fbpx

Tag: Provisions

Laying off workers? Here’s how to avoid ACA fines

Employers who layoff or furlough their staff could be subject to fines through the Affordable Care Act if they fail to offer those employees health coverage.

The COVID-19 pandemic has left many businesses little choice but to cut down on staff, but choosing not to outright terminate an employee could leave you open to one of two penalties, according to Rob Glus, partner and consulting actuary at Harrisburg-based financial advisory firm Conrad Siegel.

The act, commonly referred to as Obamacare, stipulates that employers with 50 or more full-time equivalent employees must offer at least 95% of their employees affordable health care. To determine what employees are considered full time during any given year, Glus said that most employers look back at the number of hours each employee worked the previous year and apply that to the next.

“If there is a furlough period where I am laid off, I am still considered a full-time employee for that period unless that employer terminates me,” Glus said.

Because each employee was already documented as full time for the coming year, employers need to offer some level of health care to the employees they furlough or layoff or they will be susceptible to the act’s “sledgehammer” penalty. The sledgehammer penalty is given to employers who fail to cover 95% of their employees. Businesses that incur the penalty are subject to $2,570 in fines for each full-time worker.

“From the Affordable Care Act perspective, that person is still a full time employee,” Glus said. “If I don’t offer coverage, I have opened myself to an employer-mandate penalty. You have to be careful with how you offer coverage.”

Glus suggests offering furloughed or laid off employees coverage through COBRA, a federal law that allows employees to continue their health care benefits but at 100% of the cost.

Offering COBRA to employees brings along its own risk. If an employee declines to keep their benefits through COBRA and elects a subsidized policy in the ACA marketplace, the employer could receive a “tack-hammer” penalty of $3,860 for that employee.

“The offer of COBRA is considered to be an offer of coverage and you’ve protected yourself as an employer for that calendar year, but it does open you up to the tack-hammer, or affordability penalty, as there is a possibility that the offer of coverage you are providing would be considered unaffordable,” Glus said.

Taking on the risk of the tack-hammer penalty could be worth it for employers since paying for coverage is a guaranteed expense but allowing an employee to turn down COBRA only has the risk of a potential penalty, said Glus.

Provisions to close on Friday

Provisions, a small neighborhood grocer officially opened its doors Nov. 1 in downtown Harrisburg. It is the first grocery retailer to open in the business district in several decades.

Harrisburg-based grocery story Provisions is set to close this Friday after two years of operation at Strawberry Square.

A grocer focused on selling natural and local foods in bulk, Provisions announced late last week that it would be closing the business on Jan. 31.

“We’d like to thank all of our patrons, vendors, staff, family and friends who’ve supported us on this wild ride of small business ownership the last two years,” the company wrote in the announcement on its website. “While saying goodbye is never easy, we can end this journey being proud of the grit and drive of the fellow small businesses we aimed to feature every day.”

Since co-owners Adam Porter and Shaun Donovan opened the business in late 2017, Provisions has offered products such as whole grain breads, local produce and meats from local farms such as Warrington Farm Meats in Dillsburg, York County.

“The rapidly evolving landscape of retail, especially for food, makes your consistent, impassioned support of your favorite local small businesses absolutely critical,” the company wrote. “We cannot thank you enough for your love of the fresh, local, healthy food we sought to bring to a city we adore.”

Guest view: National Small Business Week an invitation for new neighbors

National Small Business Week on May 5-11 is the formal recognition of entrepreneurs, mom and pop shops and small businesses with generally fewer than 100 employees. While the Fortune 500s might grab more national economic headlines, it’s small businesses that truly define a region and give it character, vibrancy and a sense of place.

With more than 25 small business tenants in our Central Pennsylvania portfolio of plazas, we have deep appreciation for the hard work, risk and resilience of Pennsylvania’s nearly 1 million small businesses. They account for 99.7% of all business in the U.S., employ 56.8 million people and provided 1.9 million net new jobs in 2018. They are the drivers of our economy. Where they go, our neighborhoods go.

One of the most important decisions a small business owner makes is where to call home; and for retail and office space, entrepreneurs need an affordable and accessible location in a growing community. They need a landlord who understands the unique experiences of small business.

It’s hard to find an article or TV show about commercial real estate development that doesn’t position the developer or commercial property owner as an antagonist. This makes an intriguing and impassioned storyline, but I’m happy to report it’s not our region’s normal.

Brad Jones, president and CEO of Harristown Enterprises and owner of the near-capacity Strawberry Square, is intentional about attracting small business owners like Amma Johnson, owner of fashion retailer Amma Jo, and Shaun Donovan, a first-timer in the organic, independent grocery space with Provisions. “We need their passion and authenticity. They are the fresh faces of our city — informal brand ambassadors. Rite Aid and Sprint add critical services, but Little Amps and Best Friends Day Care keep people connected to our community. Attracting small businesses is what will sustain our future,” says Brad.

At Neighbors & Smith, our newest redevelopment site on Market Street in Camp Hill, every existing and ready-to-sign tenant is a woman-owned small business. A trend to support local works both ways. Local property ownership matters to them, and they feel more secure knowing we don’t outsource our eyes.  Small-shop retailers may need additional services to grow — marketing and PR support, build-out support and less complicated leases. They benefit significantly from our Plaza-wide events like Healthy Neighbors Fest and the Wicked Spooky Party aimed at bringing more foot traffic to their stores and giving back to the community.

How does the rising number of small businesses impact our region? And what does it reveal about the economy? When small business thrives, the entire neighborhood benefits. With each new store opening, there is a higher percentage of reinvestment back into our community. We appreciate our national anchor tenants, but they are more likely to tap corporate’s available services than to use our local talent for marketing support or local printers to print collateral pieces.

When boutique chocolatiers, artisan jewelers, trendy clothiers and tea and coffee shops flourish, it demonstrates the power and potential of a good address in a walkable community. On Market Street in Camp Hill, there are 44 women-owned small businesses. This statistic is revealing, not only declaring consumer preferences to shop small, but as a leading indicator of the economy and rising consumer confidence. It signals that financing and SBA loans are more accessible to a segment often forced to resort to non-conventional funding. Three of the existing tenants in the process of transitioning to Neighbors & Smith are expanding in both square footage and product lines.

In July 2016, Urban Land Institute, an international land use organization, was invited to Camp Hill Borough for a two-day Technical Assistance Panel. Professionals from around the country were tasked with developing a plan to promote a vibrant business corridor. After interviewing 26 stakeholders and business owners, they outlined formal recommendations with long-term goals like streetscape improvements and quick fixes to improve the pedestrian experience.

Their report was well-received and remains the framework for creating a more vibrant commercial district. Thanks to the record number of small businesses, the Downtown Camp Hill Association was formed and is emphasizing a walkable, shopable, family-friendly Market Street full of places where people are coming together.

We look forward to adding more small and women-owned businesses at our properties with new opportunities to connect beyond buying and selling. We’re grateful for their partnerships, their job creation, their unique products, and the social connections they bring to our cities and towns.

The invitation is open.

Richard E. Jordan III. president and CEO, Smith Land & Improvement Corp.

Richard E. Jordan III is president and CEO of Smith Land & Improvement Corporation, a commercial real estate development firm headquartered in Camp Hill, Pennsylvania. He can be reached at [email protected].