IRS Delivers Covid-19 Surprise To Workers:  A Chance To Redo Their 2021 Health Plan And FSA Choices

If your employer lets you make changes to your workplace healthcare elections for 2021 under new Treasury guidance, it could cut your tax bill.

 

Wish you could change your health plan for 2021? In newly released guidance on new flexible rules for healthcare and dependent care FSAs, the Internal Revenue Service has included a new Covid-19-relief surprise: Employers can allow employees to make changes prospectively to health care coverage for 2021.

“The guidance is very employer and employee friendly; it really gives a lot of flexibility,” says Jake Mattinson, an employee benefits lawyer with McDermott Will & Emery in Chicago.

Notice 2021-15 allows for mid-year changes to employer-sponsored health care coverage, healthcare flexible spending accounts and dependent care accounts. It will help employees whose medical and caregiving situations have changed because of the coronavirus pandemic. That is, if your employer is on board.

Usually healthcare elections are set in stone on a calendar year basis. Last May, the Treasury Department came up with a partial mid-year fix for 2020, allowing prospective changes and extending grace periods and carryovers through year-end (IRS Notice 2020-29). But employees still cried foul: they had socked away more money than they could spend in these workplace tax-favored accounts, and would be subject to forfeiture rules.

In December, in the tax provisions tied onto the year-end spending package, Congress passed new special rules allowing rollovers and more for leftover 2020 and 2021 FSA money for employees and ex-employees. Notice 2021-15 answers a lot of the open questions about how to implement the new rules.

For 2021, you can revoke an existing healthcare plan election and make a new election, or revoke an existing election and attest that you’re getting coverage elsewhere. Say you picked an HMO plan, but really want to be in a PPO plan. Or say you decide you’d be better off under a spouse’s plan. This gives you the chance to make a mid-year change. That allowance is not in the December law, so it was a surprise, Mattinson says.

For healthcare and dependent care FSAs, the guidance says employers can allow employees to carryover unused amounts they’ve stashed in these accounts from the 2020 and 2021 plan years. It wasn’t clear before, but the IRS says that any plan can implement a 100% carryover or extended grace period, no matter what feature the plan had before, Mattinson says. That means employees might be able to carry over their whole balance (instead of just $550 under current law) from one year to the next.

The extended grace period could go out 12 months, instead of just 2.5 months. as of January 1, 2022, everything would shift back to the regular rules. Under the regular rules, you can stash up to $5,000 pretax per year in a dependent care FSA, but if you don’t use the money for the specified year, you lose it. You can put up to $2,750 in a healthcare FSA, and if you don’t use it, you may be able to either use it up during a grace period or carry over $550.

Don’t get your hopes up just yet: Employers have to adopt these changes, and while some have already been working on amendments to their plans based on the December law even before today’s guidance, others have decided to do nothing. “The reaction among employers is mixed; everyone has their own ideas of what to implement. It’s all optional,” says Mattinson. One client said they would implement it all, while another client said they wouldn’t make any of the changes, for example.

Some of the nitty-gritty guidance surrounds COBRA and health savings accounts. For COBRA, the guidance makes clear that if an employer lets terminated workers seek reimbursement from an FSA, that won’t hurt their qualification for COBRA. For health savings accounts, the guidance clarifies that for employees who want to make a midyear change into a high deductible health plan with an HSA, they could convert a general purpose FSA to a limited purpose FSA so as not to be disqualified from contributing to the HSA.

Notice 2021-15 is 34 pages long and includes detailed examples, suggesting this is an area of the tax code that could be simplified! Here’s a bullet point summary of the law changes addressed in the IRS guidance; employers can:

 

  • allow employees to carry over unused money up to the full annual amount from the plan year 2020 to 2021, and also from the plan year 2021 to 2022 for healthcare and dependent care FSAs
  • allow up to a 12-month grace period for employees to incur new expenses and submit claims against unused accumulated funds for plan years ending in 2020 or 2021 for healthcare and dependent care FSAs
  • allow midyear election changes on a prospective basis without a change in status event for plan years ending in 2021 for healthcare and dependent care FSAs
  • allow dependent care reimbursement up to age 14 in cases where an employee’s dependent turned 13 in 2020 and the employee had leftover funds from 2020 (this special carry forward rule helps employees whose dependents “aged out” during the pandemic) for dependent care FSAs
  • allow health FSA participants who stop participating in the plan (ex-employees) during calendar year 2020 or 2021 to continue to receive reimbursements through the end of the year, including grace periods (this post-termination benefit applies to healthcare FSAs, not dependent care FSAs)

 

Further reading: Healthcare And Childcare FSA Fix For 2021, Finally: Special Carry Over Rules And More

Follow me on Twitter or LinkedIn.

I cover personal finance, with a focus on retirement planning, trusts and estates strategies, and taxwise charitable giving. I’ve written for Forbes since 1997. Follow me on Twitter: @ashleaebeling and contact me by email: ashleaebeling — at — gmail — dot — com

Source: IRS Delivers Covid-19 Surprise To Workers:  A Chance To Redo Their 2021 Health Plan And FSA Choices

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How Sales Enablement Can Drive Revenue Growth in 2021

How did your leadership priorities change in 2020? If you started paying more attention to the sales enablement needs of your organization, you’re not alone.

According to recent HubSpot research, 65% of sales leaders who outperformed revenue targets in 2020 reported having a dedicated person or team working on sales enablement efforts instead of making it an initiative someone works on off the side of their desk.

[New Data] The 2021 Sales Enablement Report

For sales organizations that have been waiting to implement dedicated sales enablement measures — the time is now. With 2021 right around the corner, intentional sales enablement is a must-have for organizations that want to remain competitive in the future.

HubSpot recently sat down with Chris Pope, Director of Sales at Crayon, to discuss how companies can implement sales enablement strategies that can move the needle and drive revenue growth.

“Crayon defines sales enablement as providing our account executives with the resources and content they need to win more deals. Closing deals is more important than ever, especially in today’s competitive market where there are fewer deals to close,” he says.

In 2020, Crayon placed even greater emphasis on sales enablement to support their sales force. “We’ve put even more effort into making sure that our sales teams have the resources they need, simply because every deal matters more than ever,” says Pope.

How to Improve Sales Enablement for Your Team

1. Use data to inform your sales enablement content.

Crayon uses data to inform sales enablement decisions. According to Pope, his team relies on “velocity reports” to determine what areas of the sales process reps need the most support with.

“Velocity reports tell us what our reps conversion rates are at every stage of the sales funnel. How many opportunities are turning into discovery calls? How many discovery calls are turning into demos? How many demos are turning into proposals? And how many proposals do we send out that turn into closed business?” says Pope.

“We leverage that data to inform us where each individual rep needs to spend the most time, and where managers need to spend time training individual contributors.”

From an organizational level, this approach helps sales leaders know how to support sales managers and reps, and provides valuable insight into the type of training and content would be most effective.

Two examples of enablement content Crayon leadership has provided to their sales team include:

Call Recordings

“We love call recordings. We not only have call recordings of what the perfect call sounds like, we also have recordings of ideal discovery calls, effective demos, and successful closing calls. We share these recordings with reps who may need help in those areas, and we share them broadly across the organization so everyone is on the same page,” Pope says.

Battle Cards

Battle cards are a valuable tool for preparing reps to speak to features and objections related to your product. Crayon relies heavily on battle cards to ensure sales reps understand what they’re selling inside and out.

“We use our own product to make sure that our individual contributors have the most up to date messaging on how we position against our competition. This knowledge has been crucial not only for our organization, but for our customers as well,” says Pope.

2. Focus on sales team culture.

Chances are, you’re familiar with the term “company culture” — the idea that a company should have a shared set of beliefs, values, and practices. But when was the last time you assessed the culture of your sales team?

Sales teams are often dynamic organizations with motivated team members whose ability to sell is critical to the health of a company. Building strong rapport among members of the sales team and having a culture of open communication, especially in a remote environment, is an effective way to support sales enablement.

Feeling supported and included while selling remotely can be challenging for reps. For Crayon, sales team cohesion is a high priority.

“We’ve done our best to create a team atmosphere. We have daily calls where the entire sales team is on together, we have a peer program where our more experienced reps are paired with less experienced reps to offer coaching and mentorship, and we’re creating cross-functional opportunities for our pipeline generation team to work closer with our closing team,” says Pope.

These activities build trust across the team, and strengthen communication among sales managers and reps, creating a better environment to tackle sales enablement issues as they arise.

3. Prioritize sales enablement at each level of the organization.

At Crayon, sales enablement is an all-hands-on-deck initiative from the top down.

“Sales enablement is a team effort at Crayon. It starts at the top with our Senior Vice President of Sales, who delivers insight on broad topics and training related to overarching sales themes such as a demo workflow, or how to run a closing call,” says Pope.

“The managers and directors are responsible for individual training tailored to the needs of their reps. This can include listening in on at least a few calls for each individual contributor weekly, and providing regular feedback.”

In addition to the sales enablement work of leadership, Crayon focuses heavily on team selling to get everyone involved.

“If one of our reps is great at positioning our product against a competitor’s or they’re strong at demoing a certain aspect of our platform, we’ll invite their team members to tune into their sales calls so they can learn from them.”

Everybody within the organization plays a role in our sales enablement.

In 2020, sales managers at Crayon took a hands-on approach to coaching reps who had opportunities for improvement.

“We’ve really made it a focus to make sure managers are involved in more calls. Managers are putting time aside to give individual contributors and feedback that they need after calls, and benchmarking performance after every stage of the sales cycle,” says Pope.

According to Pope, if a rep is struggling with a specific part of the sales process, Crayon’s team will “focus our training on the specific aspect of the process they’re struggling with to help them improve and get their overall win rate up.”

4. Don’t wait to give feedback.

When sales managers and seasoned team members are coaching reps, the Crayon team makes it a point to provide feedback quickly.

For example, if Pope were to listen in to a rep’s sales call with a prospect, he would schedule 15 minutes with the rep right after the call to deliver feedback on how it went.

“When you let time pass, the call is not as fresh in the rep’s mind, and your feedback is not going to be as direct as it would be if you delivered it right away.”

5. Make sure sales managers feel supported.

Sales managers often have a lot on their plate. They are responsible for coaching and leading their reps to success, and are accountable for their team’s performance to leadership. For growing companies, relieving pressure from sales managers is crucial for a healthy organization.

“As you continue to scale your teams you don’t want your managers to feel overwhelmed. You want to make sure they have enough time in the day to give every individual contributor the attention that they need to to perform their best.” says Pope.

Pope says Crayon focuses on conscious staffing and resourcing to avoid sales manager burnout:

“If we know we’re going to hire a new group of sales reps, we make sure we already have enough managers in place who have the bandwidth to lead.

So when those people start we don’t have a new manager meeting new reps, we have experienced managers working with new reps, and we make sure that team members have the data they need to understand what their path to success will be as an individual contributor.”

Improving Team Morale in 2021

Per HubSpot’s 2021 Sales Enablement Report, 40% of sales leaders expected to miss their revenue targets this year. That means sales enablement efforts are not only necessary for growth — they are critical for survival.

In a competitive landscape where sales teams are working with volatile markets and buyer uncertainty, keeping morale high is more challenging than ever. Pope shares why communication is Crayon’s greatest tool for keeping employees engaged.

“Morale has been all over the map for different members of the team. At Crayon, we never go a day without checking in on our reps,” he says. “I try to at least have two times a day where I’m asking them how their days are going, what they’ve been working on, what calls have gone well, what calls haven’t gone well, and asking how can I continue to support them.”

This approach to communication happens at the organizational level as well.

“Crayon has done a really great job of communicating, being honest about when we might go back into the office, and making sure we’re meeting with folks who are concerned about not having an office atmosphere to make sure that they’re comfortable with their remote work setup,” says Pope.

If you’re looking for more advice on boosting sales rep productivity and morale, check out this post for advice from an Aircall sales leader on navigating employee fatigue.

By: Lestraundra Alfred @writerlest

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HubSpot

Learn more about Sales Enablement: Why You Need Sales Enablement: https://clickhubspot.com/Sales-Enable… The Sales Enablement Certification will teach you how to develop a marketing-driven sales enablement strategy. This course was designed with marketing managers in mind, but other marketers, as well as sales leaders, can benefit from learning the principles involved in this approach to sales enablement.

This course is made up of 12 classes and a 60-question exam. Completing this course will help you: 1. Align your marketing and sales teams around business-level goals 2. Define your target customer using buyer personas and Jobs to Be Done 3. Implement marketing processes that will provide your sales team with a steady flow of qualified leads 📔 Grow Your Career and Business with HubSpot Academy: https://clickhubspot.com/Popular-Courses 📔 Favorite Free Certification Courses: • Social Media Marketing Course: https://clickhubspot.com/Social-Media… • SEO Training Course: https://clickhubspot.com/SEO-Training… • Inbound Course: https://clickhubspot.com/Inbound-Cert… • Inbound Marketing Course: https://clickhubspot.com/Inbound-Mark… • Email Marketing Course: https://clickhubspot.com/Email-Market… • Inbound Sales Course: https://clickhubspot.com/Inbound-Sale… • Taking your Business Online Course: https://clickhubspot.com/Business-Online

How WhatsApp Can Add Another $10 Billion To Facebook’s Revenue Almost Overnight

A crowd of people

Facebook earned over $60 billion last year. But it could add another $10 billion almost overnight. One of the vastly under-reported story over the last 12 months is the almost unprecedented growth of WhatsApp. I’m not sure we’ve ever seen anything like it in the history of mobile. We’ve seen apps like Pokémon Go blast off from zero to a half a billion installs in mere months. We’ve seen social entertainment platforms like TikTok acquire 614 million new users incredibly quickly.

But have we ever seen already-mature billion-user-plus social platforms gain 760 million new users in a single year? Shockingly, that’s exactly what WhatsApp did in 2019.

I don’t think we’ve seen that before. That makes WhatsApp Facebook’s fastest-growth platform.

And, its greatest opportunity.

Because WhatsApp is almost completely unmonetized right now, according to mobile expert Eric Seufert, who runs MobileDevMemo.

WhatsApp is an incredibly important virgin field for Facebook. It can start selling inventory directly or integrate audience network there and very nearly instantly will into existence billions of dollars worth of revenue per quarter.

Eric Seufert

Facebook’s average revenue per user was over $7 in the company’s most recent financials. While it’s lower in Asia Pacific, where WhatsApp is strongest, an analysis from 2017 suggests that WhatsApp could add between $5 and $10 billion to Facebook revenue.

It’s also before we’ve seen the potential for what WhatsApp might really become: something approaching what WeChat is in China, an uber-app that manages massive portions of people’s commerce as well as communications.

Much of the growth has been fueled by India, and that’s where we see the greatest impact.

WhatsApp is the WeChat of India.

Subhodip Dutta

The Indian “monopoly” factor has driven a lot of WhatsApp’s growth, says entrepreneur Subhodip Dutta. It’s the “epicenter” of marketing, spam, political campaigns, he added … in addition to being the primary place people use to communicate.

WhatsApp is big in India, for sure. But not just in India. My friends in the Caribbean use it significantly. Colleagues on the east coast of the United States have started asking to WhatsApp instead of messaging with Messenger. And it’s big in Africa, with tens of millions of downloads recently in Egypt, Nigeria, South Africa, and other countries on the continent, according to Apptopia.

Why?

“No ads, [and] minimal bandwidth hit makes it popular with professional connections in Africa,” says Jerome Lengkeek, president of Urban Matters and former president of Fourth Watch African Investments. “On the same note, the quality of calls is much better with weak internet connections than Skype.”

So why has Facebook left WhatsApp almost entirely unmonetized, beside some minor efforts to connect businesses and consumers on the platform?

One theory: Facebook is waiting for a rainy day.

When, inevitably, growth stalls in North America and Europe.

“Facebook seems to be waiting strategically to monetize WhatsApp: possibly because it wants to use WhatsApp revenue to buoy its stock price when the Big Blue App and Instagram revenue growth stalls in high-ARPU (average revenue per user) markets again,” says Seufert.

Another theory is that the value is already baked into Facebook’s stock price, and it’s more valuable as a possibility than a reality, Seufert adds.

Which, of course, gives Facebook more time and less pressure to figure out ways of harvesting golden eggs from WhatsApp without killing the goose. The company just backed off plans to fit ads into WhatsApp, according to recent reports from the Wall Street Journal and The Verge, and that might be a good idea.

One commonality in answers to my queries on WhatsApp?

People really like the lack of ads.

“My mother has old relatives in Pakistan and they all chat together on WhatsApp,” says entrepreneur Miguel Ali. “Before it, other apps did the same, but you were either bombarded with horrific amounts of ads (that slowed down your device) or you had to continually buy ‘credits’ which made it undesirable.”

Which means that Facebook’s plan to not stuff the app with ads is probably good. And that Facebook will redouble its efforts to integrate payments and commerce into communication in WhatsApp.

That might be challenging in India:

India hasn’t yet allowed the most innovative wallet function of WhatsApp there, yet.

Rajesh Johnny

India has a strong technology industry of its own, and isn’t looking to be digitally colonized by American tech giants, as Amazon’s Jeff Bezos learned this past week. And there are local competitors like PhonePe, who are aggressive and well-funded.

Over time, however, you have to think that Facebook will figure out how to turn over a billion users into cash.

It is, after all, what the company is best at.

Follow me on Twitter or LinkedIn. Check out my website or some of my other work here.

I forecast and analyze trends affecting the mobile ecosystem. I’ve been a journalist, analyst, and corporate executive, and have chronicled the rise of the mobile economy. I built the VB Insight research team at VentureBeat and managed teams creating software for partners like Intel and Disney. In addition, I’ve led technical teams, built social sites and mobile apps, and consulted on mobile, social, and IoT. In 2014, I was named to Folio’s top 100 of the media industry’s “most innovative entrepreneurs and market shaker-uppers.” I live in Vancouver, Canada with my family, where I coach baseball and hockey, though not at the same time.

Source: How WhatsApp Can Add Another $10 Billion To Facebook’s Revenue Almost Overnight

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Report: Amazon’s Twitch Not Meeting Ad Revenue Expectations

France

Topline: While Amazon’s Twitch dominates the live-streaming landscape, a new report from The Information citing people familiar with company financials says it only translated into a modest $230 million in ad revenue for 2018 and a midyear annual projection of $300 million for 2019.

  • According to the report, Twitch was hoping to see ad revenues between $500 million-$600 million in 2019, with the service eventually hitting $1 billion.
  • Partnered streamers on Twitch share revenue from commercials, with the option of running ads at will with the push of a button during streams, but the majority of earnings for top streamers comes from premium subscription revenue that’s shared with Twitch.
  • The same is reportedly true for Twitch, which is now making more off “commerce” like subscriptions; along with its ad revenue, the company is hoping to hit $1 billion in 2020.
  • However, given the top streamers generally get the majority cut from subscriptions, Twitch sees a better profit margin on ads, according to The Information.
  • YouTube, in comparison, is thought to bring in billions off ad revenue alone, and according to Laura Martin, an analyst at Needham & Company, the service as a stand-alone business could be worth up to $300 billion after Google acquired it in 2006 for $1.65 billion.
  • Part of Twitch’s strategy is expanding beyond its gaming roots, with its variety “Just Chatting” category rising 42% to 651 million in total hours watched in 2019, ranking behind only League of Legends and Fortnite, according to analyst firm StreamElements.
  • Twitch remains far away the leader in streaming with 73% of the market share, according to StreamElements, but it’s being chipped away by YouTube (21%), Mixer (3%) and Facebook (3%), all of which have signed major streamers away from Twitch.

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Key Background: Top gamer Tyler “Ninja” Blevins set off a bidding war late last summer when he signed an exclusive streaming deal with Microsoft’s Twitch competitor, Mixer. Facebook, YouTube and startup Caffeine have since signed exclusive streaming deals with former Twitch stars. The moves have just slightly ate at Twitch’s substantial lead in the market, but the long-term impact could be substantial. Regardless, YouTube has a distinct advantage over all other streaming platforms.

No matter the content creator, after they’ve finished streaming for hours on end, they’ll generally make 10-20 minute highlight videos to upload to YouTube.

Big Number: $970 million. That’s what Amazon paid for Twitch in 2014.

Further Reading: Take a look at the major streamer acquisitions that took place late last year.

Follow me on Twitter. Send me a secure tip.

I’m the reporter for the Games section of Forbes.com. I previously served as a freelance writer for sites like IGN, Polygon, Red Bull eSports, Kill Screen, Playboy and PC Gamer. I also manage a YouTube gaming channel under the name strummerdood. I graduated with a BA in journalism from Rowan University and interned at Philadelphia Magazine. You can follow me on Twitter @mattryanperez.

Source: Report: Amazon’s Twitch Not Meeting Ad Revenue Expectations

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The Real Reason Airlines Charge Checked Bag Fees & It’s Not What You Think

Vox thinks airlines should charge for baggage by weight rather than by the piece because of fuel costs. Much of the world actually does set baggage limits and charges by weight. So if weight makes more sense to economize on cost and attach revenue to cost drivers, why doesn’t the US follow suit?

Megan McArdle finds some problems with this approach.

I think it would be helpful here to really understand why airlines are charging bag fees. Sure, there’s unbundling. But it’s not just about unbundling and charging customers more. A key driver in domestic checked baggage fees is tax arbitrage. Airlines want to get a portion of the transportation cost out from under the base airfare so that it is not subject to the government’s 7.5% excise tax on tickets.

At some level it doesn’t matter what pricing mechanism is used, as long as there is one.

That’s because the 7.5% federal excise tax on domestic tickets applies to airfare and not to ancillary services. So as long as airlines are able to unbundle, they get a portion of the transportation cost out from under that tax.

There’s an argument to be made that – contrary to conventional wisdom – charging bag fees is actually a wash for airlines except for this tax savings. I am not persuaded that it’s quite a wash, but the net revenue from bag fees is certainly not what airlines say that it is.

Let’s take an example of United which reports generating about $700 million a year in checked baggage fees.

  • That pushes more bags to the gate. Gate checked bags add a few minutes to the boarding process (passengers try to find overhead space, then wind up going back to the front of the aircraft to gate check, plus 1-2 minutes to move gate-checked bags to the belly of the plane).
  • Extra bags in overhead bins add a minute or two to deplaning.
  • Elite frequent flyers (frequently with aisle seats) board first to ensure they get bin space. Boarding aisle seats first slows down boarding — those passengers get up to let middle and window seat passengers into their row and then have to sit back down while the rest of passengers are held up getting to their rows.

Even if bag fees add just a few minutes to boarding each aircraft, that’s a huge loss to the airlines. From Southwest:

It would cost us approximately 8 to 10 airplanes of flying per day if we were to add just a couple of minutes of block time to each flight in our schedule.

Remember that airlines are trying to optimize schedules for connecting flights, they don’t just push each flight later in the day. Customers want certain times, their competitors fly certain times, there’s a scheduling inefficiency that derives from small delays. And United has twice as many planes as Southwest so the effect is even bigger.

With some very reasonable assumptions about average fare and load factor, 16 to 20 aircraft mean about $700 million worth of revenue per year, which happens to be what’s being brought in from bag fees.

It’s not really a wash, but there’s a real economic loss that trades off with charging checked bag fees.

It’s an admittedly stylized example, things aren’t actually this simple. But it’s certainly illustrative that the bulk of the value to the airline from bag fees come from savings on domestic ticket taxes… tax arbitrage not passengers.

Shifting $700 million out of ticket revenue and into ancillary revenue saves over $50 million in taxes.

Incidentally, international tickets – which do not have this 7.5% excise tax – for the most part still include a free checked bag.

Source: The Real Reason Airlines Charge Checked Bag Fees.. And It’s Not What You Think. – View from the Wing

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Airline baggage fees are up, but here are ways to save the next time you travel.
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