Regulatory Issues Regarding Employee Benefits
Posted on: April 20, 2020 by iSure
While Congress continues to address health care reform and other issues impacting employers, states and municipalities are focusing on their own initiatives. The Trump administration is proactive with its plans to develop an increasingly business-friendly environment. One of the goals is to reduce current regulations impacting employers. In efforts to increase worker protections, state and local governments are responding by bringing in a new wave of employer-facing regulations. There are common regulatory issues gaining traction with states and municipalities across the U.S. With the tension and/or evolution of employee related issues, employee benefits solutions are more important than ever.
The federal Consumer Financial Protection Bureau seeks to implement disclosure rules for payroll cards next year, however, states continue to introduce their own rules governing the use of the cards by employers.
Certain new laws permit the use of payroll cards, however the employees cannot not be charged an activation fee, and the card account must allow the employee to make at least one withdrawal per pay period for any amount up to and including the full account balance (free of charge).
Those utilizing this method are also required to comply with certain other laws and regulations, including guidance from the federal Consumer Financial Protection Bureau to implement this type of employee benefits program.
Multiple Employer Plans
Vermont has passed legislation for the first multiple employer plan design among state plans, permitting employer participation and higher contribution limits than IRA programs allow. Some municipalities are following, working on legislation to establish retirement savings programs. Vermont’s plan could be used as a moderate template for state-run options going forward. Language in the legislation highlights the voluntary nature of the program and encourages cohesion with private sector retirement plan providers. With this program, pre-tax contributions will only come from employees, but lawmakers’ crafted language leaves open the possibility for employer contributions in the future.
State-Sponsored Retirement Plans
Some states are on track for individual retirement plans. Some programs will operate in such a way that employers who do not sponsor a qualified retirement plan will be forced to enroll employees in the program, and employees will be required to contribute 5% of their compensation to a Roth IRA account. However, employees will be able to opt-out, or choose a different savings rate. A common concern is just how well these programs have been challenged. Employers who already sponsor a retirement plan, such as a 401(k) plan, will need to file a Certificate of Exemption.
Several states have introduced single-payer proposals in their current legislative session, but many have already hit obstacles. Unfortunately for progressives, future efforts are likely to fail as well. While states have been innovators with regards to many policies, fiscal issues and regulatory limitations will most likely preclude states from pursuing sweeping health reform.
Health Care Reform
Some states have put action in place to stabilize exchanges and maintain elements of the Affordable Care Act if a repeal occured, while other states are seeking flexibility on specific ACA mandates. Many states are taking advantage of the ACA’s “state innovation waivers,” 14 of which have enacted healthcare laws addressing these waivers.
Most states now have enacted paid sick leave laws with a few passing paid family leave laws regarding employee payroll deductions, which may require more complex coordination with the Federal Family and Medical Leave Act or other paid time off.
Limiting Salary History Inquiries
Legislation limiting salary history inquiries until a certain stage of the recruiting process has been a prominent phenomenon among states. This prohibits the use of salary information in employment decisions. Many states have similar bills in the works.
While employers across the country must comply with the Equal Pay Act enforced by the Equal Employment Opportunity Commission, nearly every state has equity laws and many are now stiffening their statutes.
Several states recently passed legislation to expand their existing equal pay laws to increase employer obligations and penalties, and change the way discrimination claims are legally analyzed. All of these regulations are affecting employee benefits in today’s market, so get in touch with your trusted insurance advisor to ensure you’re not exposing your business to legal trouble.
About iSure Insurance Brokers
After serving leaders in the Greater Miami market for more than three decades, iSure Insurance Brokers has become the provider of choice for discerning commercial clients and individuals alike. Because no two insurance programs are or should be alike, you can be sure that iSure will craft a comprehensive approach to protection that is as unique as you are. We welcome the opportunity to protect what you have worked so hard to build. Please contact us at (855) 221-3406 to learn more about what we can offer you.
Posted in: Employee Benefits