Minimize the Risk of Audit Failures

Billing audits are becoming more frequent and more aggressive as regulators try to root out fraud and abuse in billing. Even where errors are accidental, they are highly embarrassing to an agency.

Using paper forms and the associated labor-intensive data entry makes agencies vulnerable to audit problems if staff accidentally bill the same hours for the same consumer or bill for multiple consumers during the same date/time interval. Detecting these errors is time consuming. Where staff works at remote locations such as group homes or individual’s homes, these problems are compounded and the risk of errors multiplied exponentially.

Agencies should be using time and attendance solutions to track hours of service in real time. These eliminate duplicate billing errors and provide much greater visibility into hours of service across the agency.

landline-phoneTelephone Timekeeping

Telephone timekeeping solutions provide a very affordable solution to track hours and units of service in supported living programs. There are no equipment costs. Hours by consumer and type of service provided can tracked easily and reliably and compared against the consumers plan of care to maximize authorized billing, minimize under billing, and control over billing outside the plan of care. In addition, the cost of servicing each consumer can readily be identified, making the application for greater funding easier and more compelling.

 

nabi-tabletTablets

Tablets provide a cost-effective way of achieving the same results in busy day programs where client attendance must be verified. Irrespective of where the consumer is serviced, hours, units and costs are integrated into a single database, eliminating data entry and the risk of further transcription errors. With real time data capture, agencies are able to track variances to budget and schedule on a daily basis. The greater visibility into agency operations provides a whole new way to manage an agency.

 

Eliminating reliance paper forms, data entry, and traditional case management systems not only reduces the internal cost structure at an agency, it greatly minimizes the risk of audit failure and is proven to increase billing.

For more information on how agencies use MITC to control payroll, eliminate paper timesheets, track billing, reduce costs, and ensure compliance, contact MITC.

New Overtime Rules Explained In Detail

The new rule, announced at the start of July by the Department of Labor (DOL), raises the threshold at which salaried employees qualify for overtime coverage under the Fair Labor Standards Act, more than doubling the cut-off from $455 a week to $970 a week. In 2016, a manager earning $50,000, based on a 40 hour week for a year, or less qualifies for time-and-a-half paid overtime. Because of this, there are significant new scheduling and time and attendance issues that employers need to consider.

Two sets of regulations are relevant:

Pay

What’s proposed is a change to the salary basis minimum requirement for application of what are known as the “white collar exemptions” under section 541 of the DOL’s regulations. For most of the white collar exemptions, there are two essential components or requirements: The first is a salary basis not less than the minimum set forth in the regulations, which is currently set at $455.00 per week, and second, that the individual’s job duty is exempt work, the nature of which is spelled out in the regulations.

The proposed change increases the minimum weekly salary basis amount from $455 weekly to a level equal to the 40th percentile of earnings for full-time, salaried workers in the Bureau of Labor Statistics (BLS) annual earnings report. For 2016, that level would be $970.00 weekly.

The current minimum salary requirement for many of the white collar exemptions of roughly $23,600 annually increases to $50,440. The increase is both substantial and tied to the BLS report, so it has potential to increase year to year.

Time and Attendance Implications

Employers need to remember that it is not sufficient just to look at the annual salary. If an employee earns $55,000 a year but works 55 hrs a week on average, their effective hourly rate is $21.15 x 40 hours = $846.15 which is below the $970.00 threshold

This means that employers must retain accurate time and attendance records for any exempt employees who earn over $50,000 per annum but work more than 40 hours a week and regularly calculate the employee’s effective hourly & weekly rate.

Exempt Test

The exempt tests are not limited to the salary basis; exempt tests require employers to demonstrate that individuals for whom they’re claiming the exemption have work as their primary job duty. The change in the salary basis level is just one part of the test for who is exempt from earning OT and who is not.

Those earning substantially over $50,000 per annum are often in managerial positions and their compensation levels exceed the threshold, but not always. If the exemptions are changed or enforced differently, employees earning over $60,000 per annum for a 40-hour week might now be nonexempt.

The greatest impact could be apparent where individuals are paid on a salary basis but earn under $50,000, as well as mid-level management positions who may otherwise satisfy an executive exemption but are paid less than $50,000 (such as lower operational managers, case managers, social workers, IT staff, and administrative positions). When rules go into effect, those persons are automatically nonexempt regardless as to their job duties and are entitled to overtime pay when work in excess of 40 hours weekly.

What strategies are there to avoid paying their employees overtime?

With more workers falling into the nonexempt category, the DOL estimates 4.6 million employees that are currently classified as exempt will no longer be exempt simply by increasing the salary basis level. Employers are going to need to control hours worked by those employees who are newly nonexempt. Otherwise, their costs will increase. There will be an increase in the number of workers whose hours need to be scheduled.

Employers are going to have to weigh the cost of paying overtime against the cost of hiring more workers to accomplish the same amount of work.

Affordable Care Act

While the Affordable Care Act is not related to the overtime regulatory changes, it is another factor to consider regarding scheduling. With employees also having to track part time employee hours more carefully due to the Affordable Care Act and the 30 hour a week threshold, scheduling needs are growing from both ends of the compensation scale at many organizations

How much lead time do organizations have to prepare for them to take effect?

In terms of lead time, there is a 60-day public comment period. During the last update in 2004, the comment period was extended to 90 days. The DOL will receive and evaluate the comments and prepare the final versions of the regulations.

The effective date will not be until second quarter of 2016. There may be litigation that will impact the effective date—it’s happened in the past but most observers predict that the regulation will stand, so don’t rely on regulatory relief. When the final version goes through, the lead time may be written into regulations themselves.

Moving Forward

Scheduling the workforce and overtime avoidance just got more important. For more information on effective time and attendance and scheduling solutions, contact MITC today.

Announcing the New ACA Manager

1095-C ACA Reporting

The Affordable Care Act made life more complicated for your organization and your HR staff. But MITC can help you comply with the requirements of the ACA affordably and effectively!

Organizations with 100 or more full-time employees or part-time equivalents began complying with the ACA in 2015. The first compliance reports from these employers are due January 2016. The required IRS forms must contain data tracked month-to-month in 2015, detailing employees’ hours worked as well as employees’ access and contributions to employer-provided health care..

Organizations with 50 to 99 full-time or equivalent employees have another year—until 2016—to comply with the coverage requirements, with reporting beginning in January 2017.

  1. 1095-C
    1. Required for each full-time employee.
    2. Benefits database is extended for entering when employees were offered health insurance, the value, and type of coverage.
    3. 1095-C Pre-Filing Verification report is included. Helps ensure all the data required on when employees were offered health insurance and what type is up to date.
    4. 1095-C Forms will be available as an additional option with MITC ACA Manager later in 2015.
  2. Tracking full-time employees, equivalents, and part-time
    1. Integrates MITC Time and Attendance.
    2. Reports calculate average hours worked (30) over varying date ranges.
    3. Projection reports shows how many hours a part time employee can work in the future to remain under 30 hours a week average. Helps with scheduling compliance.
    4. Affordability compliance is another requirement. Reports calculate cost of medical insurance and % of gross pay for the 9.5% threshold. If incomplete, filings may be  inaccurate and may not be accepted.

ACA Manager is available as an add-on additional to HR Manager or as a separate application for organizations not using MITC HR.