IRRC Releases Comments in Response to Proposed Overtime Rule Changes

From PA Chamber of Business & Industry

The Independent Regulatory Review Commission last Friday issued their comments in response to the state Department of Labor and Industry’s proposal to dramatically expand overtime eligibility in Pennsylvania.

Many of IRRC’s directives and questions are similar to those posited by hundreds of employers and other stakeholders who submitted comments in response to the proposal and outlined multiple reasons the proposal should be rejected.

The Department’s proposal, released in June 2018, included a 100 percent increase in the minimum salary threshold to qualify for “overtime exempt” status and also required regular increases to the threshold. Additionally, while the proposal indicated a desire to align federal and state overtime guidelines – which the PA Chamber strongly supports – the actual regulatory language unfortunately fell far short of this goal.  The PA Chamber submitted comments in response to this proposal outlining numerous concerns including the cost on businesses and the nonprofit community and the negative impact on employees who will be forced to transition from earing a salary to less flexible hourly positions. Many of these concerns were highlighted by IRRC which also stated that the Department should work more closely with the legislature when undertaking such a significant and substantial rule change.

The Department of Labor and Industry will likely submit a final proposed rule, which IRRC could opt to reject if its questions are not sufficiently answered or directives not sufficiently adopted.

Could Self-Funding be the Strategy For You?

From ChamberChoice and Smart Business Pittsburgh

Self-funding is not a new strategy. But while historically utilized for large employer groups, its availability for medium and small employers is new. And the concept is showing impressive results when it comes to giving employers greater input in health plan design and more control over rising medical benefit costs.

Smart Business spoke with Domenic Pascucci, consultant at JRG Advisors, about the benefits of a self-funded health plan.

Why is control of a health plan so important?

Employers need to focus on where their medical dollars are spent to accurately implement and assess a benefits strategy that stabilizes costs. Employers that cling to their fully insured plan must face the reality that they have no control. They wait until 60 to 90 days from their renewal, hoping for a favorable renewal offer, but they’re often slapped with an increase. And so, the last-minute scramble begins — they modify their plan design, switch insurance companies and shift costs to employees.

These methods are a temporary solution at best. They never serve as a long-term strategy to effectively or efficiently manage an employee benefits program. In a self-insured or self-funded health plan, the employer takes on direct financial responsibility for employees’ health care costs. Rather than being in a large, fully insured risk pool, the self-funding employer takes on the risk for its group.

Why do some employers hesitate to switch?

Self-funding has grown in popularity and proven to save money, but ‘taking on risk’ can be an uncertain and intimidating concept. Many employers are misinformed and hesitate to make the leap from fully insured plans. A Sun Life Financial study found that nearly 50 percent of employers were skeptical of self-funding because of the fear of financial risk and 40 percent were fearful of incurring catastrophic claims.

Most self-funded employers, however, purchase stop-loss insurance to cover catastrophic claims, which protects the employer and caps the financial risk exposure. Furthermore, self-insured health plans are exempt from most state insurance laws and mandates. Not having to pay regular premiums to an insurance company can produce substantial savings. An employer is only paying for claims that actually occur in the self-funded model.

How do employers know if their organization is a good candidate for a self-funded plan?

Self-funding is not the right fit for every employer. Some careful research and analysis should be conducted by an experienced consultant that specializes in this type of funding arrangement. Identifying an employer’s financial situation, risk tolerance, cash flow, historical performance of claims and coverage needs are all factors that will help an employer decide.

What do employers need to know about setting up a self-funded plan?

If employers are viable candidates, their broker should guide and educate them on making the transition. Once an employer is committed to a pre-determined strategy that meets the company’s needs and affordability, a financial model should be developed. It will help identify potential outcome scenarios that will not only reduce the employer’s concerns, but also reduce the risk of incurring a large financial pitfall from a costly claim. Various stop-loss deductibles and their impact should be modeled out.

Once the financial model is set up, the broker can examine plans and benefits to find those that best suit the needs of the employer and employees. This is also a good time to review the responsibilities for managing the cost and affordability of the self-funded plan. To make the transition as smooth as possible, the self-funded plan should be similar to the fully insured plan. Finally, employers need a clear understanding of a third party administrator’s role, the various levels of insurance, network availability and which networks are best suited for them.

What’s the takeaway for employers?

If your goal is to take control of your benefits program and rising costs, it’s worthwhile to examine if self-funding is a solution for you. Seek the guidance of an experienced insurance professional who can provide a detailed analysis of your liability — only then will you be informed and ready to decide whether this strategy is for you.

Congressman Barletta Touts Accomplishments, Priorities

Congressman Lou Barletta speaks to the Columbia Montour Chamber on Sept. 21.

Congressman Lou Barletta touted some of the numerous accomplishments from his near eight-year tenure representing the 11th congressional district and also looked ahead to some of the priorities remaining for the current Congress in the few remaining months until the new Congress is seating in January. The U.S. Rep. made his remarks to members of the Columbia Montour Chamber and Columbia Montour Visitors Bureau as part of an annual breakfast program, sponsored by PPL Electric Utilities, on Friday, Sept. 21 at the Greenly Center in Bloomsburg. This marked the final time that Barletta will address the Chamber in his current capacity at a U.S. Representative, which he has done each year since he was first elected to his current office in 2010, as he is running for a U.S. Senate seat this year. 

Barletta reminded attendees that the government has eliminated over 20 federal regulations for every new regulation under the Trump Administration, which has greatly reduced the regulatory burden on small businesses and business in general. This, along with last year’s Tax Cuts and Jobs Act, has helped stimulate the economy to record highs. The recent economic growth, which was 4.2% in the last quarter, has led to a demand for workers, and there are now currently more jobs available in the country than workers to fill them, which has led to a greater need for skilled job training, needs that several local organizations such as Chamber members Pennsylvania College of TechnologyColumbia Montour Area Vocational-Technical School and others are working to address. 

In light of the recent flooding locally, as well as Hurricane Florence, which devastated several areas on and near the North and South Carolina coasts with wind and flood damage, Barletta spoke about the need to be proactive in making improvements to structures to prevent or minimize the damage caused by natural disasters. For example, instead of just rebuilding old structures that are located in flood zones and have been damaged by floods one or numerous times, Congress has and should continue to provide grant funding for flood mitigation. A local example of this is the flood wall built to protect Autoneum and the former Windsor Foods facility, which was funded in part by a federal grant. Additional federal money will be spent in the coming years to help extend that flood wall for a large portion of the rest of Bloomsburg that is located in the flood plane. Barletta mentioned that each $1 spent to mitigate damage caused by natural disasters saves anywhere between $4-8 in disaster recovery funds. 

Tracie Witter, regional affairs director at PPL, speaks about PPL’s initiatives in the community.

School safety was also a topic, and Barletta relayed his disappointment that Congress has not acted on any legislation to give secondary schools any additional funding or guidelines to deal with school security after the school shooting in Parkland, Fla. earlier this year. He compared with how Congress reacted following the shooting at the Congressional baseball practice in the summer of 2017, which took nine days for Congress to pass legislation that addressed some of the security shortcomings that were identified as a result of that incident, with what Congress has yet to do following the Florida incident. Referencing the hashtag the he started, #kidsbeforecongress, he said that legislation must be passed giving states and local school districts the resources and knowledge that they need to provide better school security. It will not be a one-size-fits-all solution, as different schools will require different security protocols, but the federal government must provide resources that will protect schools in the same way as federal buildings and critical infrastructure.

Prior to Barletta’s remarks, Tracie Witter, regional affairs director at event sponsor PPL Electric Utilities, gave an update on some of the initiatives that PPL has contributed to via the PPL Foundation. It has contributed to several local nonprofits, including Camp Victory and others, and through its Foundation, aims to make the communities in which it operates and its employees live, better places. PPL has also given back more than $300 million to its customers as a result of the Tax Cuts and Jobs Act signed into law last December. 

State Officials Promote Education Saving Program

Joe Torsella, PA Treasurer (second from left), was recently joined by PA Senator John Gordner (far left), Rep. David Millard (second from right) and Tom Leary, President of Luzerne Community College (far right), at the McBride Memorial Library in Berwick to announce the statewide launch of the Keystone Scholars program beginning in 2019.

Beginning in 2019, every child born or adopted into Pennsylvania will have $100 invested into an account for their future education. Funds can used up to age 29 for continuing education after high school to better prepare for the workforce. Pennsylvania Treasurer Joe Torsella was joined by other state officials in Berwick recently to celebrate the statewide launch of the new program to encourage education saving.

The Keystone Scholars program was piloted in seven counties in 2018 and uses Pennsylvania Treasury account earnings and philanthropic contributions, no general fund tax revenues. The goal is to encourage families to set up and fund private 529 accounts for children. Contributions to 529 plans are tax deductible, and earnings are tax free when used for qualified educational expenses.

Treasurer Torsella was joined by PA Senator John Gordner, Representative David Millard, and others at the McBride Memorial Library in Berwick on Sept. 7 to promote the program. Torsella, a Berwick native, celebrated the creation of Keystone Scholars as a bi-partisan effort. Senator Gordner applauded Torsella’s commitment to the program, noting that his swearing in ceremony in early 2017 was held at a school. 

Average student debt among college graduates in Pennsylvania ranks worst in the nation, according to Torsella. Regularly funding a 529 plan can significantly reduce, or even eliminate, the need for student loans. Additionally, children with a 529 plan are three times more likely to pursue additional education after high school, resulting in higher earnings over a lifetime.

More information about the Keystone Scholars program and 529 plans is available at the PA 529 website

SEDA-COG Requests Input For Travel Needs Survey

SEDA-COG wants to hear from you.  How are you affected by transportation services in the central Pennsylvania region?  How could services better help you, your family, or your business in Clinton, Columbia, Juniata, Lycoming, Mifflin, Montour, Northumberland, Snyder and Union counties?

Let us know by participating in a brief online survey.

The survey, available through Oct. 29, is being conducted by the SEDA-COG and Williamsport Metropolitan Planning Organizations, as they update the Coordinated Public Transit-Human Services Transportation Plan in coming months. They especially want to know what you think about gaps in transportation services affecting seniors, minorities, low-income individuals, and people with disabilities or with limited English language skills.

If you have questions or would like additional information, please contact Steve Herman by email or phone at 570-524-4491. In Lycoming County, feel free to also contact Mark Murawski by email or 570-320-2138.  SEDA-COG and Williamsport Metropolitan Planning both thank you for your time.