Comment On IRS Proposals On Determing Health Plan Minimum Value By June 11

April 26, 2012

Employers concerned about the risk that their company could face additional payment assessments under the Affordable Care Act beginning in 2014 for failing to provide group health coverage of enough value to meet the mandates of the Affordable Care Act should seize a just announced opportunity to share your concerns with the Internal Revenue Service (IRS) by June 11, 2012.

In Notice 2012-31, the IRS invites employers, health plans, health insurers and other interested persons to provide feedback on several possible approaches to determining whether health coverage under an eligible employer-sponsored plan provides  the minimum value required by the Affordable Care Act to insulate an employer from potential liability to pay assessments under Internal Revenue Code (Code) § 4980H triggered when its employees qualify for tax credits under Internal Revenue Code (Code) § 39 as a result of the employer’s failure to provide minimum coverage.

Beginning in 2014, eligible individuals who buy coverage under a qualified health plan through an Affordable Insurance Exchange may receive a premium tax credit under § 36B only if they are not eligible for other minimum essential coverage, including coverage under an employer-sponsored plan that is affordable and provides minimum value.  The Affordable Care Act provides that a group health plan fails to provide the required minimum value if the plan covers less than 60 percent of the total allowed costs of benefits provided under the plan.  If a full-time employee of a large employer receives a premium tax credit because the group health plan fails to meet the minimum value requirements, the employer may be liable for an assessable payment under § 4980H.

According to Notice 2012-31, the IRS anticipates that proposed regulations implementing these rules will allow an employer-sponsored plan to use one of several alternative approaches to ascertain that the plan provides minimum value. Specifically, Notice 2012-31 seeks comment on the following three potential approaches that could be used to decide whether an employer-sponsored plan provides minimum value.

According to Notice 2012-31, the IRS contemplates that for purposes of making the necessary calculations, the Departments of Treasury and Health & Human Services (HHS) jointly will make available to employer sponsored plans to offer three options for demonstrating satisfaction of the minimum value requirement by an employer sponsored plan.  The first two alternatives are intended to allow an employer-sponsored plan to calculate the minimum value of its plan by entering information about the plan’s benefits, coverage of services, and cost-sharing terms using one of two calculators:

  • The actuarial value calculator (AV calculator),
  • The minimum value calculator (MV calculator)

According to Notice 2012-31, the MV calculator would be designed for use by employer-sponsored self-insured plans and insured large group plans is expected to use claims data reflecting typical self-insured employer plans.  An array of design-based safe harbors in the form of checklists that would provide what the IRS characterizes as a “simple, straightforward way” to ascertain that employer-sponsored plans provide minimum value without the need to perform any calculations or secure an actuarial calculation from a qualified actuary.

For plans with nonstandard features that preclude the use of the AV calculator or the MV calculator without adjustments, the IRS anticipates that the proposed guidance will allow a group health plan to obtain an appropriate certification by a certified actuary of the minimum value for the group health plan calculated in accordance with prescribed continuance tables, recognized actuarial standards, and other conditions contained in administrative guidance.

Notice 2012-31 notes that the Affordable Care Act assigns the authority to issue certain of the rules for determining whether an employer-sponsored plan provides minimum value to HHS that will specify the methods for determining the actuarial value of a qualified health plan (QHP) offered through an Affordable Insurance Exchange and non- grandfathered plans in the individual and small group markets. On February 24, 2012, HHS issued the “Actuarial Value and Cost-Sharing Bulletin” (HHS actuarial value bulletin) available here that describes the assumptions and methodology that HHS anticipates will govern the calculation of actuarial value.  The IRS Notice describes how the IRS anticipates that guidance issued by HHS on the determination of actuarial value will be applied in determining minimum value and outlines ways in which the determination of minimum value is expected to differ from the determination of the actuarial value of QHPs in order to reflect differences between QHPs and employer-sponsored plans, such as differences in their levels of standardization and the populations covered.

The deadline for responding to the IRS’ request for comments on these proposals is June 11, 2012.  Employer-sponsored group health plans, their sponsors, fiduciaries, administrators, insurers and consultants who are concerned about the potential implications or workings of these proposals should act quickly to evaluate and share their input with the IRS in accordance with the instructions outlined in Notice 2012-31.

For Help or More Information

If you need help reviewing or responding to the Notice or other help reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care practices, documents, communications, or operations, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, 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 recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters. 

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns. 

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker 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, Modern Health Care and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

  • Small Employers Should Evaluate Eligibility For Small Business Health Care Tax Credit

For important information concerning this communication click here. THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TOU.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.

©2012 Cynthia Marcotte Stamer, P.C.  All rights reserved.


[*] See 26 CFR 54.9815-2715, 29 CFR 2590.715-2715, and 45 CFR 147.200, published February 14, 2012 at 77 FR 8668.

[†] See FAQS About Affordable Care Act

Implementation (Part VIII) at http://www.dol.gov/ebsa/pdf/faq-aca8.pdf.


EEOC Sues Wendy’s Franchisee For Disability Discrimination

April 18, 2012

Killeen Fast-Food  Restaurant Refused to Hire Hearing-Impaired Applicant Despite His  Qualifications, Federal Agency Charges

Wendy’s franchisee, CTW L.L.C., (Texas Wendy’s) is being sued by the U.S. Equal Employment Opportunity Commission (EEOC) for allegedly violating the Americans With Disabililties Act by denying employment to a hearing-impaired applicant.  In its suit against Texas Wendy’s, the EEOC  seeks injunctive relief, including the formulation of policies to prevent and  correct disability discrimination as well as an award of lost wages and compensatory damages for Harrison  and punitive damages against CTW L.L.C.   An example of a growing number of disability discrimination enforcement actions taken against employers and others on behalf of hearing impaired or other persons with disabilities under the Obama Administration, the case against Texas Wendy’s highlights the growing enforcement exposures of U.S. businesses to disability discrimination claims under the Obama Administration.

Wendy’s Suit

The EEOC charges in its suit against Texas Wendy’s, Case No. 6:12-CV-00091-WSS in U.S. District Court for the  Western District of Texas, Waco Division, that the general manager of a Killeen,  Texas Wendy’s refused to hire Michael Harrison, Jr. for a cooker position,  despite his qualifications and experience, upon learning that Harrison is  hearing-impaired.

According to the EEOC, Harrison, who had previously worked for a different fast-food franchise for over two  years, was denied hire by the general manager.  Harrison said that after successfully  interviewing with the Wendy’s shift manager, he attempted to complete the  interview process by interviewing with Wendy’s general manager via Texas Relay,  a telephonic system utilized by people with hearing impairments. Harrison’s told  the EEOC that during the call he was told by the general manager that “there is  really no place for someone we cannot communicate with.”

Expanding Disability Discrimination Exposures

As illustrated by the suit against Texas Wendy’s, employers must exercise care when making hiring, promotion or other employment related decisions relating to persons with hearing or other conditions that could qualify as a disability under the ADA.  

The ADA generally prohibits disability discrimination and requires employers to make  reasonable accommodations to employees’ and applicants’ disabilities as long as  this does not pose an undue hardship.

 In recent years, amendments to the original provisions of the ADA have made it easier for plaintiffs and the EEOC to establish disabled status of an individual.  Businesses should exercise caution to carefully document legitimate business justification for their hiring, promotion and other employment related decisions about these and other individuals who might qualify as disabled.  Provisions of the ADA Amendments Act (ADAAA) that expand the definition of “disability” under the ADA,  As signed into law on September 25, 2008, the ADAAA amended the definition of “disability” for purposes of the disability discrimination prohibitions of the ADA to make it easier for an individual seeking protection under the ADA to establish that that has a disability within the meaning of the ADA.  The ADAAA retains the ADA’s basic definition of “disability” as an impairment that substantially limits one or more major life activities, a record of such an impairment, or being regarded as having such an impairment. However, provisions of the ADAAA that took effect January 1, 2009 change the way that these statutory terms should be interpreted in several ways. Most significantly, the Act:

  • Directs EEOC to revise that portion of its regulations defining the term “substantially limits;”
  • Expands the definition of “major life activities” by including two non-exhaustive lists: (1) The first list includes many activities that the EEOC has recognized (e.g., walking) as well as activities that EEOC has not specifically recognized (e.g., reading, bending, and communicating); and (2) The second list includes major bodily functions (e.g., “functions of the immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine, and reproductive functions”);
  • States that mitigating measures other than “ordinary eyeglasses or contact lenses” shall not be considered in assessing whether an individual has a disability;
  • Clarifies that an impairment that is episodic or in remission is a disability if it would substantially limit a major life activity when active;
  • Changes the definition of “regarded as” so that it no longer requires a showing that the employer perceived the individual to be substantially limited in a major life activity, and instead says that an applicant or employee is “regarded as” disabled if he or she is subject to an action prohibited by the ADA (e.g., failure to hire or termination) based on an impairment that is not transitory and minor; and
  • Provides that individuals covered only under the “regarded as” prong are not entitled to reasonable accommodation.

The ADAAA also emphasizes that the definition of disability should be construed in favor of broad coverage of individuals to the maximum extent permitted by the terms of the ADA and generally shall not require extensive analysis.In adopting these changes, Congress expressly sought to overrule existing employer-friendly judicial precedent construing the current provisions of the ADA and to require the EEOC to update its existing guidance to confirm with the ADAAA Amendments.  Under the leadership of the Obama Administration, the EEOC and other federal agencies have embraced this charge and have sigificantly stepped up enforcement of the ADA and other federal discrimination laws.

Violations of the ADA can expose businesses to substantial liability. Violations of the ADA may be prosecuted by the EEOC or by private lawsuits.  Employees or applicants that can prove they were subjected to prohibited disability discrimination under the ADA generally can recover actual damages, attorneys’ fees, and up to $300,000 of exemplary damages (depending on the size of the employer).   

 The ADAAA amendments coupled with the Obama Administration’s emphasis on enforcement make it likely that businesses generally will face more disability claims from a broader range of employees and will possess fewer legal shields to defend themselves against these claims. These changes will make it easier for certain employees to qualify as disabled under the ADA.  Consequently, businesses should act strategically to mitigate their ADA exposures in anticipation of these changes.  

To help mitigate the expanded employment liability risks created by the ADAAA amendments, businesses generally should act cautiously when dealing with applicants or employees with actual, perceived, or claimed physical or mental impairments to minimize exposures under the ADA.  Management should exercise caution to carefully and appropriate the potential legal significance of physical or mental impairments or conditions that might be less significant in severity or scope, correctable through the use of eyeglasses, hearing aids, daily medications or other adaptive devices, or that otherwise have been assumed by management to fall outside the ADA’s scope. Employers should no longer assume, for instance, that a visually impaired employee won’t qualify as disabled because eyeglasses can substantially correct the employee’s visual impairment. 

Likewise, businesses should be prepared for the EEOC and the courts to treat a broader range of disabilities, including those much more limited in severity and life activity restriction, to qualify as disabling for purposes of the Act. Businesses should assume that a greater number of employees with such conditions are likely to seek to use the ADA as a basis for challenging hiring, promotion and other employment decisions.  For this reason, businesses generally should tighten job performance and other employment recordkeeping to enhance their ability to demonstrate nondiscriminatory business justifications for the employment decisions made by the businesses.

Businesses also should consider tightening their documentation regarding their procedures and processes governing the  collection and handling records and communications that may contain information regarding an applicant’s physical or mental impairment, such as medical absences, worker’s compensation claims, emergency information, or other records containing health status or condition related information.  The ADA generally requires that these records be maintained in separate confidential files and disclosed only to individuals with a need to know under circumstances allowed by the ADA. 

As part of this process, businesses also should carefully review their employment records, group health plan, family leave, disability accommodation, and other existing policies and practices to comply with, and manage exposure under the new genetic information nondiscrimination and privacy rules enacted as part of the Genetic Information and Nondiscrimination Act (GINA) signed into law by President Bush on May 21, 2008.  Effective November 21, 2009, Title VII of GINA amends the Civil Rights Act to prohibit employment discrimination based on genetic information and restricts the ability of employers and their health plans to require, collect or retain certain genetic information. Under GINA, employers, employment agencies, labor organizations and joint labor-management committees face significant liability for violating the sweeping nondiscrimination and confidentiality requirements of GINA concerning their use, maintenance and disclosure of genetic information. Employees can sue for damages and other relief like currently available under Title VII of the Civil Rights Act of 1964 and other nondiscrimination laws.  For instance, GINA’s employment related provisions include rules that will:

  • Prohibit employers and employment agencies from discriminating based on genetic information in hiring, termination or referral decisions or in other decisions regarding compensation, terms, conditions or privileges of employment;
  • Prohibit employers and employment agencies from limiting, segregating or classifying employees so as to deny employment opportunities to an employee based on genetic information;
  • Bar labor organizations from excluding, expelling or otherwise discriminating against individuals based on genetic information;
  • Prohibit employers, employment agencies and labor organizations from requesting, requiring or purchasing genetic information of an employee or an employee’s family member except as allowed by GINA to satisfy certification requirements of family and medical leave laws, to monitor the biological effects of toxic substances in the workplace or other conditions specifically allowed by GINA;
  • Prohibit employers, labor organizations and joint labor-management committees from discriminating in any decisions related to admission or employment in training or retraining programs, including apprenticeships based on genetic information;
  • Mandate that in the narrow situations where limited cases where genetic information is obtained by a covered entity, it maintain the information on separate forms in separate medical files, treat the information as a confidential medical record, and not disclosure the genetic information except in those situations specifically allowed by GINA;
  • Prohibit any person from retaliating against an individual for opposing an act or practice made unlawful by GINA; and
  • Regulate the collection, use, access and disclosure of genetic information by employer sponsored and certain other health plans.

These employment provisions of GINA are in addition to amendments to the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the Employee Retirement Income Security Act of 1974 (ERISA), the Public Health Service Act, the Internal Revenue Code of 1986, and Title XVIII (Medicare) of the Social Security Act that are effective for group health plan for plan years beginning after May 20, 2009.

If you have any questions or need help reviewing and updating your organization’s employment and/or employee practices in response to the ADAAA, GINA or other applicable laws, or if we may be of assistance with regard to any other workforce management, employee benefits or compensation matters, please do not hesitate to contact the author of this update, Curran Tomko Tarksi LLP Labor & Employment Practice Chair Cynthia Marcotte Stamer at 214.270.2402.

About The Author

Management attorney and consultant Cynthia Marcotte Stamer helps businesses, governments and associations solve problems, develop and implement strategies to manage people, processes, and regulatory exposures to achieve their business and operational objectives and manage legal, operational and other risks. Board certified in labor and employment law by the Texas Board of Legal Specialization, with more than 20 years human resource and employee benefits experience, Ms. Stamer helps businesses manage their people-related risks and the performance of their internal and external workforce though appropriate human resources, employee benefit, worker’s compensation, insurance, outsourcing and risk management strategies domestically and internationally. Recognized in the International Who’s Who of Professionals and bearing the Martindale Hubble AV-Rating, Ms. Stamer also is a highly regarded author and speaker, who regularly conducts management and other training on a wide range of labor and employment, employee benefit, human resources, internal controls and other related risk management matters.  Her writings frequently are published by the American Bar Association (ABA), Aspen Publishers, Bureau of National Affairs, the American Health Lawyers Association, SHRM, World At Work, Government Institutes, Inc., Atlantic Information Services, Employee Benefit News, and many others. For a listing of some of these publications and programs, see here. Her insights on human resources risk management matters also have been quoted in The Wall Street Journal, various publications of The Bureau of National Affairs and Aspen Publishing, the Dallas Morning News, Spencer Publications, Health Leaders, Business Insurance, the Dallas and Houston Business Journals and a host of other publications. Chair of the ABA RPTE Employee Benefit and Other Compensation Committee, a council member of the ABA Joint Committee on Employee Benefits, and the Legislative Chair of the Dallas Human Resources Management Association Government Affairs Committee, she also serves in leadership positions in numerous human resources, corporate compliance, and other professional and civic organizations. For more details about Ms. Stamer’s experience and other credentials, contact Ms. Stamer, information about workshops and other training, selected publications and other human resources related information, see here or contact Ms. Stamer via telephone at 214.270.2402 or via e-mail here.

Other Helpful Resources & Other Information

If you found these updates of interest, you also be interested in one or more of the following other recent articles published in this electronic Solutions Law publication 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 at here.

For important information concerning this communication click here.  If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject to support@solutionslawyer.net.

©2012 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press, Inc.  All other  rights reserved. 


Brokerage Firm To Pay $630,000+ To Benefit Plans To Settle DOL Charges It Wrongfully Steered Clients To Investments

April 18, 2012

News that Memphis-based brokerage firm Morgan Keegan and Co., Inc. will pay more than $600,000 to settle charges it violated the Employee Retirement Income Security Act (ERISA) reminds employee benefit plan fiduciaries and brokerage or other providers of investment advice or services to employee benefit plans.

The Employee Benefit Security Administration (EBSA) announced April 16, 2012 that Morgan Keegan has agreed to pay $633,715.46 to 10 ERISA-covered pension plans to settle EBSA charges that it violated ERISA when it recommended certain hedge funds of funds as investments to its ERISA-covered employee benefit plan clients. These recommendations resulted in the hedge funds of funds paying Morgan Keegan revenue-sharing and other fees.   

Following an investigation by EBSA’s Atlanta Regional Office as part of EBSA’s “Consultant/Adviser Project,” EBSA charged Morgan Keegan violated ERISA between April 2001 and November 2008 by accepting undisclosed compensation to steer employee benefit plan investments. The Consultant/Advisor Project focuses on the receipt of improper or undisclosed compensation by employee benefit plan consultants and other investment advisers.

Under the terms of the settlement, Morgan Keegan has agreed to disclose to its ERISA plans clients whether the company will act as a fiduciary to those plans. If the company is acting as a fiduciary, Morgan Keegan has agreed to specify the services that it is providing as a fiduciary and to provide the ERISA plan clients a description of all compensation and fees received, in any form, from any source, involving any investment or transaction related to them. Morgan Keegan also agrees not to collect commissions or, if it does collect them, to refund to its ERISA plans clients 100 percent of the amount collected from third parties.

Meanwhile, EBSA also increasingly has focused regulatory and enforcement attention on broker or other service provider arrangements involving compensation arrangements that might involve a brokerage or other fiduciary service provider in a conflict of interest in contravention of these ERISA duty of loyalty requirements. 

ERISA Section 404 generally requires that plan fiduciaries act prudently and for the exclusive benefit of plan participants and beneficiaries when dealing with plan assets or conducting other plan related responsibilities.  

As part of this general fiduciary duty, plan fiduciaries selecting service providers for the plan generally are required to conduct due diligence and prudently review the fees and other compensation received by a service provider.  To help support the ability of plan fiduciaries to carry out these responsibilities, EBSA fee disclosure regulations also generally require plan consultants and investment advisors to disclose compensation they receive as a result of plan related transactions and activities.  

Along side their fee disclosure obligations, where investment advisor and other service provider acts as employee benefit plan fiduciary, ERISA Section 404 also requires that service provider to conduct its duty prudently and “for the exclusive benefit” of the plans and their beneficiaries.  Additionally, ERISA Section 406 generally prohibits plan fiduciaries and other parties in interest from acting for the benefit of a party other than the plan and from engaging in certain other enumerated “party-in-interest” transactions except in certain narrowly proscribed circumstances.  

The Morgan Keegan investigation and settlement highlights the readiness of the EBSA to enforce these requirements against broker or other service providers who abuse these rules. “The law is very clear: If you accept a fee to give investment advice to a retirement plan, you are a fiduciary and must therefore act solely in the best interests of the participants in that plan,” said Phyllis C. Borzi, assistant secretary of labor for employee benefits security. “Third-party payments should never be the motivating factor behind which investments brokers and advisers steer retirement clients into.”

To mitigate liability risks arising from fee related violations like those charged against Morgan Keegan, employee benefit plan fiduciaries and brokerage other service providers to employee benefit plans should carefully review and update existing fee and other practices to ensure that the fee disclosure, fiduciary responsibility, prohibited transaction and other requirements of ERISA and other applicable federal law are met.  Documented analysis should be conducted and retained to position the parties to demonstrate that the service provider and its fees were prudently determined and disclosed, and that the transaction is free from any prohibited conflicts of interests.

For Help or More Information

If you need help reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices or with other employee benefits, human resources, health care or insurance matters, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, 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 recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on leading health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters. 

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials about regulatory, investigatory or enforcement concerns. 

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker 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, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

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 at ww.solutionslawpress.com

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.  All other rights reserved.


Latest $100,000 HIPAA Resolution Agreement Nails Physician Group,

April 17, 2012

The $100,000 settlement with an Arizona-based physician group announced today by the Department of Health & Human Services (HHS) Office of Civil Rights (OCR) under the Health Insurance Portability & Accountability Act of 1996 (HIPAA) demonstrates the need for all health care providers, health plans, health care clearinghouses (covered entities) and their business associates to maintain appropriate HIPAA compliance and risk management procedures and documentation.

Arizona-based Phoenix Cardiac Surgery, P.C. (PCS) will pay the U.S. Department of Health and Human Services (HHS) Office of Civil Rights (OCR) a $100,000 settlement and take corrective action to implement policies and procedures to safeguard the protected health information of its patients to settle OCR charges PCS violated the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy and Security Rules. Health care providers and other HIPAA-covered entities should heed the PSC and other recent settlements as the latest signal of the risks that health care providers and other covered entities run by failing to adequately implement and administer appropriate HIPAA compliance practices.

The PCS settlement follows an extensive OCR investigation of a report that PCS posted clinical and surgical appointments for its patients on a publically accessible Internet-based calendar. Among other things, the Resolution Agreement documenting the PCS settlement states that OCR’s investigation found that the persistent failure by PCS to adopt HIPAA required policies and safeguards, maintain required business associate agreements, and conduct necessary workforce training resulted in the prohibited posting of more than 1,000 separate entries of ePHI on a publicly accessible, Internet-based calendar and business associates improperly receiving and maintaining PHI and ePHI without the protection of required business associate agreements.

Under the PCS HHS Resolution Agreement available here, PCS will pay a $100,000 settlement amount and a corrective action plan that includes a review of recently developed policies and other actions taken to come into full compliance with the Privacy and Security Rules. Like the $1,500,000 Blue Cross Blue Shield of Tennessee (BCBST) Resolution Agreement announced last month, the PCS shows OCR’s readiness to sanction health care providers and other covered entities of all sizes for violations of HIPAA.

Enforcement Actions Highlight Growing HIPAA Exposures For Covered Entities

Like the BCBST Resolution Agreement and other previously announced OCR Resolution Agreements, the PCS provides more evidence of the growing exposures that health care providers, health plans, health care clearinghouses and their business associates need to carefully and appropriately manage their HIPAA responsibilities. See $1.5 Million HIPAA Settlement Reached To Resolve 1st OCR Enforcement Action Prompted By HITECH Act Breach Report; HIPAA Heats Up: HITECH Act Changes Take Effect & OCR Begins Posting Names, Other Details Of Unsecured PHI Breach Reports On Website. Covered entities are urged to heed these warning by strengthening their HIPAA compliance and adopting other suitable safeguards to minimize HIPAA exposures.

In the face of rising enforcement and fines, OCR’s initiation of HIPAA audits and other recent developments, covered entities and their business associates should tighten privacy policies, breach and other monitoring, training and other practices to reduce potential HIPAA exposures in light of recently tightened requirements and new enforcement risks.

In response to these expanding exposures, all covered entities and their business associates should review critically and carefully the adequacy of their current HIPAA Privacy and Security compliance policies, monitoring, training, breach notification and other practices taking into consideration OCR’s investigation and enforcement actions, emerging litigation and other enforcement data; their own and reports of other security and privacy breaches and near misses, and other developments to determine if additional steps are necessary or advisable.

For more information about the PCS Resolution Agreement and HIPAA compliance and risk management tips, see here.

For Representation, Training & Other Resources

If you need assistance monitoring HIPAA and other health and health plan related regulatory policy or enforcement developments, or to review or respond to these or other health care or health IT related risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

Vice President of the North Texas Health Care Compliance Professionals Association, Past Chair of the ABA Health Law Section Managed Care & Insurance Section and the former Board Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer has more than 24 years experience advising health industry clients about these and other matters. Ms. Stamer has extensive experience advising and assisting health care providers, health plans, their business associates and other health industry clients to establish and administer medical privacy and other compliance and risk management policies, to health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. She regularly designs and presents HIPAA and other risk management, compliance and other training for health plans, employers, health care providers, professional associations and others.

Scheduled to serve as the scribe for the ABA Joint Committee on Employee Benefits agency meeting with OCR, Ms. Stamer also regularly works with OCR and other agencies, publishes and speaks extensively on medical and other privacy and data security, health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her publications and insights appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. For instance, Ms. Stamer for the second year will serve as the appointed scribe for the ABA Joint Committee on Employee Benefits Agency meeting with OCR. Her insights on HIPAA risk management and compliance frequently appear in medical privacy related publications of a broad range of health care, health plan and other industry publications Among others, she has conducted privacy training for the Association of State & Territorial Health Plans (ASTHO), the Los Angeles Health Department, the American Bar Association, the Health Care Compliance Association, a multitude of health industry, health plan, insurance and financial services, education, employer employee benefit and other clients, trade and professional associations and others.

You can get more information about her HIPAA and other experience here.

If you need assistance with these or other compliance concerns, wish to inquire about arranging for compliance audit or training, or need legal representation on other matters please contact Ms. Stamer at (469) 767-8872 or via e-mail here.

You can review other recent publications and resources and additional information about the other experience of Ms. Stamer here. Examples of some recent publications that may be of interest include:

DC Court Enjoins Implementation of NLRB Poster Rule

Orthofix Medical Device Exec Awaits Sentencing After Pleading Guilty To Violating Anti-Kickback Law

Health Care Providers Also Should Guard Against Rising Exposures To State Health Care Fraud & Other Enforcement Risks

Director of Texas Office of e-Health Coodination To Discuss Texas HIE Strategy in 3/14 HHS Sponsored Teleconference

Halfway House Owner Gets 24 Months Imprisonment For Health Care Fraud & Kickback Conviction

Health Plans Should Act Quickly To Prepare Affordable Care Act Required Summary of Benefits & Communications & Update Other Health Plan Communications

NLRB Report Shows Rise In Unfair Labor Practice Complaints & Formal Proceedings

Sullivan University System to Pay $483,000 in Back Wages Overtime Violations Stemming From Worker Misclassifications

New DOL Final Rules Tighten Requirements For Employers To Hire Alien Workers Using H-2B Visas

OSHA $1Million Award Against AirTran Airways Highlights Retaliation Risks

HHS Chides Trustmark Life Insurance Company For “Excessive” Health Premium Increases After Affordable Care Act Rate Audit

Labor Department Final Rule Defines Recreation Vehicle For Longshore & Harbor Workers’ Compensation Act

Portion of Health Care Costs Paid By Government Programs Rose As Employer Provided & Other Private Health Care Coverage Declined In 2010

Help Careflite Celebrate New Facility 1/11

Careflite Dedicates New Facility January 11, 2012

Manufacturer’s Excessive I-9 Documentation Triggers Discrimination Liability

If you need help investigating or responding to a known or suspected compliance, litigation or enforcement or other risk management concern, assistance with reviewing, updating, administering or defending a current or proposed employment, employee benefit, compensation or other management practice, wish to inquire about federal or state regulatory compliance audits, risk management or training, or need legal representation on other matters please contact Ms Stamer here or at (469) 767-8872.

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. If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject to here.

©2012 Cynthia Marcotte Stamer, P.C.  Non-exclusive right to republish granted to Solutions Law Press, Inc.   All rights reserved.


DC Court Enjoins Implementation of NLRB Poster Rule

April 17, 2012

The District Court for the District of Columbia  today (April 17, 2012) granted employers a temporary reprieve from the obligation to comply with a National Labor Relations Board (NLRB) poster mandate scheduled to take effect April 30, 2012.

The NLRB rule that was scheduled to take effect on April 30 would dictate that most private sector employers post a 11-by-17-inch notice informing workers of certain union organizing and other labor-management relations rights under the National Labor Relations Act using language dictated by the NLRB.   The notice is available at no cost from the NLRB through its website, which has more information on posting requirements and NLRB jurisdiction.

Facing litigation challenging the rule, the NLRB announced on December 23, 2011 that it would delay the deadline to comply with the rule until April 30, 2012.   Today’s court ruling enjoins the NLRB from enforcing the new requirement pending additional litigation.

In addition to the D.C. Circuit Court’s decision, a South Carolina Court also recently issued rulings questioning the NLRB’s enforcement mechanisms under the impending rule.

In response to today’s D.C. Circuit Court decision, NLRB Chairman Mark Gaston Pearce said of the recent decisions, “We continue to believe that requiring employers to post this notice is well within the Board’s authority, and that it provides a genuine service to employees who may not otherwise know their rights under our law.”  Nevertheless, the NLRB announced today thaat it plans to delay further implementation of the poster rule by its regional offices pending the outcome of the impending litigation.

While the poster requirement is delayed, the NLRB continues to pursue an active regulatory and enforcement agenda.  See, e.g., Employers Face New Labor-Management Exposures Under Activist National Labor Relations Board.  Employers should continue to strengthen their labor-management policies and practices to mitigate the growing labor exposures that result from this activist agenda. 
 
For Help or More Information
If you need help with labor and employment or other human resource, performance management, internal controls or compliance and risk management matters, please contact the author of this article, Cynthia Marcotte Stamer.  Board Certified in Labor & employment Law by the Texas Board of Legal Specialization,management attorney, author and consultant  Ms. Stamer is nationally and internationally recognized for more than 24 years of work helping private and governmental organizations and their management; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; schools and other governmental agencies and others design, administer and defend innovative compliance, risk management, workforce, compensation, employee benefit, privacy, procurement and other management policies and practices. Her experience includes extensive work helping employers carry out, audit, manage and defend worker classification,union-management relations, wage and hour, discrimination and other labor and employment laws, procurement, conflict of interest, discrimination management, privacy and data security, internal investigation and discipline and other workforce and internal controls policies, procedures and actions. 
Widely published on worker classification and other workforce risk management and compliance concerns, the immediate past-Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee and current Co-Chair of its Welfare Plan Committee, Vice Chair of the ABA TIPS Section Employee Benefits Committee,  a Council Representative of 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 management, worker classification, re-engineering, investigations, human resources and workforce, employee benefits, compensation, internal controls and risk management, federal sentencing guideline and other enforcement resolution actions, 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.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

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 at www.solutionslawpress.com

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. All other rights reserved.

 

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