Risk & Business Magazine CEO/CFO Business Today Magazine Summer 2018 | Page 25

GROWING PAINS
Growing Pains...
BY: CAROL SHOWALTER,
KOLBE CERTIFIED™ CONSULTANT
...Of A Growing Business
C
ongratulations! The business
you started with high hopes has
become a successful enterprise.
You’re hiring employees, paying
them well, and offering them a
competitive benefits package. Life is good!
Unfortunately, growth brings a barrage
of compliance issues. The importance
of complying with laws and regulations
cannot be overstated; noncompliance
opens the door to large penalties and
liability for your company. Here are some
milestones to be aware of.
TWENTY EMPLOYEES
Medicare is the primary medical payer for
active employees and dependents eligible
for Medicare due to age if your company
employs less than 20 employees. Once
you have 20 full-time and/or part-time
employees for 20 weeks during the current
or preceding calendar year, Medicare
becomes the secondary payer and the
employer’s plan pays first. This will affect
the coverage available to Medicare-eligible
members and the cost to members and
the employer. Alert your insurance carrier
when you reach twenty employees so it can
set up and rate your plan appropriately.
When your company averages twenty full-
time equivalent employees on 50 percent
of the business days during a calendar year,
you must comply with COBRA beginning
the following year. COBRA rules regarding
notifications and elections of continuation
coverage are onerous, so it’s recommended
that you outsource the administration to a
specialty firm. leave who meet specified criteria.
FIFTY EMPLOYEES ONE HUNDRED PARTICIPANTS
The Affordable Care Act (ACA) subjects
Applicable Large Employers (ALEs)
to the employer shared responsibility
mandate. If an ALE should have offered
an employee medical coverage but did
not, and the employee receives a subsidy
toward the purchase of an individual
ACA policy, the ALE may be assessed
penalties. Once your company employs
fifty full-time equivalents, it becomes an
ALE the following year. ALEs must report
annually to the IRS whether affordable and
minimum value coverage (defined by the
ACA) was offered and to whom. Most private employer plans are subject
to ERISA and its requirements for
administering plans and communicating
benefits to participants. Once an ERISA
Welfare Plan reaches 100 participants at
the end of the Plan Year, a Form 5500 must
be filed with the IRS for the following year.
The Family and Medical Leave Act
(FMLA) also may apply when you reach
50 employees. The FMLA mandates that
certain rights, including the right to
benefits, be maintained for employees on
CONCLUSIONS
These are not the only compliance issues
you will face as your company grows.
There are many legal and regulatory
requirements on the local, state, and
federal levels. It’s wise to develop a
relationship with trusted legal and benefits
advisers to guide you through your
obligations as your business grows. +
Carol Showalter has been with Snider, Fuller and Stroh since 1987. She works with business
clients on their group benefits by designing and implementing life, health, and disability
programs, and assisting with interpretation of and compliance with governmental
regulations. Carol has been a Kolbe Certified™ Consultant since 2004, trained to assist
with employee hiring, retention, and team building.
Carol works regularly with the CEO, CFO and the HR staff of our business clients to
provide cost competitive and compliant benefit plans.
Carol earned a BA in Business Administration from Rutgers University and a MBA from
Ohio University. She is a Certified Financial Planner™ professional and a Certified
Employee Benefit Specialist (CEBS) qualifying as a fellow since 1989.
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