Don’t get caught without kidnap and ransom insurance

_JBK5366Once you’re above the preteen years, kidnap and ransom sounds like a rather exotic peril…something that only happens to drug kingpins on shadowy, private islands. But the threat for adults is real, especially for high net worth individuals who travel internationally.

How real? Well, author Ann Auerbach spent two years chronicling kidnap and ransom cases and estimated more than 30,000 take place every year. The FBI says there are more 60,000 missing American adults whose disappearance is unexplained and for whom there’s a reasonable concern about their safety.

For United States citizens, high net worth — or just the perception of it — equals high profile and the assumption by nefarious elements of ready access to liquid capital. It’s a tempting combination for brazen criminals thinking they can score a big payoff by taking a hostage and demanding cash for his or her release.6 1 Davis Kidnap and Ransom V2

The costs of a kidnapping incident go beyond any ransom demanded. Paying a ransom — if it’s even advisable! — is certainly not a simple task.  It could require a small army of consultants and advisors such as negotiators, investigators, attorneys, public relations professionals, forensic analysts, and a security force, to name a few. Reward money and extensive medical costs not covered by traditional insurance plans add to the grim picture. No matter how successful you may be, it adds up to a potentially significant financial drain.

You may even be blackmailed for payments without even being taken hostage! In some cases, perpetrators make increasingly detailed and scary threats to the safety of you, your family, and your employees, demanding payment to make it stop.

Thankfully, there are insurance products that can help mitigate this potential financial jeopardy and provide expert support from firms who specialize in handling this type of crisis. They can help negotiate a ransom, safely make the transfer, and evacuate the kidnapped out of a foreign country. These are priceless  skills that you can acquire just by carrying the right insurance.

At Sinclair Risk, we have the expertise needed to tailor a kidnap and ransom policy that makes sense for you and your business. Our clients are our partners, and we pride ourselves on getting to know all aspects of your business AND your risk management needs. Concerned about this growing threat? Talk to us today about kidnap and ransom insurance.

Stephen Davis

VP Personal & Commercial Lines, Sinclair Risk & Financial Management

sdavis@srfm.com

2015 Draft Instructions for 6055 and 6056 Reporting Include Filing Extensions

Sinclair 7-22-15-21The Affordable Care Act (ACA) created new reporting requirements under Internal Revenue Code (Code) Sections 6055 and 6056. Under these new reporting rules, certain employers must provide information to the IRS about the health plan coverage they offer (or do not offer) or provide to their employees. Reporting is first required in 2016, related to coverage offered or provided in 2015.

 

On Aug. 7, 2015, the Internal Revenue Service (IRS) released the following:

2015 draft Forms 1094-B, 1095-B, 1094-C and 1095-C were previously released on June 16, 2015. Except for a few minor changes and a number of clarifications, the 2015 draft forms and instructions are largely unchanged from the 2014 versions. However, the 2015 draft instructions also include:

  •  A proposed automatic 30-day filing extension, upon request (under certain hardship conditions, reporting entities may apply for an additional 30-day extension); and
  •  A proposed waiver from the requirement to file returns electronically.

These 2015 forms and instructions are draft versions only and should not be filed with the IRS or relied upon for filing. The IRS may make changes prior to releasing final 2015 versions.

Proposed Filing Extensions and Waivers Although the changes made in the 2015 draft instructions were mostly clarifications of existing requirements, they did include new proposed filing extensions and a proposed waiver from the requirement to file electronically.

Filing Extensions Reporting entities can get an automatic 30-day extension of time to file by completing and filing Form 8809, Application for Extension of Time To File Information Returns by the due date of the returns. The form may be submitted on paper or electronically through the FIRE System. No signature or explanation is required for the extension.

Under certain hardship conditions, reporting entities may apply for an additional 30-day extension. See the instructions for Form 8809 for more information.

Furnishing Extensions Reporting entities may also request an extension of time to furnish the statements to recipients by sending a letter to: IRS, Information Returns Branch, Attn: Extension of Time Coordinator, 240 Murall Drive, Mail Stop 4360, Kearneysville, WV 25430.

The letter must include the filer’s name, taxpayer identification number (TIN) and address, the type of return, a statement that the extension request is for providing statements to recipients, a reason for the delay and the signature of the filer or authorized agent. The request must be postmarked by the date on which the statements are due to the recipients.

If a request for an extension is approved, a maximum of 30 extra days will generally be granted to furnish the recipient statements.

Electronic Reporting Waiver To receive a waiver from the requirement to file returns electronically, reporting entities must submit Form 8508, Request for Waiver From Filing Information Returns Electronically, at least 45 days before the due date of the returns.

Without an approved waiver, a reporting entity that is required to file electronically but fails to do so may be subject to a penalty of up to $250 per return, unless it can establish reasonable cause. However, reporting entities can file up to 250 returns on paper; those returns will not be subject to a penalty for failure to file electronically.

2015 Draft Instructions—Additional Clarifications 

The 2015 draft instructions also include the following clarifications:

  • Substitute Forms—Entities using substitute forms instead of the official IRS versions may develop substitute forms themselves or buy them from a private printer. Currently in draft form, Publication 5223, General Rules & Specifications for Substitute ACA Forms 1094-B, 1095-B, 1094-C, and 1095-C and Certain Other Information, explains the requirements for the format and content of substitute statements to recipients. Only forms that conform to the official form and the specifications in Publication 5223 are acceptable for filing with the IRS.
  • Corrected Returns—The 2015 draft instructions include detailed information for correcting returns. The procedure for correcting a return will vary, depending on the form and whether it is filed with the IRS or provided to individuals. The instructions provide examples of errors and step-by-step instructions for filing corrected returns.
  • Expatriate Health Plans—According to the 2015 draft instructions, statements reporting coverage under an expatriate health plan may generally be furnished electronically without affirmative consent, unless the recipient affirmatively refuses consent or requests a paper statement. For more information on expatriate health plans, see Notice 2015-43.
  • Penalties—The 2015 draft instructions include an additional section outlining the penalties for reporting entities that fail to comply with the reporting requirements. For 2015, the IRS will not impose penalties for reporting incorrect or incomplete information if the filer can show that it made good faith efforts to comply with the information reporting requirements. No relief is provided for reporting entities that fail to file on time. For more information on penalty relief, see the Sections 6055 and 6056 FAQs.
  • Multiemployer Interim Rule Relief—For reporting offers of coverage on the Form 1095-C for 2015, an employer relying on the multiemployer arrangement interim guidance should enter Code 1H on line 14 for any month for which the employer enters Code 2E on line 16 (indicating that the employer was required to contribute to a multiemployer plan on behalf of the employee for that month and therefore is eligible for multiemployer interim rule relief). For reporting for 2015, Code 1H may be entered without regard to whether the employee was eligible to enroll in coverage under the multiemployer plan. For 2016 and future years, reporting for offers of coverage made through a multiemployer plan may be reported in a different manner.
  • COBRA Coverage—For purposes of the Form 1095-C, the 2015 draft instructions included additional information for reporting offers of COBRA coverage. In general, an offer of COBRA coverage to a former employee upon termination is reported as an offer of coverage on Line 14 only if the former employee enrolls in the coverage. An offer of COBRA coverage to an active employee (for example, due to a reduction in the employee’s hours) is reported in the same manner and uses the same code as an offer of that type of coverage to any other active employee.
  • Method for Determining Monthly Cost—For purposes of the Form 1095-C, the 2015 draft instructions allow an employer to divide the total employee share of the premium for the plan year by the number of months in the plan year to determine the monthly employee contribution for the plan year. This monthly employee contribution would then be reported for any months of that plan year that fall in the 2015 calendar year.
  • Indexed Affordability Percentage—The 2015 draft instructions note that references to 9.5 percent in the affordability safe harbors and alternative reporting methods may be subject to change if future IRS guidance provides that the percentage is indexed in the same manner as for purposes of applying the affordability thresholds under the premium tax credit. In general, this should not affect reporting for 2015, but taxpayers may visit www.IRS.gov for any related updates.
  • Minimum Value—The definition of “minimum value” was revised to clarify that the plan must provide substantial coverage of inpatient hospitalization services and physician services. An offer of coverage under a plan that fails to provide substantial coverage of inpatient hospitalization and physician services should be reported on Form 1095-C as not providing minimum value, even if an employer qualifies for the transition rule under Notice 2014-69.
  • Supplemental Coverage—The 2015 draft instructions for Forms 1094-B and 1095-B included information about supplemental coverage. Providers are not required to report the following minimum essential coverage that is supplemental to other minimum essential coverage:
    •  Coverage that supplements a government-sponsored program, such as Medicare or TRICARE supplemental coverage.
    •  Coverage of an individual in more than one plan or program provided by the same plan sponsor (the plan sponsor is required to report only one type of minimum essential coverage).

According to the 2015 draft instructions, coverage isn’t provided by the same plan sponsor if they aren’t reported by the same reporting entity. Thus, an insured group health plan and a self-insured health reimbursement arrangement covering the employees of the same employer aren’t supplemental.

2015 Draft Forms

The 2015 draft forms were largely unchanged from the 2014 versions. One change was addressed in the 2015 draft instructions.

The 2015 draft Form 1095-C includes an additional field, titled “Plan Start Month.” This new field is optional for 2015, but will be required for 2016 and beyond. For 2015, ALEs can choose to:

    •  Add this field and provide plan year information;
    •  Add this field and enter “00”; or
    •  Leave this new field out (thus using the 2014 format).

Additional Resources

The IRS previously released the following final 2014 versions on Feb. 8, 2015:

These forms are not required to be filed for 2014, but reporting entities may voluntarily file them in 2015 for 2014 coverage.

The IRS also released:

Jill Goulet

Benefits Risk Manager – Sinclair Risk & Financial Management

jgoulet@srfm.com

Franchise owners: 5 secrets to managing your Workers’ Compensation rates

Nothing is worse than having an employee injured on the job. As a franchise owner you know injuries can happen. But when one occurs you’re left doing a balancing act, caught between assuring your employee gets the best care while trying to keep your workers’ compensation costs from spiraling out of control.

The stress can be overwhelming.

Here are 5 tips help your franchise thrive:

Start a transitional duty program.  The longer an employee is out of work, the higher rates climb. Having a transitional duty program in place allows an injured worker to keep working after a claim has been made, therefore reducing rates.

Small injuries can become big injuries.  According to the U.S Department of Labor’s workplace safety index, the most common work-related injuries are small. Sprains, neck and shoulder pain, and falls top the list. However, employers should watch out for those smaller claim injuries, especially if they occur frequently, because they could lead to bigger claims due to repetition.  Workers’ Compensation carriers also don’t like to see frequency  – it’s a red flag that you aren’t managing your safety programs and trying to mitigate injury claims!

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Get to know your medical provider. Establish a relationship with your clinic/doctor so they know the nature of your business. A good relationship with a doctor who is familiar with your workplace and Workers’ Compensation claims can help streamline the paperwork and get the injured employee on the road to wellness quicker. We know that injured workers seek out legal advice quicker when they feel their employer is not actively involved in their claim and getting them back on their feet.

Report a claim promptly and properly: Late reporting of a claim can jeopardize the claim, lead to higher costs, and even lawsuits. Gathering information on the injury and objective witness statements is also crucial to investigating a claim.

Start a wellness program.  Advocate for a healthy lifestyle. Keeping your workers healthy can prevent workplace-related injuries. There are plenty of creative ways to start a wellness program without added costs.  Many non-profits have fundraiser bike tours, walks & runs – get a team together!  Have fun with a Biggest Loser contest, have healthy snacks in the break room, or give incentives to team members who take charge of their health by joining a gym or a nutritional program. Think outside the box and have fun!

At Sinclair Risk and Financial Management your business is important to us. Would you like to learn more about how to manage your Workers’ Compensation rates? Send me an email.

Josie Griffin

jgriffin@srfm.com

Franchise  Risk Management Consultant

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