1. IMPACT OF HEALTHCARE REFORM ON PAYROLL, HRIS AND HUMAN RESOURCES

2. Health Care Reform – It Does Impact Payroll 2010 - 2011 Small Business Tax Credit –Temporary small business tax credit is available for some firms who provide qualified health coverage. Continuation of dependent coverage –Children may stay on their parent’s policies until age 26. Burden on business to track the age of dependants.

3. Health Care Reform – It Does Impact Payroll 2011 W-2 Reporting –Employers required to report employee’s health benefits (medical, dental, vision coverage costs on W-2’s. –Upgrades necessary for payroll systems to produce the new W-2. HSA & FSA Limits –Elimination of tax advantage for OTC items

4. Health Care Reform – It Does Impact Payroll 2012 1099 Reporting –Businesses need to produce and distribute Form 1099 for every business-to-business transaction of $600 or more

5. Health Care Reform – It Does Impact Payroll 2013 “Medicare” payroll taxes –The Medicare payroll tax on wages and self- employment income in excess of $200,000 will increase from 1.45% to 2.35% –Penalty to employer if they do not collect the additional tax. FSA Limits –Cafeteria plan FSAs will be limited to a maximum of $2,500 (inflation adjusted after 2013)

6. Health Care Reform – It Does Impact Payroll Key considerations for payroll/HRIS services –Make sure your provider makes all of the necessary calculation adjustments –Evaluate current systems to ensure that the required data can be collected and reported

7. Critical Factors for Success Planning Knowledge Communication Maintenance

8. Planning Establish your internal leadership team –Chief Operations Officer –Chief Financial Officer –Chief Human Resource Officer –Chief PR/Marketing Officer Determine activities, timeframes and responsible parties

9. Planning Establish your internal working team –Finance CFO/Controller Accountant Payroll Administrator –Human Resources Director of HR Benefits Administrator –PR/Marketing Director of PR/Marketing Determine activities, timeframes and responsible parties

10. Planning Identify external resources –Benefits broker/consultant –Accountant –Payroll administrator –Benefits attorney –Benefit plan administrators Determine roles and interface with internal teams

11. Knowledge Become knowledgeable of overall legislation regulations Identify the aspects affecting your organization Conduct detailed research on high impact areas

12. Communication Communicate changes in procedures to: –Board and executive staff –Employees –Vendors –Clients –Other interested or affected groups

13. Communication Communicate changes –In advance –Describe rationale –Action required –Multiple times and use various media Implementation follow-up –Insure compliance and understanding

14. CONTACT INFORMATION John Israel – Principal –215-654-9140 ext. 110 –jisrael@proxushr.comjisrael@proxushr.com Greg Gast – Principal –215-654-9140 ext. 103 –ggast@proxushr.comggast@proxushr.com www.proxushr.com