Free 2/7 RPTE Employee Benefits & Other Compensation Arrangements Study Group Teleconference Call On Evolving Health Care Reform Plan Guidance

January 27, 2011

 The American Bar Association (ABA) Real Property, Trust & Estates Employee Benefits & Other Compensation Arrangements Group invites interested members and other legal professionals to participate in a complimentary one hour study group conference call focusing on selected health plan developments on Monday, February 7, 2011 at 1 PM Eastern, Noon Central, 11 AM Mountain and 10 AM Pacific.

Hosted by the Group’s Welfare Plan Committee, the study group call will feature a roundtable discussion of various current Health Care Reform issues. The discussions will be lead by Sarah Brown, Associate General Counsel, HealthSmart Holdings, Inc., Cynthia Marcotte Stamer, Esq., Elizabeth Ysla Leight, Society of Professional Benefit Administrators, and Robert A. Miller, Calfee, Halter & Griswold LLP, but all members will be invited to share their views and experiences.

 Planned topics of discussion include the following:

  •  105(h) issues, enforcement delay, comment opportunity and other developments
  • Drug card HRSA reimbursements
  • GINA and other wellness issues
  • Latest information on the Tax Section Meeting and the Baltimore TEGE discussion
  •  Other PPACA topics

 The dial-in information for the call is:

 Phone Number:   (866) 646-6488

Participant Pass code: 7255887619#

 Participation is available on a first come, first serve basis at no charge, based on the availability of lines.  Group members or others planning to participate are encouraged to R.S.V.P. via e-mail here to be included on the distribution list for materials to be shared in connection with the meeting.

For additional information about the Group, the Study Group call or other opportunities for involvement, contact Group Chair Cynthia Marcotte Stamer via e-mail here or at (469) 767-8872 or Group Vice Chair Robert Miller via email here or at (216) 622.8363.  If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication click here. 

About Solutions Law Press, Inc.

Solutions Law Press, Inc.™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested in exploring other Solutions Law Press, Inc. ™ tools, products, training and other resources here and reading some of our other Solutions Law Press, Inc.™ human resources news here.

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication click here. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.



IRS, HHS & DOL To Delay Enforcement of New Insured Group Health Plan Non-Discrimination Rules Pending Guidance; Seek Public Input on Rules

January 24, 2011

Implications of Announced Reprieve on Possible Participant Suits Unclear

The Internal Revenue Service (IRS), Department of Labor (DOL) and Department of Health & Human Services (HHS) recently announced that the agencies do not plan to enforce new rules that prohibit non-grandfathered insured group health plans from discriminating in favor of highly compensated employees until guidance is published on the workings of certain key elements of these requirements.  The IRS announced the relief from enforcement of the new insured group health plan nondiscrimination requirements enacted as part of the Patient Protection and Affordable Care Act (Affordable Care Act) in Notice 2011-1, which was published in the Internal Revenue Bulletin on January 7, 2011.  According to Notice 2011-1, the Agencies determined that questions about the construction of certain aspects of the non-discrimination rules made it inappropriate to require insured group health plans to comply or to impose sanctions for their failure to comply with the new non-discrimination rules until the agencies publish certain regulations or other administrative guidance.  According to Notice 2011-1, pending the publication of further guidance, the agencies do not intend to enforce sanctions for non-compliance with the new non-discrimination rules and will not require insured group health plan sponsors to file IRS Form 8928 with respect to excise taxes resulting from the incorporation of Public Health Services Act (PHS Act) § 2716 into Internal Revenue Code (Code) § 9815. Its unclear how this guidance will impact possible participant or beneficiary suits to enforce the new rules under Section 512 of the Employee Retirement Income Security Act (ERISA).

New Insured Plan Non-Discrimination Rules

As part of the Affordable Care Act health care reforms, Congress amended the PHS, Code and ERISA to require insured non-grandfathered group health plans to satisfy non-discrimination rules like those applicable to self-insured group health plans under Code § 105(h).  Unlike the taxation of highly compensated participants that generally results from a discriminatory self-insured group health plan, however, the Affordable Care Act provides for potentially draconian sanctions against an insured group health plan or its sponsor when an insured group health plan violates these non-discrimination requirements.

The Affordable Care Act generally provides that if a non-grandfathered insured employer-sponsored group health plan that discriminates in favor of highly compensated employees in a manner that would violate the non-discrimination requirements of Code § 105(h)(2) in any post-September 22, 2010 plan year, the plan or plan sponsor may face significant  excise taxes, civil money penalties, and lawsuits to compel it to provide nondiscriminatory benefits to non-highly compensated participants equivalent to the discriminatory benefits provided to highly compensated participants.

According to Notice 2011-1, the agencies determined from initial public comments that without regulations or other administrative guidance under PSA § 2716, plan sponsors are uncertain how to apply the nondiscrimination provisions.   Accordingly, Notice 2011-1 indicates that the agencies decided that their enforcement of the new insured group health plan nondiscrimination rules should be delayed until the publication of that guidance.  Notice 2011-1 invites concerned plan sponsors and others to submit comments on a broad range of concerns relating to this guidance.  According to Notice 2011-1, the deadline for submission of this input is March 11, 2011.

Implications of Relief For Insured Group Health Plans

While Notice 2011-1 indicates that HHS and DOL also plan to hold off enforcement of the new non-discrimination rules, it is unclear what effect, if any, the relief announced in the Notice will have on the ability of participants and beneficiaries to enforce the requirements by filing civil lawsuits under ERISA.  Under ERISA § 512, participants and beneficiaries generally have the ability to sue plans and their fiduciaries for equitable relief to enforce violations of ERISA.  As amended by the Affordable Care Act, the new non-discrimination requirements for insured group health plans of ERISA § 715(a)(1) are effective for all post-September 22, 2010 plan years.   Accordingly, while insured group health plans and their sponsors still potentially risk participant or beneficiary law suits if their program is discriminatory.

While awaiting further guidance from the agencies, insured and self-insured group health plans, their sponsors and fiduciaries should document their attempt to prudently evaluate and determine their responsibilities under the non-discrimination rules, and other federal laws.  In addition, plans, their fiduciaries, sponsors and service providers should begin implementing and administering the data collection and other processes that they are likely to need to test their programs for discrimination and perform other requirements.  To encourage the agencies to adopt regulations that are sensitive to the challenges of plan sponsors and plans in meeting these requirements, plan sponsors, fiduciaries, insurers and service providers also should provide input to the agencies and Congressional health care policy leaders about these concerns.

For More Information Or Assistance

If you need assistance submitting comments to the agencies, evaluating or updating your plans in response to these new rules or auditing or assessing, updating or defending other labor and employment, employee benefit or compensation practices, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469)767-8872. 

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 23 years of work helping employers; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; and others design, administer and defend innovative workforce, compensation, employee benefit  and management policies and practices. The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer works, publishes and speaks extensively on wage and hour, worker classification and other human resources and workforce, employee benefits, compensation, internal controls and related matters.  She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly.

About Solutions Law Press, Inc.

Solutions Law Press, Inc.™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested in exploring other Solutions Law Press, Inc. ™ tools, products, training and other resources here and reading some of our other Solutions Law Press, Inc.™ human resources or other updates here.

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication see here. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

 

©2011 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press, Inc.™  All other rights reserved.


DOL Announces Changes To H-2B Prevailing Wage Calculation Rules

January 20, 2011

The methodology used to calculates the prevailing wages the Labor Department requires employer to pay H-2B workers and United States (U.S.) workers recruited in connection with a temporary labor certification for use in petitioning the Department of Homeland Security (DHS) to employ a nonimmigrant worker in H-2B status will change effective January 1, 2012. Comments on the Final Regulation published here (Final Regulations) in the January 19, 2011 Federal Register are due March 21, 2011.   Employers using or contemplating using H-2B workers should take into account these new rules when budgeting and projecting workforce costs and assessing the cost-effectiveness and compliance requirements associated with these contemplated relationships.

To comply with its H-2B program obligations, an employer must pay H-2B workers hired in connection with an H-2B application a wage that will not adversely affect the wages of U.S. workers similarly employed. The Labor Department’s H-2B procedures have always provided that adverse effect is prevented by requiring H-2B employers to offer and pay at least the prevailing wage to the H-2B workers and those U.S. workers recruited in connection with the job opportunity.

The Final Regulations are issued largely in response to an August 30, 2010  court order that set aside portions of regulations governing the H-2B temporary worker program issued on December 19, 2009 at 73 Fed. Reg. 78020 (“2008 Final Rule”).  On August 30, 2010, a Federal Court found that the Labor Department violated the Administrative Procedures Act when it issued the 2008 Final Regulations.  See Comit[eacute] de Apoyo a los Trabajadores Agricolas (CATA) v. Solis, Civil No. 2:09-cv- 240-LP, 2010 WL 3431761 (E.D. Pa.).  In that decision, the Federal District Court ordered the Labor Department to “promulgate new rules concerning the calculation of the prevailing wage rate in the H-2B program that are in compliance with the Administrative Procedure Act.  The Final Regulation is issued in response to this order.

Under the Final Regulation, Labor Regulation § 655.10 generally will provide that for temporary labor  certification purposes, the prevailing wage is the highest of the following:

  • The wage rate set forth in the CBA, if the job opportunity is  covered by a CBA that was negotiated at arms’ length between the union  and the employer;
  • The wage rate established under the DBA or SCA for the occupation in the area of intended employment if the job opportunity is  in an occupation for which such a wage rate has been determined; or
  • The arithmetic mean of the wages of workers similarly employed in the occupation in the area of intended employment as determined by  the OES. This computation will be based on the arithmetic mean wage of  all workers in the occupation.

The NPC now only will consider employer provided wage surveys for purposes of determining the prevailing wage in a very limited number of circumstances where the employer is permitted to and makes a request for a prevailing wage determination in accordance with the Final Regulations.

For assistance with assessing or defending your current worker classification, wage and hour or other health care and human resources policies and controls, please contact Cynthia Marcotte Stamer at cstamer@solutionslawyer.net, 972-419-7188.

For Help With Investigations, Policy Updates Or Other Needs

If you need assistance reviewing your prevailing wage determinations under these, government contracts or other laws, or evaluating, managing or defending your organization’s existing other labor and employment, employee benefit, compensation, compliance or other practices, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469)767-8872 .

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 23 years of work helping employers; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; and others design, administer and defend innovative workforce, compensation, employee benefit  and management policies and practices. The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer frequently has worked, extensively on these and other workforce and performance related matters.   She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly.

About Solutions Law Press, Inc.

Solutions Law Press, Inc.™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested in exploring other Solutions Law Press, Inc. ™ tools, products, training and other resources here and reading some of our other Solutions Law Press, Inc.™ human resources news here.

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication click here. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

 

©2011 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press, Inc.™  All other rights reserved.


$1 Million + FLSA Overtime Settlement Shows Employers Should Tighten On-Call, Other Wage & Hour Practices

January 20, 2011

CALNET Inc. and two subcontractors providing language, intelligence and information technology services to the U.S. Army at Ft. Irwin, California have paid a combined total of $1,060,554 in back wages to settle claims they violated the Fair Labor Standards Act by failing to properly pay for on-call time, the U.S. Department of Labor’s Wage and Hour Division (DOL) announced January 19, 2011.  Highlighting the growing exposure employers generally face from the heightened Labor Department emphasis on overtime and other wage and hour law enforcement, .the settlement also demonstrates the significant risks that employers face from mischaracterizing or failing to properly pay for on-call, standby or other similar times required of non-exempt employees.  Employers and others providing workforce staffing should review and tighten existing worker classification, timekeeping and classification, recordkeeping and other practices and take other steps to strengthen the defensibility of their practices.

CALNET FLSA Backpay Settlement

According to its January 19, 2011 settlement announcement, the DOL, a Wage and Hour Division investigation determined that prime contractor CALNET Inc. of Reston, Va., and subcontractors Acclaim Technical Services Inc. of Huntington Beach, Calif., and McNeil Technologies of Springfield, Va., violated the Fair Labor Standards Act (FSLA) by not properly compensating workers for all on-call time, resulting in overtime violations. The employers also were found to be in violation of FLSA recordkeeping requirements for failing to maintain proper records of the number of hours worked by employees and the compensation they were paid.  

The three companies have paid their employees a total of $1,060,554 in back wages owed for the period between October 2008 and October 2010. CALNET paid $676,698 to 597 employees.  Acclaim Technical Services paid $234,311 to 177 employees. McNeil Technologies paid $149,545 to 91 employees. 

Overtime & Other Wage & Hour Enforcement Risks Rising

Government contractors and other employers increasingly risk triggering significant liability by failing to properly characterize, track and pay for on-call and other compensable time in violation of the FSLA or other laws.

The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates of pay, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employees must also maintain accurate time and payroll records.  Improper classification of on-call or other hours that the FLSA requires an employer to treat as compensable exposes the employer to potential minimum wage, overtime and recordkeeping violations.

Under the FLSA, on-call time becomes compensable when the on-call conditions are so restrictive or the calls to duty so frequent that the employee cannot effectively use on-call time for personal purposes under the facts and circumstances.  

Unfortunately, many employers often are overly optimistic or otherwise fail to properly understand and apply FLSA rules for characterizing on-call or other time, classifying workers as exempt versus non-exempt or making other key determinations. 

Employers wearing rose tinted glasses when making wage and hour worker classification or compensable time determinations tend to overlook the significance of the burden of proof they can expect to bear should their classification be challenged.  Under the FSLA and applicable state wage and hour laws, employers generally bear the burden of proving that they have properly paid their employees in accordance with the FLSA. Additionally, the FLSA and most applicable state wage and hour laws typically mandate that employers maintain records of the hours worked by employees by non-exempt employees, documentation of the employer’s proper payment of its non-exempt employees in accordance with the minimum wage and overtime mandates of the FLSA, and certain other records.  Since the burden of proof of compliance generally rests upon the employer, employers should take steps to ensure their ability to demonstrate that they have properly paid non-exempt employees in accordance with applicable FLSA and state wage and hour mandates and that employees not paid in accordance with these mandates qualify as exempt from coverage under the FLSA. 

These mistakes can be very costly.  Employers that fail to properly pay employees under Federal and state wage and hour regulations face substantial risk.  In addition to liability for back pay awards, violation of wage and hour mandates carries substantial civil – and in the case of willful violations, even criminal- liability exposure.  Civil awards commonly include back pay, punitive damages and attorneys’ fees. 

The potential that noncompliant employers will incur these liabilities has risen significantly in recent years.  Under the Obama Administration, Labor Department officials have made it a priority to enforce overtime, recordkeeping, worker classification and other wage and hour law requirements. While all employers face heightened prosecution risks, federal officials specifically are targeting government contractors, health care, technology and certain other industry employers for special scrutiny.  Meanwhile, private enforcement of these requirements by also has soared following the highly-publicized implementation of updated FLSA regulations regarding the classification of workers during the last Bush Administration. See Minimum Wage, Overtime Risks Highlighted By Labor Department Strike Force Targeting Residential Care & Group Homes; Review & Strengthen Defensibility of Existing Worker Classification Practices In Light of Rising Congressional & Regulatory Scrutiny; 250 New Investigators, Renewed DOL Enforcement Emphasis Signal Rising Wage & Hour Risks For EmployersQuest Diagnostics, Inc. To Pay $688,000 In Overtime Backpay.

Employers Should Strengthen Practices For Defensibility

As a consequence, most employers should review and document the defensibility of their existing practices for classifying and compensating workers under existing Federal and state wage and hour laws and take appropriate steps to minimize their potential liability under applicable wages and hour laws.  To minimize exposure under the FLSA, employers should review and document the defensibility of their existing practices for classifying and compensating workers under existing Federal and state wage and hour laws and take appropriate steps to minimize their potential liability under applicable wages and hour laws.  Steps advisable as part of this process include, but are not necessarily limited to:

  • Audit of each position current classified as exempt to assess its continued sustainability and to develop documentation justifying that characterization;
  • Audit characterization of workers obtained from staffing, employee leasing, independent contractor and other arrangements and implement contractual and other oversight arrangements to minimize risks that these relationships could create if workers are recharacterized as employed by the employer receiving these services;
  • Review the characterization of on-call and other time demands placed on employees to confirm that all compensable time is properly identified, tracked, documented, compensated and reported;
  • Review of existing practices for tracking compensable hours and paying non-exempt employees for compliance with applicable regulations and to identify opportunities to minimize costs and liabilities arising out of the regulatory mandates;
  • If the audit raises questions about the appropriateness of the classification of an employee as exempt, self-initiation of appropriate corrective action after consultation with qualified legal counsel;
  • Review of existing documentation and recordkeeping practices for hourly employees;
  • Exploration of available options and alternatives for calculating required wage payments to non-exempt employees; and
  • Reengineering of work rules and other practices to minimize costs and liabilities as appropriate in light of the regulations.

Because of the potentially significant liability exposure, employers generally will want to consult with qualified legal counsel prior to the commencement of their assessment and to conduct the assessment within the scope of attorney-client privilege to minimize risks that might arise out of communications made in the course of conducting this sensitive investigation. 

For Help With Investigations, Policy Updates Or Other Needs

If you need assistance in conducting a risk assessment of or responding to an IRS, Labor Department or other legal challenges to your organization’s existing workforce classification or other labor and employment, employee benefit or compensation practices, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469)767-8872 .

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 23 years of work helping employers; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; and others design, administer and defend innovative workforce, compensation, employee benefit  and management policies and practices. The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer frequently has worked, extensively on these and other workforce and performance related matters.   She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly.

About Solutions Law Press, Inc.

Solutions Law Press, Inc.™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested in exploring other Solutions Law Press, Inc. ™ tools, products, training and other resources here and reading some of our other Solutions Law Press, Inc.™ human resources news here.

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication click here. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2011 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press, Inc.™  All other rights reserved.


Medical Resident Stipend Ruling Shows Health Care, Other Employers Should Review Worker Classification, Payroll & Other Practices

January 12, 2011

Stipends paid to medical residents to provide on patient care and other medical services for 40 or more hours per week as part of an accredited graduate medical education program are wages paid to employees for Federal Insurance Contributions Act (FICA) payroll taxes purposes and do not qualify as exempt from FICA tax or withholding as student stipends according to January 11, 201 U.S. Supreme Court ruling in Mayo Foundation v. U.S.   The decision is the latest reminder to health care providers and others of the need to critically review and update as necessary their organizations existing worker and wage characterization in light of evolving interpretations and the growing success of regulators and private plaintiffs in challenging these classifications.

In Mayo Foundation, the U.S. Supreme Court denied the plea of Mayo Foundation For Medical Education And Research (Mayo) that it overrule an Internal Revenue Service (IRS) Regulation that provides that medical students or others providing full-time services as part of their course of instruction do not qualify as “students” for purposes of the “student” exemption of Code § 3121(b)(10) regardless of whether “the services performed . . . may have an educational, instructional, or training aspect.” See Treas. Reg.§31.3121(b)(10)–2(d)(3)(iii).   Mayo Foundation, the Supreme Court ruled against Mayo Foundation.  It ruled the IRS’ regulation construing Code § 3121(b)(1) as inapplicable to medical students or other workers providing full-time services as part of a residency or other educational program should stand as Congress has not directly spoken to foreclose that interpretation and because the Treasury Department’s rule is a reasonable construction of what Congress has said. 

Beyond its specific holding, the Mayo Foundation decision also serves as another reminder that health industry and other employers should not take the defensibility of their worker classification and associated income and payroll tax, employee benefit, employment and other practices for granted. 

Recent developments send a clear message that  health industry and other employers must remain constantly diligent about confirming and documenting the defensibility of their worker classifications and other associated practices in light of evolving rules and standards, enforcement, the growing frequency and success of regulators and private plaintiff challenges, and changing workforce practices.  See e.g. Review of Worker Classification Needed As Classification Scrutiny Rises;Minimum Wage, Overtime Risks Highlighted By Labor Department Strike Force Targeting Residential Care & Group Homes; Review & Strengthen Defensibility of Existing Worker Classification Practices In Light of Rising Congressional & Regulatory Scrutiny; 250 New Investigators, Renewed DOL Enforcement Emphasis Signal Rising Wage & Hour Risks For EmployersQuest Diagnostics, Inc. To Pay $688,000 In Overtime Backpay.

The IRS, Department of Labor and other federal and state regulators are stepping up scrutiny of and enforcement of worker classifications and claims of exemption from applicable employment, tax and other requirements.  In light of these and other developments, health industry and other employers should take reasonable steps to guard against these and other growing risks of worker misclassification and associated non-compliance.  To minimize their potential exposure, health industry and other employers should consult with qualified legal counsel for advice within the scope of attorney-client privilege concerning the need to audit or otherwise act to strengthen the defensibility of their existing worker classification, employee benefit, fringe benefit, employment, wage and hour, and other workforce policies to mitigate exposures to potential IRS, Labor Department or other risks of worker misclassification or the handling of associated payroll, employment or other responsibilities.

For Help With Investigations, Policy Updates Or Other Needs

If you need assistance in conducting a risk assessment of or responding to an IRS, Labor Department or other legal challenges to your organization’s existing workforce classification or other labor and employment, employee benefit or compensation practices, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469)767-8872 .

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 23 years of work helping employers; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; and others design, administer and defend innovative workforce, compensation, employee benefit  and management policies and practices. The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, and the Managing Editor of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, Ms. Stamer recently was a featured panelist on the ABA Joint Committee on Employee Benefits Teleconference on “Worker Classification & Alternative Workforce: Employee Plans & Employment Tax Challenges” and has worked, published and spoken extensively on worker classification and other related matters.  She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available for review here.

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication click here. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

 

©2010 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


CMS Physician Compare Web Site Offers Consumers New Provider Info Source

January 4, 2011

The Centers for Medicare & Medicaid Services (CMS) added a new “Physician Compare” feature to the CMS Healthcare Provider Directory on December 30, 2010.  Regulators hope the new feature will help Medicare and non-Medicare patients and their families find and assess the quality of providers.  While these and other similar resources can provide valuable information for patients and their families, like all provider directories, patients and their families should be cautioned to properly understand the benefits and limitations of the resource.

Required by the Patient Protection & Affordable Care Act (“Affordable Care Act”), the Physician Compare tool located here has information about Doctors of Medicine, Osteopathy, Optometry, Podiatric Medicine, and Chiropractic and certain other types of health care professionals participating in the Medicare Program, who routinely care for Medicare beneficiaries.

According to CMS, the Physician Compare Web Site is designed to be consumer friendly and help all patients—whether on Medicare or not—locate health professionals in their communities. The information on the site includes contact and address information for offices, the professional’s medical specialty, where the professional completed his or her degree as well as residency or other clinical training, whether the professional speaks a foreign language, and the professional’s gender.  The tool can also help Medicare beneficiaries find out which physicians that see Medicare patients.

In addition to information about the physician’s practice, Physician Compare also shows consumers whether the practice reported certain data to CMS through the Physician Quality Reporting System, formerly known as the Physician Quality Reporting Initiative (PQRI). Currently, the PQRI reporting system is a voluntary reporting program that rewards physicians and other eligible healthcare professionals for reporting data on quality measures related to services furnished to Medicare beneficiaries.  These quality measures are based on the best available medical evidence and designed to help professionals improve care for patients. In 2009, over 200,000 professionals reported data to CMS through the Physician Quality Reporting System.

According to CMS, it plans a second phase of the Web site which will indicate whether professionals chose to participate in a voluntary effort with the Agency to encourage doctors to prescribe medicines electronically, rather than through traditional paper-based prescription methods later in 2011.

In future years, the Physician Compare Web site will be expanded with information about the quality of care Medicare beneficiaries receive from physicians and the other healthcare professionals profiled on the site.  The expansion will include information on quality of care and patient experience that can help consumers learn more about the care provided by Medicare-participating physicians.  CMS is required by the Affordable Care Act to develop a plan to implement this expansion by 2013.

The new Physician Compare resource supplements a broad range of resources that patients and their families can use to gather information about an existing or proposed health care provider.  Like all directories, however, patients and their families should keep in mind that no single resource or directory provides complete information about any one provider or should be used as a sole basis for selecting or assessing the quality or credentials of any health care provider.

For More Information Or Assistance

Learn more about other useful patient empowerment information and share your own insights to help other patients and their families develop real meaningful improvements by joining Project COPE: Coalition for Patient Empowerment here by sharing ideas, tools and other solutions and other resources.

If you need help empowering your workforce or their families with new health care coping skills, updating your health benefit programs and contracts or with other employee benefit, compensation or employment regulations or other related matters please contact Cynthia Marcotte Stamer here or (469) 767-8872. 

Management attorney and consultant, Ms. Stamer is nationally and internationally recognized for work experience, advocacy and leadership on health benefit and related matters.  A practicing attorney, Ms. Stamer has more than 23 years experience advising and representing employers, employee benefit plans, their sponsors, fiduciaries, plan administrators, service providers, consultants, vendors, outsourcers, insurers, financial services providers, governments and others about health and other employee benefit, compensation, employment, insurance and financial services, and a wide range of other performance, legal and operational risk management practices and concerns.  Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization, Chair of the American Bar Association (ABA) RPTE Employee Benefit & Other Compensation Group, a Council Member of the ABA Joint Committee on Employee Benefits, and Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is nationally recognized for her work helping clients to design, document, administer and defend health and other employee benefit plans and other related financial and insurance products and to manage risks associated with the offering and administration of these arrangements.  Her experience includes extensive work advising and representing employers, plans, plan fiduciaries, trustees, investors, and others about managing and resolving risks relating to fiduciary, contracting and other risks and responsibilities involved in the design, selection and administration of investments for employee benefit plans, and other fiduciary responsibility matters.  She also has extensive experience assisting these and other clients to investigate and determine the appropriateness of retirement plan investment selections to comply with ERISA and other fiduciary responsibility rules, as well as to defend challenges to investment offerings or decisions against complaints or actions brought by private plaintiffs, the Labor Department, state and federal securities regulators, insurers and others.  A prolific author and popular speaker, Ms. Stamer also publishes, conducts client and other training, speaks and consults extensively on employee benefit, compensation and human resources practices and concerns for the ABA, World At Work, SHRM, American Health Lawyers Association, Institute of Internal Auditors, Society for Professional Benefits Administrators, HCCA, Southwest Benefits Association and many other organizations.  Her insights on these and related topics have appeared in Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, Managed Healthcare, Health Leaders, various ABA publications and a many other national and local publications. To learn more about Ms. Stamer, her experience, involvements, programs and publications, see here or contact Ms. Stamer.

Other Resources & Developments

If you found this information of interest, you also may be interested in reviewing other recent updates by Ms. Stamer about the tax credit on Code §45R or other benefits, compensation or human resources matters including:

If you or someone else you know would like to receive future updates and notices about upcoming programs and events, please be sure that we have your current contact information – including your preferred e-mail- by creating or updating your profile at here.  For important information about this communication click here.

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2010 Cynthia Marcotte Stamer. Limited non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


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