13 Aug

Big Week for Cookeville

Winston Churchill once said:

"Excellence is... caring more than others think is wise; risking more than others think is safe; dreaming more than others think is practical; expecting more than others think is possible."

The local primary/general elections were held last week and a number of local leaders, all striving for excellence, threw themselves into the painful political process. Some were rewarded and others were not. In the week before the election, we held a Candidate Forum that was an unprecedented success with over 75 in attendance. Hopefully, it was beneficial for our members and friends who were present to get to interact with a large number of candidates from several races in an informal environment. We truly appreciate all the candidates who attended and wish them the very best (both those who won as well as those who didn't) in the days ahead. Most of all, our hats are off too all of you who showed the willingness and desire to serve our community. I can't imagine you would do it for the pay!

An even bigger event occurred the morning after the election when Academy Sports and Outdoor made it official that they were coming to Cookeville. They plan to build a 1.6 million square feet fulfillment center and bring a minimum of 700 new jobs to our area. We've known we were in the running for this project for quite a while but most didn't know any details. A big thank you to all of the city, county, and state officials who made this happen for our area. Kudos as well, to all of us who stifled our natural tendency to want to gossip and speculate and risk loosing the project due to the company's competition getting wind of it! Everyone give yourself a pat on the back. By the way, this announcement also means that our fifth interchange will be accelerated!

Folks, this really could be one of the components that helps our community reach a tipping point that will mean quality of life improvement for many in this area. The announcement of a major company locating a logistics oriented operation here, along with strides being made by Dr. Oldham and TTU, the continued success of our medical community, and expanding cultural opportunities are the types of things that attract more companies and families to our area. In fact, there are already some other potential projects in the works. Winning begets winning!

Thanks and let's continue asking what we can do for our county...I mean country...I mean world.

13 Aug

My Robin Williams Story – Vitaliy N. Katsenelson, CFA

I was showing my eight-year-old daughter, Hannah, who Robin Williams was. She knew him as the voice of Ramon in Happy Feet (listen here) but had never seen his movies. We were browsing through YouTube videos and stumbled on a clip from a movie that brought back a lot of memories. Before I tell you about the movie I have to share with you a short excerpt. It is from the autobiographical preface I wrote for my book Active Value Investing. In that preface I told the story of how my family immigrated from Russia in 1991.

After the glasnost reform (transparency, openness) of 1985, the decades of brainwashing were slowly supplanted by the truth. In the late 1980s few people could afford VCRs, but little VCR movie theaters were popping up in basements of apartment buildings everywhere, comprised of several TV sets hooked up to a VCR. Unlike state-owned theaters, they were not censored and had the freedom to choose their repertoire. Picture and sound quality were terrible, as VHS tapes were copied dozens of times before they made it into a VCR. Movies were dubbed by one monotone voice that translated all characters.

But none of that mattered; we were hungry for variety, and American cinema was it. After watching hundreds of these flicks, it became painfully obvious that America and capitalism were not so rotten after all, and despite what my camp teacher told me, Americans did not really have any intention of poisoning little kids.

Moscow on the Hudson, starring Robin Williams, was one of the first movies I watched in one of those VCR basement theaters. Robin portrayed a Russian musician who came to NYC from Moscow and (almost by accident) defected. It showed his life as newly minted Russian immigrant in the Big Apple. For all of us watching it in basement movie theaters, it was an eye-opening movie. In just two hours it sanitized decades of Soviet propaganda about the US.

Robin Williams was flawless – we could totally relate to his confusion over how the real America was so different from the one painted by the Soviet brainwashing machine. Most of us were confused. We expected Americans to be evil, greedy, hamburger-loving Russian haters. We found them to be … well, people. Not so different from us. This movie had an enormous impact on me and on millions of immigrants who were blessed with a chance to come to the US.

Here is a great clip from Moscow on the Hudson.

I have shared “The Making of a Capitalist Pig” story with my readers in the past, but I am attaching it just in case you hit the delete button before you had a chance to read it.


I spent my youth in Murmansk, a city in the northwest part of Russia, located right above the Arctic Circle. Murmansk owes its existence to the port that, due to the warm Gulf Stream, doesn’t freeze during the long winters, providing unique access to Russia from the north. During the Cold War, Murmansk’s coordinates must have been on the speed dial of the U.S. military, as it is the headquarters of the Russian Northern Navy Fleet. Fans of Tom Clancy’s The Hunt for Red October may remember Murmansk as the home base for the submarine Red October

The city revolves around its port, and its academic institutions are geared toward producing a workforce for the fishing and merchant marine industries. It was always assumed that I’d attend either the Marine College or the Marine Academy. Both were semi-military schools where the students (cadets) had to reside in dormitories, wear navy uniforms, follow strict military-like rules, and take orders from navy officers (and ask no questions).

Russia has a draft army. It is not concerned about recruiting and thus treats its soldiers very poorly (an understatement). The pay is only high enough for soldiers to afford the postage to write home asking for money. Russian youth look at serving in the Russian army as akin to a two-year prison sentence (at least when I was there). The army avoidance in the late 1980s was not about fear of death, as the war in Afghanistan was over, but came from the dread of losing years of one’s youth and the dismay of humiliation, as the older soldiers commonly abused the younger ones. My very sane friend entered a psychiatric institution and faked mental disease just to avoid serving in the army.

My father and both of my older brothers graduated from the Murmansk Marine Academy. My father, a PhD, also taught electrical engineering at the academy for 27 years. Neither my brothers nor I had any dreams about being seamen. Quite to the contrary, my oldest brother could have been a philosopher (now he is a technology engineer); my other brother wanted to be anything but an electrical engineer (he is now a successful real estate broker in Denver). Our choices were limited: either attend one of these two semi-military schools or join the Red Army.

By the time I was finishing eighth grade, the law had changed: Cadets from the Marine Academy lost their draft exemption, but college cadets were spared. I enrolled in the Marine College and dreaded every moment I spent there, but the alternative was even worse.

Aunt in Siberia

My father has two younger sisters; one lived all her life in Moscow, while the other moved with her family from Moscow to Siberia in 1979. For a long time I wondered why my aunt and my cousins in Siberia never visited or called us. It seemed so uncharacteristic of our family, who were always very close. In the summer of 1988 my father finally told me that my aunt did not really move to Siberia — she immigrated to the United States of America. My immediate reaction was resentment toward her. The first words out of my mouth were “traitor” and “spy.”

It sounds a bit silly now, but you have to understand I was a child of the Cold War. A couple of times a month my class walked to the movie theater (this was before VCRs) and watched propaganda documentaries about decaying capitalistic America, infested with the homeless, where black people are lynched, the poor are exploited by the rich, and people are poisoned by hamburgers (later, of course, I learned that the part about hamburgers was not a complete lie).

Russian movies showed Americans as evildoers, usually spies whose single goal in life was to destroy Mother Russia — the whole country was brainwashed. When I was nine years old, I attended a pioneer camp and went on a field trip. A foreign tourist, mesmerized by my smile and internal beauty (okay, that is just a wild guess), gave me bubble gum. My camp teacher, in horror, took it away, yelling that I was lucky to be alive as it was probably poisoned.

My father was not at all surprised to hear the words “traitor” and “spy” come out of my mouth. He calmly explained that despite being well educated, his sister’s family had lived in poverty because they had faced the invisible anti-Semitic wall that is so often encountered by Jewish people in Russia.

He also explained that he hid the truth about my aunt’s whereabouts from us because the consequences of the truth leaking out to local authorities would have been dire. My mother and he could have lost their jobs, and my brothers and I would never be permitted to leave the borders of the country, which for (future) seamen would have been devastating. In fact, his sister who stayed behind was demoted due to my aunt’s departure for the United States; she was deemed guilty of betrayal by association.

Shame of Being Jewish

Though my parents always tried to shield us from anti-Semitism, I was often made aware that there was something wrong about me being Jewish. Even as a little child I often encountered a second-class-citizen attitude toward me.

Nationality was a mandatory line in Soviet passports and was a required disclosure on every application. When I was seven, my parents, hoping that I had a hidden music talent (I didn’t), signed me up for singing lessons. While filling out a standard application, the teacher asked me the usual questions: parents’ names, address, phone — and then nationality. I vividly remember being filled with shame, while staring at the ground, when I said, “Jewish.”

Russia was not South Africa under apartheid regime; there was no formal discrimination and segregation towards Jews. Though Stalin was going to send all Jews to the Far East, fortunately his timely death interrupted that endeavor. I’d be lying if said that we constantly felt anti-Semitism in Russia; we did not. It had sporadically touched parts of lives; some people were impacted more than others.

We were impacted even less by discrimination than most. Murmansk was a city of immigrants, a melting pot that came to life for the most part in the 1960s and 1970s. My father moved to Murmansk in 1952 from Moscow. Despite tutoring other kids in math, he failed the math admission exam in Moscow University. Of course, the real reason for failure was his “wrong” nationality; he actually aced the exam. Murmansk Marine Academy at the time could not afford to be choosy — Murmansk was in the middle of nowhere and accepted anybody who showed up.

I always thought of being Jewish as a nationality. Until my late teens I never related being Jewish as a religious identity. My parents and grandparents were not religious. The premise behind all organized religions was “debunked” by teachers at school in Soviet Russia from first grade forward. I don’t think “the God doesn’t exist, it is all a mass delusion” lecture was on the curriculum, but it sounded consistently the same from all teachers. My father says my teachers were just a product of their environment; he is probably right.

Come to think of it, I did not know a single religious person of any religion. My parents had a lot of Jewish friends which for the most part were either teachers, scientists or doctors, and none of them were religious. In reality, the Soviets just substituted one religion for another. They wanted to have a monopoly on the real estate in one’s brain that controlled one’s life goals and ambitions, and they did not want to share it with other religions.

Coming to America

After the glasnost reform (transparency, openness) of 1985, the decades of brainwashing were slowly supplanted by the truth. In the late 1980s few people could afford VCRs, but little VCR movie theaters were popping up in basements of an apartment buildings everywhere, comprised of several TV sets hooked up to a VCR. Unlike state-owned theaters, they were not censored and had the freedom to choose their repertoire. Picture and sound quality were terrible, as VHS tapes were copied dozens of times before they made it into a VCR. Movies were dubbed by one monotone voice that translated all characters. But none of that mattered; we were hungry for variety, and American cinema was it. After watching hundreds of these flicks, it became painfully obvious that America and capitalism were not so rotten after all, and despite what my camp teacher told me, Americans did not really have any intention of poisoning little kids.

Just a few years earlier it would have sounded absurd, but after my “Siberian” aunt’s invitation in 1990, we decided to immigrate to the United States. My father saw no future for us in Russia. On December 4, 1991, we landed in New York City. Our new and in many ways harder (at least at first) life started, and we never regretted leaving Russia.

Our coming-to-America experience lacks the color and drama one would expect. Pan Am oversold its coach class, we got a free upgrade, and we flew first class from Moscow to New York. In 1991 the road to new immigrants was already paved by the hundreds of thousands that came before us a few years earlier. So with the help of my aunt and Jewish Family Service (a terrific organization that helped tens of thousands of Jewish families successfully integrate), we were able to get on our feet relatively quickly.

I discovered that my English was worthless. It was good enough to buy a pack of cigarettes but beyond that, I could barely understand anything. Americans spoke in full sentences, not in separate words. But lack of language did not stop me from visiting every neighborhood fast food establishment in search for a job. I never got the fast food job, but I did get a job at a health club folding towels and cleaning locker rooms.

TV was a great educational tool. In fact, the show Married with Children is responsible for a good portion of my day-to-day vocabulary and Al Bundy for awhile was my role model (not too long though).

When we first arrived, we were not residents of Colorado and could not afford paying out of state college tuition rates. So I found myself going to high school to learn English. This was quite a shock considering I left Russia three months before my college graduation.

The rest of my American life was fairly straightforward. I was very fortunate to discover what I wanted to do (more accurately what I love to do) — investing. While enjoying the benefits of being single and living with my parents, I worked full time and put undergraduate and graduate degrees in finance under my belt. I got married. My wife and I have, thank God, wonderful kids. I figured the best way to learn is to teach, so I started teaching an investment class at the University of Colorado and write regularly for financial newspapers and websites.

We had a lot of great experiences in Russia – mainly from family and friends. But at the same time it was also full of injustice, powerlessness, discrimination, lack of choice, and Russian-like poverty. In America, our past was a great motivator and none of the problems we encountered felt insurmountable. We feel very blessed to be here.

Vitaliy N. Katsenelson, CFA, is Chief Investment Officer at Investment Management Associates in Denver, Colo. He is the author of The Little Book of Sideways Markets (Wiley, December 2010). To receive Vitaliy’s future articles by email or read his articles click here.

Investment Management Associates Inc. is a value investing firm based in Denver, Colorado. Its main focus is on growing and preserving wealth for private investors and institutions while adhering to a disciplined value investment process, as detailed in Vitaliy’s book Active Value Investing (Wiley, 2007).

3 Jun

Food for Thought






For those of you who have been saying that Ironwood had the bones to be Cookeville’s first great golf course/club, here’s your chance. Maybe there’s an investor group out there ready to take it on. Who know’s, maybe a high-end municipal course. Can you say Bear Wood?








4 Feb

Congressman Diane Black- Session Update

We had an excellent crowd for our session with Congressman Diane Black. If you
weren’t able to be with us, you missed a very informative session. Given
Congressman Black’s positions on the Ways and Means and Budget committees, we
were provided with some unique insight into the current tone in Washington.
Probably the most interesting part of the conversation was the potential for
significant tax reform both personal and corporate. In fact, Congressman Black
shared with us that the Ways and Means committee has actually hammered out the
language for both personal and corporate tax reform. This language would make
the code much simpler, more fair, and generally easier to contend with.  Their
goal is to generally lower the rate and allow 85 to 90% of taxpayers to actually
file on one page while being revenue neutral.  The corporate draft has already been put out for review. It lowers the top right to bring United States into line with other developed countries.

Another portion of the discussion was dedicated to addressing our $17 trillion
debt and ongoing budget deficits. She shared that two thirds of the budget is
dedicated to mandatory spending, particularly Social Security and Medicare.
Medicare itself began with approximately nine contributors for every consumer
in 1965. Today there are approximately three contributors for every consumer.
The system is also contending with much longer life expectancy than in the past. Any
real attempt to address a reduction of the natural national debt will have to
start without run and run away mandatory spending within the budget.

These issues were just some of the topics Congressman Black touched on during our evening together.  To stay up to date on the latest news and events concerning Congressman Black, visit her website http://black.house.gov/ for more information.  Most recently, she has discussed the House passage of the G. I. Bill Tuition Fairness Act and the local annoucement of Beretta to build a new R&D manuafacturing facility in Middle Tennessee.

We feel very fortunate to have had the opportunity to host Congressman Black and look forward to hearing from her again at a future Save the World session.

10 Jan

U.S. Congressman Diane Black to Visit January 22nd


U.S. Congressman Diane Black will be making a visit to the next Save the World session on Wednesday, January 22nd from 5:00-6:30PM at the Progressive Financial Center, Cookeville.  Black represents the Tennessee’s 6th Congressional District including Putnam County and 18 other counties in middle Tennessee.  She serves on the House Ways and Means Committee, House Budget Committee and has over 40 years of experience in the health care field.  Below is Black’s full biography. For additional information, as well as the latest news and events conerning Black, you can visit her website http://black.house.gov/.


As a nurse, small businesswoman and former educator, Congressman Diane Black brings a unique and dynamic perspective to her work in Congress. Diane’s faith in America’s promise was shaped from an early age. The middle daughter of working-class, Great Depression era parents, Diane saw firsthand their efforts to create a better life for their children through their pursuit of the American Dream.

First elected to Congress in 2010, Black represents Tennessee’s 6th Congressional District, which includes 19 counties in middle Tennessee. Black is driven by her Christian faith and an unwavering commitment to restore fiscal sanity in Washington, enact market-based health care reform, and return America to its founding principles of limited government and a strong free enterprise system.

Black serves on the House Ways and Means Committee and has quickly established herself as a leader in the efforts to fundamentally reform the U.S. tax code for the first time in over 25 years. Black is fighting for a flatter, fairer and simpler tax code to help create the conditions for economic growth, job creation, and higher wages for American workers. In the 113th Congress, Black was selected to chair the Ways and Means Education and Family Benefits Tax Reform Working Group.

Through her over 40 years of experience working in the health care field, Black learned first-hand about the importance of high-quality care and the obstacles faced by patients, health care providers and employers. Black’s real world experiences as a nurse have uniquely positioned her as a credible and effective leader on health care policy in Congress. She is focused on dismantling the president’s health care law and advancing true market-based, patient-centered reforms that will bring down the rising cost of care by increasing private sector competition and consumer choice. In the 112th Congress, Black was the first member of Congress to have legislation signed into law that repeals a health care provision in Obamacare, which saved taxpayers $13 billion dollars.

Black is also a member of the House Budget Committee, and a co-author of the 2014 Path to Prosperity budget, which balances the federal budget within ten years, reduces federal spending by $4.6 trillion, saves Medicare for future generations and promotes private sector economic growth. Black is a firm believer that getting America’s fiscal house in order also requires serious reforms of the broken Congressional Budget process. That is why she introduced the Legally Binding Budget Act, H.R. 1868, and has been a leading advocate for initiatives such as the Balanced Budget Amendment to the Constitution and the No Budget, No Pay Act, H.R. 325, which withholds pay from Congress if an annual budget is not passed by the legal deadline.

In October 2013, following the Senate Democrats’ first budget agreement in four years, Black was appointed to serve on the bicameral budget conference committee which seeks to reconcile differences between the House and Senate budget proposals. As one of only four House Republican conferees, Black will play an integral role in the ongoing negotiations to reduce the nation’s deficit and restore regular order to the budgetary process.

Building off her work in the Tennessee legislature as a pro-life leader, Black has continued to fight for the rights of the unborn. Her first piece of legislation in the 113th Congress, H.R. 217, would block any Title X federal funding from going to organizations that perform abortions, such as Planned Parenthood. Black is also the sponsor of the Health Care Conscience Rights Act, H.R. 940, legislation that would protect the religious freedom of health care providers who refuse to perform abortions and offers full exemption from the Health and Human Services (HHS) employee healthcare mandate that requires coverage for abortion inducing drugs.

Black and her husband of over 30 years, Dr. David Black have three grown children and six grandchildren.  They live in Gallatin and attend Community Church in Hendersonville.

Full Biography- U.S. Congressman Diane Black Website, http://black.house.gov

18 Nov

Affordable Care Act: What Does it Mean for Business?

By: Chris C. Owens

Whether you love it or hate it, supported it or didn’t, the Affordable Care Act is here to stay….at least for now. So what does that mean for employers; what do you need to know about the ACA? Well, there are a lot of answers to that little question; so, let’s begin at our present point on the timeline and look at it piece by piece. In 2014, we can expect several points of the ACA to come into effect.  Not every point will result in a direct compliance obligation for every employer, but will have some effect on each one, either directly or indirectly. The ACA is very much a numbers game and understanding the numbers is the only way to win.

So where to begin? Well, a good place to start would be employer size. Because the ACA mandates that all large employers provide fair and affordable coverage to its employees, a determination of size must be made in order to determine whether or not this mandate is applicable to you. The ACA defines a “large” employer as any employer who employed an average of 50 or more full time equivalent employees on business days during the preceding calendar year. So how do we determine whether or not we have 50 employees? Well, for the purposes of this calculation, the key word is equivalent. The ACA says that any employee who works an average of 30 hours per week is considered full time. But the law isn’t just looking for what is traditionally considered full time employees; but rather, it’s looking for full time equivalent employees. The ACA requires an employer to add together the total monthly hours of all part time employees and divide by 120. This formula will give an employer his number of monthly full time equivalent employees. Add this number together with the total number of regular full time employees, and an employer will arrive at his total number of full time employees. This is the number used to determine employer size under the ACA. If you get to 50 after these calculations, then the mandate applies to you and, under the law, you will have to provide fair and affordable coverage to your employees or be penalized. One thing to note, the employer mandate has been postponed to take effect until January 1, 2015; however, it’s a good idea to begin these calculations now as these numbers will be used for determination in 2015.

Now that we know our numbers, we can do some extrapolation based on what we know. If you have reached the magic number of 50 full time equivalent employees then you must comply with the employer mandate. Fair and affordable coverage must be offered to all of your full time employees. Sounds easy, right? Well, maybe, but compliance doesn’t stop here. Now we need to look at the type of coverage offered; meaning, the actual benefits within the plan. Beginning in 2014, ACA regulations require all individual and group health plans to provide an essential health benefits package. Compliant plans must include a list of ten comprehensive benefits, to include maternity and newborn care and pediatric oral and vision care. Keep in mind, the essential benefits package is non-negotiable; it must be included in every plan offered, whether it’s needed and wanted or not. Making sure your plan includes this will keep you within the letter of the law. Next, your new plan must meet the mandated minimum of a 60% actuarial value. Simply put, your plan must pay for at least 60% of covered medical expenses incurred within the plan. Finally, the plan offered must be deemed affordable. And what constitutes affordable? Well, the employee only portion of the yearly premium cannot exceed 9.5% of his or her modified adjusted gross income. Because there is no way for the employer to truly know what an employee’s total household income is, the employee’s income, alone, may be used for the purposes of calculating the affordability of a plan. Here are a few considerations to remember. As an employer that doesn’t comply with the mandate, you will be fined $2000 per employee, minus the first 30, per year. For example, you have 50 employees and you don’t comply, you will pay $40,000 per year in fines (50-30=20, 20 x $2,000=$40,000). On the other hand, if you do offer a plan but it doesn’t meet the criteria set forth within the ACA, you will be fined $3000 per employee, minus the first 30, per year. Back to our example, you still have 50 employees but your plan doesn’t comply then you will be fined $60,000 per year (50-30=20, 20x$3,000=$60,000). Remember, it’s a numbers game.

But what if you didn’t reach the magic number of 50 full time equivalent employees? What will you have to do in this situation? Well, the short answer is nothing. There are no requirements with which to comply. However, the ACA, to some degree, does incentivize small employers to offer qualified health coverage to its employees. For tax years 2014 and beyond, employers who purchase coverage through the state exchange will be able to claim a tax credit of up to 50% of the employer’s contribution toward the employee’s health insurance premium, provided the employer contributes at least 50% of the total premium cost. This credit is available to businesses employing less than 25 people, have average annual wages of less than $50,000 per employee, and will be available for two years. Businesses with 10 or fewer full time employees and have average annual wages of less than $25,000 per employee may claim the full credit. The credit will phase out as firm size and average wages increase; therefore, it won’t always be available.

So far we’ve covered the direct effects from the ACA that businesses can expect in 2014, but what about the indirect effects? These are a little more subjective, but sound arguments, nevertheless. Beginning in 2014, the ACA imposes an “annual fee” on the fully insured market that serves most small business employers and those who purchase individual policies. You and I would call this a “tax”, and, for the purposes of this discussion, we should keep in mind who really pays taxes imposed on business. In 2014 the amount of that fee will be 8 billion dollars, distributed across health insurers. 2015-16 will see a fee of 11.3 billion dollars, 13.9 billion in 2017, and 14.3 billion in 2018. After 2018 the fee will increase according to an index based on net premium growth. This fee (tax) will almost certainly be passed through to the consumer in the form of higher premiums, creating a perpetual increase in premiums year after year. After all, as premiums increase, the fee increases…and as the fee increases, premiums increase. According to the CBO, self-insured plans will be mostly exempt from the fee, leaving the burden to be primarily borne by small business and the self-employed. And that’s just one way premiums will likely increase as a result of this fee. Another is from a likely move by insurers to offset an increased liability in corporate income taxes incurred as a result of  increased premiums collected.  Let’s look at an example.  Douglas Holtz-Eakin explains it this way: an insurer responds to a $1,000,000 fee by raising premiums by $1,000,000, thereby incurring $350,000 in corporate income taxes (35% x $1,000,000). In turn, the after tax profits of the insurer will drop by $350,000. If, instead, the insurer raises premiums by $1,538,462, it will incur a corporate tax liability of $538,462 (35% x $1,538,462), completely offsetting the tax. The corporate tax will likely amplify the total impact of this annual fee by approximately 54%, according to Holtz-Eakin. $87.4 billion in first decade taxes could result in $134.6 billion in premium increases. The law of unintended consequences is in full force!

This has been a short summary of what businesses can expect for 2014. What I’ve written is only an abbreviated version of what the ACA has planned for the immediate future. Further guidance and closer examination concerning the ACA and your business is available by contacting Cravens&Co, LLC.


1 Oct

Affordable Care Update – Notice to Employers

By: Pugh CPAs

As the various effective dates for the Patient Protection and Affordable Care Act (ACA), commonly referred to as Obamacare, are approaching, we are attempting  to inform our clients about the new law, its effects on employers, and actions they need to take. Presently, many aspects of the Act   need clarification from the regulatory authorities, especially administrative issues. Nevertheless, most employers will be required to send a notice to their employees regarding the existence of the “Marketplace” (the Exchanges) and its features by October 1 of this year. Moreover, please note that although a portion of the Obamacare mandate has been delayed until 2015, the deadline of Tuesday, October 1, 2013 to notify employees about the Marketplace has not been delayed.

The Patient Protection and Affordable Care Act (ACA) requires employers subject to the Fair Labor Standards Act (FLSA) to provide a written notice to employees about the new health insurance exchange by Tuesday, October 1, 2013. The FLSA applies to governmental, not-for-profit and for-profit entities as described in Technical Release 2013-02. There is a link under section III (A) of this webpage to assist taxpayers determine the applicability of the FLSA. The notice must also be provided to employees hired after Oct. 1, 2013, within 14 days of their start date. Employers must provide the notice to all employees regardless of their status as part-time or full-time or whether they are eligible to enroll in an employer-sponsored health plan. Employers are not required to provide a separate notice to spouses or dependents of employees.

The notices must be sent to employees via first class mail or approved electronic delivery. The notice cannot be handed out at a staff meeting or similar company-wide gathering or be emailed unless each employee has a specific business email address and a dedicated computer at the office that is not shared. Merely posting a notice on the employer’s website will not, by itself, be sufficient to satisfy the notice requirement. Employers also need to provide a written or electronic notification to employees directing them to the website and describing the significance of the health insurance exchange notice. In addition, employees must be advised of their right to request a paper version of the exchange notice.

The exchange notice must be written in a manner that will be understood by an average employee and must advise employees of the following:

  • The existence of the exchange (also known as a marketplace), including a description of services provided and information on how employees can contact the exchange for      assistance
  • Employees may be eligible for a premium tax credit if they purchase health insurance through the exchange and if the employer’s health plan (if any) fails to meet certain standards
  • Employees will lose the employer’s contribution (if any) to any health plan the employer offers, including the tax-favored treatment of such contribution (e.g., that it may be excluded from federal income tax), if the employees purchase health insurance through the exchange

The Department of Labor (DOL) has provided two model notices, one for employers that do not currently offer any health plan options and another for employers that currently offer a health plan to some or all employees. The DOL has indicated that employers are not required to use these models and thus can modify any part of them, provided the exchange notice meets the content requirements described above.

Because Part A of the DOL model notices contains standard information designed to meet the content requirements, it is anticipated that most employers will use Part A of the model notices. Part B contains specific information about the employer and its health plans (if any). Therefore, employers will need to decide if they want to include any of the Part B information in their exchange notice.

With regard to the minimum value and affordability standards, an employer’s health plan meets the minimum value standard if the plan’s share of the total allowed benefit costs covered by the plan is at least 60 percent of such costs. A plan meets the affordability standard if an employee’s cost for self-only coverage does not exceed 9.5 percent of the employee’s household income. Employers may use the employee’s rate of pay or W-2, Box 1 wages as a safe harbor for household income. Employees who are offered health plan coverage by their employer that meets the minimum value and affordability standards are not eligible for premium tax credits on health insurance coverage they purchase on the exchange.

The Department of Labor has indicated there is currently no penalty for failing to provide this notice. However, if you are subject to the FLSA (1) we recommend printing out the forms from the links above and mailing them to your existing employees’ home address of record on or before October 1, 2013 and to any new employees within the first 14 days of employment. See discussion above for possible electronic delivery methods.

If you have any questions or concerns, please contact us at 931-528-6865.

Thank you for the opportunity to serve you.

(1) Most employers with at least one employee and $500,000 in annual gross receipts will be subject and some will be subject even if they do not meet the gross receipts testWe hope you enjoyed hearing our perspective and we thank you for your continued support.  Feel free to call with any questions or concerns.

If you would like to receive other updates from us or would like information about our services, please email us at info@cravensco.com or call (931) 528-6865.  We look forward to continuing to serve you.

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10 Sep

Session Update- Moving Forward

Our last meeting solidified the shift away from an “idea only” group to one focused on action.  To that end, we will be forming a steering committee that will help us to redefine our mission statement and identify key initiatives that we feel can be impactful in helping to elevate the attractiveness of our community and the quality of life for its citizens. If you would like to be a part of this committee please let us know.  We will discuss this more in depth at our next meeting on Wednesday September 11th- 5:00pm at the Progressive Financial Center, Cookeville.

31 Jul

Session Update- Taking Action

It was another productive week at Save the World, as we continued our ongoing discussion regarding the Highlands Initiative III.  At our last session we heard from Arty Allen, CEO of Live Oak Community Development, who shared with us the goals of the initiative and the strategic process to attaining economic growth in the community.  This session, we took a step further, and openly discuss how our group can specifically take action towards making the Highlands Initiative III a success.

Our conversation remained focused on the specific issue of how we can attract new industry to the area.  It was stated that 40% of engineers in the state of TN, graduate from Tennessee Tech.  There is no doubt TTU provides our region with a high level of engineering graduates, but how do we attract new businesses that will keep them local?  It was agreed, there must be a thriving job market that will specifically attract and retain this higher per capita income group to the region.  This would be a strong first step to boosting the economic development in the community.

We heard from George Halford, President of the Cookeville Chamber of Commerce.  He updated us on the future of the initiative and remains very optimistic that we are headed in the right direction.  He continues to be extremely impressed with the commitment from TTU and their desire to help facilitate growth in our area. It is imperative we continue to capitalize on our strengths such as TTU and CRMC to help us move forward.

The Highlands Initiative III will be successful if we remain specific and focused on the steps we must take to initiate change.  The community needs to remain informed and as Joe Albrecht  said, “we must always be telling our story.”  It was discussed, there needs to be a strong relationship with our local media, to ensure the community and those outside of it, are aware of the steps that are being taken to develop this initiative. The Cookeville Chamber continues to provide excellent tourism and marketing resources to illustrate the quality of life that is offered to those who choose to visit or make this region their home.

Please feel free to comment below or email us at info@savetheworld.us.com with any suggestions or ideas that can help us better our community and the success of the Highlands Initiative III.

Our next session will resume on Wednesday, August 14th -5:00pm at the Progressive Financial Center in Cookeville.  Hope to see you there!

15 Jul

Session Update- Arty Allen

Arty Allen- CEO, Live Oak Community Development

Arty Allen- CEO, Live Oak Community Development

We appreciate all who were able to attend last week’s Save the World.  Mr. Arty Allen, CEO of Live Oak Community Development, facilitated an informative discussion regarding the Highlands Initiative III.

Mr. Allen gave us great insight on his strategy to help improve job creation and economic development in our community.  He believes we need to focus our attention on the assets currently available in our community and evaluate which companies are growing quickly in our region.  Tennessee Tech University and CRMC offer a strong foundation for attracting new industry; however, there needs to be a specific focus as to how these assets can be fully utilized.  It was agreed we must stay committed to a strategic timeline to ensure this initiative is achieved.

In order to grow, we must first define our community’s cultural focus.  Mr. Gordon Martin proposed the idea of expanding our music and art scene in the Upper Cumberland, considering our geographical proximity to Nashville.  Cookeville Mayor Matt Swallows, suggested having a music and arts council that would help to bring local acts into the area. Those who were in attendance agreed that establishing a more influential music and arts scene would be the right step towards creating an attractive place to live, work and visit.

Our next Save the World session will be held on Wednesday July 24th@ 5:00pm- Progressive Financial Center, Cookeville. We hope to see you all there!

Have a great week!