Hello to our awesome Thor community! This dispatch on the road comes to you from Las Vegas, the urban oasis in the Nevada desert, where I am attending World Crypto Con. Being at conferences like these always brings home the real power that blockchain technology has for connecting a global community despite the array of barriers — be they borders, language barriers, financial barriers, or legal ones — that are working to keep us apart.
That’s why I’m here networking with industry leaders, thought leaders, and business owners to see if they can help us with our ultimate goal: connecting independent contractors to bring them the benefits that community can provide while preserving the freedom that comes from being your own business. It’s no easy task, but I am very proud of the strides our team has made, from launching Odin to partnering with M Group Health to bring access to healthcare for contractors on our network.
Our technical team is working hard to add to the immense array of services found in Odin, and our legal team is busting their behinds to form the Association(s) required to offer the non-profit Association Health Plan that we can’t wait to bring to contractors. We are already helping improve the lives of contractors and on-demand companies, but I truly feel that this is just the beginning.
Speaking of conferences, I’ll be speaking at one myself at the end of this month! The event is Blockchain Expo North America, the world’s largest blockchain conference, and it will be held in Santa Clara, south of San Francisco, on November 28th and 29th. I’ll be speaking on the afternoon of Wednesday the 28th, and our team will be manning a booth both days. Please stop by and say hello if you are in the bay area, we’d love to meet you in person!
Thanks again for being with us on this journey. There will be more major announcements to come this month as we continue building out our platform and growing our network, so stay tuned, and we hope to see you in Santa Clara!
— David Chin, CEO, Thor
As many of you know, the big news of the month was the launch of Odin at the start of October. Much of our team’s technical efforts over the last 30 days have been focused on continuing to strengthen the suite of services that Odin offers on-demand companies with the ultimate goal of making Odin the only one-stop-shop on the market for managing 1099 Contractors.
This took us down a few avenues. We received the prototype for the Thor/Odin Debit Card and made our very first purchase using cash from a Thor Mobile Wallet that was sent there using the Odin software! The debit card is vital to Lightning Pay, the instant payments portion of our platform. This is due to the fact that while we can facilitate payments from Odin to a Thor Mobile Wallet instantly, we can not bypass the three-day ACH transfer period to get that money into the user’s bank account. By equipping that user with a Thor Debit Card attached to their Thor account, they can spend that money at any location that accepts major credit cards the moment it hits their mobile wallet.
Another key feature we are working on is automated tax reporting. An on-demand company must track all of their payments to independent contractors over the course of a year in order to report it to the IRS come tax season. This can be much more cumbersome for companies that rely on 1099 contractors than those that use W2 employees. This is because they often work with a much larger pool of people who receive widely varying levels of payment over an array of time periods. Additionally, they do not need to report payments to an independent contractor if those total less than $600 in a given year, so the company must track these payments and trigger a different classification when this level is reached.
Some companies we have spoken with are still documenting these payments with spreadsheets and storing the relevant documents in filing cabinets. They then have to pay a tax specialist to sort through the documents come tax season, correctly tally the total payments over the year, and then fill out and ship off the correct forms to both the IRS and the contractor in question. Tracking these payments and storing the relevant information digitally would be of obvious benefit to these companies. As their payments platform, we would be uniquely positioned to automate this process, adding immediate value to these companies and reducing the amount of hurdles — and headaches—required to manage their contractors.
Lastly, we are working on an integration with a major workplace scheduling provider to equip companies and their contractors with additional tools for determining which contractors take which shifts. An on-demand company would be able to post available shifts over a given time period, and then contractors could claim the shifts that they wish to work. Given the recent CA Supreme Court ruling in the Dynamex Case and the IRS’ 20-factor test for determining if an individual is an employee or independent contractor, it is important to find solutions to worker scheduling and onboarding that operate within the confines of the law.
The rising demand for 1099 workers has predictably triggered a number of new legal and statutory requirements on a state-by-state basis. We believe companies that engage 1099 workers will need to adapt quickly to these changing regulatory requirements — Wal-Mart recently implemented a similar system for their gig economy program, Spark Delivery Service.
Together, these services will continue to extend the list of essential tasks that Odin either automates or significantly simplifies for the companies that use it.
Today is the start of open enrollment, and we have partnered with M Group Health to provide access to health coverage for contractors in our network (and anyone else looking for a new health plan)! We are very excited to secure this partnership and provide this option as we continue to march down the path towards offering group-plan health insurance uniquely tailored to workers in the gig economy.
As we mentioned in our July article “Bringing Healthcare to the Gig Economy,” we have been hard at work reviewing the recent changes to the ACA in order to bring affordable healthcare to the 1099 economy. Based on our feedback from professionals within the industry, we believe that we are one of the few companies nationwide currently pursuing this route to providing affordable group-plan insurance for independent contractors.
While the recent changes have expanded the scope of Association Health Plans, there is still some uncertainty about how to properly group 1099 workers within a specific plan on both a state and federal level.
Our focus will be to group 1099 workers by geographic region or by common industry. By structuring our AHP as a non-profit, we will be able to truly align our vision of providing healthcare to an underserved and growing part of the U.S. economy without adding an additional layer of excessive fees. Furthermore, we will be able to leverage the growing number of contractors on the Odin platform to garner competitive premium prices via the various insurance companies.
In terms of a timeline, we envision the following*:
Q4 2018 -
- Thor completes legal analysis regarding ACA Rule changes
- Thor registers non-profit Association within ERISA, IRS and state rules
- Board is formed and begins drafting of by-laws
- Develop summary plan descriptions
- Draft administrative services agreement
- Thor begins negotiation with insurance companies to underwrite plan and provide coverage
- Thor unveils Thor Care and begins open-enrollment by the November 1, 2019 deadline.
*subject to change depending on legal and regulatory considerations
We anticipate the priorities to evolve over the next 3–6 months, but the above timeline represents the basic necessary steps in forming a new AHP under the recently announced changes to the ACA. The feedback we’ve received from both independent contractors and the on-demand companies that engage their services has been overwhelmingly positive.
We are doing everything we can to bring our vision of healthcare to the 1099 economy as quickly as possible; however, consistent with our overall approach, we are doing things by the book and with the support of legal and industry professionals. More details will be released as we reach each milestone of our AHP roadmap!
On the regulatory front, we continue to make progress in securing the Money Transmitter Licenses (MTLs) in all 50 states. We’ve recently partnered with an AI-based Anti-Money Laundering (AML) company that specializes in crypto-based transaction monitoring and screening (announcement coming soon). This is an important step in securing MTLs and registration with FinCEN as a money services business.
We are also on the list to be part of an exciting pilot program designed to streamline the MTL process on a state-by-state level. Ben’s home state of Washington has taken the lead on a unique initiative to combine MTL requirements across six states in Phase I of the program with an additional 11 states to follow in Phase II. Because each state generally has its own unique set of rules related to money transmission, this is a welcome change and will likely expedite the application process and create uniformity across state lines.
The above updates represent important steps in ensuring Thor remains compliant with the many state and federal regulations related to virtual currency and traditional fiat transmission. We believe a solid compliance program focused on sniffing out fraudulent transactions and attempts to launder money before they occur will further establish Thor as a leader in the payments space.
Odds and Ends
- We partnered with Dwolla, a leading U.S.-based payment services provider, to facilitate our payment network on the fiat/USD side of Odin™ and the Thor Mobile Platform
- We had the first winner for the Thor Rewards Referral Program! DeMarcus Nelson won $500 for signing the most people up to be a part of our prospective pool of insured people during September. Sign up for the program yourself and you too can win some extra spending cash! The best part: the more people we get to show interest in ThorCare, the more we can leverage insurance companies to provide low rates for our contractors.