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7 Important Differences Between FMLA and the Paid Family Leave Act

7 Important Differences Between FMLA and the Paid Family Leave Act

For those of you who do not know, starting in 2018, New York state is introducing the Paid Family Leave Act (PFL). New York’s Paid Family Leave program provides wage replacement to employees to help them bond with a child, care for a close relative with a serious health condition, or help relieve family pressures when someone is called to active military service. Employees are also guaranteed to be able to return to their job and continue their health insurance. If you contribute to the cost of employee health insurance, you must continue to pay your portion of the premium while they are out on Paid Family Leave.

FMLA, or The Family Medical Leave Act, has been in effect since 1993 when it was enacted to provide 12 weeks of unpaid job protections for eligible employees at covered employers.

While both PFL and FMLA are designed to protect the family members of an employee, they do have key differences:  

1. Federal vs. State:

FMLA is a federal program where PFL is a state program. All businesses with 50 more employees across the United States must abide by the laws of FMLA. PFL however is a state mandated program and although it has been implemented in other states, it will begin in New York starting in January of 2018.

2. Benefits Comparison:

FMLA is an unpaid benefit, which means no monetary benefit is provided to employees who participate. PFL is a paid benefit, which will start out by providing 50% of an employee’s income capped at New York’s average weekly wage which is currently $1,305.92. By 2021 PF will cover up to 67% of an employee’s income. Payment for PFL comes from employee payroll deductions.

3. Job Protection:

Both FMLA and PFL provide job protection for eligible employees.

4. Time off:

FMLA provides employees with a maximum of 12 weeks off in increments of as little as 15 minutes. This means an employee can miss 15 minutes of work at a time for an FMLA-related event.

PFL will initially be capped at 8 weeks of time off and will increase to a maximum of 12 weeks by 2021. Time off with PFL may be used in 1-day increments.

5. Eligibility:

FMLA applies to employees who work for a company employing 50 or more employees. In order to be eligible for FMLA, an employee must work for the same employer for a minimum of 12 uninterrupted months, or 1,250 hours in the months prior to FMLA event.

PFL applies to all business in New York and other states where PFL has been applied. Any and all New York State companies employing 1 or more employees are required to participate in the PFL. To be eligible an employee must work a minimum of 20+ hours per week for a minimum of 26 consecutive weeks. If an employee is working less than 20 hours per week, they must have been working for their employer for 175 days or more to be eligible.

*Note: If an employee is eligible for both FMLA and PFL the benefits they receive will run concurrently. This means an employee cannot combine FMLA and PFL time to extend the duration of the leave.

6. Qualifying Events:


For the most part, FMLA and PFL cover the same life events. These events include bonding and caring for a newborn child, caring for a sick family member, and adjusting for a family member’s military deployment.

One major difference between FMLA and PFL is that PFL will not cover an employee who is absent from work because they need to care for themselves and a personal injury or illness they endure. FMLA will cover an employee if they personally become sick or injured.

7. Vacation & Sick Days:

Vacation and sick time benefits are left at the employer’s discretion, however all employees must be treated equally under the governing decisions of the employer. Under FMLA, an employer can force an employee to use their sick or vacation days while they are on leave. Under PFL, an employer cannot require an employee to use their sick or vacation days during leave.


Other brokerages take a cookie cutter approach to insurance and outfit their customers with generic coverage.  Skyline is different.  We believe insurance should be built on innovation and experience. We appreciate the fact that every engagement is unique and understand proper coverage requires a deep understanding of the underlying business and individual.

"The opportunity to safeguard your concerns is a privilege we never take for granted."

ACA Repeal & Tax Returns

ACA Repeal & Tax Returns

On January 20th president Trump signed an executive order, permitting the Department of Health and Human Services to withdraw and repeal certain features of the Affordable Care Act (Obamacare). Prior to this executive order, law under the ACA and the IRS required taxpayers to demonstrate “essential minimum coverage (MEC).” Taxpayers are considered to have MEC if they have health insurance via: Medicaid, Medicare, CHIP, retiree coverage, TRICARE, VA health coverage, or private health insurance purchased from the individual, small group or large group market place. Taxpayers on COBRA or state continuation may also qualify for MEC depending on their plan type.

Taxpayers who do not have MEC are subject to a waiver of exemption or a penalty. This penalty is referred to as the “shared individual responsibility payment.” In 2016, the shared individual responsibility payment for anyone who does not have MEC is 2.5% of your adjusted gross income, or $695 per adult and $347.50 per child, up to a maximum of $2,085, whichever is greater. In 2015, taxpayers without MEC had to pay $325 per adult and $162.50 per child up to $975 per family, or 2% of your household income, whichever was greater.

Results for 2015 aren’t currently available, however in 2014, 7.5 million Americans paid shared individual responsibility payments to the IRS for a total of $1.5 billion in penalties.

Here is the good news, the IRS has recently announced, “Individuals do not have to wait for their Form 1095-B or 1095-C in order to file. While the information on these forms may assist in preparing a return (tax return) they are not required. Like last year (2015), taxpayers can prepare and file their returns using other information about their health insurance.”

The quickest and easiest way for tax payers to indicate that they have coverage is to complete the box on line 61 on page 2 of their individual income tax return:

In 2017, the IRS has said that it will accept and process tax returned even if a taxpayer is silent on coverage. This means that tax payers filing for their tax returned are not obligated to specify their healthcare coverage.

To be clear, this does not mean that tax payers should leave this question on their tax return blank. If possible it is always recommended to complete any IRS document truthfully and to the best of your ability. 

Understanding Liability Under the False Claims Act

Understanding Liability Under the False Claims Act

Over the years, government compliance requirements have grown and grown. They've become more intricate, too – as have the tools needed to enforce them. Using a wide array of enforcement methods, the federal agencies work to control and enforce compliance.

There is one tool the government uses that affect contractors more than others – the False Claims Act. While understanding the False Claims Act can be difficult, it's imperative for contractors and surety professionals. The risks associated with violating the Act are significant.

What is the False Claims Act?

Before we get too far in, let's break down the False Claims Act. While complicated, the Act boils down to this: the law imposes liability on companies and individuals who defraud any government program. The federal government uses the act as the primary litigation device in fighting fraud against the government.

Not Too Difficult?

Contractors are typically aware that defrauding a customer, company, or government is completely prohibited and illegal. The False Claims Act extends beyond full-on fraud. A doctrine known as the "false certification doctrine" states that a contractor who falsely states they have complied with a variety of compliance policies imposed by the government can be held liable under the False Claims Act.

Violating the False Claims Act is far easier than committing traditional fraud. The government doesn't have to prove any damages suffered. They simply have to find a contractor who has submitted a claim that was "known" to be false.

Due to how the Act is enforced and the "false certification doctrine" – it is incredibly simply to violate the False Claims Act. Once you do, the violations can add up. Most contractors find a violation can be exceptionally costly.

Volatile and Expensive

There are two different types of liabilities the government can dish out to violators of the False Claims Act. Both actual damages and statutory penalties can be lobbied against violators.

The penalties can be between $10,781 and $21,563 for each claim submitted by the government. As individual invoices are treated as separate claims, a large penalty can be enforced – even when the government hasn't suffered any actual harm.

Not only are the fines costly, but they can be unpredictable, too. Even subcontractors without a direct relationship to the government can be subjected to liability – just like federal prime contractors.

Due to the whistleblower provisions in the False Claims Act, individuals with knowledge of a company's operations can bring suit on the government's behalf. This clause often catches contractors flat-footed and unaware of the consequences that may be coming.

What Sureties & Their Contractors Should Know

Paying attention to the False Claims Act is mandatory these days. While it seems to be tougher and tougher to stay in compliance with the Act than ever before, the consequences for failing to do so continue to get higher and higher.

As a surety, it's imperative to educate contractors on the perils of the False Claims Act. Contractors can take a number of steps to ensure risks are minimized. For example, a contractor could:

  • Implement a mandatory independent review of every single invoice by a project manager before submitting and completing the project.
  • Continual communication with the federal government through counsel. Details of contractual difficulties that arise and compliance issue may be discussed.
  • Fully implementing a compliance, monitoring, and training program for all employees that covers a majority of significant contractual requirements.

On top of these ideas, a contractor may seek to consult with outside counsel regarding changes to federal regulations and implementation. By doing so, a contractor can limit exposure to liabilities under the Act. 

To learn more about liability under the False Claims Act and how this effects your business contact Skyline Risk Management, Inc. at (718) 267-6600.

Trends for 2017: Workers' Comp Edition

Trends for 2017: Workers' Comp Edition

Some brokers struggle to help clients these days. It's not easy. Rising health care costs seem to be an inevitable part of doing business today. While the skyrocketing costs cannot be ignored, there are ways to decrease risk and manage premiums in the wide world of workers' comp.

Workers' Comp Trends in 2017

As we enter 2017, changes and trends in the workers' comp world are coming. Brokers may have niche opportunities to help businesses and clients by keeping workers' comp costs in line.

Here are six workers' comp trends to pay attention to:

1. Rising Premiums

High claims typically lead to high premiums. This is the insurance industry in a nutshell. That's the bad news, but it gets worse. Certain insurance companies have seen more claims, longer breaks from work, and higher dollar amounts being claimed. That's a recipe for high premiums. And many predict these premiums will continue to go up due to increasing costs for prescription drugs and an aging workforce. If change is to happen quickly, most brokers note it'll come from within an organization – not to the system.

2. Bad Management

One way companies may control workers' comp costs is through better management of pharmaceutical benefits. Opioid use has continued to rise in the United States. As such, many employers require workers' comp claims using opioids to have a weaning off strategy at the start. Another way to manage benefits is limiting where employees can get pharmaceuticals. Getting drugs from the physician's office typically costs more than at an off-site pharmacy.

3. Plentiful Partnerships

Certain workers' comp programs have developed relationships with facilities that specialize in work-related injuries specific to their industry. While requiring workers' comp claimants to choose a particular occupational medicine clinic is barred, a recommendation is legal. Brokers can help make an introduction in these scenarios.

4. More Technology

Innovations in the medical field incorporate technology to give patients options. Telemedicine is one such trend. Instead of visiting a doctor's office, a patient can call in on a smartphone or iPad at any time during the day or night. This is especially useful for people who work nights and mornings. Other programs have incorporated a hotline that connects injured employees to a health care professional immediately.

5. Cultural Focus

A culture of getting back to work is essential to ensure the success of a workers' comp program. Employees who want to get healthy and get back to work can save a company a lot of money. One way to potentially get employees back faster is through support. Most companies don't contact employees while they're off on a workers' comp claim. A phone call or card from a supervisor could help an employee recover mentally and physically.

Many were surprised to learn that over 80% of a workers' comp program costs go towards 5% of the claims. This means employees away from the job for a long time eat up more costs than anything else. Getting these people back on the job on schedule can be significant for workers' comp programs.

6. Keep Things Safe

While workers' comp programs are in place for a reason, the easiest way to potentially control costs is through a safety program at the workplace. Many have found the costs of incorporating more safety programs and measures to be minimal compared to the cost of workers' comp when an employee gets injured.

Certain companies have found a large financial incentive to focusing on safety and doing things the correct way. A broker can play a significant role in helping companies manage workers' comp costs by focusing on safety. 

For more information regarding workers compensation contact Skyline Risk Management, Inc. at (718) 267-6600. 

It Finally Happened! 421-A Gets Extended

It Finally Happened! 421-A Gets Extended

It took months upon months. There was a lot of hand-wringing. Developers threatend to stop a number of multifamily developments if there was no tax abatement in place.

Luckily, that disaster was avoided. Finally, the Real Estate Board of New York and the Building and Construction Trades Council of Greater New York came to an agreement. The extension of the lapsed 421-A program that offers tax exemption has been extended.

What It Means?

So what was all the fuss about? The 421-A extension means that eligible buildings in Manhattan must pay an average hourly wage of at least $60 – including all wages and benefits. Other buildings in Queens and Brooklyn are required to pay at least $45 per hour when all wages and benefits are taken into account.

The 421-A extension obligations only apply to buildings in certain areas that meet specific criteria. Only buildings in Manhattan south of 96th street qualify. In Brooklyn and Queens, only buildings in Community Boards 1 and 2 around one mile from the closest waterfront bulkhead qualify.

As well, only buildings with over 300 rental units are obligated to the pay stipulations. Buildings that have 50% or more of affordable housing units are also excluded from the obligations in 421-A.

If a project began before the effective date of the new 421-A agreement, then the project can choose to opt-in to the program if they want to. Of course, these projects must meet eligibility criteria, too.

Understanding the Benefits of 421-A

While the details are important, the reasoning behind the agreement shouldn't be overlooked. Many important people are thrilled with the agreement, especially regarding benefits for low-income New Yorkers. Governor Andrew Cuomo is one of them:

"The deal reached today between these parties provides more affordability for tenants and fairer wages for workers than under the original proposal. While I would prefer even more affordability in the 421-a program, this agreement marks a major step forward for New Yorkers.

The agreement extends affordability for projects created with 421-a for an additional five years–bringing affordability for these units to 40 years. It also allows lower-income individuals to qualify as it lowers the percentage of area median income needed to apply.

Additionally, this agreement rightly delivers fair wages for working men and women – providing a rate of $60 per hour in Manhattan and $45 for certain projects in Brooklyn and Queens. Most importantly until this agreement is finalized, the State Legislature has refused to release $2 billion in state affordable housing funds. I urge the Legislature to come back to Albany to pass desperately needed affordable housing and to sign the MOU to release these funds. We simply cannot allow the lack of resolution to stall affordable housing production for years to come. There is no excuse not to act."

More Info on 421-A

Governor Andrew Cuomo is excited about 421-A for a number of reasons, including:

1. Traditional Worker Standards: Many applaud the amendment for continuing to give construction workers the rights they deserve in New York City. The standards and benefits provided in 421-A go a long way towards keeping workers taken care of.

2. Affordable Housing: The 421-A amendment allows for the development of affordable housing for low-income individuals. This is critical in a city like New York City, which features some of the most expensive housing costs in the world. The 421-A program allows buildings complying with the regulations to stay in the program for 35 years with a property tax exemption. This incentive should keep units with income limitations in the program.

Finally Done!

Overall, the passing of 421-A is set to benefit a number of New Yorkers. The amendment ensures quality wages and benefits for construction workers. It also ensures affordable housing units are created in some of New York's most popular neighborhoods and areas. 

For more information about NYC insurance laws contact Skyline Risk Management, Inc. at (718) 267-6600.

New York Labor Law

New York Labor Law

  • What it means for property owners, their agents, managers and commercial tenants.
  • What you need to know to protect your assets.
  • How GNY can help.

New York Labor Law:

New York State’s Labor Law (NYLL) represents an onerous burden for property owners and managing agents in New York, making them financially liable for virtually any work-related accident on their premises. So as building owners and managing agents routinely hire contractors to do work on their properties, they routinely face huge liability exposures.
To insulate themselves from high-value lawsuits brought by injured workers, building owners and managing agents should enter into hold harmless and indemnification agreements, backed up by the contractors’ own insurance, which transfers liability for such injuries from themselves to the contractors and subcontractors whose negligence caused the injuries. Failure to do so can cost building owners millions of dollars.

GNY can help navigate this challenging landscape.

Three Key Sections:

1. Section 200 requires building owners and managing agents to provide workers with safe places to work.

2. Section 241(6) makes building owners strictly and vicariously liable for worker injuries at their buildings if improper or inadequate safety equipment causes a worker’s injury. Damages from resulting lawsuits can be reduced or eliminated if building owners can show that the injured worker was partially or fully responsible for his injuries.

3. Section 240(1), commonly known as the Scaffold Law, makes the building owners as well as their contractors and project managers “absolutely liable” for all gravity-related construction accidents at their buildings, subject to a few hard-to-prove exceptions. The building owner is liable even if it did not hire the injured worker or his employer, even if it did not know that the worker or his employer was working at the building, and even if the worker is partially or fully responsible for his own injuries. These lawsuits often result in summary judgment for the plaintiff on the issue of liability, leaving only the damages portion of the lawsuit to be tried against the building owner and property manager. Because these lawsuits often present serious injuries, verdicts in such cases can be quite high.

  • A good safety record will not protect building owners, managing agents and construction contractors from liability under any of these statutes. In addition, litigation can become a part of your loss history, which may drive up your insurance rates. Don’t let this happen to you.

  • GNY Recommends The Following Steps To Protect Your Business And Assets Under These Statutes: 


  • Verify the contractor is properly licensed, insured and experienced in the type of work it is being hired to perform.
  • Verify whether the general contractor uses subcontractors. If the general contractor uses subcontractors, find out how it screens its subcontractors and confirm with your contractors that its subcontractors are properly insured.
  • Verify there are written agreements in place between the building owner and its general contractor, as well as between the general contractor and its subcontractors, with proper indemnification and insurance-procurement clauses. The contractor and subcontractors should name the building owner and the managing agent as additional insureds on their liability policies on a primary and non-contributory basis.
  • Verify before entering into contracts with your contractors that the contracts make the contractors responsible for worksite safety and for having a safety-and-employee training program in place.
  • Verify contractors have obtained all necessary permits before they begin their work.
  • Verify your contractors and their subcontractors do not have a history of Occupational Safety and Health Administration Law violations.


Using written contracts to transfer the risk of liability and damages from you to your contractors can protect you from claims of serious injury and potentially large damage awards. The following clauses have proven successful:

  • Hold Harmless and Indemnification Agreements

Every contract between you and your general contractors, as well every contract between your general contractors and their subcontractors, must contain a clause requiring the general contractors and their subcontractors to “defend,” “indemnify,” and “hold harmless” the building owner and the managing agent from liability, loss or other damages that arise because of any of the contractors’ negligence. It is important that this agreement be properly worded, dated and executed before the work begins.

  • Insurance Procurement Requirement

Contractors and their subcontractors must agree to add building owners and their managing agents as additional insureds to their insurance policies for any liability arising out of their work. The limits of these policies should be at least $1 million for a primary commercial general liability (CGL) policy and $5 million for an umbrella policy. Also, the additional insured coverage should be written on a “primary and non-contributory basis.”

  • Insurance Requirements and Certificates of Insurance

While it is common practice to request a Certificate of Insurance (COI) from contractors and subcontractors, the certificate alone does not confer or prove the existence of additional-insured coverage on your behalf. A proven “best practice” is to require your contractors to submit a copy of their primary liability and umbrella policies for review by an insurance professional. All COI’s and insurance policies must be provided to the building owner or managing agent before the work begins. The COI and insurance policies should also show that the building owner and managing agent are named on the primary and umbrella policies as additional insureds.

GNY will review your contracts with your contractor or subcontractors free of charge. Simply ask your broker to forward the contracts and insurance policies to your GNY underwriter.




NYLL’s unfavorable liability provisions can adversely affect the owners of commercial buildings when tenants hire contractors to perform construction, alteration, repair or maintenance in their units, and those tenants are inadequately insured or indemnified by the contractors they hire.

As part of their commercial leases with tenants, building owners should use the same strategies suggested above for the transfer of risk from themselves to their contractors:

  • Obtain copies of the CGL and umbrella policies and COI’s from all commercial tenants and their contractors.
  • Set up a notification system alerting you to renewal dates for these policies.
  • Make sure tenants have sufficient CGL and umbrella policy limits.
  • Require tenants and their contractors to name the building owner and the managing agent as additional insureds on their CGL policies on a primary and non-contributory basis.
  • Require tenants to sign agreements indemnifying and holding the building owner and managing agent harmless for liability arising out any of the tenants’ work in their units.
  • Review your leases with an attorney to ensure these clauses have been included in the leases.

GNY will review the relevant contractual clauses and policy provisions for you free of charge. Simply ask your broker to forward the contracts and insurance policies to your GNY underwriter.


To protect the board, the shareholders and the co-op corporation, the same risk-transfer strategies mentioned above should be in place whenever a shareholder in a co-op has work done in his unit. This work ought to be done under an Alteration Agreement, which should require the shareholder’s contractors to indemnify and hold harmless the shareholder, the co-op and the managing agent, and to name these entities as additional insureds on the contractors’ general-liability policies on a “primary and non-contributory” basis.

The Alteration Agreement should also require the shareholder to indemnify the co-op and the managing agent and to have proper liability insurance in place to cover these exposures. The co-op must mandate, preferably in the lease agreement, that contractors cannot begin work in a unit until the shareholder submits to the co-op and the co-op approves all of these construction contracts and insurance policies.

Insurance companies insuring contractors have come up with broad exclusions and limitations designed to protect them from having to defend and indemnify you as additional insureds under their policies. This is very unfair to the co-op. By showing you what to look for in these policies, GNY can help protect you and your finances.

GNY will review the relevant contractual clauses and policy provisions for you free of charge. Simply ask your broker to forward the contracts and insurance policies to your GNY underwriter.

GNY can also supply you with an exemplar of an “Alteration Agreement” incorporating these conditions for the co-op, the shareholder and the contractors to sign.

Affordable Care Act Marketplace Competition Getting Slim

Affordable Care Act Marketplace Competition Getting Slim

Those who are taking advantage of the Affordable Care Act may find themselves with fewer choices in carriers. Three major insurance companies are pulling out of the marketplace, and this can leave some counties with only one carrier and others with only two.

Why Are Insurance Companies Pulling Out of the Marketplace?

This lack of competition as far as insurance companies goes is largely due to a lawsuit that the Obama administration is part of in trying to prevent two major insurance companies from coming together into a merger. The administration contends that it would harm the competition. One of the companies, Aetna, had previously said that they were going to expand the plans that they were going to offer in the marketplace. However, after the lawsuit was filed, they decided to exit the marketplace in most areas of the United States.

The other company involved in the lawsuit, Anthem, has not said that they are pulling out of the state marketplaces. However, it has hinted that it may leave in the future, simply because of the money lost on its Obamacare claims last year.

Completely separate from the above legal battle, the largest insurance company in the country, United Healthcare, reduced its offerings in the marketplace to just five states. This comes after seeing hundreds of millions of dollars in losses in plans and claims over the last few years.

Some Areas Worse Than Others

Some areas of the country are seeing a lack of competition more than others. This is especially true in the South. In fact, South Carolina and Alabama are finding that none of their counties have more than one carrier option; North Carolina, Georgia, Florida, and Mississippi are seeing this in the majority of their counties as well. The only state not seeing this trend in the South is Arkansas. Every county in this state has at least three different carriers to choose from in the marketplace.

Research Finds Some Good New About ACA

A study released recently by the University of Miami School of Business had some good news about the Affordable Care Act (ACA). Based on over 100 other studies of the ACA, it was found that approximately 20 million Americans had received coverage through the ACA. It broke down to 11.7 million receiving coverage through the marketplace, almost 11 million receiving coverage through Medicaid, and 3 million young adults being able to stay on their parent’s insurance.

On the other side of the coin, this research study found that there were not enough providers that accept ACA plans. Almost 40 percent of Americans still say that they have an issue getting health care access, and this is especially true for those who are impoverished or people of color.

More Work Still to Do

The Affordable Care Act is a mix of good and bad, but it has given many Americans access to health care for the first time ever. Unfortunately, however, it sounds like it is time for some attention to be given to the plan to ensure that it continues to work for Americans now and in the future. 

Are you an employer or employee struggling to adapt to Obamacare? Contact Skyline Risk Management, Inc. at (718) 267-6600 to voice your concerns. 

Small Business Subcontracting Faces More Scrutiny (Compliance)

Small Business Subcontracting Faces More Scrutiny (Compliance)

Gone are the good old days of wheeling and dealing. If you're working with subcontractors, you need to keep an eye on compliance. It doesn't matter if you're working on federal, state, local or prime contracts – you need to know the legal ramifications of every action, and explain them to your subcontractors.

As a construction contractor, you pay close attention to your local subcontracting community. You need to know where you can get great work done when you need it. You even need to know where you can get cheap work done now and then. You know the subcontractors in your area, but are you familiar with the legal ramifications of working with subcontractors on federal contracts?

Get It Right the First Time

Unless you fancy yourself the center of a federal investigation that could end up costing you millions, it's imperative to stay on top of compliance right from the start. You must employ robust compliance measures when working on any and every government contract.

If you don't, you could find a number of government agencies banging on your door. Just a few of the organizations that deal with subcontractors include:

  • The Small Business Administration (SBA)
  • The Federal Acquisition Regulation (FAR)
  • The U.S. Department of Transportation (DOT)
  •  Disadvantaged Business Enterprise Program (DBE)

While we won't go into all the federal regulations, these agencies enforce (as that would take a number of full-length books), a few examples should help illustrate how these organizations work. Take note that negligence is not punished as severely as purposeful actions. 

Tired Trickery

Nationwide Supply and Fence found themselves in a lot of trouble in 2015. They claimed to have used a DBE-qualified company on a number of federally funded projects. In reality, the company had hired a non-DBE company to supply the materials. Then they directed the DBE company they claimed to be working with to make it seem as though they were providing the materials – not the non-DBE business.

This dog-and-pony show resulted in $1.75 million in fines to settle allegations stemming from the project. In addition, one of Nationwide Supply and Fence's former officers was personally dinged over $350,000 to settle further allegations resulting from the trickery.

Masked Markups

Nationwide wasn't the only company in trouble. Yonkers Contracting in New York found themselves ordered to pay over $2.5 million after they violated a DBE program on a federally funded contract.

The company hired Global Marine Supply to provide steel on a DBE federal contract. Global Marine Supply bought the steel from a non-DBE company, then added a 1% markup and sent it to Yonkers. All the while, Yonkers Contracting knew exactly what Global was doing and had signed off on it.  


As is clear from the above examples, construction contractors can’t afford to ignore subcontracting requirements on federal contracts. If you do so, you could be held accountable for quite a costly sum. Focus on reducing your compliance risk by making sure all subcontractors understand DBE guidelines. 

Have questions about compliance regulations for your business? Contact Skyline Risk Management, Inc. (718) 267-6600 to voice your concerns. 

Contractors are Now using Drones for Large Construction Projects

Contractors are Now using Drones for Large Construction Projects

Drones are becoming a household concept. More and more industries are looking for the best way to utilize drones safely and effectively to help save time and money for any task. Drones are even becoming something discussed around the home for personal use, especially when dealing with repair and maintenance issues around the house. However, using a drone for business is not that cut and dry. At home they may cause issues, however, businesses must adhere to regulations for their industries as well as insurance issues that could ultimately cause more trouble if ignored. The construction industry sees drones as a huge asset to their business. However, if the proper steps to obtaining and using drones are ignored, the fines and lawsuits could easily put a construction company out of business. Therefore, it is important to know and follow the rules before purchasing a drone for your site.

The Preliminary Work

Before you even purchase a drone, first you must complete some preliminary research and work. For instance, did you know you must receive approval from the FAA to operate a drone? The FAA has guidelines that must be learned and understood when applying for approval for use of a drone (or UAV: Unmanned Aircraft System) on a construction site. In addition to applying for approval from the FAA, you must have a new section of your employee handbook or operations manual that deals with the use of drones, risk management, and safety procedures. This includes proper employee training regarding drones and their proper usage on a job site. In addition to training your employees and receiving an FAA approval, you must prepare to hire drone operators or train current employees on drone operations and have those operating employees pass the required aeronautics test for them to serve as a drone operator.

Finally, the last piece of preliminary work that must be completed before purchasing your first drone is the insurance test. It is important to contact your insurance provider or broker to determine the following items:

  • Does your insurance cover drones?
  • If not, do you need a policy or rider that will cover drones on your worksite?
  • How much will this extra coverage cost, and is it cost effective in the long run?
  • Once coverage is purchased, how long will it take to go into effect?

Your insurance broker should be able to sit with you to discuss these and other issues which may pop up as the results of drone usage on a job site. Most importantly, when dealing with insurance, never assume anything.  Many policies specifically exclude drone usage and specific policies need to be purchased just for this type of issue.

Continuing Issues

Once you have set everything in motion and have purchased your first drone, your job has not ended. Each job site must be analyzed properly to ensure you are within the proper guidelines of the FAA in regard to drone usage. For instance, drones are not allowed to fly over people that are not directly involved with your project.  Therefore, if you are in a busy commercial district, it may be wise to leave the drone at the office or only do work with the drone during off business hours. This and many other regulations will play a constant issues for each job.

Furthermore, since drones are a relatively new technology, the issues involving drones are constantly changing and being updated.  Should you choose to utilize drones for your construction projects, dedicate an individual within your company to constantly check for updates regarding drones in your industry and adjustments you may need to make to accommodate their usage.

Finally, be prepared to always mitigate risks for each job that may occur. Drones are a great opportunity to save money and keep employee injuries down. However, they are new and still being analyzed and understood. Therefore, there is still quite a bit of unknown risk involved. Each job site may offer a different risk as well, therefore, it is important to know your risks in advance and prepare accordingly.  

Interested in using drone technology for your construction company? Contact the experts at Skyline Risk Management, Inc., (718) 267-6600 to get proper coverage for all your business needs. 

Affordable Care Act: A Year-By-Year Overview

Affordable Care Act: A Year-By-Year Overview

The Affordable Care Act, often referred to as Obamacare, although passed by the Congress in 2010, was designed to be phased in each year with 2016 marked as full implementation. Along the way there have been challenges by some of the states and challenges by Congress; but, alas, the full-blown Affordable Care Act (ACA) has arrived. Each year, portions of this massive healthcare reform act were implemented, and the most significant are as follows:


Patient's Bill of Rights - This provision was designed to protect U.S. consumers from alleged abuses of the insurance industry. It also called for free preventative services to begin for U.S. consumers who become insure. There was also an additional twenty changes included with the 2010 implementations.


Medicare members are offered key preventive services at no cost and receive a 50% savings on brand-name drugs while in the "donut hole." There are an additional eight components that were also implemented in 2011.


This year was all about improving healthcare quality and reducing paperwork and administrative costs in the healthcare industry. 2012 was also the year for the implementation of CLASS, a voluntary long-term care insurance solution. There were also four other major implementations in 2012.


This was the year when open enrollment began for the Health Insurance Marketplace and will be remembered for the many failures of the HealthCare.Gov online portal. There were also four other major implementations that went into effect.


2014 is considered by many to be the year of the consumer. Pre-existing conditions, annual limits of coverage, and clinical trial coverage were the highlights for 2014.


Physicians who provide a higher quality of care rather than volume of care will receive higher payments than physicians who provide a lower quality of care.


2016 is scheduled as the year for complete implementation of the employer mandate:

  • Any business that employs at least 50 full-time employees will be required to offer at least 95% of the full-time employees health insurance to avoid penalties.
  • The definition of "affordability" is changed to 9.66% of an employee's total household income.
  • Employers will be penalized for failure to provide minimum essential coverage to employees or offering an inadequate health plan. The new penalty under section 4980H(a) is increased to $2,160per full-time employee in excess of 30 employees.
  • If an employer offers minimum essential coverage the doesn't satisfy the requirements of "Minimum Value and Affordability," a penalty will be levied if a full-time employee receives a premium tax credit to buy insurance on an exchange as a result of the following:

1.      The employer health coverage did not offer "minimum value".

2.      The employer health coverage was considered "unaffordable."

Challenges Over the Years

Although the ACA was passed by the Congress, it was done so on a razor thin margin and therefore there were many who felt that the massive health care overhaul might not pass constitutional muster, and so challenges were certainly to follow:

  • Early on Republicans in 26 states challenged the mandate in the act, saying it was an unconstitutional expansion of federal power. The Supreme Court heard the case and in June of 2012 ruled that it was constitutional.
  • In June of 2014 after a case was filed by Hobby Lobby that complained that the ACA forced closely held businesses to violate religious convictions while being required to pay for contraception, the Supreme Court ruled against the ACA.
  • In another case in 2015, the Supreme Court ruled that health insurance subsidies could be awarded in states that set up their own and exchanges and in states that did not.

Whatever your feelings are regarding the Affordable Care Act, most can agree that it is a massive piece of legislation that is complex and confusing. To make certain that your business is adhering to the rules and regulations, contact an insurance professional at Skyline Risk Management  (718) 267-6600 to learn more about managing your employee benefits.

FLSA and Employment Practices Liability Issues

FLSA and Employment Practices Liability Issues

Looking to the future, it's important for insurers to pay close attention to wages and hourly employment claims with Employment Practices Liability Insurance (EPLI) coverage. Claims falling under the Fair Labor Standards Act (FLSA) have continued to rise each year due to the complexity of the legislation. Many companies never even realize they're in violation of the law until it's too late.

What is FLSA?

The Fair Labor Standards Act, or FLSA, is a federal law that encompasses minimum wage, overtime pay standards, records keeping, and child labor regulations. These laws affect both full and part-time workers in private and public sectors.

Exemptions Revisions Create Confusion

Many companies conducted business by utilizing employee positions that would be considered exempt from FLSA. These positions were exemptions and often, highly useful to many corporations. Things have changed. Many positions that used to be exempt are now non-exempt. Furthermore, white-collar exemptions for supervisors and the like have been looked at and will be updated soon. This will lead to further confusion for insurers and companies – while leading to more litigation.

Off-the-Clock Confusion

Many lawsuits have resulted from companies being sued for not paying hourly employees properly. Many times companies do not realize they're in violation of FLSA in these cases. For instance, an employee sending work emails on his or her smartphone during a non-paid lunch break can be a violation. Sadly, intent is irrelevant with regards to the FLSA, and hourly wage violations can be an unforgivable mistake.

Common Claims

While discrimination claims can be incredibly difficult to prove, an hour and wage claim can be simple to win in court. With the FLSA, the savvy employee’s attorney can almost always find a violation in how a disgruntled employee was paid. Not only do these cases prove easier for the plaintiff to win, but there's also a hefty lawyer’s fee that comes automatic with such a claim.

Group Actions

Companies continue to take hits with the FLSA. A violation regarding hourly pay often will not only include one employee. Many times the violation will involve hundreds of employees. If this occurs, then a class action lawsuit will be on the table. Companies know nothing cheap comes when the words "class action" are thrown around.

Waiving Class Action Issues

Luckily, companies do have one trick in their toolbox. Class action waivers have recently been held up in the Supreme Court. This means a company can have an employee sign a class action waiver that prevents class-action lawsuits against the company regarding violations concerning hourly work and pay.  

How Insurers Can Lower the Risk

To ensure your clients do everything possible to avoid such claims and cases, an insurer can ask companies to proactively audit their policies and payment structures for hourly employees. Auditing the employee handbook and staying up-to-date on FLSA changes will help limit a client's vulnerability. Ultimately, an insurer can only educate a client on what they can do to protect their company. The rest is up to the businesses themselves.

If you have questions about FLSA and/or Employment Practices Liability Issues contact Skyline Risk Management, Inc., (718) 267-6600 to discuss your concerns. 

OSHA Will Take Your Money and Ruin Your Reputation

OSHA Will Take Your Money and Ruin Your Reputation

It appears that OSHA (Occupational Safety and Health Administration) wants to do more than collect hundreds of thousands of dollars in fines. They're taking additional steps by targeting traditional safety incentive programs and releasing negative press reports for businesses that pay minimal fines. Safety should always be a business's first priority, but this "gotcha" mentality appears to be getting out of hand.

Attempts To Embarrass

Many employers are complaining that while traditionally the agency only published reports for fatalities and substantial fines, OSHA is not putting out press releases about smaller offenders.

Some experts believe that the negative press is used as a hammer to embarrass employers and give incentives for maintaining a safer workplace.

Higher Penalties on the Horizon

Employers need to prepare for higher OSHA penalties since President Obama has allowed the government agency to increase fines for the first time in many years. Increases are expected to range from 75% to 80% as the agency plays catch-up for not increasing fines from 1990 to 2015.

Businesses, especially repeat offenders, should consider the new penalties as a "safety hammer" and prepare accordingly by initiating comprehensive safety programs that should play a large part in reducing preventable accidents in the workplace.

Differences in Opinions

New rules have many employers scratching their respective heads since logic seems to have been tossed out of the window. For example, OSHA believes that post-accident drug testing is a bad thing since it could cause employees impaired by drug or alcohol use to delay reporting an accident. Since about a third of workplace accidents involve employees who are impaired by drug or alcohol use, employers feel that post-accident drug testing should be mandatory to help determine if the accident was truly a safety issue.

The general duty clause is another area of contention since it is used to penalize employers. Simply put, the general duty clause requires the employer to provide a workplace from hazards that cause or may cause harm to an employee. Employers have become vocal that the general duty clause has become "extraordinarily controversial" over the past few years and is now being used to address areas of entertainment. Employers are now complaining that OSHA is now deciding what is and isn't considered as acceptable entertainment, and the list goes on.

Solutions to Consider

You can't fight city hall if you don't know and understand the rules. Employers should attend as many conferences regarding OSHA and Workers Compensation as possible. Knowing and understanding the rules of workplace safety is the employer's first responsibility. The employer can make informal contact with their local OSHA office to inquire about areas of concerns and OSHA expectations for mitigation.

Since it has become obvious that the agency is looking for opportunities to spotlight safety violations and collect the resulting fines and penalties, it is incumbent upon the employer to look for gaps in their safety programs and make the necessary corrections as soon as possible.

It should go without saying that no business wishes to become a repeat offender, so use your resources wisely to get to the root of any safety issues. A fine is bad enough, and adding a negative press release can be devastating to your company's reputation.

Have questions about OSHA and how it effects your business? Contact Skyline Risk Management, Inc. (718) 267-6600 to discuss your concerns. 

Fair Labor Standards Act (FLSA) - Overtime Rule

Fair Labor Standards Act (FLSA) - Overtime Rule

One of the Largest Exposures Employers face today are Wage and Hour claims
"On May 18, 2016, President Obama and Secretary Perez announced the publication of the Department of Labor's final rule updating the overtime regulations, which will automatically extend to over 4 million workers within the first year of implementation." - Department of Labor (DOL) 

What Does this Mean?

Previously, any employee making less than $23,660 a year and working more than 40 hours per-week was eligible for time-and-a-half overtime compensation. The new overtime rule has increased the minimum salary required for overtime pay from $23,660 to $47,476, or from $455 to $913 per week. The final rule will be enforced starting on December 1, 2016.

How Does this Impact Employers?

Scott Green, a partner specializing in employment and labor law at Rivkin Radler LLP, is of the opinion that the effects on employers can be minimized.  “If you have a class of exempt employees that do not meet the salary basis test, you can simply increase their salary. However, where that option is not realistic, employers can pay those employees an hourly wage. The key to controlling cost is to find an hourly wage, that, when accounting for overtime, pays the employee a wage this is on average equivalent to their prior earnings as a salaried employee.”


Whatever action you choose to take as an employer, mistakes can and will happen and the cost for these missteps is very high. The penalties for violating the new overtime rule include fines and in some cases even imprisonment. Under the new rule, “any employer” in violation of the unpaid overtime law can be held liable for both the deficit, liquidated damages and one of the largest expenses associated with a wage claims, legal fees.

What Can You Do?

In addition to consulting with your attorney for legal advice on this and other employment practice issues, an employer may be covered for the legal fees associated with a wage & labor claim under their Employment Practices Liability Insurance (EPLI).

EPLI policies typically protect employers against lawsuits filled by their employees for causes of action such as sexual harassment, discrimination, wrongful termination, breach of employment contract, negligent evaluation, failure to employ or promote, wrongful discipline, deprivation of career opportunity, wrongful infliction of emotional distress, and the mismanagement of employee benefit plans but usually exclude wage and hour claims.

The good news is that certain carriers offer a wage and hour coverage endorsement that affords coverage for the legal fees associated with wage and hour claims with a limit of up to $250,000, for a relatively low premium. Adding an EPLI policy, which protects employers against wage and hour claims is highly recommended if you believe your business will have to make changes to its compensation structure because of the new overtime rule. For questions about how you can better position yourself while adjusting to the new overtime rule contact Skyline Risk Management, Inc. at (718) 267-6600 to discuss your concerns.

What Is EPLI and Why Should I Buy It?

What Is EPLI and Why Should I Buy It?

Every business that has at least one employee has an employment practices liability risk. Claims can be brought for many reasons and may typically include charges of wrongful termination, discrimination, sexual harassment and retaliation. In many cases the claims are based on “he said – she said” information but must be defended nonetheless. Even though most claims are filed against large corporations, every employer is at risk.

EPLI Provides Coverage against Employee Lawsuits Including Claims Of:

  • Sexual harassment

  • Discrimination

  • Wrongful termination

  • Negligent evaluation

  • Failure to employ or promote

  • Breach of contract

  • Wrongful discipline

  • Deprivation of opportunity

  • Infliction of emotional distress

  • Mismanagement of benefit plans

Typically, policies are rated based on your industry, the number of employees and claims history. The insurance policy is designed to reimburse for defense costs, settlement costs, and court judgments although they will not pay for punitive damages or civil and criminal fines.

Your Insurer Will Help Your Business

Most insurance carriers that offer EPLI will provide resources to the business in order to mitigate claims. If implemented properly, these mitigation resources will assist the business with reducing claims and can result in discounted premiums by:

  • Creating effective screening and hiring programs

  • Posting corporate policies in conspicuous areas throughout the workplace and placing them in employee handbooks

  • Offering a systematic process to file a grievance if the employee believes they have been subjected to sexual harassment or discrimination

  • Documenting everything that occurs and the process your company is taking to solve and prevent employee disputes

Many business owners make the mistake of purchasing EPLI after an action has been filed and then discover that coverage will not be available while the action is pending. When they are able to purchase coverage after an action has been resolved they will more than likely be surcharged for the previous action whether they were forced to settle or not. Knowing this, it is incumbent on every business owner to make this coverage a part of their insurance portfolio. Most Business Owner Policies offer an endorsement for EPLI; however as an endorsement, the coverage may not be as broad as in a stand-alone policy.

There are many reasons every employer should carry Employment Practices Liability Insurance, particularly in the litigious environment we are living and working in. Although many EPLI cases never make it inside a courtroom, there are, very often, settlements offered by the insurer. Even actions that appear without merit on their face must be responded to by a skilled attorney, which can become very expensive. Your EPLI policy will respond by paying your defense costs so that the company's bottom line doesn't take a hit every time a disgruntled employee claims they were harassed at the workplace or fired for no reason.

Who Should Carry Employment Practices Liability Insurance?

Any employer that answers yes to at least one of the following questions:

  1. Have you ever terminated an employee?

  2. Have you ever interviewed a prospective employee and didn't make a job offer?

  3. Do you currently have at least one employee?

EPLI is a very important coverage for any business with employees. Contact an insurance professional at Skyline Risk Management, Inc. (718) 267-6600 to learn more about protecting your business from your everyday risks. 

Are you in Compliance with PPACA, ERISA & HIPAA?

Are you in Compliance with PPACA, ERISA & HIPAA?

The impact of the Patient Protection and Affordable Care Act (PPACA) on Employee Retirement Income Security Act (ERISA), and The Health Insurance Portability and Accountability Act of 1996 (HIPAA)

            Your business is affected by PPACA, ERISA, and HIPAA compliance in ways you are probably not aware of or fully comprehend. It is important to understand that you, and your business, are likely in violation of these regulations.

In one-way or another you might be subject to costly penalties!

Patient Protection and Affordable Care Act (PPACA)

The Patient Protection and Affordable Care Act commonly referred to as Obamacare was established in March of 2010. The PPACA was designed to make healthcare more affordable, by compelling people to purchase health insurance or pay penalties. In other words, all U.S citizens are forced to purchase some form of health insurance or pay a penalty of either 2.5% of their annual family income or a max of $2,085 dollars, whichever is higher.

For employers, under the PPACA businesses with 50-100 employees are subject to penalization effective January 1, 2016. Businesses may be penalized for a multitude of reasons and face much higher penalties.

Learn More About the Penalties

Employee Retirement Income Security Act (ERISA)

The Department of Labor (DOL) created the Employee Retirement Income Security Act in 1974 to address the public’s concern regarding the fraudulent use of private pension plans.  Over the last 40 years ERISA’s responsibilities have broadened, focusing on the protection of retirement and healthcare essentials for employees and their families. The overlapping interests of ERISA and the Affordable Care Act have triggered the issuance of more audits from the DOL than ever before.

According to the DOL, 3 out of ever 4 plans are non-compliant under ERISA law, and 70% of these non-compliant plans are subject to monetary fines issued to the employer.

DOL Fines & Penalties 1999-2014

The Health Insurance Portability and Accountability Act of 1996 (HIPAA)

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) was established to protect working Americans with medical ailments by safeguarding the privacy of their medical histories. HIPAA ensures that people with per-existing medical conditions cannot be denied insurance if they switch to a new job based on their medical history. Since PPACA also abolishes any discrimination towards a person with a per-existing medical condition the number of HIPAA audits has simultaneously been increasing.

Obamacare has flipped the healthcare industry upside down. Your opinion on whether or not the Affordable Care Act is good or not is your own. Regardless, everyone is going to be effected by these newly enforced regulations. The importance of being aware of these changes is immense, and the Department of Labor has made it clear that they will send audit letters to as many businesses as possible. If you have questions about PPACA, ERISA, or HIPAA contact Skyline Risk Management, Inc. at (718) 267-6600 to discuss your concerns. 

New York’s New Budget Deal - Family Leave Act

New York’s New Budget Deal - Family Leave Act

New York's legislature went into overdrive and closed out March with a finalized budget deal that promises $15 an hour to employees and mandated paid-family-leave time for them as well.

The new deal contrasts with other states that offer the paid time off by offering up to twelve weeks paid time off that allows employees to bond with a new child or take care of seriously ill family members.

This new deal will supersede the Family Medical Leave Act (FMLA), which requires some employers to offer unpaid time off for some employees but employers with less than 50 employees are exempt. Other requirements in the newly outdated FMLA, are employment requirements of greater than a year as well as a prescribed minimum number of hours worked for the previous year.

Who's Covered?

This new monster bill eliminates many of the FMLA exclusions and applies to full-time and part-time employees. There are no exemptions for small businesses (less than 50 employees), and employees need only six months of service to qualify. The legislature claims the expense of the program will be paid by a one dollar per week deduction from employees and no cost to the employer. Men and women are entitled to the new paid leave program for both straight and same-sex two-parent households and single-parent households.

When does it Start?

Nothing in government happens quickly. The bill allows for a phased-in period for benefit time and payments. The paid leave benefits will kick in January 1, 2018, when the phase-in period begins. Employees will become eligible for eight weeks of paid leave in 2018, then ten weeks in 2019 and 2020, then up to twelve weeks beginning 2010.

How Much?

Beginning with the 2018 kick-off, the paid leave will cover 50% of an employee's average pay and then rise over the following four years to a maximum of 67% of an employee's average pay. The maximum payment represents two-thirds of the state's average weekly wage of $1,266.44 which translates to $848. If you're a high earner, be prepared to take a huge cut during your paid family leave, but hey, it's $848 higher than before.

Employer Effect

There are costs to consider even though the plan is supposed to be funded by the employee rather than employers. The additional costs of hiring temporary employees or paying overtime to existing employees to cover the responsibilities of the "on leave" employee may become unbearable for small business employers. In states such as California, where six weeks employee family leave has been available for over ten years, many businesses are reporting that the mandate has attributed to basically neutral effects. In fact, in many cases, businesses are reporting a positive effect because of improved employee morale and job security.

Why Now?

Businesses wanting to know why the paid-family-leave program is about to become a reality need to look no further than New York's office of the governor. Governor Cuomo has had recent family tragedies that obviously triggered his need to get this done sooner rather than later. During a February news conference, the governor remarked " There are times in life when you should be with family members because that's what it's all about at the end of the day... When you have a newborn baby, you should enjoy it... If you have a family member who is passing away, God forbid, you should be there."  If you have questions about FMLA contact Skyline Risk Management, Inc. at (718) 267-6600 to discuss your concerns. 

Best Practices for Selecting a Third Party Administrator

Best Practices for Selecting a Third Party Administrator

Employers who have made the commitment to offer retirement or health insurance plans to employees have been regulated by ERISA (Employment Retirement Income Security Act) since 1974.

The employers who decide to accept the responsibility of administering and managing ERISA plans must be very careful as they do so according to regulation and guidelines set forth by the Department of Labor. One of the most important responsibilities is to point out their plan's need for services and then to select an experienced and competent professional to help the plan fiduciaries in performing their duties according to ERISA regulations and guidelines. Using the most appropriate criteria to ascertain the right Third-Party Administrator (TPA) will go a very long way in making certain that the plan is run in a smooth and cost-effective manner.

Selecting an inexperienced and even mildly incompetent TPA for your ERISA plan could result in

negative consequences when plaintiffs bring actions alleging violations and seek maximum penalties.

Selection Process

Every employer offering retirement and health insurance plans should consider taking the time necessary to select the most appropriate TPA for their ERISA benefit plan. Developing a well-planned selection process can be time-consuming and can take away from focusing on the day-to-day demands of administering the plan and addressing the needs of the participants. Taking the current litigious environment into consideration and using due diligence in the selection of your plan's TPA will satisfy your duties under ERISA and also minimize your risk of litigation.

Over time, the Department of Labor has revealed that the TPA selection process should depend on the facts and circumstances associated with each plan, but should also consider the TPA's qualifications, the historical quality of services, and the sensibleness of its fees. Some of the most important factors to consider are:

·Qualifications - When considering any TPA, it's important to drill down and consider the available services being offered, experience dealing with ERISA plans, fees, and expenses, and most importantly, client references. Not taking the necessary steps to properly evaluate your TPA, could, according to the DOL, constitute a breach of fiduciary responsibility.

·Data Security - Safeguarding your employee's data in the current data environment should be near or at the top of the list of considerations. Request a documented safety protocol regarding data security.

·Conflicts of Interest - The employer's consideration process should require a thorough review of affiliations between the plan fiduciaries, sponsor, and service provider.

·TPA Comparison Shopping - Although the employer is not responsible for selecting a TPA with the lowest fees and expenses, the employer should shop the marketplace to find the most qualified TPA at the most competitive rates.

·Bond Verification - When a TPA is charged with handling plan assets, the TPA should have a bond in place to protect the plan against potential losses due to fraud or dishonest acts. ERISA requires that every person involved with plan assets be sufficiently bonded.

·Monitoring - Employers should request regular updates and monitoring from the TPA so that comments or complaints from participants can be addressed. Participants should receive regular updates from the TPA about the plan and how it could affect them and ensure that performance issues are properly addressed.

Utilizing a competent and experienced third party administrator to assist with your benefit and retirement program will go a very long way to assure you are in compliance with ERISA regulations and are keeping employee benefits managed properly. If you have questions about selecting a third party administrator, or for ERISA compliance contact Skyline Risk Management, Inc. at (718) 267-6600 to discuss your concerns.