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  • Another Healthcare Acronym Arrives – How Does it Compare?
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    ICHRAs versus QSEHRAs Small employers, which are those not subject to the employer mandate because they have fewer than 50 full-time and full-time equivalent employees, are always looking for ways to provide health coverage for their staff on an affordable basis. Looking ahead to 2020, small employers have two ways in which they can reimburse employees for their individually-obtained health coverage. In other words, small employers don’t have to provide a traditional group health plan to offer meaningful health coverage and not break the bank. Healthcare boggle You know that game where you make words from cubes with letters on them -- boggle word game? Well, in the arena of health coverage, there are numerous words you can make to denote various types of health care plans. For example, there is FSA for flexible spending account. There is HSA, for health savings account. There is HDHP for high deductible health plan used in conjunction with an HSA. And a few years ago, another option was created: qualified small employer health reimbursement accounts, or QSEHRAs. Now there’s a new choice: individual coverage health reimbursement accounts, or ICHRAs. (There’s another new option, called an excepted benefit health reimbursement account, or EBHRA, but that is not discussed further here.) ICHRAs Under a final rule developed jointly by the Treasury Department (IRS), the Department of Labor (DOL), and the Department of Health and Human Services (HHS) that will enable small employers (and large employers with special rules) to offer ICHRAs under specific conditions beginning on January 1, 2020. An ICHRA is funded solely by the employer; no employee contributions are allowed. However, the employer can have a cafeteria plan to permit employees to pay for coverage (other than coverage through the government Marketplace) on a pre-tax basis any amount that is greater than what the employer is paying through the ICHRA. If a small employer chooses to offer an ICHRA, it must be done on a nondiscriminatory basis. But this does not preclude offering increased amounts for older workers (as long as contributions don’t vary by more than 3:1 for older versus younger workers) or workers with dependents. And distinctions are permissible for certain classes of workers (full-time, part-time, salaried, hourly, seasonal, etc.). The amount of the reimbursement under ICHRAs is set by the employer. But an employee is only eligible for reimbursement if he or she is enrolled in an individual health insurance… Read more »
  • Getting Out of Your Commercial Lease
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    So, you’re in an office that no longer suits your needs: the space is too large, too small, inaccessible to public transportation, or for any other reason. Or perhaps you want or need to relocate to another city or state. If your lease has more than just a few months left to run, you probably want to find a way to end your monthly lease payments in a legal and stress-free way. Otherwise, your business (and likely you personally if you co-signed the lease) face considerable financial exposure. What can you do to get out of your commercial lease? Don’t just walk away A lease is a binding contract. If you breach the contract, the landlord holds all the cards. Under the law in some states (e.g., New York), there’s acceleration of payments, meaning the landlord can immediate demand all the rent due under the remainder of the lease. In any state, a landlord can sue for damages (the unpaid rent, legal fees, etc.). So if you want or need to get out of a lease, don’t just abandon the premises without resolving your legal obligations under the lease. Check for escape clauses The terms of your lease may allow you to walk away under certain conditions: Early termination clause. This would let you off without any further obligation to the landlord for the balance of the rent. It usually can only be exercised after a certain period (e.g., one year) and requires some additional payment, such as rent for one or several months. Co-tenancy clause. If you have a store in a mall and the anchor store closes, you may be entitled to a rent cut or even to the cancellation of your lease. Exclusive use clause. If you were assured in the lease that you would be the only tenant in the landlord’s property to sell the type of products you do, then the landlord’s leasing space to your competitor can be your way out. Bailout clause. If you fail to reach a pre-set level of sales, you may be released from the lease. Sublet clause. If you have a sublet or assignment clause, you are entitled to find a new tenant. This will get you off the financial hook for future rent payments (assuming you can find a business willing to pay your monthly rent). Depending on the commercial real estate market, you may only be able… Read more »
  • Developing Leadership Qualities: Empathy
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    Empathy is defined as the action of understanding, being aware of, being sensitive to, and vicariously experiencing the feelings, thoughts, and experience of another of either the past or present without having the feelings, thoughts, and experience fully communicated in an objectively explicit manner. That’s a mouthful. For some, it connotes a purely emotional response. But in truth, empathy is an important skill for being a successful leader. Why empathy is important Fast Company had an article last year entitled “5 Reasons Empathy Is the Most Important Leadership Skill.” To paraphrase: It begets loyalty in your employees Your staff is more engaged Employees work better with each other Employers are happier Your staff is more creative In other words, there’s a strong connection between empathy and employee job performance. And this, of course, translates into success for your business. Developing empathy It seems to me that some people have a natural ability to be empathetic. For others, it’s a skill that must be developed. According to a white paper on Empathy in the Workplace: A Tool for Effective Leadership, empathy can be learned by: Talking about empathy and letting employees know that it matters Teaching listening skills, which are the underpinning of empathy. For example, you have to hear the meaning behind what’s being said in order to be empathetic. Encouraging employees to view something (a suggestion, a proposal) from someone else’s perspective). You can find resources on empathy at the Emotional Intelligence Consortium. The case against empathy It should be noted that there are some who suggest empathy leads to poor decisions. For example, a Yale professor says empathy distorts judgment. My view on empathy is that it is no less essential than any other leadership trait. Empathy can’t be used to the exclusion of rational thought. But excluding empathy from your leadership basket of skills would be a serious error. Final thought Maya Angelou said: “I think we all have empathy. We may not have enough courage to display it.” Do you? Last month’s blog concerned creativity and vision. Next month’s blog on developing leadership qualities addresses grit. The post Developing Leadership Qualities: Empathy appeared first on Barbara Weltman. Read more »
  • What Is 'Income' for Your Business?
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    Not all monetary increases in your business are treated as income for tax purposes.  Separating what you feel as more wealth from what is actually taxable income can help you make tax savvy decisions for your business. Here’s a rundown of some items to note. Gross receipts. The sales proceeds you receive for your merchandise is not entirely income. The proceeds (gross receipts) must be reduced by the cost of goods sold (what it cost you for inventory) to arrive at the amount of income that’s taxed. Consignments. Consignments of merchandise to others to sell for you are not sales. This is because the title to the merchandise remains with you (the consignor), even after the other party (the consignee) possesses the merchandise. If you ship goods on consignment, you have no profit or loss until the consignee sells the merchandise. The merchandise you shipped out on consignment is included in your inventory until it is actually sold. Sales taxes. While you may be required to collect sales tax from customers and remit it to the state, you’re just the state’s agent. The amount of this sales tax is not income to you. Getting back your own money. It is not “income” for tax purposes when you get back your own money. This can occur when what you receive is a return of capital (i.e., your investment in property). This is your basis in property, which is subtracted from the sales proceeds to determine your gain (or loss). Similarly, when you receive proceeds from a loan you made to someone, you’re merely getting back the principal. It’s not income. Paper profits. The value of your property may go up or down. When the value of your property appreciates, it is not income until there’s a sale. For example, your business owns a strip mall in a city that’s booming. The value of your property may increase substantially, giving you potential profit (income)…but your gain only becomes taxable if you sell. The law makes it tax free. Some types of income are tax free because the law says so. Examples of tax-free income include: Frequent flyer miles and other rewards programs (e.g., cash backs). But there are some things to watch out for. Although the receipt of frequent flyer miles isn’t taxed, a deduction for business travel financed with them needs to be reduced accordingly. And certain credit card reward bonuses are… Read more »
  • Entrepreneurs Who Made the Revolution
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    It’s been 243 years since a group of men in Philadelphia signed the Declaration of Independence and started a revolution. Most of these 56 men were small business owners, lawyers, doctors and farmers; 14 were plantation owners.  These men risked it all: “We mutually pledge to each other our Lives, our Fortunes, and our sacred Honor.”  (This is an update of a blog I ran 5 years ago.) Here’s a list from the National Archives of the signers and their occupations to remind us that our businesses, our jobs, and our lives can be on the line when freedom is at stake. Signers Occupation John Adams (MA) Lawyer Samuel Adams (MA) Merchant Josiah Bartlett (NH) Physician Carter Braxton (VA) Plantation owner, ship owner Charles Carroll (MD) Merchant, plantation owner Samuel Chase (MD) Lawyer Abraham Clark (NJ) Lawyer, surveyor George Clymer (PA) Merchant William Ellery (RI) Lawyer, merchant William Floyd (NJ) Land speculator Benjamin Franklin (PA) Scientist, printer Elbridge Gerry (MA) Merchant Button Gwinnett (GA) Merchant, plantation owner Lyman Hall (GA) Physician, minister John Hancock (MA) Merchant Benjamin Harrison (VA) Plantation owner, farmer John Hart (NJ) Landowner Joseph Hewes (NC) Merchant Thomas Heyward Jr. (SC) Lawyer, plantation owner William Hooper (NC) Lawyer Stephen Hopkins (RI) Merchant Francis Hopkinson (NJ) Lawyer, musician Samuel Huntington (CT) Lawyer Thomas Jefferson (VA) Lawyer, plantation owner, scientist Francis Lightfoot Lee (VA) Plantation owner Richard Henry Lee (VA) Plantation owner, merchant Francis Lewis (NY) Merchant Philip Livingston (NY) Merchant Thomas Lynch Jr. (SC) Lawyer Thomas McKean (DE) Lawyer Arthur Middleton (SC) Plantation owner Lewis Morris (NY) Plantation owner Robert Morris (PA) Merchant, land speculator John Morton (PA) Farmer Thomas Nelson Jr. (VA) Merchant, plantation owner William Paca (MD) Lawyer, plantation owner Robert Treat Paine (MA) Lawyer, scientist John Penn (NC) Lawyer George Read (DE) Lawyer Caesar Rodney (DE) Plantation owner, military officer George Ross (PA) Lawyer Dr. Benjamin Rush (PA) Physician Edward Rutledge (SC) Lawyer, plantation owner Roger Sherman (CT) Lawyer James Smith (PA) Lawyer Richard Stockton (NJ) Lawyer Thomas Stone (MD) Lawyer George Taylor (PA) Merchant Matthew Thornton (NH) Physician George Walton (GA) Lawyer William Whipple (NH) Merchant William Williams (CT) Merchant James Wilson (PA) Lawyer John Witherspoon (NJ) Minister Oliver Wolcott (CT) Lawyer George Wythe (VA) Lawyer   Some of the signers were very successful in their businesses, while others failed miserably. Many loaned money in support of the American Revolution and were not repaid.  Others had their… Read more »
  • What Business Books to Read this Summer
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    "Reading is everything. Reading makes me feel like I've accomplished something, learned something, become a better person. Reading makes me smarter."  Nora Ephron Did you know that reading correlates with success? Tom Corley (Rich Habits: The Daily Success Habits of Wealthy Individuals) says that 85% of successful people read two or more self-improvement or educational books each month.  Whether summertime gives you some extra time for reading or you’re busy but don’t want to miss good reads for your business, here are some ideas. My favorites this summer One book to consider is Grit: The Power of Passion and Perseverance by Angela Duckworth. It shows that you don’t have to be the smartest, strongest, or most creative to succeed; all you need is grit. The book shows how grit can be learned, regardless of I.Q. or circumstances. A novel that I think is a good business book is The Last Days of Night by Graham Moore. It came out a few years ago and describes the contest between industrialists Thomas Edison and George Westinghouse on which type of electric power would run the world. Just a good read about these and other titans of the era, including Alexander Graham Bell and Stanford White. My last suggestion is a new book: The Pioneers: The Heroic Story of the Settlers Who Brought the American Ideal West by David McCullough. As the New York Times book review says, “If every generation of Americans gets the visionary colonizer it deserves, we get Elon Musk, but people in the early republic got the Rev. Manasseh Cutler.” He set out to colonize the Ohio Territory. And what he and those who joined him went through is inspirational. Being an entrepreneur is being a visionary and having the will to pursue the dream. As a McCullough fan, if this one doesn’t do it for you, consider The Wright Brothers. Their patent saga will wow you. Summer reading lists My list is short; you may be hungry for more. Here are some good lists to check out for business books this summer: Fast Company’s 12 Books CEOs Think You Should Read in 2019 Forbes’ Best Books for Summer 2019 Inc.’s 10 Business Books You Need to Read in 2019 Final thought Don’t overlook Hack The Entrepreneur’s 101 Best Business Books of All Time (2019). This list includes some very old favorites, including such must-reads as Dale Carnegie’s How… Read more »
  • What to Do About Drugs in the Workplace Now
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    Three years ago, I blogged on this topic. Since that time, things have changed. The opioid crisis is still raging (every day more than 130 people die in the U.S. from overdosing on opioids). More states have legalized marijuana for recreation and/or medical use. The job market continues to be tight (the U.S. unemployment rate in May 2019 was 3.6%). All of these factors may impact your company’s drug policy. What you must do If your business is subject to federal regulations, such as a transportation business subject to DOT drug-testing rules, you must implement a drug testing policy to be compliant with the law. Find details about the types of businesses required to have drug testing at the Substance Abuse and Mental Health Services Administration (SAMHSA). Ideas on creating a drug policy follows. What you can do Most employers can set their own drug policy, as long as it’s fair (i.e., nondiscriminatory). For example, employers can set a drug-free workplace policy, which bans employees from marijuana use (even if such use is legal in the state) in the same manner as alcohol use. When implementing a policy to test employees, including those who’ve been offered positions pending the outcome of a drug test, the Council on Alcohol and Drugs recommends: A written policy Access to assistance Employee education Supervisor training Drug testing In crafting a drug policy, be very careful to avoid problems that could trigger lawsuits against you for invasion of privacy, wrongful discharge, or discrimination. For example, if your state has legalized marijuana, it may be unlawful to discharge an employee solely on the basis of a positive test for marijuana­. In fact, permitting the use of medical marijuana (in states where this is legal) may be a reasonable accommodation under the Americans with Disabilities Act. Be sure to have your drug policy reviewed by an employment law attorney. What you can’t do Be sure your drug policy aligns with the law in your state (e.g., accommodating medical use). Check the map to see the law in your state. Increasingly, states that permit the use of marijuana for recreational use are prohibiting employers from using positive marijuana tests to be used against an employee or job applicant; in effect, employers there cannot prohibit off-duty marijuana use. However, look for exceptions (allowing or requiring you to test for drugs and use positive results against an employee) if the… Read more »
  • 5 Ideas for Disaster Preparedness
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    The Atlantic hurricane season began on June 1; it runs through November 30. While the prediction for storms this season are modest (slightly less than last year), all it takes is one big storm in your area to wreak havoc with your business. Consider the devastating flooding that occurred early June in many parts of the U.S. Here are some suggestions to help you be prepared for any disaster that may come your way. 1. Review your disaster preparedness plan If you have a plan in place, look it over to make sure you’ve done what the plan directs you to do (e.g., have emergency supplies on the premises). If you don’t yet have a plan, make one. Resources to help: FEMA Ready.gov The Hartford 2. Keep records in the cloud A flood can wash away all of your office papers. But if your information is stored in the cloud, you can easily recover everything. Take the time to scan your documents and store them in the cloud. Keep all of your passwords accessible. Consider using a password manager stored on your smartphone for this purpose. PC Magazine has a list of the 10 best password managers for 2019. 3. Prep your smartphone Make sure you have all key numbers in your contact list. These include your insurance agent, repair people you use (e.g., electrician), and all of your employees. Also be sure to have numbers for vendors and other business associates. Add apps to your device to help you through disasters. For example, you want to have an app that will inform of weather conditions. You may also want an app to stay in contact with others. For example, Zello Walkie Talkie is a free app that lets you communicate faster than texting. 4. Check your insurance If you wait until the weather report tells you a storm is coming, it may be too late to have the insurance you need to cover potential losses. Discuss now with your insurance agent what you have and what you should have. Then decide what you can afford. Insurance to review: Business owners policy (BOP). Check the limits of coverage under your basic insurance policy. Business interruption insurance. This coverage will pay the bills that don’t stop despite a disaster, such as rent. Depending on the policy, it may even cover profits lost during an interruption. Flood insurance. Depending on where your… Read more »
  • What to Know about Your Child’s Lemonade Stand
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    In early June it was reported that a 13-year old sold 3,500 cupcakes over the course of a year to raise the $5,000 he needed to take his family on a trip to Disney World. This story illustrates that the entrepreneurial spirit can strike even children. So, too, does the Girl Scout Cookie Program foster entrepreneurship. As the Girl Scouts says: “Whether girls go door to door, set up booths at libraries and shopping centers, or sell cookies online with Digital Cookie®, they’re also preparing for a bright future. The Girl Scout Cookie Program lets girls show the world their entrepreneurial spirit as key members of the world’s largest girl-led business.” A lemonade stand can teach valuable lessons about running a business. But these entries into entrepreneurship should not ignore certain realities for business owners, regardless of their age. Lessons from a lemonade stand If you look on Amazon, you’ll find dozens of books with “lemonade stand” in the title. After culling out children’s story books, you’ll see that authors use the lemonade stand to illustrate how this basic business affords important lessons that can translate into running any type of business. Here are 7 lessons to note from a blog posted on American Express (you can see many more lessons in books and articles on lemonade stands). Deliver the best product you can Location, location, location Brand extensions can kill your brand Develop an integrated business growth strategy Humanize your business Speak the language of your customers Have an exit strategy—or not Legal rules Children who want to run a business venture…even a lemonade stand…need to comply with the law. This may include vendors permits, health code compliance, and other legal requirements to operate. But don’t feel overwhelmed because there may be exemptions for child-run businesses. For example, in Utah, cities and counties cannot require a license or permit for any occasional business created by a minor. New York is considering a similar exemption entitled Lemon-Aid Law. Tax rules When it comes to federal taxes, there are no blanket exemptions from reporting and paying taxes for minors. But again, if the income is modest, no reporting and no taxes are required. For example, in 2019, a dependent child with earned income must file a return only if such income exceeds $12,200. So the typical lemonade stand earnings would not trigger any federal income tax compliance issues. But check on… Read more »
  • What Your Employees Really Want
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    Being in a tight labor market as now exists requires employers to find ways to keep employees satisfied and loyal.  Unfortunately, this isn’t an easy thing for small businesses.  Typically, their budgets don’t permit generous fringe benefits offered by large companies, such as on-site gyms and eating facilities. But is this what employees really want? The answer may depend on who you ask. Here is a sampling from some recent surveys to give you some ideas about your policies and offerings: Basic things employees want ServiceNow’s survey found that what employees want most is meaningful work. In fact, 61% would ask for meaningful work rather than 34% who would ask for a raise. Other findings: Help in figuring out HR benefits. 45% would rather clean their bathroom than figure out HR benefits. Office equipment that works. 37% would rather be stuck in traffic than troubleshoot a broken printer by themselves. IT assistance. 36% would rather stand in line at the DMV than troubleshoot an IT issue. Wish list depends on generation This is what was reported by Daily Pay. Here’s a sampling of desired benefits by generation: Baby boomers want flexible schedules and family care programs. Gen Xs also want flexible schedules and family leave but desire the ability to make a difference in the organization, recognition for their work, and development opportunities. Millennials want health and wellness programs, support and feedback, coaching (but not micromanaging), social consciousness, and a strong workplace culture with collaboration. Generation Z want money, job security, and the opportunity to advance. Learning opportunities According to LinkedIn’s Workforce Learning Report, 94% of employees said they’d stay at a company longer if there were learning opportunities. About one quarter of Gen Z and Millennials said learning is the main thing that makes them happy at work. Final thoughts From this sampling of surveys, you can see that what employees want is not all about money (of course competitive compensation is important). Your benefits offering is about many other things that are within your power and pocketbook to provide. Many employees have expressed their desire for customized benefits so they can choose what suits their situation. If you want to see how other businesses are tackling this, see Compt’s Employee Perks Statistics: The Ultimate List (2019 Update). The post What Your Employees Really Want appeared first on Barbara Weltman. Read more »
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