When to Retire
SSA Resource Helps Workers Plan for Retirement
The U.S. Social Security Administration (SSA) recently unveiled a new online retirement calculator designed to help people plan for retirement . Unlike other retirement estimators that require the user to insert yearly earnings information into a calculator, the SSA’s Retirement Estimator automatically pulls information from a person’s actual Social Security earnings record.
The personalized Retirement Estimator allows the user to compare different retirement options based on differing retirement dates or earnings scenarios. This fall, the agency plans to release a new online retirement application for Social Security benefits that will reduce the average filing time for individuals from about 45 minutes to 15 minutes.
To access SSA’s new calculator, click HERE.
COBRA Due to Spouse, Even When Dropped at Open Enrollment
By Shari Lau
Q: If an employee drops a spouse from their group health coverage at open enrollment in anticipation of a divorce, are we still required to offer COBRA coverage? When?
A: Yes, you are still required to offer COBRA coverage to the spouse from the date of the divorce, not from the loss of coverage date due to the open enrollment drop. Section 4980B-4 of the Internal Revenue Code, under Q&A-1, paragraph c, states that if coverage is eliminated in anticipation of a qualifying event, such as a divorce or legal separation, the elimination is disregarded in determining a loss of coverage for COBRA purposes. As the intent of the law is to provide continuation coverage due to a divorce or legal separation, simply dropping coverage at open enrollment is not a way for an employee or an employer to circumvent COBRA coverage being offered to a spouse dropped for this reason. Rather, while the spouse may be dropped from the group plan at open enrollment, when the divorce does become final, the spouse or employee will have at least 60 days to inform the employer or plan administrator of the divorce, and COBRA continuation must be offered as of the date of the divorce. The Internal Revenue Service (IRS) made this clear in Revenue Ruling 2002-88.
So how does the employer know when the divorce is final so that they may meet their obligations under the law? Remember that pesky requirement of having to send or add to your summary plan description a general COBRA notice to all new participants? Within that notice, the employer is required to explain both their own COBRA obligations and those of the participants, including guidance on the allowable time frames to notify the company or plan administrator of a qualifying event. Those notices are not just for the employee, but for all dependents on the plan, and an employer may hold all qualified beneficiaries to those time frames. COBRA states that employers must give participants at least 60 days to notify them of a divorce or legal separation, and that time frame must be communicated in the general COBRA notice. If the employer meets this notice obligation, and neither the spouse nor employee notifies the employer or plan administrator within 60 days of the date of divorce or legal separation, the employer’s COBRA obligations for that spouse will have been met.
Professional Pointer: To ensure a good faith effort to comply with general COBRA notice obligations, an employer may wish to mail the notice to the employee and dependents by certificate of mailing (not certified mail) and keep a log of these mailings.
Shari Lau, SPHR-CA, GPHR, is manager of SHRM’s HR Knowledge Center.
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On June 16, 2008, the USCIS released a newly-dated I-9 form which employers may begin using immediately.
What’s behind the change?
Due to the Paperwork Reduction Act, the Office of Management and Budget (OMB) must have current expiration dates on all approved forms, including the I-9. While the content of the form has not changed from last year’s version, the date of the form and OMB expiration date have been adjusted.
While the use of new forms is generally not required before 30 days after appearing in the Federal Register and guidance on this requirement has yet to be issued, we want to make sure that SHRM members have the most updated form, and recommend that you begin using this new form as soon as possible.
Furthermore, the Department of Homeland Security (DHS) recently published higher civil fines against employers that violate federal immigration laws; as of March 27, 2008, monetary penalties increased approximately 25 percent. Penalties will be given on a per-alien basis—if an employer knowingly employed or continues to employ five unauthorized citizens, five separate fines may be charged.
I-9 Inspections on the Rise
The U.S. Immigration and Customs Enforcement (ICE) has launched a new I-9 inspection campaign across the country, targeting employers suspected of employing unauthorized workers. These “inspections” are announced by service of a subpoena calling for production of Forms I-9 for all current employees and for all employees terminated over the past year. To get more information on this topic, visit our Express Request service and select the key term Immigration Enforcement and Penalties
7/11/08 7:26 AM
Don’t Bypass Workers’ Compensation
By Angela Stone
Q: We have an employee who suffered a minor injury at work and missed a few days of work as a result. Could we just pay the person for time missed instead of filing a workers’ compensation claim?
A: No. Employers are required by federal and state law to report injuries in the workplace and can face stiff penalties for noncompliance.
Most employers are required by law to provide workers’ compensation coverage for their workers. Workers’ compensation insurance benefits both employees and employers. It provides employees with essential medical care, replacement wages and disability benefits. For employers, it is the exclusive remedy for work-related injuries, which prevents an employee from seeking further damages through a separate lawsuit and limits the amount of benefits the employee may recover. It also helps the employer by limiting its disability benefit planning to illnesses/injuries that do not occur on the job.
Some employers are concerned that reporting too many injuries to their workers’ compensation carrier will affect their insurance/experience rating, which is why they sometimes consider not filing a claim and paying the employee’s expenses out-of-pocket. While some minor medical bills could potentially be paid out-of-pocket, employers are still required by federal and state law to report these injuries and failure to do so can lead to citations and civil penalties.
When employers do not file a claim with their workers’ compensation carrier, they leave themselves open to the possibility of lawsuits by injured workers, which most likely would lead to larger expenses for the employer. Workers’ compensation carriers have extensive resources that help manage the care an employee receives and work for both the employer and the employee in ensuring that the workers receive the care they need.
Filing injury reports can also help determine whether other factors were an issue and help employers remedy any safety concerns, as well as confirm whether the injury was work-related or whether the employee is making a fraudulent claim.
Prompt and proper reporting of work-related injuries through the employer’s workers’ compensation carrier not only protects the employer from future liability but is also the best way to protect employees and provide the medical care and benefits needed to return an injured employee to good health and back to work.
Angela Stone, SPHR, is an HR Knowledge Advisor in SHRM’s HR Knowledge Center
DOL Regulations – On July 21, 2008, the Department of Labor (DOL) released a proposed regulation governing fiduciary disclosure requirements in participant-directed individual account plans. The regulations would be effective for plan years beginning on or after January 1, 2009. According to DOL, “The proposed regulation requires that uniform, basic disclosures be given to all participants and beneficiaries who direct the investment of assets in their individual accounts, and that investment-related information be presented in a format that makes comparisons easy.” The regulations would apply to all participant-directed plans. The DOL issued both a press release and fact sheet explaining the new proposed regulation.