Long-term, well trusted employees are an employer’s dream. In the event that an employee is dishonest, good internal controls can keep that dream from becoming a nightmare.
For medical offices, there is a significant risk that employee dishonesty will lead to the diversion of collections with a corresponding record-keeping cover up. To mitigate this risk, the person who opens the mail or collects funds should not have the ability to credit a patient’s account. Additionally deposits should be made daily and collections should be posted to patient accounts based on the date received. This allows an owner to reconcile patient funds received to deposits. Of course, an owner must regularly perform this check, and it’s never a bad idea for the employees to know that this is done.
Regular online account statement review by the owner and the owner’s monthly review of statement transactions and cancelled checks may be an especially important internal control in a small practice where there aren’t enough employees for an adequate segregation of duties. An alternative to online statement review would be for the owner to receive the unopened bank and credit card statements and review the hard copies for suspicious activity. Another effective and important control is for the owner to perform regular reviews and approval of write-offs.
If you would like assistance in establishing or reviewing the effectiveness of your internal controls, please contact us. In our next issue we will help you identify signs of potential problems resulting from employee dishonesty and suggest more ways to help you avoid them.
Article contributed by Terri Marakos, CPA
Photo by Pixabay on Pexels
In an effort to stabilize the individual health insurance marketplace, New Jersey lawmakers enacted legislation that became effective January 1, 2019. The new legislation did not change any of the provisions of the Affordable Care Act (ACA) but reaffirmed the aspects of the Act that have been questioned or altered on the Federal level.
Beginning on October 29, 2018 employees in New Jersey may earn up to 40 hours of paid sick leave per year. A benefit year can be defined by the employer and cannot be changed without the approval of the Department of Labor. All New Jersey employers, except governments, are subject to this law. Employers who already have policies in place should confirm that they are in compliance with the new law.
New Jersey Health Insurance Mandate to be effective in 2019: In response to the repeal of the Affordable Care Act’s (ACA) federal health insurance mandate that will become effective in 2019, legislation was signed on May 30, 2018 by New Jersey Gov. Phil Murphy whereby New Jersey will impose a similar mandate effective in taxable years beginning January 1, 2019. The New Jersey law requires all state residents to have health insurance or pay a penalty. The penalty will be calculated based upon the current federal formula, which is 2.5% of income or $695 per adult taxpayer and $347 per child, whichever is greater. A family’s maximum penalty is $2,085. The penalty is designed to increase each year that someone is not covered, but cannot exceed the price of a lower-cost bronze-level plan on New Jersey’s ACA marketplace. The cost of such a plan averaged just under $3,300 in 2017.
New Jersey is the second state to enact a health insurance mandate. In 2006, Massachusetts was the first state to adopt an individual mandate. Other states are currently developing similar legislation.
By Terri L. Marakos, CPA