1. Nebraska Construction Prompt Pay Act and Healthcare Reform
Nebraska Building
Chapter
Nebraska Construction Prompt Pay Act
and
Healthcare Reform
Presented by
Ed Tricker and Keith Prettyman

2. Healthcare Reform
Six Months Later
What do We Know? 2

3. 3
What Do We Know?
We now have regulations and answers to many (ok – SOME) questions.
Extension of dependent “child” coverage to age 26
What services are “preventive” and exempt from deductibles and co-pays
How to lose “grandfather” status and why it doesn’t really make much difference

4. What does healthcare reform mean to you?
Do you have 25 or fewer full time equivalent employees whose average annual wages are $25,000 or less?
Small Employer Health Insurance Credit
35% of the employer-paid premium for tax years
50% of the employer-paid premium for 2 consecutive tax years starting after 2013 if the coverage is through an exchange
Cannot use a cafeteria plan as “employer contribution”
Employer must pay 50% or more of employee premium

5. What does healthcare reform mean to you?
Do you have more than 50 full time equivalent employees?
Starting January 1, 2014 you are subject to a “pay or play” penalty
$2,000 per employee over 30 employees if you provide no plan
$3,000 per employee who opts for subsidized coverage through an exchange if you provide a plan

6. What does healthcare reform mean to you?
Do you have between 26 and 50 full time equivalent employees?
CONGRATULATIONS!
(actually, if you provide a plan, for employees’ whose household income is below 400% of the federal poverty level and the coverage costs more than 8% of household income, you will need to provide a voucher to use to buy less costly coverage through the exchange)

7. What Should You Do?
Option One – Nothing – Wait and see if Healthcare Reform goes away
Option Two – Stop providing coverage – could benefit you and your employees
Example: Kaiser Family Foundation, 40 year-old head of
household with household income of $55,000, spouse and 2 children
Premium - $12,130/year
Government Subsidy - $7,995/year
Employee pays $4,135/year; $345/month
Employer pays $2,000/year penalty
Option Three – Revise your current plan to reduce costs and meet rules
Wellness incentives
High Deductible Health Plan and a Health Reimbursement Arrangement

8. Nebraska’s Prompt Pay Act

9. Overview of LB 552
Applies to contracts or subcontracts entered into on or after October 1, 2010
Prompt pay provisions
Claims to political subdivisions
Voids certain contract provisions
Does not apply to residential projects of no more than four residential units

10. Prompt Payment Timing of Payment
Owner must pay contractor within 30 days after the owner or the owner’s rep (e.g. architect, construction manager) receipt of a pay request pursuant to the contract
Contractor must pay subcontractor or supplier within 10 days after receipt by contractor of amount received for the subcontractor’s work or supplier’s materials
Subcontractor must pay its suppliers and the sub-subcontractors within 10 days after receipt by the subcontractor of amount received for supplier’s materials or sub-subcontractor’s work
Owner does not include State of Nebraska, including Department of Roads

11. Prompt Payment Interest
Untimely payment results in 1% per month interest obligation
BUT:
Party responsible for payment must be notified of interest provisions of LB552 by party entitled to payment
Acceptance of progress payment or a final payment releases all interest claims
If higher rate allowed in contract or subcontract which was in existence prior to October 1, 2010 then LB552 does not modify
LB552 does not modify remedies provided by other statutes

12. Prompt Payment Withholding Monies
Retainage until substantial completion
If contract or subcontract allows:
Late completion due to unsatisfactory job progress
Third party claims actually filed or reasonably likely to be filed
Contractor fails to make timely payments to subs or suppliers
After Substantial Completion
An amount not to exceed 125% of estimated cost to complete remaining work
No express provisions re withholding monies for
Defective/faulty work
For excessive costs (e.g. GMP)

13. Claims to Political Subdivisions
No specific definition of “claim”
Includes City, County, Village, State, University of Nebraska and the Nebraska State College
Standardizes claims process against political subdivisions under construction contracts
Claims must be filed within 180 days of date of substantial completion of the construction project
Political Subdivision must issue decision within 90 days and if not, entire claim deemed denied
If all or part of claim denied, claimant can file original civil action in district court in county where project located within 2 years after date of denial
Either party can appeal decision of the District Court

14. Void Contract Clauses
Applies only to construction work performed within Nebraska
Applies to contracts and subcontracts
Clauses which are unenforceable:
Provisions that waive or release rights to file claims against payment or performance bonds, except for partial waivers conditioned upon receipt of payment
Provisions making the law of another state applicable to or governing
Provisions requiring the location of a court or arbitration proceeding to be held outside of Nebraska

15. Questions?

16.
Denver ▪ Lincoln ▪ Omaha ▪ Washington D.C.
Keith Prettyman
Ed Tricker