Government Relations Report

Health Care

Signed into law 3/30 Important dates for franchisees:

2014: Employer requirements begin 3/1/13: Notification to employees required

Exemptions: Employers with less than 50 full-time equivalent

employees (FTEE’s)

Health Care: Requirements

Employers must provide “minimum essential coverage”Covers “essential health benefits”Limits cost-sharing (deductibles)Has an actuarial value of at least 60%

Further clarification will be provided by U.S. HHS via regulation

Health Care: Calculations

How to calculate who is covered:1) Determine if you have 50 or more full-time

equivalent employees (based on 30 hour work week)a. Ex. – 2 part-time employees working 15 hours each =

1 full time employee

2) If >50, you must provide health insurance to your actual full-time employees only

3) No penalties for not providing health care to the first 30 actual full-time employees

Health Care: Penalties Do not offer coverage AND have at least one

F/T employee who uses a tax credit$2,000 per full-time employee per year (first 30

waived) Offers coverage but at least 1 F/T employee

uses the tax credit$3,000 per each employee receiving tax creditNot to exceed $2,000 x FTE’s (above)

Offers coverage but FTE’s contribution is 8-9% of incomeEmployer must offer voucher to avoid penalties

Health Care: Next Steps

HHS and IRS already have “guidance” on their websites HHS: Group Health Plans and Health Insurance for

children up to age 26 IRS: Small business tax credit

July 2010: HHS must create a website with information for consumers and small business

Everything must be completed by 2014: HHS Treasury DOL

Credit Card Interchange Bills

Credit Card Fair Fee Act Requires credit card companies to negotiate

directly with merchants to lower interchange rates. 

Hearing in April - No vote taken Credit Card Interchange Fees Act

Allows merchants to:• Provide discounts for other types of payments• Set minimums/maximums for cc purchases

FTC oversight and required transparency

Credit Card Interchange Fees – Financial Services

Mid-May: Sen. Durbin (IL) introduces interchange amendment to financial reform bill which:    Requires Fed to issue regulations where

interchange fees are "reasonable and proportional" to the cost

Disallows anti-competitive restrictions placed by Visa and Mastercard.

• Allows merchants to offer discounts for competing cards and cash, checks or debit cards and set minimum and maximum transaction amounts.

Provides exemption for small banks

Credit Card Interchange Fees – Financial Services

5/13: Amendment passes 5/20: Bill passes out of Senate Next steps:

Conference committeeNote: Interchange is NOT in House version and

strong opposition to keep it out! Stay tuned for an Action Alert!

Paycheck Fairness Act

Provisions: Requires a higher “business necessity” standard on

employers to prove no bias in any pay discrepancies

Cannot pay employees differently based on market forces, negotiating ability, past salary or the amount of revenue generated

Provides for unlimited "punitive and compensatory" damages for pay discrimination

• Trial Lawyers benefit; Employers suffer    

Paycheck Fairness Act

Status: Passed out of the House in January 2009

with Ledbetter bill (now law) In Senate, 42 co-sponsors – need 60 to passSenate looking for post-health care “win”

prior to electionsNo vote scheduled – may come up quickly

Hiring Incentives to Restore Employment Act ("HIRE Act")

Signed into law 3/19/10 Payroll Tax Holiday:

Employers exempt from paying SS payroll tax• Up to taxable wage of $106,800

Employees must be hired after 2/3/10 and before 1/1/11

• Up to taxable wage of $106,800Applies to wages paid from March 18, 2010

through 2010

Hiring Incentives to Restore Employment Act ("HIRE Act")

Tax CreditsFor employees retained for at least one full year. Employers can claim a credit for "retained

workers" Credit calculation:

• The lesser of $1,000 or 6.2 percent of the wages paid to the employee for the year on their 2011 income tax returns.

Wages during the last 26 weeks of employment > at least 80% of wages during the first 26 weeks.

Hiring Incentives to Restore Employment Act ("HIRE Act")

For both holiday and credits, employees must be “qualified”Unemployed or working part-time (less than

40 hours a week) for at least the past 60 days;

Not a family member or other relative of the employer;

Fills either a new position or a position that was vacated voluntarily or for cause.

Hiring Incentives to Restore Employment Act ("HIRE Act")

Small Business ExpensingSection 179 of the IRS Tax Code Can deduct the full purchase price of financed

or leased equipment placed into service in 2010Maximum from $125,000 to $250,000 through

2010. Employer and employee must complete new

form W-11Guidance and Form on IRS website

Immigration Schumer-Graham bill

Graham – tabled until 2012 – focused on climate change bill

OtherLeader Reid wants to tackle “this year”Working with Sen. Menendez

Timing: Will start in Senate - JudiciaryMore likely June than JulyMost likely 2012

Employee Free Choice Act (“Card Check”)

3/27/10 – President Obama recess appointment of Craig Becker to NLRBAssociate General Counsel for AFL-CIO2/9/10 Senate vote – nomination rejected

Concerns raised about administering Card Check w/o bill’s passageBinding arbitration and secret ballot cannot be

imposed administratively

Building Depreciation American Jobs and Closing Tax Loopholes Act

One-year extension of 15-year depreciation schedule (from 39 ½ years) likely included

Applies to: leasehold improvements, restaurant improvements and new construction and retail improvements.

Current extension expired 12/31/09Issue: costly – need “pay fors” – Chairmen

Baucus/Levin looking for income sources Permanent Extension – Meek/Tiberi bill

Recent push to increase co-sponsors

Cap and Trade - “American Clean Energy and Security Act”

Provisions: Limits greenhouse gases through declining cap

on allowable emissions• Must be down 17% from 2005 levels by 2020• Must be down 80% by 2050

Companies must obtain a permit for every ton of C02 emissions

• Permits are tradable• # of permits decreases every year → increased

energy prices

Cap and Trade Legislation Impact

Increase in gas, oil, electricity Decrease in consumption Loss of millions of jobs Jobs shipped overseas

Status: 6/26/09: Passed House - 219-212

• Blue Dog Coalition concerned of cost – 30 voted against/20 in favor

Senate considering (Sen. Boxer – sponsor) • More of a priority before Reid’s announcement to focus on

immigration

20102010CFA DAY FORUMCFA DAY FORUM

20102010CFA DAY FORUMCFA DAY FORUM

SAVE THE DATE!SAVE THE DATE!

July 15-17, 2010July 15-17, 2010Gaylord NationalGaylord NationalWashington, DCWashington, DC

July 15-17, 2010July 15-17, 2010Gaylord NationalGaylord NationalWashington, DCWashington, DC

2010 CFA Day Forum Basics2010 CFA Day Forum Basics

Date:Date:• July 15-17, 2010

Location:Location:• Gaylord National- Washington, DC

Schedule of Events:Schedule of Events:• Thursday, July 15, 2010

Educational Session on Legislative IssuesKeynote speaker George Will Cocktail ReceptionExhibit Hall

• Friday, July 16, 2010 BreakfastHill VisitsGeneral Session Gala Dinner Event with guest speaker Sam Donaldson

• Saturday, July 17, 2010Depart

Registration Fee:Registration Fee:• Franchisees: $1,000/Guests: $300• Includes registration, materials, meals and receptions, two nights at the

Gaylord – register at www.thecfainc.com/event.html

To Leverage the collective strengths of Franchisee

Associations for the benefit of the Franchisee Community

Mission Statement:Mission Statement: