Increase to Business Mileage Reimbursement in 2018

From ChamberChoice

The business mileage reimbursement rate is used by some employers for computing employee reimbursement amounts when an employee operates a motor vehicle not owned by the employer for the employer’s business purposes. The Internal Revenue Service (IRS) is responsible for establishing the standard mileage rate.

Recently, the IRS provided that beginning on Jan. 1, 2018, for all miles of business use, the standard mileage rate for transportation or travel expenses is 54.5 cents per mile (up slightly from 53.5 cents in 2017), according to IRS Notice 2018-03.

There are other reasons for which an individual can be reimbursed for mileage such as when rendering gratuitous services to a charitable organization. If an individual or employer has questions about the reimbursement of mileage, or use of a personal vehicle, the advice of tax counsel should be sought.

Executive Order Supports Broadband Infrastructure Expansion With Focus on Rural America

In an effort to support the expansion of broadband internet service in rural America, President Trump signed an executive order on Jan. 8 that streamlines the application process for locating wireless facilities on Federal property. The order sets guidelines and timelines for processing applications from private entities. It is hoped that other benefits will be realized from this policy “to use all viable tools to accelerate the deployment and adoption of affordable, reliable, modern high-speed broadband connectivity in rural America.” (Read the full executive order)

The Columbia Montour Chamber continues to advocate for the expansion of broadband in rural areas to support economic growth. In November, the Chamber sent a letter to the Federal Communications Commission supporting a petition by the Pennsylvania Public Utility Commission (PUC) to keep $140 million for broadband expansion in Pennsylvania. While federal funds have traditionally only been available to regulated telecommunications companies such as Verizon, the PUC and Chamber are seeking greater flexibility to work with other potential providers.

Workers’ Compensation Costs to Increase Following Approval of Mid-Year Cost Hike Filing

From PA Chamber of Business & Industry

On Dec. 27, the Pennsylvania Department of Insurance announced its approval of the Pennsylvania Compensation Rating Bureau’s unprecedented mid-year loss cost increase filing, with a Feb. 1 effective date. The filing was prompted by the state Supreme Court’s decision last year in the Protz v. Workers’ Compensation Appeals Board case, which threw out Impairment Rating Evaluations. IREs, a feature of the workers’ compensation process since 1996, are conducted by physicians designated by the Department of Labor & Industry who utilize guidelines from the American Medical Association to assess an injured employee’s level of impairment in order to determine their disability status.  The Court’s holding was essentially based on a technicality and led to an overall change in loss costs of +6.06 percent.

At the time the decision was handed down, the PA Chamber warned its members that workers’ compensation cost hikes in 2018 would be a likely result. In fact, in September the PCRB testified to the House Labor and Industry Committee that the overall impact on employers that carry workers’ comp insurance policies is expected to be at least $165 million – and that total doesn’t even account for employers who self-insure, meaning that the impact will likely be far greater.

Legislation has since been introduced to address the decision and stave off cost increases. In a statement issued following the Dept. of Insurance’s approval of the rate hike, PA Chamber President Gene Barr issued a statement that called for the timely approval of the bills to help mitigate the impact of the increases. “The PCRB’s filing and the Department of Insurance’s subsequent approval clearly demonstrate the need for swift legislative action,” Barr said. “The PA Chamber is strongly urging the General Assembly to act on H.B. 1840 or companion legislation in the Senate, S.B. 963 – legislation to reinstate the impairment rating evaluation process with the Supreme Court’s concerns addressed.”

Interaction of COBRA and Medicare: An Information Letter

From ChamberChoice

Information letters are furnished by the Internal Revenue Service’s (IRS) National Office in response to requests for general information by taxpayers, by congresspersons on behalf of constituents, or by congress-persons on their own behalf. The release of information letters has increased and is intended to increase public confidence that the tax system operates fairly and in an even-handed manner with respect to all taxpayers.

A recently released information letter addresses the interaction of COBRA and Medicare. Specifically, the information letter addressed the circumstances under which a covered spouse is entitled to extended COBRA continuation due to the covered employee’s Medicare entitlement prior to termination of employment. The letter provides that a covered employee becomes “entitled to Medicare benefits upon the effective date of enrollment in either part A or B, whichever occurs earlier.”

Background
Under the Consolidated Omnibus Budget Reconciliation Act (COBRA) a qualified beneficiary who loses group health plan coverage due to a qualifying event can be eligible to continue that coverage for a specific period of time.

A qualified beneficiary is an employee, the employee’s spouse and/or dependent. There are six events that if their occurrence causes a loss of coverage will trigger COBRA continuation. They are: termination of employment, a reduction in hours, death, divorce, loss of dependent status, and entitlement to Medicare. The general rule is that continuation coverage, which is paid for by the qualified beneficiary, is available for a period of 18 months. However, there are limited situations where coverage may be extended for up to 29 or 36 months.

Medicare and COBRA
Even though the rules provide that “entitlement to Medicare” is a reason for continuation coverage, this language often causes confusion. As a reminder, the Medicare entitlement must cause a loss of coverage. An employer that is subject to COBRA continuation, i.e. one that has 20 or more employees in the current or preceding calendar year, is also subject to another federal law governing a health care plan, and that is the Medicare Secondary Payer rules (MSP). The MSP rules provide that an employee (or spouse) that becomes entitled to Medicare cannot be terminated from the plan due to that entitlement. Therefore, just becoming Medicare eligible, such as by turning 65 years old, is not a reason for terminating an employee’s or spouse’s health care coverage.

However, Medicare entitlement will become an issue if there is a loss of coverage for an employee due to the qualifying event of a reduction in hours or termination of employment. The issue will be whether the employee becomes Medicare entitled before the qualifying event or after the qualifying event.

The information letter explains that the covered spouse of an employee can receive COBRA continuation coverage for 36 months if that employee became entitled to Medicare benefits before termination of employment or a reduction in hours. The 36-month period begins to run after the date the covered employee became entitled to Medicare coverage. If the employee becomes entitled to Medicare after the termination of employment or reduction in hours, then the spouse will be limited to a maximum COBRA continuation period of 18 months.

As a reminder, an employee who experiences a loss of coverage due to a qualifying event is always limited to a maximum COBRA continuation period of 18 months.

Conclusion
The information letter is not breaking new ground but serves as a reminder of one of the ways the maximum period of COBRA continuation coverage can be affected by a covered employee’s Medicare entitlement. As noted, information letters are often released relating to requests on general information. As always, an employer should consult with its counsel and trusted advisors to ensure that it is complying with the various laws when providing employee benefits.

New Legislation Makes $30 Million Available in Grants for Businesses in Solar Energy Field

From Chambers for Innovation and Clean Energy

In an effort to help develop and maintain solar jobs and manufacturing in Pennsylvania, new bipartisan legislation was recently passed and signed into law to do just that. Act 40 is designed to keep solar energy jobs within the Keystone State instead of sourcing them to neighboring states, as has been practice in recent years.

Additionally, $30 million in grants and loans is now available through the Solar Energy Program (SEP) to businesses that manufacture solar equipment, or generate or distribute solar power. The goal is to support Pennsylvania’s efforts to strengthen its position in the clean energy space.

“The Solar Energy Program is vital in our efforts to make Pennsylvania a leader in clean energy,” Governor Tom Wolf said. “Developing new renewable energy sources including solar is critical to ensuring Pennsylvania has a balanced and diverse energy mix that maintains our position as a major energy producing state.”

Many local Pennsylvania chamber member businesses can benefit from the SEP as it provides financial assistance in the form of grant and loan funds to promote the use of solar energy in Pennsylvania.

If your organization is interested in applying for a SEP loan or grant, please visit the PA Dept. of Community and Economic Development page.