Equifax, one of the largest credit reporting agencies in the United States, was recently the victim of a massive cyber attack—an attack that may have compromised the personal information of 143 million people.
The breach itself occurred between mid-May and July 2017 when cyber criminals gained access to sensitive data by exploiting a weak point in website software. As a result of the attack, sensitive information like Social Security numbers, birthdays, addresses and driver’s license numbers were compromised. In addition, Equifax said 209,000 credit card numbers were stolen, including information from international customers in Canada and the United Kingdom.
The recent attack on Equifax is the third major cyber security threat the organization has experienced since 2015 and one of the largest risks to personally sensitive information in recent years. The attack is so severe, in fact, it’s likely that anyone with a credit report was affected.
If you are concerned that you may have been impacted by the breach, Equifax has set up a website to help individuals determine if any of their personal information may have been stolen. Once you have navigated to the website, complete the following steps:
- Click the “Check Potential Impact” button.
- Provide your last name and the last six digits of your Social Security number.
From there, a dialogue box will pop up and indicate whether or not your information was lost in the hack. All U.S. customers will also be given the opportunity to sign up for TrustedID Premier, which is an Equifax service that includes identity theft insurance, credit reports, and a service that crawls the internet and alerts you if your Social Security number is posted somewhere online. This service will be free for one year for those who sign up by Nov. 21.
If you have been impacted by the breach, experts recommend engaging in a credit freeze. This effectively locks down your Social Security number on your credit report and prevents criminals from opening up new lines of credit under your name. For more information on credit freezes, visit the Federal Trade Commission’s website.
It should be noted that it may not be obvious that you are a customer of Equifax, as the company gets its data from credit card companies, banks and lenders that report on credit activity. As such, it’s important to follow the appropriate steps and check to see if your information was compromised.
Additionally, you should review your online bank and credit card statements on a weekly basis. This will help you monitor any suspicious activity. Contact law enforcement officials if you believe criminals have used your stolen information in some way.
Clark & Associates of Nevada, Inc. will continue to monitor the Equifax cyber incident, providing any major updates as necessary.
Statistics show that violence continues to be a problem in the workplace. Employers have a duty to provide a safe working environment for both their employees and their visitors and to not negligently hire or retain potentially violent employees. The following tips will help you prevent or reduce workplace violence.
The following strategies can be used during hiring:
- Verify information on all new hires through reference checking.
- Consider using drug testing to weed out unfit job applicants.
- Screen applicants by conducting background checks. Condition offers of employment upon the completion of backgrounds checks, drug tests or medical exams.
Conduct a worksite analysis and risk assessment. Review workers’ compensation records and illness claims to identify patterns of assault and other workplace violence. Understand industry experience and specific job exposures.
The following tactics can help minimize workplace violence:
- Create an atmosphere that promotes open communications, allows employees to have adequate control over their work and provides support and recognition.
- Have a clear, written policy protecting employees from harassment, threats and intimidation. Policy should include that any complaints of harassment or threats will be investigated and appropriate steps taken, including discipline and discharge.
- Establish a grievance/complaint procedure.
- Establish an employee assistance program (EAP).
- Offer outplacement counseling to employees being laid off or terminated.
Consider the following security measures: monitoring systems, limited access key cards, employee identification cards, emergency warning systems, security guards, visitor sign-in policies, security escorts for those working late and safe rooms in case of emergencies.
Training and Education
The following strategies can be used to educate employees on how to recognize workplace violence:
- Train employees how to recognize hazards and respond to incidents of violence.
- Educate employees on the zero-tolerance policy, the importance of a safe workplace and how to get help.
- Train employees how to recognize a potentially violent employee. The following are potential warning signs:
- Changes in behavior
- Sensitivity to feedback
- Slip in job performance
- Easily irritable
- Tardy or absent often
- Angry remarks
- More emotional than usual
- More errors than usual
- Using a raised voice or profanity
- Alcohol or drug use
Put a team together and develop a plan on how to assess and address a threatening situation in case the need ever arises. Your team should consist of human resources, security, and medical and legal personnel. Investigation and post-incident analysis by the team will help shape future responses.
Training and Education
Develop a crisis plan that could include an outline on reporting incidents of workplace violence and instructions on who to notify. The plan should include:
- How to assess the situation
- Getting help
- Warning employees
- Securing the workplace
- Involving the police and gathering information to assist the investigation
- Follow-up activities like debriefing employees, resuming operations and long-term planning
On March 24, 2017, Republican leadership in the U.S. House of Representatives withdrew the American Health Care Act—their proposed legislation to repeal and replace the Affordable Care Act (ACA).
A House vote was scheduled to take place on that day, but House Republicans could not secure enough votes to approve the legislation and, instead, canceled the vote. As a result, the ACA will remain in place at this time.
IMPACT ON EMPLOYERS
Because the House was unable to pass the American Health Care Act, the ACA remains current law, and employers must continue to comply with all applicable ACA provisions.
President Donald Trump has indicated that he would not continue to pursue an ACA repeal if the American Health Care Act could not be passed. Both President Trump and House leadership have stated that they now intend to focus on other issues. Despite this, Congress may choose to pursue their own ACA repeal and replacement in the future.
Two separate bills that make up the American Health Care Act were released in response to a budget resolution passed by Congress on Jan. 13, 2017. The budget resolution is a nonbinding spending blueprint that directs House and Senate Committees to create federal budget “reconciliation” legislation. To become law, budget reconciliation bills must go through the legislative process. However, a budget reconciliation bill is generally filibuster-proof, and can be passed by both houses with a simple majority vote.
A full repeal of the ACA cannot be accomplished through the budget reconciliation process. A budget reconciliation bill can only address ACA provisions that directly relate to budgetary issues—specifically, federal spending and taxation. A full repeal of the ACA must be introduced as a separate bill that would require 60 votes in the Senate to pass.
Debate on the American Health Care Act began on March 8, 2017. To address concerns raised by both Democrats and fellow Republicans, the House Republican leadership released amendments to the legislation on March 20, 2017, followed by a second set of amendments on March 23, 2017. The House vote was originally expected to take place on March 23, 2017, but was delayed for one day, until March 24, 2017.
Following the announcement that the House vote would be delayed, President Trump stated that he would not continue to pursue an ACA repeal if the House could not pass this legislation. As a result, the ACA will remain in place at this time. However, Congress may choose to pursue their own ACA repeal and replacement in the future.
On March 6, 2017, Republican leadership in the U.S. House of Representatives issued two bills to repeal and replace the Affordable Care Act (ACA) through the budget reconciliation process. These bills, which were issued by the Ways and Means Committee and the Energy and Commerce Committee, are collectively known as the American Health Care Act.
To become law, these bills must go through the legislative process, although a budget reconciliation bill can be passed with a simple majority vote. Debate on the legislation is scheduled to begin on March 8, 2017.
IMPACT ON EMPLOYERS
If enacted, the new law would not repeal the ACA entirely, although it would make significant changes to key provisions.
The ACA’s employer and individual mandates would be repealed retroactively beginning in 2016. Key consumer protections, like the ACA’s prohibition on pre-existing condition exclusions and dependent coverage to age 26, would remain intact.
See below for a summary of the bills’ important provisions.
The two separate bills that make up the American Health Care Act were released in response to a budget resolution passed by Congress on Jan. 13, 2017. The budget resolution is a nonbinding spending blueprint that directs House and Senate Committees to create federal budget “reconciliation” legislation.
Once drafted, any budget reconciliation bill can be passed by both houses with a simple majority vote. If these bills are passed in both the Senate and the House, the law would then go to President Donald Trump for approval. However, a full repeal of the ACA cannot be accomplished through this process.
ACA Provisions Not Impacted
The majority of the ACA is not affected by the new legislation. For example, the following key ACA provisions would remain in place:
- Cost-sharing limits on essential health benefits (EHBs) for non-grandfathered plans (currently $7,150 for self-only coverage and $14,300 for family coverage)
- Prohibition on lifetime and annual limits for EHBs
- Requirements to cover pre-existing conditions
- Coverage for adult children up to age 26
- Guaranteed availability and renewability of coverage
- Nondiscrimination rules (on the basis of race, nationality, disability, age or sex)
- Prohibition on health status underwriting
The requirement to offer the EHB package for individual and small group plans also remains in place, although the actuarial value requirement would be repealed. Age rating restrictions would also continue to apply, with the age ratio limit being revised to 5:1 (instead of 3:1), and states would be allowed to set their own limits.
Repealing the Employer and Individual Mandates
The ACA imposes both an employer and individual mandate. The American Health Care Act would reduce the penalties imposed under these provisions to zero, effectively repealing both mandates (although they would technically still exist). These changes would apply retroactively for months beginning after Dec. 31, 2015.
However, the American Health Care Act would impose what it calls a “continuous coverage incentive” in an effort to limit adverse selection in health care markets and to encourage individuals to maintain health coverage. Beginning with open enrollment for 2019, issuers would be permitted to add a 30 percent late-enrollment surcharge to the premium cost for any applicants that had a lapse in coverage for greater than 63 days during the previous 12 months. The late-enrollment surcharge would be discontinued after 12 months.
Replacing Health Insurance Subsidies with Tax Credits
The ACA currently offers federal subsidies in the form of premium tax credits and cost-sharing reductions to certain low-income individuals who purchase coverage through the Exchanges. The American Health Care Act would repeal both of these subsidies, effective in 2020.
The American Health Care Act would replace the current ACA subsidies with a portable, monthly tax credit to all individuals that can be used to purchase individual health insurance coverage. The tax credit could be used to purchase any state-approved major medical health insurance and unsubsidized COBRA coverage.
The new tax credit would be both advanceable and refundable, and would be age-rated, with older individuals eligible for larger credits. The new tax credits would be capped at $14,000 per family and would be adjusted for inflation over time. In addition, the credits would be phased out for individuals making over $75,000 per year ($150,000 for joint filers).
The American Health Care Act would also repeal the ACA’s small business tax credit beginning in 2020. In addition, between 2018 and 2020, the small business tax credit generally would not be available with respect to a qualified health plan that provides coverage relating to elective abortions.
Enhancements to Health Savings Accounts (HSAs)
HSAs are tax-advantaged savings accounts that are tied to a high deductible health plan (HDHP), which can be used to pay for certain medical expenses. To incentivize use of HSAs, the American Health Care Act would:
- Increase the maximum HSA contribution limit: The HSA contribution limit for 2017 is $3,400 for self-only coverage and $6,750 for family coverage. Beginning in 2018, the new law would allow HSA contributions up to the maximum out-of-pocket limits allowed by law (at least $6,550 for self-only coverage and $13,100 for family coverage).
- Allow both spouses to make catch-up contributions to the same HSA: The new law would allow both spouses of a married couple to make catch-up contributions to one HSA, beginning in 2018, if both spouses are eligible for catch-up contributions and either has family coverage.
- Address expenses incurred prior to establishment of HSA: Starting in 2018, if an HSA is established within 60 days after an individual’s HDHP coverage begins, the HSA funds could be used to pay for expenses incurred starting on the date the HDHP coverage began.
Relief from ACA Tax Changes
The American Health Care Act would provide relief from many of the ACA’s tax provisions, including:
- Cadillac tax: The ACA imposes a 40 percent excise tax on high cost employer-sponsored health coverage, effective in 2020. The new law would change the effective date of the tax, so that it would apply only for taxable periods beginning after Dec. 31, 2024.
- Restrictions on using HSAs for over-the-counter (OTC) medications: The ACA prohibits taxpayers from using certain tax-advantaged HSAs to help pay for OTC medications. The new law would allow these accounts to be used for OTC purchases, beginning in 2018.
- Increased tax on withdrawals from HSAs: Distributions from an HSA (or Archer MSA) that are not used for qualified medical expenses are includible in income and are generally subject to an additional tax. The ACA increased the tax rate on distributions that are not used for qualified medical expenses to 20 percent. The new law would lower the rate to pre-ACA percentages, effective for distributions after Dec. 31, 2017.
- Health flexible spending account (FSA) limit: The ACA limits the amount an individual may contribute to a health FSA to $2,500 (as adjusted each year). The new law would repeal the limitation on health FSA contributions for taxable years beginning after Dec. 31, 2017.
- Additional Medicare tax: The ACA increased the Medicare tax rate for high-income individuals, requiring an additional 0.9 percent of wages, compensation and self-employment income over certain thresholds to be withheld. The new law would repeal this additional Medicare tax beginning in 2018.
- Deduction limitation for Medicare Part D subsidy: The ACA eliminated the ability for employers receiving the retiree drug subsidy to take a tax deduction on the value of this subsidy. Effective in 2018, the new law would repeal this ACA change, and reinstate the business-expense deduction for retiree prescription drug costs without reduction by the amount of any federal subsidy.
Beginning after Dec. 31, 2017, the new law would also repeal the excise tax on the sale of certain medical devices, the annual health insurance providers fee, the annual fee on certain brand pharmaceutical manufacturers and the 10 percent sales tax on indoor tanning services. It would also restore the medical expense deduction income threshold to pre-ACA levels beginning in 2018.
The American Health Care Act would repeal the ACA’s Medicaid expansion, and make certain other changes aimed at modernizing and strengthening the Medicaid program. For example, the new law would provide enhanced federal payments to states that already expanded their Medicaid programs, and then transition Medicaid’s financing to a “per capita allotment” model starting in 2020, where per-enrollee limits would be imposed on federal payments to states.
The legislation would also modernize Medicaid’s data and reporting systems, repeal the ACA’s disproportionate share hospital (DSH) cuts and make changes to the process for eligibility determinations.
The Affordable Care Act (ACA) imposes a dollar limit on employees’ salary reduction contributions to health flexible spending accounts (FSAs) offered under cafeteria plans. This dollar limit is indexed for cost-of-living adjustments and may be increased each year.
On Oct. 25, 2016, the Internal Revenue Service (IRS) released Revenue Procedure 2016-55 (Rev. Proc. 16-55). Rev. Proc. 16-55 increased the FSA dollar limit on employee salary reduction contributions to $2,600 for taxable years beginning in 2017. It also includes annual inflation numbers for 2017 for a number of other tax provisions.
Employers should ensure that their health FSA will not allow employees to make pre-tax contributions in excess of $2,600 for 2017, and they should communicate the 2017 limit to their employees as part of the open enrollment process.
An employer may continue to impose its own health FSA limit, as long as it does not exceed the ACA’s maximum limit for the plan year. This means that an employer may continue to use the 2016 maximum limit for its 2017 plan year.
The ACA initially set the health FSA contribution limit at $2,500. For years after 2013, the dollar limit is indexed for cost-of-living adjustments.
- 2014: For taxable years beginning in 2014, the dollar limit on employee salary reduction contributions to health FSAs remained unchanged at $2,500.
- 2015: For taxable years beginning in 2015, the dollar limit on employee salary reduction contributions to health FSAs increased by $50, for a total of $2,550.
- 2016: For taxable years beginning in 2015, the dollar limit on employee salary reduction contributions to health FSAs remained unchanged at $2,550.
- 2017: For taxable years beginning in 2017, Rev. Proc. 16-55 increased the dollar limit on employee salary reduction contributions to health FSAs to $2,600.
The health FSA limit will potentially be increased further for cost-of-living adjustments in later years.
An employer may continue to impose its own dollar limit on employees’ salary reduction contributions to health FSAs, as long as the employer’s limit does not exceed the ACA’s maximum limit in effect for the plan year. For example, an employer may decide to continue limiting employee health FSA contributions for the 2017 plan year to $2,500.
Per Employee Limit
The health FSA limit applies on an employee-by-employee basis. Each employee may only elect up to $2,600 in salary reductions in 2017, regardless of whether he or she also has family members who benefit from the funds in that FSA. However, each family member who is eligible to participate in his or her own health FSA will have a separate limit. For example, a husband and wife who have their own health FSAs can both make salary reductions of up to $2,600 per year, subject to any lower employer limits.
If an employee participates in multiple cafeteria plans that are maintained by employers under common control, the employee’s total health FSA salary reduction contributions under all of the cafeteria plans are limited to $2,600. However, if an individual has health FSAs through two or more unrelated employers, he or she can make salary reductions of up to $2,600 under each employer’s health FSA.
Salary Reduction Contributions
The ACA imposes the $2,600 limit on health FSA salary reduction contributions. Non-elective employer contributions to health FSAs (for example, matching contributions or flex credits) generally do not count toward the ACA’s dollar limit. However, if employees are allowed to elect to receive the employer contributions in cash or as a taxable benefit, then the contributions will be treated as salary reductions and will count toward the ACA’s dollar limit.
In addition, the limit does not impact contributions under other employer-provided coverage. For example, employee salary reduction contributions to an FSA for dependent care assistance or adoption care assistance are not affected by the health FSA limit. The limit also does not apply to salary reduction contributions to a cafeteria plan that are used to pay for an employee’s share of health coverage premiums, to contributions to a health savings account (HSA) or to amounts made available by an employer under a health reimbursement arrangement (HRA).
Grace Period/Carry-over Feature
A cafeteria plan may include a grace period of up to two months and 15 days immediately following the end of a plan year. If a plan includes a grace period, an employee may use amounts remaining from the previous plan year, including any amounts remaining in a health FSA, to pay for expenses incurred for certain qualified benefits during the grace period. If a health FSA is subject to a grace period, unused salary reduction contributions that are carried over into the grace period do not count against the $2,600 limit applicable to the following plan year.
Also, if a health FSA does not include a grace period, it may allow participants to carry over up to $500 of unused funds into the next plan year. This is an exception to the “use-it-or-lose-it” rule that generally prohibits any contributions or benefits under a health FSA from being used in a following plan year or period of coverage. A health FSA carryover does not affect the limit on salary reduction contributions. This means the plan may allow the individual to elect up to $2,600 in salary reductions in addition to the $500 that may be carried over.
Plan documents that specify the health FSA dollar limit must be amended if the higher limit will be used in 2017.
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