Why Don’t Businesses Embrace Universal Health Care?

Yesterday the California Senate passed SB 562, The Healthy California Act. This bill would create the Healthy California Program to provide comprehensive universal single-payer health care coverage and a healthcare cost control system for the benefit of all residents of the state of California. It would be funded by a combination of employer and employee payroll taxes. Of the 33 developed nations in the world 32 of them have what is known as universal healthcare. The lone exception to this, of course, is the United States. Universal healthcare, however is not defined as government only healthcare, but can include both public and private insurance and medical providers. So if this bill actually passes the assembly and the financial aspects are resolved it would put California on the list of countries with universal healthcare. This would be a very unique situation. One of our states has universal health care but the country does not. But I think the bigger question for this blog is: “why don’t businesses embrace universal health care?”

And I’m not the only one questioning this. Warren Buffett has stated that other countries have gained a five or six point advantage over the United States because of healthcare spending by employers. The National Federation of Independent Business conducted a survey of small business priorities and problems and found that the cost of health insurance is the most severe problem facing American small business today. In fact 52% of small business owners identified it as a critical issue. The Bureau of Labor Statistics (BLS) puts the cost of healthcare in 2016 for employers with more than 500 workers at $4.28 per hour or 9% of the total compensation costs. For employers with 100 to 499 employees the insurance costs are $2.77 per hour worked or 8.5% of total compensation. Now some will say that this cost is due to the Affordable Care Act. But the increase under the Affordable Care Act for employers with more than 500 employees as compared with the cost in 2006 was 1%. For those employers with under 500 employees it was 2.5%. However this statistic does not reflect that many of the employers with under 500 employees did not offer health insurance in 2006. So why do we continue to put this burden on employers and why do they continue to fight to keep it?

Using the 2006 figures so that we do not factor in Obama care, if I were to propose an 8% tax on all employers with over 500 employees there would be riots in the streets. Yet that’s what employers were paying for healthcare. So if we were to take this 8% as a payment from each employer and add in the cost the employee paid could this be the beginning of universal healthcare for the United States. Think about it for a minute. Employers would no longer need to contact insurance companies, negotiate costs, and have someone in the company to oversee the program (an additional cost of a salary) nor have someone in Accounts Payable pay the bill. Would it have to be a federal program? Most countries that have universal healthcare have a combination of national and municipalities handling the programs. The tax would be on the federal level but the healthcare itself is provided on the local level since those are the ones that usually understand what the community requirements are.

Would this help us become more competitive in the world?  Would it help employers become more financially solvent?  Would it get health care for all the citizens of the United States?  The answers to those questions, of course, remained unanswered as of today.  But unless we begin to look into shifting the costs of health care away from employers we will never know.

 

What do you think?  Take our poll [polldaddy poll=9763126] or leave a comment.

Thinking About Getting Your CPP or FPC?

I get a lot of questions on whether or not a payroll professional should get certified and if they should then which certification should they try for first. Should they go right into the CPP exam? Or start off with the FPC and work up to the CPP? Many payroll professionals are even confused as to which certification they could qualify for. In their blog, Payroll News, Symmetry Software has done a very nice and quick comparison of the two certifications offered by the APA. If you are looking to certify but aren’t sure which test to try for, take time to check out the blog today.

Child Support Report is In–Payroll Doing a Great Job!

The Office of Child Support Enforcement (OCSE) has submitted its Annual Report to Congress FY 2015.  The report outlines its accomplishments and provides a status for the program. This fiscal year marked the 40th anniversary of the Child Support Program, which was established in 1975.  In total, $32.4 billion  in child support was collected in FY 2015.  Of this $24.3 billion or 75% was collected through income withholding from the employee’s paycheck.  Well done payroll professionals!

 

Our Latest White Paper–Year End Memo Makes Sense

Our new white paper is on the topic of sending out a year end memo to your employees.  This memo contains pertinent information that the employees need to know.  So this memo not only helps your employees but also cuts down on questions coming your way from those same employees.  We hope you find the information useful.

white-paper-year-end-memo-dec-2016

 

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Where does Payroll Belong?

This has been a question I have been asked ever since I began in payroll in 1977.  Does payroll report to human resources (personnel way back then) or to finance?  Where should the functionality and operations of payroll be housed? And it is not a questions with a simple answer.This age old question is the heart  of the APA’s next PayNewsChat on Thursday, December 8 at 3pm Eastern time. Dan Dycus, CPP, APA’s Senior Director of Education Services, and Jodi Parsons, CPP, Director of Payroll for the Kansas City Royals Baseball Club, will share their thoughts with you during this half-hour talk at #PayNews Chat. You can be of the conversation by using the chat portal Twubs or participate directly on Twitter by following along with #paynews and including the hashtag in your tweets.  Be a part of the conversation if you can.

Get Your Opinion Heard on Form W-2

The IRS is required, as part of its continuing effort to reduce paperwork (pause for giggles from Payroll Professionals) to invite the public to comment on either proposed or continuing information collections.  This is all part of the Paperwork Reduction Act of 1995.  This time around it is forms we all know and love.  The IRS is currently taking comments the following forms: W-2, W-2c, W-2A, W-2GU, W-2VI, W-3, W-3c, W-3cPR, W-3PR, and W-3SS.

They want to know how to improve the form so it is less burdensome. One area that immediately comes to mind is the lack of space for reporting the Additional Medicare Tax. In my opinion it would be better to have a separate box for the wages and the taxes. Just a reminder that box 9 is already taken as of 2017 so you can’t suggest using that box for anything.   You need to submit your comments directly to the IRS. They accept comments from any user so you don’t have to be an “accounting firm” or a “law firm”.  They want to hear from users. Written comments must be received on or before December 12, 2016 to be assured of consideration.  Written comments are directed to:

Tuawana Pinkston, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW, Washington, DC 20224

Requests for additional information or copies of the collection tools should be directed to Sara Covington, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW., Washington, DC 20224, or through the internet at Sara.L.Covington@irs.gov.

 

New Tax Fraud Scheme

You need to warn your fellow employees and customers that the IRS has announced a new tax fraud scheme.  This time it involved fraudulent Affordable Care Act notices being emailed to individual taxpayers. The IRS has received numerous reports around the country of scammers sending a fraudulent version of CP2000 notices for tax year 2015. Generally, the scam involves an email that includes the fake CP2000 as an attachment.

The CP2000 is a notice commonly mailed to taxpayers through the United States Postal Service. It is never sent as part of an email to taxpayers. The indicators are:

  • These notices are being sent electronically, even though the IRS does not initiate contact with taxpayers by email or through social media platforms;
  • The CP 2000 notices appear to be issued from an Austin, Texas, address;
  • The underreported issue is related to the Affordable Care Act (ACA) requesting information regarding 2014 coverage;
  • The payment voucher lists the letter number as 105C.
Open hand raised, Stop Fraud sign painted
Open hand raised, Stop Fraud sign painted

 

What’s In A Name? Should We Be Payroll?

Yesterday I attended the second day of the APA’s Virtual Congress.  I found the webinars highly informative and loved the interaction in the chat room.  One of the webinars I attended live was the “Developing a Successful Payroll Service Delivery and Staffing Model” presented by Robert Gerbin, SPHR, who is a Global HR and Payroll Operations Consultant for Ernst & Young, LLP.  While the webinar contained excellent information on staffing and maintaining a payroll department, Mr. Gerbin brought up a unique question that I have never encountered before. And what was this question?  Mainly should the Payroll Department be called “The Payroll Department”?  So why should be change our name?  According to Mr. Gerbin, since payroll departments do so much more than “process payroll” why not make the name reflect the actual work being done.  Payroll is both a tactical and a strategic business process.  There are tremendous responsibilities.  Failure to carry out these responsibilities correctly and with deadly accuracy can result in heavy fines, have a negative impact on operations, severely damage employee moral and result in negative publicity to the company.   The title proposed is an excellent one.  Payroll Services. We process payroll, handle general ledger interfaces and files, administer garnishments, interact with management, process benefits, and withhold, administer and report taxes. Why not let our name reflect that?  Just as when “personnel” became Human Resources we should become Payroll Services.

What do you think?

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Training Your Staff Part 2: Yes I have Tests!

Last week I blogged about and offered a white paper on how important it is to have a trained staff. I suggested that you create tests to help determine each staff member’s current level of payroll knowledge on such topics as wage and hour law, taxation and garnishments.  A whole lot of my followers requested the white paper and a whole lot of those asked me if I had any tests that I could supply to get started with.  Because there was such an abundance of requests for the testing I decided to make this white paper a 3-parter.  The first part you got last week on the basic info.  This week I am supplying two simple tests for wage and hour law.  These are culled from my student testing core questions that I use at Brandman University’s Practical Payroll Online Program and my certificate in Payroll Practice and Management offered through ed-2-go in over 100 universities nationwide.  I hope you find this week’s white paper very useful.  Next week’s white paper will be on testing for tax law both under IRS rules and state law.

Training Your Payroll Staff

There is more to running a payroll department than just producing X number of payroll checks every X number of weeks and passing them out.  Payroll not only has to meet the payday deadlines but each and every paycheck must be 100% correct.  Not just mathematically but it must also comply with every federal, state and local wage and hour or tax law that applies to it specifically.  Of course, we can’t forget that is must be process properly through the payroll system itself to ensure that all wages, taxes, employee benefits, other deductions such as garnishments, are reported and paid according to all the rules and regulations that govern them.  So how does a payroll department, whether it is a party of one or twenty, ensure that it is in compliance with this myriad of laws and regulations?  The answer to that question is actually fairly simple.  Make sure the staff is trained in every facet of their individual job duties and that the training is thorough and current.

But just saying out loud my staff needs training is not going to resolve the issue.  Questions arise as to how to set up a training program. These include:  where do I get this training, how do I pay for it with my limited budget and most critical of all, which staff member needs or should receive training on what subjects?  My white paper this week, that is available on my website, deals with  these exact questions and many more when it comes to staff training.  Please stop by and request your copy today. I know you will find it useful.