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Are You Really On Top of All of the Affordable Care Act Penalties?

February 4th, 2015 by Member Contributor

The latest discussions around the looming and potential penalties employers face under the Affordable Care Act (ACA), more commonly known as Obamacare, are no longer just the “pay or play” penalties for employers who either do not offer insurance or offer inadequate or unaffordable insurance to their employees, but rather other penalties that can make the “pay or play” penalties look insignificant.

This is not to say the “pay or play” penalties are a thing of the past; they are still in place and businesses will start being exposed to them in 2015.  These looming penalties are associated with businesses who reimburse employees for individual health insurance, regardless of whether the reimbursement is done pre-tax or post-tax.

The penalty for employers currently doing this—$36,500 per employee per year for employers large and small. That’s a far cry from the $2,000 “no insurance penalty” or the $3,000 “unaffordability penalty” that only large employers thought they were facing for their employees starting in 2015.

Before understanding these penalties, let’s first step back and understand how we got here. Revenue Ruling 61-146 along with Code Section 106 specifically laid the groundwork for employers to be able to pay individual insurance premiums directly to the individual’s insurance company or to reimburse the individual for those premiums upon proof of payment. These reimbursements were excluded from the employee’s gross income under Code Section 106. This type of payment plan is referred to as an Employer Payment Plan (EPP).

The market reforms put in place under the ACA have two specific requirements that need to be mentioned. They prevent group health insurance from placing annual limits on certain benefits, and they require non-grandfathered plans to provide certain preventative care without cost-sharing requirements.

Notice 2013-54 issued on September 13, 2013, detailed penalties for plans not abiding by the market reforms. It also specified that if employers were providing EPPs pre-tax, they are considered to be providing group coverage and will then fail the market reforms, as the amount of the individual coverage would be considered an annual limit, which under the market reforms is not allowed.

However, it also stated that employers who were utilizing these EPPs and providing these payments post-tax were not part of this notice. Therefore, it was advised that employers start taxing these EPPs, rather than offering them pre-tax, in order to avoid the costly market reform rules.

Fast forward to November 6, 2014, in which the DOL in conjunction with the IRS and Treasury put out a short FAQ (frequently asked questions) which specifically stated that employers reimbursing employees for individual insurance premiums, whether that reimbursement is done pre-tax or post-tax, will be subject to the costly $100-per-day excise tax under Code Section 4980D, per person. Keep in mind these excise taxes are considered penalties, which are non-deductible when it comes to filing income tax returns. The date these excise taxes kicked in for this reimbursement was January 1, 2014.

The problem gets worse when it comes to 2 percent S corporation shareholders. These shareholders, who had individual health insurance plans, are required to have the company reimburse them for their premiums paid personally in order to take the self-employed health insurance deduction on the front page of their individual tax return per Notice 2008-1.

The November 6 guidance, although only issued in an FAQ, states that by reimbursing these individual premiums, the S corporation will be subjecting itself to the $100-per-day penalty per shareholder who was reimbursed. Without this reimbursement from the S corporation, the shareholder loses a valuable deduction on page one of their individual tax return. However, it should be noted that the market reforms do not apply to plans with “less than two participants.”

Obviously, the tax rules and the market reforms are in conflict with each other. For now, businesses need to weigh the potential benefits of pre-taxing or post-taxing individual coverage or subjecting themselves to a penalty of $36,500 per employee per year. The recommendation is to stop offering reimbursement of insurance premiums for individual coverage, regardless if that reimbursement is done pre-tax or post-tax.

However, there is nothing to stop a business from giving employees bonuses for whatever dollar amount they choose. It’s of the utmost importance, however, that businesses do NOT label this bonus as an insurance reimbursement, as this will then lead to the penalty. Businesses need to keep in mind the potential impact bonuses have on employee’s overtime rates as well as employee expectations should the post-tax bonuses get too costly for the business once they’ve started.

The rules surrounding the Affordable Care Act are continually changing. It’s essential that businesses, large and small, keep up with these changes to make sure they do not inadvertently get caught on the wrong side of the penalties.

There are many questions surrounding health care reform, insurance costs and the Marketplace. Visit www.eidebailly.com/healthcarereform to learn more.

Women Connect Program Kicks Off With Sell-Out Crowd, Phenomenal Speaker

January 30th, 2015 by Danielle Teigen

WCMore than 500 women packed the Hilton Garden Inn Fargo on January 27 for a chance to be inspired by author and businesswoman Lynette Lewis, the author of “Climbing the Ladder in Stilettos.” Lewis served as the keynote speaker for the new program’s inaugural session, and she did it with panache, humor and humility.

Her message about dreams and the power of connection resonated with attendees, who left with Lewis’s book, new connections and motivation to pursue what they most want to achieve. Lewis shared her 1-1-1 strategy, which encourages taking one step once a week toward one dream, a principle busy women who balance work, home life and community involvement can relate to.

Lewis also worked in reflection and connection moments throughout her presentation to ensure attendees would leave with well-defined steps as well as individuals to help them move forward in those steps.

“Your dream is someone else’s answer,” Lewis said. “If you don’t move forward on your dreams, that person will never realize theirs.”

Intertwined in her presentation were heartfelt, touching stories about her own trials of re-evaluating her life plans in college to counseling to marrying later in life to dealing with the death of a beloved stepson to adopting twin girls.

“Don’t ever quit dreaming,” she said. “Dreams are what tell our hearts that we’re living, not dying.”

A social after the event offered attendees the opportunity to continue networking and discussing the content. Lewis also signed copies of her book for attendees.

Attendees also donated more than 100 pairs of shoes to Dress For Success Red River Valley, a local nonprofit that promotes the economic independence of disadvantaged women by providing professional attire, a network of support and career development tools to succeed in work and life. Dress for Success Red River Valley was a nonprofit partner for last year’s Leadership Fargo Moorhead West Fargo program, which helped the organization develop a professional women’s group.

The next Women Connect session will be held on February 24.

Check out all the great observations from the event by searching #FMWFWC, and be sure to join the FMWF Chamber Women Connect Facebook group to continue the conversation. Photos are also available online.


Chamber Members Offer Flowers, Candy and Cookies to Celebrate Loved Ones

January 26th, 2015 by Danielle Teigen

In 2013, Americans spent $1.6 billion on candy and $1.9 billion on flowers during the month of February to show their affection for loved ones, according to a CNN article. That same year, an estimated 224 million roses were grown in preparation for Valentine’s Day.

If you’re planning to celebrate the holiday this year, here are a few Chamber members that could help you with your candy, baked good or flower needs.

This Fargo favorite offers hearth-baked breads, rolls and other baked goods made every day from scratch using the best all-natural ingredients that are free from preservatives.

Carol Widman’s Candy Co
Four generations of candy makers have been perfecting Widman recipes since 1885, including the famous Chippers.

Cash Wise Flower Shoppe – Fargo and Moorhead
The technicians at Cash Wise can put together a variety of floral arrangements for many special occasions.

Country Greenery – Fargo and Moorhead
Country Greenery offers a large inventory of fresh flowers, interior plant leasing and maintenance, gifts and home accessories as well as gourmet fruit baskets and balloon bouquets.

Dalbol Flowers Gifts
More than 25 years, this family owned and operated shop has been spreading happiness throughout the community, one floral arrangement at a time.

Fantasies in Frosting LLC
While this bakery specializes in wedding cakes, bars, cookies, pies and desserts are available to order.

Great Harvest Bread Co
This neighborhood bakery focuses on making breads, muffins, cookies and scones from scratch each day. Baked goods are made with 100% whole wheat flour that is milled daily.

Paradise Donuts
For a new treat, try donuts made by this locally owned franchise or check out the rest of the baked goods available.

Prairie Petals
Looking for a creative, personal, affordable and environmentally friendly arrangement? Prairie Petals is the place for you; all items are locally grown and gathered.

Quality Bakery
This wholesale and retail bakery has been a staple in the community for more than 90 years, offering cakes, cookies, pops, buns, pies, breads and donuts.

Sandy’s Donuts and Coffee Shop – West Fargo and Downtown Fargo
This local eatery has been serving up donuts, baked goods, cakes and cookies since 1983. Items are also available by delivery, and Sandy’s now offers its treats in two locations.

Shotwell Floral Greenhouse
One of the oldest florists in the community, Shotwell provides fresh floral arrangements and gift baskets to people throughout the metro and surrounding communities.

Sweet Dreams Confections
If you’re looking for an old-fashioned treat, Sweet Dreams Confections is the place to check out. The shop offers old-fashioned soda pops and retro candies as well as homemade fudge, chocolates and other gourmet foods.

Public Relations Committee Chair Profile: Kayla Beehler, BioLife Plasma Services

January 26th, 2015 by Danielle Teigen

Kayla BeehlerKayla Beehler, a senior regional marketing representative for BioLife Plasma Services took over as the chair of the committee in September 2014.

How long have you been involved with the committee and program? I have been involved with the Ambassador program since 2010, and I love it!

What have you enjoyed most about working with the public relations ambassadors? One of the most enjoyable things is the group of individuals that we have on our committee and the commitment they all make to the program. One of the highlights for us as a whole is getting to meet the leaders responsible for our growing business community as well as the fun aspect of getting to celebrate the major milestones for all of the successful businesses in our community.

What is one thing you would like other people to know about the public relations ambassadors? The Public Relations Ambassadors are a fun and professional group of volunteers from the business community in the Fargo-Moorhead area. They simply become another family to you and another resource for anything you can think of. I highly encourage anyone that has a growing interest in the business community to apply for our committee and join in our fun!

Military Matters: Committee to Help WDAY Organize Honor Flights

January 26th, 2015 by Danielle Teigen

The Military Affairs committee is excited to help WDAY organize more Honor Flights for area veterans by supporting its Adopt a Vet Project. Schools, service clubs, businesses and individuals are invited to either directly donate to or run a specific fundraiser that will generate dollars for an Honor Flight.

Fundraising Coordinator Lance Akers explained to the committee that the next Honor Flights will focus on the Korean and Vietnam War veterans.

The project has two objectives:

1. Raise money for another Honor Flight.

2. Help spread the fundraising effort throughout the communities from which veterans have applied.

Donations or funds in the amount of $750 are needed to adopt a veteran. Fundraising information can be provided to the project so sponsors can help promote the effort. Any sponsoring organization or individual may donate “In honor of ” or “In memory of,” which will be incorporated into the Adopt a Vet list of participants online.

“The Chamber, its Military Affairs committee and the Honor Star Program is looking forward to supporting this effort because we believe it is so important for our veterans to see memorials built in their honor,” said Chamber President and CEO Craig Whitney.

Learn more about the project.

Gust Promoted to New Position

January 26th, 2015 by Danielle Teigen

Gust, SamanthaLast month, Samantha Gust promoted to Professional Development Coordinator after serving as program coordinator for Leadership Fargo Moorhead West Fargo since April 2014.She will now be responsible for the leadership program as well as the Young Professionals Network.

She earned a bachelor’s degree in sociology with a minor in psychology from the University of North Dakota. She previously worked for the Community Violence Intervention Center in Grand Forks as the community and evaluation specialist.

Gust will also co-manage the Young Entrepreneurs Academy (YEA!).

Leadership Class Learns About Economic Development, City Planning

January 26th, 2015 by Danielle Teigen

Fourth fastest-growing metro in the country. One of the best small cities for business and careers. Number two best metro in the nation. Best performing small city in the country.mayors

Those are just a few of the lists the FMWF metro has made over the past 12 months. It’s no doubt the metro is doing something right in terms of economic development and city planning, so it was important for the Leadership class to have an opportunity to hear how it all comes together.

The day started off at the annual State of the Cities address where the class heard from the mayors of Fargo, Moorhead, West Fargo and Dilworth. The class also had the opportunity to meet with the mayors in a more informal setting where they got to ask questions ranging in topics from leadership styles to getting involved in local government to the impacts of infrastructure.

futuresTo help the class understand how leaders plan for the future of our region, Jodi Bruns, North Dakota State University Extension Services, had the class participate in The Futures Game. This interactive game based upon different scenarios, provided an opportunity to make important decisions about their hypothetical communities over the course of 20 years. Seeing how one choice made 10 years ago can affect everything from the economy to job growth was an eye-opening experience.

The day concluded with the class discovering how the Bakken Oil Reserves and lignite-generated energy are impacting business located in Fargo, Moorhead and West Fargo. Along with Community Builders and members of The Chamber’s Board of Directors, the class received a crash course in the production of coal and oil in western North Dakota, followed by a panel discussion focused on how the energy boom is affecting local businesses in a major way.

Members from the Lignite Energy Council, Bakken Backers, TrueNorth Steel and Ulteig shared firsthand knowledge and experiences on how the region is benefiting.

Thank you to Microsoft’s helpful and dedicated staff for hosting the January LFMWF session.

Nominate Students For Young Entrepreneur’s Academy

January 26th, 2015 by Danielle Teigen

We are looking for energetic students interested in starting their OWN real company! No need to have a business in mind; developing an idea is part of the fun with the Young Entrepreneurs Academy (YEA!).

YEA! is a nine-month program that teaches middle and high school students how to start and run their own businesses. As business leaders, you are encouraged to nominate creative, motivated students who pursue their goals with tenacity. Nominated students should have a strong work ethic and should demonstrate high levels of effort on a consistent basis.

A limited number of scholarships are available. Please be aware that the nomination of a student does not guarantee a scholarship. Nominated students will receive additional information about the Young Entrepreneurs Academy and a personal invitation to the YEA! informational session. All are welcome to apply and attend the informational sessions.

Please contact Sam at sgust@fmwfchamber.com or 218.359.0529 to nominate or for more information.

Student Success Story
Conner Christian was only 13 years old when he started the YEA! program, through which he created the Rubber Boot Buddy. This metal device attaches to the bed of any truck and holds a pair of boots in place.

The Rubber Boot Buddy is being sold in many hardware locations across Texas and the business is expanding. The ABC TV show, “Shark Tank,” asked Christian to audition for the show in the fall of 2013. You can learn more about his business at www.rubberbootbuddy.com.

Generational Marketing: How Age Impacts Your Approach

January 26th, 2015 by Member Contributor

Article by Jodi_MG_9073_FCJodi Duncan, President of Flint Communications, Inc.

When you are planning your marketing efforts are you thinking about how to profile your audience by attitudes and behaviors?

Have you thought about where, when and how to reach them? Is there a way to look at how each generation consumes media and influences their purchasing decisions?

How can you alter strategies to align with attributes of different generations? Should you do that? How do you do that?

What emerging technologies can help you leverage generational insights to get more out of your marketing dollars?

Think about this:

  • Baby Boomers make smartphones a priority and are the leading users of online dating. Boomers are expected to retire en masse in 2015.
  • Gen Xers research products in excess before making a purchase using Google, Yahoo, Facebook, Twitter, Yelp, Amazon.com, Angie’s List, Epinions, CNET as part of research tools seeking reviews. They have a strong mistrust in the government and corporate America.
  • Gen Y distrusts traditional advertising and boast $200 billion a year in spending power. They also enjoy trends like backpacking internationally and purchasing the latest tech gadgets.

Do you see how this information can be valuable? Knowing your customer is key to creating good and effective marketing.

Because we know Baby Boomers are attached to their smartphones, we can determine how and when to incorporate a mobile campaign. And as importantly, we can generate messages that cater to different audiences. You can and should leverage as much information as you can glean from your own database and use that information to your advantage. Many companies don’t. Many companies simply don’t know where to start!

If marketing is about engaging with your customers on an emotional level, the better you define that, the better job you can do. Use generational marketing as a foundation for your audience profiles. It’s a great place to start with information you know or can find through a little research. Then take those profiles and build on them with data you have from your own customer information and input.

Once you’ve effectively profiled your audiences, you can start to determine key messages and what channels will be the most logical and cost – effective ways to reach them. Data is the key to improving marketing accuracy and effectiveness. Compiling all of this information PRIOR to launching your campaign is the most impactful but it is much easier said than done!

Peterson to Lead Chamber Advocacy Efforts

January 26th, 2015 by Danielle Teigen

Last month, Elly Peterson was promoted to Government Affairs and Advocacy Coordinator. Elly Peterson

She has worked for The Chamber since January 2013, first as the public affairs intern and most recently as program coordinator for the Young Professionals Network.

Peterson earned a bachelor’s degree in health communications with a minor in public relations from North Dakota State University.

Peterson will also co-manage the Young Entrepreneurs Academy (YEA!).

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