Health Care Reform Facts

Health Care Reform:
What Employers Need to Know

Brown & Brown Insurance Healthcare Reform Update

Update on impacts for schools:          This information has been summarized and reported out by our Health Benefits Broker - Brown & Brown
During March 2010, Congress enacted two new laws which overhaul the United States health care system. These two laws are often referred to as Health Care Reform. For employers, the new laws represent the most significant changes to their health benefit plan since the passage of ERISA.
Many provisions of Health Care Reform are already in effect. The purpose of this bulletin is to summarize key changes that become effective in 2013, 2014 and 2015. It is based upon federal regulations and other guidance published as of July 29, 2013.

Additional Plan Changes Employers will be required to make several additional changes to their health plans to comply with Health Care Reform. The changes include the following:

1. Limit on Medical FSA Contributions
For plan years beginning in 2013, a participant is not permitted to contribute more than $2,500 to the participant’s medical flexible spending account (FSA) under an employer’s Section 125 cafeteria plan. An employer is required to amend its Section 125 plan to include this limit no later than December 31, 2014.

2. Waiting Period
For plan years beginning in 2014, health plans may not impose a waiting period of longer than 90 days for newly-eligible full-time employees. Because coverage must be effective no later than the employee’s 91st day of employment, a plan provision which permits a full- time employee to become a participant in the health plan on the first day of the month after
90 days of employment will not comply.

3. Automatic Enrollment
Employers with more than 200 full-time employees will be required to automatically enroll newly-eligible individuals and reenroll existing employees. No regulations have been issued regarding this requirement. The requirement will not take effect until after the regulations are issued.

4. Cap on Maximum Out-of-Pocket Limits
For plan years beginning in 2014, the maximum out-of-pocket limits for all nongrandfathered plans cannot exceed the maximum out-of-pocket limits for high deductible health plans offered in connection with an HSA. These limits during 2014 will be $6,350 for single coverage and $12,700 for two-person or family coverage.

School Security Protocols Evolving

Following a recent in district security meeting with our local Chief of Police and the Special Security Liaison for the schools, I was struck by the ever changing and evolving protocols related to security in our schools.  In particular, a new movement afoot Nationally for "Lock Down" procedures that includes "Fighting Back!"  Being a former military man this resonates with me and is more in line with my beliefs as I feel our duty and responsibility to our children goes beyond simply hiding with them and waiting for the threat will pass.

As an administrator I understand and support the need for planning, drilling and keeping order during any crisis.  In most cases the established protocols are effective and should continue be carried out as noted in the following article that appeared in 2007:

Back to Lockdown Basics

Schools have been using lockdown protocols with success for the past 30 to 40 years. Acts of workplace violence, emergency room shootings, K-12 and higher education shooting rampages demonstrate the need for our campuses to have this lifesaving capability.

by Michael Dorn - Also by this author

July 01, 2007 | Comments (0) | Post a comment

A public high school in the Asheville, N.C., region had just conducted a lockdown drill in the early 1970s when the need arose to implement an actual emergency lockdown. A mentally ill individual began shooting beverage cans he had placed on the trunk of a car and had to be shot and killed by local police in the front school parking lot. Though clearly a bad situation, lockdown procedures protected students and staff from the dangerous intruder.

While this traditional type of Lock down works for certain situations, many believe it leaves our students, faculty and staff in a defenseless position, which I agree. Fighting back may be the difference between surviving or simply becoming another statistic.  This new protocol is labeled the ALICE method:   ALICE is an acronym for Alert, Lock down, Inform, Counter, and Evacuate.

Marietta Police Department Patrolman, Patrick Gragan recently gave the same information to their local high school stating, "The most important part about Alice is the E, evacuate, put distance between you and the problem," explains Gragan.

Typical classroom in lockdown mode

Inform does away with code words but more so is about telling everyone what is happening at all times and where the shooter is.

Counter is about distracting and actively stopping the shooter.

When looking back at tragic events such as Columbine, we see that the lock down procedures actually lead to higher casualty/death rates as the procedures yielded defenseless unmovable targets.

PTO Risk and Insurance

School Business Administrator's fulfill many roles associated with titles that have entered the mainstream in the private sector such as, Chief Financial Officer (CFO), Chief Operations Officer (COO), and Chief Information Officer (CIO).  In addition to these functions a growing area of our responsibility is that of risk avoidance working in partnership with a district Risk Manager to protect against potential liability ranging from use of facilities to storm preparation and disaster recovery.

One particular aspect of this growing concern is related to PTO/PTA activities involving our schools and support groups.  Perhaps the biggest fallacy is that of insurance coverage afforded to PTO/PTA's through the school district.  While Some PTO/PTAs are protected under the school's blanket policy, that is not the case for many activities.  According to the Risk Manager the first line of defense is to have specific events and actions reviewed by the district and in fact approved by the Board of Education in the minutes of a regular meeting.  This recognizes the activity as a "Board Sponsored Event" and minimizes attempts by the carrier to disallow or challenge afforded levels of coverage consistent with the policy.

Very few School Districts in the country provide coverage for PTO activities. In fact, it is a well known and proven method of loss control for the School District to require all groups using School District facilities carry at least $1,000,000 of General Liability and name the School District on the PTO policy as an Additional Insured. Of the few School Districts which do actually insure some PTO events, it is only with prior approval for a specific event. Also, the School District coverage will not extend to any PTO activities off campus.

 

Keep in mind that of the more than 15,000 public school districts, less than 5% provide insurance coverage for PTO activities and then only over and above a very large deductible such as $500,000 or $1,000,000 which the School District, as a municipality, can afford to pay and which the PTO cannot. (source: RV Nuccio & Associates, Inc.)

That said, some events such as those serving or providing alcohol are prohibited by Board policy and place individuals within the PTO/PTA organization at risk of personal assets including their home.  For that reason it is recommended that PTO/PTA secure direct coverage for specific events called, "Event Insurance" that provide coverage to include 'Liquor Liability'.

A recent policy obtained by our High School PTO for such an event, "Dine Around" dinner fund raiser afforded that group General Aggregate Insurance in the amount of $3 million for only $93.75.  As a BA, I call that a serious return on investment (ROI).

(QPA) Credits at NJSBA Conference

Just announced by School Boards - "We are pleased to announce that several programs taking place at Workshop 2013 have been approved for continuing education credit for Qualified Purchasing Agents (QPA). Please make note of the following approved for QPA credit."

• Best Practices in Existing Building and Operation Maintenance, Wednesday, Oct. 23, 9:00 - 10:00 a.m.
• Create Funding through School Bus Ads, Wednesday, Oct. 23, 9:30 - 10:30 a.m.
• Costing Out the Labor Agreement, Tuesday, Oct. 22, 10:00 - 11:30 a.m.
• Costing Out the Labor Agreement, Wednesday, Oct. 23, 2:00 - 3:30 p.m.
• Analyzing Salary Guides, Tuesday, Oct. 22, 2:30 - 4:00 p.m.
• Analyzing Salary Guides, Wednesday, Oct. 23, 2:00 - 3:30 p.m.
• Kindergarten Wrap Around Fee-Based Program, Thursday, Oct. 24, 11:00 a.m. - 12:00 p.m.
• Money in the Trash, Wednesday, Oct. 23, 4:00 - 5:00 p.m.

If attending these sessions, please get scanned in so that we can provide proof of attendance to the Certification Unit of the Department of Community Affairs.
For more information on Workshop, visit www.njsba.org/workshop.

The Purpose of EthicsTraining

The following article was recently published by the Alternative Press, a local paper serving out community following a recent Board of Education Meeting.  

 

Bob Faszczewskihttp://thealternativepress.com/

Friday, September 20, 2013 • 4:01pm

Content Options

SUMMIT, NJ - When does a parent cease being an advocate for his or her child?  The answer may be when they assume responsibility for policies affecting all of the school children in a community.  The assumption of responsibility for policies affecting the entire school community comes when a citizen becomes a member of the board of education.  (see the above link to read more on this article)

While this training is mandatory in New Jersey, it goes beyond explaining critical issues such as confidentiality, conflicts, chain-of-command, claims and commitments such as attendance at Regular Board Meetings; it provides clarity and awareness for Administrators and Boards of Education to hold their members accountable and enforce appropriate behavior.

In New Jersey, school board  members must undergo the training sessions but they may choose to do them privately or in public.  Failure to comply can result in removal from the board. 

Removal may also happen if a Board Member misses three or more Regular meetings in a twelve month period according to attorney Anthony P. Sciarrillo of the Westfield firm of Lindabury, McCormick, Estabrook & Cooper.  This action must come from the School Ethics Commission.  Interestingly this is not the case for missing Workshop meetings.

The School Ethics Commission is a nine-member body with the power to issue advisory opinions, receive complaints, receive and retain disclosure statements, conduct investigations, hold hearings, and compel the attendance of witnesses and the production of documents as it may deem necessary to enforce the School Ethics Act.   School Ethics Commission Members are appointed by and serve at the pleasure of the Governor.  The Commission is established in the New Jersey Department of Education.

The attorney noted that certain board matters, such as negotiations, personnel, contracts and litigation are protected from public disclosure while they are under discussion and the board must hold such discussions in private sessions in order to protect the confidentiality of parties involved.  He said board members are bound to protect this confidentiality even after they leave a school body.

What's So Affordable about the Affordable Care Act?

The real irony here is the word "Affordable" as it certainly does not take into account the facts surrounding the impact on small businesses over 50 employees and certain industries such as public education, which in many states like New Jersey is funded by the taxpayer. 

FAQ on Notice of Coverage Options

Q: Can an employer be fined for failing to provide employees with notice about the Affordable Care Act's new Health Insurance Marketplace?

A: No. If your company is covered by the Fair Labor Standards Act, it should provide a written notice to its employees about the Health Insurance Marketplace by October 1, 2013, but there is no fine or penalty under the law for failing to provide the notice.

The notice should inform employees:  About the Health Insurance Marketplace; that, depending on their income and what coverage may be offered by the employer, they may be able to get lower cost private insurance in the Marketplace; and that if they buy insurance through the Marketplace, they may lose the employer contribution (if any) to their health benefits
The U.S. Department of Labor has two model notices to help employers comply. There is one model for employers who do not offer a health plan and another model for employers who offer a health plan or some or all employees:

THIS GUIDANCE IS TAKEN FROM THE U.S. DEPARTMENT OF LABOR'S WEBSITE:
http://www.dol.gov/ebsa/faqs/faq-noticeofcoverageoptions.html

• Model Notice for employers who offer a health plan to some or all employees
• Model Notice for employers who do not offer a health plan

In many instances, the cause and effect in education will result in reduced hours for substitutes and aides along with added administrative and clerical time on implementation, monitoring and compliance.

Eligibility is triggered at 30 Hours or more per week

or an avg. 130 Hours a month;

 for a minimum of 120 days in a year

 

Add to this very little clear information with a myriad of links, time lines, scenarios and unanswered questions that are left to interpretation with a healthy dose of threats and fines...

Below is an article that appeared in the Suffolk News Hearld:

Schools weigh Affordable Care Act cost

suffolknewsherald.com/2013/07/02/schools-weigh-affordable-care-act-cost/

Annual fees approaching $180,000 and the possibility of penalties is the cost of the new health care law on Suffolk Public Schools, its finance director says.

Major Change in Local Code Review Signatures

NJASBO has been lobbying for elimination of duplicative and cumbersome steps in the paperwork side of school facilities projects for the past five years since the inception of RODS I in 2008.  Our work through the RODS committee has streamlined the application and filing process that improved life for all districts.  Now another welcomed break through outlined in the notice below is the newest step forward to aid in stream lining the process to act on certain projects without the unnecessary pre-approval from DCA:

From: Codes and Standards Information [mailto:cstandards@dca.state.nj.us]
Sent: Friday, September 06, 2013 12:19 PM
To: Codes and Standards Information
Subject: Change in Process for Review of Plans for Projects as Schools

 

Dear Construction Officials,

 

In the past, only projects involving "educational adequacy" had to be submitted first to the Department of Education (DOE) for review and then to DCA for plan review or for approval for local review.  These were projects of some consequence, those impacting instructional space. Intervening changes, significantly the passage of the Educational Facilities Construction and Financing Act, caused all projects undertaken at public schools to be reviewed by DOE and then forwarded to DCA for approval for local review.  This includes the replacement of boilers, roofing projects, etc.   There is no compelling reason to require that boards of education continue to come to DCA for permission to take these plans to the local construction official for review.   Accordingly, attached please find a letter stating that local enforcing agencies may perform plan review for school projects (other than new construction or SDA projects) without the prior written approval of the DCA.  These projects will be treated the same as other projects subject to local review, thus eliminating one small, bureaucratic step in the process.  This streamlining was undertaken with the cooperation of staff at the Department of Education.  The Department of Education will be returning approved plans to the design professionals for submission to the local enforcing agency.

 

Corrections to the language of the rules (NJAC 5:23-3.11A) and of Bulletin 00-3 will follow in due course.  The Act supports review by appropriately classified municipal code officials.  (See NJSA 52:27D-130.)

Validating Payroll to Budget



Staffing is one just one of many critical tasks performed throughout the year at every district with a significant upsurge in the summer.  There is perhaps no greater impact on budget than the outcomes of these staffing decisions and as such require effective communication and coordination between the Superintendent and or Director of Human Resources and the Business Administrator.  This is necessary to gauge the effects on budget from the hiring decisions by validating payroll to budget. 

Sample Excerpt Comparison from Excel Spreadsheet consisting of over 60 positions

To ignore this crucial analysis puts the budget at risk; opening the school year blind only to find out in the months to come whether you're under or over budget.  Remember, salary and benefits command upwards of 70% of all budgets.

Many people outside of Education see summer to be a time slow to no activity for schools, they could not be more wrong!  Summer comes with a plethora of challenges in a compressed time frame for all within central office requiring such tasks as curriculum revision, staffing, grants management, training, professional development and many other functions.  While all offices remain busy, it is the Business Office that must oversee and undertake a variety of assignments that are critical to the successful operations of a district that begin in June with end of year purchasing, budget close out ("Roll-overs" vs. Accounts Payables), project management and construction, facility cleaning and preparations, transportation, and my favorite, the Comprehensive Annual Financial Report... aka. the Audit.  All of this in addition to the regular day to day responsibilities of meetings, correspondence, phones and email, despite the fact that on any given day someone is on vacation and that someone is the one needed to resolve or accomplish one of those tasks.

If it sounds like a lot to juggle your right; however, that is what BA's do and they do it well with a lot of help from their staff, other district administrators, colleagues and a strong support system through their professional associations.  In New Jersey that group is the New Jersey Association of School Business Officials (NJASBO) currently led by John Donahue, Executive Director and Derek Jess, Immediate Past President and Tom Fanuka, President.

While every aspect of summer operations is important and all require detailed analysis, oversight and leadership - the focus of this post is on validating payroll to budget.  It is as simple as keeping track of the employee changes in real time as they happen instead of waiting months to see where you actually are.  While simple, it requires coordination of data and input from personnel in payroll, benefits and human resources as well as direction from key administrative personnel.  Many of us begin this task at budget time somewhere between October and December with November's payroll a typical starting point.  The analysis includes comparison of salaries budgeted (encumbered) vs. actual (payroll) employees to determine true availability of cash balance in each of the salary account lines.  This analysis carries through each program and function of the district to include leave replacements, resignations, non-renewals, retirements and new programs/additions.  Keep in mind, the budget for September 1 to pay all employees was finalized back in March/April almost 5 months prior.  A lot can and does change in personnel during this time and the larger your district... the larger your budget and the opportunity for major variances.

Often hiring decisions net new employees based on upward changes in enrollments or new program demands that result in new positions not even in the budget which can be anywhere from $70,000 to $90,000 on average including benefits that must be covered from other line items or absorbed by other personnel gains such as "breakage" resulting from a senior person leaving and a lesser experienced person being hired.  Keep in mind this must all be accomplished within the current 2% CAP.

Bottom line..... Don't Wait to find out your short!  Plan ahead by working with your team to monitor your true position prior to September.  Often this means crunching numbers before they are in the system or your departments are ready for this task; however, a better estimate allows for a more informed position in other decisions related to budgetary resource availability.