Top Ten Most Frequently Asked Questions…

1. Does the new subsidy apply to our company?

If your company currently provides the option to continue health, dental or vision coverage to individuals who experience a qualifying event, you need to be aware of the new subsidy and your potential obligations.

2. How much will the subsidy cost our business?

Basically, the COBRA subsidy requires employers to provide the government with a short-term loan through which the government will be covering 65% of the cost of coverage for eligible individuals. Employers will be initially responsible to pay 65% of the cost of coverage for eligible individuals. Once an employee remits their portion of the cost of coverage (35%), the employer is permitted to take a direct credit against their current payroll tax obligations. If the employer’s credit exceeds the amount of their tax liabilities in a quarter, they will be entitled to a refund to make up the difference.

Employers need to be aware that the legislation requires employers to submit documentation to support and justify the tax credit utilized. The Treasury has been instructed to produce additional regulations specifying the forms and documentation necessary to substantiate the credit/refund.

Also, employers are to provide those individuals who remit the full cost of continuation coverage for periods occurring during the first 60 days after enactment of the legislation with either reimbursement for the amount of premiums paid in excess or a corresponding credit reducing one or more subsequent premium payments that the individual will be required to pay to maintain coverage.

3. When does the subsidy begin?

The subsidy begins to apply for periods of coverage commencing after the date of enactment of the legislation. For most plans, this means March 1, 2009.

4. Who is eligible for the subsidy?

An individual who was involuntary terminated between September 1, 2008 and December 31, 2009, and who, because of the involuntary termination, was eligible for and elected to continue benefits under COBRA will generally be eligible to receive the subsidy. However, individuals, who are above a certain income levels, will not be eligible for the subsidy. In the event such an individual receives the subsidy and is not eligible, he or she will be subject to a corresponding increase on their tax liability.

Individuals who were involuntarily terminated as far back as September 1, 2008 who are not currently enrolled in continuation coverage will need to be provided with an additional 60 days to change their mind and elect coverage. In the event such an individual or their dependent(s) elect coverage, coverage will be effective as of March 1, 2009. Further, the individual should not be subject to any preexisting condition exclusions for the time period between September 1, 2008 and March 1, 2009

5. What type of notice(s) is required?

Employers are required to provide notice to those individuals who are eligible for the subsidy. In addition, Employers are also required to provide alternate notices, i.e., notice regarding the basis of ineligibility for the subsidy. The Department of Labor has been instructed to issue model notices and additional guidance within 30 days of the enactment of the legislation.

6. How much time do we have to provide the notices?

Employers must distribute required notices to affected individuals within 60 days of the enactment of the legislation. Again, the Department of Labor has been instructed to issue model notices and additional guidance within 30 days of the enactment of the legislation.

Those individuals and dependents given a new opportunity to change their mind and elect continuation coverage will have 60 days from the date notice is provided to elect coverage.

7. Do we need to amend our existing notices?

The legislation clarifies that employers have the option of amending existing notices or preparing addendums to supplement current notices.

8. How long can someone be eligible for and receive the subsidy?

Where an employee is eligible to continue coverage due to an involuntary termination, they could be eligible for the subsidy for up to nine months. However, the COBRA subsidy legislation does not extend the maximum amount of time an individual is otherwise eligible to continue coverage.

Additionally, an individual is no longer eligible for the subsidy at the point he or she becomes eligible for coverage under any other group health plan or Medicare. In the event an individual becomes eligible for such coverage, they are required to notify their previous employer/plan administrator of such ineligibility. Where an employee does not provide sufficient notice, he or she could be liable for up to 110% of the amount of premium assistance received.

9. Who is enforcing and overseeing compliance with the subsidy?

The Secretary of Labor, the Secretary of Health and Human Services, and the Secretary of the Treasury are charged with enforcement and oversight. The Department of Labor has been instructed to implement an expedited claims procedure to review claims brought by individuals alleging they were improperly denied the subsidy. An individual will not be required to exhaust the claims procedures set forth under the plan in order to utilize the expedited review process at the Department of Labor. Additionally, individuals may also be permitted to simultaneously bring an action in federal court. A reviewing court would be required to give deference to any determination made by the Department of Labor.

10. What do we do now to prepare for complying with the new subsidy?

Initially, employers should begin by auditing records to determine and account for those individuals who have experienced a COBRA qualifying event as far back as September 1, 2008. The type of qualifying event experienced should be noted as not all COBRA eligible individuals will be able to receive the benefit of the subsidy. For example, those eligible for COBRA due to divorce or ceasing to meet dependent status under the plan would not be eligible for the subsidy. Additionally, those who voluntarily resigned would also not be eligible to receive the subsidy.

Employers should also prepare to establish procedures to ensure compliance with future notice obligations and payroll tax reporting.

While additional guidance is still needed from the government in order to ensure proper compliance with the legislation, the time frame employers will have to react is extremely limited. Employers need to take every effort to be fully prepared in order to be able to respond to the forthcoming additional guidance and model notices in an incredibly short time frame.

A Wednesday article by the American Patriot includes some good ideas that each homeowner should consider when thinking about basement flooding. The recommendations were issued by FEMA to North Dakota residents this week, in preparation for potential problems caused by melting show and heavy spring rains. One of the most important, yet, overlooked aspect is flood insurance.

It’s the first thing to do because there is a 30-day waiting period before a policy can take effect. If the waters are rising, it may be too late to file a flood insurance claim.

Examine and clean your sump pump, if you have one. Test your sump pump by pouring water into the pit. Make sure the discharge hose carries the water several feet away from the house to a well-drained area. Also make sure that the pipe is on sloped ground so it drains to prevent it from freezing.

If you are living in new home, you might consider replacing the primary sump pump, unless you know for sure that pump installed is a reliable brand. Most builders install lesser efficiency sump pumps in order to reduce costs. Furthermore, you should consider backup sump pumps in the event the primary pump fails or for when power fails.

Full Article: North Dakota: Spring Rainfall, Snow Melt Can Cause Flooding

The NBC affiliate in Albany New York, WNYT, posted a short, yet helpful reminder on how the flu can easily spread in one’s household when indoor air is poor.

The researchers from Oregon State University find the influenza virus is more likely to survive in low humidity environments. Now, no one’s suggesting you make your home so moist mold can grow .. but check out the humidity in your home.

Mold spores and allergens like humidity above 50%. We recommend keeping the humidity level around 45-50%, especially in the winter. This keeps the air quality at a desired level while helping prevent the spread of flu, and the proliferation of mold spores and allergens.

The following is an informative article, pertaining to ongoing talks of the federal government stimulus package that has been pushed hard by President Barack Obama. The following piece was written by David O’Leary, a Chicago area lawyer.

The U.S. Treasury Department Announces New Restrictions on Executive Compensation for Financial Institutions Receiving Government Assistance

On February 4, 2009, the Treasury Department issued strict new regulations on executive pay for banks and other financial institutions receiving assistance under the federal government’s “bailout” programs. The new regulations impose a $500,000 salary cap on banks receiving “exceptional assistance,” restrict severance payments to terminated executives and impose disclosure requirements on so called “luxury spending.”

The Obama administration has indicated it recognizes that distressed financial institutions need to attract and retain top talent if they are to regain profitability and repay the taxpayers’ investments. Nonetheless, the administration has significantly restricted the amount of compensation that can be paid to such employees and imposed strict monitoring and accountability requirements on these institutions. It is clear that this is only the beginning of a long-term effort by the administration to examine and reform executive compensation policies.

The new regulations distinguish between banks and financial institutions receiving governmental assistance under generally available programs, and banks and financial institutions receiving “exceptional assistance.” For those institutions receiving exceptional assistance, such as AIG, Bank of America and Citigroup, the restrictions are draconian. While the restrictions are less severe for those institutions participating in generally available assistance programs, they will still have a significant effect on the compensation strategies of these institutions. The new regulations generally do not apply retroactively, but will apply to banks and other financial institutions receiving future assistance, including those who have already received assistance.

The new regulations require:

• Annual Certification. The chief executive officers of all banks receiving any form of government assistance must provide certification that the banks have strictly complied with statutory, Treasury and contractual executive compensation restrictions. Compliance with these restrictions must be re-certified annually. In addition, compensation committees of these banks must provide an explanation of how their senior executive compensation arrangements do not encourage excess or unnecessary risk taking.

• $500,000 Compensation Cap. The compensation of senior executives of banks receiving exceptional assistance is limited to no more than $500,000. Additional amounts can be paid by using restricted stock or other similar long-term incentive arrangements if the executive is prohibited from receiving benefits (a) prior to the time the government has been repaid, with interests, or (b) after a specified period, as negotiated between the bank and Treasury. Banks receiving assistance through generally available programs are permitted to waive this compensation cap if they provide full public disclosure and the waiver is approved by vote of the bank’s shareholders.

• “Say or Pay” Shareholder Resolution. For banks receiving exceptional assistance, the senior executive compensation structure and the rationale for how compensation is tied to sound risk management must be fully disclosed and submitted to a non-binding shareholder resolution.

• Bonus Clawbacks. All banks receiving government assistance must have a program in place to claw back bonuses and incentive compensation from any of the top 25 senior executives if they are found to have knowingly engaged in providing inaccurate information relating to financial statements or performance metrics used to calculate their own incentive pay.

• Ban on Golden Parachutes. For banks receiving exceptional assistance, the top 10 executives are prohibited from receiving any golden parachute payments upon a severance from employment. The next 25 executives will be prohibited from receiving any golden parachute payment greater than one year’s compensation, upon a severance from employment. For banks receiving assistance through generally available programs, only the top five executives will be affected and they will be prohibited from receiving any golden parachute payment greater than one year’s compensation.

• Board’s Approval of Luxury Expenditures. The boards of directors of banks receiving any governmental assistance must adopt a company-wide policy on any expenditures related to aviation services, office and facility renovations, entertainment and holiday parties, and conferences and events. This policy is not intended to eliminate reasonable expenditures for sales conferences, staff development, reasonable performance incentives and other measures tied to a bank’s normal business operations. The bank’s chief executive officers must certify expenditures that could be viewed as excessive or luxury items. The text of the bank’s expenditure policy should be posted on the bank’s website.

The Importance of Compliance With the New Rules

The new regulations are only the beginning of the administration’s attempt to regulate executive compensation. If you are a bank or other financial institution that is currently receiving or is considering any type of government assistance, it is imperative to review your compensation policies and determine the steps that must be taken to comply with the new regulations. If you are not receiving, and do not expect to receive, any government assistance, it is still important to understand the new rules as some of them may apply or affect your company or institution.

When waterproofing a basement, one of the most important considerations should include a home’s overall indoor air quality. Fifty percent of the home’s air originates from the basement, and a significant influence on the health of those living inside a home may come from radon gas. Whether you are a homeowner or a basement waterproofing contractor, one of the most important tasks you should consider testing for is radon gas.

In the state of Iowa, the month of January is Radon Action Month. A recent article from the Decorah Newspaper out of Winneshiek County, Iowa, cited that Iowa is the one state in the U.S. where every home should be tested for radon gas. According to the article, radon gas is the second leading cause of lung cancer.

Problem levels can be corrected as easily as caulking or by a more involved process of installing a mitigation fan. Such fans penetrate through the basement floor, collecting radon and blowing it outside before it enters the house.

Radon can enter a home through the gap between the basement slab and the home’s foundation, and any other penetrations of the concrete floor, including drains, cracks, sump pumps, exposed soil, construction joints and loose fitting pipes.

Complete article from Decorah Newspapers… Radon: Every homeowner should test.