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June 26, 2014

“One’s an outlier, a few many be a passing fad, but over 50 is the beginning of an industry trend.” Eric Grossman, National Exchange Leader at Mercer

Reuters is predicting 2014 to be a “watershed” year. Over 65 employers are moving to private exchanges, with over 1,000,000 active employees due to participate. Like the Health Insurance Marketplace (i.e., the public exchanges), private exchanges are marketplaces of health insurance and other employee benefit products where employers may purchase the health insurance. Then, the employees can choose from a health plan provided.

Unlike the public, governmental exchanges, there is no governmental subsidy to purchase insurance for those who meet the salary guidelines under the ACA. Instead, there is an employer subsidy to purchase insurance that meets the ACA requirements as well as any state insurance regulations. This shifting in the cost and risk of health insurance allows employers to control their bottom line, while shifting the costs to their employees. Under the private exchanges, employers’ former duties of plan design and other insurance relationships are now outsourced. However, employers will still have to face communication challenges, such as monitoring employees’ relationship and understanding of the exchanges.

What are the benefits of private exchanges?

  • Negotiating Leverage
  • Competition
  • Product Commoditization
  • Administrative Streamlining
  • Cost Trend Control (risk pooling)
  • Cost Trend Control (defined contribution)
CBIZ offers not only a mid to large market private health care exchange, but also a custom version for employers with 25 to 100 employees. Keep an eye on our blog for an upcoming post on CBIZ Choice, our own private exchange. For all questions regarding private exchanges or the Affordable Care Act, please contact Steve Dunavant at sdunavant@cbiz.com or (901) 685-5575.  

 




June 24, 2014

Practice Development Manager, Megan Murdock, was recently published in BIZGrowth Strategies Summer 2014 edition for her piece highlighting the "The Shift to Content Marketing."

Her story, which follows content from its creation to distribution, focuses on the importance of content marketing and its ability to be leveraged for lead generation as well as operate as a tool to help meet business goals.

The following is a short excerpt from the article:

Content should not be created haphazardly and should ultimately tie into a company's overall marketing and business strategy. Before committing to this approach, companies must realize that content marketing is an ongoing process that requires budget allocation, constant planning, methodical execution and insightful evaluation. However, if executed well, a content marketing strategy can assist companies with achieving their business goals and lead them to a broader, more engaged customer base.

BIZGrowth Strategies is a newsletter produced by CBIZ and published on a quarterly basis. To view electronic versions of current and past issues of BIZGrowth Strategies, visit http://www.cbiz.com/News/Newsletters. View Megan's full article here.




June 20, 2014

What has been delayed for employers?

Employer Shared Responsibility Requirement Provisions: No reporting until calendar year 2015

  • Delayed until January 1, 2015 for large employers with 100 or more employees.  There is a potential excise tax penalty for failure to offer minimum essential coverage (MEC) at an affordable rate:

1. "No coverage” Penalty ($2000): Failure to offer MEC to 95% (70% for 2015) of full-time employees working 30+ hours

2. “Inadequate or Unaffordable” Penalty ($3000): Coverage fails to meet minimum value standard or is unaffordable

Transition relief is only available if the non-calendar year plan year has not been changed since December 27, 2012.

  • Delayed until 2016 for small employers with 50-99 employees. There is a potential excise tax penalty for failure to offer minimum essential coverage (MEC) at an affordable rate:

1. “No coverage” Penalty ($2000): Failure to offer MEC to 95% of full-time employees working 30+ hours

2.  “Inadequate or Unaffordable” Penalty ($3000): Coverage fails to meet minimum value standard or is unaffordable

To qualify, employer must not have materially reduced the health benefits offered as of February 9, 2014.

What has been delayed for individuals?

Individual Mandate Penalties for Failure to Maintain MEC: Provisions Delayed until October 1, 2016

 Individual Mandate Penalties

What has NOT been delayed?

Group Health Plan Mandates: For plan years beginning on or after January 1, 2014, all group health plans, including grandfathered and non-grandfathered plans, must include these mandates:

  • Ban on pre-existing condition exclusion limitations on anyone
  • Extension of dependent coverage until age 26
  • Full implementation of ban on annual or lifetime limits for essential health services
  • Increased limit in outcome-based incentives/disincentives permitted in wellness programs from 20% to 30%; or, up to 50% for tobacco-free programs
  • Ban on waiting periods exceeding 90 days (60 days if using 1st of the month eligibility)
  • Inclusion of essential benefit coverage, providing a specified actuarial value, and cost-sharing limitations by insurers in small group and individual markets, and large group markets via state marketplaces
The Affordable Care Act sets in motion the largest change in employer-provided health benefits most of us have seen in our lifetime. Keep in mind the reform is ever-changing. To keep up to date subscribe to our blog. For further questions regarding the ACA, please contact Steve Dunavant at sdunavant@cbiz.com or (901) 685-5575.



June 17, 2014
CBIZ Women's Advantage (CWA) in Memphis has launched a book club open to both men and women, led by two CWA Executive Board members, Linda Lauer and Megan Murdock.

The introduction of a professional book club in the Memphis office comes with immense support from Senior Managing Director, Eustis Corrigan. The first book to be discussed in the program is Lean In by Sheryl Sandberg.

Linda Lauer notes the overall takeaway from the first meeting: "We came to the conclusion that no matter what we focused on (in the book) - work/life balance, confidence, leadership, prioritizing responsibilities - it never pertained to one gender."

CWA believes that reading good books can challenge us, inspire us, and make us hungry for more. Research tells us that the best way to remember new ideas and put them into action is to share our thoughts and ideas with someone else. In fact, participating in a book discussion increases retention by 70 percent.

For more information about CWA or our internal book club, please contact Megan Murdock at mmurdock@cbiz.com or 901.685.5575.




June 12, 2014

Nominations are now open for the 2014 CFO of the Year awards hosted by the Memphis Business Journal. CFOs will be split into 5 separate categories this year, including the Lifetime Achievement category. Other groups include the following:

  • Private Company Less than $100 Million Annual Revenue
  • Private Company More then $100 Million Annual Revenue
  • Nonprofit Company Less than $30 Million Annual Revenue
  • Nonprofit Company More than $30 Million Annual Revenue

The CFO of the Year awards honor influential financial professionals in Memphis and the Mid-South for outstanding performance in their roles as corpoate financial stewards. The deadline to nominate a CFO is July 25, 2014. You can nominate your CFO through the Memphis Business Journal website.

This year's awards breakfast will take place Thursday, October 23rd at the Holiday Inn University of Memphis. Registration will be begin at 7:30 a.m., and the program will begin at 8:00 a.m.

Click here to view a list of last year's winners.




June 10, 2014

The Memphis office of CBIZ MHM hosted our bi-annual CFO Conference on Tuesday, June 3 at the FedEx Institute of Technology on the University of Memphis campus.

We have hosted these half-day conferences since the Fall of 2012 in hopes to both further the professional education of CPAs as well as to offer thought leadership to the financial leaders in the Memphis community.

Tuesday's event focused on the CFO's role in mergers and acquisitions.

"The interest of the Memphis financial community is of the greatest importance to us as we plan for our future CFO Conferences. We noted the high-level of concentration surrounding the M&A process in our past evaluations, particularly in the role of the chief financial officer," comments Megan Murdock, Practice Development Manager.

As a result, the event highlighted the M&A transaction process with presentations from Atlanta-based Doug Hubert of De NES Partners, LLC, Tampa-based Dave Enick of CBIZ MHM, and our own Steve Dunavant, Managing Director.

The program closed with a panel of local CFOs including Steve Martin of TruckPro, David Dunavant of Monogram Food Solutions, and Joe Lyons of Barr Brands International. This session was moderated by Eustis Corrigan, Senior Managing Director of CBIZ MHM Memphis.

Perhaps he said it best in his closing remarks, "I think the key takeaway we can share with our respective organizations is that the CFO is a trusted advisor on both sides of the deal."

We are already planning for the next CFO Conference to take place on November 11th. For more information regarding this conference as well as our past conferences, follow @CBIZCFOConf on Twitter and use #CFOConf.




June 5, 2014

A group from the Memphis office of CBIZ MHM kicked off our annual Summer Days of Service program at the Mid-South Food Bank this year. Participants inspected and sorted donated food in the agency shopping area for the organization.

As part of their main food distribution program, this warehouse supplies over 80% of the food the Mid-South Food Bank distributes. In 2013, volunteers saved the Food Bank $1,106,038.

Further information about the Mid-South Food Bank can be found on their website.

The Memphis office will participate in several service days throughout the summer, and all are organized by our employee-run Community Involvement Committee. The next volunteer opportunity for employees will be June 20th at MIFA to help with the organization's Meals on Wheels program.




June 3, 2014

As discussed in Part 1 of our Tax Reform Update, two tax proposals have gained momentum in recent weeks. A short summary of President Obama’s 2015 budget can also be found in this post.  The House Finance Committee Chair, Dave Camp, released his “Tax Reform Act of 2014,” aimed at reforming the current taxation of “carried interests.” Below is a short summary of his proposal, effective January 1, 2015, if enacted. Though no significant changes can be anticipated until after elections, both of these proposed reforms show tax change is likely coming in the near future.

Under Chairman Camp’s Proposal, an applicable partnership interest held in connection with the performance of services would be subject to a rule that characterizes a portion of any capital gains as ordinary income. An applicable partnership interest would include any interest transferred, directly or indirectly, to a partner in connection with the performance of services by the partner, provided that the partnership is engaged in a trade or business conducted on a regular, continuous and substantial basis consisting of the following:

(1) raising or returning capital,

(2) identifying, investing in, or disposing of other trades or businesses, and

(3) developing such trades or businesses.

This provision would not apply to a partnership engaged in a real property trade or business. The recharacterization amount would be determined (but not realized) on an annual basis and tracked over time. The result would be less capital gain characterized as ordinary income to the extent a service partner contributes capital to the partnership.

Any distribution or gain from the sale of a partnership interest (i.e., a realization event) would then be treated as ordinary to the extent of the partner’s recharacterization account balance for the tax year. Amounts in excess of the recharacterization account balance would be capital gain. The invested capital of a partnership is, as of any day, the total cumulative value determined at the time of contribution of all money and other property contributed to the partnership on or before such day.

Partner loans to the partnership and indebtedness entitled to share in the equity of the partnership would qualify as invested capital. Furthermore, if at any time during a tax year a taxpayer holds directly or indirectly more than one applicable partnership interest in a single partnership interest, all interests in a partnership would be aggregated and treated as a single interest.

If you have questions regarding any of the above tax terms, anticipated changes, or this proposed reform, please contact Steve Dunavant, Senior Managing Director, at sdunavant@cbiz.com or 901.685.5575.




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