October 17, 2014

Enrollment: IRS guidance for Section 125 cafeteria plan

On Sept. 18, the Internal Revenue Service (IRS) released guidance to address two situations in which a Section125 cafeteria plan participant is permitted to revoke his or her election during a period of coverage. Normally, a cafeteria plan election is locked in for the duration of a cafeteria plan year and only permits an employee to revoke an election and select other group coverage in certain situations. Prior to this guidance, potential situations could arise where an individual may have no choice but to stay with their group health plan even where a Marketplace qualified health plan (QHP) is a better option.

Under the Sept. 18 guidance, a cafeteria plan may allow an employee to cancel group coverage (1) due to a reduction in hours or (2) to enroll in a Marketplace QHP if certain conditions are met.

  1. To revoke a cafeteria plan election for group coverage due to a reduction in hours the following conditions must be met:
    • Group health plan is not a health flexible spending account (FSA) and provides minimum essential coverage;
    • There is a change in the employee’s status such that the employee will reasonably be expected to average less than 30 hours of service per week, even if that reduction does not result in the employee ceasing to be eligible under the group health plan; and
    • The revocation of coverage corresponds to the enrollment of the employee and applicable dependents in another plan that provides minimum essential coverage with the new coverage effective no later than the first day of the second month following the month the original coverage is revoked.
  2. To revoke a cafeteria plan election for group coverage and purchase a Marketplace QHP, the following conditions must be met:
    • Group health plan is not a health FSA and provides minimum essential coverage;
    • The employee is eligible for a special enrollment period or seeks to enroll in a Marketplace QHP during the annual open enrollment period; and
    • The revocation of coverage corresponds to the intended enrollment of the employee and applicable dependents in a Marketplace QHP with new coverage that is effective beginning no later than the day immediately following the last day of the original coverage that is revoked.

This guidance permits, but does not require, a cafeteria plan amendment to adopt the new permitted election changes above on or before the last day of the plan year in which the elections are allowed, and permits the amendment to be effective retroactively to the first day of that plan year, provided that the employer informs participants of the amendment. An election change to permit revocation of coverage on a retroactive basis is not allowed.

A cafeteria plan for a plan year that begins in 2014 may be amended at any time on or before the last day of the plan year that begins in 2015. For example, an employer has until 9/30/16 to amend elections for a plan year that runs 10/1/14 – 9/30/15.

Where can I find more information?
The Treasury Department and the IRS intend to amend Treas. Reg. § 1.125-4 to reflect the guidance in this notice.


In an effort to keep you informed of LARA’s (Michigan Department of Licensing and Regulatory Affairs) efforts to support business growth and job creation, while safeguarding Michigan’s citizens through a simple, fair, efficient and transparent regulatory structure, we are pleased to share the following news with you.

The Workers’ Compensation Agency (WCA) has announced the pure premium advisory rate for workers’ compensation insurance will drop by an average of 6.5 percent in 2015 and will decrease 6.3 percent annually from 2011-15. The pure premium rate will plummet 27.7 percent since 2011, saving Michigan employers an estimated $277 million. The most recent comparison data shows that Michigan’s cumulative pure premium decrease of 22.7 percent from 2011-14 is best in the Midwest and second best in the nation. While Michigan’s rate plummeted, the national average went up 10.8 percent.

Please see the below information and watch the video to learn more about how the WCA is focused on protecting injured workers and containing costs for employers. Michigan’s Workers’ Compensation System is a strategic asset to the state and provides a competitive edge in attracting and retaining businesses and growing jobs.

Michigan Workers' Comp Rate Decrease

Grants Money

Michigan Occupational Safety and Health Administration
Investing $1 Million in Worker Safety and Health
MIOSHA is offering matching grant awards of up to $5,000 per employer to improve workplace safety and health!

October 7, 2014 – In celebration of the 40th anniversary of Michigan’s program for workplace safety and health, the Michigan Occupational Safety and Health Administration (MIOSHA) is offering matching grant awards of up to $5,000 to improve workplace safety and health. The grants are open to qualifying employers to purchase safety and health-related equipment. The goal of this special grant program is to create safer and healthier work environments and reduce the risk of injury and illness to workers in Michigan.

“We are encouraging employers to step up workplace safety and health during MIOSHA’s 40-year anniversary,” said Martha Yoder, MIOSHA Director. “We are pleased to partner with small employers by offering matching grants of up to $5,000 to make improvements in workplace safety and health. With a total of $500,000 available from MIOSHA, that’s a $1 million investment in keeping Michigan’s workers safe and healthy.”

To qualify for the MIOSHA Safety and Health Improvement Program (MiSHIP) Grant, an employer must meet the following conditions:
• Have 250 employees or less.
• Come under the jurisdiction of MIOSHA.
• A qualified safety professional or a safety committee must have conducted a site-specific evaluation, and there must be a written report with recommendations based on the evaluation unless the project is for lifting equipment in residential care facilities, or fall protection equipment in residential construction.
• The grant project must be consistent with the recommendations of the safety and/or health evaluation and must directly relate to improvements that will lead to a reduction in the risk of injury or disease to employees.
• The employer must have the knowledge and experience to complete the project, and must be committed to its implementation.
• The employer must be able to match the grant money awarded and all estimated project costs must be covered.
The MiSHIP Grant requires that an eligible project is one designed to reduce the risk of injury to employees as identified in a site-specific safety and/or health evaluation conducted at the site. The site-specific evaluation must identify the injury and illness risks associated with a work task or area, and the recommended actions of the grant project must directly relate to eliminating or minimizing the risks. Please note that requests for residential fall protection and lifting equipment for in-home care or residential care facilities do not require a hazard evaluation to be performed.

The MiSHIP places priority on those projects that impact employment sites that provide goods, manufacturing or processing jobs for the majority of workers; businesses within the current MIOSHA Strategic Plan and other high-hazard workplaces.
Some examples include:
• Residential Fall Protection Systems
• Lifting Equipment or Portable Lifting Equipment for In-home Care or Small Nursing/Residential Care Facilities
• Monitoring Equipment for Confined Space Entry
• Noise Reduction Engineering Controls
• Lock Out/Tag Out Systems
• Cooling Systems for Agriculture-based Worksites
• Eyewash Stations for the Accommodations Industry

A limited number of MiSHIP Grants will be available to training organizations. To be eligible, the training organization must make the equipment available to its members for use.

For more information about the MiSHIP and how to apply, please visit
For more information about MIOSHA, please visit

In an article appearing in PCWorld, reporter Lucian Constantin outlined a new phishing campaign targeted to Apple iCloud users. The complete article can be found at The Chamber would like to remind members that phishing schemes can lead to identity theft, computer and network crashes, and loss of vital information.

Microsoft has provided a good overview of information on how to recognize phishing email messages, links, or phone calls and what to do if you have been subject to phishing.

What does a phishing email message look like?
Here is an example of what a phishing scam in an email message might look like.
To view the complete article –

Please take a few moments to familiarize yourself with some of the ways to recognize these malicious attacks and protect your information.

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.


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.

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.