Business Update – October 6 2021

What does it cost to be hospitalized for COVID-19? A study by The Wall Street Journal found the cost can vary by tens of thousands of dollars, depending on the hospital and the insurance policy. While most insurers waived out-of-pocket costs for patients for most of the pandemic, many patients are now receiving bills for hospital stays, which can depend on rates negotiated between hospitals and insurers. For example, at one hospital in New York City, the cost for a severe-respiratory patient ranged from $55,182 to $94,357, depending on the insurance provider. Unfortunately, once admitted, a patient has no control over the services they receive nor over the cost.

THE AMERICAN RECOVERY PLAN ACT (ARPA)

Monthly Child Tax Credit Payments

The deadline to unenroll from advance Child Tax Credit payments before the October 15 deadline was October 4. Nontraditional families, divorced parents, or anyone with a complicated tax situation may want to opt out from future payments to prevent a possible surprise tax bill come October.

As a reminder, if you want to opt out of future payments, you must opt out by the deadline for the next month’s payment. Check out the IRS FAQs where you’ll find everything you need to know about opting out in Section J.

TAX MATTERS

Did you work remotely in a different state from your employer in 2021? While many states offered leniency during 2020 related to the pandemic, those breaks are going away, so remote workers may need to check out the precise rules for the state or states they resided in during 2021. States don’t follow any kind of uniform rules about taxing income earned in that state, so 2021 may be more complex than 2020. Whichever state you are a resident of will tax a portion of your income, no matter where you were when you earned it. Some states allow nonresidents to work there for 30 days or more before employers are required to withhold state taxes, while others have a wage-based threshold, and still others have no income tax. Several neighboring states have reciprocal agreements so that employees who work in one state but live in the other only pay tax where they live.

THE GREAT REASSESSMENT

Companies are beginning to think about how they might implement a four-day workweek as a means to safeguard their employees’ mental health against burnout. But what would this look like in practice? Some companies require employees to work four ten-hour days, while others drop the required work hours from 40 to 32. Some want all employees to work the same four days, while others offer flexibility in choosing their days of work. Benefits of a four-day workweek include better work-life balance, reduced stress, and improved productivity.

Workplace perks for the past decade or so have centered around nice things at the workplace: snacks in the kitchen, pool tables, and in-house gyms. But as pandemic restrictions ease, people are looking for different kinds of perks. Employees are now interested in workplace amenities that make working at the office better than working at home. For example, urban commuters may want showers and bike racks to make commuting by bike easier. Employee-specific options for flexibility and career development pathways may help workplaces attract and retain talent. However, providing customized arrays of perks and benefits to a widely dispersed workforce is more difficult than offering the same package across all team members. Sometimes the best perk is simply providing people an opportunity to do their best work: according to one expert, “If you want someone to do a good job, you don’t need to give them perks, you have to give them a good job to do.”

REOPENING THE OFFICE AND REMOTE WORK OPTIONS

Starting a new job is challenging enough, but as a remote worker, that start can be more challenging. This piece from CNN Business offers tips to make onboarding easier. First, get your workspace in order with everything you think you may need. Review your new company’s website and social media profiles to learn as much as you can about your co-workers and company culture before you start. Ask your manager to assign you a buddy who can answer small questions to learn how things work. Asking for regular feedback from your manager in your first few weeks will also help you stay on track.

ECONOMY

Across the country, supply chain problems worsened by the pandemic are expected to continue through 2022. As consumers switched spending from restaurants and live entertainment to laptops and bicycles, the pandemic exposed weaknesses in the nation’s transportation structure. At the port of Los Angeles, a lack of investment and information sharing has made it difficult for ships, cargo terminals, truckers, and railroads to work together to move freight smoothly off ships and across the country.

The biggest issue facing the Federal Reserve today is easing the tension between elevated unemployment and inflation, according to Fed Chair Jerome Powell. The U.S. is still more than five million jobs short of the pre-pandemic era, and inflation is forecast to be 4.2%, more than twice the targeted rate of 2%. At least part of the disconnect between inflation and unemployment stems from supply chain issues.

Personal spending increased by 0.8% and personal income rose by 0.2% in August according to the latest report from the Commerce Department. Wage gains and distribution of monthly child tax credit payments contributed to the increase in personal incomes. However, the spread of the delta variant slowed spending on meals and travel. However, as COVID-19 cases decline, spending is picking up in many categories, including restaurants.

GENERAL RESOURCES

We sincerely hope that you and your family are well and remain well. If you have any questions or concerns, don’t hesitate to reach out to us. We are all in this together!

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