IRS Delays ACA Reporting Deadlines

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Good News!

The Internal Revenue Service (IRS) sent out a belated Christmas present to employers and other plan sponsors on December 28th when it announced it was delaying the 2016 Affordable Care Act reporting requirements. In Notice 2016-4, the IRS announced that the deadline for providing to individuals the 2015 Form 1095-B and Form 1095-C is delayed from February 1, 2016 to March 31, 2016. Similarly, the deadline for filing with the IRS Forms 1094-B and 1094-C is delayed from February 29 to May 31, 2016 for non-electronic filers and from March 31 to June 30, 2016 for electronic filers.

These requirements are related to defined “Large Employers” in 2015, those with 100 or more employees. “Medium Employers“, those with 51 to 99 employees, will meet the law’s requirements for the first time in 2016, and provide the noted documents to employees and the IRS in early 2017. “Small Employers“, those with less than 50 employees, are not subject to these requirements at this time.

Because of the delay, some employees will not receive their forms until after the April 15 tax filing deadline. The IRS indicates that these employees do not have to file an amended tax return. Employers should simply keep their forms in a file should they need them later.

Should you have any questions about this extension or anything else, please contact your Professional Agent or Underwriter here at Morris & Reynolds Insurance and we will be most happy to help.

As always, thank you for allowing us the honor to be of service.

ACA Compliance Bulletin:
ACA Reporting Deadlines Delayed


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Notice 2016-4 From the IRS

Florida Workers’ Compensation Rates Will Decrease Again in 2016

Good News! I am pleased to advise that the Florida Office of Insurance Regulation (OIR) has approved an overall decrease of 4.7% to workers’ compensation rates for new and renewal workers’ compensation policies issued in Florida on or after January 1, 2016. This is the second consecutive rate decrease in Florida.

The 4.7% decrease is an average over all workers’ compensation class codes. Individual class codes may decrease more or less than this amount. The average rate change for the five major industry groups are as follows:

Office & Clerical
Goods & Services

Please note: Although NCCI proposed a reduction in the Expense Constant (flat per-policy fee that is charged for every policy), OIR did not approve this change, so the Expense Constant will stay at $200. In addition to the class codes rate changes, OIR has approved an increase in the annual payroll amount used to determine premium for partners and sole proprietors. This amount is increasing by $800, from $43,000 to $43,800.

If you have any questions about your specific coverage or class codes, or anything else for that matter, please contact your Morris & Reynolds Underwriter or Agent and we will be happy to help you. As always, for the honor of providing your protection, thank you.

Consumer Reports and the Fair Credit Reporting Act

Consider the following situations that you may encounter in your hiring and promotion activities:

  • Your advertisement for cashiers nets 100 applications. You want credit reports on each applicant. You plan to eliminate those with poor credit histories. What are your obligations?
  • You are considering a number of your long-term employees for major promotions. Can you check their consumer reports to ensure that only responsible individuals are considered?
  • A job candidate has authorized you to obtain a credit report. The applicant has a poor credit history. Although the credit history is considered a negative factor, it’s the applicant’s lack of relevant experience that’s more important to you. You turn down the application. What procedures must you follow?

As an employer, you may use consumer reports when you hire new employees and when you evaluate employees for promotion, reassignment and retention— as long as you comply with the Fair Credit Reporting Act (FCRA). The FCRA is designed primarily to protect the privacy of consumer report information and to guarantee that the information supplied by consumer reporting agencies is as accurate as possible. The Consumer Financial Protection Bureau is the federal agency responsible for enforcing the FCRA.

Consumer reports are a valuable resource for making hiring and other employment decisions, but employers have regulations they are required to follow.

Employers who use consumer reports must ensure that individuals are aware that consumer reports may be used for employment purposes and agree to such use, and individuals are notified promptly if information in a consumer report may result in a negative employment decision.

Employers should also review state laws related to consumer reports. Some states restrict the use of consumer reports for employment purposes.

What is a Consumer Report?
A consumer report contains information about an individual’s personal and credit characteristics, character, general reputation and lifestyle. To be covered by the FCRA, a report must be prepared by a legitimate consumer reporting agency (CRA). Employers often do background checks on applicants and get consumer reports during their employment. Some employers only want an applicant’s or employee’s credit payment records, others want driving records and criminal histories. For sensitive positions, it’s not unusual for employers to order investigative consumer reports— reports that include interviews with an applicant’s or employee’s friends, neighbors and associates. Credit background, references, past employment, social security, work habits, education, drug testing, judgments and liens, sex offender lists, criminal backgrounds, driving records, and military records are all consumer reports if they are obtained from a CRA.

Applicants are often asked to give references. Whether verifying such references is covered by the FCRA depends on who does the verification. A reference verified by the employer is not covered by the FCRA; a reference verified by an employment or reference checking agency (or other CRA) is covered. Section 603(o) of the FCRA provides special procedures for reference checking; otherwise, checking references may constitute an investigative consumer report subject to additional FCRA requirements.

Key Provisions of the FCRA
The FCRA includes several key provisions concerning the use of consumer reports.

Employee notice and authorization: Before you can get a consumer report for employment purposes, you must notify the individual in writing—in a document consisting solely of this notice—that a report may be used.

Employers also must get the individual’s written authorization before asking a CRA for the report, and special procedures apply to the trucking industry. If you are requesting medical information, the individual’s authorization must specifically state his or her consent to release such information.

When requesting a credit report from a CRA, you must certify that you will inform the individual of his or her rights under the FCRA and agree not to use the information in violation of state or federal employment laws.

Action based upon credit information: When you receive a credit report from a CRA, you are not required to release the report to the employee unless the report prompts you to make an “adverse action”—denying a job application, reassigning or terminating an employee, denying a promotion or access to company benefits, or other discipline. Before you take the adverse action, you must first give the individual a disclosure that includes a copy of the individual’s consumer report and a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act”—a document prescribed by the Consumer Financial Protection Bureau. This document is available at the Federal Trade Commission’s (FTC) website, The CRA that furnishes the individual’s report will give you the summary of consumer rights.

After you’ve taken an adverse action, employers must give the individual notice—orally, in writing or electronically—that the action has been taken in an adverse action notice. The notice must contain the following information:

  • The name, address and phone number of the CRA that supplied the report.
  • A statement that the CRA that supplied the report did not make the decision to take the adverse action and cannot give specific reasons for it.
  • A notice of the individual’s right to dispute the accuracy or completeness of any information the agency furnished.

Before giving you an individual’s consumer report, the CRA will require you to certify that you are in compliance with the FCRA and that you will not misuse any information in the report in violation of federal or state equal employment opportunity laws or regulations.

An individual can request a copy of his or her credit report from the consumer reporting agency within 60 days of any adverse employment action based on the report at no cost. Employers should notify individuals of their rights to dispute the information contained in the credit report. CRAs must reinvestigate the accuracy of the disputed information within 30 days of the dispute without cost to the individual. If an applicant or employee notifies the employer that he or she is challenging information in the report, the employer should not make a final decision on the employment status of the applicant or employee until after that person has had a reasonable opportunity to address the information contained in the report. Employers must also make sure that they properly dispose of all “consumer information” obtained from consumer reports.

Investigative Reports: Employers who use “investigative reports”—reports based on personal interviews concerning a person’s character, general reputation, personal characteristics and lifestyle—have additional obligations under the FCRA. These obligations include giving written notice that the employer may request or have requested an investigative consumer report, and giving a statement that the person has a right to request additional disclosures and a summary of the scope and substance of the report.

In Practice
Here is information on how to apply these general requirements to the examples listed in the introduction of this article:

  • Your advertisement for cashiers nets 100 applications. You want credit reports on each applicant. You plan to eliminate those with poor credit histories. What are your obligations?
    • You can get credit reports—one type of consumer report—if you notify each applicant in writing that a credit report may be requested and if you receive the applicant’s written consent. Before you reject an applicant based on credit report information, you must make a pre-adverse action disclosure that includes a copy of the credit report and the summary of consumer rights under the FCRA. Once you’ve rejected an applicant, you must provide an adverse action notice if credit report information affected your decision.
  • You are considering a number of your long-term employees for major promotions. Can you check their consumer reports to ensure that only responsible individuals are considered?
    • You cannot get consumer reports unless the employees have been notified that reports may be obtained and have given their written permission. If the employees gave you written permission in the past, you need only make sure that the employees receive or have received a “separate document” notice that reports may be obtained during the course of their employment—no more notice or permission is required.
    • If your employees have not received notice or given you permission, you must notify the employees and get their written permission before you get their reports. In each case where information in the report influences your decision to deny promotion, you must provide the employee with a pre-adverse action disclosure. The employee also must receive an adverse action notice once you have selected another individual for the job.
  • A job candidate has authorized you to obtain a credit report. The applicant has a poor credit history. Although the credit history is considered a negative factor, it’s the applicant’s lack of relevant experience that’s more important to you. You turn down the application. What procedures must you follow?
    • In any case where information in a consumer report is a factor in your decision—even if the report information is not a major consideration —you must follow the procedures mandated by the FCRA. In this case, you would be required to provide the applicant a pre-adverse action disclosure before you reject his or her application. When you formally reject the applicant, you would be required to provide an adverse action notice.

There are legal consequences for employers who fail to get an applicant’s permission before requesting a consumer report or who fail to provide pre-adverse action disclosures and adverse action notices to unsuccessful job applicants. The FCRA allows individuals to sue employers for damages in federal court. A person who successfully sues is entitled to recover court costs and reasonable legal fees. The law also allows individuals to seek punitive damages for deliberate violations. In addition, the FTC, other federal agencies and individual states may sue employers for noncompliance and obtain civil penalties.

More Information
For more information on the FCRA, or if you have any other questions concerning compliance, contact the experts at Morris & Reynolds Insurance.

Employment Practices Liability Insurance

From the moment that you start the pre-hiring process until the exit interview, you are vulnerable for a lawsuit. As a result, your business should take a hard look at whether it can afford to defend itself against alleged wrongful employment practices accusations. If not, there is an insurance solution called Employment Practices Liability that protects against wrongful termination, discrimination (age, sex, race, disability, etc.) or sexual harassment suits from your current, prospective or former employees. This coverage applies to directors, officers and employees, and can sometimes extend to third party liabilities.


Why Choose Employment Practices Liability Insurance?
According to researchers, three out of five employers will be sued by a prospective, current or former employee while they are in business. While many suits are groundless, defending against them is costly and time-consuming.

Employment Practices Liability Insurance provides protection from the following wrongful employment practices, including:

  • Harassment
  • Discrimination
  • Actual or alleged wrongful dismissal, discharge or termination
  • Employment-related misrepresentation
  • Employment-related libel, slander, humiliation, defamation or invasion of privacy
  • Wrongful failure to employ or promote
  • Wrongful deprivation of a career opportunity, wrongful demotion or negligent evaluation
  • Wrongful discipline
  • Vicarious liability for intentional acts
  • Punitive damages
  • Coercion or humiliation in relation to race, marital status, gender, age, physical and/or mental impairments, pregnancy, sexual orientation and any other protected class established by federal, state and local statutes

Many policies offer the following inclusions and add-ons:

  • Consultation, HR assistance and other risk management consultative services.
  • Coverage for defense costs outside the policy limits (for qualifying risks).
  • Third party liability coverage (for qualifying risks).
  • Wage and Hour Coverage for claims alleging wage and hour violations.
  • Volunteer workers can be added as additional insureds.
  • Extended reporting periods may be added.

To learn more about Employment Practices Liability coverage and how Morris & Reynolds Insurance can help protect your business, contact us today at 305.238.1000.