2019/2020 SCA Fringe Rates Issued

New Fringe Rates for SCA Contracts

The Wage and Hour Division of the U.S. Department of Labor has released the new fringe rates for 2019/2020 for all contracts and contractors under the Service Contract Act.

 

Per All Agency Memorandum 230, the rate for any prevailing health and welfare fringe benefits issued under the SCA will increased to $4.54 per hour. This is a modest increase from last year’s fringe benefit rate of $4.48 per hour. The new fringe rate is effective as of July 5, 2019.

 

This information can be found on the Wage Determination and WHD websites.

Grandfathered Benefit Continues

In 2004, the WHD announced in All Agency Memorandum 197 that it would increase the fringe benefit rate for all wage determinations and retain the two different methods for determining compliance. That policy will continue this year.

Both the employee-by-employee benefit and average cost fringe benefit rates will be $4.54 per hour, up to 40 hours per week (which is $181.60 per week, or $786.93 per month). Consistent with longstanding policy, the average cost fringe benefit wage determination will be issued only contracts in which the formerly grandfathered benefit rate would have applied

 

Don’t Forget EO 13706

Executive Order 13706, Establishing Paid Sick Leave for Federal Contractors, requires that employers that contract with the federal government provide their employees with up to 56 hours of paid sick leave annually; this comes out to seven days paid sick leave. This rule applies to “new” government contracts entered into on or after the Executive Order’s effective date, January 1, 2017. This paid leave can also be applied to family care and any employee absences that occur as a result of domestic violence, sexual assault, and stalking.

Compliance. We got this.

At Boon, we understand that compliance is crucial and it’s our job to navigate the changing landscape so that you don’t have to. Click here to learn more about our comprehensive compliance services.

Our ability to create flexible plans that are customized to the fringe keeps you compliant and covered in the most cost-efficient way. Check out this post to learn more!

The Boon Blog is your resource for the latest in industry updates. You can also catch up with Boon on FacebookTwitter, and LinkedIn!

Posted in compliance, employee benefits, Executive Orders, federal contractors, fringe benefits, government contractors, paid sick leave, prevailing wage, Service Contract Act | Tagged , , , , , , , , , , , , , | Leave a comment

You Just Won Your First Government Contract. Now What?

A common question that arises when speaking with contractors around the country:

“Now that we’ve won this contract, what should we do next?”

Let’s take a look at the factors that should be considered after a successful bid to ensure a profitable contract.  An example of a typical scenario:

A new company with twenty employees receives notice that they’ve been awarded a contract on a bid submitted months ago. The pre-solicitation process and hard work is finally paying off. However, the initial excitement often leads to questions about payroll, compliance, administration and fringe rates. And that’s just the beginning!

Benefits as a Foundation for Success

How will health and welfare dollars be applied to the employees working on the contract? Good question. And it’s a question your employees will have, as well.

A top priority should be to establish a solid foundation on which a contractor or employer can grow. Second priority is to be aware of any considerations that arise within the regulations and specifications of a particular contract, such as state and local regulations. Finally, the employer or contractor should educate its employees on the benefit options being made available to them.

So, what’s the advantage to putting the fringe dollars into bona fide benefits?

By putting those additional fringe dollars toward bona fide benefits – versus simply paying cash to its employees – the contractor would receive recurring payroll savings.

Fringe dollars can be applied toward a medical benefit plan – whether that be fixed indemnity or major medical – ancillary benefits, a retirement contribution, or a combination of these options.

The unique position for the contractor is they have the option to spend those fringe dollars for bona fide benefits – depending on the contract – at its discretion, with some exceptions. It can be a win-win for the contractor and the employee. The contractor saves money, and the employee receives employer provided benefits.

How can employers lay that foundation?

Start off by establishing a precedent on how the company handles fringe dollars. Will you pay the fringe dollars out in cash or through a bona fide fringe benefit? If you offer a combination of cash, medical benefits, and retirement contributions, for example, that can result in an inconsistent message and can cause confusion with employees.

Plus, it creates additional administrative work for your team to track both cash and benefit options. It is important to make the decision, communicate it clearly to your team, and have a straightforward plan in place for managing fringe dollars.

By streamlining the process and setting clear expectations from the outset, you set the precedent with employees and staff. Offering benefits keeps your employees in the know regarding fringe dollars and saves you money — a perfect formula for growth and sustainability.

Administration, Compliance and Cost

Another key component that must be addressed with the new award is how to handle benefit administration. It takes a lot of time and energy to account for and maintain an accurate record of the hours worked by these employees, and to ensure that those details are handled in compliance with the ruling legal and local obligations and requirements.

You never know what may come up and it pays to be prepared.

Not anticipating that this amount of work might cause unexpected burdens on a contractor can be a harsh reality. We’re talking additional hours in the office, new employees to manage the workload, and meticulous tracking of employee hours.

However, as a benefit provider, The Boon Group’s product offerings include providing benefits on an hourly basis and Boon’s services are a functional component that helps you document and achieve compliance. At Boon, our partnership philosophy with our carriers and plan benefit providers position us perfectly to be a benefit to your business.

Path to Success

A contractor that understands their obligations under the specific wage determination and is aware of how different options can benefit their company is a contractor that is better equipped to win contracts.

The road to a win can sometimes be long and full of challenges. The path to success is to clearly define your game plan, this will propel that award into action for you and your employees!

The Boon Blog is your source for the latest updates in wellness, benefits, and healthcare. Be sure to give us a follow so that you don’t miss a single post!

You can also keep up with Boon on FacebookTwitter, and LinkedIn.

 

 

 

 

 

 

 

Posted in cost savings, Davis-Bacon Act, employee benefits, federal contractors, fringe benefits, government contractors, health care, health care costs, paid sick leave, prevailing wage, Service Contract Act | Tagged , , , , , , , | Leave a comment

Form 5500: Everything You Ever Wanted to Know

If you’re an employer that provides benefits to your employees, staying on the up and up with the big government institutions is imperative. The Department of Labor (DOL), the Internal Revenue Service (IRS), and the Pension Benefit Guaranty Corporation (PBGC), to name a few, are examples that require a host of forms to ensure compliance with their reporting requirements.

But did you know that there is a form that touches all of these agencies? The Form 5500 Series is one of the most diversely used forms that you’ll ever file. Know the ins-and-outs? Read on to find out more:

A Form 5500 is required when a plan has 100 or more employee participants or when a plan is funded through a trust (regardless of the number of participants). The form is due on the last day of the seventh month following the plan year end. However, a one-time two-and-a-half month extension can be requested when filing using Form 5558.

The Basics of Form 5500

Let’s break down the basics of Form 5500.

The form is an annual report of the information in an employee benefit plan, prepared for the use of the Department of Labor.  Under the requirements of ERISA, the form must be filed every year. Examples of plans that are subject to ERISA and, therefore, must file aForm 5500 include:

  • Profit sharing plans and 401(k) plans
  • Church pension plans that elect to be covered by ERISA
  • Individual retirement arrangements
  • Welfare benefits plans that provide benefits including medical, dental, and life insurance

To file, insured benefits are required to attach a Schedule A for each contract, other schedule attachments are required if the plan is self-funded through a trust. A “Schedule A” contains insurance information and must be filed with a Form 5500 if a pension, group health plan, or welfare plan has insurance contracts.

You may have also heard of a “Schedule C”, which contain Service Provider Information. If a service provider failed to provide information necessary for the completion of Part I, Part II must now also be completed. Part I refers to any information concerning insurance contract coverage, fees, and commissions. For Part II, you must enter the current value of the plan’s interest at year end in the contract, along with any investment and annuity contract information.

In more extreme cases, where an accountant or actuary was terminated, Part III is also required. These “Schedule C” rules do not apply to small pension and welfare plans. Determining whether you are a small or large plan filer is quite simple: If the participant count is 99 or less, you can file as a small plan. If you have 100 or more participants, you’re considered a large plan.

Form 5500 comes with some pretty steep penalties for late filers and non-filers, with some penalties going as high as $30,000 per year for non-filers, until the Form 5500 is filed.

How to File Form 5500

If the plan is considered a “funded” self-funded plan, and has 100 or more employee participants then an audit is required and must be attached to the Form 5500. A “funded” plan is one where funds are set aside in a trust fund or custodial account for the exclusive benefit of the plan participants. This keeps it separate from the general assets of the employer.

Form 5500 must be filed electronically using either a third-party software or the DOL website. The DOL, IRS, and PBGC all endeavored to develop the Form 5500 series so that employee benefit plans could satisfy the annual reporting requirements under ERISA and the IRS.

The Form 5500 series is an integral part of ERISA’s overall reporting and disclosure network. The form is widely used across agencies. The DOL utilizes it as a research tool and also as a means of gauging compliance. Federal agencies view the Form 5500 a comprehensive disclosure document for plan participants and beneficiaries, as well as a source of information and data.

Compliance. It’s what we do.

Want to learn more about staying compliant and competitive? Contact Boon!

The Boon Blog is your source for the latest updates in government contracting, benefits, and healthcare. Be sure to give us a follow so that you don’t miss a single post!

You can also keep up with Boon on FacebookTwitter, and LinkedIn.

Posted in compliance, DOL, DOL audits, employee benefits, employer-sponsored group health plans, ERISA, federal contractors, government contractors, health care, health care costs, health insurance, health insurance claims | Tagged , , , , , , , | Leave a comment

Health-Related Productivity Costs to Government Contractors

Offering health coverage and benefits to employees and their dependents is a major expense. In government contracting, there’s an interest in keeping costs low and bids competitive. It can be tempting for government contractors to take the required fringe and pay it out in cash but, ultimately, putting those fringe benefit dollars into healthcare for their employees can be the greatest cash saver. Lost employee productivity due to health problems can be more costly for employers.

We classify lost productivity in two ways: presenteeism and absenteeism. Absenteeism is what happens when the employee is not physically at work, while presenteeism is when poor health impacts the employee’s work quality and quantity while they are at the workplace. 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?

A study by the AdvancePCS Center for Work and Health revealed that 71% of the 29,000 employees involved in the study lost productivity time in direct relation to deficient performance of the job. Only 23% felt that they had lost productivity as a result of actual absences from work.

Here are some negative effects of presenteeism on the workforce:

  • Spending unneeded additional time on tasks
  • Decreased quality of work
  • Spreading an illness to other employees
  • Decreased work quantity
  • Impaired ability to perform at the high level

If you do not address the healthcare needs of your employees, you workplace is likely to suffer for it and bring your competitiveness in competing for contracts down.

These are examples of how some workplaces decrease health-related productivity costs:

  • Integrate your health benefit strategies with your health management and wellness initiatives.
  • Design your benefits package to support the behaviors you want to see at your organization.
  • Partner with a healthcare company that takes an innovative approach to wellness and offers resources like telemedicine and other solutions that focus on preventative care and empower our workers to take control of their health.

By this point you may be asking yourself what you can be doing now to reduce your healthcare productivity costs. Our answer? Create and maintain meaningful benefits for your employees that fit within the designated hourly fringe rate. Maximize your fringe dollars and trim down your costs by putting the fringe into healthcare benefits for your employees.

Want to learn more about staying compliant and competitive? Contact Boon!

The Boon Blog is your source for the latest updates in wellness, benefits, and healthcare. Be sure to give us a follow so that you don’t miss a single post!

You can also keep up with Boon on FacebookTwitter, and LinkedIn.

Posted in compliance, cost savings, employee benefits, employer-sponsored group health plans, federal contractors, fringe benefits, government contractors, health care, health care costs, health insurance, preventive health care, wellness | Leave a comment

Boon’s Top 5 Health and Wellness Tips for Spring 2019

The warm weather is coming! You’re spending more time outside and enjoying the best of the season. A cornerstone of seasonal happiness is, of course, your health. Whether it’s a health tip to carry through the rest of the year, or something that you should be extra mindful of in the warm weather, Boon is bringing you our top five tips for Spring 2019.

1. Walk it Out

Embarking on a wellness journey and intimidated by the gym? No problem. You already have all the tools you need.

Walking is the ideal method for maintaining your health and wellness. You can do it anytime, anywhere, and at no cost to you. Experts advise that fitness beginners start with a 15 to 30 minute walk every day, gradually adding 5 to 10 minutes to each session.

The ideal pace, to maintain your health, is the “talking pace.” This just means that you should not be breathing so hard that you would not be able to hold a conversation. Of course, you can always ramp up the pace for aerobic and cardiovascular health. Don’t forget to stretch when you’re done, to prevent sore muscles.

2. Your Health by the Numbers

Preventative care starts with you. Knowing your “numbers”, your blood pressure, cholesterol, blood sugar, and body mass index are vital to assessing your risk of illness and are a good baseline to understanding your overall health. If you know where “your numbers” are, you’re better equipped to make decisions that address your personal health needs.

Here’s a quick lightning round on how to interpret your health, by the numbers. Normal blood pressure should be less than 120 over 80. With respect to your blood sugar, a normal blood sugar level is under 100 when using the FPG test. Which brings us to your BMI. Your BMI measures your weight in relation to your height, it’s not a precise science but it helps you to determine a healthy range. A BMI more than 25 is an indication that you may be overweight for your frame.

3. Eat Well, Live Well

Our food is our fuel. When we put in quality, healthy fuel, we feel better and we operate better. Replacing unhealthy eating habits with healthier ones can be difficult, especially if unhealthy habits are all you have ever known.

Lifestyle changes don’t happen overnight. They’re small adjustments that stick and grow over time. Some quick tips to get you started could include: plan as many home-cooked meals as you can, switch to a healthier version of one of your favorite foods, replace one sugary drink per day with a glass of water, and be sure to eat breakfast.

Fun Fact about breakfast: People who eat breakfast not only have more energy and focus, throughout the day, but also tend to make healthier meal and portion choices for lunch and dinner. Click here to read more!

4. Stay Cool

Summer is coming! The days are getting warmer and you’re sure to be spending more time outside. Have fun, but do not let the summer heat get the best of you.

Heat exhaustion is a very real threat and can sneak up on you when you’re taking advantage of those warm days. Symptoms include, dizziness, blurry vision, nausea, and vomiting. Heat exhaustion can turn into the much more dangerous heat stroke, so quick action is necessary.

It’s imperative to get a person suffering from heat stroke to a cool place and to make sure they are getting plenty of water. You can ward off heat exhaustion by being mindful of your time outdoors and taking breaks in the AC, drinking plenty of water, and dressing in light clothes.

5. Manage Your Stress

Did you know that 80 percent of Americans see their jobs as a huge stressor in their life?

Common workplace stressors include heavy workloads, pressure to perform, long work hours, and office conflicts. Stress is a normal part of everyday life, but there comes a point when stress starts to negatively impact your health and that’s when you have to spring into action. Stress can result in insomnia, headaches and stomachaches, and issues with anxiety and depression.

It is important to manage your stress, so you can maintain optimal health. Don’t be afraid to take a break, ask for help when you need it, and focus more on the things you can control versus the things that are beyond your control.

Have a very healthy Spring!

The Boon Blog is your source for the latest updates in wellness, benefits, and healthcare. Be sure to give us a follow so that you don’t miss a single post!

You can also keep up with Boon on Facebook, Twitter, and LinkedIn.

Have you tried any of these wellness tips? Have a tip that we missed? Leave us a comment!

Posted in employee benefits, health care, preventive health care, wellness | Tagged , , , , , , , , , , , | Leave a comment

Boon Buzz: Benefit News for Spring 2019

April showers bring May flowers, and the world of benefits is also in full bloom! Here’s your spring refresher on the latest regulations, data, and more! Read on to learn more:

1. DOL Increases Civil Penalty Amounts for 2019

In January 2019, the Department of Labor (DOL) increased the civil penalty amounts that may be imposed on employers. These increased amounts apply to civil penalties that are assessed after January 23, 2019.

These civil penalty amounts apply to employers that are under the following federal laws: The Fair Labor Standards Act (FLSA), The Employee Retirement Income Security Act (ERISA), The Family and Medical Leave Act (FMLA), and The Occupational Safety and Health Act (OSHA).

2. BLS Data on Family Leave Available

Recently, the Bureau of Labor Statistics (BLS) released an economic report on civilian access to paid and unpaid family leave for 2018. In the report, leave to care for family members and maternity/paternity leave were included in the definition of family leave.

In March 2018, 16 percent of workers in the private sector and 17 percent of civilian workers had access to paid family leave. That percentage leaped to 25 percent in the public sector, among state and local government workers. Access to leave varied based on the size of the employer.

By and large, the majority of family leave access, in both the public and private sector, was unpaid.

3. HHS Proposes Benefit and Payment Parameters for 2020

The Department of Health and Human Services (HHS) recently published a proposed Notice of Benefit and Payment Parameters for 2020.

This proposal describes what the benefit and payment parameters would be applicable for the 2020 benefit year under the Affordable Care Act (ACA).

Standards included in the rule would relate to annual limitations on cost sharing, the individual mandate’s affordability exemption, and direct and special enrollment in exchanges. The goal of the HHS is to reduce eligibility errors and government misspending.

Among the proposed changes would be an increase to the out of pocket maximum and an increase to the ACA’s affordability exemption threshold. The proposed rule would also expand opportunities for individuals to directly enroll in Exchange coverage by enrolling through the websites of certain third parties.

At Boon, benefits are what we do best!

From our comprehensive administrative capabilities, to compliance, to innovative healthcare solutions that keep employer costs low and provide benefits to employees. We got this.

The Boon Blog is your resource for all the latest updates in healthcare, benefits, and all things Boon! Click here to read our previous posts on the 2019 headlines that you need to know. Make sure you give us a follow so that you never miss an update.

You can also keep up with Boon on Facebook, Twitter, and LinkedIn.

Posted in ACA, Affordable Care Act, compliance, cost savings, employee benefits, ERISA, health care, paid sick leave, wellness | Leave a comment

Standards for San Francisco HCSO Released

The City of San Francisco recently released their official 2019 notice regarding the Health Care Security Ordinance that applies to businesses with 20 or more workers and nonprofits with 50 or more employees.

It states that businesses with 20 or more workers worldwide (50 or more workers in the nonprofit space) must spend a minimum amount on healthcare benefits for each of their covered employees. The notice defines covered employees as those that work for eight or more hours per week in the city of San Francisco and have been employed for more than 90 days.

Employers with 22 to 99 workers must spend at least $1.95 on benefits per each hour payable to each covered employee. Employers with 100 or more workers must spend at least $2.33. It’s required that these expenditures be made for each employee within 30 days following the end of each calendar quarter.

Employers have a choice when it comes to how they spend the money, provided  they make the minimum required expenditures. For example, employers could make payments to the City’s health benefit program or they could pay for healthcare benefits for their employees.

Check out our previous blog post on the pros of offering benefits to your employees.

At Boon, we offer healthcare solutions that are competitive, cost-effective, and compliant. We provide employers with the opportunity to offer benefits to their employees — custom-tailored benefit solutions to meet their needs and reduce the administrative burden to the employer.

Compliance is key, and nobody knows that better than us. We offer innovative benefit solutions that are in compliance with local, state, and federal regulations; a competitive edge and cost savings for the employer.

The City has the option to investigate possible violations of this ordinance and can order employers who violate the ordinance to pay penalties and make payments for healthcare benefits.

The Boon Blog is your source for all the latest industry updates and news. Make sure you give us a follow so that you never miss out!

You can also keep up with Boon on Twitter, Facebook, and LinkedIn.

Posted in compliance, cost savings, employee benefits, Fair Pay and Safe Workplaces, federal contractors, fringe benefits, government contractors, health care, health care costs, health insurance | Tagged , , , , | Leave a comment