1. “The creators of the Human Capital Connection” Employee Benefits Finding Clarity in a Murky World Presented by: Booker Moore, President & CEO Beckie Beck, EVP/COO Tom Muldoon, Director of Retirement Services L.R. Webber Associates, Inc. June 17, 2015

2. “The creators of the Human Capital Connection” Over 90% of your assets walk out the door each night… What are you doing to bring them back the next day?

3. “The creators of the Human Capital Connection” ASSETEXPENSE How do you view your employees?

4. “The creators of the Human Capital Connection” We focus so much on medical and retirement costs, but we may be missing three big points: 1.Paid Time Off is a big expense AND greatly valued! 2.Ancillary benefits can easily run 1 – 3% of payroll. 3.Work environment and culture are incredibly important.

5. “The creators of the Human Capital Connection” Paid Time Off (PTO) When was the last time you reviewed? Using a PTO bank? Using separate sick, vacation & personal days? Employee sharing? Carryover?

6. “The creators of the Human Capital Connection” Paid Time Off (PTO) Movement is accelerating in this direction. Employees find it more valuable than sick, vacation, personal days. Carry over is permitted although rules vary. Consideration needs to be given to extraordinary items like bereavement. Consider how leave benefits (FMLA, Military, etc.) will be impacted. Cont…

7. “The creators of the Human Capital Connection” Paid Time Off (PTO) Consider a centralized, fully integrated absence management program. Impact of PTO Impact of “presentee-ism” Impact on worker’s compensation claims Impact on disability claims Programs available via your disability carriers Integrate benefit levels and design with wellness initiatives.

8. “The creators of the Human Capital Connection” Ancillary Benefits What is offered? Level of benefits? Who pays: employer or employee? When did you last review these benefits?

9. “The creators of the Human Capital Connection” Ancillary Benefits Big movement towards lower core life & disability benefits with a voluntary “buy up” by employees. Group based products often much more cost effective than traditional individual contracts. Efficiencies may be gained via automated enrollment systems. Dental and vision benefits continue to be of value. Dental and vision benefits lend themselves to self-insured models; much more efficient. Just like medical insurance, these benefits have undergone changes and need to be reviewed.

10. “The creators of the Human Capital Connection” Work Environment & Culture Non-profit world Faith-based culture Do you use “job descriptions”? Is “work” part of your life or “life” part of your work? How do you engage employees in your mission? How do you communicate with employees?

11. “The creators of the Human Capital Connection” Work Environment & Culture Employee communications are the key Are your employees your most valuable asset? What team building exercises are used? Life has become faster and more chaotic; EAP’s need to evolve to help Flexible work environments & times are appreciated

12. “The creators of the Human Capital Connection” Work Environment & Culture Wellness programs now need to include financial counseling. Leverage electronic media for messaging: email, Facebook, LinkedIn, Twitter. General cutbacks have been made in employee education & professional development. Review articles on the “Best Places to Work” for ideas; usually non-insurance related! Cont…

13. “The creators of the Human Capital Connection” Employer Caution #1: Safe Harbor Test on Affordability

14. “The creators of the Human Capital Connection” Employer Penalties Do you offer coverage? Does the plan provide minimum value? Plan pays 60% of claims Is the coverage affordable? No Penalty Yes No $2,000 per FTE (minus first 30 / 2015 its 80) Only applies if one full-time employee receives federal premium assistance (i.e. credit or subsidy) for exchange coverage. Lesser of: $3,000 per FTE receiving tax credit/subsidy; or $2,000 per FTE (minus first 30 / 2015 its 80) Only applies if one full-time employee receives federal premium assistance (i.e. subsidy) for exchange coverage. No Employer “Safe Harbor” Coverage would be considered “affordable” if the premium contribution for single coverage does not exceed 9.5% based on safe harbor method.

15. “The creators of the Human Capital Connection” The affordability test means single coverage in an employer’s least expensive plan that provides minimum essential coverage cannot exceed 9.5% of “income.” There are multiple safe harbor methods to determine “income” for this test: Cost of single coverage in the least expensive plan providing minimum essential coverage cannot exceed 9.5% of… Box 1 W-2 Wages Federal Poverty Level (Single) Full-time equivalent wages – (Employee Rate x 130 hours per month ) Affordability Safe Harbors

16. “The creators of the Human Capital Connection” Box 1 W-2 Safe Harbor – Box 1 wages are not the same as gross income as they are reduced by 401(k) and pre-tax Section 125 contributions. Additionally, it is Box-1 of the current year, not the prior year that is used. Hourly Rate of Pay Safe Harbor – The hourly rate of pay used for this safe harbor must take into consideration the lowest rate paid to that employee in the plan year. Federal Poverty Level Safe Harbor – For administrative convenience, employers may apply a poverty level value. Notes: The W-2 or FPL methods are the most practical methods to use for commissioned employees. All similarly situated employees must be measured using the same safe harbor method. Special Considerations on Harbor Methods

17. “The creators of the Human Capital Connection” Employer Caution #2: Tracking Hours under Pay or Play

18. “The creators of the Human Capital Connection” Under the final regulations, an hour of service is defined as each hour for which an employee is paid, or entitled to payment, for the performance of duties for the employer as well as paid time off. You must also include FMLA, USSERA and jury duty regardless if paid or not. How Will Employers Count Hours?

19. “The creators of the Human Capital Connection” Employer Caution #3: Reporting Requirements

20. “The creators of the Human Capital Connection” What is Required to be Reported? Code Series 1, Offer of Coverage. 1A. Qualifying Offer: Minimum essential coverage providing minimum value offered to full-time employee with employee contribution for self-only coverage equal to or less than 9.5% federal poverty level for the 48 contiguous states and at least minimum essential coverage offered to spouse and dependent(s). (If this code is used, next line is left blank.) 1B. Minimum essential coverage providing minimum value offered to employee only. 1C. Minimum essential coverage providing minimum value offered to employee and at least minimum essential coverage offered to dependent(s) (not spouse). 1D. Minimum essential coverage providing minimum value offered to employee and at least minimum essential coverage offered to spouse (not dependent(s)). 1E. Minimum essential coverage providing minimum value offered to employee and at least minimum essential coverage offered to dependent(s) and spouse. (Employers who exclude or impose a surcharge on a spouse who has coverage available through spouse’s employer may use this code even if the employee’s spouse falls under the carve-out.) 1F. Minimum essential coverage NOT providing minimum value offered to employee, or employee and spouse or dependent(s), or employee, spouse and dependents. 1G. Offer of coverage to employee who was not a full-time employee for any month of the calendar year and who enrolled in self- insured coverage for one or more months of the calendar year. Enter code 1G in the “All 12 Months” box and do not complete the monthly boxes. 1H. No offer of coverage (employee not offered any health coverage or employee offered coverage that is not minimum essential coverage). 1I. Qualified Offer Transition Relief 2015: Employee (and spouse or dependents) received no offer of coverage, received an offer that is not a qualified offer, or received a qualified offer for less than 12 months.

21. “The creators of the Human Capital Connection” What is Required to be Reported? 2A. Employee was not employed on any day of the month. 2B. Employee was employed but not a full-time employee. This code is also used for the last month of an employees' employment if coverage ended prior to the last day of the month. 2C. Employee enrolled in coverage offered. Enter code 2C for any month in which the employee enrolled in health coverage offered by the employer, regardless of whether any other code in Code Series 2 might also apply. 2D. Employee in a section 4980H(b) Limited Non-Assessment Period. (for example, a new full-time employee was within the first three full calendar months of employment) 2E. Enter code 2E for any month for which the multi-employer interim guidance applies for that employee. 2F. Enter code 2F if the employer used the section 4980H Form W-2 safe harbor to determine affordability for purposes of section 4980H(b) for this employee for the year. If an employer uses this safe harbor for an employee, it must be used for all months of the calendar year for which the employee is offered health coverage. 2G. Enter code 2G if the employer used the section 4980H federal poverty line safe harbor to determine affordability for purposes of section 4980H(b) for this employee for any month(s). 2H. Enter code 2H if the employer used the section 4980H rate of pay safe harbor to determine affordability for purposes of section 4980H(b) for this employee for any month(s). 2I. Enter code 2I when non-calendar year transition relief applies (i.e. your plan year is other than calendar year and qualifies for the transition rule to delay compliance with the play or pay requirement until the start of the 2015 plan year.

22. “The creators of the Human Capital Connection” What is Required to be Reported? Must provide name and social security number (of date of birth if a SSN is not available) of each covered person (that is, the employee and any covered spouse or dependent children). The calendar months each person was covered for at least one day (if the person was covered for the whole year, this may be reported annually rather than month by month) Self-Insured 50+ FTE’s

23. “The creators of the Human Capital Connection” Employer Caution #4: Medical Plan Opt Out Incentives

24. “The creators of the Human Capital Connection” Employer Caution #5: Flexible Spending Accounts

25. “The creators of the Human Capital Connection” Employer Caution #6: 5500 Filing Rules

26. “The creators of the Human Capital Connection” Employer Sponsored Retirement Plans: 401(k), 403(b), Non-ERISA Church Plans

27. “The creators of the Human Capital Connection”  Fees  Funds  Fiduciary  Leads to Fear-based decision-making Let’s Not Talk About…

28. “The creators of the Human Capital Connection” Plan Objectives Leads to Outcomes-based decision-making Instead, Let’s Talk About…

29. “The creators of the Human Capital Connection” A Mindset for Successful Outcomes

30. “The creators of the Human Capital Connection”  Participation90%+  Average Savings Rate10%+  Quality of Investing70%+ 3 Measures of Success

31. “The creators of the Human Capital Connection” DC Plan Elements for Success

32. “The creators of the Human Capital Connection”

39. THANK YOU!