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R&R Insurance Blog

IRS Employer Shared Responsibility Payment Notices

Posted by Terry Frett

Wed, Dec 13, 2017 @ 09:21 AM

bank-written in cracked stone.jpgThe Affordable Care Act (ACA) employer mandate applies to employers who fall into the Applicable Large Employer (ALE) classification outlined in the law.  An applicable large employer is any company or organization that has an average of at least 50 full-time employees or full-time equivalents. For the purposes of the Affordable Care Act, a full-time employee is someone who works at least 30 hours a week.

If an employer is classified as an Applicable Large Employer, they must either offer a group health plan to their full-time employees that is of a “minimum value” and is “affordable” or potentially pay a fine known as a ‘’shared responsibility payment’’.  In 2016, the federal government Health Insurance Marketplace for individual health insurance sent out notices to certain employers that had an employee attest to the government marketplace (Healthcare.gov) that they were neither enrolled in employer sponsored coverage or eligible for employer coverage that is affordable and meets the minimum value standard.  At that time employers who received an individual notice had 90 days to respond and provide an appeal.  No fines were imposed since this first step involved data collection.

More recently, the IRS began sending Employer Shared Responsibility Payment Notices known as the 226J letter, to specific employers outlining the payment they owe for their full-time employee or employees that received an individual premium tax credit for the purchase of a private individual health plan on the Marketplace.  If you receive such a notice and do not agree with the IRS findings you must act immediately as outlined by the IRS in their publication entitled “Your Appeal Rights and How To Prepare a Protest If You Don’t Agree”.

Generally, only Applicable Large Employers (ALEs) who had full-time employees enrolled into a private individual health plan through the Marketplace that qualified for a premium tax credit should receive a notice for payment.  If you do receive a 226J letter from the IRS, our agency can assist you with an initial review.  However, if a formal appeal must be filed we will recommend you work with your legal counsel or with a law firm we can recommend.
Hopefully, your firm will not receive this Holiday Greeting from the IRS.  However, if you do, take immediate action since the timeline to respond to your defense is limited.

How to Recognize a Water Damaged Vehicle

Posted by Dan Wolfgram

Tue, Dec 12, 2017 @ 08:33 AM

iStock-660678650.jpgToday's modern vehicles have electronics throughout; in the doors, under the seats, behind the dashboard, in the engine and even in the trunk. With so many electronics susceptible to flood-related failure, most cars that take on water cannot be be repaired.
Leaders Edge Magazine describes the steps you should take to ensure a used vehicle does not have a history of water damage. While there is no sure way to know if a vehicle has been damaged by a flood, the National Automobile Dealers Association offers these tips to prospective buyers to spot flood-damaged vehicles:
  • Check a vehicle’s title history using the National Insurance Crime Bureau’s VinCheck, the National Motor Vehicle Title Information System or a commercially available vehicle history report service, such as Experian or Carfax, etc. Reports may state whether a vehicle has been flood damaged.
  • Examine the interior and the engine compartment for evidence of water and grit from suspected submersion.
  • Check for recently shampooed carpeting.
  • Look under the carpeting for water residue or stain marks from evaporated water not related to air-conditioning pan leaks.
  • Inspect for interior rust and under the carpeting, and inspect upholstery and door panels for evidence of fading.
  • Check under the dash for dried mud and residue, and note any mold or a musty odor in the upholstery, carpet or trunk.
  • Check for rust on screws in the console and in other areas water would normally not reach unless the vehicle was submerged.
  • Look for mud or grit in alternator crevices, behind wiring harnesses and around the small recesses of starter motors, power steering pumps and relays.
  • Inspect electrical wiring for rusted components, water residue or suspicious corrosion.
  • Inspect other components for rust or flaking metal not normally found in late-model vehicles.

Contact a KnowledgeBroker for additional information.

An Important Health Care Reform Update

Posted by Pete Frittitta

Mon, Dec 04, 2017 @ 07:33 AM

clock.jpgLast Saturday, the U.S. Senate passed their version of a tax reform bill, the Tax Cuts & Jobs Act. The bill is not yet finalized. While the Senate and the House have passed similar tax reform plans, negotiators from both chambers need to develop agreement on a single piece of legislation that both chambers must approve before it is sent to the President for his signature.

One component of the Senate Bill that is not in the House Bill is regarding the Individual Shared Responsibility Payment (aka “Individual Mandate”) provision of the Affordable Care Act (ACA). If the Senate Bill provision makes its way into the final version of a tax reform bill, the Individual Mandate Tax would be set to zero dollars. However, all other ACA-related taxes would remain intact including the “Employer Mandate” (discussed here later).

While any other legislative actions to repeal/replace/repair the ACA remain to be seen, the Trump Administration has been busy focusing on what it can do via the rule-making agencies, namely, the Treasury (IRS), the Department of Labor (DOL) and the Department of Health and Human Services (HHS). Following is a summary of key updates, changes, and proposed changes:


  • It’s that time of year again. ACA Employer Reporting (IRS Forms 1094-C and 1095-C) is still required. For what it’s worth, none of the discussions involving ACA repeal/replacement/repair mentioned the elimination of reporting. This required reporting will be alive and well for some time.

    The Individual statements for 2017 must be furnished by January 31, 2018. IRS returns for 2017 must be filed by February 28, 2018 (April 2, 2018, if filed electronically, since March 31, 2018, is a Sunday). R&R has updated our Employer Reporting Tool for 2017 which will generate the required forms in PDF format (paper filing allowed by IRS for less than 250 forms).
  • Check your mailbox. The IRS recently released an outline of the processes and form letters that it will use to enforce assessment of ESRPs (Employer Shared Responsibility Penalties, aka the “employer mandate”). These are penalties that apply to large employers (with 50 or more full-time equivalent employees) to offer a medical plan (to at least 95% of its full-time employees) that is of a “minimum value” and is “affordable.”

    The IRS began to issue assessment letters last week informing employers of their liability for 2015 calendar year penalties. These letters will have a response deadline of 30 days from the date the letter was written. Timely response is crucial to maintain your appeal rights. Read more here regarding sample letters and the processes involved.
  • No more “Reinsurance Fees.” The ACA’s “Reinsurance Fees” were imposed for 2014, 2015, and 2016 only. The 2nd (last) installment payment for 2016 was to be made by November 15, 2017.
  • One more round. The PCORI fees continue to apply but are scheduled to sunset. The PCORI fees will no longer apply beginning with plan years ending on or after October 1, 2019.
  • “HIT” Restart. The ACA’s Health Insurance Tax (HIT) is a permanent, annual fee on health insurers that began in 2014. It was suspended for 2017 as part of the 2015 Budget Act but will restart for 2018 collection and payment. The traditional insurance market continues to be further challenged by innovative self-funding and level-funding arrangements which also have the advantage of being exempt from the ACA’s “HIT” (3.5% - 5% of premium).
  • Where did they park that Cadillac? Although it has been delayed until 2020, the ACA’s “Cadillac Tax,” if it is ever implemented, would put pressure on employers to reduce benefits to avoid/minimize paying a 40% excise tax. By its design, it is not a question of “if” an employer will be subject to the “Cadillac Tax” but “when.”


  • Simplified…almost. On October 6, 2017, the DOL, HHS and the IRS issued two interim final rules expanding certain exemptions from the ACA’s contraceptive coverage mandate. As a result, objecting employers are no longer required to choose between direct compliance and compliance through the accommodation. A plan sponsor, issuer and plan covered by these exemptions will not be penalized for failing to include contraceptive coverage in the plan’s benefits. Note that fully-insured policies will most likely need to file policy riders as appropriate once the rule is final.
  • Going up! On October 27, 2017, the Department of Health and Human Services (HHS) released its Proposed Notice of Benefit and Payment Parameters for 2019. Following are the current and proposed out-of-pocket maximums:
    • For 2017, the out-of-pocket maximum is $7,150 for self-only coverage and $14,300 for family coverage.
    • For 2018, the out-of-pocket maximum is $7,350 for self-only coverage and $14,700 for family coverage.
    • Under the proposed rule, the out-of-pocket maximum would increase for 2019 to $7,900 for self-only coverage and $15,800 for family coverage.
  • Who doesn’t want more flexibility? The same proposed rules would allow states more flexibility in their options to select a new EHB-benchmark (Essential Health Benefits) plan on an annual basis beginning in 2019. This would provide more plan design choices for the small group market (less than 50 employees in Wisconsin).
  • Off the table for now. The HIPAA certification requirement is delayed indefinitely, pending guidance from HHS as on October 4, 2017, HHS withdrew its proposed rule in order to reexamine the issues and explore options and alternatives to comply with the HIPAA certification requirement. This would apply to all self-funded plans including medical reimbursement HRAs.
  • Back to the drawing board. The EEOC’s (Equal Employment Opportunity Commission) “final rule” regarding “voluntary” wellness incentives turns out to be not so final after all as it has been challenged by the courts to revisit its position regarding the definition of “voluntary.” The current rules were not “vacated” by the courts so the EEOC guidance should still be complied with. Stay tuned.
  • That’s an order!  Several weeks ago, President Donald Trump signed “Presidential Executive Order Promoting Healthcare Choice and Competition Across the United States.” The executive order directs federal agencies to expand access to MEWAs (Multiple Employer Welfare Arrangement), HRAs and short-term, limited-duration insurance. More will follow on this as the agencies’ deadline to draft proposed regulations is December 11, 2017.
  • Coming home? Even without a “repair” or “replacement” of the ACA, it is anticipated that there will be a number of states that will apply for Section 1332 State Innovation Waivers. This has been discussed recently for consideration in Wisconsin by the Office of the Commissioner of Insurance.
The disruption and turbulence in the employee benefits market will continue. For now, the Affordable Care Act remains the “law of the land” and requires much in the way of compliance for which we have the knowledge, resources and experience in helping our clients. R&R continues to monitor discussions at the federal and state levels with respect to legislative changes that will impact employee benefits. As always, do not hesitate to contact your R&R Benefits Consultant with any questions or concerns.

Topics: Affordable Care Act, ACA

Potential Worker’s Compensation Changes on the Horizon

Posted by Scott Shaver

Wed, Nov 01, 2017 @ 02:00 PM

iStock-534314106.jpgEvery two years, the Wisconsin Worker’s Compensation Advisory Council (WCAC) negotiates a bill that goes off to the legislature for consideration. The WCAC, made up of 5 representatives from management and 5 representatives from labor, tries to come to agreement on a bill that makes modifications to the Worker’s Compensation Act. It has a long standing history in our State, with each side attempting to get changes that benefit those they represent.

There are several potential changes that are noteworthy  for this cycle. Here is a summary of the big items:

  • Fee Schedule: Both sides have agreed that there is a need for a fee schedule as a way to better control medical expenses. We are one of the few States in the country that has no fee schedule. As a result, it’s not uncommon for a work related medical procedure to cost two to three times more than the same procedure that is non-work related. The challenge here is that the fee schedule has not yet been developed and it is supposed to be based on negotiated health insurance rates. Networks are very protective of the rates that they have negotiated with providers. I see that as an obstacle. The other component of this proposal is that any savings realized from the fee schedule are to be shared with injured workers. Call me a pessimist, but I will be surprised if this ends up looking anything like what the management representatives envisioned.
  • Permanent Partial Disability: Permanent Partial Disability rates will increase substantially over the next two years. The current rate is $362. That will increase to $382 in 2018 and $407 in 2019. Those are some hefty benefit increases at 5.5% and 6.5% respectively. How do those percentage increases compare to your budget for merit increases?
  • Injury Multiplier: This provision could prove to be quite expensive for businesses. This will allow an additional 15% in benefits to workers with scheduled injuries who are not able to come back to work within 85% of their pre-injury wage. This is a benefit that did not exist in the past.

It appears as though the management representatives gave some big increases in indemnity benefits in hopes that savings from a fee schedule will offset those increases. Time will tell.

There are several other proposals as part of this agreed bill that will impact the premiums moving forward including supplemental benefits, loss of hearing and treatment of opioids. For a full list of changes, click here.

Please feel free to reach out to me if you would like to better understand how these changes could impact your worker’s compensation premiums. 

Topics: Work Comp

Top Takeaway from the FPA of Wisconsin Symposium

Posted by Dan Wolfgram

Mon, Oct 16, 2017 @ 04:33 PM

After attending last week’s FPA of Wisconsin Symposium the resounding message still ringing in our ears is “team.” Despite how cliché it may sound, we left those few days reminded of how valuable R&R’s partnership with the FPA truly is.

Our Private Client Division is excited to be a part of your team. We understand how important your clients are to you and value your goal of growing their wealth. We take it upon ourselves to properly protect those assets with the very best coverage. We’ve been there before - and will continue to provide unparalleled service.

Below is a quick preview of the fun we had last week!

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FPA Event 5.jpg

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Topics: Private Client Group

4 Ways to Prevent Business Email Compromise Scams

Posted by Mike Payne

Fri, Oct 13, 2017 @ 03:39 PM

iStock-495588550.jpgThat Nigerian prince requesting bank account information may be easy email fraud to spot, but what if a spoofed email arrived looking exactly like your boss? Business Email Compromise (BEC) scams are misleading employees into diverting company payments to swindlers who are impersonating customers, vendors, or senior executives.

According to FBI statistics, $1.6 Billion was lost by US companies between October 2013 and December 2016. Common scenarios cited by the FBI include fraudulent correspondence through a compromised email from a vendor or client, attorney impersonation, and wire transfer requests from a spoofed or hacked CFO email address.

The Hanover Insurance Group created a piece “Stop Imposter Fraud scams before they happen”. It's an excellent read pertaining to BEC. I’ve condensed some of their ideas from seven to four tips.

1)     Verify all changes to fund transfer payments over the phone.

Employees with the authority to transfer funds should not change vendor, client, or employee bank account information without first confirming the change with a phone call. This phone number must be previously established and not a number provided on a potentially fraudulent email.

2)     Be suspicious of emails calling for a rush transfer.

An email crafted to pressure an employee into transferring funds hastily should be a red flag. Employees should be trained not to fall victim to intimidation that might cause them skip authentication procedures.

3)     Limit the number of employees with wire transfer authority.

Fewer authorized personnel mean fewer targets for fraudsters. Supervisors should be required to sign off on changes to vendor or client/customer bank account information or internal/external wire transfers.

4)     If a scam email has been detected consult IT.

Stop the bleeding lest others be scammed. If a fraudulent email is coming from someone internally, your network likely has been breached. Actions should to be taken to secure the companies network.

Most insurance policies will not cover a BEC scam. The willful parting of money is often excluded from the language of contracts and usually requires the insured to add false pretense coverage to an existing plan.

Prevention is the ideal solution to BEC scams. Once compromised though, your only lifeline is false pretense coverage which normally is an addition. Be sure you’ve talked to your agent about the proper Social Engineering coverage.

Topics: Cyber Crime

October | National Cyber Security Awareness Month

Posted by Carla Borda

Fri, Oct 13, 2017 @ 03:33 PM

iStock-622184706.jpgEach year National Cyber Security Awareness month is held in October.  As such, many events are held around the country bringing together experts from government, industry and security to share information and enhance the dialogue around cyber risks.

The resounding theme?

Cyber is a risk to be managed not a risk that can be prevented.

Cyber crime is a threat to all industries, governments and businesses. There is no perfect solution and we will be in constant battle against those that seek to extort monies, disrupt our infrastructure, cause damage to our businesses and harm individuals.  Equifax had a cyber security budget of $250 million over 3 years to enhance cyber security  and a team of 225 professionals across the globe and still suffered a breach affecting 145.5 million people. Small business and non-profits are at greater risk as they have neither the funds nor personnel to effectively manage the ever evolving threat landscape.

Cyber extortion became a $1 billion industry for criminals in 2016. According to Rod Rosenstein, Deputy Attorney General for the Dept of Justice, there are 100,000 extortion demands made every day around the globe. 

Business leaders must learn to approach cyber risk as they do other aspects of their business such as safety and compliance. Cyber is a serious and inevitable risk your business will confront. Have you determined what level of risk is acceptable?  There will be financial consequences. It is a grave mistake to think that it will not happen to you.

From Stuxnet in 2010 to WannaCry and Petya/NotPetya in 2017 malicious code can be targeted at a specific Industrial Control System to malicious code being spread to hundreds of thousands of computers around the globe within hours, unsuspecting companies have felt the impact. Companies have incurred losses involving having to replace computer hardware to loss of income in excess of $200 million. 

R&R urges all companies to be #cyberaware and focus on cyber risk management especially during the month of Cyber Security Awareness.   


Topics: Cyber

Keep Your Vacation Home Water Tight All Year Long

Posted by the knowledge brokers

Mon, Oct 09, 2017 @ 09:05 PM

iStock-172339213.jpgDid You Know? Water is the top preventable cause of damage to American homes — more than fire and theft. However approximately one in every 55 insured homes has a water/freezing claim each year.

Our friends at Nationwide shared an article about the importance of protecting your vacation home during the offseason.

Seasonal and vacation homes are at greater risk of water damage due to prolonged periods of inoccupancy. Undetected, the amount of water damage from a water leak in a secondary home compared to your primary home can be astronomical. However, with proper maintenance and oversight, you can reduce your risk of experiencing an extremely inconvenient loss from water damage to your secondary home.

Nationwide recommends the following tips to help prevent water damage:

  • Keep your thermostat set at no less than 60 degrees Fahrenheit during winter months.
  • Hire a professional caretaker or contract with a local building contractor to check on your vacation house and make sure the temperature is warm enough to keep pipes from bursting.
  • Consider shutting off the water and draining the plumbing system before leaving your home for extended periods of time.
  • Enhance your central station alarm system to include temperature monitoring. Your alarm company will notify you or your caretaker if the temperature in your house falls below a pre-determined limit.
  • Consider having a wireless and programmable thermostat, such as Nest, installed as a lower cost option for temperature monitoring. This device can communicate the temperature at your vacation home with your smart phone.
  • Consider installing an emergency electrical generator to operate the heating system when the power fails during winter storms.

For more information on properly protecting your vacation home this winter, contact a KnowledgeBroker at R&R Insurance.

Topics: Personal Insurance

Making Big Changes? Don't Forget to Contact Your Insurance Agent

Posted by Dan Wolfgram

Mon, Oct 09, 2017 @ 08:42 PM

iStock-539841066.jpgWe recently had a Personal Insurance client report an auto claim to us. After we made sure the client was not injured, we took a deep breath and started the process of submitting a claim. The submission process typically includes gathering details of the accident and getting the appropriate insurance carrier involved.

While submitting the information to the insurance company, we realized that the client’s car involved in the accident was not on their auto insurance policy. Our client was under the impression the car dealership would contact us to add the new car and take off the car they had traded in. Unfortunately, R&R was never contacted. While this specific scenario ended with R&R and the insurance company providing assistance on the claim, this is unfortunately not always the case.

So, this is my friendly reminder to you, our valued customer.  If something happens in your life (i.e., you buy something, you sell something, you are considering buying a certain breed of dog, or if you just want to talk about the Packers, Brewers or Bucks), contact R&R and we can talk you through the process. We are not here to sell you coverages you don’t need or want, but we will only provide knowledge to you so you can make great decisions.  That’s just another reason why we are known as The Knowledge Brokers.

Topics: Personal Insurance

Your Naked Loading Dock is Worth $12k to OSHA

Posted by Mike Payne

Tue, Oct 03, 2017 @ 10:01 AM

Loading Docks 1.jpgIt’s a common sight at any industrial park, but five open loading dock doors in front of a moody OSHA inspector could land your company a $63,375 fine!

The rules have changed. Welcome to 2017.

If your company hasn’t been waiting on bated breath for the latest regulations, on January 17 OSHA added wording to statute 1910.28. All unprotected sides and edges suspended 4 feet or more in the air must have approved fall protection in place. Violations could cost as much as $12,675 per occurrence.

Either word hasn’t travelled fast enough, or many businesses are ignoring the new regulation.

Driving through an industrial park last week I stopped counting the open loading docks when I ran out of fingers. By my calculation, 1/3 of the open dock doors were compliant, 1/3 had inadequate fall protection, and 1/3 had no fall protection at all. An overzealous OSHA inspector could take the same drive I did and rack up fines in the hundreds of thousands without leaving the comfort of his air conditioned Prius.

Who isn’t getting a raise this year, because Johnny left the dock door open on a hot day?

Every year Fall Protection is the number one hazard cited by OSHA. Of the 6,906 citations issued related to Fall Protection in 2016, most came from the residential construction industry (roofing). OSHA’s top priority is to get these numbers down, but the new rules are hitting general industry in ways many are not aware of - and in more ways than just loading docks.

Guardrail 1.pngOSHA’s new ruling requires edges 4 feet or more in the air to have one of three methods of protection:

  • A guardrail system
  • Safety net system
  • Personal fall protection

For loading docks, practicality eliminates a safety net and personal fall protection system. That leaves two options:

  1. Keep the loading dock doors shut when the truck is away
  2. Install an OSHA approved guardrail system.


Don’t expect a thin chain or strip of highlighted caution tape to do the job. The guardrail must be able to take up to 200lbs of horizontal pressure and be highly visible. Two or more chains MAY be acceptable if they are spaced at both a “high” and “mid” tier level and visible, but the single chain is not kosher.

Guardrail 2.png

If keeping dock doors shut at all times isn’t practical, there are still many ways to stay OSHA compliant. The ideal solution might look like a Rite-Hite Dock-Guardian Safety Barrier which can handle up to 30,000lbs of horizontal pressure and is highly visible. Other methods used include a Vestil Safety Swing Gate or Uline Scissors Security Gate.

Ladder 1.pngAnother target of the January 17 language is guarding on fixed ladders. Stationary ladders must have a guard at their opening in order to be complaint. OSHA would frown on the ladder below.

Safety chains atop fixed ladders may have been okay in the past, but are now out. To remain complaint a spring loaded self-closing gate is needed. The reasoning behind this decision is that a safety chains do not close themselves. They require a worker to stand on the ladder while using one hand to reattach the chain with his back is to a hazard. A self-closing gate requires no such action and is OSHA compliant.

Fall protection is not required when using portable ladders however, OSHA still encourages employers to provide additional protection.

Ladder 2.pngThe January rule changes also call for a Walking Worker Surfaces Inspection. These inspections are to be done “on a regular schedule” and “when necessary”. These inspections are to be adequate enough to identify slip, trip, and fall hazards. Employers are mandated by the new rules to have a scheduled WWS inspection and to conduct more when conditions or events occur that warrant an additional check.

Don’t let OSHA catch you with a naked loading dock. Slip, trip, and fall regulations have been revised and employers are responsible for keeping up with the language. Especially when a violation is visible from the roadside, it’s probably worth fixing right away.


Topics: OSHA