After 30 years, Trump’s tax code plans aim to reduce taxes for the middle-class and corporations. However, this, in turn, has serious ramifications for 401(k) owners retirement plans.

The new Trump Tax Code offers a number of opportunities to save significantly for a limited period of time. Qualified retirement plans (IRA’s, 401K’s, 403B, 457 plans, TSP’s, SEP’s, etc.) lead to problems that most people who are nearing retirement, or are retired often don’t expect.

Problems With Your Retirement Accounts:

• Every distribution is taxed at your highest rate.
• Distributions may put you in a higher tax bracket.
• Distributions often lead to an additional tax on your Social Security Income.
• Distributions can lead to more tax on capital gains.
• It’s the only account that requires distributions, even if you don’t want or need the money.
• It’s the highest tax account to leave to your heirs.
• During retirement years, you can easily argue these are the least tax-efficient you own.

How Could the New Tax Code Help?

With the new tax brackets, for single files filing the tax deductions are higher in 2018 than in 2017. For married filers filing jointed the deduction is much higher in 2018 than 2017.

All in all, more of your 401(k) money will be taxed similarly to your savings directed into Roth IRAs: You would put in after-taxes, then withdraw money tax-free during retirement.

There’s already a Roth 401(k) that works this way, and it has been slowly gaining momentum.

One of the best ways to reduce the tax liability of your retirement accounts over time is to pay some tax today (at the new lower rates) and shift money into a Roth IRA. This could save you taxes significantly during your retirement years.

You ask, why you move money from your IRA to a Roth IRA?

The Benefits of a Roth IRA Conversion:

1.) Tax-free distributions (assuming you follow the five-year rules).

2.) If you are over 59 1/2, immediate access to funding, tax-free with no penalties.

3.) No required minimum distributions. Freedom of choice.

4.) Tax-free inheritance to beneficiaries if set up correctly.

5.) It’s grandfathered in against any future tax law changes.

Before you rush out and start transferring your retirement accounts to Roth IRA’s, you really want to meet with a financial planner and your CPA to look at the differences to make sure it makes sense for you financially and to make sure it makes sense for you tax-wise.

HR Departments across the country are incorporating technology into their roles to do their jobs more efficiently, including Benefit Administration. Why spend hours collecting paper forms, tracking plan selections and payroll deductions when an HRIS platform can do the work for you.

New and improved tools are making it easier to onboard and enroll employees. Digital processes can speed up inefficiencies, and the right tools can keep information secure from end-to-end.

Paper is still the most common in the healthcare world today, but the risks of mainly using paper include turning away customers who are increasingly paying their bills through electronic online means. Managing employee benefits on a pile of paper seems dated and increasingly inefficient. Not to mention, storing all the data, which is proven to be less secure when it’s not stored on a protected server that incorporates two-factor authentications for access.

Digital benefit enrollment changes all this. It allows for your employees to access robust enrollment data, revisioning, approvals, and seamless usability.

Digitizing Enrollment

CorpStrat®HR’s Benefit Enrollment capabilities make it convenient for your employees to manage their Open Enrollment elections through one central Web-based system.

Some key features include:

• Employees can enroll in or change all aspects of their benefits and other HR-related information themselves.
• Allows employees to compare, analyze and check plan costs prior to benefits enrollment.
• Allows employees to view plans from different benefit providers, showing only the plans they are eligible for.
• Lets employees attach dependents and beneficiaries to benefit plans.
• Lets employees submit benefit and HR-related data electronically to you for approval and review.
• Provides employees with a benefit summary statement after they enroll in or change their benefits.
• Gives employees access to pertinent company and benefits information via the Information Links and Documents sections.
• Is easily configurable to include the features and content most relevant to your company.
• Is quick and simple for employees to navigate through.

Not only will HR automation streamline your processes and help you gain efficiencies, but it also improves the overall experience for your employees. Contact CorpStrat® to learn more.

Job descriptions are one of the most important, yet overlooked employer tools an employer has at their disposal. If you have not reviewed your company’s job descriptions this year, the fourth quarter is just around the corner and it’s a great time to do so prior to year-end.

When drafting and or reviewing job descriptions, to ensure they are effective and accurate for your business needs, keep in mind these key areas:

• Hiring – effective job descriptions give applicants and employees an accurate picture of what is expected of them in performing their job duties.
• Workers’ Compensation Insurance – often workers compensation carriers require you to provide job descriptions in order to determine policy coverage. If an employee is injured, the job description is needed to determine when and if the employee is able to return to work.
• ADA/FEHA compliance – job descriptions are a key resource when an employee requires a workplace accommodation. It will be key in evaluating the key requirements of the employee’s job duties and help in determining whether a job transfer qualifies as a reasonable accommodation.
• Exempt/Non-exempt status – job descriptions help employers ensure they are classifying employees properly based on the tasks defined in the job description.
• Employee evaluations – there a few better metrics against which to measure an employees performance than the employee’s job description.  If an employee’s performance is lacking, the job description is key to getting the employee back on track.

Compensation Time Pitfalls

Comp time polices are not new, but wage and hour litigation in California is continuing to catch well-intentioned employers of all sizes in class action lawsuits over improperly implementing comp time policies. Employers are best protected from such claims when they understand the connectedness between comp time policies and the employee pays.

California laws governing payment to employees (including comp time) are very stringent. Employers can easily become subject to wage and hour lawsuits for violating them. Consider these common mistakes when reviewing your policy:

1. Allowing comp time to be accrued and taken off the books.
2. Exchanging comp time evenly one day for one day worked.
3. Having an oral agreement only.

Labor Code Section 204.3 outlines the rules to follow when establishing a comp time policy. It only takes one unhappy employee to bring a lawsuit. Don’t let this happen to you.

Voluntary Benefits Are Considered Essential To Millennial and Gen Z Employees

Many employers offer voluntary benefits to supplement their core benefit plans.  Supplemental insurance plans appeal to the changing and diverse workforce that has come to expect comprehensive employee benefits packages. To stand out in a competitive job market, employers are offering more choices and flexibility to employees.

In a recent study conducted by Willis Towers Watson found two emerging trends to attracting and retaining Millennial and Gen Z employees. Personalized options and support of financial well-being were named the top two for this employee demographic.

Personalization along with benefits that align with company values and engage employees are likely to have greater success in driving employee satisfaction.

For more detailed information, please contact your CorpStrat® Account Manager. We are always here to help.

With the publication of the final rules regarding the establishment of association health plans, many believe we have given new life to an old concept of employers banding together to purchase goods and services in an effort to use a scale-up approach to reduce expenses.

Unfortunately, with this strategy comes with the meeting of several roads; each having very rocky terrain.

On the one hand, the appeal of industries banding together makes a lot of sense.  For example, the tech industry typically attracts young healthy employees who traditionally embrace healthy lifestyles and who require little health care services to maintain healthy lives (a perfect pool for an insurer).

On the other hand, pools like this would extract the healthiest individuals from other pools; leading to the worst disaster for insurance companies, what we call adverse selection. This adverse selection is the likelihood that those most likely to join are those most likely to consume – and in significant amounts.

The ACA, for all its efforts, attempted to build the largest pools and level the playing field for all by requiring virtually all Americans to purchase and maintain health insurance – creating the best chance for Insurers to find a way to balance claims and rising medical care and pharmacy costs within a private healthcare system.

Trump’s new path allows associations to not only potentially offer, but further differentiate, the plan, by allowing significant reductions or exclusions to coverage.  This creates the idea/illusion that there is a simple format to buy coverage that doesn’t cover virtually everything (we call these “essential” health benefits), thus potentially paving the way for the Pool to charge lower premiums.

California legislators aren’t thinking this way – there is a strong sense the state of California likes the status quo, the pools of individuals that allow for guaranteed acceptance. The concept of allowing insurers to offer plans that are less generous or that cover fewer conditions seems to make legislators uneasy.

And so, the jury is still out as to whether states will embrace association-based health plans and whether insurance companies will consider sponsoring these pools.