Wednesday, 25 May 2016
Overtime For Salaried Employees Final Rule.

On March 13, 2014, President Obama signed a Presidential Memorandum directing the Department of Labor (DOL), headed by Secretary of Labor Thomas E. Perez, to update the overtime regulations contained in the Fair Labor Standards Act (FLSA).  The Department of Labor spent more than two years in discussions with employers, workers, and unions and received more than 270,000 comments from the public during this time.  On May 18, 2016, President Obama and Secretary Perez announced the publication of the Department of Labor's Final Rule that updates the overtime regulations.  The effective date of the Final Rule is December 1, 2016.

The purpose of this blog post is to give the reader an overview of the Final Rule, examine the three tests that must be met in order for each exempt professional employee type to qualify for the white collar exemption, and give the reader some options on how to respond to the Final Rule's increased salary thresholds.  Although not intended as an opinion piece on the subject, the blog will conclude with objections to the Final Rule from two important authorities. 

The blogger has made every attempt to summarize the information in a logical and coherent format as a service to our clients and other readers.  Please keep in mind that this blog does not carry the force of law or legal opinion.  The United States Code, the Federal Register and the Code of Federal Regulations remain the official sources for statutory and regulatory information.


According to the Department of Labor website, the Final Rule focuses primarily on updating the salary and compensation levels needed for Executive, Administrative, and Professional workers to be exempt from the overtime rules. These workers are exempt if they are employed in a "bona fide" executive, administrative, or professional (EAP) capacity, as those terms are defined in the DOL's regulations at 29 CFR part 541.  Certain computer professionals and outside sales employees are also included in the exemption and therefore excluded from the minimum wage and overtime requirements. This exemption from the FLSA is sometimes referred to as the "white collar" or "EAP" exemption.    The following are the key provisions of the Final Rule:

  1. Sets the standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South: $913 per week or $47,476 annually for a full-year worker.  The current rates, set in 2004 are $455 per week or $23,660 annually.  The "40th percentile" means that, according to the Census Bureau and Bureau of Labor Statistics' figures, 40 percent of the full-time salaried workers in the region earn at or below that amount.  The regulations provide a lower special salary level requirement for American Samoa of 84 percent of the standard salary level, or $767 per week.  In addition, the regulations establish a special base rate threshold of $1,397 per week, or a prorated amount based on the number of days worked, for employees in the motion picture industry.
  2. Increases the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test from $100,000 to $134,004.  The new amount is equal to the 90th percentile of full-time salaried workers nationally.
  3. Establishes a mechanism for automatically updating the salary and compensation levels every three years to maintain the levels at the percentiles noted herein and to ensure that they continue to provide useful and effective tests for exemption.  The next automatic update to the salary and compensation levels will be on January 1, 2020.
  4. Amends the salary basis test to allow employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level.  Nondiscretionary bonuses and incentive payments (including commissions) are forms of compensation promised to employees to induce them to work more efficiently or to remain with the company.  Examples include bonuses for meeting set production goals, retention bonuses, and commission payments based on a fixed formula.  Discretionary bonuses, alternatively, are those for which the decision to award the bonus and the payment amount is at the employer's sole discretion and not in accordance with any preannounced standards.  An example would be an unannounced bonus or spontaneous reward for a specific act.  If an employee does not earn enough of a nondiscretionary bonus or incentive payment in a given quarter to meet the standard salary level, an employer may make a "catch-up" payment no later than the next pay period after the end of the quarter.  Any such "catch-up" payment counts only toward the prior quarter's salary. 

There are some important qualifications to the Final Rule:

  • There will be a time-limited non-enforcement policy for providers of Medicaid-funded services for individuals with intellectual or developmental disabilities in residential homes and facilities with 15 or fewer beds. This non-enforcement policy will be in effect from December 1, 2016 until March 17, 2019.
  • Neither the FLSA nor the Department's regulations provide an exemption from overtime requirements for non-profit organizations.
  • Schools and institutions of higher education are generally covered by the FLSA's minimum wage and overtime provisions.  However, several provisions apply to many employees at these institutions that exempt them from the Final Rule, especially teachers.  (Teachers are defined in detail on the DOL website and discussed later within this blog under the "Teachers" section.)
  • Private employers cannot satisfy their overtime obligations by providing compensatory time ("comp time").
  • The use of comp time instead of overtime pay is limited by the FLSA to a public agency that is a state, a political subdivision of a state, or an interstate governmental agency, under specific circumstances. (Some public universities or colleges qualify as public agencies.)
  • Overtime-eligible workers are not required to punch a time clock.  As long as they are complete and accurate, employers may use any method they choose for tracking and recording hours.
  • The FLSA does not require minimum or maximum hours for a shift, or prohibit split shifts.
  • The FLSA does not prevent a state from establishing more protective standards.  If a sate establishes a more protective standard than the provisions of the FLSA, the higher standard applies in that state.
  • Job titles never determine exempt status.
  • For the EAP exemption to apply, a white collar employee's specific job duties must meet the duties test even if the employee's salary exceeds the standard salary level.
  • The salary level is not a minimum wage requirement, and no employer is required to pay an employee the salary specified in the regulations, unless the employer is claiming an applicable white collar exemption.


There are three criteria, or tests, that must be met in order to claim a white collar or EAP exemption:  the salary basis test, the standard salary level test, and the standard duties test.  These tests are slightly different depending on whether an employee falls into the executive, administrative, professional, outside sales, computer employee, or highly compensated employee (HCE) category.  Therefore, we will examine each category separately.


Salary Basis Test Employee must be paid on a salary basis.  Up to 10% of the salary level may be satisfied with nondiscretionary bonuses or incentive payments.

Standard Salary Level Test - $913 per week or $47,476 per year for a full-year worker.

Standard Duties Test The employee's "primary duty" must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise.  Additionally, the employee must customarily and regularly direct the work of at least two other full-time employees or the full-time equivalent (FTE) thereof.  The employee must also have the authority to hire or fire other employees or the employee's suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees must be given particular weight.

Additional information related to the Executive exemption may be found at 29 CFR 541 Subpart B or WHD Fact Sheet 17B.  (WHD Wage and Hour Division of the United States Department of Labor)


Salary Basis Test Employee must be paid on a salary or fee basis.  Up to 10% of the salary level may be satisfied with nondiscretionary bonuses or incentive payments.

            Note:    If the employee is paid an agreed sum for a single job, regardless of the time required for

its completion, the employee will be considered to be paid on a "fee basis".  A fee payment is generally paid for a unique job, rather than for a series of jobs repeated a number of times and for which identical payments are repeatedly made.  To determine whether the fee payment meets the minimum salary level requirement, the test is to consider the time worked on the job and determine whether the payment is at a rate that would amount to at least $913 per week if the employee worked 40 hours.

Standard Salary Level Test - $913 per week or $47,476 per year for a full-year worker.  Academic administrative personnel may qualify with a salary at least equal to the entry salary for teachers at their educational establishment.

Standard Duties Test The employee's primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers.  Additionally, the employee's primary duty must include the exercise of discretion and independent judgment with respect to matters of significance.

Additional information related to the Administrative exemption may be found at 29 CFR 541 Subpart C or WHD Fact Sheet 17C.


There are four different types of exempt professional employees:  "learned professionals", "creative professionals", teachers, and employees practicing law or medicine.

       Learned Professionals

Salary Basis Test - Employee must be paid on a salary or fee basis.  Up to 10% of the salary level may be satisfied with nondiscretionary bonuses or incentive payments.

Standard Salary Level Test - $913 per week or $47,476 per year for a full-year worker. 

Standard Duties Test The employee's primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment.  The advanced knowledge must be in a field of science or learning, including law, medicine, theology, accounting, actuarial computation, engineering, architecture, teaching, various types of physical, chemical, and biological sciences, pharmacy, and other occupations that have a recognized professional status and are distinguishable from the mechanical arts or skilled trades where the knowledge could be of a fairly advanced type, but is not in a field of science or learning.  The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction, which means specialized academic training is a standard prerequisite for entry into the profession.

Creative Professionals

Salary Basis Test - Employee must be paid on a salary or fee basis.  Up to 10% of the salary level may be satisfied with nondiscretionary bonuses or incentive payments.

Standard Salary Level Test - $913 per week or $47,476 per year for a full-year worker. 

Standard Duties Test The employee's primary duty must be the performance of work requiring invention, imagination, originality, or talent in a recognized field of artistic or creative endeavor.  This includes such fields as music, writing, acting, and the graphic arts.


Salary Basis Test Does not apply.

Standard Salary Level Test Does not apply. 

Standard Duties Test Teachers are exempt if their primary duty is teaching, tutoring, instructing, or lecturing in the activity of imparting knowledge, and if they are employed and engaged in this activity as a teacher in an educational establishment.  Exempt teachers include, but are not limited to, regular academic teachers; kindergarten or nursery school teachers; teachers of gifted or disabled children; professors; adjunct instructors; teachers of skilled and semi-skilled trades and occupations; teachers engaged in automobile driving instruction; aircraft flight instructors; home economics teachers; vocal or instrument music teachers; and, under certain circumstances, athletic coaches and assistant coaches.  Preschool employees whose primary duty is to care for the physical needs of the facility's children would not meet the requirements for the exemption as a bona fide teacher.  Graduate and undergraduate students who are engaged in research under a faculty member's supervision in the course of obtaining a degree are not entitled to overtime because of an educational relationship rather than an employment relationship.  Also, the administrative personnel that help run higher education institutions and interact with students outside the classroom, such as department heads, academic counselors and advisors, intervention specialists, and others with similar responsibilities are subject to a special salary threshold that does not apply to white-collar employees outside of higher education.  Instead, they are not eligible for overtime if they are paid at least as much as the entrance salary for teachers at their institution.

Doctors and Lawyers

Salary Basis Test Does not apply.

Standard Salary Level Test Does not apply.

Standard Duties Test An employee holding a valid license or certificate permitting the practice of law or medicine is exempt if the employee is actually engaged in such a practice.  An employee who holds an academic degree for the general practice of medicine is also exempt if the employee is engaged in an internship or resident program for the profession.

Additional information related to the Professional exemption may be found at 29 CFR 541 Subpart B and WHD Fact Sheet 17D.

Outside Sales

Salary Basis Test Does not apply.

Standard Salary Level Test Does not apply.

Standard Duties Test The employee's primary duty must be making sales or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer.  "Sales" includes any sale, exchange, contract to sell, consignment for sale, shipment for sale, or other disposition.  It includes the transfer of title to tangible property, and in certain cases, of tangible and valuable evidences of intangible property.  Also, the employee must be customarily and regularly engaged away from the employer's place or places of business.

Computer Employee

Salary Basis Test Employee must be paid on a salary or fee basis unless the employee is paid on an hourly basis and receives at least $27.63 per hour.  Up to 10% of the salary level may be satisfied with nondiscretionary bonuses or incentive payments.

Standard Salary Level Test - $913 per week or $47,476 per year for a full-year worker or at least $27.63 per hour.

Standard Duties Test The employee must be employed as a computer systems analyst, computer programmer, software engineer, or other similarly skilled worker in the computer field.  The employee's primary duty must consist of:

  1. The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional specifications.
  2. The design, development, documentation, analysis, creation, testing, or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications.
  3. The design, documentation, testing, creation or modification of computer programs related to machine operating systems, or
  4. A combination of the aforementioned duties, the performance of which requires the same level of skills.

    Highly Compensated Employees

Total Annual Compensation Requirement - $134,004 in total compensation, including payment of at least $913 per week.

Salary Basis Test 100% of the standard salary level of $913 a week or $47,476 annually must be paid on a salary or fee basis.  The remainder of the HCE total annual compensation requirement may be paid in nondiscretionary bonuses or incentive payments (including commissions).

Standard Duties Test The employee's primary duty must be office or non-manual work.  The employee must customarily and regularly perform at least one of the exempt duties of a bona fide executive, administrative, or professional employee, as described in the regulations.  An employee who performs such exempt duties on an isolated or occasional basis will not satisfy this minimal duties requirement.


Employers have several options for implementing the updated salary level requirement established in the Final Rule:

  • Pay current salaries, with overtime pay after 40 hours.
  • Increase the salary of an employee who meets the job duties test to at least the new salary level in order to retain the employee's exempt status.
  • Adjust wages by reducing the amount of pay allocated to base salary (the employee would still have to earn at least the applicable hourly minimum wage) and add pay to account for overtime for hours worked over 40 in the workweek.  This action would hold total weekly pay constant.
  • Reorganize workloads, adjust schedules, or spread work hours in order to manage overtime hours.
  • Limit workers' hours to 40 per week.
  • Hire more entry-level employees, part-time workers, freelancers, and/or independent contractors.

OBJECTIONS TO FINAL RULE   As with any new rule or regulation, there are always objections.  We felt that two of the most noteworthy objections should be noted for the reader.

First, Speaker of the United States House of Representatives, Paul Ryan (R-WI), said in a statement, "This regulation hurts the very people it alleges to help.  Who is hurt most?  Students, nonprofit employees and people starting a new career.  By mandating overtime pay at a much higher salary threshold, many small businesses and nonprofits will be unable to afford skilled workers and be forced to eliminate salaried positions, complete with benefits, altogether.  For the sake of his own political legacy, President Obama is rushing through regulations-like the overtime rule-that will cause people to lose their livelihoods.  We are committed to fighting this rule and the many others that would be an absolute disaster for our economy."

Secondly, since our firm is a member of the American Institute of CPAs (AICPA), we would be remiss if we did not include the objection from AICPA president and CEO Barry Melancon:  "The AICPA has clearly and consistently outlined its concerns that the Department of Labor proposed rule will increase the administrative burden in complying with the regulations while dramatically increasing employers' payroll costs.  The proposed revisions fail to modernize or streamline the regulations, are not reflective of the realities of the modern workplace and a changing workforce, and would adversely affect both employees and employers.  DOL's modifications to the rule did little to lessen the likelihood that CPA firms and countless other businesses will be forced to curtail hiring-and may even have to reduce the size of their workforce.  The changes would have an especially negative impact on smaller accounting firms and the millions of small business clients they represent that simply cannot afford to raise their salaries for exempt employees above the new proposed threshold but also cannot afford to pay overtime to exempt workers.  As a member of the Partnership to Protect Workplace Opportunity-a diverse group of stakeholders including businesses and associations that represent millions who could be impacted by the proposed rule-we urge Congress to intervene in the process so that regulations governing overtime pay reflect the evolving workplace in a manner that is not economically counterproductive."

For more information on the Final Rule, please visit the DOL website at:


Posted on 05/25/2016 6:19 PM by Ronald K. Neal
Thursday, 12 May 2016
Negative Interest Rates

One of the most talked about financial issues in 2016 is the implementation of negative interest rates by foreign central banks for the purpose of stimulating their stagnant economies.  This deviation from historical monetary policy has caused many to scrutinize the reasons behind the move, opine about future ramifications, and speculate whether negative interest rates might be utilized in the United States. 


A negative interest rate is when a bank depositor pays interest to the bank for holding his/her deposits instead of the bank paying the depositor interest on the account balance.  Negative Interest Rate Policy (NIRP) is determined by a country's central bank.  The central bank manages the nation's currency, money supply, and interest rates and normally prints the national currency.


The Riksbank in Sweden was the first central bank to utilize negative interest rates in 2009.  The European Central Bank (ECB) implemented negative interest rates on June 5, 2014. The ECB further cut rates on September 4, 2014 and December 3, 2015. On March 10, 2016, the ECB reduced rates again, charging banks 0.4 percent to hold their cash overnight.  The Swiss National Bank (SNB) implemented negative interest rates on December 18, 2014.  And now, the Bank of Japan (BOJ) has joined them, announcing negative interest rates on January 29, 2016. Denmark and Switzerland are also experimenting with negative interest rates, with Sweden lowering its bank lending rate from a negative 0.35 percent to a negative 0.5 percent on February 11, 2016.

Arguments for Negative Interest Rate Policy (NIRP)

Some of the reasons foreign nations are experimenting with negative interest rates are to:

  • Stimulate an economy when other options have failed or produced lackluster results
  • Hold back the downward spiral of deflation
  • Lower borrowing costs for businesses and individuals, thereby increasing the demands for loans
  • Encourage investment in private sector businesses
  • Encourage consumer spending
  • Increase the value of the stock market
  • Devalue a nation's currency so that exporters will be more competitive
  • Create expectations of higher inflation, howbeit at a manageable level, which will motivate consumers to spend money now

Arguments against NIRP

Despite the arguments offered for negative interest rates, there are many more arguments that are against them. In a recent QuickTake, Jana Randow and Simon Kennedy indicated the following:

  • It's an unorthodox choice that has distorted financial markets and triggered warnings that the strategy could backfire.
  • "Negative interest rates are an act of desperation. They punish banks that hoard cash instead of extending loans to businesses or to weaker lenders.
  • "If banks make more customers pay to hold their money, cash may go under the mattress instead, robbing lenders of a crucial source of funding. But, there's mounting concern that when banks absorb the cost of negative rates themselves, that squeezes the profit margin between their lending and deposit rates, and might make them even less  willing to lend.

Charles Kane, a senior lecturer in international finance and entrepreneurial studies at the MIT Sloan School of Management, in writing for, notes that even a 0.1 percent negative rate on billions of dollars of deposits could mean the difference between profit or loss for a major commercial bank.  He points out that the European banks, especially the German banks, are already objecting to current negative interest rate levels.  His conclusion on negative interest rates: In the face of continually lowering growth estimates, persistently high unemployment, and a possible Brexit, this is the last thing Europe needs (Brexit is a slang term that refers to the possibility that Britain will pull out of the European Union).

Another argument against lowering interest rates below zero is that negative interest rates is just a euphemistic way of introducing a tax and, in effect, confiscating savings.  Christopher J. Waller, Executive Vice President and Director of Research for the Federal Reserve Bank of St. Louis calls it taxes in sheep's clothing.  He states that the tax has to be borne by someone in one of the following three ways:

  1. The banks can choose not to pass it on and just have lower after-tax profits.  This will depress the share price of banks and weaken their balance sheets by having lower equity values.
  2. The banks can pass the tax onto depositors by paying a lower interest rate on deposits or charging them fees for holding the deposits.  In either case, depositors have less income to spend on goods and services.
  3. The bank can pass the tax onto borrowers by charging them a higher interest rate on a loan or higher fees for processing the loan. In either case, it is more costly to finance purchases of goods and services by borrowing.

Mr. Waller concludes by stating, None of this sounds very stimulative for consumer spending.  But then, no tax ever is.

In an online piece for the New York Times, Neil Irwin warns that negative interest rates could cause damage to the very architecture by which money and credit zoom through the economy, and in turn inhibit growth.  Banks could cease to be viable businesses, eliminating a key way that money is channeled from savers to productive investments.  Money market mutual funds, widely used in the United States, could well cease to exist. Mr. Irwin goes on to quote Herve Hannoun, the former deputy general manager of the Bank for International Settlements, who in a speech last year stated that negative interest rates could over time encourage the use of alternative virtual currencies, undermining the foundations of the financial system as we know it today.

The most extreme consequence of negative interest rates could be the potential elimination of cash itself.  The case for 100 percent electronic transactions is usually sold to the public as a cure for criminal behavior or terrorism, increased cash flow efficiency, lower costs, and preventing tax evasion.  Some even outrageously tout the public health benefit of not touching viruses and bacteria that cling to cash bills. Satyajit Das, a former banker and author of The Age of Stagnation (Prometheus Books), in an article at claims that abolishing cash would require a revolutionary change because cash is still extensively used throughout the world and cash use is especially high among both poor and older people.  He also points out that security and operational risks, such as counterfeiting, cyber-hacking, and disruptions due to technology failures would be considerable.

Jason Scheurer, writing for, point blank states, You can have cash or you can have negative interest rates, but you can't have both.  He includes a graph that shows global debt has increased by over 57 trillion dollars since 2007, outpacing world Gross Domestic Product (GDP) growth.  He states that, The cold reality is that just paying the annual interest cost would be next to impossible for the majority of the world's governments.  And, Rather than dealing with the debt and slowing its growth to levels below the rate [of] inflation, the central bankers' solution is to instead destroy physical cash and punish savers.  He concludes this line of thought with, It is simply much easier for governments to reduce borrowing costs to below zero, eliminating those constraining interest payments, than admit they were wrong and reverse course.  He then includes six steps that have been taken to force the world into a cashless environment:

  1. It is illegal to buy anything in France costing more than 1,000 euros with physical cash.  This number is down from 3,000 euros just a few years ago.
  2. Spain has banned cash transactions above 2,500 euros.
  3. Italy banned cash transactions above 1,000 euros.
  4. Germany's Deputy Finance Minister, Michael Meister, wants a 5,000 [euro] cap on cash transactions.
  5. Former Treasury Secretary, Larry Summers, is calling for ending the $100 bill, and wants Europe to retire the 500 euro [note].  This would effectively remove over 50% of all physical currency currently in circulation in Europe and the U.S.
  6. The head of the European Central Bank, Mario Draghi, along with a growing list of former and current banking officials, is calling for ending the 500 euro [note].

Negative Interest Rates in the United States

With all the what-ifs related to the issue of negative interest rates, the burning question on everyone's mind is, Will the United States follow the world's lead and include negative interest rates in its monetary policy

Janet Yellen, the Federal Reserve chairwoman, in November 2015 stated that negative interest rates could be on the table should economic circumstances dictate.  However, the Fed raised short-term rates from a range of 0% to 0.25% to a range of 0.25% to 0.5% in December 2015 after rates had remained at almost zero since December 2008, citing the improving health of the economy.  Later, during congressional testimony on February 10-11, 2016, regarding negative interest rates, she stated, We are taking a look at them again.  But, Ms. Yellen did note two major issues that would need to be investigated.  One, the legality of negative interest rates "remains a question that we still would need to investigate more thoroughly.  Second, It's also a question of could the plumbing of the payment system in the United States handle it?  Ms. Yellen further stated, "Is our institutional structure of our money markets compatible with it? We've not determined that."

Jared Dillian, a contributor to, thinks that negative interest rates are possible, but unlikely.  He notes that former Federal Reserve Chairman Ben Bernanke also wonders about the legal implications of negative interest rates.  He notes the Fed is required to pay interest rates to member banks.  So, could the Fed get away with paying negative interest rates?  Mr. Dillian thinks the issue is not that simple and could even end up in court for years.


In determining the will they or won't they/should they or shouldn't they debate regarding negative interest rates, the two opinions in the following paragraph seem to have the proper perspective.

Dan Celia, host of the nationally syndicated radio talk program "Financial Issues", in a commentary for, stated, "We must have an economy built on strength and consumer confidence.  And the only way this can happen is for Central Banks and governments to stay out of it.  The government's only responsibility should be creating an environment that is good for the country."  He further states that, "We need to create an environment where the government or a Central Bank is not propping up anything."  Louis Rouanet, a student at Sciences Po Paris (Institute of Political Studies) seconds the argument in his blog asserting, "The allegation that negative interest rates are somehow natural or answering to the needs of the economy is absurd, and without the interference of central banks and governments, the negative interest rate topic would be non-existent."


Posted on 05/12/2016 5:49 PM by Ronald Neal
Monday, 2 May 2016
Healthcare Sharing Ministries

There has been much focus on the Patient Protection and Affordable Care Act (ACA), commonly referred to as Obamacare, since its passage in March 2010.  A Kaiser Health Tracking Poll in 2013 found that just 37 percent of Americans viewed Obamacare favorably.  However, there is one exemption or loophole in the federal legislation that almost gets no attention:  Congress allowed healthcare sharing ministries to continue as an alternative to the insurance mandate. The House did not intend to recognize sharing plans, but the provision was contained in the Senate version of the bill.  The House rushed to adopt the Senate bill to avoid further debate.  Therefore, the provision remained in the final version of the bill.

The legislation defines healthcare sharing plans as tax exempt, 501(c)(3) organizations whose members share a common set of ethical or religious beliefs and share medical expenses without regard to residence or employment.  The plans must also have been in continuous existence since December 31, 1999.

The three largest Christian plans are:

  • Christian Healthcare Ministries (CHM) of Barberton, OH.  Operations began in 1982.
  • Christian Care Medi-Share (CCM), a program of Christian Care Ministry, of Melbourne, FL.  Operations began in 1993.
  • Samaritan Ministries International of Peoria, IL.  Operations began in 1994.

All three plans have seen a dramatic increase in participating members since passage of Obamacare.  Many of the reasons given for joining include:  government interference in healthcare, rising cost of insurance premiums, concern over paying for plans that cover birth control and abortifacients, the astronomical cost of COBRA upon loss of employment, and the requirement to purchase insurance or pay a fine.  There also seems to be an increased desire among Christians to meet one another's medical needs.

All three plans require members to sign a statement of faith, use no tobacco products or illegal drugs, abstain from sex outside the confines of biblical marriage, and live by biblical principles in other aspects of life.  There are differing costs associated with differing options and there are rules on preexisting conditions.  For example, CHM offers individual and family plans from which a member may choose either a gold, silver, or bronze level of participation.  Gold level is most expensive with most coverage and bronze, likewise, is least.  (Disclosure:  Blogger is a Gold Level individual member.)  There is also a Brother's Keeper plan for catastrophic medical bills that exceed the $125,000 per illness sharing limit.  Ongoing bills from pre-existing conditions do not qualify for sharing, but members with these types of medical bills are placed on the Prayer Page of CHM's monthly newsletter.  Members may then give tax-deductible contributions over and above their monthly gift (premium) amounts to CHM to help cover these medical needs.

If you want more information on healthcare sharing plans, please visit the plan websites listed below:

Also, two articles of interest regarding healthcare sharing plans:

Posted on 05/02/2016 10:51 AM by Ronald Neal CPA Matheney Stees & Associates PC
Monday, 2 May 2016
FQHC Form CMS 224-14 and Upcoming Cost Report Due Dates

 The Centers for Medicare & Medicaid Services (CMS) has notified us that form CMS-224-14 has been approved.  Freestanding Federally Qualified Health Centers (FQHC's) with a cost reporting period beginning on or after October 1, 2014, must complete the new form for cost report submissions.
CMS approved an extension of the due dates for the impacted cost reports. The original due dates and the revised due dates are included in the chart below for your information.

Form CMS 224-14 Cost Report

  Schedule of Due Dates For Cost Reporting Periods

Cost Reporting Periods Beginning On or After October 1, 2014 and Ending on or Before:

Due Date

Revised Due Date




10/01/2015 through 10/31/2015



11/01/2015 through 11/30/2015



12/01/2015 through 12/31/2015



01/01/2016 through 01/31/2016



02/01/2016 through 02/29/2016



03/01/2016 through 03/31/2016



FQHCs that previously filed as part of a SNF facility healthcare complex (Form CMS-2540-10) or a HHA healthcare complex (Form CMS-1728-94) must now complete the FQHC form CMS-224-14.

In addition to this notice, Cahaba will send out a separate cost report reminder letter identifying the specific due date for your health center.

If you do not have a cost report prepare or would like to change please contact Bill Matheney or Meredith Cate to discuss what we can do for you.  We can also be reached at 423-894-7400 or 800-556-1076 extensions 105 and 112 respectively.

Posted on 05/02/2016 10:56 AM by Cahaba GBA