Resource Center

September 1, 2008: America Protect®, LLC is launching a new and redesigned website today as part of the company’s renewed focus on providing best of breed solutions for the limited benefit health market. The new site contains more information regarding the products and services that America Protect offers and is visually more appealing.

America Protect® specializes in the creation and implementation of limited benefit health plans as well as other voluntary benefit offerings and provides an innovative approach to meeting the unique needs of their clients. America Protect® partners with carriers, administrators, and vendors to design and develop products and services unique to each client’s needs.

To learn more about our company, click here.

Things are pretty grim out there. Home values are dropping, unemployment is climbing, stocks are mired in a bear market and wages are failing to keep up with escalating prices. In short, hardly any industry is immune to the downturn in the economy.

The staffing industry is no different. The industry’s successes have long been tied to the economy. In fact, the increase in demand for temporary and contract employees that typically occurs throughout the calendar year has not been seen in 2008, according to the American Staffing Association (ASA).

In their annual economy analysis, ASA found that temporary and contract staffing as a whole – which makes up the vast majority of the industry – has never experienced such an extended period of flatness. The good news is that, while this industry may be feeling the effects of the downturn, staffing firms are uniquely positioned to cope and become one of the first to recover.

(For more, download the full article.)

Article by:

George J. Lehmann, President
America Protect, LLC
1-877-757-5600

americaprotect.com/govcontractor-solutions.php

Download Article

In the world of contractors involved in public work initiatives, there usually exist Department of Labor mandates that require those operators to fund specified contribution – per hour worked – toward a "bona fide" benefit. That benefit may take the form of, and is typically:

1. A cash payout in employee payroll that is in addition to the also specified hourly wage.
2. A contribution to a pre-tax savings vehicle, such as a 401(k), on behalf of the affected employees.
3. A premium payment funding employee health, life and/or other welfare insurance.

How a contractor navigates those options can have a profound impact on both profit and operating margins, as well as liabilities (or the absence of liabilities) pursuant to regulatory compliances. This article attempts to basically sort out how these issues interface, and the most usual and prudent methods and means to do so.

COMPLIANCE

As previously referenced, nearly all concerns in these venues are subject to state and/or federal regulations that demand contractor compliance. Some of these extensive requirements pertain specifically to the aforementioned health and welfare funding mandates. Failure to maintain compliance, especially on a "willful" basis, promises, within said regulations, potentially onerous consequences for the employer. Intent to maintain compliance is a significant differentiating factor within the Department of Labor. Clearly, the intent, especially in federal regulations, is to have the contractor direct bona fide benefits – or health and welfare/pension contributions – into a "3rd party fund or plan" – not into direct cash payments. For example, Subpart D, para. 4.170(b) of the Part 4 Service Contract Act Regulations states that payments in cash are allowable only "where such a [bona fide] plan or fund does not exist."

Ultimately, while the Department of Labor maintains some leeway pertaining to enforcement of the cash versus benefits issue, utilization of a bona fide benefit would appear to comply with the clear intent of the law, and therefore be more compliant than cash payout.

CASH BENEFIT VS. INSURANCE/SAVINGS BENEFIT

Irrespective of the previous compliance issue regarding cash payout vs. benefit contributions, a government service contractor must allow for considerable monetary consequences pursuant to these two options. When tendering the mandated monetary contribution into cash payroll the contractor exposes those payouts to various payroll burden assessments, including but not necessarily limited to FICA, FUTA, SUTA, workman’s compensation and liability insurance premiums. In as much as these mandated contributions are incumbent upon the employer – and not the employee – said contractor is not required to provide these benefits on a voluntary basis. Directing these payments into "a bona fide 3rd party fund or plan" excludes same from the payroll stream and in turn from most, if not all of the aforementioned payroll assessments, depending on affected state law.

In this win-win scenario, the contractor – in utilizing a compliant non-cash benefit – may easily save upwards of $.50 per man-hour while at the same time reducing compliance exposure. Furthermore, it allows the employee access to appreciably less expensive and restrictive group coverage rates through the employer, as opposed to using his after-tax dollars to access individual coverage and rates. The referenced employer savings of payroll assessments may be utilized to reduce bid costs, improve margins, or both, depending on whether the affected business is a startup or is existing.

In the case of an existing business, the contractor may transition, midstream of a contract, from cash payment to insured benefits or a pre-tax savings plan. How to effect that change most efficiently and effectively while minimizing employee change-over issues is a subject for the contractor and the plan engineer – usually a licensed insurance professional with experience in these areas. Typically, a health and welfare option is preferred by most employees over investment plan options, especially given recent fund performances (losses). New business environments are less complicated, but both are reasonably easy to install, given some due diligence and case background. The actual benefits to be installed, how and when they are to en enrolled and various other conditions would typically be routine functions executed prior to a final decision and subsequent implementation.

Article by:

George J. Lehmann, President
America Protect, LLC
1-877-757-5600

americaprotect.com/govcontractor-solutions.php

Download Article

The health insurance industry is experiencing big and expensive changes. Faced with rising costs, employers may find it difficult, even impossible, to provide traditional, comprehensive medical plans to their employees. To maintain a talented, dedicated workforce, companies must find ways to provide alternative coverage options for their employees. Limited benefit medical plans can be the answer. Though smaller in scale, well-designed limited benefit medical plans can assist employees who do not have access to “traditional” insurance through their employer or who have had to drop coverage for themselves or their dependents.

When seeking such coverage, look for a plan that can be specifically tailored to the group. Flexible benefit decisions and packaging options can allow employers, working with their broker, to design a plan that addresses many of the health care needs of their uninsured employees. Groups should look at their demographics and determine the benefits most desired by their employees. Age, sex, family structure and prior coverage impact what employees need, want and use. Keep in mind that people typically use the following health benefits: office visits for illness or injury and preventive visits for both adults and children, including screening exams (i.e., mammogram, Pap test, colonoscopy). With a list of core desired elements in place, employers can then work with a broker to identify a carrier that can put together a customized package of benefits to meet those needs.

In this new era of health care financing, employers and employees must be more intimately involved in health care decisions. Employers who offer a limited benefit medical plan to their workers may find that they have healthier, happier employees – something essential to maintaining a healthy bottom line.

Original Article