IBAW December 2017 Magazine

DECEMBER 2017 December 11th

Sales Roundtable

December 15th

“Sales Process for Success: A Focussed Approach”

Inside This Issue:

ROCHESTER: BUSINESS LEADERS URGE CONGRESS TO REPEAL OR DELAY HEALTH INSURANCE TAX BEFORE END OF THE YEAR

MCKENZIE: CAN I PAY WORK COMP CLAIMS OUT OF POCKET

KEATING: SENATOR RAND PAUL NAILS IT ON TAXES

Networking matters

At AT&T, we know that making connections is critical to success. In Wisconsin and across the nation, we link businesses with their customers and the world through our wireless network with access to the nation’s largest Wi-fi network. It’s just another way we help our customers stay connected.

AT&T is proud to support the Independent Business Association of Wisconsin.

© 2014 AT&T Intellectual Property. All rights reserved.

IBAW thanks AT&T for it’s continued sponsorship.

MEDIA LINK Hutton Apprenticeship Bill Helps Expand Skilled Trades Workforce

Executive Director Steve Kohlmann President Dan Hansen Secretary Charles Fry Baird Treasurer Tony Palmen Sikich Directors Jim Leef ITU AbsorbTech Ann Barry Hanneman Von Briesen Law Office John Weber Hypneumat

Rep. Rob Hutton (R-Brookfield) explains his legislation that allows more skilled trades workers into the workforce by reducing an apprentice-to-journeyman ratio to 1-to-1 unless negotiated otherwise.

To watch, click here.

Video courtesy of the MacIver Institute.

Jeff Hoffman Boerke Co. Lisa Mauer Rickert Industries Tom Boelkow BSI Design, Build, Furnish Robert Gross Gross Automation Scott Seroka Seroka Brand Development Tom Parks Annex Wealth Management Jake Hansen Jacsten Holding Scott Hirschfeld CTaccess

IBAW Mission: To advance business prosperity through insightful programming, executive networking and member-driven public policy and advocacy.

Monthly Meeting: AN IBAW EXCLUSIVE!

Presenter: Dave Steele, CEO, PAVE

Erik Buell is a pioneer of modern race motorcycle technology and was the founder, former Chairman and Chief Technical Officer of the Buell Motorcycle Company, which eventually merged with Harley-Davidson Corp..

In November 2009, Mr. Buell launched Erik Buell Racing (EBR), a firm essentially focusing on developing race-machines based on the Harley-Davidson engine platform featuring new ground breaking technologies for the motorcycle industry.

Join us for a morning of business innovation, success...and challenges...sure to inspire you.

Register at IBAW.com LOCATION

THE WISCONSIN CLUB 900 W. WISCONSIN AVE. MILWAUKEE

7:00 AM

REGISTRATION & NETWORKING

7:30 AM

BREAKFAST & PROGRAM

9:00 AM

PROGRAM ENDS

Tax Reform Bill: Take The 3 Points Steve Kohlmann, IBAW Executive Director

The long awaited Tax Reform Bill has left the The Senate Finance Committee and is on the way to the full Senate for debate. Will it pass the Senate? Not sure. It’s going to be a close vote.

Wisconsin Senator Ron Johnson stated in the past several weeks that he wasn’t fully onboard with the bill citing that it didn’t do enough for small business. He made it very clear that he couldn’t vote for the bill in its present form unless small business got a better break.

Senator Johnson is right, the bill doesn’t do enough for small business.

Small business accounts for a huge amount of this nation’s economy and unfortunately this bill doesn’t do enough to address that. But that’s not a reason to vote NO here and to scrap bringing the corporate tax rate from 35% down to the proposed 20% which would keep more jobs and corporate headquarters here in the United States and not move them offshore where other countries have lower rates.

But the news isn’t all bad for small business.

The House plan lowers the top rate from 39.6 percent to 25 percent for small businesses that operate as a pass through, (LLCs, S-Corps, partnerships). A large percent (about 95%) of American small businesses are organized this way. There are a lot of other advantages to the bill and I’m not going to get into all of them in this column. If you want a more at what’s in the bill, Jim Brandenburg of Sikich has an article in this issue which goes into greater depth and details of the bill.

The Republicans ran on two major platforms in the last election; Healthcare Repeal and Replace and Tax Reform. They failed miserably on repealing Healthcare and now we’re enjoying fewer choices for healthcare coverage and paying more for it. To come up short on Tax Reform would be a major blow.

Let me use a football analogy: The Tax Reform Team needs to get some points on the scoreboard.

To continue the analogy it would be like the Packers playing the Vikings and the Packers march down the field to the 32 yard line but are unable to get into the end zone for seven points - now it’s 4th & 9. Instead of kicking a field goal and taking the 3 points, the Packers decide they are unhappy with their situation and are going to let the Vikings take over the possession. Does that make sense? Of course not.

Like it or not, politics in Washington D.C. is a lot like football. There are touchdowns, incomplete passes, interceptions and fumbles (lots and lots of fumbles.) But politics - like football - is a game of inches and one should take the 3 points if 7 points are unobtainable. On the next possession you can reset your offense and once again attempt a touchdown.

That’s how it works in football - and politics.

Merry Christmas and Happy New Year!

Wishing You Peace, Joy, Good Health and Much Success this holiday season and throughout the coming new year!

IBAW in 2017...

Senate Takes Big Step Forward for Mining Jobs The Wisconsin State Senate recently approved a bill making mining jobs closer to reality in Wisconsin. AB 499, repealing Wisconsin’s mining restrictions, was approved by state representatives in the Senate by a 19-14 vote.

Months earlier, IBAW Executive Director Steve Kohlmann, testified before a public committee hearing in favor of this legislation commenting; “While Foxconn has recently lead the headlines for job creation, we must not forget there are other parts of the state that depend on employment. Particularly for northern Wisconsin, not all employment can, or should, be related to tourism. Mining - and all the ancillary jobs that support that industry - play an important role in Wisconsin’s supply chain economy. We need to afford the rural communities of upper Wisconsin the economic opportunities needed to retain its young people in order for those communities to remain vibrant and eliminate the talent drain.”

The bill, authored by Sen. Tom Tiffany and Rep. Rob Hutton repeals requirements that made it nearly impossible to mine in Wisconsin.

Direct Primary Care On Monday, Representative Sanfelippo and I introduced a bill to allow doctors and patients to contract directly for primary care. The direct care model allows doctors to forego insurance contracts and deal directly with patients, often charging a monthly fee for primary care and medications. The doctors will list their prices for procedures up front, which are often significantly lower than under the standard model. Our bill would allow direct primary care agreements for anyone as well as directs the Department of Health Services to create a plan to implement this model for Medicaid recipients as well. According to the Legislative Fiscal Bureau, Medical Assistance payments have ballooned from $4.7 billion in 2004 to $9.2 billion in the 2016-17 fiscal year. By adding direct primary care to Medicaid, we could drive down costs as much as 20 percent, saving taxpayers hundreds of millions of dollars.

Direct primary care models incentivize patients to go to a primary care physician rather than use the emergency room for routine care. Our Medicaid programs have rampant Emergency room abuse, which drives up the cost of care. The state is currently spending $56 million dollars annually on Medicaid recipients who use the ER more than 7 times a year. This bill attempts to use market forces to reduce the cost of primary care and incentivize patients to contract directly with a doctor for services rather than clogging up emergency rooms.

I am looking forward to working on this legislation and seeing it through the legislative process.

Tax Reform Pushes Forward in Congress Bill Passes the House and Moves Ahead in Senate Jim Brandenburg, Sikich

HOUSE ACTION The first major vote on tax reform is over. The House passed its tax reform legislation bill, also known as the “Tax Cuts and Jobs Act” (H.R. 1) on Thursday, November 16, 2017 by a vote of 227-205. The vote was along party lines, and there were no changes to this House tax bill that was passed by the House Ways and Means Committee on November 9, 2017. The House now awaits floor action in the Senate.

SENATE ACTION The Senate Finance Committee (SFC) has been meeting all week on its tax plan that was unveiled on November 9, 2017. The SFC was planning to complete work on its tax bill and vote on the bill today, but they finished late last night (November 16, 2017). The bill passed out of the SFC on a party line vote. The Senate’s version of tax reform legislation (which differs from the House version) now moves to action in the full Senate the week after Thanksgiving. All eyes will be on the Senate as the high stakes political drama plays out to see whether tax reform will move ahead.

SFC CHAIRMAN HATCH’S AMENDMENTS TO THE BILL SFC Chairman Orrin Hatch made several changes to the tax bill on November 16, 2017, which were in addition to those he made on November 14, 2017. The changes were approved by the committee, but they were not as significant as the changes made earlier in the week. You can find the November 14, 2017 changes here, and the November 16, 2017 changes here. We have provided several selected changes below.

•

Provisions removed entirely from initial Senate tax bill released November 9, 2017.

The provisions on non-qualified deferred compensation plans are removed. The House also had this ◦ measure and then later pulled it as well.

The Senate provision on the reporting of employee/independent contractor status was removed. ◦

•

Modifications to the initial Senate tax bill released November 9, 2017.

The individual tax rates were modified and lowered slightly. Due to Senate budget rules, however, these ◦ individual tax rate changes have a sunset feature and lapse on December 31, 2025.

The Alternative Minimum Tax (AMT) is repealed under the proposed Senate bill effective in 2018. Under the ◦ above noted Senate budget rules, the AMT would resurface in 2026.

The child tax credit would be increased up to $2,000. ◦ The corporate tax rate cut to 20% would apply in 2019, but this lower rate would be permanent. It would not ◦ sunset as would the individual tax rates after 2025 (noted above).

The 17.4% business deduction in the Senate bill would be enhanced at lower income levels. This is still a ◦ complicated provision, but this change enhanced this deduction.

The Net Operating Loss (NOL) deduction limitation would drop from 90% to 80%; but this would not apply ◦ until 2023.

Some revisions to business interest limitations, including a new exemption for farming. ◦ A modification to the repeal of the deduction for meals provided for the convenience of the employer. The ◦ effective date will be for tax years beginning after December 31, 2025.

A modification of the rehabilitation tax credit would provide: (1) a 20% credit for qualified rehabilitation ◦ expenditures with respect to a “certified historic structure”; and (2) that the 20% credit be claimed ratably over a five-year period beginning in the taxable year in which a qualified rehabilitated structure is placed in service.

•

New provisions to the initial Senate tax bill released November 9, 2017.

Repeal of the ACA (Affordable Care Act) “individual mandate.” This item was scored as large revenue ◦ raiser, and thus permitted some of the above tax rate reductions.

New tax credit for family leave. This proposed change would allow eligible employers to claim a general ◦ business credit equal to 12.5% of the amount of wages paid to qualifying employees during any period in which such employees are on family and medical leave (“FMLA”) if the rate of payment under the program is 50% of the wages normally paid to an employee. The credit is increased by 0.25 percentage points (but not above 25%) for each percentage point by which the rate of payment exceeds 50%. This new credit would first apply beginning in 2018.

Deduction for fines and penalties. The proposal denies the deduction for any otherwise deductible ◦ amount paid or incurred (whether by suit, agreement, or otherwise) to or at the direction of a government or specified nongovernmental entity in relation to the violation of any law or the investigation or inquiry by such government or entity into the potential violation of any law. Some exceptions apply. This is effective for amounts paid or incurred after the date on which the tax bill is enacted.

Carried Interests. This provision would impose a three-year holding period requirement for qualification ◦ as long-term capital gain with respect to certain partnership interests received in connection with the performance of services. This item is similar to a House provision that was also added as an amendment by the Ways and Means Committee Chairman Kevin Brady last week.

A proposed change to deny attorneys an otherwise-allowable deduction for litigation costs paid under ◦ arrangements that are primarily on a contingent fee basis until the contingency ends. The proposal applies to expenses and costs paid or incurred in taxable years beginning after the tax bill is enacted.

Research expenditures. Under the proposal, amounts defined as specified research or experimental ◦ expenditures are required to be capitalized and amortized ratably over a five-year period, in the tax year the specified research or experimental expenditures were paid or incurred. This would apply beginning in 2026.

Several international tax changes. Please click here for a special separate Sikich Tax Alert on proposed ◦ international tax changes.

Roth IRAs. The proposal repeals the special rule that allows IRA contributions to one type of IRA (either ◦ traditional or Roth) to be re-characterized as a contribution to the other type of IRA. Thus, for example, under the proposal, a conversion contribution establishing a Roth IRA during a taxable year can no longer be re-characterized as a contribution to a traditional IRA (thereby unwinding the conversion). This proposed change would apply in 2018.

There is even a new tax form proposed to help those age 65 and over, “Form 1040SR.” It is supposed to be ◦ like a Form 1040EZ, but covers many items that senior filers often have.

Several tax changes for craft beer makers. These changes are for those involved in making beer, wines, and ◦ spirits.

NEXT STEPS & WHAT TO EXPECT Now that the bill has passed through the SFC, it moves on to the Senate. The Senate is in recess until the week after Thanksgiving, at which time it will take up its tax bill. The political stakes will be high as the Senate debates this tax bill, and the outcome is still uncertain. It is important to keep an eye on what is in the Senate bill; if a tax bill does pass the Senate, any compromise bill worked on with the House will probably more closely resemble the Senate bill due to the narrower margins in the Senate.

Stay tuned for other tax alerts from Sikich so you can be up-to-date on all the tax reform legislative activity.

Business Leaders Urge Congress to Repeal or Delay Health Insurance Tax Before End of Year Chris Rochester, The MacIver Institute

A federal health insurance tax set to take effect in 2018 will hit Wisconsin businesses, families, and taxpayers hard if congress doesn’t take action to stop or delay the tax before the end of the year.

The health insurance tax, or HIT, is a new federal tax on health insurance plans purchased by most small business owners, the self-employed, and farmers. All will suffer if congress lets the tax take effect, a group of Wisconsin business leaders said on Wednesday.

Without action by Congress to delay or repeal the HIT, the tax is estimated to impact 156 million Americans starting next year.

Those earning an income between $10,000 and $50,000 per year will pay half of the tax, and a recent study by Oliver Wyman shows that families in the small employer market could be faced with an average of $577 in higher premiums in 2018 as a result of the HIT. The HIT will add about 2-3 percent to fully insured health insurance plans in 2018 alone, a study by the National Federation of Independent Businesses found. The report states that nationwide, “Such price increases will reduce private sector employment by 152,000 to 286,000 jobs in 2023, with approximately 57 percent of those losses falling on small business.”

Suspended for 2017 in a broad bipartisan vote, congressional leaders planned to deal with the HIT as part of the broader effort to tackle healthcare, but those efforts fell through as congressional Republicans’ efforts to repeal and replace Obamacare failed earlier this year.

The HIT, tucked into the voluminous Obamacare legislation, “imposes fees on insurance companies that offer fully-insured health insurance coverage. The fees, which are treated as taxes under the Internal Revenue Code, are assessed on earned health insurance premiums, with certain exclusions,” the Oliver Wyman report states.

If Congress fails to repeal the tax by year’s end, the average American family can expect to see their health insurance premiums rise by more than $5,000 over the next decade.

Steve White, who owns a small manufacturing company in Genoa City, said the tax will hit his company hard. White has six people on his company’s small group health insurance plan. In recent years, the cost of providing insurance for them has gone up 56 percent. “Health insurance premiums, they’re not going anywhere but up,” the small business owner said.

White said his company has felt the financial pinch of Obamacare’s broken promises. “We were promised something like a $2,500 decrease, but it’s actually swung in the opposite direction there.”

Even a relatively small savings would help his business stay afloat. “Every little bit helps. I’m definitely not sitting on some really big fat profit margins, so if it’s just a thousand dollars or two difference a year, it makes a big difference,” White said.

The HIT will especially hurt the state’s agriculture community, said Karen Gefvert, director of government relations for the Wisconsin Farm Bureau Federation, which is made up of more than 46,000 members statewide.

Farm income has recently dropped 46 percent, according to a 2017 USDA report, so the HIT would be especially hard for farmers to absorb. “Farmers are struggling right now. So during this time of depressed commodity prices, farmers are having a difficult time making ends meet,” Gefvert said.

Farmers are already paying a larger amount for their health insurance coverage because of the nature of their profession and the risks they face on the job. Not delaying the HIT would be an additional financial burden on farmers, Gefvert said.

“Delaying the HIT or repealing the HIT would definitely help ease just a little piece of the struggle they’re going through right now,” she said.

The HIT will also weigh down on state coffers. In the BadgerCare program alone, the tax will add about $34 million in increased costs to taxpayers. The HIT will also cost taxpayers additional money because it is maintaining a fully insured health insurance system for state employees and their dependents.

The tax will also apply to Medicare Advantage plans, which about half of Wisconsin senior citizens are on.

Wisconsin already has high health care costs, and the HIT won’t help, said Chris Reader, director of health and human resources policy at Wisconsin Manufacturers and Commerce. The group represents 3,800 Wisconsin businesses in all industries.

Reader said WMC’s surveys of its members showed 92 percent provide health insurance for their employees, but those costs are going to go up. “A majority of people said they believe their healthcare costs will go up next year,” he said.

Reader said 1.2 million people are employed by 440,000 small businesses in Wisconsin.

Employers will also have to cut back in areas like research or training, and families will have to cut back, too. “Anything that will increase the cost is a negative to our members and the economy as a whole,” Reader said.

Seventy percent of businesses surveyed predicted higher deductibles, and half said cost increases would lead to higher out of pocket costs like co-insurance and co-pays. “It’s an unnecessary tax increase with bipartisan support to get rid of it,” Reader said.

There’s support from both sides of the aisle for bipartisan legislation to delay the HIT. While Sen. Ron Johnson (R-Oshkosh) supports HIT repeal, Sen. Tammy Baldwin (D-Madison) does not. “Hopefully she’ll join on and support that bill,” Reader said.

Last year, nearly 400 Republicans and Democrats voted to suspend the tax.

“There’s bipartisan support to get rid of this tax for another year. Hopefully lawmakers will hear what we’re hearing from our members and see that it’s just something they should postpone for at least another year if not get rid of altogether,” Reader said.

HERE’S WHY...Because It’s The Right Thing To Do Sue Kohlmann, Kohlmann Management Group

I’m getting tired of all of the animosity. I’m getting tired of listening to foul language in normal conversations. I’m getting tired of the rush to judgment in every situation. I’ve been threatening to move to Montana. Not because I know anything about Montana but because I picture it as Big Sky Country without a soul in sight. And limited internet access.

We all know of those situations where the conversation is getting just a bit too tense and we try to find of a way to calm everyone’s tone. Or of a work situation just on the edge of being an HR problem. How many times have you heard a comment that could be taken out of context and, oh no, we don’t want to go down that road!

I came across an item which reminded me that, I too, can use some help. Perhaps you’ve seen it: Before you speak, THINK. " " " " "

T – is it TRUE? H – is it HELPFUL? I – is it INSPIRING? N – is it NECESSARY? K – is it KIND?

Do we need the Holiday Season to remind us to be kind? To be helpful? To give of ourselves? Can we inspire our staff or our children in a way that helps them grow to their full potential? I’m optimistic that nice can overtake nasty, that good people outnumber bad.

Can we do the right thing because it’s the right thing to do. Yes, we can.

Sales Roundtable Monday, December 11th, 2017 | Time: 7:30 a.m. - 9:00 a.m.

Location: CTaccess, 740 Pilgrim Parkway, Elm Grove

Sales Process for Success: A Focused Approached

Mark Bishop of Oak Hill Business Partners will lead our discussion. This will be an interactive, group strategy session focused on the Sales Process: What is involved? How & why does it work? What you need to know!

We will cover all aspects of sales: planning to closing; prospecting & qualifying; setting appointments and more!

Come prepared to share specific obstacles you encounter, so we can focus on solutions.

Register at IBAW.com

Coach’s Corner: Recalling and Using Names Steve Bobowski, Dale Carnegie Using a person’s name during a conversation appropriately tends to increase their attentiveness, and adds a special importance to the information we are sharing or the request we are making. To a new acquaintance it sends the message that they are important to us. Here are a few tips in order to remember names.

1. Look and Listen - Get a solid mental image of the person. What are the unique characteristics that he or she has? Paying close attention to what he or she says because you’re not only trying to remember a name, you want to remember the person.

2. Impression - After you have met someone, use the impression the person left on you as a way to help recall who they are. If you met Larry and he was tall use that, if Bob was funny use that.

3. Repetition - Say the person’s name after you hear it. “It was very nice to meet you Michael” or “Talk to you soon Michael”. After your conversation repeat the name to yourself a few times.

4. Association - Make a connection between the person’s name and a recognizable image. Make sure this image has as much detail as possible this will help make it memorable.

5. Write it down - The act of writing also has been known to actually help people remember. Writing the name down will also give you a reference to look back on.

Remembering someone’s name is an important aspect of starting your career. This skill will allow you to network yourself within a company; this hopefully will lead to great success in the future.

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Learn the benefits of membership at IBAW.com

Senator Rand Paul Nails It on Taxes Raymond Keating, SBE Council, Washington D.C. In a FoxNews.com op-ed, U.S. Senator Rand Paul (R-KY) nails it on taxes. Senator Paul explains why he is planning to vote “yes” on the Senate tax plan, while also calling on Congress to pass annual measures that provide tax relief.

Paul lays out a bit of governing and economic wisdom that most others in Washington fail to seriously consider, that is, “Our default position should be that the money you earn belongs to you, and government has to justify why it should take it from you.”

In the current debate, Paul noted that he pushed for an overall tax cut, not simply a “revenue neutral” measure, and he got what he wanted. In addition, he pointed out, “I’m also pleased to note that, in part by my urging, the Senate tax-plan writers have included repeal of the ObamaCare individual mandate in the tax plan. The mandate is clearly a tax, a fact that was established by the Supreme Court when it upheld ObamaCare. So including it in the tax bill only makes sense.”

Yes, Senator Paul acknowledged, “This bill is not perfect,” noting that he preferred a larger tax cut and more permanence on the individual side. But Paul added, “Some of that is still achievable. Some of it is due to the peculiarities of the budget and Senate rules and will have to wait for another day.”

But then the Kentucky senator hits on a key point that his fellow Republicans would be wise to adopt as part of their governing philosophy going forward: “The good news is — we can do this every year. Want a bigger tax cut? Urge your legislators to do one every single year.

I’ll sponsor it. Want them to be permanent? Well, one good start is to keep extending them, every single year.” Sign me up, Senator Paul!

As Rand Paul reminds us, that process has to start now, with the House and Senate sending a substantial tax relief measure to the White House for the president’s signature that will benefit individuals, families, entrepreneurs, small businesses, investors and large firms. How? Well, ultimately, by recognizing that the money earned by workers, entrepreneurs, and shareholders belongs to them, and government must justify why it should take it from them. What a crazy idea!

Thank you, Senator Paul. __________ Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

Keating’s latest book published by SBE Council is titled Unleashing Small Business Through IP: The Role of Intellectual Property in Driving Entrepreneurship, Innovation and Investment and it is available free on SBE Council’s website here.

President’s Circle IBAW / DALE CARNEGIE PRESIDENTS CIRCLE A LEADERSHIP PROGRAM FOR CEOs, PRESIDENTS, AND BUSINESS OWNERS

As the CEO, President, or Owner you are asked to produce more results with fewer resources, meet and exceed competition, innovate and motivate. This creates very difficult teams and leadership challenges. Leaders must encourage teamwork, bottom-up idea generation, alignment, loyalty and above all commitment. Rather than direct and dictate, leaders must inspire and motivate!

The Presidents Circle: The IBAW and Dale Carnegie Training have developed an exclusive Leadership program for IBAW members only. The Presidents Circle combines peer group engagement and highly targeted executive Dale Carnegie Training among peers to help you achieve significant results. These results will be achieved by providing insights, peer challenges, and developing leadership skills which are aligned with your organization and which will help drive agendas. By combining corporate mission, vision and values with our unique methodology employees will begin supporting a world they helped create.Ultimately, the only sustainable competitive advantage is the innovation, motivation, and creativity of the employees of an organization. Establishing a strong leadership culture provides the environment where innovation and creativity can flourish.

Program Specifics: • • • •

Meetings with other IBAW CEOs/Presidents/Business Owners 10 monthly meetings Dale Carnegie Executive Leadership Training workshop each session.

Round Table Issues Discussed and Resolved

• • •

Guided Yearly planning Accountability among peers.

Business Results

The President’s Circle will help you achieve results by: • • •

Providing training among peers Creating and sustaining change initiatives Ensure continuous improvement and bottom-line impact

• • • • •

Align the organization behind a common vision Develop a habit of fact-based decision making at every level.

Strengthen and implement strategic planning Create a value based culture to ensure loyalty Build energy and trust up and down the organization to insure customer loyalty.

Program Leader: Steve Bobowski

“Knowledge isn’t power until it is applied.”

-Dale Carnegie

Commitments: • Attend meetings • No cost for meetings, a benefit of IBAW membership •

Referrals or 3 enrollments

This program is now forming and is limited in the number which can attend.

For more information, contact Program Leader Steve Bobowski by clicking here.

Can I Pay Work Comp Claims Out of Pocket?

Marina McKenzie, HNI Risk Advisors

Business owners are continuously looking for ways to reduce their insurance costs. Unfortunately, paying for work comp claims out of pocket (and often under the table) isn't only costly, risky, and illegal, but it could backfire in unexpected ways.

How your MOD impacts your costs Worker's Compensation is a class-rated insurance program. Within each state, an insurance company applies an average rate to all employees who fall into a given class. However, this rate does not recognize any individual characteristics of any particular employer.

To differentiate high performers from low performers, a MOD score is used to measure whether your company’s losses are better or worse than expected for your size and industry. If your losses are better than expected, then your company will pay less for Worker's Compensation insurance.

Paying for claims out-of-pocket to keep your MOD low In an effort to reduce Worker's Compensation premium, some employers look to pay small claims out of pocket instead of reporting them to the insurance carrier (instead of focusing on safety and a return to work program). Although this sounds like a harmless practice and often seems beneficial to the employer, in most states, this practice is illegal and may be subject to penalties.

Risks with paying out of pocket It might be illegal.

The ability of an employer to self-pay for small medical claims is illegal in some states, acceptable in other states pending certain conditions are met, and subject to fines or penalties in other states. Make sure you know your state's rules.

You're still liable.

An employer might mistakenly believe that by paying for the employee’s medical bills and then asking them to sign a waiver, they have shielded themselves from a Worker's Compensation claim. This couldn’t be further from the truth. An employee can’t waive his or her statutory right to Worker’s Compensation coverage and benefits. This means that even a signed agreement or “waiver” to waive the right to Worker’s Compensation benefits would be unenforceable and would have zero effect on an employee’s claim.

You could lose your insurance.

Most insurance policies require employers to report work-related injuries. It is the right and responsibility of the insurance company to investigate the claim as well as pay the medical bills and other Worker’s Compensation benefits owed. An employer that does not timely report injuries may be liable for underpayment of Worker’s Compensation premiums to the insurer, an improper experience rating, penalties for failure to timely report an injury or pay benefits, and even face cancellation of the insurance policy.

Minor injuries may become costly.

Injuries often seem minor at the onset. Unfortunately, injuries that appear minor in the beginning could spiral into serious claims requiring hospitalization, time off work, and significant care and treatment. For example, a worker's cut finger could become infected. This infection could worsen, causing your employee to land in the hospital for additional treatment. This treatment is not going to be cheap. The truth is, without a working crystal ball, you can’t accurately predict 100% of the time

which injury is truly “minor.” And don’t forget, even if you have a working crystal ball, not reporting the injury to your insurance company might still be illegal depending on what state you operate in.

What to do if an injury occurs 1. Have the injured employee complete a first report of injury, have your supervisor complete a report, and don’t forget about any potential witnesses. This will help you with the claims process and could also shed light on opportunities to implement additional safety features in your workplace.

2. Report the injury to your insurance company. Timely reporting allows the insurance company to properly investigate the claim and it ensures that the injured employee is able to get the proper treatment and benefits quickly without delay.

3. Maintain contact with the injured worker. Communication is key. Workers who know they are thought about, missed, and still part of the team are generally more eager to return to work and do return to work significantly quicker than their counterparts.

4. 4. Establish a return-to-work program. If a return to work program exists, more employees will return to their jobs earlier in their recovery period. This means reduced claim costs, reduced litigation expenses, and usually, happier employees. In fact, studies show that when an employee returns to light duty work during a healing period, that employee is more likely to have a better outcome and a higher likelihood of getting back to his or her 100% pre-injury way of life. That’s a win-win (no paying claims under the table required).

A Strong Culture Requires Leadership Scott Seroka, Seroka Brand Development

Team your best salesperson with a crummy manager and what do you get? A resignation letter and loads of business going to your competitor. Team a highly trained and skilled manager with a group of average-to-slightly above-average employees and you’ll soon have enthusiastic and highly motivated team-players willing to bleed for your company. In no time, you’ll earn a great reputation in your market and industry, and most importantly, you’ll grow.

It’s a fact that the quality of leadership has a direct impact on your brand’s culture which in turn has a direct impact on your productivity and bottom line. And it makes sense – people who respect and enjoy working for their manager consistently perform at peak levels. It’s a sad fact that too many people are placed into leadership positions based on all the wrong reasons – such as industry knowledge, tenure, or technical aptitude – and then fail.

To be an effective leader requires a very specific set of skills. Read on…

Are leaders born or made?

It’s the million-dollar question, and arguments can be made for both sides. We are all leaders in that we make decisions for ourselves. However, managing a sea of diverse personalities, motivating individual people to consistently give their best, building teams, creating synergies in groups, and knowing how to efficiently resolve conflict where everyone “wins” (feeling as if their needs have been met) are skills that very few people intuitively have. These skills must be refined or taught from the ground up, especially when you consider that most of us developed our leadership styles based on leaders we personally admire or believe to be effective. And here’s the trap – in the absence of leadership training where proven management techniques are taught, managers rely on trial and error with many different leadership styles until they find one they believe works. It’s this trial and error leadership style that frustrates employees and perpetuates already dysfunctional manager/employee relationships.

What makes a great leader?

There are several characteristics that make up the fabric of good leaders, and it starts with having a high E.Q. (Empathy Quotient a.k.a. Emotional Intelligence).

What does this mean? Think about the last three people you know who were fired. Were they shown the door due to their lack of product, company or industry knowledge? Or were they released because of their inability to get along with others or be a team player?

Leaders with higher E.Q.’s, develop cultures in suit where people naturally work and communicate better with each other.

This translates into higher productivity, less errors and mistakes and higher morale.

Great leaders are great active listeners. They have mastered the art of acknowledging and feeding back what they hear to confirm understanding. Where many people in conversation are simply thinking of what they want to say and waiting until one person is finished talking so that s/he may speak, active listening involves focusing one’s attention on the function and purpose of a conversation. It cannot be faked. It builds trust, deepens relationships and is the sincerest form of communication there is. One of the greatest active listeners I know walks out from behind his desk, sits down at a small table away from his computer, turns off the ringer on his cell phone and gives his undivided attention to the person with whom he is speaking.

Great leaders also encourage open communication without road blocking. Road blocking occurs when we order, warn, moralize, suggest, use logic, criticize, praise, label, analyze, reassure, question and recommend. In other words, road blocking is steering a conversation toward our direction and way of thinking, inhibiting open and candid conversation. We’ve all been road blocked and know how offensive and irritating it can be. Think of it this way: road blocking is the #1 reason teenagers don’t talk to their parents.

Great leaders don’t solve problems. They see to it that problems get solved. When people come to us with their problems, some of us can’t wait to jump in and tell the person who owns the problem how to fix it. Nothing could be worse for three reasons: 1) the person who owns the problem may very well dump all their problems on you in the future, or 2) you may offend them because you are indirectly telling him or her that they don’t have the intelligence to fix things on their own, and 3) Once you, the manager gets involved, you immediately assume responsibility for the problem and the consequences of the advice given. Consider the fact that the person who owns the problem is in the best position to fix it.

Attracting and Retaining Strong Leaders Great leadership needs to start at the top, which is why I’m a huge proponent of leadership training. CEO’s are a special breed – they take risks, push themselves hard, can smell the blood of new business, and know how to negotiate and close deals. And then they get back to the office and must deal with egos, attitudes, under-performers, complainers, and a host of other issues they would rather ignore, or don’t know how to deal with and, thus, wears on their patience. Failing to deal with these issues erodes a healthy culture.

What Now? As the CEO or owner of your company, you need to surround yourself with people who have the same level of passion, determination and drive to win as you do. The only way to drive such a culture is by practicing and perfecting strong leadership skills.

Register now for the January 19th IBAW meeting.

Ideal for Upper Management & HR.

: S E L A S

2nd Monday of the Month SALES ROUNDTABLE 7:30 am - 9:00 am Free & open to IBAW members only Register at IBAW.com

Sales can be a tough road of ups, downs, potholes and a few bumps.

But it can also be fast paced, exhilarating and rewarding.

If you’re in sales, you know there are things only other sales people understand; the thrill of scoring the big account, the uncertainty of “let me think about that.”, the frustration of phone calls or emails that don’t get returned. IBAW’s Sales Roundtable is a support and knowledge resource for sales professionals, business owners, marketing and branding experts who are charged with driving sales.

Join us to discuss the strategy, tactics, inspiration, and motivation to increase sales. It’s a FREE benefit of your membership!

Who should attend: • Sales professionals of any level.

• Business owners • Sales Managers • Marketing & P.R. Professionals

“For many years I ran sales meetings for as few as 3 and as many as 22 sales rep’s now I can go as a participant once a month to IBAW’s Sales Roundtable.

BONUS! Join the IBAW Sales Roundtable and get a compact disc with the BEST in Sales Survival Music. Play it to pump you up before that big meeting or to console you if you hit a sales slump. Guaranteed to make life better.

It’s a focused meeting and everyone wants the same thing – to be more effective at selling.”

- Jerry Wick, CEO, Custom Data Too Mail

IBAW is on an upward trend of growth and we are actively recruiting businesses just like yours to join!

When you join IBAW your entire company is a member - anyone from your team can attend our fine educational and networking events.

Help yourself, your business AND your Team Members.

Come on in...we’re open for business!

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2017 Membership Committee

Jake Hansen Jacsten Holdings

Charles Fry Robert W. Baird

Mike Poludniak Merrill Lynch

Dan Hansen

Tom Parks Annex Wealth Mgt.

Legislative Fix Moving Ahead for Wisconsin’s New Manufacturing & Agricultural Credit Jim Brandenburg, CPA, MST - Sikich LLP

In IBAW meetings and publications in recent years we have introduced you to Wisconsin’s new tax incentive - the Wisconsin Manufacturing and Agriculture Credit (referred to as the “MAC”). The MAC came about in 2011 to provide an incentive for Wisconsin manufacturers and agricultural companies to remain and grow here, and also perhaps to have out-of-state companies move here. It was scheduled to begin in 2013, and when fully phased-in by 2016 it would essentially exempt any Wisconsin manufacturing and agricultural income from Wisconsin income tax. The MAC was championed by Representative Dale Kooyenga and Senator Glenn Grothman in the legislature.

Magazine Content Needed Consider Submitting an Article!

The MAC, however, had some problems for individual taxpayers when it was drafted and this glitch was recently identified. Here is the issue in a nutshell: the MAC would reduce a taxpayer’s Wisconsin individual income tax, but then would trigger a Wisconsin minimum tax for nearly the same amount. Thus, there may be little, if any, net savings for the MAC in 2013 (a “MAC Attack?”). The legislature is trying to remedy this situation now so that taxpayers can realize the proper tax savings with the MAC on their 2013 Wisconsin individual tax returns.

The IBAW magazine is in need of content, we rely on our members and sponsors to supply us informative articles. The digital magazine is sent out to over 650 contacts statewide and the magazine is parked on the web where, on average, it gets over 1100 views.

Legislative Update: It seems that all key legislative leaders are now on board to correct this issue. It was approved by the legislature’s Joint Finance Committee last week. The Senate and Assembly will be in session in March and voting on final passage for several bills, one of which is this tax bill with the MAC correction. It looks like the legislative timetable will have the bill passed near the middle of the March, before going to the Governor.

Thus, a best guess now is that the bill would be enacted into law somewhere in the latter half of March, 2014.

MAC Attack Options: For any of our individual taxpayers taking advantage of the MAC, this may present some filings logistics. Here are the possibilities:

1. Best case scenario - in some cases the taxpayer’s share of the MAC for 2013 will be used and not result in a Wisconsin Minimum Tax. A taxpayer in this situation could go ahead and claim the MAC and file their 2013 Wisconsin individual return. There would be no need to wait for the legislation to pass.

Consider writing an article on a timely business related topic to your particular field of business. This is an outstanding opportunity for you and your company to gain exposure and increase your brand awareness to a statewide audience. There is no cost to submitting an article.

2. Next, a taxpayer has generated a MAC for 2013, but it will trigger a Wisconsin Minimum Tax. The taxpayer in this case could wait until the law is changed (and then wait a little for the WDR to update its computer processing systems) and then file their Wisconsin tax return and claim the MAC, and not incur the Wisconsin Minimum Tax. This could present a tight timeline for the April 15 deadline, and you may need to file for an extension.

3. Similar case as #2, but this taxpayer could file their Wisconsin individual return with the MAC, but also incur and pay a Wisconsin Minimum Tax for 2013. Then, once the corrective law is enacted go back and file an amended 2013 Wisconsin tax return to obtain the proper tax benefit of the MAC. You would not need extend, but you would need to amend.

We’ll keep you posted as this legislation moves forward.

If you have any questions, please contact Jim Brandenburg or Brian Kelley at Sikich, LLP in Brookfield (262)754-9400.

Contact Steve Kohlmann for details.

Articles submitted by our members & sponsors.

Welcome New IBAW Members!

Meeting Recaps 2014 Wisconsin Manufacturing Knowledge Summit

Power Test

On June 20, 2014 the IBAW partnered with the Tool, Die & Machining Association of Wisconsin (TDMAW) to offer Wisconsin manufacturers and their suppliers a unique look at trends within the industry and to also report on some of the challenges the industry faces in the next 5 years.

Power Test, Inc. is an industry leader in the design, manufacture and implementation of dynamometers and control systems.

Special thanks to the event sponsor, First Business Bank for their efforts in helping organize this event.

For more than 37 years, Power Test has provided specialized test equipment to manufacturers, rebuilding facilities and distributors globally. Our products can be found in use at these facilities in nearly 100 countries on six continents.

Chris Halaska

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Our headquarters and manufacturing operations are located in Sussex, WI with sales representatives worldwide. Our unparalleled customer service is well known throughout the industry.

Power Test employs a dedicated staff of talented machinists, fabricators, electronic technicians, assemblers, designers, engineers, software developers, and administrative and customer service personnel.

Our exceptional product life and excellent customer service is well known throughout the industry and has made us one of the industryleading dynamometer manufacturers. Our dedication to the customer and to the advances in powertrain component testing keep us there.

Power Test N60 W22700 Silver Spring Drive Sussex, WI 53089 Phone: 262-252-4301

4 Advanced Waste Services Advanced Waste Services is an environmental services company that provides wastewater recycling and other waste and risk elimination services to manufacturers in all industries. Each day, AWS helps hundreds of businesses, both large and small, meet their community and environmental obligations. Annually, we collect, treat and recycle more than 50 million gallons of contaminated wastewater into clean, reusable water and other valuable resources like fuel, steam and electricity.

AWS is constantly helping our clients manage, reinvent and improve their sustainability successes. For example, we recently partnered with Forest County Advanced Waste Services Potawatomi Community to help Wisconsin food and beverage manufacturers convert 1126 South 76th Street food waste into clean, green renewable energy.

Suite N408B

West Allis, WI 53214 Founded in 1993, AWS employs 55 people in the Milwaukee area and a total of 150

people companywide in 5 states.

414-847-7100

Photo Key 1: A full house in the main ballroom of the Wisconsin Club as IBAW & TDMAW members prepare to hear about the state of manufacturing and the challenges the industry faces in the workforce.

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2: David Vetta of First Business Bank delivers opening remarks and highlights the importance of a strong relationship between banking and manufacturing working together for success.

3: New IBAW President, John Weber of Hypneumat addresses the change in IBAW Bylaws and calls for voting in new board officers.

4: Kent Lorenz of Acieta gives the main presentation on “Manufacturing Matters” pointing out the trends on manufacturing now and what to expect in the future.

5: Outgoing IBAW President, Steve Van Lieshout receives his award for his efforts as 2013 - 2014.

6 Photos courtesy of Tim Townsend.

6: IBAW Executive Director, Steve Kohlmann (Left) presents David Drumel with an award for his service on the IBAW board.

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THERE’S ROOM AT THE TABLE

As an advocate for small business, the IBAW offers intimate meetings on relevant topics such as Leadership, HR, Sales, and Political Issues.

Business Leaders...Leading Business

Join us. “...the sales round table was very informative, Judson will be renewing our membership in the IBAW. Thank you and I look forward to more roundtables!”

Dominic Misasi, Judson and Associates s.c.

“ I almost always come away from an IBAW meeting with useable material that helps me with my business. Many times, a speaker will give me something that applies to ITU AbsorbTech. Other times, it is a conversation over breakfast that gives me value.”

Jim Leef, President & CEO, ITU AbsorbTech

“Being involved with a business organization like the IBAW is critical for small business owners in Wisconsin for growth and to have a voice with government.”

Rich Meeusen, CEO, Badger Meter.

Education • Networking • Political Advocacy BUSINESS LEADERS...LEADING BUSINESS

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MEMBERSHIP BENEFITS apply to your entire team.

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Paying By Check? Please make check payable to IBAW. Want to pay credit card? If you would like to pay by Visa, MasterCard or American Express, you can pay online at IBAW.com or by calling the IBAW office at 262-844-0333.