Proposal 1 (Eliminating the Personal Property Tax) Benefits Everybody in Michigan – Vote Yes

We all win by voting “YES” on Proposal 1!

Proposal 1 will make sure 100 percent of the estimated lost revenue will be reimbursed to communities when the Personal Property Tax (PPT) is eliminated.

Eliminating the PPT is expected to create up to 15,000 jobs and increase business investment by $450 million.

As you know, Proposal 1 would end the unfair and antiquated double tax (also known as the personal property tax) small businesses pay every year on the equipment they already own, while stabilizing funding for police, fire, jails, roads, schools, senior services and other important municipal services.

Business Leaders for Michigan recently produced a short, simple video explaining how Proposal 1 would benefit all of Michigan. Watch the new video here:

The Saginaw County Chamber of Commerce urges you to vote Yes on Proposal 1. Please share this information with your voting friends and acquaintances.

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Final regulations released on 90-day waiting periods and its limitations

Reform-Alert-Header-2014

Update to previous alert from July 26, 2013: Federal agencies release proposed rule on 90-day waiting period limitation

On Feb. 20, the Department of Labor (DOL), Internal Revenue Service (IRS) and the Department of Health and Human Services (HHS) jointly released both the final rule and proposed rule on 90-day waiting periods.

The final rule on waiting periods applies to plan years beginning on or after Jan. 1, 2015. For the 2014 plan year, compliance is based on the proposed rule from 2013, which states that group health plans (including grandfathered, non-grandfathered and self-funded plans) and group health insurance coverage issuers cannot apply a waiting period that exceeds 90 days.

The final rule maintains that eligibility conditions that are not based solely on the passage of time are generally acceptable unless designed to avoid compliance with the 90-day waiting period limitation.

  • If a group health plan conditions eligibility for health care on an employee regularly working a specified number of hours per period (or working full time), and it cannot be determined that a newly hired employee is reasonably expected to meet the required number of hours (or work full time), the health plan may take a reasonable period of time to determine whether the employee meets the plan’s eligibility conditions. A time period designed to determine whether such an employee meets the plan’s eligibility conditions is considered compliant with the 90-day waiting period limitation if coverage is made effective no later than 13 months from the employee’s start date plus, if the employee’s start date is not the first day of a calendar month, the time remaining until the first day of the next calendar month.

Health insurance issuers may rely on the eligibility information reported by employers (or other plan sponsors) and will not be considered in violation of the 90-day waiting period limitation if:

  • Issuers require plan sponsors to make a representation regarding the terms of any eligibility conditions or waiting periods imposed by plan sponsors before an individual is eligible to become covered under the terms of the plan (and requires plan sponsors to update this representation with any applicable changes); and
  • Issuers have no specific knowledge of the imposition of a waiting period that would exceed the permitted 90-day period.

All calendar days are counted beginning on the eligibility date, including weekends and holidays. Employee coverage must begin on or before the 91st day of eligibility.

Proposed rule on waiting periods and orientation periods
The proposed rule on orientation periods may be relied on for the 2014 plan year.

The proposed rule, issued in conjunction with the final 90-day waiting period rule, allows for a “reasonable and bona fide” employment-based orientation period of no more than one month.

During this time the employer and employee can evaluate whether the employment situation is satisfactory, and standard orientation and training processes begin.

The Proposed Rule may be relied on throughout 2014 and if a final rule is more restrictive, reasonable time for compliance will be provided.

More information can be found at:

________________________________________
*Blue Cross Blue Shield of Michigan is not responsible for the content or practices of the destination website.
The information in this document is based on preliminary review of the national health care reform legislation and is not intended to impart legal advice. The federal government continues to issue guidance on how the provisions of national health reform should be interpreted and applied. The impact of these reforms on individual situations may vary. This overview is intended as an educational tool only and does not replace a more rigorous review of the law’s applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. As required by US Treasury Regulations, we also inform you that any tax information contained in this communication is not intended to be used and cannot be used by any taxpayer to avoid penalties under the Internal Revenue Code.

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Chamber Partners with Community Leaders and Governor to Make Saginaw a Safe Community

The Saginaw County Chamber of Commerce was invited to join Governor Rick Snyder, Michigan State Police, Saginaw County and City Law Enforcement, Community Leaders and the Faith Community in a round table discussion to talk about continuing efforts to make Saginaw one of Michigan’s safest communities.

The invitation-only event allowed for candid discussion about the Secure City Initiatives that Governor Snyder implemented in the past two years, including Community Ventures, the Pathways to Potential, and increased presence in targeted areas by the Michigan State Police, as well as engaging the community with law enforcement and law enforcement with the community.
For its part, the Saginaw County Chamber of Commerce fully supports the resources and focus that Governor Snyder, through his Office of Urban Initiatives, has placed on Saginaw. The Community Ventures Program in Saginaw focuses on getting the chronically unemployed into jobs and is Michigan’s most successful implementor of the program, moving over 300 people into the workforce. The Community Ventures Offices were originally housed at the Chamber, and we continue to work closely with Saginaw Future Inc. and Community Ventures to connect companies with the Community Ventures Program.

One of the Saginaw County Chamber of Commerce’s great members, Consumers Energy, has spearheaded an initiative called Light Up The City. Consumers employees, along with volunteers and community leaders are going door to door and replacing burnt-out porch lights with new, energy-efficient bulbs that not only save energy, but provide the light that dissuades wrong-doers.

All in all, we’re pleased to have participated in this important community meeting and will continue to work with our members, the governor and community leaders to make Saginaw a safe place where business can thrive.

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Saginaw County Chamber Supports Michigan Citizens for Strong and Safe Communities Campaign

The Saginaw County Chamber of Commerce is proud to support Michigan Citizens for Strong and Safe Communities’ campaign to protect local community services and help small businesses create jobs – without increasing taxes for anyone.

This important proposal will be on the August 5 primary ballot across Michigan. We encourage you to learn more about this proposal and to vote YES in August.

This proposal would create 15,000 jobs in Michigan by eliminating the personal property tax on small businesses. Businesses must pay this tax every year on every piece of equipment they own, which is unique to Michigan and puts our state at an economic disadvantage when competing for new businesses and jobs. This proposal would immediately eliminate the personal property tax on small businesses and phase it out over nine years for larger businesses.

Many communities rely on revenue from the personal property tax to fund local services like police, fire, ambulances, jails, roads, schools, parks and libraries even though it is an unreliable revenue source. This referendum guarantees that 100 percent of the money a community loses from the elimination of the personal property tax will be replaced using the more stable State Use Tax.

This proposal is not a tax increase – for anyone. It is paid for by eliminating special corporate tax breaks that the legislature has voted to end, and by establishing a statewide Essential Services Assessment paid only by manufacturers receiving a personal property tax reduction.

We strongly encourage you to sign up for Michigan Citizens for Strong and Safe Communities’ email alerts at www.strongandsafecommunities.com to receive updates from this important campaign to strengthen Michigan communities and help local small businesses create jobs.

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Saginaw County Chamber of Commerce Travels to State Capitol

State and local Chambers from around the state gathered in Lansing for meetings with legislators and staff and to advocate for policies that foster business and job growth

On Tuesday, May 6, the Saginaw County Chamber of Commerce, the Michigan Chamber of Commerce and 31 other local Chambers met in Lansing to discuss their combined goals and strategies in 2014. Participants were scheduled to attend a series of meetings with legislators and policymakers throughout the day to discuss issues favorable to job creation and business growth in Michigan.

The Saginaw Chamber of Commerce is leading the way for members in our community to be better informed about issues affecting their businesses,” said Chamber President Bob Van Deventer. “Our participation in Chamber of Commerce Day demonstrates we are engaging our members with lawmakers and opinion leaders to make a difference.”

Participants met early in the day with policymakers to discuss topics on transportation and infrastructure funding, minimum wage and personal property tax reform. In the afternoon, chamber leaders met with legislators and concluded the meeting with a forecast on the remainder of the legislative session.

The event marks the first Chamber of Commerce Day, but participants are already making plans for an annual event.

“We had an impressive turnout today with many important chambers of commerce from around the state,” said Bob Thomas, Executive Director, Michigan Chamber Foundation. “Legislators heard directly from local businesspeople in their district about policies affecting their companies. Having so many business leaders convene at once is a powerful opportunity to send a message.”

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Chamber Collaborates with Governor’s Office and Other Chambers on Energy Efficiency Retrofits and Clean Energy Generation Solutions for Members

 

Saginaw County Chamber Logo 2012

On April 9, 2014, the Lansing Regional, Saginaw County, and Traverse City Area Chamber CEOs and Chambers for Innovation and Clean Energy hosted an energy-focused briefing call with Governor Snyder’s Office and 40 local chamber representatives and member companies from around the state. Following is a recap of the discussion and important information the chamber and members can use to pursue energy efficiency retrofits and clean energy generation.

Valerie Brader, Governor Snyder’s Senior Policy Advisor on Energy, updated the audience on key elements of the Governor’s energy goals. Brader has been very supportive of local chambers and had spoken in person at a gathering of local Michigan chambers in Lansing in January. As Michigan plans for the eventual retirement of some of its coal plants and how to replace this supply, it wants to be adaptable and ready for the future. Michigan uses 38% more energy per capita and pays six percent more than the national average for heat and power. The Governor’s office sees an opportunity in diversifying sources of energy and significantly increasing energy efficiency. Diversifying the portfolio of energy sources also has the potential to increase Michigan’s business competitiveness. There are opportunities to reduce mercury and particulate matter in the air, increase the desirability of Michigan as a place to do business, and improve public health.

Michigan’s industrial sector is energy intensive, in part due to older equipment and buildings. While businesses have a financial incentive to upgrade or do energy retrofits, they don’t always have the time and financing to do them. The Governor is interested in examples where chambers and their members overcame these barriers.

Doug Luciani, CEO of the Traverse City Area Chamber, outlined a revolving loan fund created to fund building retrofits. Loans go up to $250k at low interest rates. The program has been very well received. The Saginaw County Chamber said it plans to involve its members in one of the state’s new energy working groups and the Lansing Regional Chamber discussed its continuing efforts to guide innovative energy policies in the state.

In terms of facilitating change through policy, right now there is a bill in the legislature (HB 5397) that would allow qualifying municipal electric utilities to offer innovative financing options to customers interested in making energy efficiency improvements. These financing mechanisms, such as on-bill financing or locally issued bonds, allow customers to spread the cost of efficiency and renewable energy projects out over a set amount of time, rather than bearing the full cost up-front. The final speaker was Erin Lane with Cascade Associates in Washington D.C. Erin gave an excellent overview of the high level of bi-partisan momentum in Congress around energy efficiency. Follow this link to a summary of legislative bills.

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Final Regulations Released on Employer Shared Responsibility Requirements for 2015 and Beyond

Reform-Alert-Header-2014

On Feb. 10, the final regulations for the Employer Shared Responsibility provisions (also referred to as the “employer mandate”) under the Affordable Care Act were released by the Internal Revenue Service and Department of the Treasury.

These final regulations provide different types of safe harbors to employers in 2015, depending on the type of employer or plan offered. The triggers for the tax penalties also vary depending on the type and timing of the safe harbor option an employer may qualify for (and chooses to implement).

Key safe harbors for 2015 are outlined below:

Applicable large employers with 50 to 99 full-time equivalent employees may not be subject to the employer mandate requirements until the first day of their 2016 plan year.

An applicable large employer is not subject to tax penalties for any calendar month in 2015 (and for the portion of the 2015 plan year that falls in 2016 if it has a non-calendar plan year) if it meets all three major requirements and certifies that it qualifies for this safe harbor:

  1. An applicable large employer has at least 50 and no more than 99 full-time equivalent employees during 2014 so that it meets the workforce size requirements.
  2. There are no reductions to an employer’s workforce size or overall hours of service between Feb. 9, 2014 and Dec. 31, 2014.
    • However, reductions made due to “bona fide” business reasons are allowed. The regulations provide examples of “bona fide” reasons that include changes in the economic marketplace, sales of business divisions or other similar reasons.
  3. An applicable large employer must maintain the health coverage it previously offered between Feb. 9, 2014 through Dec. 31, 2015 (or on the last day of the 2015 plan year).

An employer will certify its eligibility requirements on designated IRS forms (1095-C for self-funded large employers and 1094-C for fully insured large employers) by Jan. 31, 2016. These forms have not yet been issued by the IRS.

Applicable large employers with calendar or non-calendar plan years and new employers may qualify for this safe harbor.

Percentage threshold to offer coverage is 70 percent for all applicable large employers

For all applicable large employers in 2015, including employers with 50 to 99 full-time equivalent employees that do not qualify for the safe harbor described earlier, the employer will be liable for tax penalties only if:

  1. The applicable large employer does not offer coverage to at least 70 percent of full-time employees and their dependents (unless the employer qualifies for the 2015 safe harbor for dependent coverage described later in this alert), and at least one of the full-time employees receives a premium tax credit to help pay for coverage on a Marketplace (Exchange); or
  2. The applicable large employer offers coverage to at least 70 percent of full-time employees and their dependents (unless the employer qualifies for the 2015 safe harbor for dependent coverage), but at least one full-time employee still receives a premium tax credit to help pay for coverage on a marketplace.
    • This may occur because the employer did not offer coverage to that employee or because the coverage that was offered to that employee was either unaffordable to the employee or did not provide minimum value.

This percentage threshold only applies for 2015. The percentage of employees that must be offered coverage to limit employer mandate liability increases from 70 to 95 percent in 2016.

Change in 2015 tax penalty calculation for employers with 100 or more full-time equivalent employees

An employer with 100 or more full time equivalent employees during 2014 is still subject to the tax penalty in 2015 for not offering health coverage to at least 70 percent (will increase to 95 percent in 2016) of its full-time employees and their dependents. This means a tax penalty will be assessed if the employer (a) does not provide health coverage at all, or (b) the employer does not offer coverage to at least 70 percent of its full-time employees and at least one full-time employee receives a premium tax credit on the Marketplace.

For 2015, this tax penalty calculation is different. The tax penalty will be calculated by subtracting 80 full-time employees (instead of 30):

  • 2015: Annual penalty calculation is $2,000 x (number of full-time employees minus 80)
  • 2016: Annual penalty calculation is $2,000 x (number of full-time employees minus 30)

This safe harbor is only available for each calendar month in 2015 (and for any months that fall in 2016 for a 2015 plan year). For example, a group with a July 1 plan year would be able to use the tax penalty calculation above for July 2015 through June 2016.

Applicable large employers with non-calendar year plans

An applicable large employer may receive relief from tax penalties for any month prior to the first day of the 2015 plan year if it meets the following requirements:

  1. Maintained a non-calendar plan year as of Dec. 27, 2012 and not changed its plan year after this date to begin later.
  2. Meets one of the following three tests:
    1. offers affordable coverage meeting minimum value requirements to its eligible employees (under the terms of the non-calendar plan as of Feb. 9, 2014) by the first day of the 2015 plan year
    2. covered at least 25 percent of all employees on any date between Feb. 10, 2013 through Feb. 9, 2014, or offered coverage to at least 33 percent of all employees during the most recent open enrollment period ending before Feb. 9, 2014
    3. covered at least 33 percent of its full-time employees as of any date between Feb. 10, 2013 through Feb. 9, 2014, or offered coverage to at least 50 percent of full-time employees during the most recent open enrollment period ending before Feb. 9, 2014
  3. Offers coverage to at least at least 70 percent of full-time employees and their dependents (unless the employer qualifies for the 2015 safe harbor for dependent coverage) as of the first day of the 2015 plan year.

Note that the relief does not apply to employees also eligible for or covered under a calendar year plan offered by the applicable large employer.

Dependent coverage safe harbor

Another safe harbor is available for applicable large employers with 2015 plan years where dependent coverage:

  1. Is not offered,
  2. Does not meet minimal essential coverage requirements, or
  3. Is offered to some, but not all, dependents

This applies to employers that take steps during 2015 (or the 2015 plan year) to extend coverage to dependents that were previously not offered coverage during the 2013 and/or 2014 plan years. This is not an option for employers that offered, but then dropped, dependent coverage during the 2013 and/or 2014 plan years.

Under the employer mandate a dependent is a biological and/or adopted child of an employee who has not reached age 26. This excludes foster children and stepchildren (only for the employer mandate). It also excludes an employee’s spouse being considered as a dependent.

Points for clarification

The employer shared responsibility provision does not apply to employers with less than 50 full-time equivalent employees.

Employers affected by the employer mandate are encouraged to seek their own legal counsel as each employer’s situation will be unique to the type of safe harbor that an employer may qualify for.

More information can be found at:

Additional guidance is pending.

 

*Blue Cross Blue Shield of Michigan is not responsible for the content or practices of the destination website.

The information in this document is based on preliminary review of the national health care reform legislation and is not intended to impart legal advice. The federal government continues to issue guidance on how the provisions of national health reform should be interpreted and applied. The impact of these reforms on individual situations may vary. This overview is intended as an educational tool only and does not replace a more rigorous review of the law’s applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. As required by US Treasury Regulations, we also inform you that any tax information contained in this communication is not intended to be used and cannot be used by any taxpayer to avoid penalties under the Internal Revenue Code.

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Final regulations released on Employer Shared Responsibility requirements for 2015 and beyond

Reform-Alert-Header

On Feb. 10, 2014, the Treasury Department and the Internal Revenue Service released final regulations for the Employer Shared Responsibility provisions (also referred to as the employer mandate) under the Affordable Care Act.
An applicable large employer that, for a calendar month, does not offer its full-time employees health coverage that is affordable and provides minimum value may be subject to the assessable payments (tax penalty) if a full-time employee enrolls for that month in a qualified health plan (QHP) through an Exchange and receives a premium tax credit.
These requirements were originally effective beginning Jan. 1, 2014, but in July 2013, the assessable payments were delayed by one year.
These final regulations issued yesterday provide additional transition relief to employers and clarify or confirm guidance that was been previously issued.
Who does this apply to?
In general, the employer mandate applies to applicable large employers with 50 or more full-time equivalent employees. However, there is a transition period that will phase in this requirement.
Starting on Jan. 1, 2015, the employer mandate will apply to applicable large employers with 100 or more full-time equivalent employees. In 2015, the mandated requirements will not apply to employers with fewer than 100 full-time equivalent employees.
In 2016, the employer shared responsibility provisions will apply to employers with 50 or more full-time equivalent employees.
Is there a phase-in period for the number of employees that must be covered to avoid an assessable payment?
Yes. In 2015, an applicable large employer potentially will be subject to a penalty if it does not cover at least 70 percent of its full-time equivalent employees.
In 2016, applicable large employers will be required to cover at least 95 percent of their full-time employees.
Is there a safe harbor for the requirement that employers offer coverage to employees’ dependents?
Yes. Employers that currently do not offer coverage to dependents (and did not offer coverage to dependents in 2013) are generally permitted to transition to offering such coverage in 2016.
When are these requirements effective?
Generally, the requirements are effective beginning on Jan. 1, 2015. For those applicable large employers with non-calendar plan years that begin after Jan. 1, 2015, the final rule includes a safe harbor that generally will make the mandate effective beginning with the first day of their 2015 plan year.
More information can be found at:
Internal Revenue Service FAQ*
Final regulations*
Treasury Department fact sheet*

*Blue Cross Blue Shield of Michigan is not responsible for the content or practices of the destination website.

The information in this document is based on preliminary review of the national health care reform legislation and is not intended to impart legal advice. The federal government continues to issue guidance on how the provisions of national health reform should be interpreted and applied. The impact of these reforms on individual situations may vary. This overview is intended as an educational tool only and does not replace a more rigorous review of the law’s applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. As required by US Treasury Regulations, we also inform you that any tax information contained in this communication is not intended to be used and cannot be used by any taxpayer to avoid penalties under the Internal Revenue Code.

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Legislative Update – 2014 Eligible Personal Property Tax Exemption

For the 2014 tax year, legislation was passed that exempts certain “Eligible Personal Property” from taxation. Businesses that own personal property of less than a true cash value of $80,000 ($40,000 assessed value) may be entitled to an exemption for the 2014 tax year. To qualify for the Eligible Personal Property exemption, the qualifying business MUST FILE Form 5076 with the local assessor by February 10, 2014. If the business fails to file the Form 5076, the local assessor is obligated to place an assessment, even if the assessor’s estimate is less than the $80,000 true cash value threshold.

Personal Property Statements were mailed to taxpayers shortly after January 1, 2014. If you have questions regarding this issue, please contact your local assessor.

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Department of Health & Human Services issues guidance for the 2015 benefit year

Reform-Alert-Header

On Nov. 25, 2013, the Department of Health and Human Services (HHS) issued guidance proposing changes to the annual open enrollment period and the qualified health plan (QHP) certification deadlines for the 2015 benefit year.

For the 2015 benefit year, the proposed annual open enrollment period is Nov. 15, 2014 through Jan. 15, 2015:

Enroll by Dec. 15, 2014
For Coverage Effective January 1, 2015

Enroll December 16, 2014 through January 15, 2015
For Coverage Effective February 1, 2015

Qualified individuals already enrolled in a QHP through the Marketplace in 2014 who maintain the same eligibility would have their coverage continue into 2015, but may choose to select new coverage at any time during the annual open enrollment period.

The annual open enrollment period for benefit years on or after 2016 is still Oct. 15 through Dec. 7 of the preceding calendar year, with coverage effective the first day of the following benefit year.

If finalized, the Marketplace is expected to delay 2015 QHP certification dates by at least one month.

HHS is currently seeking comments.

Where can I find more information?

Blue Cross Blue Shield of Michigan will continue to monitor and advise when new information is received. Please visit our Reform Alerts webpage for the latest health care reform updates.

The information in this document is based on preliminary review of the national health care reform legislation and is not intended to impart legal advice. The federal government continues to issue guidance on how the provisions of national health reform should be interpreted and applied. The impact of these reforms on individual situations may vary. This overview is intended as an
educational tool only and does not replace a more rigorous review of the law’s applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. As required by US Treasury Regulations, we also inform you that any tax information contained in this communication is not intended to be used and cannot be used by any taxpayer to avoid penalties under the Internal Revenue Code.

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