were not able to manage the gas, so they would burn it. New permit requirements are being phased in that will require the capture of that gas.
What is required regarding wastewater collected from drilling operations?
In Ohio, a regulatory decision was made that the wastewater associated with oil and gas exploration and production is to be injected into permitted disposal wells. These disposal wells are generally off-site and operated by disposal companies that collect waste from tanks at the well pad. They’re injecting the waste 10,000 feet into the ground in porous rock, where it is designed to remain.
Drillers and wastewater treatment companies are working very hard to demonstrate effective mechanisms to treat and recycle that water, because millions of gallons are used for every well and fresh water is very valuable.
Do you expect regulations to change as the industry expands its operations here?
Regulations will undoubtedly continue to evolve, but the basic structure is in place. There is every indication that companies are continuing to make substantial infrastructure investments in Ohio, and there is a regulatory program that is overarching and impacts every step of the process.
This industry is going to have an environmental impact, but it can be done in a very responsible manner. Economically, it will be a good thing for the state. There will be some trials and tribulations along the way, but overall Ohio is doing a nice job to ensure a very substantial long-term benefit while protecting environmental resources in Ohio.
Scott Doran is a director at Kegler, Brown, Hill & Ritter Co., L.P.A. Reach him at (614) 462-5412 or firstname.lastname@example.org.
For more information on Kegler, Brown, Hill & Ritter, please visit www.keglerbrown.com.
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