The 3 Cs of Government Contracting

There’s no manual for being a successful and competitive government contractor. But, there are three important principles to remember; we call them “The 3 Cs.”

Compliance. Cost Savings. Competitiveness. 

What are the 3 Cs? How do they help you win contracts? How do you master them?

Read on to learn more!

Compliance

SCA. DBA. ACA. There are a lot of intimidating acronyms floating around out there.

What’s worse? Failure to comply with all those rules, requirements, and regulations can result in withheld contractor funds, liability for the contractor, termination of crucial contracts, and (worst of all!) potentially being debarred from future government contracts. It is even possible for a contractor to be debarred for years!

Compliance can be tricky once you start to factor in health and welfare requirements, fringe obligations, responsibility over sub-contractors, and other concerns.

Boon’s in-house compliance department is here to provide support for any compliance issues that may arise, handling each situation with the utmost discretion and efficiency. Our team is here, adjusting to each new executive order and change in legislation and offering full support in the constantly evolving field of compliance and government contract standards.

Cost Savings

There are two options for hour government contractors can fulfill the fringe obligation:

  1. Paying those fringe dollars to their employees in cash.
  2. Putting those fringe dollars towards bona fide benefits (health and welfare benefits, in particular).

We recommend going with the benefits. Why?

Click here to learn more!

Investing the fringe obligation into health and welfare benefits has been reported to result in higher workforce productivity, less absenteeism, and significantly reducing healthcare expenditure overall.

Still need convincing? Did you know that employers spend two to three dollars on medical related productivity costs for every dollar they spend on pharmacy and healthcare costs? Did you also know that, in 2017, healthcare costs increased in 79 percent of organizations with an average yearly increase of 11 percent?

Employers that don’t offer solid healthcare options are at a huge disadvantage and the costs are just as large.

Competitiveness 

When it comes to providing health and welfare benefits to employees, government contractors have a choice. Maximizing those fringe dollars by developing a benefits plan that meets the unique needs of an employer keeps contractors compliant and allows ample opportunity to save money. The Boon Group can help contractors by offering bona fide benefits, which creates a tax cost savings by reducing additional expenses in the form of payroll burden.

In the arena of government contracting, projects are won or lost on mere dollars and cents. Being able to offer a low bid and quality service through your healthy, productive workforce makes you top competitor material.

Compliance and cost savings are the factors that add up to more competitive bids. You can have the full 3 Cs and start winning even more contracts.

Boon’s Mission

At Boon, our mission is to offer competitive rates and comprehensive care, with affordability and flexibility in mind. A little goes a long way and Boon recognizes that lowering costs on a contract today means bigger savings tomorrow.

Not only is The Boon Group competitive in our industry, but we want to help you be competitive in yours by offering you benefit plans that facilitate the savings that lead to lower contractor bids and more opportunity. At Boon, we understand that benefits are more than just solutions; when it comes to employee care, they are a boon to contractors themselves.

Follow the Boon Blog for the latest in industry news and happenings at The Boon Group! You can also keep up with Boon on FacebookTwitter, and LinkedIn.

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The Top 5 Reasons that Cybercriminals Target the Healthcare Industry

You’d be hard-pressed to find something that is of higher priority than your health and, subsequently, your healthcare. The information provided to your healthcare providers is just about as personal as it gets and it must be fiercely protected. The healthcare industry has seen a significant increase in cyberattacks and cybersecurity is becoming a huge part of the industry conversation. Why do cybercriminals target the healthcare industry and what do they want with your information? Read on to find out more:

1. Healthcare is the Perfect Target

Did you know that medical records are a hot ticket item on the black market? An electronic health record (EHR) goes for anywhere from $50 to thousands of dollars versus the low price of $1 for a stolen social security number. WHOA! Why are medical records so valuable among criminals?

Because your medical records create more opportunities for crime. Cybercriminals get all the personal information they need for garden variety identity theft, while also gaining access to purchasing drugs, creating a fake ID, and opening up claims with your insurer.

Additionally, because healthcare organizations hold the valuable data of thousands of people, cybercriminals can possibly obtain a huge stolen data haul all in one concentrated cyberattack.

2. Insufficient Updates and Awareness

Let’s be honest. Technology often moves way faster than the rest of us and there are several industries that are trailing behind the trends in technology. The healthcare industry is notorious for underspending, when it comes to cybersecurity. The industry often places more of an emphasis on hiring better doctors or having more customer service on hand to help answer your coverage questions. This is a noble and very human pursuit, and we’re not discounting it. But, for many, this emphasis on the human aspects of healthcare means that the technology aspects get neglected. At Boon, we’re continually working to keep healthcare flexible and accessible … just not at the expense of dotting our “I”s and crossing our “T”s when it comes to IT (Information Technology).

3. Bigger Organization, Bigger Target

Healthcare is a giant industry. Not just in impact but in literal numbers. Hospitals and insurers and various other healthcare providers serve thousands of people and all those names and other personally identifiable information are stored in electronic data. The more people in the system, the more chances to steal and exploit that information. Thankfully, standards for the protection of that information are exceptionally high and there is training available on HIPAA compliance. At Boon, for example, every single one of our employees is rigorously trained in HIPAA protocol so that your information is protected at every level.

Another issue created by the sheer size of entities in the healthcare industry is that many operations require multiple shared networks. There are simply too many people and too much information that must be accommodated. Problems happen when, across these networks, there is no consistency in the security standards and processes. With so many devices moving between networks, all it takes is one weak spot and one more (unwanted) device sneaking into a system to create a major problem.

4. Good “Ole Fashioned” Ransomware and Scams

Remember those scam emails where some ousted foreign prince promises you riches beyond your wildest dreams if you will just fork over your bank information? Almost laughable to think about now, right? Well, cybercriminals have gotten smarter and online scams and cyberattacks are becoming more and more difficult to spot. In the healthcare industry, many employees (for all their HIPAA training) have not had much of an education on cybersecurity.

Sometimes, cybercriminals don’t even have to hope for a human error, they’ll go straight for the source. Ransomware goes directly into a healthcare organization’s IT system and prevents company access to valuable files and information. The cybercriminal holds the file hostage and demands a ransom, hence the name. In an industry like healthcare, where access to patient information can be urgent and a matter of life and death, these entities are more likely to pay out and this makes them more attractive targets.

5. Pitfalls of Bringing Your Own Device

The healthcare industry is all about streamlining the process and making healthcare more efficient and affordable. Great, so what’s the issue? There is an increasing trend in healthcare to allow employees to work off of their own personal devices. While this may seem like an appealing way to cut costs on equipment, the reality is that personal devices do not have the same level of security and are subject to all the risks that may come up while that employee is not at work (theft, viruses, you name it).

The Boon Advantage

Boon strives to keep your healthcare close to home. Because your health is important to us, when you’re under our roof, we’re taking all known precautions to keep your information safe. The Boon Group runs a tight operation at our Austin headquarters under the watchful eye of our in-house professional teams. Every single one of our employees has designated devices and systems with the highest standard of protections in place. The personalized experience isn’t limited to our members, it’s keeping our employees guarded too!

Follow the Boon Blog for the latest in industry news and happenings at The Boon Group! You can also keep up with Boon on Facebook, Twitter, and LinkedIn.

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Medicare Part D Notices Due Soon: Coming Up in Compliance

Medicare Part D notice must be provided to employees by October 15, 2018. Here’s everything you need to know.

The Basics

Every year, Medicare Part D requires employers, as group health plan sponsors, to disclose to  employees eligible for Medicare Part D and to the Centers for Medicare and Medicaid Services (CMS) whether prescription drug coverage on the employer’s health plan is creditable. It’s required that this this information be disclosed to eligible individuals by October 15, 2018. This marks the beginning of annual enrollment for Medicare Part D.

How do you do it?

Disclosures to CMS must be made on an annual basis or any time that a change occurs that impacts whether the prescription drug coverage is creditable. Employers should confirm whether prescription drug coverage on their health plan is creditable or non-creditable. Medicare Part D disclosure notices should be prepared for sending before October 15, 2018. To streamline the process, it helps to include the Medicare Part D notice in open enrollment packets that are provided to employees prior to October 15, 2018.

What is creditable coverage and who is eligible?

Prescription drug coverage is considered creditable if the actuarial value equals or exceeds the value of standard Medicare Part D prescription drug coverage. Actuarial determination measures whether the expected amount of paid claims under the group health plan’s prescription drug coverage is at least as much as the expected amount of paid claims under the Medicare Part D prescription drug benefit.

This creditable coverage disclosure notice must be provided to employees who are eligible under Medicare Part D  and are covered by, or apply for, prescription drug coverage under the employer’s group health plan. An individual is considered eligible under Medicare Part D if the employee is entitled to Medicare A or enrolled in Medicare Part B, or if the employee lives in the service area of a Medicare Part D Plan.

Dates and Deadlines

At the minimum, the disclosure notice for CMS creditable coverage must be provided at the following times:

  • Prior to the annual coordinated election period for Medicare Part D. This year that’s October 15 thru December 7;
  • Within 60 days following the start date for the plan year;
  • Within 30 days following the termination of the prescription drug plan;
  • Within 30 days following any change in the creditable coverage status of a prescription drug plan;
  • Prior to an individual’s initial enrollment period for Medicare Part D;
  • Prior to the effective date of coverage for any eligible individual that joins the plan;
  • When prescription drug coverage ends or any major change that impacts whether its creditable occurs; or
  • Upon the request of the beneficiary.

How to Deliver

Plan sponsors have three options in how they may provide their creditable coverage disclosure notices.

  • Disclosures notices may be provided separately;
  • Disclosure notices can be provided with other plan participant materials, if certain conditions are met; or
  • Disclosure notices can be sent electronically.

Generally, a single notice may be provided to the covered individual and all of his eligible dependents covered under the same plan. However, if any spouse or eligible dependent lives at a different address than where the participant materials were mailed, a separate notice must be provided.

CMS has indicated that health plan sponsors may use electronic disclosure under the Department of Labor (DOL) regulations. These regulations permit a plan sponsor to provide a creditable coverage disclosure notice electronically to plan participants that can access electronic documents at their place of work, provided that they have access to the sponsor’s electronic information system as part of their regular, daily work duties.

The DOL also requires that the plan sponsor use appropriate and reasonable means to ensure that the information is being properly transmitted and received; that notice is provided to the plan participants on the significance of the document; and that a paper version of the document is available upon request.

Additionally, if a plan sponsor opts to use electronic delivery, the sponsor must inform the plan participant that they are responsible for providing a copy of the electronic document to their eligible dependents covered under the plan.

The Boon Blog is your source for the latest in healthcare industry news and updates. You can keep up with the world of healthcare and all things Boon on our FacebookTwitter, and LinkedIn.

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The Davis-Bacon Act: Everything You Need to Know about DBA Compliance

Compliance tops the list, when it comes to government contractors’ priorities. Construction contracts with the federal government are governed by the Davis-Bacon Act (DBA), so it’s best to brush up on your DBA basics. Read on to learn more about the DBA.

The primary function of the Davis-Bacon Act is to protect local communities from economic upheaval caused by federal government contracts. The DBA requires that workers employed on federal contracts be paid a local prevailing wage rate and fringe benefits. This applies to any contract valued in excess of $2,000 and levels the playing field by preventing outside contractors from coming into an area and underbidding local contractors and unions.

Compliance with the DBA

During the performance of the contract, employees must be paid at least once a week with full wages and the employers’ option of a) fringe benefits or b) cash, in lieu of those benefits. Companies are required to maintain basic records for all workers during the course of their work and for at least three years after. These records must contain:

  • The basic info of each employee (name, address, social security number);
  • Hourly rates of pay, including rates associated with fringe benefits and cash equivalents;
  • Daily/weekly number of hours worked;
  • Deductions made and actual wages paid;
  • Details on the fringe benefit plans and programs and documentation that the program has been communicated in writing to the workers.

By identifying the requirements of the DBA from the outset, it’s easy to set yourself up with strategies for compliance and, by extension, maximizing your competitiveness. Knowing key information, like the wage requirements, early on allows you to capture the highest level in profitability in the bidding process.

One of the critical strategies for successful compliance is putting forth an integrated effort. Bringing in legal, human resources, accounting, and other knowledgeable professionals cuts down on the likelihood of errors and gives you the full force of a capable team to ensure your compliance. At Boon, we’re 100 percent committed to this strategy. Boon offers comprehensive, legal, licensing, compliance, and accounting services, in addition to our friendly customer service and simple enrollment methods.

Annualization Basics

Annualization is the computation strategy used to determine the hourly rate of contribution that is creditable towards a contractor’s prevailing wage obligation on DBA covered projects. The concept of annualization is incredibly important because the amount of credit a contractor may claim can be just as crucial to determining DBA compliance as the particulars of a fringe benefit plan under the DBA.

Annualization was applied in the 1970s in health insurance plans that called for the same rate of contribution for all hours worked by laborers that were employed on both DBA covered projects and other, non-covered endeavors.

In practical application, annualization limits Davis-Bacon credits to an amount equal to the hourly cost of the fringe benefit averaged across all the hours an individual works during a year. This prevents individuals from using Davis-Bacon work as the exclusive source of funding for continuous benefits and compensation for all of an employee’s work.

Penalties Associated with the DBA

The Wage and Hour Division (WHD) of the Department of Labor is responsible for administering and enforcing the DBA. The WHD is notorious for being unwilling to negotiate and quick to drop the legal hammer to punish non-compliant contractors and any subcontractors that contractor is responsible for. Some examples of those penalties include:

  • Paying of back wages and fringe benefits to employees
  • Termination of the contract
  • Personal liability of company officials
  • Prohibition from all government contracts for a three-year period
  • Withholding payments due to the contractor

Developing a benefits plan that is flexible to your needs and keeps you compliant will allow you and your employees to save money, which keeps you competitive! That’s what we do at Boon.

Visit our website to learn more and catch us on Facebook, Twitter, and LinkedIn! Follow the Boon Blog for the latest in industry trends, updates, and news.

 

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Downstream Compliance and Contractor Responsibility

Every year, the federal government spends more than $500 billion a year on contracts. More than 50 percent of that total works its way down to subcontractors.

Wow.

The business of government contracting is built upon the hard work of government contractors and the subcontractors that make these massive projects possible. It’s a partnership that is not only common but vital.

So what laws apply in these working relationships? The subcontractor is subject to the same laws and regulations as the prime contractor when that subcontractor enters into an arrangement with a federal contractor for any service that is necessary to the performance of any one or more government contracts.

The same rule applies to an arrangement that assumes, undertakes, or promises performance of any portion of the federal contractor’s obligation under one or more government contracts.

Additionally, the prime contractor is also responsible for the subcontractor’s compliance with the regulatory requirements.

Many subcontractors do not have access to the professionals that can design compliant and comprehensive healthcare solutions. As stated above, ultimately, the prime contractor is responsible for the overall compliance of all parties working under the prime contract. So, how are the prime contractor and its subcontractors to ensure their compliance?

By understanding the rules and working with professionals who know them.

Contractors have options on how they spend the fringe dollars afforded to them. Employers that provide health insurance typically experience more employee engagement, reduced absenteeism, and significantly lower healthcare costs overall.

For 35+ years, Boon has been providing our clients with efficient, knowledgeable, and purposeful solutions to address their compliance issues. We can keep you compliant from the top down, all while providing your employees accessible healthcare through flexible and meaningful healthcare plans.

The Boon Blog is your source for the latest in industry tips, information, and news. You can also keep up with all things Boon on our FacebookTwitter, and LinkedIn.

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Boon Buzz: HSA/HDHP Limits Will Increase for 2019

The IRS limits for HSA contributions are set to increase for 2019. This also includes the limits for HDHPs.

The Internal Revenue Service (IRS) announced the inflation-adjusted limits on health savings accounts (HSAs) and high deductible health plans (HDHPs) for 2019 on May 10, 2018. The Revenue Procedure 2018-30 details the following limits:

  • The maximum HSA contribution limit
  • The minimum deductible amount for HDHPs
  • The maximum “out-of-pocket” limit for HDHPs

Some dates to remember. On January 1, 2019 the increase in HSA contributions limits will go into effect. As for the HDHP limits, those increases will be effective for plan years beginning on or after January 1, 2019.

Now, let’s get to numbers. The HDHP Minimum Deductible for both self and family will remain unchanged; $1,350 for self-only and $2,700 for family. Another unchanged amount is the HSA catch-up contributions for those age 55 or older; from 2018 to 2019 the amount remains at $1,000.

For the HSA contribution limit, Self-only contributions jumped from $3,450 to $3,500 from 2018 to 2019. The Family limit made a $100 jump between 2018 and 2019; from $6,900 to $7,000.

The maximum out-of-pocket expense limit includes such things as deductibles, copayments, and other amounts that do not fall under premiums. This was the area of greatest increase, across the board. From 2018 to 2019 Self-only out-of-pocket increase from $6,650 to $6,750. The family limits increased by a factor of $200, increasing to $13,500 from the 2018 limit of $13,300.

What does this mean for employers? Due to these changes, employers that sponsor HSA and HDHP plans may look to adjust their plan design for the beginning of 2019. It’s recommended that employers communicate the HSA contribution limits to employees as part of the enrollment process and that all enrollment materials be updated to reflect the increased limits.

The Boon Blog is your source for the latest in industry news. You can keep up with the world of healthcare, industry updates, and all things Boon on our Facebook, Twitter, and LinkedIn.

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Lawsuit Pushes Back Against DOL Rule

Eleven states, accompanied by the District of Columbia, have launched a lawsuit against the federal government. This suit is led by New York and the following states have signed on, as well: California, Delaware, Kentucky, Maryland, Massachusetts, New Jersey, Oregon, Pennsylvania, Virginia, and Washington. This group hopes the suit will push the Department of Labor to roll back a recent regulation to expand access to associated health plans (AHPs). These AHPs are generally cheaper but offer fewer benefits.

The regulation in question expands who can gain access to an association health plan. In practice, this would enable small businesses to join together when getting insurance. In a previous post here on the Boon Blog, we discussed the regulation and its potential impact in greater detail. You can check it out here.

In the lawsuit, states charge that this regulation is intended to move a large number of individuals and small employers into the large group market to avoid the core protections of the Affordable Care Act. The individual market allows people to obtain health insurance, if they are unable to access it through the government or their job. The small group market is used by small businesses to insure employees.

The Affordable Care Act’s essential health benefit requirements do not apply in the large group market. Further, the states participating in the suit allege that the final rule is unlawful because it operates in direct conflict with the statutory structure adopted by Congress in the ACA, to apply basic protections to individuals and small groups. The states claim that this will do harm as it will require them to devote additional resources to managing a high volume of fraudulent or inadequate plans offered by associations.

This is a rapidly developing issue, so keep up with the Boon Blog for the latest developments. You can also catch up on all things Boon on our Facebook, Twitter, and LinkedIn.

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