Attention Government Contractors!

Are you a government contractor? Has your organization been subject to an OFCCP audit in the last 18 months? If you answered yes to both of these questions, then you are familiar with the requirements associated with being an Affirmative Action employer, including the Rehabilitation Act of 1973. Specifically, Section 503 of the Act requires that employers with federal contracts in excess of $10,000 take steps to hire, retain and promote qualified individuals with disabilities. The Office of Federal Contract Compliance (otherwise known as the OFCCP) is the governing body that enforces Section 503 of the Rehabilitation Act.

Did you know that the OFCCP has made formal notice to the public (NPRM — Notice of Proposed Rulemaking) of proposed changes to Section 503? The proposed changes include the use of words such as “shall” and “must” in the requirements government contractors must adhere to in order to maintain their existing relationships with the federal government.

What does this mean for you? The proposed changes require:

• Annual review of personnel/hiring processes
• Mandatory outreach efforts including entering into three linkage agreements with organizations such as EARN, SSA agencies and/or disabled veterans service organizations
• Establishment of a national utilization goal of 7% for each job group in the workforce to be individuals with disabilities
• Development and implementation of a Reasonable Accommodation Requests procedure that will become part of the Affirmative Action Plan for the organization
• Increased data collection and reporting, including ratio of job applicants with disabilities to all applicants, and ratio of individuals with disabilities hired to all hires
• Invitation to individuals to self-identify must be made pre-offer and post-offer
• A resurvey of employees using post-offer language must be conducted on an annual basis

The OFCCP will review and analyze the comments submitted to assist in developing the Final Rule on Section 503 which is estimated to be finalized by Fall 2012. As an Affirmative Action employer, you are encouraged to ensure you mitigate any risk involving your federal contract status.

Taking the Pulse of Healthcare Reform

When someone mentions healthcare reform what exactly are they referring to? This term has become synonymous with The Affordable Care Act that was signed into law March 2010 by President Obama. The law, which rolls out over the next few years with most changes occurring in 2014, is a common topic in America’s boardrooms as companies develop their strategic plans for future growth. The decisions made in these boardrooms over the next few years will provide the backdrop for the future of healthcare coverage in the workplace.

The law was designed with the intention that medical coverage will not only become affordable for every American, but by 2014 each American will be required to have coverage. In addition, employers will be faced with the “Pay or Play” decision in 2014, which simply means that employees will either be provided healthcare by their employer (the Play option) or coverage will have to be purchased through an Exchange on an after tax basis (the Pay option). If employers choose to “Pay” rather than “Play”, employees will be forced to purchase healthcare coverage somewhere else.

The most recent changes that took place in 2011 include coverage for children up to the age of 26, removal of lifetime maximums from existing and new medical plans and no cost sharing for preventive healthcare. In addition, the exclusion of over the counter drugs paid by Flexible Spending accounts was enacted.

Going forward in 2012 employers will be required to report the value of employee health coverage on individual W2’s. The plan value will not be included as taxable income for employees. This W2 reporting is a tracking mechanism and was designed to support the 40% excise tax employers with high cost plans will be subject to in 2018. Employers will want to take a proactive approach and discuss these W2 requirements with their payroll providers to ensure they are planning for these upcoming changes.

As 2014 draws closer, the debate in Congress continues over healthcare reform. The issue is bipartisan and some organizations are jumping on the bandwagon by filing lawsuits claiming the law is unconstitutional. Whatever the outcome, the next few years are going to be very interesting as organizations decide whether or not to use a health plan as a competitive advantage in attracting top talent.