HealthCare.gov is a great source for more information.

The wheels of health care reform are constantly turning, leading to new and revised requirements being rolled out on a rather irregular basis. What was market driven up to this point will be directed by federal government health care reform in the future. In the past, employers of at least 50 full-time or the equivalent of 50 full-time employees had a choice whether to offer insurance. In the future, the choice will be laden with costly consequences. Health care reform is another large government regulation that will have an impact similar to that of Cobra and the FMLA on businesses. It’s a game of play or pay.

While there are still many unknowns, we do know several big changes business owners can prepare to see come to pass in 2014. Here are three ways you can prepare for health care reform in 2014 and one overarching “Bottom Line” choice to consider.

1. In light of the individual mandate, take a hard look at insurance benefits for employees.

The biggest thing to happen in 2014 will be the individual mandate. In 2014, virtually every American will have the “choice” to obtain health insurance coverage through one means or another. If they choose not to obtain health insurance, they will be subject to a related tax. Under this individual mandate, individuals will be able to purchase coverage on their own or through their employers.

If they don’t carry insurance, they will have to pay a tax. For example, if a 20-year-old male in excellent health chooses not to purchase insurance, he will have to pay a punitive tax. Other likely candidates who will choose to or have to pay this penalty include the superrich and the poor.

At this time, if you want to find private insurance, you have to go through a broker, which, some argue, is typically a rather clumsy process. As a result, the federal government is creating exchanges. These exchanges are essentially online sellers of insurance.

Unfortunately, creating a more transparent, fluid marketplace for insurance will not have the same effect this same approach has had on online sellers such as Travelocity and Amazon. The math needed to lower the cost of insurance simply doesn’t add up.  The risk carriers take on is simply too high and unpredictable. In fact, projections are that insurance rates will go up as a result of the individual mandate. As insurance becomes more regulated, competition will likely go down.

2. Better understand upcoming market reforms so you can make smart decisions.

Another major change related to health insurance is market reform, which includes a number of changes. The Patient’s Bill of Rights falls under market reform and is designed to, among other things, protect children (and eventually everyone) from obtaining coverage if they have a pre-existing medical condition. The market reforms going into effect in 2014 also prevents annual dollar limits from being set on annual medical coverage of essential benefits such as hospital, physicians and pharmacy benefits.

Under the law, if a plan includes children, a parent can cover children on their health insurance plan until the child turns 26 years old. Prevention regulations in 2014 will require new private health plans to cover certain evidence-based preventive services. Rate reviews will be put in place to improve insurer accountability and transparency.

These are just few of the reforms coming down the pipeline for employers. It is important to familiarize yourself with these upcoming changes, as your employees will have questions about how these changes will affect them. Be prepared to help them understand why costs are going up and where the blame lies so you don’t feel the brunt of it.

3. Budget now to pay new taxes in 2014.

There are a number of new federally imposed taxes that will begin in 2014. These are being put into place to offset insurance premiums, which are projected to go up across the board.

• Reinsurance Assessment fee — A flat fee to be paid 2014-2016 that applies to both insurance and self-insured plans that provide major medical coverage
• The Health Insurance Industry fee — Created to help offset cost-generating provisions of health care reform
• Patient Centered Outcomes Research Institute (PCORI) fee — Designed to fund research that will compare different medical treatments and interventions to determine what is most effective
• Federally Facilitated Exchange User fee — Put in place to pay for access to exchanges facilitated by the federal government

Employers can’t avoid having to pay these taxes. It doesn’t matter how healthy your team is or how robust your wellness programs are, these new taxes need to be in your budget in 2014.

BOTTOM LINE: Decide who you are in your marketplace.

The most far-reaching, strategic action that business owners can take regarding health care reform is to think about what role they want to play and what impact they want to make in this new group benefits world and then act accordingly. Look at who you are in your marketplace and what you’re trying to be for your people. Ask yourself what all of this means from an employee retention and morale standpoint. What should you do in order to recruit and keep valuable employees?

If your business is small (49 employees or fewer), you have a real choice whether to offer insurance. If you choose to offer it, something else in your business will have to give to pay for the future pay increases that are inevitable. Perks such as gym memberships and paid parking spaces might become things of the past. If you’re a large group (50 or more employees) and you don’t want to offer insurance, you will be liable for a significant tax.

Aside from advocating change, business owners need to know how to handle the changes. Having a partner such as a PEO professional who can help them navigate these choppy waters is critical.

I can offer much more insight into how health care reform will affect your business. Please contact Servant HR more for a free consultation.

Ray Hilbert, CEO, Truth@Work

When Jeff Leffew launched Servant HR in 2003, he knew that as a business leader, he wanted to be held accountable to live out his faith in his professional life as well as his personal one. This part of his mission led him to Truth@Work in 2003. Jeff has been an active member ever since, one of hundreds around the country, and Truth@Work became a client of Servant HR in 2005.

Truth@Work is a nonprofit organization based in Indianapolis cofounded by Ray Hilbert, whose career path tested his ability to run a business on biblical principles versus worldly values. A man of strong conviction and bold vision, Ray and the Truth@Work team serve business leaders by hosting Christian Roundtables to integrate Christian faith into businesses’ daily operations. Products, programs and services help entrepreneurs, CEOs and executives develop and share technologies, achieve personal-spiritual-business “life integration” and balance, and experience a safe place to share issues and challenges.

Ray cofounded Truth@Work with fellow businessman Matt Peelen in 1998. At the time, they weren’t sure exactly how the new organization would function on a daily basis or precisely what this new model would look like. What they did know is they were searching for the next chapter in their lives and that the Lord would direct their steps.

In April 2000, Truth@Work had a roster of nine members. Slowly and organically, the Indianapolis organization grew. When a few people in other cities reached out with an interest in expanding Truth@Work to their cities, Ray said he wasn’t surprised.

“Since our inception, we felt it would happen. We didn’t know how or when. We just wanted to build the best things we could right now so we would be ready if and when it presented itself,” he says.

They ran beta tests in other cities for three years, 2007-2010, to see if the Truth@Work model was repeatable. The answer was yes. In 2010, Ray and his team decided to really scale and grow to other chapters. Since 2010, Truth@Work has moved into to about 30 cities.

“A very realistic plan is that by the end of 2014, we will be up to 100 cities. Five years from there, we will be in 200 markets,” Ray says. He calls it the “proverbial flywheel.” His team is totally focused on the job at hand. All systems are on go. They aren’t distracted by tasks that wouldn’t help them grow or risks they shouldn’t carry, so they are all going in the direction they want to go.

“The big takeaway of our value and relationship with Servant HR is it allows us to focus on what we do, which is grow and serve and build our Roundtable program,” Ray says. “We have peace of mind knowing our HR and payroll and all those pain-in-the-neck issues are off our plate so we can grow and build and sustain our organization.”

Truth@Work has seven full-time employees. To carry out the organization’s functions across the country, Ray and his team certify chapter presidents who are independent of the company payroll. Servant HR helped counsel Ray regarding why that would be a good structure.

From the start, Ray and Matt also made two critical decisions that have influenced the current growth. First, they wanted to be structured as a nonprofit.

“Because business owners and high-level executives are our audience, the nonprofit route has allowed us to stay very focused on what we do and to have very trusting relationships. There is no alternative agenda to make money,” Ray says.

Second, related to scalability, the Anderson University marketing graduate says Truth@Work didn’t make itself visible or findable on the web for its first several years. They didn’t want phone calls and emails without the infrastructure in place to be able to deliver on what they wanted to provide.

“We had the vision, but we intentionally didn’t position ourselves for fast, rapid growth that we couldn’t handle. So in beginning, we sent out a few letters sharing the concept and invited people to come to informational meetings regarding the Roundtable,” Ray says. Truth@Work is now highly visible on the web.

A major advantage of partnering with a PEO is to reduce risk. Asked how Servant HR helps him avoid unnecessary HR risks, Ray answers, “This the most intriguing question. My view and perspective on this is that they are doing their job right, so I don’t even know about the risks I’m avoiding.”

Most recently, Ray says Servant HR is helping Truth@Work navigate the real-world implications and impact of the Patient Protection and Affordable Care Act, helping them understand how different choices might impact or affect the organization and its employees.

Servant HR has also helped on a number of occasions when Truth@Work has had to terminate employees by putting together solid exit plans to help them maintain friendships and a healthy culture. Handling those situations with honor, dignity and respect was important.

“Servant HR has been a great fit for us because they are also very family and values oriented. Christian faith is their No. 1 priority for them like it is for us. This is all a natural extension,” Ray says.

For more information about Truth@Work, visit the website. Contact Servant HR to find out how we can help your organization stay focused.

Anson Thompson (left) and Jenny Dils Durr of The Thompson Group joined forces, cultures and employees in 2012.

The Thompson Group’s mission is about finding pain, healing pain and showing love. About three years ago, the insurance agency began to feel its own pain. The Parker City, Ind., business  had seven employees with owner Anson Thompson at the helm. He had purchased the agency from his father in 1996. While Anson was focused on growing sales and serving clients, he started to realize a significant gap.

“I’m not a good manager of people by any means. I’m a salesperson. A lot of my interactions with people weren’t going well. I hired Servant HR to act as a kind of buffer,” he says. Anson knew what he was good at and what he needed to focus on to be an effective leader, and HR didn’t apply.

Since that time, Anson has helped his agency grow in several ways. Its culture has matured,  its staff has grown and it has added a second location. But The Thompson Group’s path to where it is now was not a simple one. After merging with a larger, more traditional agency, he experienced fundamental differences of culture and business direction that weren’t going to be worked out with time and effort.

“Our office has always been a little creative. We look at the insurance business in a different light than most people in our industry. We’re kind of quirky,” he says.

While the relationship between The Thompson Group and the larger agency floundered, one of the owners of the larger agency found she had a lot of common ground with Anson. As a result,  Jenny Dils Durr and Anson joined forces and merged in 2012.

Servant HR handled the hiring of Jenny’s employees in Indianapolis under The Thompson Group’s HR umbrella. Servant HR had developed administrative processes, an employee handbook and other strategies that made it easy for Jenny and Anson to follow necessary regulations and be sure their employees understood the changes.

Anson says that having Servant HR handle the human resources for The Thompson Group’s 16 employees allows him to get out and sell. “If we have an issue at all, we call Servant HR . It’s the ‘good to great’ theory. Good is the enemy of great,” he says.

“We aren’t good at managing people, and Servant HR has become our HR position, which positions us to go sell and make money. By partnering with Servant HR, we are far more profitable than if we didn’t work with Servant HR. Servant HR makes us money.”

Contact us to see how we can help you focus on being the business leader you want to be.

Many people look at human resources as one of those things you have to do in business. It’s just the way it is. Our clients understand that human resources isn’t just an obligation — which it is to a degree — but when it’s used strategically, it can be a means to unlock opportunities and grow your business. The bottom line is, when you use a PEO, you are being strategic.

Here are six ways a PEO helps you grow your business:

1. PEOs create the freedom for you to focus on your business. PEOs like Servant HR take projects off their clients’ plates. Administrative tasks are the obvious ones. For example, the State of Indiana requires you to report all new hires. This is one of the things that can easily slip through the cracks at businesses in growth mode. When you are focused on building your infrastructure, hiring the best people and moving into new markets, tasks like reporting a new hire can get lost — and get you in trouble. When you have someone else focusing on those things, you can keep growing your business.  There’s no wasted time scrambling to figure what’s required and how to fulfill the requirement. A PEO simply does it, often without our clients even knowing it’s been done. Setting up workers’ compensation is another admin task that often goes overlooked — we just do it.

2. We can help minimize potential attorney fees and wasted time. You probably have an accountant, so when you have an accounting-related question, you call your accountant. In the same way, once business leaders understand their PEO’s areas of involvement, they begin to contact them first when they are dealing with a sensitive HR-related issue.

Going directly to your PEO when you have an issue may help prevent you from wasting money on attorney fees or wasting time researching issues on your own. If we can handle the issue, we will. If we need to work with a client’s attorney to help, we will, and we will have the background information needed to inform our client’s attorney of the issue. In this way, a PEO can help look out for your bottom line.

3. PEOs work strategically with your business goals in mind. Your PEO knows your employee handbook from cover to cover – it probably helped you develop it. And it knows your company philosophy and priorities. When you are dealing with risk issues, such as a discipline challenge, business leaders can turn to their PEO to help them figure out the next steps, and those handbook details and understanding of your business play key roles in how you should strategically respond to risk-laden circumstances. PEOs advise their clients with a full understanding not only of your employee numbers but also an understanding of where you stand financially and other seemingly non-HR matters.

4. PEOs minimize risk. Entrepreneurs recognize the depth and breath of HR today. Healthcare reform helps greatly accentuate that point. All employers are intimately aware of opportunities and threats related to legislation and regulations. If you don’t follow the rules, you could conceivably lose your business in a matter of months. That doesn’t happen often, but it can happen. When you work with a PEO and have a process in place related to payroll, benefits, risk management, workers’ compensation, employee coaching and counseling services, you can keep your eye on the ball in your particular area without worrying about potential penalties or threats related to HR legislation. It’s like using an FDIC-insured bank, as a PEO assumes some of the risk related to HR issues.

Take payroll for example, if you withheld moneys for taxes and didn’t submit them to the government, it’s a federal offense. I’ve seen this happen often. Most of the time, I believe it happens by accident, but there isn’t a risk of this happening when you work with an effective PEO. As another example, you might not know about some FMLA rules that you inadvertently ignored. An employee who bears the brunt of your ignorance might bring a suit against you for failing to comply. A PEO helps take on some of the risk related to these types of issues.

5. A PEO’s process adds value in the eyes of investors. When investors are shopping for opportunities, their due diligence process is thorough. When they see that you work with a PEO, you are demonstrating that you are focused on growing your business (not HR admin tasks) and you don’t have any HR skeletons in your closet. Having a PEO’s input as a third party also can appear as more reliable than information submitted to a potential investor directly from the business seeking funds.

6. Having a PEO in place is impressive for prospective employees. For businesses that want to grow, seeking out and hiring top employees is key. When a potential hire sees that you have health care plans, direct deposit, an employee handbook and other HR-related items in place, they regard you as credible. They can see that you have your house in order as it relates to one of the most important aspects of your business – your people. A PEO helps put that internal structure in place.

If you have questions about how a PEO relationship works, please contact me, Scott Ingram, at 317-585-1688.

Does your company have employees who are actively engaged? Does it really make a difference? Watch as Leah Elms, Customer Service Representative at Servant HR, shares research findings on the relationship between profitability and employee engagement. Plus, get tips on how to analyze your culture and boost engagement.

Visit the Servant HR video page to learn more ways to strengthen your HR. If you can’t see the video above, visit http://youtu.be/7yl1veH1OSo.

Most U.S. states have an at-will employment policy.  This means that you as a business owner or employer may fire someone for a good reason, a bad reason or no reason at all — as long as your reason isn’t illegal. While this does provide more freedom for employers, it is not a free pass to fire someone without regard for how it is handled.

What’s the issue here?

If you as an employer discipline or terminate an employee and do you it badly, you create risk for yourself. A former employee could potentially sue you for discrimination, wrongful termination or a similar claim.

In at-will states, you can terminate someone’s employment for almost any reason as long as it isn’t illegal. If you can’t prove just cause, the employee can file for and get unemployment compensation. More concerning, the person can claim you released them from their job because of their protected class status. Those characteristics could include being over the age of 40, being a certain race or sex, or having a disability.

Generally, as HR professionals, we want to be able to prove that an employee has earned the right to be terminated. There should be some level of just cause when they broke company rules, were insubordinate, etc. We use that information to defend an unemployment compensation claim or discrimination claim.

What are my risks?

While no recent legislative changes have modified how unemployment compensation is handled, the U.S. Equal Employment Opportunity Commission (EEOC) under the current administration has become more proactive in addressing such issues. Employers should be even more mindful of these kinds of HR issues than they perhaps were in the past.

Most frequently, we see the biggest problems arise when an employer discharges someone who is in a protected class (e.g. they are disabled or practice a certain religion) and chooses to fire them at will. In such cases, the employee can come back and successfully say there was not just cause so they have a right to unemployment compensation. They can use that judgment to file a claim with the EEOC. From there, the EEOC hears those claims and if the employee is successful, the employer could be obligated to settle with the individual (in the form of money and/or the offer of getting their job back), or the EEOC gives the employee a “right to sue” notice so the person can potentially find an attorney and take the issue to federal court.

How can I limit my risks?

There are ways to protect yourself from risk or potential losses before an actual termination takes place or becomes necessary. A process of progressive discipline is a prudent, widely used method to follow. With progressive discipline, you follow steps to help document and show evidence of the employee’s bad behavior or failure to follow policy.

For example, if someone does something wrong, you first talk to them about the issue, giving them a verbal warning. If the problem persists, you may follow with a written warning. If this warning is not heeded, termination might be justified and necessary. Normally, the state wants you to walk through a progressive process so employees are warned and understand that if they continue down this road, they could lose their job.

If you can show just cause for terminating an employee, you as an employer are improving your chances that a terminated employee is unable to collect unemployment compensation and sue you.

What’s the bottom line?

Firing an employee comes with risk, and while a state employment at-will doctrine may lead an employer to believe they can fire someone for no reason, there are potential consequences if progressive discipline is ignored. Considering a progressive discipline process based on a just-cause standard is a recommended part of a company’s HR policies. When a policy is developed, it must be part of the company handbook, where you document just-cause offenses. HR professionals, such as those at a PEO, can walk you through the ins and outs of this policy development.

If you have any questions about this issue, contact me, Mike Yoder, at 317-585-1688. 

Even if leaders are born and not made, none is born ready to be their most successful. Jeff Leffew, founder and president of Servant HR, has worked with lots of business leaders through the years. Here are three characteristics he has noticed the most successful ones possess as they are faced with HR challenges and tasks.

Visit the Servant HR video page to learn more ways to strengthen your HR. If you can’t see the video above, visit http://youtu.be/Cz5Wg1Rupxg.

The IRS controls what makes a person an employee or an independent contractor. If you incorrectly classify someone, back taxes, penalties and fees can come into play. Mike Yoder, CEO of Servant HR, walks us through three areas of control that play a role in determining whether someone is an employee or an independent contractor.

• Behavioral
• Financial
• Type of relationship

Find out more about these categories and how they may relate to you in the video.

Visit the Servant HR video page to learn more ways to strengthen your HR. If you can’t see the video above, visit http://youtu.be/gpJfg_m41NI.

Human resources can be tricky. If you don’t make it a priority for your business, serious legal and financial repercussions can result. When an employee termination is bungled, a tax change isn’t heeded or payroll is mismanaged, that’s an HR issue. When you add a new employee, revise benefits or are faced with worker’s compensation issues, that’s HR too.

Not everyone needs to outsource their human resource services. If you own a small company that isn’t going to grow, and you don’t mind managing the paperwork and compliance issues that come with having employees, then you’re probably okay. If you don’t fit into that mold, read on to see if you identify with one or more of the following Twelve Identifiers.

Ask yourself these questions and — here’s the important part — answer each one honestly. If your answers show that you do relate to one or more of these scenarios, contact us. We would be happy to discuss your situation and see how we can help.

No. 1

You aren’t spending as much time generating revenue as you should be. As a business owner, your energy is best spent carrying out revenue-generating tasks. Getting bigger and better requires focus and time. If you need to put more energy into capturing market share, increasing sales or flexing your marketing muscle, you may need Servant HR. Would product or service improvements make you bigger

and better? Would your people be more efficient and happier if you had time to dedicate to their development? If you know that you could be more effective and work more in depth with clients if you only had more hours in your workday, outsourcing your HR might be a good option for you.

Is unemployment tax all doom, gloom and writing checks to the government? Staff Accountant Jayne Blazier offers up three positive aspects of unemployment tax and ways you may be able to decrease the amount you pay.

Visit the Servant HR video page to learn more ways to strengthen your HR. If you can’t see the video above, visit http://youtu.be/O3ICltpSf2s.