Certified Ophthalmic Assistant (COA) Final Exam | Verified Answers

Certified Ophthalmic Assistant (COA) Final Exam | Verified Answers Medical Loss Ratio (MLR) - ansrebates may be taxable o The Affordable Care Act requires companies to spend a specified percentage of premiums paid on medical care and quality improvements. If the requirement is not met, the insurance companies are required to provide rebates to their consumers beginning in 2012. Does not apply to self insured plans o MLR rebate can be a form of premium reduction that employers pass on to employees in the form of a reduction in the premiums. The amount of the rebate is taxable income to the employees if they pay their portion of the premium with pre-tax dollars. This is also taxable if the employees receive a cash rebate rather than a reduction in premium. • This is because the rebate is a return to the employee of a pretax deduction that is no longer being used to pay for health insurance. W2 Box 12 DD Reporting - ansER's with more than 250 W2 employees are subjet to report medical Cost of employer sponsored health insurance coverage (required for 2012 and not taxable) MSA (Medical Savings Account/Archer MSAs) - ans• ONLY available for employers with no more than 50 employees. • Contributions can ONLY be made by EITHER the employee or the employer, NOT both. o The deduction/contribution cannot exceed the employee's compensation. o If the employer contributes, it must be the same amount for each employee based on either a dollar amount or a percentage. • MSAs cannot be part of a cafeteria plan. • Must be reported in box 12 of the W2, code "R" • Not subject to Cobra continuation coverage. • If employee has a HSA in addition to the MSA the employer can only contribute to one, not both. Long Term Care Insurance - HIPAA 1996 - ansLong Term Care Insurance Contracts are generally treated as accident and health insurance contracts and are excluded from income as amounts received for personal injury, sickness, and reimbursement for medical expenses. • If the contract makes per diem payments the excludable amount will be capped at $330/day (2014). List the factors for the Reasonable Basis Test. - ans1. Court decisions, published IRS rulings, IRS technical advice or a private letter ruling from the IRS or, 2. A past IRS audit of the employer or, 3. A longstanding, recognized practice in the employers industry that treats workers in similar situations as independent contractors. What is a temporary help agency employee? - ansTemp workers are hired, screened and trained by the temp help agency to provide services for clients. They are employees of the temp agency which sets their wages and has sole right to hire and fire. The agency is alsor responsible for all payroll taxes. What is a leased employee? - ansLeased employees are hired, trained, and qualified by a leasing company which provides workers for a client company. The client pays a fee to the leasing company to cover the cost of payroll, benefits, etc... Responsibility for payroll taxes depends on the degree of control exercised by the client over the employees work and which entity has control over the payment of their wages. When leasing an employee or using a temp agency, what should you know about the overall company that you are dealing with to avoid having to pay any withholding or employment taxes? - ansEmployers should make sure they are dealing with a financially secure and reputable company before entering into a contract, since the temp agency or leasing company's financial failure could lead to the client company becoming liable for any withholding or employement taxes that remain unpaid. What are the three parts of the ABC test? - ans1. (Absence Control): Free from control via agreement and in reality. 2. (Business- unusual and/or away): performed outside the usual course of company business or away from employers facility 3. (Customarily independent contractor): independent trade, occupation or business What is the ABC test used to determine? - ansWhile many states use the Common Law Test to determine an employee relationship, more than half use the ABC Test. ABC test is used by many states to determine a worker's employement status under state unemployment insurance laws to see if the employee is indeed an independent contractor. What is Form I-9 used for? - ansIt is used to verify that an individual has the legal right to work in the US. The Immigration Reform and Control Act of 1986 makes it illegal for an employer to hire an unauthorized worker. When a client company hires leased employees, who is responsible for withholding and/or paying the FIT, SS, Med and FUTA taxes? - ansAlthough the client company may have the right to hire and fire the workers, set wage levels and supervise their work, the workers are generally employees of the leasing company, which is responsible for withholding FIT, FICA, as well as paying the employers share of FICA and FUTA taxes because of the leasing companys control over the payment of wages. What factors do the courts and the DOL consider when making an employment status determination under the FLSA? - ans1. How much control the employer has over how the work is performed 2. Wheter the worker has the chance to make a profit or risks a loss based on how skillfully the work is performed 3. Whether the worker invests in tools or materials required to perform the work or hires helpers 4. Whether the worker requires a special skill 5. How permanent the working relationship is 6. Whether the work performed is an integral part of the employers business operation Why would many employers rather use workers who are not employees to perform services for them? - ansEmployers would rather use workers who are not employees to perform services for them because employers must withhold income and employment taxes from employees wages and pay employement taxes with their own funds. Employers also must pay federal and state unemployment taxes based on ther employees wages. If a worker is an employee, most companies have their own list of benefits and other entitlements that are provided to employees but not to independent contractors. What does a SS card prove in terms of an employees work authorization status under IRCA? - ansA SS card that does not contain language saying that the employment is not work-authorized is proof of an employees authorization to work in the US but not proof of identity. Which factors are considered not to be importatnt by the IRS in making a worker classification determination because of changes in the workplace over the years? - ansFactors that the IRS does not consider important in making worker classification determinations include PT/FT work, the work location and hours of work. What are the elements that are required for New Hire Reporting? - ansEmployer must report: -New hire's name -Address -SSN -1st day of work for which compensation is paid as well as the employers name -ER address -ER federal employer ID number. Tip Credit conditions - ans-Must receive as much tips as the credit taken by er -The ee must be informed about the tip credit provision -All tips received by ee must be kept by employee -Credit card tips must be given to the ee by the next payday but credit card charges can be deducted from the tip FLSA complaint filing limit - ans2 years Equal Pay for Equal Work - ansRequires equal pay for Men and women doing equal work under similar working conditions. Enforced by the Equal Employment Opportunity Commission. Included in Reg Rate of Pay (but not limited to) - ansShift Differential Nondiscretionary bonuses- Contractual/Agreed upon Payments in form other than cash Retro pay On call pay Supplemental Pay Sick Leave buyback Per Diem Pay Not included in Reg Rate of Pay - ansGifts- As long as it doesnt depend on hours worked Paid Time Off Expense Reimb Discretionary bonuses Benefit Plan Contributions Stock Options OT premium pay Premium Pay for extra days worked Premium Pay under union contract for extra hours Belo-Type Plan - ansSimilar to fluctuating workweeks. Plan must be agreed upon by EE and ER through an individual contract or collective bargaining agreement. EE must work irregular hours (with workwees fluctuating above AND below 40 hours) Contract mus guarantee a straight time rate of at least the statutory min (.5) and an OT rate of 1 1/2. Weekly guarantee must be for not more than 60 hours of work. Fluctuating Workweeks - ansER paying a fixed salary even though hours may vary from week to week. So long as the employees received 1 1/2 reg hourly rate for the week for each hour of OT worked. Compensatory Time Off - ansUnit of time used in determining whether OT pay is due to an ee Compesable Time Issues - ansAll hours during which the employhee is under the Er's control, even if the time is unproductive, so long as the time spent is for the ER's benefit Federal Child Labor Restrictions - ans**State might be more protective -Minor under 18 cannot work hazardous jobs