Zillow enters home improvement space
Zillow has launched an iPad app and a website focused on the home improvement marketplace to provide inspiration, price transparency and lead generation for contractors.
Seattle-based Zillow disrupted the real estate industry seven years ago when it introduced a home valuation service and it quickly because a household name in the real estate information world. The company’s new service, called Zillow Digs, looks to leverage the large number of consumers who are using the Zillow website and predisposed to home improvement projects to provide inspiration and connect them with professionals who can perform the work.
“Tens of millions of home buyers shop for homes on Zillow each month, and home improvement is a natural next step for us in consumer empowerment and transparency of information to help people make smarter decisions,” said Zillow CEO Spencer Rascoff. “I’m also excited to introduce a revolutionary new tool for consumers: Digs Estimates. This first-of-its-kind remodeling cost estimate algorithm was created by Zillow’s industry-leading team of economists and data analysts who produce extensive housing data and research.”
The goal of Zillow Digs, beyond providing home shoppers and homeowners visual inspiration and an understanding of the cost of remodeling projects, is to show the estimated cost of thousands of real bathrooms and kitchens. Those costs are based on a proprietary algorithm which includes real-world data from local contractors such as size, materials, finish level, and regional labor and material rates. Armed with such information, Zillow contends home shoppers and homeowners will be able to create more realistic budgets appropriate for their specific market.
In addition, users can browse tens of thousands of photos and see actual costs for where they live of the projects being viewed. The platform also enables the creation and sharing of ideas and provides a way for people to connect with others, comment on projects and follow those with similar interests. Home improvement professionals can create a free Zillow Digs profiles with contact information, photos of past work and a link to their website. Professionals also can market their expertise and their business by creating Boards, commenting on others’ photos and answering questions.
Making the ‘play or pay’ decision
As key provisions of healthcare reform under the Patient Protection and Affordable Care Act (PPACA) move closer to implementation, employers need to consider how they will respond. More specifically, employers with 50 or more full-time equivalent employees need to decide whether they will “play” by continuing or beginning to offer affordable health benefits to employees working an average of 30 hours or more per week in a month, or “pay” the penalties for not offering affordable benefits.
However, as employers begin pondering these questions, the answer is not necessarily as straightforward as some expected. More than a few employers, it seems, are maintaining the status quo on their health benefit programs and focusing on making sure that their health plan offerings meet the affordability and other requirements under the PPACA.
These employers are not necessarily making a long-term commitment to providing health benefits to employees. Instead, they are postponing a decision until they see:
- How difficult and costly it is to comply with the “shared responsibility” provision requiring that employers provide coverage to all full-time equivalent employees.
- How the state health insurance exchanges will operate and what types of plans they will offer at what prices.
- The impact of all of these changes on the overall cost of health benefits.
All aspects of PPACA compliance will be very specific to the employer involved. Everything from differences in employee demographics and income levels, to hours worked, to benefits strategy will have a tremendous impact on compliance and decision making. However, there are a few key things for all employers to keep in mind.
Affordability is key
It is not enough for employers to begin or continue offering health benefits to employees to avoid penalties under the PPACA. That coverage must provide “essential health benefits” as defined by the U.S. Department of Health and Human Services, and it must be deemed “affordable,” or the employer could be subject to penalties under the shared responsibility portion of the law.
“Affordability” in this case means that an employee’s cost for self-only coverage should not exceed 9.5 percent of the employee’s W-2 wages from the employer.
If the lowest priced health plan the employer offers does not meet this threshold for every employee, the employer must pay a penalty of $3,000 for each employee who becomes eligible for federal subsidies when he purchases coverage through one of the government-run health insurance exchanges scheduled to launch in 2014.
“All employers should consider introducing a high-deductible health plan, then making sure that they are subsidizing it enough so that it is affordable (under the law),” said Kate Saracene, a labor and employment counsel with law firm Nixon Peabody LLP.
However, an employer mindful of costs does not need to do more than necessary to satisfy the law’s affordability requirements. For example, an employer with a large population of very highly paid employees making, say, $100,000 per year and a much smaller population of lower-paid employees making $20,000 per year may want to vary the amount it subsidizes plan costs by income level, so that it complies with the 9.5 percent affordability requirement for each eligible employees while avoiding unnecessarily higher costs.
Moreover, in some cases paying the penalty for not providing “affordable” plan options to those lower paid employees may be less expensive than keeping the subsidy within the required 9.5 percent of income.
Over time, health care reform is likely to shift perception about health coverage. “The standard of coverage could become lower based on the availability of the public exchanges and the types of plans those exchanges will offer,” said Christopher Calvert, senior vice president with Sibson Consulting. At some point, “employers may have an opportunity to adjust their coverage to a more affordable level for themselves.”
Don’t forget taxes
One of the most attractive elements of employer-provided health benefits is that they are tax-free to the employee and tax-deductible to the employer. If employers decide to stop offering affordable coverage or to stop offering health benefits at all, any resulting penalty they pay under the PPACA’s shared responsibility provision will not be tax-deductible to the employer. Moreover, if employers increase employee compensation to make up for those lost benefits, that additional compensation will be taxed just like any other regular income, making the additional pay less valuable than the tax-free benefits they are replacing.
Employers that are considering whether to continue offering benefits or to begin doing so if they have not offered benefits in the past need to consider the value of the health benefits’ tax deductibility when making their cost calculations. “These employers should talk to a broker about the cost of offering a plan with just enough of a subsidy to make that coverage affordable under the 9.5 percent shared responsibility rule and then compare it to the cost of paying the penalty for not offering coverage,” said Saracene. “I would not be surprised if many employers can still save money by offering affordable coverage” rather than paying the penalties. In other words, if coverage costs as much or even more than the cost of the penalties, coverage still may be the more affordable option when the tax consequences are factored in.
Track hours carefully
The number of hours worked determines whether an employee is eligible for health coverage, so it is important for employers to track these hours carefully. Once again, the devil is in the details. Disability pay, paid time off, prorated periods for family or medical leave, military leave and so on must all be calculated and considered when determining if an employee has worked enough hours to be considered eligible for health benefits. “This can be really hard math,” said Saracene. “I have not seen anyone step up with a program to crunch the numbers and tell you who is a full-time employee according to how many hours your people have worked.”
In addition, employee status does not necessarily matter when making these calculations. For example, temporary or per-diem workers are eligible for health benefits if they meet the hours-worked requirement. For this reason, employers will need to be more diligent when it comes to tracking employee hours than in the past. Everyone from full-time to part-time salaried workers to commission salespeople will need to track their hours and submit time cards.
However, there does not appear to be any legal restriction against cutting employee hours to keep them below the 30-hour threshold for benefits. Still, employers that take this approach need to prepare for potential negative reaction to that approach both inside and outside the company.
Be ready for evolution
The decisions and actions employers take in the next couple of years are not irrevocable. Once the state health insurance exchanges are up and running and become a stable and viable option for coverage, “there is a high likelihood that more employers over time will move into the pay (penalties) category rather than the play (by offering health coverage) category,” said Calvert. “At some point, employers need to rise above the details of health benefits and health care reform and think clearly about the value proposition they are offering employees.”
Joanne Sammer is a New Jersey-based business and financial writer.
©2013 SHRM. All rights reserved.
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LG introduces allergy-friendly washer
LG Electronics USA has launched what it claims is the industry’s first top-load washer with steam technology certified "asthma and allergy friendly" by the Asthma and Allergy Foundation of America (AAFA).
In addition, the new high-efficiency top-load washer is designed to deliver superior high-efficiency performance, offering uniquely gentle but deep cleaning capabilities, with the added benefit of odor reduction, the company said.
During the exclusive LG "Allergiene" cycle, steam gently but powerfully penetrates fabrics for a deeper clean and allows for the reduction of allergens and wrinkles, the company said.
"LG is proud to be the first in the industry to bring these new technologies to top-load washers," said David VanderWaal, director of home appliance brand marketing, LG Electronics USA. "LG pioneered the use of steam in home laundry, and this new top-loader exemplifies our commitment to enhancing consumers’ lives through the powerful combination of smart and steam technologies."
The new LG top-load washer and its companion gas or electric dryers are available now through selected U.S. regional dealers and expected to become available nationally during the second quarter.