Category Archives: featured

Group Disability Insurance: Just How Important Is it? (Hint: Very)

Getting disabled. It’s easy to think, “that’s never going to happen to me” or “stuff like that only happens to other people”. We get it, nobody thinks they’re going to be the victims of a disability. Did you know that 1 in 7 Americans can expect to be disabled for 5 years or more? You heard us right, 1 in 7.

Most people dismiss the idea of becoming disabled without giving it a second thought. We think it’s one of the biggest mistakes employers and employees can make. Becoming disabled could be financially catastrophic, especially for families that rely on a single income. If you’re a close relative of Bill Gates or Jeff Bezos, becoming financially burdened may not be a problem for you. But if you’re not, you need to ask yourself: how are you going to replace your income in the event that you can’t work? Both business owners and employees who earn and need to continue to generate incomes must protect themselves and their families.

That’s where Group Disability Insurance comes in. Group Disability Insurance is:

1.) Extremely affordable
2.) A fantastic Employee Benefit
3.) Protection for people who need to protect others.

Some people are under the false impression that Group Disability Insurance is expensive. This couldn’t be further from the truth. In the event of the unthinkable, NOT having Group Disability Insurance is far more costly. Even though it’s not a flashy benefit, none of your employees are going to jump for joy, it’s one of the most important benefits you can provide. Because when life happens and someone gets disabled, this will be the lifeline that keeps their family financially afloat.

If you’d like to set up Group Disability Insurance for your team, contact us at marketing@corpstrat.com and we’ll get you started!

Can Employers Offer Employees Different Levels of Contribution?

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Today we want to share a hack around discrimination in employer contribution to employee benefit plans. The question we often receive is: Can you give different employees different levels of employer contribution?

The short answer is “Yes you Can.”

It’s commonly thought that employers don’t have a lot of discretion in designing and delivering health care benefits for their employees. But the reality is, there are many ways employers can enhance the delivery of their benefits by defining the class of eligibility. Thus creating legal and non-discriminatory ways to enhance employee benefits by class.

Now while it is possible, there are some complexities to setting it up because it touches on some issues regarding employment law and may not be advisable depending on workplace culture. But in general, an employer can create classes of employees and define the contributions or the offering of benefits to these select classes of employees.

Non-discriminatory ways to define an employee’s class of eligibility:

Generally employers have discretion when structuring their benefits plans and are able to make distinctions among employees and the benefits they’re offered. Plans may differ among employees only on “bona fide employment-based classifications”. A “bona fide employment-based classifications” might include: full-time versus part-time employee status; different geographic location; membership in a collective bargaining unit; date of hire or length of service; or differing occupations. Each of these can be treated as different groups of similarly situated individuals and receive different levels of employer contribution. For example, it is perfectly fine to offer three weeks of vacation to exempt employees and two weeks to nonexempt employees because the basis of the vacation benefit is their FLSA category and not any protected category.

The key is to make sure that benefits plan decisions are non-discriminatory, and that’s where we can help. We can make sure protected groups remain protected and design an employer contribution plan that delivers the best possible benefit while eliminating any unintentional discrimination that may result from these decisions.

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With the current challenges in recruiting and retaining it’s a perfect time to revisit how you deliver, what you deliver, and make sure your benefit packages are competitive in helping you attract, retain, and reward the A players to move your business forward. Need help creating classes of employees and defining contributions? Let’s talk, shoot us an email at marketing@corpstrat.com

Everything You Need to Know About the American Rescue Plan Act & the COBRA Premium Subsidy

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On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021, or ARPA. ARPA provides $1.9 trillion in federal stimulus which includes a handful of items directly affecting employers and their employees. Among other provisions, ARPA created a 100% COBRA Premium Subsidy and additional COBRA enrollment rights for certain employees (and their families) who lost group health plan coverage due to an involuntary termination of employment or a reduction of hours. Today, we’ll break down how ARPA will affect employers specifically when it comes to the COBRA Premium Subsidy.

Who qualifies for the COBRA Premium Subsidy?

From April 1, 2021 through September 30, 2021, group health plans providing COBRA continuation coverage must offer a 100% subsidy of COBRA premiums for Assistance Eligible Individuals (AEI) and their qualified beneficiaries. An individual is an AEI if they qualify for COBRA coverage due to an involuntary termination of employment or reduction of hours due to COVID-19. The subsidy requirement applies to major medical, dental, and vision plans offered by employers, but does not apply to Health Flexible Spending Accounts (HFSA). It’s important to note that individuals who qualify for COBRA coverage due to other qualifying events, such as a voluntary termination of employment, are not considered to be AEIs eligible for the premium subsidy.

In addition, the following individuals also qualify for the COBRA Premium Subsidy:

Individuals who do not have a COBRA election in effect on April 1, 2021, but who would be AEIs if they did, are also eligible for the subsidy. This means that individuals who experienced an involuntary termination of employment or a reduction of hours so that COBRA would have started sometime within the 18 months prior to April 1, 2021, but who did not timely elect COBRA, may still elect subsidized COBRA coverage.
Individuals who had elected COBRA coverage but discontinued such coverage before April 1, 2021 are eligible to re-elect COBRA coverage if they would otherwise be AEIs and are still within their COBRA 18-month maximum coverage period.

Will AEIs be responsible for COBRA taxes?

The amount of the COBRA premium subsidy is not taxable to the AEI. The premium amount is advanced by the employer or plan and will be reimbursed by the federal government through a refundable credit against payroll taxes.

What tax benefit will employers receive?

For self-insured plans and insured plans subject to federal COBRA, the employer will receive the tax credit. For insured plans not subject to COBRA, the insurer will receive the credit. Credit amounts exceeding Medicare taxes will be treated as a refund of a Medicare tax overpayment. Employers, insurers, and administrators will need to implement the ARPA COBRA provisions on very short notice, since subsidies became available beginning April 1, 2021.

The Department of Labor is expected to issue further guidance, but employers should consult with their insurers, third-party administrators, and advisors now to ensure compliance.

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We know this is a lot of information. Feel free to reach out to us we will help answer any questions. Email us at marketing@corpstrat.com or call us at 818-377-7260.

Top 5 Benefits of Buy/Sell Agreements

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An often overlooked but important aspect of Executive Planning is the Buy/Sell Agreement. No one wants to think about the death of one of their business partners, it’s painful on both a personal and financial level. But it’s important to plan for the worst so that if that day comes, both their family members and your business remain protected and secure.

What is a Buy/Sell Agreement?

A Buy/Sell Agreement is basically a business prenup: it’s a legally binding contract that stipulates how a partner’s share of a business may be reassigned if that partner dies, divorces, or faces bankruptcy. Often the agreement stipulates that, in the event of a business partner’s death, their shares be sold to the remaining partners or to the partnership. As part of the agreement, business partners can buy life insurance policies on each of the owners. This way, if one of the owners dies, the remaining owners can use the payout from the life insurance policy to buy the deceased owner’s share of the business and make sure the deceased’s families are taken care of.

Top 5 Benefits of Setting up a Buy/Sell Agreement:

1. Peace of Mind

A Buy/Sell Agreement is great because it’s a simple way to secure the future of your business. It protects all partners in a business, whether they decide to leave the business or can no longer partake in the business.

2. An Easier Transition

In addition to offering business owners and partners peace of mind, a Buy/Sell Agreement also assures continuity for customers, creditors, and employees. Loosing a partner can be difficult enough, the last thing you want is to lose customers or assets in the transition process.

3. Promotes Equitable and Orderly Transfer of Wealth and Ownership

Having an effective Buy/Sell Agreement will help your company avoid messy inheritance issues or having an unexpected family member become a partner. It also guarantees the family a buyer for the assets which really help ensure the family is taken care in paying estate debts, expenses, and taxes.

4. Inexpensive Way to Protect your Company

Setting up a Buy-Sell Agreement is affordable and simple. Even if everything goes great and there are no unexpected deaths, you’re not losing money by setting one up and it can even offer tax advantages. However, if the worst does happens, having one can save everyone involved a great deal of time, money, and emotional heartache. To us, it’s a no-brainer to set one up.

5. Easy to Do When All Partners Are Healthy

Since a Buy/Sell Agreement involves taking out life insurance plans, the younger and healthier every partner is, the easier it will be to get an affordable life insurance policy. If you try to procure a plan after one of your partners is diagnosed with a terminal illness, you may not be able to get a plan at all.

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Need help setting up a Buy/Sell Agreement? We can help you with that. Contact us at marketing@corpstrat.com today!

8 Reasons Seamless Onboarding Is So Important

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Believe it or not, not so long ago companies had to store their paperwork in massive filing units that took up valuable office space. When an employee needed a document, HR teams had to go fishing for it in an interminable sea of paper. If something went missing, it could lead to major compliance issues and leave employers vulnerable to law suits.

Thanks to new technology allowing for powerful mobile apps, those days are mostly behind us. However, many companies still aren’t using the most efficient onboarding systems. Some have a general onboarding system but it’s not connected to payroll. Others have paperless onboarding but it has a clunky UI and information isn’t stored in a single database, leaving room for error and documents falling through the cracks. With our Workforce Ready, all-in-one solution: onboarding is connected directly to Payroll, employees can use a single login to keep things streamlined, and everything is stored securely in a single database.

Here are 8 ways our Workforce Ready platform can make onboarding completely painless:

1. It’ll save you a tremendous amount of time.

Our platform features a powerful desktop and mobile application that allows HR teams to easily and immediately generate documents and send them to employees. This mean no more running to and from the printer or using a third party app that you then have to upload into the system.

2. It’ll save you valuable office space.

Employers don’t have to store a thing. This means no more dedicating entire rooms in your office for storing paperwork or hard drives. It also reduces the anxiety of forms getting lost or misfiled, which can quickly snowball into a bigger compliance issue.

3. It’ll make connecting new employees to payroll a breeze.

A big inconvenience for HR teams we see is when their onboarding platform and employee HR portals aren’t connected with their payroll. We think it’s extremely important for onboarding and payroll to be connected through a single datapoint entry because it eliminates the possibility of mistakes and delays. Our Workforce Ready platform stores everything in one database making it easy for HR teams and guarantees no confusion or delayed payments for employees.

4. It’ll make it easy for employees to access their documents.

With the Workforce Ready app, employees can access their onboarding documents any time and any where through their portal. This empowers your employees and offloads work from your HR team’s plate.

5. It’ll keep your managers accessible and accountable.

Many employees who leave a job do so because they have issues with their direct manager. By using an efficient employee onboarding and tracking system, employers can ensure their managers are efficiently leading and motivating their team members by using the app to bake in evaluations and performance benchmarks at designated times.

6. It’ll offer your team a more personalized experience.

Surveys have shown that going paperless can actually reduce turnover rates. Companies that have effective onboarding procedures save money by retaining up to 50% more new hires. When your team members feel empowered and in the know, they’re more likely to be satisfied with their work environment.

7. It’ll make sure they can get to work faster.

The sooner your new hires can get to work, the sooner they can start contributing to and getting to know the team. Employers that haven’t adopted paperless onboarding might be wasting their new employees’ valuable time by having them mired in paperwork before they even know where the coffee maker is. Having a powerful web and mobile application like Workforce Ready means HR can send documents and checklists, employees can immediately sign what they need to, and those signatures are stored in a single cloud-based database.

8. It’ll help with efficiency and compliance

It’s simple: electronic onboarding ensures compliance, which protects your business. The onboarding app basically force employees to complete each step before they can move on. This means that if your company gets audited, it’ll be easy and straightforward to present all the relevant paperwork and show your company is compliant.

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Need help setting up seamless onboarding? Let’s talk! Email us at marketing@corpstrat.com.