Employers | | Page 15

HHS Projects Medicare Advantage Enrollment Will Rise As Premiums Decline In 2012; Plans Face Increased Regulation & Enforcement

September 25, 2011

Medicare Advantage enrollment will rise and premiums will decline in 2012. While plans can expect increased enrollment, they also face increasing challenges in managing the demands of increased government regulation under Health Care Reform and other new regulations, as well as rising governmental scrutiny of premiums and compliance. Consequently, while more individuals than ever are expected to sign up for Medicare Advantage Plan coverage, the plans still face significant compliance and operational challenges.

According to the Department of Health & Human Services (HHS) , Medicare Advantage premiums on average will be 4% lower in 2012 than in 2011. Meanwhile HHS reports that Medicare Advantage plans project enrollment to increase by 10%. This follows an earlier HHS announcement that average prescription drug plan premiums will remain virtually unchanged in 2012.

Of people with Medicare, HHS reports 99.7% continue to enjoy access to a Medicare Advantage plan, and benefits will remain consistent with those offered in 2011. To offset declining premiums and other costs, however, many industry experts expect that plans will make greater use of technology in place of human staffing, cut back on broker compensation and utilization and implement other operational changes to help control operations costs.

While many Medicare Adtange and Medicaid Advantage Plans will benefit from increased enrollment, producing promised benefits and avoiding regulatory sanctions amid tightening budgets remains a challenge for many of these plans. Medicare and Medicaid Advantage plans are tightly regulated by federal and state law. Over the past few years, the compliance, premiums, profits and other activities of these and other health plans have been heavily scruitinzed by Congress and federal and state regulators. As part of the stepped up health care fraud and other cost containment efforts, federal regulators have stepped up audit and enforcement against these programs. Several plans have suffered administrative sanctions or other discipline under these laws. Most commentatorys anticipate this scrutiny to expand in 2012.

Learn more here.

For Assistance or Additional Information

Nationally and internationally known for her knowledge and work on health and other employee benefit matters and engaging and informative presentations, attorney, author and policy advocate Cynthia Marcotte Stamer will help you prepare your plan and organization to cope with these and other challenges of understanding and coping with health care reform.

Chair of the American Bar Association (ABA) RPPT Employee Benefits & Other Compensation Arrangements, an ABA Joint Committee on Employee Benefits Council Representative, incoming ABA TIPS Employee Benefit Plan Committee Vice Chair, former ABA Health Law Section Managed Care & Insurance Interest Group Chair, past Southwest Benefits Association Board Member, Employee Benefit News Editorial Advisory Board Member, Board Certified in Labor and Employment Law and a widely published speaker and author, Ms. Stamer has more than 24 years experience advising businesses, plans, fiduciaries, insurers and governments on health care, retirement, employment, insurance, :and tax program design, administration, defense and policy and related employment, insurance and health care matters. Her experience includes extensive experience advising insured and self-insured ERISA group medical and other plans, Medicare and Medicaid Advantage plans, mini-med, high-deductible and other consumer driven medical, long-term care, occupational injury, ex-pat, association, fraternal benefit and other managed care and medical benefit plans and insurers, their service providers, insurers, sponsors, fiduciaries, technology providers and others. A primary drafter of the Bolivian pension law, Ms. Stamer also has more than 30 years experience working on legislative and regulatory health care, pension, workforce, education and immigration reform matters including extensive work on the Pension Protection & Affordable Care Act, HIPAA, COBRA, state managed care and other insurance and other laws. In addition to her experience advising governments and others internationally about these matters, she regularly advises and represents employers, employee benefit plans, insurers, health care and managed care providers and others about evolving laws and regulations and assists them in dealing with Congress, the Internal Revenue Service, the Department of Labor, Immigration and Customs, OCR, OIG, CMS and other HHS agenices, the FTC, the Justice Department, state insruance and health departments, and others.

A widely published author and popular speaker, Ms. also regularly publishes and speaks for a broad range of organizations including American Bar Association, Aspen Publishers, World At Work, Benefits Magazine, Employee Benefit News, Spencer Publications, SHRM, the International Foundation, Solutions Law Press and many others. She currently or previously has served on the editorial advisory board of Employee Benefits News, BNA Employee Benefits CDRolm and a wide range of other highly regarded publications. Her insights on these and other matters have appeared in Managed Care Executive, Health Leaders, Private Payers News, the Wall Street Journal, various publications of the Bureau of National Affairs, Aspen, Atlantic Information Serices, the Wall Street Journal, and many other industry and news publications. In recognition of this extensive record of employee benefit experience and involvement, Ms. Stamer recently was selected to be inducted as a Fellow in the American College of Employee Benefits Counsel.

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. For important information concerning this communication click here.

About Solutions Law Press

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Comments Off on HHS Projects Medicare Advantage Enrollment Will Rise As Premiums Decline In 2012; Plans Face Increased Regulation & Enforcement | 105(h), Affordable Care Act, CHIP, COBRA, Employee Benefits, Employers, Employment Tax, ERISA, Excise Tax, Fiduciary Responsibility, FMLA, Health Care Reform, Health Plans, HIPAA, Human Resources, Income Tax, Insurance, Malpractice, Medicare Part D, Mental Health, Mental Health Parity, Patient Empowerment, Patient Protection and Affordable Care Act, Payroll Tax, Preemption, Prescription Drugs, Protected Health Information, Reporting & Disclosure, Tax Credit, Wellness Programs | Tagged: benefits, Employee Benefits, employee benefits policy, Employer, Health Care Reform, Health Insurance, health issuer, Health Plans, health policy, instruction, Insurance, Insurer, speech, Speeches, Training, WEB | Permalink
Posted by Cynthia Marcotte Stamer

IRS Adds Participant Notification To Required Procedures For Church Plan Determination Letter Requests

September 23, 2011

Participant Notification Added To Required Procedures For Church Plan Determination Letter Requests

Revenue Procedure 2011-44 modifies the procedures previously announced by the IRS in January to include a requirement that parties requesting a determination letter for a church plan notify plan participants and other interested parties of the letter request by providing a written notice containing the information set forth in a Model Notice published by the IRS as an attachment to the Revenue Procedure.

Procedures for requesting determination letters and other employee benefit plan related rulings generally are governed by Revenue Procedure 2011-04.

Revenue Procedure 2011-44 is scheduled for official publication in Internal Revenue Bulletin 2011-39 on September. 26, 2011

The author of this update, attorney Cynthia Marcotte Stamer frequently conducts training and publishes on these and other matters. She regularly speaks and conducts briefings on employee benefit, human resources, internal controls and risk management matters. You can find out about upcoming training or other events, learn more about Ms. Stamer and get updates at www.CynthiaStamer.com.

For Help With These Or Other Matters

If you would like help reviewing or defending your organization’s health or other employee benefit or insurance programs, need legal representation on health plan or other employee benefits, employment or insurance concerns, or wish to discuss arranging for Ms. Stamer to conduct training or speak for your organization, please contact Ms Stamer here.

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 health and other employee benefit and related workforce, insurance and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with health benefit and insurance matters, Ms. Stamer continuously advises and assists 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 programs and practices. She works extensively with plan sponsors, insurers, administrators, technology and other service providers and others to develop and operate legally defensible programs, practices and policies that promote the client’s human resources, employee benefits or other management goals. Ms. Stamer also is a widely published author and highly regarded speaker on these and other employee benefit and human resources matters who is active in many other employee benefits, human resources and other management focused organizations.

About Solutions Law Press

Comments Off on IRS Adds Participant Notification To Required Procedures For Church Plan Determination Letter Requests | Employee Benefits, Employers, Retirement Plans, Tax | Tagged: Determination Letters, Employee Benefits, plan qualification, Retirement Plans, Tax | Permalink
Posted by Cynthia Marcotte Stamer

4th Circuit Rejects Two Challenges To Affordable Care Act Constitutionality

September 8, 2011

The Fourth Circuit this morning (September 8, 2011) published decisions ruled rejecting two lawsuits challenging the constitutionality of the Patient Protection and Affordable Care Act on jurisdictional grounds in Liberty University v. Geithner and Commonwealth of Virgina v. Sebelius.

Cynthia Marcotte Stamer will discuss this new development and other health care reform issues when she speaks to the Houston Chapter of WEB at 11:30 a.m on September 14, 2011 on “Coping With Health Care Reform: What’s New, What Lies Ahead & What To Do.” The program will cover newly proposed rules that will require health plans and health plan issuers to provide a new summary of benefits and coverage beginning in 2012 and other emerging rules imposed under recently engaged health care reform laws. The program is approved for 1 hour of general continuing education credit by the Texas Department of Insurance. Get details and register online at www.webnetwork.org/houston.

As the debate over the validity and future of the sweeping health care reforms enacted under the Patient Protection and Affordable Care Act (ACA) rages in Congress and the federal courts, employer and other health plan sponsors, insurers, fiduciaries and administrators face the daunting challenge of keeping their health plans compliant, affordable and relevant in the face of the steady rollout of the deluge of new mandates imposed by the Affordable Care Act and other evolving health plan mandates and planning for changes yet to come.

A former national WEB member nationally and internationally known for her knowledge and work on health and other employee benefit matters and engaging and informative presentations, attorney, author and policy advocate Cynthia Marcotte Stamer will help you prepare your plan and organization to cope with these and other challenges of understanding and coping with health care reform.

Ms. Stamer’s presentation will focus on key health care reform information that can help employers and other plan sponsors, insurers, fiduciaries, insurers, administrators and advisors understand and cope with the effects and responsibilities of health care reform including:

Recently proposed and finalized regulations;
Updating you on the status of litigation challenging the ACA health care reforms in the courts;
Updating you on the key developments affecting health care regulatory reforms likely to impact your health plan;
Sharing an updated roadmap of the currently scheduled implementation of key future health benefit reforms enacted under ACA;
Sharing selected tips and strategies for managing compliance and other risks and deal with uncertainties arising as health care reform continues to evolve; and
Audience questions and discussion of questions and ideas.

For additional information about Ms. Stamer and her experience, see www.CynthiaStamer.com.

Comments Off on 4th Circuit Rejects Two Challenges To Affordable Care Act Constitutionality | 105(h), Affordable Care Act, CHIP, COBRA, Employee Benefits, Employers, Employment Tax, ERISA, Excise Tax, Fiduciary Responsibility, FMLA, Health Care Reform, Health Plans, HIPAA, Human Resources, Income Tax, Insurance, Malpractice, Medicare Part D, Mental Health, Mental Health Parity, Patient Empowerment, Patient Protection and Affordable Care Act, Payroll Tax, Preemption, Prescription Drugs, Protected Health Information, Reporting & Disclosure, Tax Credit, Wellness Programs | Tagged: benefits, Employee Benefits, employee benefits policy, Employer, Health Care Reform, Health Insurance, health issuer, Health Plans, health policy, instruction, Insurance, Insurer, speech, Speeches, Training, WEB | Permalink
Posted by Cynthia Marcotte Stamer

Stamer Speaks 9/14 On Coping With Health Care Reform: What’s New, What Lies Ahead & What To Do

September 3, 2011

Cynthia Marcotte Stamer will speak to the Houston Chapter of WEB at 11:30 a.m on September 14, 2011 on “Coping With Health Care Reform: What’s New, What Lies Ahead & What To Do.” The program will cover newly proposed rules that will require health plans and health plan issuers to provide a new summary of benefits and coverage beginning in 2012 and other emerging rules imposed under recently engaged health care reform laws. The program is approved for 1 hour of general continuing education credit by the Texas Department of Insurance. Get details and register online at www.webnetwork.org/houston.

Recently proposed and finalized regulations;
Updating you on the status of litigation challenging the ACA health care reforms in the courts;
Updating you on the key developments affecting health care regulatory reforms likely to impact your health plan;
Sharing an updated roadmap of the currently scheduled implementation of key future health benefit reforms enacted under ACA;
Sharing selected tips and strategies for managing compliance and other risks and deal with uncertainties arising as health care reform continues to evolve; and
Audience questions and discussion of questions and ideas.

For additional information about Ms. Stamer and her experience, see www.CynthiaStamer.com.

Comments Off on Stamer Speaks 9/14 On Coping With Health Care Reform: What’s New, What Lies Ahead & What To Do | 105(h), Affordable Care Act, CHIP, COBRA, Employee Benefits, Employers, Employment Tax, ERISA, Excise Tax, Fiduciary Responsibility, FMLA, Health Care Reform, Health Plans, HIPAA, Human Resources, Income Tax, Insurance, Malpractice, Medicare Part D, Mental Health, Mental Health Parity, Patient Empowerment, Patient Protection and Affordable Care Act, Payroll Tax, Preemption, Prescription Drugs, Protected Health Information, Reporting & Disclosure, Tax Credit, Wellness Programs | Tagged: benefits, Employee Benefits, employee benefits policy, Employer, Health Care Reform, Health Insurance, health issuer, Health Plans, health policy, instruction, Insurance, Insurer, speech, Speeches, Training, WEB | Permalink
Posted by Cynthia Marcotte Stamer

ABA TIPS Section Appoints Cynthia Marcotte Stamer Vice Chair of Employee Benefits General Committee

August 16, 2011

The American Bar Association Tort Trial & Insurance Practice Section recently appointed Solutions Law Press Managing Editor Cynthia Marcotte Stamer to serve as Vice-Chair Appointment of the Employee Benefits General Committee for the 2011-2012 fiscal year.

The TIPS Employee Benefits Committee concentrates on helping attorneys and others keep on top of and respond to developments in the constantly evolving practice area of employee benefits, with particular emphasis on litigation and regulatory compliance issues through programs, meetings, publications and other projects and activities. Additional information about involvement in the Employee Benefits Committee and its programs, publications and activities is available here.

A noted Texas-based employee benefits and employment lawyer with extensive involvement in the leadership of the ABA and other professional organizations involved in employee benefits, health care and workforce matters, is nationally and internationally known for her pioneering leadership and work as an attorney, consultant, policy advocate, speaker and author helping businesses, governments, and communities on health and other insurance and employee benefits, patient education and empowerment, wellness and disease management, and other programs, policies, and processes. For more than 24 years, Ms. Stamer’s legal practice has focused on advising and representing employers, insurers, health care providers, community leaders and governments about health care and employee benefits policy and process improvement, quality, performance management, education, compliance, communications, risk management, reimbursement and finance, and other related matters. In addition to her legal practice, Stamer also extensively consults and provides leadership to a broad range of clients, professional and civic organizations, and others on strategies for improving the health care system and the ability of health care providers, payers, employers, community organizations, government agencies to help patients and their families to access cost-effective, quality, affordable health care and other resource needs. She also has worked extensively with a broad range of business and government clients on health care, pension, social security, workforce, insurance and many other related policy matters.

In addition to her service with TIPS, Ms. Stamer also is active in the leadership of a broad range of other professional and civil organizations. For instance, Ms. Stamer presently serves as Executive Director of Project COPE, the Coalition on Patient Empowerment and the Coalition for Responsible Healthcare Policy; Vice President of the North Texas Healthcare Compliance Professionals Association; Immediate Past Chair of the American Bar Association RPTE Employee Benefits & Other Compensation Committee and its representative to the ABA Joint Committee on Employee Benefits and Vice Chair of its Welfare Benefits Committee; Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and a current member of its Healthcare Coordinating Council; and as the Gulf Coast TEGE Council TE Committee Coordinator. She previously served as a founding Board Member and President of the Alliance for Healthcare Excellence, as a Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; the Board President of the early retirement intervention agency, The Richardson Development Center for Children; Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a member of the Board of Directors of the Southwest Benefits Association; on many seminar faculties and in many other professional and civic leadership and volunteer roles.

Author of the hundreds of publications and workshops these and other employment, employee benefits, health care, insurance, workforce and other management matters, Ms. Stamer’s insights on employee benefits, insurance, health care and workforce matters in Atlantic Information Services, The Bureau of National Affairs, HealthLeaders, Modern Healthcare, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other publications. She also regularly conducts training and speaks on these and other management, compliance and public policy concerns. Some recent publications and programs that may be of interest include:

Stamer Speaks 9/14 On Coping With Health Care Reform: What’s New, What Lies Ahead & What To Do
Labor Department 2011 Stats Show Employer Health Coverage & Other Benefit Statistics
Borzi Tells House Committee Current Fiduciary Regs Flawed; Must Fix Loopholes In Investment Advisor Definition To Protect Plans
Labor Department 2011 Stats Show Employer Health Coverage & Other Benefit Statistics
Conviction Highlights Risks Of Misleading Investors
DOL Considers Easing Rules For Electronic Benefit Communications
Improving The Effectiveness Of Compliance & Risk Management By Getting Hr On The Compliance Team
IRS Establishes Safe Harbor Election For Allocating Success-Based Fees Paid On Certain Business Transactions
IRS Changing Substantiation Rules For Business Travel Expenses
9/22/11 Cutoff To Apply For Affordable Care Act Annual Limit Temporary Waiver
Spectrum Healthcare NLRB Charge Settlement Highlights Need To Defend Against Possible Unfair Labor Practices & Other Union Exposures
IRS Releases Health Savings Account, High Deductible Health Plan 2012 Indexed Amounts
IRS Guidance On Affordable Care Act Requirement That Employers Report Cost Of Health Coverage On W-2 Released
Plan Sponsors. Their Owners & Management & Others Risk Personal Liability If Others Defraud Plans Or Mismanage Employee Benefit Plan Responsibilities
Health Plans, Insurers Get Limited & Imperfect Relief From Grace Period Extension For Some New Affordable Care Act Health Claims & Appeals Rules
EEOC Finalizes Updates To Disability Regulations In Response To ADA Amendments Act: Employers Should Manage Risks
Employer Charged With Misclassifying & Underpaying Workers To Pay $754,578 FLSA Back Pay Settlement
Avoiding Liability For Another’s Health Plan Fraud
Health Plans & Employers Beware! $4.3 Million Civil Penalty Shows OCR Serious About HIPAA Enforcement
IRS Expands When HFSAS & HRAs May Allow Over-The-Counter Drug Purchases With Drug Cards
DOL Announces Changes To H-2b Prevailing Wage Calculation Rules
$1 Million + FLSA Overtime Settlement Shows Employers Should Tighten On-Call, Other Wage & Hour Practices
Affordable Care Act Grandfathered Plan Rules Loosened To Allow Insured Plans Making Some Insurance Changes To Qualify
Update Employment Practices To Manage Genetic Info Discrimination Risks Under New EEOC Final Gina Regulations
EEOC Attacks Medical Leave Denials As Prohibited Disability Discrimination
DOL Proposes To Expand Investment Related Services Giving Rise To ERISA Fiduciary Status As Investment Fiduciary

For additional information about Ms. Stamer, upcoming training, publications or other materials or events, see here or contact Ms. Stamer directly via email here or (469) 767-8872.

IIf 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.

Comments Off on ABA TIPS Section Appoints Cynthia Marcotte Stamer Vice Chair of Employee Benefits General Committee | Cafeteria Plans, COBRA, Corporate Compliance, Defined Benefit Plans, Defined Contribution Plans, Disability Plans, Employee Benefits, Employers, Fiduciary Responsibility, Health Plans, HIPAA, Human Resources, Insurance, Internal Controls, Malpractice, Medicare Part D, Mental Health, Mental Health Parity, Preemption, Prescription Drugs, Retirement Plans, Wellness, Wellness Programs | Permalink
Posted by Cynthia Marcotte Stamer

New Affordable Care Act Guidance Helps Some Health Plans Stay Grandfathered

August 2, 2011

Affordable Care Act To Require Health Plans Cover Contraception & Other Women’s Health Procedures Beginning In 2012

Contraception Mandate Might Not Apply To Certain Religious Employer Plans

Starting with plan years beginning after July 31, 2011, most employer and union sponsored group health plans and group and individual health insurers generally must cover contraceptive and certain other preventive services for women (“Women’s Preventive Services”) at no cost to comply with federal rules that these programs cover preventive care for members with no cost sharing enacted as part of the Patient Protection and Affordable Care Act (“ACA”).

On Monday, August 1, 2011, the Department of Health & Human Services (“HHS”) on Monday, August 1, 2011 announced guidelines (Women’s Preventive Services Guidelines”) that add contraception and a list of women’s health procedures to the preventive care procedures that ACA requires covered health plans and health insurance policies covered by the Affordable Care Act to cover without cost to members. ACA’s general preventive coverage rules generally have required covered health plans and policies to cover without cost a broad list of other preventive care procedures since the first plan year beginning after September 22, 2009.

Interim Final Regulations implementing ACA’s new preventive care mandate published July 14, 2010 interpreted this ACA preventive care mandate broadly to dictate that ACA covered health plans and health insurers cover as preventive services at no member cost hundreds of procedures.

Concerning the Women’s Preventive Services, however, the Interim Final Regulations delayed implementation of requirements to cover Women’s Preventive Services until August 1, 2011 to give time to HRSA time to issue its recommendations about what procedures should qualify as Women’s Preventive Services. When HRSA failed to finalize its input by August 1, 2011, HHS finalized its list of required Women’s Preventive Services now rather than to continue waiting for HRSA’s final input.

Finalization of the list of required Women’s Preventive Services now means covered health plans and policies must add coverage for these listed procedures with no co-pay beginning with all post-July 31, 2012 plan years.

While the published list of required Women’s Preventive Services generally mandates that ACA-covered health plans and policies cover contraceptive services for women at no cost beginning in 2012, some plans sponsored by religious employers and group health policies covering these groups may be exempt from the duty to coverage contraception under a new regulation that HHS, along with the Department of Labor Employee Benefit Services Administration (“EBSA) and the Department of Treasury Internal Revenue Service (“IRS”)(collectively, the “Agencies”) will jointly publish in the Federal Register on August 3, 2011. See here for more detailed information.

Plans & Insurers Should Review & Update Preventive Care & Other Wellness Benefits

Non-grandfathered health plans and policies, their sponsors, insurers, fiduciaries and administrators should carefully review and update their health plans for compliance with the existing preventive care mandates and other evolving rules about disease management and wellness benefits and coverages, as well as to consider the impending requirement to comply with additional Women’s Preventive Services coverage requirements in 2012 as part of their plan design and cost projections.

Existing health plans and health insurance should be reviewed to ensure that the programs appropriately cover all preventive services currently required by the applicable ACA mandates or other laws and re-reviewed for compliance with any updated rules before each plan year to identify any additional costs, changes to plan documents, communications, administrative procedures and vendor contracts required to administer the health plan in accordance with existing rules. For 2012, this should specifically consider the need to comply with the new Women’s Preventive Services coverage requirements that take effect next plan year also should be considered.

In addition to specifically planning for compliance with ACA’s preventive services coverage mandates, all health plans and policies, their sponsors, insurers, fiduciaries and administrators should review the other wellness and disease management components of their plans. In addition to ACA compliance, these arrangements may need redesign to minimize emerging exposures to challenge by the Equal Employment Opportunity Commission (“EEOC”) or private plaintiffs under the Americans With Disabilities Act (“ADA”). Since the Obama Administration took office, the EEOC has taken the position that many common wellness and disease management programs violate the ADA. In addition to these exposures, amendments to the nondiscrimination requirements of the Health Insurance Portability & Accountability Act (“HIPAA”), new nondiscrimination rules added by the Genetic Information & Nondiscrimination Act (“GINA”), federal mental health parity rules, evolving Affordable Care Act claims, coverage and other rules and guidance about essential benefits and other statutory, regulatory and enforcement changes often require updates to common disease management and wellness programs as well as other health plan provisions. Appropriate steps should be taken to review and update these and other plan terms, procedures, communications and practices to maintain compliance and support the ability to enforce plan terms and rely on plan cost projections.

The author of this update, attorney Cynthia Marcotte Stamer frequently conducts training and publishes on these and other matters. She is scheduled to speak about these and other changing health plan requirements in light of health care reform at the September 14, 2011 Houston WEB Chapter lunch and will be conducting briefings on preventive care, wellness and disease management and other rules for several other organizations over the next few months. You can find out about upcoming training or other events and get updates at www.CynthiaStamer.com.

For Help With These Or Other Health Plan Or Employee Benefit Matter

If you would like help reviewing or defending your organizations health plan or other insurance or employee benefit and employment practices in light of these or other laws, please contact attorney Cynthia Marcotte Stamer.

Chair of the American Bar Association (ABA) RPTE Employee Benefits & 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 recognized, internationally, nationally and locally for her more than 23 years of work, advocacy, education and publications on employee benefit and related matters.

A board certified labor and employment attorney Ms. Stamer continuously advises and assists employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators 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 programs and practices. She works extensively with plan sponsors, insurers, administrators, technology and other service providers and others to develop and operate legally defensible programs, practices and policies that promote the client’s human resources, employee benefits or other management goals. Ms. Stamer also is a widely published author and highly regarded speaker on these and other employee benefit and human resources matters who is active in many other employee benefits, human resources and other management focused organizations.

You can review other recent human resources, employee benefits and internal controls publications and resources and additional information about the employment, employee benefits and other experience of Ms. Stamer here. Some recent publications and programs that may be of interest include:

Ms. Stamer is scheduled to conduct training on these and other health benefit requirements for a number of organizations over the upcoming month. For information about these and other training opportunities or for other resources and information, see here or contact Ms. Stamer directly.

For Help or More Information

If you have questions or need help understanding or responding to the Regulations, with other health benefit design, administration or operations concerns, or with other employee benefits, compensation, labor or employment or other workforce management concerns, please contact the author of this update, Board Certified Labor and Employment attorney and management consultant Cynthia Marcotte Stamer here or at (469)767-8872.

Past Chair of the American Bar Association (ABA) Health Law Section Managed Care & Insurance Interest Group, Chair of the ABA RPTE Employee Benefit and Other Compensation Committee, and a council member of the ABA Joint Committee on Employee Benefits, Ms. Stamer is nationally recognized for her more than 23 years pragmatic and innovative health program work.

Board certified in labor and employment law by the Texas Board of Legal Specialization with extensive leading edge health plan experience, Ms. Stamer has worked continuously throughout her career helping health plan sponsors, fiduciaries, administrators, insurers and others design, administer and defend health and other employee benefit and insurance programs domestically and internationally. She is widely recognized for her experience helping design and implement legally compliant self-insured and insured health reimbursement, mini-med, high-deductible health plans, limited benefit plans, 24-hour and occupational medicine, ex-pat and medical tourism, deductible reimbursement and other creative health benefit programs to solve a wide range of financial and other challenges while coping with changing regulatory and market realities. Her work includes both working with clients to design, document, implement and administer these and other arrangements, as well as the development of wellness and disease management, claims administration and appeals, eligibility, and other administrative services, processes and technologies. She also works with plan fiduciaries, plan sponsors, insurers, administrators, brokers and advisors, bankruptcy trustees, creditors, debtors, service providers and their officers and directors about the prevention, investigation, mitigation and resolutions of civil and criminal liability arising from suspected or known benefit administration claims, breaches of fiduciary duty, privacy and data security breach, vendor disputes and other disputes arising in relation to employee benefit and insurance arrangements. As a continuing part of this representation, Ms. Stamer regularly represents and defends plan sponsors, fiduciaries, third party administrators and other service providers and management officials in dealings with the Department of Labor, Department of Justice, Department of Health & Human Services, Department of Defense, Securities and Exchange Commission, state insurance regulators, state attorneys general and other federal and state regulators and prosecutors and private plaintiffs in connection with investigations, prosecutions, audits and other actions arising from employee benefit, insurance and related arrangements and products.

Recognized in the International Who’s Who of Professionals and bearing the Martindale Hubble Premier 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. In addition to her many ABA leadership involvements, she also serves in leadership positions in numerous human resources, corporate compliance, and other professional and civic organizations. 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, World At Work, the ICEBS, SHRM 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

Stamer Speaks 9/14 On Coping With Health Care Reform: What’s New, What Lies Ahead & What To Do
Labor Department 2011 Stats Show Employer Health Coverage & Other Benefit Statistics
Borzi Tells House Committee Current Fiduciary Regs Flawed; Must Fix Loopholes In Investment Advisor Definition To Protect Plans
Labor Department 2011 Stats Show Employer Health Coverage & Other Benefit Statistics
Conviction Highlights Risks Of Misleading Investors
DOL Considers Easing Rules For Electronic Benefit Communications
Improving The Effectiveness Of Compliance & Risk Management By Getting Hr On The Compliance Team
IRS Establishes Safe Harbor Election For Allocating Success-Based Fees Paid On Certain Business Transactions
IRS Changing Substantiation Rules For Business Travel Expenses
9/22/11 Cutoff To Apply For Affordable Care Act Annual Limit Temporary Waiver
Spectrum Healthcare NLRB Charge Settlement Highlights Need To Defend Against Possible Unfair Labor Practices & Other Union Exposures
IRS Releases Health Savings Account, High Deductible Health Plan 2012 Indexed Amounts
IRS Guidance On Affordable Care Act Requirement That Employers Report Cost Of Health Coverage On W-2 Released
Plan Sponsors. Their Owners & Management & Others Risk Personal Liability If Others Defraud Plans Or Mismanage Employee Benefit Plan Responsibilities
Health Plans, Insurers Get Limited & Imperfect Relief From Grace Period Extension For Some New Affordable Care Act Health Claims & Appeals Rules
EEOC Finalizes Updates To Disability Regulations In Response To Ada Amendments Act: Employers Should Manage Risks
Employer Charged With Misclassifying & Underpaying Workers To Pay $754,578 FLSA Back Pay Settlement
Avoiding Liability For Another’s Health Plan Fraud
Health Plans & Employers Beware! $4.3 Million Civil Penalty Shows OCR Serious About HIPAA Enforcement
IRS Expands When HFSAS & HRAs May Allow Over-The-Counter Drug Purchases With Drug Cards
DOL Announces Changes To H-2b Prevailing Wage Calculation Rules
$1 Million + FLSA Overtime Settlement Shows Employers Should Tighten On-Call, Other Wage & Hour Practices
Affordable Care Act Grandfathered Plan Rules Loosened To Allow Insured Plans Making Some Insurance Changes To Qualify
Update Employment Practices To Manage Genetic Info Discrimination Risks Under New EEOC Final Gina Regulations
EEOC Attacks Medical Leave Denials As Prohibited Disability Discrimination
DOL Proposes To Expand Investment Related Services Giving Rise To Erisa Fiduciary Status As Investment Fiduciary

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Posted by Cynthia Marcotte Stamer

Stamer Speaks 9/14 On Coping With Health Care Reform: What’s New, What Lies Ahead & What To Do

July 29, 2011

Cynthia Marcotte Stamer will speak to the Houston Chapter of WEB at 11:30 a.m on September 14, 2011 on “Coping With Health Care Reform: What’s New, What Lies Ahead & What To Do.” Get details and register online at www.webnetwork.org/houston.

Updating you on the status of litigation challenging the ACA health care reforms in the courts;
Updating you on the key developments affecting health care regulatory reforms likely to impact your health plan;
Sharing an updated roadmap of the currently scheduled implementation of key future health benefit reforms enacted under ACA;
Sharing selected tips and strategies for managing compliance and other risks and deal with uncertainties arising as health care reform continues to evolve; and
Audience questions and discussion of questions and ideas.

For additional information about Ms. Stamer and her experience, see www.CynthiaStamer.com.

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Posted by Cynthia Marcotte Stamer

Labor Department 2011 Stats Show Employer Health Coverage & Other Benefit Statistics

July 29, 2011

A new 2011 U.S. Department of Labor Bureau of Labor Statistics Study of employee benefits offered shares key insights into how many employers offer employer-provided health and other benefits The study shows that health and other benefits offered by employers, how much employers contribute and when employees enroll in offered benefits varies widely varied by whether the employer is a government or private sector employer, the industry, size and other characteristics of the employer and the income, profession, education and other characteristics of the employee. It is no surprise that government employers that can pass along costs to taxpayers provide coverage more broadly and subsidize more of the cost.

With regard to health benefits, the report reveals that practices vary significantly among employers, on average, medical care benefits were available to 69 percent of private industry workers and half of workers participated in a medical plan. For single coverage, private sector employers paid 80 percent of the medical care premiums for full-time workers and 69 percent of medical care premiums for full-time workers in private industry. Data shows employees often elect not to take offered coverage.

In addition to data on medical benefits, the study also reports that paid leave remains the most commonly provided benefit nationally and includes data on other benefits.

The DOL highlights 1st time reporting of domestic partner status for 1st time in its announcement. Data also provided on paid vacation and other leave.

Read report summary and access report at http://www.bls.gov/news.release/ebs2.nr0.htm.

For Help or More Information

About Solutions Law Press

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Posted by Cynthia Marcotte Stamer

Borzi Tells House Committee Current Fiduciary Regs Flawed; Must Fix Loopholes In Investment Advisor Definition To Protect Plans

July 28, 2011

Assistant Secretary of Labor, Employee Benefits Security Administration (EBSA) Phyllis C. Borzi testified Tuesday, July 26, 2011 to the House Committee on Education and the Workforce Subcommitte on Health, Employment, Labor, and Pensions that EBSA a proposed fiduciary regulation that would update EBSA regulations defining when a person is considered a “fiduciary” by reason of giving investment advice for a fee with respect to assets of an employee benefit plan or IRA will help protect employee benefit plan participants by correcting “loopholes” in a “flawed 35-year-old rule” that allow many parties providing advice about the investment of retirement plan assets to escape coverage by ERISA’s fiduciary responsibility rules. The proposed regulations and other stepped up regulations and enforcement of ERISA’s fiduciary protections by the EBSA means that plan sponsors, fiduciaries, investment advisors and other plan service providers and others involved in the sponsorship, design, and administration of an employee benefit plan need to act to manage expanding fiduciary responsibilities and exposures.

Borzi Says Loopholes & Other Flaws In Existing Regulations Hurt Plans & Their Participants

Borzi told the Committee that EBSA believes its rules about the types of advisory relationships that give rise to fiduciary status under the ERISA on the part of those providing investment advice services need to change because “technicalities” and “loopholes” in the current EBSA fiduciary regulations definition of “investment advisor” in effect since 1975 harms participants and beneficiaries by allowing many advisers to easily dodge fiduciary status.

Borzi testified that the five-part regulatory test used under the current regulations to determine when ERISA’s fiduciary requirements apply to “investment advice” and when the advisor is a “fiduciary” significantly narrowed the plain language of the ERISA statute so that much of what plainly is advice about plan investments is not treated as investment advice as fiduciary conduct under ERISA and the person paid to render that advice is not treated as an ERISA fiduciary.

Under current fiduciary regulation, an investment adviser is not treated as a fiduciary accountable for complying with ERISA’s prudence, exclusive benefit, prohibited transaction and other fiduciary responsibility safeguards if and when providing advice that meets each element of a five part test.

Under the current regulation, a person is a fiduciary under ERISA and/or the tax code with respect to their advice only if and when he or she:

Make recommendations on investing in, purchasing or selling securities or other property, or give advice as to their value;
On a regular basis;
Pursuant to a mutual understanding that the advice;
Will serve as a primary basis for investment decisions; and
Will be individualized to the particular needs of the plan.

Borzi told members of Congress this narrow definition of investment advisor exempts a wide range of parties receiving compensation for providing advice about the investment of employee benefit funds from coverage by ERISA’s fiduciary responsibility requirements. Borzi testified that the narrowness of the existing regulation opened the door to serious problems, and changes in the market since the regulation was issued in 1975 have allowed these problems to proliferate and intensify. Borzi says the narrowness of the regulation has harmed some plans, participants, and IRA holders. Research has linked adviser conflicts with underperformance. SEC reviews of certain financial sales practices may also reflect these influences. Finally, EBSA’s own enforcement experience has demonstrated specific negative effects of conflicted investment advice.

Borzi Says Proposed Regulation Would Strengthen Protections For Plans & Their Participants

Borzi said the proposed regulation published in the Federal Register on October 22, 2010 would change the rules defining a person is considered to be a “fiduciary” by reason of giving investment advice for a fee with respect to assets of an employee benefit plan or IRA by modifying the current regulation in effect since 1975 would replace the five-part test of “investment advisor” with a broader definition more in keeping with the statutory language while providing clear exceptions for conduct that should not result in fiduciary status.

According to Borzi, types of advice and recommendations that generally would trigger fiduciary status under the proposed regulations include: (1) appraisals or fairness opinions concerning the value of securities or other property; (2) recommendations as to the advisability of investing in, purchasing, holding or selling securities or other property; or (3) recommendations as to the management of securities or other property.

To be a fiduciary for performing these or other activities treated as fiduciary investment advice, Borzi explained that a person engaging in one of these activities must receive a fee and also meet at least one of the following four conditions:

Represent to a plan, participant or beneficiary that the individual is acting as an ERISA fiduciary;
Already be an ERISA fiduciary to the plan by virtue of having any control over the management or disposition of plan assets, or by having discretionary authority over the administration of the plan;
Be an investment adviser under the Investment Advisers Act of 1940; or
Provide the advice pursuant to an agreement or understanding that the advice may be considered in connection with investment or management decisions with respect to plan assets and will be individualized to the needs of the plan.

At the same time, Borzi testified that the proposed regulation recognizes that activities by certain persons should not result in fiduciary status. Specifically, these are:

Persons who do not represent themselves to be ERISA fiduciaries, and who make it clear to the plan that they are acting for a purchaser/seller on the opposite side of the transaction from the plan rather than providing impartial advice;
Persons who provide general financial/investment information, such as recommendations on asset allocation to 401(k) participants under existing Departmental guidance on investment education;
Persons who market investment option platforms to 401(k) plan fiduciaries on a non-individualized basis and disclose in writing that they are not providing impartial advice; and
Appraisers who provide investment values to plans to use only for reporting their assets to the DOL and IRS.
EBSA Still Working To Address Expressed Concerns

The proposed regulation has prompted a large volume of comments and a vigorous debate. Borzi testified that the EBSA is working hard to hear and consider every stakeholder concern and shared some examples of how EBSA is considering addressing certain of these concerns. Borzi said EBSA is taking multiple steps in its effort to respond to these and other concerns in its efforts to finalize the regulation including:

Borzi told the Committee EBSA is working to better understand how specific compensation arrangements would be affected by the proposed rule and whether clarifications of existing prohibited transactions exemptions would be appropriate. Borzi said EBSA has already begun to issue subregulatory guidance describing some of these clarifications and will continue to do so as necessary as it completes its analysis.

Borzi also said that as EBSA further develops its thinking in this rulemaking, EBSA is paying special attention to the two primary exceptions to fiduciary status under the proposed rule: (1) clarifying the difference between investment education that does not give rise to fiduciary status and fiduciary investment advice; and (2) clarifying the scope of the so-called “sellers’ exception” under which sales activity is not fiduciary advice. In both cases, Borzi said EBSA intends to analyze and address the comments and concerns that were raised during our extensive public comment period.

Finally, Borzi said EBSA is exploring a range of appropriate regulatory options for moving forward, taking into consideration public comments submitted for the record, EBSA’s economic analysis, and relevant academic research. In so doing, Borzi told the Committee EBSA is aiming to address conflicted investment advice while not unnecessarily disrupting existing compensation practices or business models.

Plan Sponsors, Fiduciaries, Service Providers Should Prepare For Tighter Rules While Continuing To Provide Input To EBSA

The proposed changes to the definition of investment advisor is one of many steps that EBSA is taking to tighten the regulations implementing ERISA’s fiduciary requirements and to enforce the protections of ERISA. The proposal to expand the conditions that providing investment advice regarding retirement plan assets will trigger the fiduciary protections of ERISA is designed to expand the reach of those regulations. Service providers involved in providing these or other related services generally will want to review and update their processes, documentation and training to manage new exposures likely to arise from these proposed regulations, while continuing to share feedback to EBSA and other rulemakers.

Service providers are not the only parties that need to update practices and provide input about these rules. Plan sponsors, fiduciaries, service providers, participants and beneficiaries also are impacted. Employers and other plan sponsors, fiduciaries and others need to anticipate and respond effectively to the inevitable efforts by providers of investment advice and other services to avoid or shift liability. Parties securing or relying on advice or services about investments or other responsibilities should:

Carefully, prudently conduct a documented investigation and critical analysis of existing and proposed advisors and other service providers credentials, analysis, performance, contract, recommendations and other conduct;
Carefully review contracts and other materials and secure appropriate constractual and other safeguards;
Require indemnification, insurance and other protections;
Ensure that appropriate action is taken to appoint parties intended to perform fiduciary advisory or other services to manage risks
Secure and maintain appropriate fiduciary and other liability insurance coverage;
Carefully conduct an appropriate, well-documented prudent review of performance, credentials and other relevant factors on a regular basis to preserve ongoing evidence of prudence; and
Other appropriate safeguards to manage risks and liabilities.

To help guard and position themselves to defend against fiduciary exposures plan sponsors, fiduciaries, service providers and others involved in the administration of health or other employee benefit plans should seek the advice of legal counsel with appropriate experience with employee benefit and other related matters to develop an understanding of ERISA and other laws and the duties and liabilities that these rules may create for their organizations and themselves personally. For additional tips and information about managing these risks, see here.

For Help With These Or Other Risk Management Matters

If you need assistance in auditing or assessing, updating or defending your wage and hour or with other labor and employment, employee benefit, compensation or internal controls 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. Her experience includes extensive work helping employers implement, audit, manage and defend wage and hour and other workforce and internal controls policies, procedures and actions. 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.

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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 or e-mailing this information here. To unsubscribe, e-mail here.

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Posted by Cynthia Marcotte Stamer

IRS Changing Substantiation Rules For Business Travel Expenses

July 19, 2011

Employers and business travelers get ready. The Internal Revenue Service is changing its rules for substantiation of expenses for lodging, meal and incidental expenses incurred while traveling away from home on business.

Announcement 2011-42, scheduled for Federal Register publication on August 8, will announce the IRS’ stop allowing taxpayers to use the high-low per diem method for substantiating lodging, meal, and incidental expenses incurred in traveling away from home.

Along with its elimination of this substantiation method option, the IRS has announced it plans to publish a revenue procedure providing the general rules and procedures for substantiating these expenses (omitting the high-low substantiation method) and a notice providing the special transportation rate. The IRS has announced that it plans to stop publishing the per diem revenue procedure annually but will publish changes as required.

For Help With Monitoring Developments, Compliance, Investigations Or Other Needs

If you need help with fraud prevention and detection or other internal controls or compliance matters, the author of this update, attorney Cynthia Marcotte Stamer, can help. Board Certified in Labor & Employment Law, Chair of the ABA RPTE Employee Benefits & Other Compensation Arrangements Group, and an ABA Joint Committee on Employee Benefits Council Representative, Ms. Stamer has more than 23 years experience advising a broad range of public and private businesses on human resources, employee benefits, compensation, performance management and other related operations, risk management, compliance and product matters. Ms. Stamer also regularly represents and advises business clients, employee benefit plans and their fiduciaries, insurers, financial services providers, and others about dealings with investigations and disputes, vendor relations and credentialing, government regulations, investigations and audits, disputes and enforcement actions and a wide range of other concerns. She also publishes and speaks extensively on regulatory and compliance, performance management, and other operations and risk management concerns. Her publications and insights appear in the SHRM, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, and a many other national and local publications. You can get more information about Ms. Stamer and her other experience here.

If you need help investigating or responding to a known or suspected compliance, litigation or enforcement or other risk management concern, help 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.

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Posted by Cynthia Marcotte Stamer

9/22/11 Cutoff To Apply For Affordable Care Act Annual Limit Temporary Waiver

June 20, 2011

6/17 Guidance Says Temporary Relief Offered Through 2014 Unavailable For Plans Not Applying By 9/22/11

Health plans and insurers wishing to qualify for a temporary waiver of annual limit restrictions enacted under the Affordable Care Act after September 22, 2011 must act quickly and should expect to face tougher qualification requirements. Plans and insurers not applying by a newly set September 22, 2011 deadline will be permanently disqualified from eligibility to request the relief for post-September 22, 2011 plan years according to guidance issued Friday, July 17, 2011.

Plans Must Apply Before 9/22/11 & Meet Tightened Requirements To Preserve Possibility Of Temporary Relief Qualification For Post 9/22/11 Plan Years

On Friday, June 17, 2011, the Centers for Medicare and Medicaid Services (CMS) announced that CMS will not accept or consider any new applications or requests for extensions of temporary waivers of the Affordable Care Act annual limitation requirements.

Additionally, CMS also updated the requirements that plans and insurers applying for a new or extension of an existing annual limit waiver before September 22, 2011 through 2013. Under the new guidance, any plans receiving these waivers also will have to meet tighter requirements to qualify for the requested annual limit waiver for post-September 22, 2011 plan years.

The Affordable Care Act will ban annual limits for non-grandfathered health plans beginning in 2014. Until then, the Affordable Care Act provides for the phased out of annual limits. The phase out of the annual limits is intended to preserve access to needed benefits and the affordability of coverage until the reforms scheduled to take effect in 2014 are in place.

Currently, most plans cannot impose an annual limit that is lower than $750,000. Beginning in September, 2011, the allowable annual limit under the Affordable Care Act will increase to $1.25 million and to $2 million for plan years beginning in September 2012.

Temporary Waiver Program Provides Relief For Some Qualifying Plans

In response to concerns that compliance with the phased in annual limit restrictions would result in significant cost increases or coverage terminations for many plans, CMS last year issued guidance that granted temporary waivers from the phased in annual limits for qualifying limited benefit,, “mini-med” or certain other qualifying plans that submitted timely applications demonstrating that compliance with the phaseout limits would result in a significant decrease in access to benefits or a significant increase in premiums and met other qualification requirements. (For a list of applications previously approved or denied by city and state, see cciio.cms.gov/resources/files/approved_applications_for_waiver.html.)

CMS Most Likely To Approve Waiver Requests For Plans With Lower Annual Limits But Other Plans Also Can Apply

Like the waiver program guidance for 2010, the June 17, 2011 guidance technically gives all plans and issuers with restricted annual limits below $2 million the opportunity to apply for a temporary waiver before September 22, 2011. However, not all plans will necessarily qualify for the requested relief.

Under the temporary waiver program, CMS authority to decide whether to approve or deny an annual limit waiver request made by a plan that otherwise meets all requirements. CMS has indicated that it is most likely to approve waivers for plans with low annual limits (e.g., $10,000), as CMS sees these plans as most likely to need waivers to prevent a significant increase in premiums or decrease in access to coverage to comply with the current limit of $750,000. In contrast, CMS views plans with higher annual limits as less needful of a temporarywaiver because complying with the new rules is unlikely to lead to a significant increase in premiums or decrease in access to care. CMS says that its actuarial analysis indicates that most plans that currently have annual limits above $750,000 and below $2 million can meet the increased 2011 annual limit of $1.25 million with minimal premium increases (less than one percent). Similarly, CMS predicts that increasing annual limits from $1.25 million to $2 million in 2012 will have a “small impact” on premiums. Consequently, CMS is less likely to approve waiver requests for plans that already have higher limits in effect.

CMS Also Tightening Other Requirements For Waiver Relief Qualification

In addition to applying for a waiver before September 22, 2011 and showing the requisite impact on plan costs or coverage, the July 17 guidance also will require that plans seeking a temporary waiver of the annual limit after September 22, 2011 meet other more stringent conditions. Among other things, plans with waivers will be required:

To tell consumers that their health care coverage is subject to an annual dollar limit lower than what is allowed under the law;
Include the dollar amount of the annual limit along with a description of the plan benefits to which the limit applies;
Show how the annual limit would affect a consumer who was hospitalized to help people understand how far their coverage will reach if they become seriously ill; and
Must attest annually to their compliance with the consumer disclosure requirement.

Plans & Sponsors Should Act Quickly To Keep Option of Qualification For Temporary Relief Option

Plans and insurers that wish to preserve the possibility of qualifying for temporary relief from the otherwise applicable Affordable Care Act limitations on annual waivers for post-September 22, 2011 plan years should act quickly to prepare and submit their application for relief.

For Help or More Information

Ms. Stamer is scheduled to conduct training on these and other health benefit requirements for a number of organizations is upcoming months. For information about these and other training opportunities or for other resources and information, see here or contact Ms. Stamer directly.

About Solutions Law Press

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Posted by Cynthia Marcotte Stamer

Spectrum Healthcare NLRB Charge Settlement Highlights Need To Defend Against Possible Unfair Labor Practices & Other Union Exposures

May 20, 2011

The National Labor Regulations Board (NLRB)’s announcement of a settlement against a Connecticut nursing home operator this week in conjunction with a series of other enforcement actions highlight the need for businesses to tighten defenses and exercise other caution to minimize their organization’s exposure to potential NLRB charges or investigation. As reflected by many of these enforcement acts, the exposures arise both from active efforts by businesses to suppress union organizing or contracting activities, as well as the failure to identify and manage hidden labor law exposures in the design and administration of more ordinary human resources, compliance, business operations and other policies and practices.

On May 17, 2011, the NLRB announced here that Connecticut nursing home operator Spectrum Healthcare has agreed to settle a NLRB case involving multiple allegations of unlawful suspensions, discharges and unilateral changes in violation of the National Labor Relations Act and other federal labor laws by offering reinstatement and back pay to all discharged and striking workers and signing a new three-year collective bargaining agreement with its employees’ union, New England Health Care Employees Union District 1199, SEIU.

Along with the contract and reinstatement of all employees, the company agreed to pay $545,000 in back pay and pension benefits to employees who were harmed by the unfair labor practices, and to expunge any disciplinary records related to the case. As a result, all NLRB charges against the company have been withdrawn. Spectrum admits to no wrongdoing in the settlement.

The settlement, reached midway through a hearing before an NLRB administrative law judge in Connecticut and approved by the judge yesterday, ends a long-running dispute which grew into a strike by almost 400 employees at four nursing homes in Connecticut operated by Spectrum Healthcare, LLC. Complaints issued by the NLRB Regional Office in Hartford alleged that, beginning in the fall of 2009, several months after the prior collective bargaining agreement expired, Spectrum discharged seven employees and suspended three others to retaliate against their union activities and to discourage other employees from supporting the union. In addition, one employee was discharged and seven others were suspended after the employer unilaterally changed its tardiness discipline policy without first bargaining with the union.

The complaints further alleged that in April 2010, employees at the four nursing homes — in Derby, Ansonia, Winsted, and Hartford — went on strike to protest the unfair labor practices. When the strikers offered unconditionally to return to work in late August, the employer refused to take them back. Under federal labor law, if a strike is called because of an unfair labor practice, employees are entitled to reinstatement after an unconditional offer to return to work.

The reinstated employees are due to return to the facilities this week.

The Spectrum Healthcare settlement is reflective of the growing number of NLRB enforcement orders against employers generally and health care providers specifically under the Obama Administration. The Obama Administration has close ties and has expressed its strong and open support for union and union organizing activities. The adoption of a series of union friendly labor law reforms was one of the key campaign promises of President Obama during his election campaign. While other legislative priorities and the change in the leadership of the House of Representatives appears to have slowed efforts to push through this agenda, it has not slowed the Administration’s efforts to support unions with strong enforcement activities. Empowered by a difficult economic and job situation and an awareness of the Obama Administration’s strong support for union organizing and other activities, unions are stepping up organizing efforts and more aggressively challenging employers actions.

Over the past few months, public awareness of the Obama Administration’s aggressive enforcement agenda on behalf of unions has drawn new attention as a result of the widespread media coverage of NLRB actions challenging Boeings planned relocation of certain manufacturing jobs intervention in a planned relocation of certain manufacturing operations. See, e.g., Acting General Counsel Lafe Solomon releases statement on Boeing complaint; National Labor Relations Board issues complaint against Boeing Company for unlawfully transferring work to a non-union facility. However, the Boeing and Spectrum Healthcare actions represent only the tip of the iceberg of the rising number of NLRB enforcement activities, most of which take place with little media or public attention.

Along side the Spectrum Healthcare and Boeing actions, in recent weeks, the NLRB also has been busy with several other enforcement activities. For instance:

On May 9 2011, the NLRB issued a complaint against Hispanics United of Buffalo (HUB), a nonprofit that provides social services to low-income clients, that alleges that HUB unlawfully discharged five employees after they took to Facebook to criticize working conditions, including work load and staffing issues. The case involves an employee who, in advance of a meeting with management about working conditions, posted to her Facebook ; and
On May 17, the NLRB secured a temporary injunction from a U.S. District Court in San Jose California against San Jose area waste hauling company OS Transport LLC, charged with engaging in unfair labor practices including the termination of a lead organizer and another Union supporter, retaliation against Union efforts in the form of unfavorable assignments, threats to Union supporters, and promises of improved treatment of employees who disavow the Union for the alleged purpose of defeating a union. o offer reinstatement to two drivers and restore full assignments to other drivers who had expressed support for a union during an organizing campaign. More Details here.,

In addition, in recent weeks, the NLRB also has:

Sued the state of Arizona on amendment limiting method for choosing union representation on May 5, 2011;
Secured an order requiring a Milwaukee job training center to pay back pay and reinstate workers fired for complaining about bounced paychecks on May 3, 2011;
Ordered a concrete supplier to rehire employees in Indianapolis on May 2, 2011;
Found a New York egg processing plant of unlawful interference and ordered a third election ohm April 27, 2011; and
Secured a settlement from Build.com of unlawful dischrage charges for firing employee based on Facebook comments on April 20

Amid this difficult enforcement environment, business leaders should exercise special care to prepare to defend their actions against both potential organizing efforts, to understand the types of actions and activities that may help fuel charges, and take steps to manage these and other union organization and other labor risks.

For Help With Labor & Employment, Employee Benefits Or Other Risk Management and Defense

If you need assistance in auditing or assessing, updating or defending your labor and employment, employee benefits, compliance, risk manage or other internal controls practices or actions, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469)767-8872.

About Solutions Law Press

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Posted by Cynthia Marcotte Stamer

OCR’s McAndrew Speaks At 5/16 JCEB HIPAA Teleconference; OCR/NIST To Share Other HIPAA Training On Line

May 10, 2011

The National Institute of Standards and Technology (NIST) and the Department of Health and Human Services (HHS), Office for Civil Rights (OCR) are making presentations from the 4th annual conference on “Safeguarding Health Information: Building Assurance through HIPAA Security” co-hosted in Washington, D.C. on May 10 & 11, 2011 available on line for review. The training is part of a series of continuing efforts by the agencies to outreach to various parties on the Privacy and Security Rules of the Health Insurance Portability & Accountability Act of 1996, as amended (HIPAA). Meanwhile, OCR’s Susan McAndrew is scheduled to share insights on OCR’s HIPAA regulatory and enforcement agenda at a teleconference to be hosted by the American Bar Association Joint Committee on Employee Benefits at Noon Central on May 16, 2011.

The Security Rule sets federal standards to protect the confidentiality, integrity and availability of electronic protected health information by requiring HIPAA covered entities and their business associates to implement and maintain administrative, physical and technical safeguards. Presentations cover a variety of current topics including updates on HHS health information privacy and security initiatives, OCR’s enforcement of health information privacy and security activities, integrating security safeguards into health IT and security automation, insider threat trends and safeguards, and more.

The conference is designed to explore the current health information technology security landscape and the Health Insurance Portability and Accountability Act (HIPAA) Security Rule, the agencies share their practical strategies, tips and techniques for implementing the HIPAA Security Rule.

For details about reviewing the May 10-11 presentations, see the 2011 HIPAA Conference website here. For details about the May 16 teleconference, see here.

For Help With Monitoring Developments, Compliance, Investigations Or Other Needs

If you need assistance monitoring federal health reform, 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, can 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 23 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.

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, On May 3, 2011, Ms. Stamer served as the appointed scribe for the ABA Joint Committee on Employee Benefits Agency meeting with OCR and will moderate a teleconference featuring comments by OCR’s Susan McAndrew for the Joint Committee on Employee Benefits scheduled for May 16. Her insights on the required “culture of compliance” with HIPAA also recently were quoted in medical privacy related publications of the Atlantic Information Service. 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, 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.

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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.

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Posted by Cynthia Marcotte Stamer

Health Plans & Sponsors Should Monitor, Begin Preparing To Meet New Health Care Reform Low-Income Member Voucher Requirements

April 14, 2011

The Affordable Care Act will require employer sponsored plans to honor vouchers to help pay the cost of coverage for certain lower income individuals and children.

Employers and their health plans will face new responsibilities to figure relevant family income, to provide information about their plans and costs of coverage, and to follow voucher handling requirements for employees and others whose coverage will be paid for in whole or in part with these low-income vouchers. While the rules are still evolving, employers and health plans nevertheless need to start preparing to meet these new responsibilities. Employers and heatlh plans need to keep an eye on the development of these rules at the Federal and state level and begin planning for how they will administer these responsibilities.

A Kaiser Family Foundation Issue Brief discusses some of the ways and implications of income determinations to be made for this purpose.

For Help With Investigations, Policy Updates Or Other Needs

If you have questions or need help responding to the RFI or have any questions or need help understanding or dealing with these or any other workforce management, employee benefits, compensation or other internal control concerns, please contact the author of this update, Board Certified Labor and Employment attorney and management consultant Cynthia Marcotte Stamer here or at (469)767-8872.

Ms. Stamer has advised, represented, trained, and defend a broad range of employer, employee benefit plan, insurance and other clients in relation to electronic and other communications and other employee benefit concerns and frequently publishes and is interviewed about electronic and other employee benefit plan communications and other employee benefit plan matters. 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, Ms. Stamer helps businesses, employee benefit plans and other organizations 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 23 years management-focused 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. Throughout her career, Ms. Stamer has continuously has advised and represented a broad range of fiduciaries, plan sponsors, bankruptcy trustees, creditors, debtors, service providers and their officers and directors about the prevention, investigation, mitigation and resolutions of civil and criminal liability arising from suspected or know breaches of fiduciary duty, fraud or other misconduct involving health, pension or other employee benefit and insurance arrangements. As a continuing part of this representation, Ms. Stamer regularly represents and defends plan sponsors, fiduciaries, third party administrators and other service providers and management officials in dealings with the Department of Labor, Department of Justice, Department of Health & Human Services, Department of Defense, Securities and Exchange Commission, state insurance regulators, state attorneys general and other federal and state regulators and prosecutors and private plaintiffs in connection with investigations, prosecutions, audits and other actions arising from employee benefit, insurance and related arrangements and products.

Other Helpful Resources & Information

If you found this article of interest, you also may be interested in reviewing other Breaking News, articles and other resources available here including:

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, unsubscribe by updating your profile here.

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Posted by Cynthia Marcotte Stamer

Recap of IRS Employee Plans 2011 1st Quarter Guidance

April 10, 2011

Keeping on top of the employee plan guidance published by the Internal Revenue Service (IRS) and other relevant agencies can be critical to efforts of plan sponsors, fiduciaries, administrators and other service provider’s ability to anticipate plan design or other actions needed to maintain compliance or manage other concerns. The following is a recap of the more significant the IRS Employee Plan guidance published by the IRS between January 1 and March 31, 2011.

Notice 2011-33, 2011-19 I.R.B.: Updates for the corporate bond weighted average interest rate for plan years beginning in April 2011; the 24-month average segment rates; the funding transitional segment rates applicable for April 2011; and the minimum present value transitional rates for March 2011.
Notice 2011-22, 2011-12 I.R.B. 557: Updates for the corporate bond weighted average interest rate for plan years beginning in March 2011; the 24-month average segment rates; the funding transitional segment rates applicable for March 2011; and the minimum present value transitional rates for February 2011.
Announcement 2011-21, 2011-12 I.R.B. 567: This announcement designates Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits, as the form to be used to satisfy the reporting requirements of §6057(a) of the Code for plan years beginning on or after January 1, 2009, and sets forth the due dates for filing the form for the 2009 plan year and subsequent plan years. .
Notice 2011-19, 2011-11 I.R.B. 550: This notice provides guidance regarding when securities of the employer are readily tradable on an established securities market or readily tradable on an established market for purposes of certain provisions of the Internal Revenue Code relating to employer securities held by certain qualified retirement plans. .
Announcement 2011-16, 2011-7 IRB 500: This announcement corrects a typographical error in Rev. Rul. 2011-3.
Rev. Rul 2011-7, 2011-10 I.R.B.: This revenue ruling provides guidance clarifying how the section 403(b) plan termination provisions apply. .
Announcement 2011-8, 2011-5 IRB 446: This announcement corrects an error in Rev. Proc. 2011-8 in the user fee schedule that applies to a non-mass submitter of a master or prototype (M&P) plan.
Notice 2011-13, 2011-9 I.R.B. 529: Updates for the corporate bond weighted average interest rate for plan years beginning in February 2011; the 24-month average segment rates; the funding transitional segment rates applicable for February 2011; and the minimum present value transitional rates for January 2011.
Notice 2011-7, 2011-5 I.R.B. 437: Updates for the corporate bond weighted average interest rate for plan years beginning in January 2011; the 24-month average segment rates; the funding transitional segment rates applicable for January 2011; and the minimum present value transitional rates for December 2010.
Notice 2011-3, 2011-2 IRB 263: The notice provides guidance on the special rules relating to funding relief for single-employer defined benefit pension plans (including multiple employer defined benefit pension plans) under the Preservation of Access to Care for Medicare. Beneficiaries and Pension Relief Act of 2010 (PRA 2010), Pub. L. No. 111-192.
Rev. Rul. 2011-3, 2011-4 I.R.B. 326: The covered compensation tables under Code §401 for the year 2011 are provided to determine contributions to defined benefit plans and permitted disparity.
Rev. Proc. 2011-4, 2011-1 I.R.B. 123: Annual EP/EO revenue procedure on letter rulings.
Rev. Proc. 2011-5, 2011-1 I.R.B. 167: Annual EP/EO revenue procedure on technical advice.
Rev. Proc. 2011-6, 2011-1 I.R.B. 195: Annual EP determination letter revenue procedure.
Rev. Proc. 2011-8, 2011-1 I.R.B. 237: Annual EP/EO revenue procedure on user fees.

For Help With These Or Other Risk Management Matters

If you need assistance in accessing, assessing or auditing, updating or defending your employee benefit or compensation arrangements and practices in response to this recent guidance or with other labor and employment, employee benefit, compensation or internal controls practices, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469)767-8872.

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Posted by Cynthia Marcotte Stamer

IRS Guidance On Affordable Care Act Requirement That Employers Report Cost of Health Coverage On W-2 Released

April 9, 2011

The Internal Revenue Service has released an advance copy of interim guidance implementing requirements that employers report to employees of the cost of their employer-sponsored group health plan coverage required under Internal Revenue Code (Code) § 6051(a)(14) of the Code, as enacted as part of the Affordable Care Act.

The interim guidance contained in Notice 2011-28 generally applies beginning with 2012 Forms W-2 (that is, the forms required for the calendar year 2012 that employers generally are required to furnish to employees in January 2013 and then file with the Social Security Administration (SSA)).

The Affordable Care Act will require that employers report to employees information about the cost of employer provided health care coverage beginning in January 2013. According to Notice 2010-69, employers are permitted, but not required to report the cost of health coverage on any forms required to be furnished to employees prior to January 2013. However, any employers that choose to report earlier (on the 2011 Forms W-2 generally furnished to employees in January 2012) may look to this notice for guidance regarding that voluntary earlier reporting.

Reporting to employees pursuant to Code § 6051(a)(14) is for their information only. The report of the information is intended by Congress to inform employees of the cost of their health care coverage. It does not cause otherwise excludable employer-provided health care coverage to become taxable. This notice provides interim guidance that

Notice 2011-28 will be published in Internal Revenue Bulletin 2011-16 on April 18, 2011.

For Help With Affordable Care Act or Other Employee Benefits or HR Needs

The new W-2 reporting requirement is one of a multitude of changes impacting the responsibilities of employment based health care coverage enacted under the Affordable Care Act.

If you have any questions or need help responding to the Affordable Care Act or other any other health plan or insurance employee benefit, compensation, workforce or internal control concerns, please contact the author of this update, Cynthia Marcotte Stamer here or at (469)767-8872.

About Solutions Law Press

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Posted by Cynthia Marcotte Stamer

Plan Sponsors. Their Owners & Management & Others Risk Personal Liability If Others Defraud Plans or Mismanage Employee Benefit Plan Responsibilities

April 4, 2011

Mitigate Risk With Appropriate Prevention, Monitoring & Response

Executives, board members, and other business leaders of companies providing health, 401(k) or other employee benefits under plans regulated by the Employee Retirement Income Security Act of 1974, as amended (ERISA) should heed a series of recent fiduciary liability settlement orders and lawsuits of the U.S. Department of Labor (Labor Department) as important reminders of the potential personal liability exposures executives can may face if their company’s benefit programs are not appropriately maintained and administered.

Recent Enforcement Actions, Changing Regulations Highlight Fiduciary Risks

On March 29, 2011, the Labor Department sued the owner of Eyeglass Factory, Inc. (EGF), Stephen Schaffer, for breach of fiduciary duties under ERISA by failing to ensure that EGF timely forwarded health plan contributions collected from employees to pay health plan contributions to the plan and failing to ensure that he and other plan fiduciaries and service providers were bonded in accordance with ERISA’s fidelity bond requirements.[i] The Labor Department suit charges that from July 1, 2000 to October 1, 2000, Schaffer and EGF withheld and failed to forward to the health plan contributions deducted from employee pay for health insurance coverage and contributions made to the flexible benefit plan sponsored by EGF from January 1, 2000 to December 4, 2000. The employees’ paycheck withholdings were commingled with the company’s general assets and used for its general operating expenses. The Labor Department is asking the court to order that Schaffer and other defendants make restitution to the plan for the misapplied contributions, including lost opportunity costs, to correct prohibited transactions and to appoint an independent fiduciary to oversee the plans once Schaffer is removed as the plan fiduciary.

The Schaffer suit follows the Labor Department’s successful prosecution of a breach of fiduciary duty action against Larry Lauterback, the president and former owner of a Minnesota Cement Company, for his role in allowing his construction company to commingle with company assets and divert to company use employee health and 401(k) contributions withheld from employee’s pay. In Solis v. Larry Lauterback, [ii] the District Court ordered Lauterback to restore $17,273.18 in unremitted employee contributions and lost opportunity costs to the company’s health and dental plan, and $747.20 in unremitted employee contributions to the company’s 401(k) plan and enjoins Lauterback from serving or acting as a fiduciary or service provider to any employee benefit plan for three years.. The order followed the entry of a consent judgment against Lauterback and the plan sponsor, Slate Cement, Inc., for failure to remit employee contributions, failure to forward employee contributions to medical and dental providers, co-mingling employee contributions of the general assets and using those assets for company operations.

The Schaffer and Lauterback actions taken in March, 2011 are only the most recent in a series of enforcement actions taken against business executives, board members, plan vendors and others for their role in committing or failing to take prudent steps to prevent or redress alleged misconduct relating to the maintenance, administration and funding of various employee benefit programs regulated by ERISA. In recent months and years, the Labor Department has filed several lawsuits against business executives and businesses for alleged breaches of fiduciary duties. While misuse of employee contributions by plan sponsors is a common focus of many of these actions, plan sponsors, plan service providers and members of their management with discretionary authority or responsibility over plan assets or administration or the election of those appointed to administer those responsibilities often arise out of the failure or these individuals to take prudent steps to prevent, monitor or address misconduct by other plan fiduciaries or service providers.[iii]

Plan sponsors, fiduciaries, service providers and their management should anticipate these risks and their attendant responsibilities will continue to rise as the Labor Department moves forward to adopt and implement revisions and enhancements to its fiduciary regulations such as those provided for in the new “Interim Final Regulation Relating to Improved Fee Disclosure for Pension Plans” scheduled to take effect in July, 2011 and the Proposed Regulation on the “Definition of the Term Fiduciary” published by the Labor Department in July and October, 2010 respectively.

Meanwhile, the Labor Department enforcement activities highlight the longstanding and ongoing policy of aggressive investigation and enforcement of alleged misconduct by companies, company officials, and service providers in connection with the maintenance, administration and funding of ERISA-regulated employee benefit plans. In its Fiscal Year 2010, the Labor Department closed 3,112 civil investigations, of which 2,301 (73.94%) resulted in monetary recoveries or other corrective action. The Labor Department referred 264 cases for civil litigation and filed 128 civil lawsuits. Meanwhile on the criminal side, the Labor Department closed 281 criminal investigations and obtained indictments against 96 people.

In addition to prosecutions brought by the Labor Department, companies and individuals that exercise discretion and control of the administration or funding of employee benefit plans regulated by ERISA also may be sued personally by participants and beneficiaries for breach of fiduciary under ERISA. A review of the Labor Department’s enforcement record and existing precedent makes clear that where the Labor Department perceives that a plan sponsor or its management fails to take appropriate steps to protect plan participants, the Labor Department will aggressively pursue enforcement regardless of the size of the plan sponsor or its plan, or the business hardships that the plan sponsor may be facing.

Plan Sponsors, Fiduciaries, Service Providers & Their Management Should Act To Manage Exposures

Given these exposures, businesses providing employee benefits to employees or dependents, as well as members of management participating in, or having responsibility to oversee or influence decisions concerning the establishment, maintenance, funding, and administration of their organization’s employee benefit programs need a clear understanding of their responsibilities with respect to such programs, the steps that they should take to demonstrate their fulfillment of these responsibilities, and their other options for preventing or mitigating their otherwise applicable fiduciary risks.

To help guard and position themselves to defend against these and other exposures, plan sponsors, fiduciaries, service providers and others involved in the administration of health or other employee benefit plans should seek the advice of legal counsel with appropriate experience with employee benefit and other related matters to develop an understanding of ERISA and other laws and the duties and liabilities that these rules may create for their organizations and themselves personally. For additional tips and information about managing these risks, see here.

For Help With These Or Other Risk Management Matters

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[i] Chao v. Stephen Schaffer, the Eyeglass Factory, Inc., No O2-CV-60197, as announced in EBSA Release No. 11-341-CHI (March 29, 2011).

[ii] Solis v. Larry Lauterback, as announced in EBSA Release No 11-322-CHI (March 14, 2011).

[iii] See, e.g. Chao v. Associated Plan Administrators, as announced in EBSA Release No. 07-1265-BOS/BOS 2007-298 (October 16, 2007); Chao v. Starkey, as announced in EBSA Release No. 05-747-ATL (May 2, 2005); Chao v. Perry., as announced in EBSA Release BOS 2002-054 (March 21, 2002); Chao v. Mabry, as announced in EBSA Release No. 160 (March 20, 2002). See also, e.g., Baker v. Kingsley, 2006 WL 2027606 (N.D.Ill.2007); In Re Enron Corp Securities Derivative & “ERISA” Litigation, 284 F.Supp. 511 (S.D.Tex. 2003); Varity Corp. v. Howe, 516 U.S. 489 (1996); Brink v. DeLesio, 496 F. Supp. 1350 (D.Md. 1980).

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Posted by Cynthia Marcotte Stamer

Health Plans, Insurers Get Limited & Imperfect Relief From Grace Period Extension For Some New Affordable Care Act Health Claims & Appeals Rules

March 24, 2011

The Departments of Labor, Health & Human Services and Internal Revenue Service are extending a previously announced enforcement grace period under which the agencies will not take enforcement against health plans or health insurers that attempt to operate in good faith compliance with, but fail to meet certain new requirements for handing medical claims and appeals enacted as part of the Patient Protection and Affordable Care Act (Affordable Care Act). While health plans and insurers working in good faith to comply with the new requirements may find the enforcement relief helpful for dealing with some areas of uncertainty about the interpretation of certain requirements, it is important to keep in mind that the enforcement grace period provides only limited and somewhat imperfect relief. As a result, health plans, health insurers and those responsible for their design and administration are encouraged to continue to move forward on efforts to comply with the new requirement in thoughtful and well-documented manners despite the announced grace period extension.

New Claims & Appeals Requirements & Enforcement Grace Period

As signed into law on March 23, 2010, the Affordable Care Act generally requires that health plans and health insurance policies that are not “grandfathered” to begin complying with a series of new requirements by the first day of the first plan year that begins after September 22, 2010. These new requirements include a number of new requirements about the way that nongrandfathered health plans and health insurance policies handle medical claims and appeals. For instance, the Affordable Care Act as construed by the agencies in interim final regulations published by the agencies on July 23, 201 will require that non-grandfathered group health plans and insurers issuing non-grandfathered health insurance plans and policies:

Implement specified internal and external review procedures that among other things mandate independent external review of medical judgment based decisions in accordance with the regulations for reviews of appeals of medical judgment based denials;
Provide a broad range of new information in notices regarding claims and do so in a culturally and linguistically appropriate manner;
Provide continued coverage pending the outcome of an internal appeal; and
Comply with a laundry list of additional criteria for ensuring that a claimant receives a full and fair review in addition to complying with the requirements of existing Labor Department claims and appeals procedures.

After the agencies jointly published interim final regulations defining and implementing these requirements on July 23, 2010, last September the agencies announced that they would not enforce certain elements (but not all) of the new requirements set forth in the interim final regulations against covered health plans or health insurers seeking to comply in good faith with the new requirements through July 1, 2011. In the March 18, 2011 announcement, the Department of Labor said that the agencies now have agreed to extend this reprieve from agency enforcement of the requirements listed in the guidance against plans seeking to comply in good faith with the new requirements until plan years beginning on or after January 1, 2012.

While offering welcome relief, covered health plans and insurers, their sponsors and issuers should not over-estimate the reach and protection provided by this new guidance. For instance:

First, in order to qualify for the enforcement grace period, efforts must be made to administer the health plan or health insurance policy in good faith compliance with the new requirements during the enforcement grace period.
Second, the enforcement grace period provides only limited relief. The extension to 2012 only four of a series of new requirements set forth in the interim final regulations. Nongrandfathered plans and their administrators and insurers remain accountable for prudently administering claims and appeals in accordance with all other requirements of the Affordable Care Act as well as pre-existing claims and appeals regulations set forth in 2000 claims regulations issued by the Department of Labor pursuant to the Employee Retirement Income Security Act.

Third, the enforcement grace period guidance only means that the agencies will not exercise their power to take action against a non-compliant plan. It does not prevent plan members, health care providers with benefit assignments or other plan beneficiaries from bringing lawsuits against health plans, health insurers or their administrators for failing to comply with the new requirements during post- September 22, 2010 plan years even if the enforcement grace period otherwise protects the plan or insurer from agency enforcement action. This means that health insurers and health plans may still run the risk that plan members or beneficiaries will ask courts to reverse claims or appeals denials or impose other penalties and sanctions against plans or their fiduciaries for failing to meet the new requirements for post-September 22, 2010 plan years.

Finally, and perhaps most significantly, the grace period guidance requires nongrandfathered plans and insurers to make “good faith” efforts to comply with the requirements covered by the relief during the grace period in order to be eligible to claim the relief offered by the enforcement grace period guidance.

Consequently, despite the relief announced March 18, nongrandfathered health plans still have significant work to do to comply with the new Affordable Care Act claims and appeals requirements even during the announced enforcement grace period.

For Help With Affordable Care Act or Other Employee Benefits or HR Needs

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Posted by Cynthia Marcotte Stamer

EEOC Finalizes Updates To Disability Regulations In Response to ADA Amendments Act

March 24, 2011

Employers Urged To Tighten Disability Related Discrimination Risk Management

Employers should review and update their existing employment and employee benefit practices in response to updated regulations (Final Regulations) governing the disability discrimination rules of the Americans With Disabilities Act as amended by the ADA Amendments Act (ADAAA) that the Equal Employment Opportunity Commission (EEOC) will publish in the Friday, March 25, 2011 Federal Register.

On Thursday, March 24, 2011, the EEOC released an advance copy of the Final Regulations along with two Question-and-Answer documents about the Final Regulations to aid the public and employers – including small business – in understanding the law and new regulations. The Final Regulations, accompanying Question and Answer documents and a fact sheet are available on the EEOC website here .

The changes contained in the updated Final Regulations update the EEOC’s disability regulations in response to amendments made to the ADA by Congress as part of the ADAAA. Like the ADAAA they implement, the Final regulations are designed to simplify the determination of who has a “disability” and make it easier for people to establish that they are protected by the Americans with Disabilities Act (ADA).

The Final Regulations and the ADAAA amendments they implement 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. Since these changes make it easier for certain employees to qualify as disabled under the ADA, businesses should act strategically to mitigate their ADA exposures in response to the Final Regulations. Learn more about the Final Regulations and get suggestions for risk management of expanding disabilities discrimination exposures here.

For Help With Disability Discrimination Risk Management or Other Needs

If you need assistance in auditing or assessing, updating or defending your disability management or with other labor and employment, employee benefit, compensation or internal controls practices, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469)767-8872.

About Solutions Law Press

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Posted by Cynthia Marcotte Stamer

Speak Up On The 1st Anniversary of Health Care Reform

March 23, 2011

On the 1st anniversary of the passage of Health Care Reform, let’s celebrate by accepting the invitation from Joe Biden to “discuss how health care reform is already working.”

Below is the text of an e-mail I (and millions of other Americans, I suspect, received an e-mail from Joe Biden, in which he touts health care reform as already saving patients like a young man from Minnesota. In the e-mail, Biden says: “On the one-year anniversary of the Affordable Care Act, I think we have a duty to discuss how reform is already working.” OK, tell me what you think?

Unquestionably, health care reform produces some winners and loosers. Although few of the reforms enacted are actually in effect yet, Biden says heath care reform is working and credits the law for saving the life of the young man and millions of others. On the other hands, many patients and doctors treating patients with cancer and other life threatening illnesses complain and report fears that in the future increasing Medicare, Medicaid or other government regulations and market distruptions. Some folks think it’s all good. Other’s think it’s all bad. Many American’s think it’s a little bit of both and many just don’t know.

Where does the truth lie? On the 1st anniversary of the passage of health are reform, one thing is certain. The American health care system and it’s impact on our employees, families, friends, communities and goverment and personal budget’s is too great to be complacent. So, as Health Care Reform turns one, let’s accept the invitation of Vice President Biden and share our experiences and thoughts with our elected representatives, regulators, with others on with others on the Coalition for Responsible Health Care Policy linkedin a the following link and keep the discussion going until we get it right:

Coalition for Responsible Health Care Policy

Here’s the e-mail from “Joe Biden [info@barackobama.com]”

Cynthia –I want to tell you about a family in Minnesota.

Justin and Kari live in Brooklyn Park, right outside of Minneapolis. They’re parents to three children. Their three-year-old, William, was born with a genetic disorder called tuberous sclerosis complex.

For the rest of his life, William will wrestle with tumors in his brain, his heart, his kidneys, his skin, and possibly other major organs. He must take medication to control seizures and faces the threat of kidney disease.

What Justin and Kari want for William is a future. And because of health reform, that’s what he’ll have.

Today, insurance companies are no longer able to discriminate against William because of the condition he’s dealt with since birth. Now, Justin and Kari know they’ll be able to get the kind of care that William needs — today and into the future.

Their story isn’t unique, but it’s one of many that need to be told. We all know people whose lives have been changed because of the Affordable Care Act, even if we don’t realize it. So we’ve found a way to show exactly how reform is working for all of us — for our parents, our siblings, our kids, ourselves.

Will you take a minute to take our Health Reform Checkup and let the people you love know how reform is working for them?

Before the Affordable Care Act, Justin and Kari weren’t sure about the future. They worried that they’d never be able to find coverage for William again if Justin lost his job. They worried about the life that William would lead — whether he’d ever be able to work or support a family.

Not anymore. William’s condition isn’t going away, but he’ll always be able to get care. The Affordable Care Act is one year old today, and it has already changed William’s life — and this country — for good.

Today, there are families who feel better about the future than they did a year ago. They’ve found some security, some relief. And these are people we know. They’re our neighbors, our colleagues, our friends, our families — the people next to us every day.

On the one-year anniversary of the Affordable Care Act, I think we have a duty to discuss how reform is already working.

Watch Justin and Kari tell their story, and take a moment to learn how health reform is changing the lives of those you know:

http://my.barackobama.com/Checkup

A year ago, I stood next to the President as he signed health reform into law — and we have you to thank for making that possible.

Yours,

Joe

Paid for by Organizing for America, a project of the Democratic National Committee — 430 South Capitol Street SE, Washington, D.C. 20003. This communication is not authorized by any candidate or candidate’s committee.

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Posted by Cynthia Marcotte Stamer

CMS Publishes Proposed Consumer Disclosure Notices Detailing Required Health Insurer Rate Increase Justification Disclosures

March 7, 2011

The Centers for Medicare & Medicaid Services (CMS) on March 7, 2011 published proposed consumer disclosure notices that it proposes to require insurers proposing rate increases over 10 percent to electronically file in furtherance of CMS’ implementation of the Affordable Care Act premium rate review regulation published by HHS in December of 2010. The proposed consumer disclosure notices can be found here listed under “CMS-10379.”

Like the premium rate review regulation, the proposed notification requirements would apply to non-grandfathered group or individual insurance plans in the individual and small group markets.

Under the premium rate review regulation, rate increases by insurers for non-grandfathered group or individual health insurance plans that exceed a specified threshold amount are subject to review by either State insurance officials or HHS if the State does not have an effective process for reviewing rates. The proposed threshold for the first year is 10%. After 2011, a state-specific threshold will be set for disclosure of rate increases, using data and trends that better reflect cost trends particular to that state. According to CMS’, the review of rates under the rate review regulation could begin as early as July 2011.

CMS contemplates that the proposed consumer disclosure notices published March 7, 2011 will ‘help consumers know what their insurance companies are proposing while the rate increase requests are being reviewed. The notices would provide some basic information about health insurance rate increases and their review, as well as detailed information about the specific increase that an insurer has proposed. Consumers would also be able to see what the insurance company believes is driving the increase in premiums and how much of the increase would go to profits and administrative expenses. CMS intends to make the information provided by insurers in the notices available to consumers on CMS’ website. According to CMS, once rates begin being reviewed, HHS will work to post information on proposed rates as quickly as possible.

For Help Responding To Affordable Care Act or Other Health Plan Rules

The proposed premium rate review and associated consumer disclosure notice requirements are part of the rapidly evolving federal and state rules, court decisions, enforcement actions and other developments that require quick action by health plans, health insurers and their sponsors and administrators. If you need assistance in auditing or assessing, updating or defending your health plan or policies, documents, practices or conduct, or other labor and employment, employee benefit, compensation, privacy and data security, or other related practices, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469)767-8872.

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 Affordable Care Act and other health and other employee benefit, insurance, human resources and health care matters.

Nationally and internationally known for her leading edge work on health benefit and insurance matters, Ms. Stamer has counseled, represented and trained employers and other employee benefit plan sponsors, plan administrators and fiduciaries, insurers and financial services providers, third party administrators, human resources and employee benefit information technology vendors and others privacy and data security, fiduciary responsibility, plan design and administration and other compliance, risk management and operations matters for more than 23 years. She also is recognized for her publications, industry leadership, workshops and presentations on health benefit reform and other related health and pension, human resources, insurance, privacy and health care concerns. She also regularly conducts training on these and other related matters for a broad range of organizations including the Association of State and Territorial Healthcare Organizations (ASTHO), the Los Angeles County Health Department, a multitude of health plans and their sponsors, health care providers, the American Bar Association, SHRM, the Society for Professional Benefits Administrators and many others 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

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Posted by Cynthia Marcotte Stamer

Avoiding Liability For Another’s Health Plan Fraud

February 25, 2011

TPA’s Embezzlement Guilty Plea Reminds Plan Sponsors, Fiduciaries & Service Providers To Ensure Fiduciaries, Administrators & Staff Prudently Selected, Monitored & Bonded

The guilty plea of an Ohio-based third-party administrator to embezzlement of $1 million in plan assets reminds employers and other employee benefit plan sponsors and members of their management participating in plan related activities, plan administrators and other plan fiduciaries and plan service providers (“plan decision-makers”) of the importance of ensuring appropriate, well-documented credentialing and selection, oversight, auditing and bonding the individuals and companies acting as fiduciaries and others participating in administration of plans or their assets (“plan workforce members”) to minimize their potential exposure to potential personal liability as a result of the fraud under the Employee Retirement Income Security Act (ERISA).

Cox Prosecution Reflective DOL Readiness To Prosecute Parties For Misuse of Plan Monies & Other Plan Fraud

According to a February 23, 2011 U.S. Department of Labor (DOL) announcement, Rhonda Sue Irvin Cox, owner of Irvin Administrative Solutions LLC (IAS), pleaded guilty to the embezzlement of $1 million of retirement plan assets from client plans administered by IAS. The DOL reports that between January 2003 and April 2007, Cox plead guilty to using used her position with ISC to embezzle the funds from 12 of 59 plans for which IAS served as a third party administrator. Cox also pleaded guilty to one count of making false statements in documents required under ERISA to be kept and certified by the plans’ administrator. Scheduled to be sentenced on June 1, 2011, Cox faces a maximum of five years in prison on each criminal count, a $250,000 fine and a special assessment. Cox is scheduled to be sentenced on June 1, 2011.

The DOL and Justice Department have a long-standing record of aggressive investigation and prosecution of embezzlement or other fraud impacting health and other employee benefit plans. Their criminal and civil enforcement and prosecution record makes clear this commitment remains strong.

Plan Sponsors, Fiduciaries & Service Providers May Face Civil Liability From When Others Defraud Their Plans

While plan decision-makers generally are aware that individuals defrauding health or other employee benefit plans risk criminal and civil prosecution, many fail to recognize their own potential civil liability exposures that may arise out of the fraudulent acts or other misconduct of another plan workforce member.

Embezzlement of plan assets is one of many acts of misconduct that can create potential fiduciary liability exposure for plan decision-makers under ERISA. Until confronted with potential fraud, misconduct or other misfeasance by a plan fiduciary, service provider or other plan workforce member, many plan decision-makers lack an adequate appreciation of the personal liability they may incur if they cannot demonstrate appropriate steps were taken to protect their health plan from this misconduct.

Under ERISA’s fiduciary responsibility rules, embezzlement or other misuse of employee contributions or other plan assets as well as certain other misconduct or misfeasance by a plan fiduciary, service provider or other plan workforce member can create personal liability exposures for plan decision-makers with responsibility or discretionary authority over the selection, retention, or management of plan workforce members if the plan decision-maker cannot demonstrate appropriate steps were taken to select, monitor and bond the plan workforce and other prudent action was taken to prevent and redress the fraud. Accordingly, health plans, their sponsors, fiduciaries, service providers, their management, and others serving as, or selecting, managing or retaining companies or individuals that participate in the handling of health plan assets or administration should act to strengthen their health plans and themselves against these exposures.

Risk Management Strategies & Tips

When embezzlement or other concern affecting their health plan arises, plan decision-makers concerned about protecting their health plans and themselves must act promptly in a carefully documented, prudent manner to investigate and respond to the concern. They should be prepared to present well-documented evidence of the scope and limits of their responsibility, authority, awareness, and potential for the selection, monitoring and oversight of the plan workforce member or others responsible for the performance of those actions, the adequacy of the bonding arrangements for the plan, and other efforts to prudently protect the plan before, during and after the discovery of the concern. While these and other steps can help strengthen the ability of a plan decision-maker to liability exposures that can result from the other plan workforce member’s embezzlement of plan assets or other misconduct, plan sponsors and plan decision-makers also should acquire suitable fiduciary and other liability insurance coverage and make other arrangements to help provide for the potential financial costs and other demands that are likely to arise in the event that it becomes necessary to investigate or redress fraud or other misconduct. Learn more here.

For Help With Investigations, Policy Review & Updates Or Other Needs

If you need help investigating or responding to fraud or other misconduct affection a health or other employee benefit plan, dealing with an employee benefit plan investigation or enforcement action by the Labor Department, private plaintiffs or another public or private party, reviewing current or proposed health plan processes or procedures, or responding to other employee benefit, labor and employment or other related controls and practices, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469)767-8872.

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 HIPAA and other privacy and data security, health plan, health care and other human resources and workforce, employee benefits, compensation, internal controls and related matters.

For more than 23 years, Ms. Stamer has counseled, represented and trained employers and other employee benefit plan sponsors, plan administrators and fiduciaries, insurers and financial services providers, third party administrators, human resources and employee benefit information technology vendors and others privacy and data security, fiduciary responsibility, plan design and administration and other compliance, risk management and operations matters. In connection with this work, Ms. Stamer regularly counsels and helps clients to defend a broad range of clients about employee benefit plan fraud and other fiduciary responsibility concerns. Throughout her career, she has represented and served as special counsel to health and other employee benefit plans, plan sponsors, plan service providers, officers, directors and other management officials, bankruptcy trustees, debtors and creditors, and others in connection with health and other employee benefit plan fraud and other fiduciary responsibility and related investigations, prosecutions and other actions involving the Labor Department, IRS, HHS, Justice Department, state insurance and attorneys general, bankruptcy actions, and participant, beneficiary and vendor disputes. She also is recognized for her publications, industry leadership, workshops and presentations on these and other employee benefits, insurance and 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 health care, human resources, employee benefits, data security and privacy, 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 including:

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Posted by Cynthia Marcotte Stamer

Health Plans & Employers Beware! $4.3 Million Civil Penalty Shows OCR Serious About HIPAA Enforcement

February 23, 2011

A $4.3 million civil monetary penalty (CMP) imposed by the U.S. Department of Health and Human Services’ (HHS) Office for Civil Rights (OCR) against Cignet Health of Prince George’s County, Md., (Cignet) signals the growing need for health plans and their sponsors, health care providers, health care clearinghouses and their business associates covered by the Health Insurance Portability & Accountability Act (HIPAA) Privacy Rule to get serious about HIPAA compliance.

The first CMP ever assessed by OCR under the HIPAA Privacy Rule, the Cignet CMP assessment announced February 22, 2011, the $4.3 million CMP against Cignet announced February 22, 2011 applies the expanded HIPAA violation categories and increased HIPAA civil monetary penalty amounts authorized as part of the expansion of HIPAA obligations and penalties enacted as part of the Health Information Technology for Economic and Clinical Health (HITECH) Act in 2009.

The Cignet penalty announcement is the latest in a series of developments documenting the rising risks that health care providers, health plans, health care clearinghouses and their business associates (“covered entities”) face for violations of HIPAA.

Even before the announcement of the Cignet CMP, the HIPAA Privacy exposures of covered entities for failing to comply with HIPAA already had risen significantly. While OCR had not assessed any civil monetary penalties against any covered entity for violation of HIPAA before Cignet, OCR’s collection of $1 Million from Rite Aid in a 2010 Resolution Agreement, $2.25 million from CVS Pharmacy, Inc. under a 2009 Resolution Agreement and $100,000 from Providence Health & Services under a 2008 Resolution Agreement demonstrated that covered entities could face significant civil liability for willful violations of the Privacy Rules. In addition, the Department of Justice has secured several criminal convictions or pleas under HIPAA’s criminal provisions. OCR data confirms that the covered entities involved in these actions included health care providers, health plans, and others.

Health plans and other covered entities as well as their business associates should tighten privacy policies, breach and other monitoring, training and other practices to mitigate against exposures in light of recently tightened requirements and new enforcement risks. To minimize the potential that the health plan’s sharing of information with the employer will create or spread HIPAA or other privacy risks to the employer or members of its workforce, employers and other plan sponsors and members of their workforce also should take steps to ensure not only that their health plan documents, policies and procedures, as well as those policies and practices applicable to employer, its human resources, and benefits advisors when accessing or handling health plan or other medical information on behalf of the employer, rather than the plan, are appropriately designed and administered.

Read more details and get tips here.

For Help With Investigations, Policy Review & Updates Or Other Needs

If you need assistance in auditing or assessing, updating or defending your HIPAA or other health plan, or other labor and employment, employee benefit, compensation, privacy and data security, or other internal controls and practices, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469)767-8872.

Ms. Stamer, a noted Texas-based employee benefits and employment lawyer Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, will discuss HIPAA and other privacy risks and risk management strategies for employers, health and employee benefit plan sponsors and their administrators at the Southwest Benefits Association/IRS Plan Administrator Skills Workshops to be held February 25 in Dallas and March 4 in Houston.

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 HIPAA and other privacy and data security, health plan, health care and other human resources and workforce, employee benefits, compensation, internal controls and related matters.

For more than 23 years, Ms. Stamer has counseled, represented and trained employers and other employee benefit plan sponsors, plan administrators and fiduciaries, insurers and financial services providers, third party administrators, human resources and employee benefit information technology vendors and others privacy and data security, fiduciary responsibility, plan design and administration and other compliance, risk management and operations matters. She also is recognized for her publications, industry leadership, workshops and presentations on privacy and data security and other human resources, employee benefits and health care concerns. Her many highly regarded publications on privacy and data security concerns include “Privacy Invasions of Medical Care-An Emerging Perspective.” ERISA Litigation Manual. BNA, 2003-2009; “Privacy & Securities Standards-A Brief Nutshell.” BNA Tax Management and Compliance Journal. February 4, 2005; “Cybercrime and Identity Theft: Health Information Security beyond HIPAA.” ABA Health eSource. May, 2005 and many others. She also regularly conducts training on HIPAA and other privacy and data security compliance and other risk management matters for a broad range of organizations including the Association of State and Territorial Healthcare Organizations (ASTHO), the Los Angeles County Health Department, a multitude of health plans and their sponsors, health care providers, the American Bar Association, SHRM, the Society for Professional Benefits Administrators and many others.t 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

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Posted by Cynthia Marcotte Stamer

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.

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Posted by Cynthia Marcotte Stamer

IRS Expands When HFSAs & HRAS May Allow Over-The-Counter Drug Purchases With Drug Cards

January 24, 2011

Recent Internal Revenue Service (IRS) guidance loosens the conditions under which health flexible spending account (HFSA) and health reimbursement accounts may permit participants to use debit cards to purchase over-the-counter medicines or drugs after January 15, 2011. Under Internal Revenue Code rules amended by the Affordable Care Act, drug card and other over-the-counter prescription drug purchases must meet new requirements to qualify for reimbursement by a HFSA or HRA. HFSA and HRA sponsors and administrators wishing to allow participants to use debt cards to purchase over-the-counter drugs must ensure that their arrangements comply with this updated guidance. Sponsors and administrators that are unable or unwilling to meet the conditions established under the updated rules for allowing debt card reimbursement of over-the-counter drugs should act quickly to confirm that all relevant plan documents, procedures and communications clearly forbid reimbursement of over-the-counter medicines and drugs to the extent required by the updated rules.

IRS Notice 2011-5 modifies IRS guidance providing that HFSA and HRA debit cards generally could not be used after January 15, 2011 to purchase over-the-counter medicines or drugs after January 15, 2011, except with respect to “90 percent pharmacies.” previously announced in Notice 2010-59

Under the new rules announced in Notice 2011-5, after January 15, 2011, the IRS has expanded the circumstances under which HFSA and HRA debit cards may continue to be used to purchase over-the-counter medicines or drugs depends on where and how they are purchased. Different conditions must be met if the over-the-counter drug is purchased with a drug card from a vendor that under IRS rules:

Is a “90-percent pharmacy;”
Has a “health care related Merchant Code;
Is a non-health care merchant that has a pharmacy, or that sells prescription drugs via mail order or the web.

Where the applicable requirements established for each of these types of vendors is met, Notice 2011-5 permits HFSAs and HRAs to continue to allow participants to purchase over-the-counter drugs using debit cards after January 15, 2011. In contrast, if the vendor is not one of these types of vendors or is a listed vendor but the applicable requirements for allowing a debit card purchase of an over-the-counter medicine for that type of vendor are not met, HFSA and HRA debit cards may not be used to purchase over-the-counter medicines or drugs after January 15, 2011.

For More Information Or Assistance

If you need assistance evaluating or updating your HSFA, HRA or other health and cafeteria 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.™

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.

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Posted by Cynthia Marcotte Stamer

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.™

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.

Comments Off on IRS, HHS & DOL To Delay Enforcement of New Insured Group Health Plan Non-Discrimination Rules Pending Guidance; Seek Public Input on Rules | 105(h), Discrimination, Employee Benefits, Employers, ERISA, Health Plans, Human Resources, Insurance, Patient Protection and Affordable Care Act, Tax | Tagged: 105(h)(2), Affordable Care Act, Group Health plans, Health Care Reform, Health Insurance, Health Plans, medical insurance, Tax | Permalink
Posted by Cynthia Marcotte Stamer

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.™

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.

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Posted by Cynthia Marcotte Stamer

$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 Employers; Quest 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.™

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.

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Posted by Cynthia Marcotte Stamer

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 Employers; Quest 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

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

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.

Comments Off on Medical Resident Stipend Ruling Shows Health Care, Other Employers Should Review Worker Classification, Payroll & Other Practices | Employers, Employment Tax, ERISA, Human Resources, Tax | Tagged: Academic Medicine, Doctor, Employer, FICA, Health Care, Human Resources, Medical Resident, Payroll, Physician, stipend, students, Wages, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

Holiday Season Celebration Reminder To Manage Intoxication Risks

December 29, 2010

With New Years Eve celebrations approaching and the Holiday Season wrapping up, businesses should take some common sense steps to minimize the risk of waking up in 2011 with a liability hangover. Participation of employees and clients in company sponsored and other social celebrations and activities can promote big rewards in relationship development and morale if properly managed. However, traditional holiday toasts and the wide-spread consumption of other intoxicating substances commonly included at New Years Eve and other parties and social activities create heightened risks for business whether or not the event is company-sponsored. However these risks continue and require management all year. Read about other common Holiday Season-related celebration risks and management tips here.

Most businesses recognize that accidents caused by alcohol or other intoxication at work or work-related functions can create substantial liability exposures both to workers and any third parties injured by a drunken employee. In many states, businesses also may face “dram shop” or other claims if employees, family members or other guests attending company sponsored functions injure others after over-imbibing. Risks are heightened when an employee consuming alcohol at a company or client-related social function drives a company or his own automobile when under the influence of drugs or alcohol.

Businesses concerned with these liability exposures should take steps to manage the potential risks that commonly arise when employees, clients or other guests consume alcohol at company sponsored events or while attending other business associated festivities.

Whether concerned with intoxication in the workplace, at work-related events or at off-duty social activities, the obvious starting point is to review existing drug and alcohol and related background investigation, drug and alcohol testing, privacy, off-duty conduct and related policies and procedures. In addition to ensuring these policies are appropriately tailored to meet existing legal requirements, businesses also should consider whether these policies should be revised to reach business-relevant off-duty conduct and locations.

To minimize these risks at company-sponsored events, many companies elect not to serve or limit the alcohol served to guests at company sponsored events. To support the effectiveness of these efforts, many businesses also choose to prohibit or restrict the consumption of guest provided alcohol at company events.

Businesses that elect to serve alcohol at company functions or anticipate that employees will attend other business functions where alcohol will be served need to consider the potential liability risks that may result if the alcohol impaired judgment of an employee or other guest causes him to injure himself or someone else. The relaxation of judgment that often results from the consumption of alcohol or other intoxicants also heightens sexual harassment and other discrimination risks. Any company that expects that an employee might consume alcohol at a company sponsored or other business associated event should communicate clearly its expectation that employees not over-imbibe and abstain from driving under the influence. Where off-duty socialization among employees is anticipated in light of company culture, similar reminders concerning off-duty conduct having implications on company policy or reputation also often are in order. Many businesses also find it beneficial to redistribute information about employee assistance programs (EAPs) along with this information. You can find other tips for planning workplace parties to minimize alcohol related risks on the U.S. Department of Labor’s website here.

When addressing business related alcohol consumption, many businesses will want to consider not only alcohol consumption at business related events as well as potential costs that may arise from off-duty excess alcohol consumption. Whether resulting from on or off duty consumption, businesses are likely to incur significant health and disability related benefit costs if an employee is injured in an alcohol-related accident. Furthermore, even when no injury results, productivity losses attributable to excess alcohol consumption, whether on or off duty, can prove expensive to business. Accordingly, virtually all businesses can benefit from encouraging employees to be responsible when consuming alcohol in both business and non-business functions.

Businesses also may want to review their existing health and other benefit programs, liability insurance coverage and employment policies to determine to ensure that they adequately protect and promote the company’s risk management objectives. Many health and disability plans incorporate special provisions affecting injuries arising from inappropriate alcohol use as well as mental health and alcohol and drug treatment programs. Similarly, many businesses increasingly qualify for special discounts on automobile and general liability policies based upon representations that the business has in effect certain alcohol and drug use policies. Businesses can experience unfortunate surprises if they don’t anticipate the implications of these provisions on their health benefit programs or liability insurance coverage. Reviewing these policies now to become familiar with any of these requirements and conditions also can be invaluable in helping a business to respond effectively if an employee or guest is injured in an alcohol-related accident during the Holiday Season.

Businesses also should consider reviewing their policy on the duty of an employee or contractor to notify the company of accidents, moving violations and driving while intoxicated or other criminal charges resulting from the consumption of drugs or alcohol. Requiring notification of traffic related charges and accidents can help management prepare to defend against potential liability exposures that may arise from an accident or other incident. Where a worker suffers an injury, notification may be essential to enable the business to provide required notification to worker’s compensation carriers and regulators, conduct timely investigations, and meet other critical responsibilities. In addition, driving under the influence or other criminal charges may impact company liability insurance risks, signal possible vicarious liability or other suits. To help facilitate the ability to adequately investigate these concerns, businesses also should review and update privacy, background check and other investigations and other related policies to ensure that they are legally compliant and are sufficiently broad to reach to relevant off-duty or off-site conduct.

Businesses also should make advance arrangements to minimize foreseeable safety risks from intoxication at social or other events. When in doubt, company policy and practice should be to regulate consumption to safe levels, to require the arrangement of safe alternative transportation of any employee or guest at risk of intoxication, and to provide other safeguards to minimize the risk of injury to workers or others. The cost of arranging a taxi ride home quickly pales when compared to the significant legal costs that can result if an accident results.

Businesses faced with suspicions or allegations of intoxication or other misconduct also should act promptly to investigate any concerns and if necessary, take appropriate corrective action. Delay in investigation can undermine the reliability and effectiveness of investigation efforts. Delay also can increase the liability exposure of a business presented with a valid complaint and complicate the ability to defend charges that may arise against the business. Additionally, delay also increases the likelihood that a complaining party will seek the assistance of governmental officials, plaintiff’s lawyers or others outside the corporation in the redress of his concern.

If a report of an accident, or other liability related event arises, remember to consider as part of your response whether you need to report the event to any insurers or agencies. Injuries occurring at company related functions often qualify as occupational injuries subject to worker’s compensation and occupational safety laws. Likewise, automobile, employment practices liability, and general liability policies often require covered parties to notify the carrier promptly upon receipt of notice of an event or claim that may give rise to coverage, even though the carrier at that time may not be obligated to tender a defense or coverage at that time.

Finally, businesses should keep in mind that the risks highlighted by Holiday Season celebrations continue to exist whenever employees, contractors or others consume alcohol or other intoxicants at social or other events throughout the year. Sporting events, marketing dinners and happy hours and other social gatherings that commonly occur during the year commonly create similar risks while engendering less attention. Accordingly, businesses should remind employees periodically throughout the year about substance abuse, intoxication and other similar policies throughout the year.

For Help With Investigations, Policy Updates Or Other Needs

If your organization needs assistance investigating a reported concern, reviewing and updating its policies or assessing, managing or defending these or other labor and employment, compensation or benefit practices, or needs other assistance auditing, updating or defending its human resources, corporate ethics, and compliance practices, or responding to employment related or other charges or suits, please contact management attorney and consultant Cynthia Marcotte Stamer at cstamer@solutionslawyer.net, (468) 767-8872.

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization and Chair of the American Bar Association RPTE Employee Benefits & Other Compensation Group and a nationally recognized author and speaker, Ms. Stamer helps business manage people, operations and risk. She is experienced with advising and assisting employers with these and other labor and employment, employee benefit, compensation, risk management and internal controls matters. Her experience includes helping management both manage performance and manage legal risk and compliance. While helping businesses define and manage the conduct and performance of their employees, contractors and vendors, she also assists employers and others about compliance with federal and state equal employment opportunity, compensation, health and other employee benefit, workplace safety, and other labor and employment laws, advises and defends businesses against labor and employment, employee benefit, compensation, fraud and other regulatory compliance and other related audits, investigations and litigation, charges, audits, claims and investigations by the IRS, Department of Labor, Department of Justice, SEC, Federal Trade Commission, HUD, HHS, DOD, Departments of Insurance, and other federal and state regulators. She has counseled and represented businesses and their management on workforce and other internal controls and risk management matters for more than 23 years. Ms. Stamer also speaks and writes extensively on these and other related matters. 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 Helpful Resources & Information

If you found this article of interest, you also may be interested in reviewing other Breaking News, articles and other resources available CynthiaStamer.com or Solutions Law Press articles authored by Ms. Stamer including:

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, unsubscribe by updating your profile here.

About Solutions Law Press

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.

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Posted by Cynthia Marcotte Stamer

Avoiding Post-Holiday Celebration Sexual Harassment & Discrimination Liability

December 29, 2010

With New Years Eve celebrations approaching and the Holiday Season wrapping up, businesses should take some common sense steps to decrease the risk of waking up in 2011 with a liability hangover. Participation of employees and clients in company sponsored and other social celebrations and activities can promote big rewards in relationship development and morale if properly managed. However, the music, food, game playing, toasting with alcohol and other aspects of the celebratory atmosphere at New Years Eve and other parties and social activities heighten the risk that certain employees or other business associates will engage in, or be subject to, risky or other inappropriate behavior that can create liability exposures or other business concerns for your business whether or not company sponsored. Read about other common Holiday Season-related celebration risks and management tips here.

Celebrations Raise Foreseeable Risks

Whether or not company-sponsored, holiday parties and other celebrations where employees celebrate with other employees or clients tend to fuel bad behavior by inviting fraternization, lowering inhibitions and obscuring the line between appropriate and inappropriate social and business behavior. The relaxation of the environment heightens the risk that certain employees or clients will make unwelcome sexual advances, make sexually suggestive or other inappropriate statements, or engage in other actions that expose the business to sexual harassment or other employment discrimination liability. Businesses also should use care to manage other discrimination exposures in the planning of holiday festivities, gift exchanges, and other activities. Businesses also should be vigilant in watching for signs of inappropriate patterns of discrimination in the selection of employees invited to participate in company-connected social events as well as off-duty holiday gatherings sponsored by managers and supervisors. In addition, businesses also should critically review their own plans for possible insensitivity. Business connected holiday parties, communications, gifts and other festivities should be designed to show appropriate sensitivity to religious and other cultural diversity.

To minimize these exposures, businesses should take steps to communicate and reinforce company policies and expectations about sexual harassment, discrimination, fraternization and other conduct viewed as inappropriate by the company and communicating reminders about these policies to employees and business associates during the Holiday Season.

Timely Investigation & Notification

Businesses faced with allegations of discrimination, sexual harassment or other misconduct also should act promptly to investigate any concerns and if necessary, take timely corrective action. Delay in investigation or redress of discrimination or other improprieties can increase the liability exposure of a business presented with a valid complaint and complicate the ability to defend charges that may arise against the business. Additionally, delay also increases the likelihood that a complaining party will contact governmental officials, plaintiff’s lawyers or others outside the corporation in the redress of his concern.

If a report of an accident, act of discrimination or sexual harassment or other liability related event arises, remember to consider as part of your response whether you need to report the event to any insurers or agencies. Injuries occurring at company related functions often qualify as occupational injuries subject to worker’s compensation and occupational safety laws. Likewise, automobile, employment practices liability, and general liability policies often require covered parties to tell the carrier promptly upon receipt of notice of an event or claim that may give rise to coverage, even though the carrier may not be obligated to tender a defense or coverage at that time.

For Help With Investigations, Policy Updates Or Other Needs

If your organization needs help investigating a reported concern, reviewing and updating its policies or assessing, managing or defending these or other labor and employment, compensation or benefit practices, or needs other assistance auditing, updating or defending its human resources, corporate ethics, and compliance practices, or responding to employment related or other charges or suits, please contact management attorney and consultant Cynthia Marcotte Stamer at cstamer@solutionslawyer.net, (468) 767-8872.

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization and Chair of the American Bar Association RPTE Employee Benefits & Other Compensation Group and a nationally recognized author and speaker, Ms. Stamer helps business manage people, operations and risk. She is experienced with advising and assisting employers with these and other labor and employment, employee benefit, compensation, risk management and internal controls matters. Her experience includes helping management both manage performance and manage legal risk and compliance. While helping businesses define and manage the conduct and performance of their employees, contractors and vendors, she also assists employers and others about compliance with federal and state equal employment opportunity, compensation, health and other employee benefit, workplace safety, and other labor and employment laws, advises and defends businesses against labor and employment, employee benefit, compensation, fraud and other regulatory compliance and other related audits, investigations and litigation, charges, audits, claims and investigations by the IRS, Department of Labor, Department of Justice, SEC, Federal Trade Commission, HUD, HHS, DOD, Departments of Insurance, and other federal and state regulators. She has counseled and represented businesses and their management on workforce and other internal controls and risk management matters for more than 23 years. Ms. Stamer also speaks and writes extensively on these and other related matters. For additional information about Ms. Stamer and her experience or to get access to other publications by Ms. Stamer see here or contact Ms. Stamer directly.

Other Helpful Resources & Information

About Solutions Law Press

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, unsubscribe by updating your profile here.

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Posted by Cynthia Marcotte Stamer

Small Employers Should Weigh If Health Premium Tax Credit Justifies Changing Employee Leasing Arrangements

December 5, 2010

Accessing more affordable health care coverage often is a major driver behind the decision of many small businesses to enter into employee leasing arrangements. Many of these small businesses should consider if changing existing employee leasing practices makes sense to avoid unknowingly forfeiting or otherwise qualify to claim valuable health insurance premium tax credits under new Internal Revenue Code (Code) § 45R.

Enacted as part of the sweeping health care reforms included in the Patient Protection & Affordable Care Act (Affordable Care Act), Code § 45R generally offers a small employer that meets Code § 45R’s conditions (qualifying employer) to claim a tax credit for premiums that it pays for health insurance coverage to employees if:

The employer had fewer than 25 full-time equivalent employees (“FTEs”) for the tax year;
The average annual wages of its employees for the year must be less than $50,000 per FTE; and
The employer pays premiums to provide employee health care coverage under a “qualifying arrangement.”

For purposes of Code § 45R, “qualifying arrangement” is an arrangement under which an qualifying employer pays premiums for each employee enrolled in health insurance coverage offered by the employer in an amount equal to a uniform percentage (not less than 50 percent) of the premium cost of the coverage.

An analysis of an advance copy of Internal Revenue Service (IRS) Notice 2010-82, scheduled for official publication on December 20, 2010, reveals that a small business that leases rather than employs directly workers gives up the ability to claim a Code § 45R tax credit for amounts paid toward health insurance premiums charged for leased employees when the leasing organization employs the worker even though the business could have claimed those amounts if it employed the worker and paid the premiums directly.

According to Notice 2010-82, leased employees as defined in Code § 414(n) are counted in computing FTEs and average annual wages of businesses leasing their services (Service Recipient). This means that that the use of leased employees will disqualify the business for the Code § 45R tax credit if its total workforce exceeds 25 FTEs when leased employees are taken into account.

Although Service Recipients must count these leased employees when calculating FTEs, and compensation for purposes of determining if the business is a qualified employer, the IRS says Code § 45R does not allow a Service Recipient to claim the Code §45R credit for health insurance premiums paid by or through a leasing organization for coverage of leased employees. Since leasing organizations usually employ more than 25 FTEs, this means that neither business can claim any credit.

While the IRS won’t let Service Recipients claim credit for health premiums paid by a leasing company, Notice 2010-82 suggests that an otherwise qualifying small business can claim the tax credit for health premiums accessed through a leasing organization or other arrangement when the Service Recipient, and not the leasing organization, employs the workers and pays health premiums for coverage for the worker. Assuming a business otherwise is a qualifying employer, Notice 2010-82 suggests that the business may claim the tax credit for premiums it pays to purchases qualifying health insurance for individuals employed as the common law employee of the business directly to a licensed insurer or to obtain insured coverage from a multiemployer plan that otherwise meets the requirements of Code § 45R.

As with any decision about the use of leased employees, the feasibility and potential costs and benefits of structuring or restructuring the relationship with a worker who otherwise would be leased through a staffing company to claim the Code § 45R tax credit needs to be carefully evaluated before a business acts. Businesses should carefully evaluate both the change in insurance costs, if any, and how the structuring of the relationship will affect other costs and liabilities. Changing the relationship with a worker from employee to leased employee or visa versa can impact unemployment, employee benefit, employment liability, contractual, tort and other costs, obligations and other responsibilities. In some instances, increased health insurance or other costs and liabilities may outweigh the tax benefits that a small business otherwise could get by qualifying for the Code § 45R tax credit. Where the existing or contemplated relationship between business and the leasing organization already creates a co-employment relationship for many legal or financial purposes, however, restructuring the relationship to allow the business to directly employ workers but continue to use the payroll services of and access health coverage and other benefits for the worker under multiple employer benefit plans sponsored by the leasing organization may prove a viable and attractive option. Moreover, as many businesses misunderstand legal risks and benefits of their employee leasing and other contingent workforce relationships, businesses should consult with competent legal counsel within the scope of attorney-client privilege to ensure that they have an accurate understanding of the legal implications of their existing employee leasing arrangements when evaluating these potential costs and benefits to avoid making misinformed decisions.

Employers Urged To Seek Advice To Determine Tax Eligibility, Manage Legal Risks

Given the high cost of health insurance coverage, the Code § 45R credit may offers valuable savings for qualifying small employer. Before providing coverage or estimating tax liabilities in reliance on the expectation of claiming the credit, however, an employer interested in claiming the credit should seek guidance from qualified tax counsel familiar with the Code § 45R rules and guidance as well as other applicable federal mandates impacting employer provided coverage. The clarifications set forth in Notice 2010-82 illustrate that the rules for determining if an employer qualifies to claim a tax credit for health insurance premiums paid for employees under Code § 45R are anything but simple. In addition to meeting these conditions, employers offering or contributing to health coverage for employees can face a broad range of other legal and financial risk if they fail to properly understand and manage the organizational and personal responsibilities that can arise under applicable federal laws. Where it is contemplated that health coverage will be accessed or provided through an employee leasing, staffing or multiple employee plan arrangement, other additional considerations also will apply. Accordingly, small and other businesses that provide health coverage to employees or paying to lease the services of workers from a leasing organization that provides health coverage should review their options with experienced legal counsel within the scope of attorney-client privilege.

For More Information Or Assistance

You can learn more about these and other federal health plan mandates by listening to the recording of the 2010 Health Plan Update Briefing or reviewing other resources available here. If you need help with these or 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 Cynthia Marcotte 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. To unsubscribe, send an e-mail with “Unsubscribe” in the subject here. For important information concerning this communication click here.

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Posted by Cynthia Marcotte Stamer

2011 Standard Mileage Rates Announced

December 5, 2010

The Internal Revenue Service on December 3, 2010 published the 2011 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes in Revenue Procedure 2010-51 for 2011.

Beginning on Jan. 1, 2011, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

51 cents per mile for business miles driven
19 cents per mile driven for medical or moving purposes
14 cents per mile driven in service of charitable organizations

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for any vehicle used for hire or for more than four vehicles used simultaneously.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Revenue Procedure 2010-51 contains additional details regarding the standard mileage rates.

For More Information Or Assistance

If you need help updating your organization’s mileage reimbursement policy or other employee benefit, compensation or employment regulations or other related matters please contact Cynthia Marcotte Stamer here or (469)767-8872.

About Ms. Stamer

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, Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, management attorney and consultant Cynthia Marcotte Stamer has more than 23 years experience advising and representing employers, health and other employee benefit plans, their sponsors, fiduciaries and plan administrators, consultants, vendors, outsourcers, insurers, governments and others about employment, employee benefit, compensation, and a wide range of other performance, legal and operational risk management practices and concerns. As a part of this work, Ms. Stamer has worked extensively with clients to manage risks and defend practices under a wide range of laws and circumstances. Her experience includes extensive work advising and representing employers, plans, plan fiduciaries, trustees, investors, and others about managing and resolving risks relating to distressed pension and other employee benefit plans, downsizing and other workforce reengineering and other similar matters. A prolific author and popular speaker, Ms. Stamer also publishes, conducts client and other training, speaks and consults extensively on GINA and other employment and employee benefit risk management 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 Solutions Law Press updates 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. To unsubscribe, send an e-mail with “Unsubscribe” in the subject here. For important information concerning this communication click here.

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Posted by Cynthia Marcotte Stamer

Free 12/6/10 ABA RPTE Employee Benefit Groups Study Group Conference Call Examines PBGC Enforcement of Downsizing Liability, Updated Reporting & Other PBGC Developments

November 19, 2010

The American Bar Association RPTE Employee Benefits & Other Compensation Arrangements Group invites members and other interested legal counsel and benefit practitioners to catch up on the latest Pension Benefit Guarantee Corporation (PBGC) enforcement and regulatory developments by participating in its next regular one hour Study Group Conference Call on Monday, December 6, 2010, at 1 PM Eastern, Noon Central, 11 AM Mountain and 10 AM Pacific. There is no charge to take part in the Study Group Conference call.

During the call the Plan Transactions and Terminations Committee, chaired by Harold Ashner of Keightley & Ashner LLP (former PBGC Assistant General Counsel for Legislation and Regulations) will discuss recent PBGC reporting, monitoring, and enforcement developments, with a focus on PBGC’s pursuit of “downsizing liability” under ERISA Section 4062(e) and on how to deal with this liability effectively.

The dial-in information for the call is:

Phone Number: 866/646-6488

Participant Pass code: 7255887619

If your client or organization maintains a PBGC-covered pension plan, you need to understand the various circumstances that may lead PBGC to pursue a claim for as much as the plan’s full termination-based underfunding — even though the pension plan remains ongoing with no intention to terminate it. These circumstances go well beyond a traditional plant closing, and may include a going-concern asset sale, a stock sale, a transfer of operations to another facility, a temporary suspension of operations, or the discontinuance of one operation with all other operations continuing.

Topics covered will include PBGC reporting requirements, triggers for 4062(e) liability, issues relating to how the liability is calculated, and options for settling the liability. Come prepared with your questions!

To receive handout materials, please RSVP, email Committee Vice Chair Robert Miller (rmiller@calfee.com) to let the Committee know you plan to attend. If you have questions you’d like to have discussed on the call, you can include those questions along with your RSVP. There is no charge for participating.

Membership In RPTE Employee Benefits & Other Compensation Group Offers Many Benefits

Chaired by Cynthia Marcotte Stamer, membership in the Employee Benefits & Other Compensation Arrangements Group offers attorneys and others employee benefit professionals a broad range of opportunities to develop and expand their employee benefit knowledge, provide leadership and input on evolving employee benefit policies and practices, to network and collaborate with fellow practitioners, and to participate in a broad range of other activities designed to advance employee benefit knowledge and professionalism. The Group focuses on all aspects of employee benefit plans and other compensation arrangements, including issues relating to qualified plans, medical and other welfare plans and nonqualified deferred compensation plans, the fiduciary responsibilities of plan trustees, plan administrators and other plan fiduciaries, plan administration, plan transactions, plan terminations, and litigation involving this area of practice. If you would like more information about the Group or getting involved in its activities, please see RPTE Website orcontact its Chair, Cynthia Marcotte Stamer, at cstamer@solutionslawyer.net or (469) 767-8872.

About Ms. Stamer

Other Resources & Developments

If you found this information of interest, you also may be interested in reviewing other recent Solutions Law Press updates 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. To unsubscribe, send an e-mail with “Unsubscribe” in the subject here. For important information concerning this communication click here.

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Posted by Cynthia Marcotte Stamer

Proposed New Defined Benefit Plan Annual Funding Notice Rule Reminder of Need to Carefully Manage Pension Plan Responsibilities

November 18, 2010

Plan sponsors and administrators of defined benefit plans must carefully monitor and comply with the funding, notification, insurance and other associated requirements of the minimum funding rules imposed under the Employee Retirement Income Security Act and the Internal Revenue Code. The Department of Labor’s Employee Benefits Security Administration today (November 18, 2010) its Pension Protection Act web page with the Annual Funding Notice for Defined Benefit Plans Proposed Rule, available at here, a fact sheet, available here, a model notice for single employer plans, available here, and a model notice for multiemployer plans, available here.

Pension plan funding, reporting and disclosure and termination requirements are complicated in non-distress situations. This complexity and the potential legal exposures of non-compliance can grow exponentially when a pension plan or one or more of its contributing employers becomes distress. Furthermore, special controlled group, lien and successor liability rules incorporated into these funding requirements often create hidden risks for affiliated employers, lenders, potential purchasers and others dealing with these plans or the businesses that sponsor them. As a consequence, all parties dealing with these plans should exercise care to understand and properly manage these exposures to avoid unintentionally triggering liability under these rules.

For More Information Or Assistance

If you need help reviewing or responding to the defined benefit plan funding or other employee benefit, compensation or employment regulations or other related matters please contact Cynthia Marcotte Stamer here or (469)767-8872.

About Ms. Stamer

Other Resources & Developments

If you found this information of interest, you also may be interested in reviewing other recent Solutions Law Press updates 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. To unsubscribe, send an e-mail with “Unsubscribe” in the subject here. For important information concerning this communication click here.

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Posted by Cynthia Marcotte Stamer

Affordable Care Act Grandfathered Plan Rules Loosened To Allow Insured Plans Making Some Insurance Changes To Qualify

November 17, 2010

A change to regulations implementing the “grandfathered plan” rules of the Patient Protection and Affordable Care Act (Affordable Care Act) announced yesterday has opened up the possibility that some insured group health plans changing insurers may continue to qualify as “grandfathered health plans” exempted from certain health care reform mandates. Because policy or insurer changes can create challenges in meeting other conditions required to get grandfathered plan status, however, sponsors and administrators of insured group health plans should prepare to timely comply with all applicable Affordable Care Act mandates unless they have verified their ability to prove that their program meets all requirements to qualify for grandfathered plan status will need to confirm that with or without the insurance-related change.

The Affordable Care Act generally requires that insured and self-insured group health plans and group and individual health insurance policies comply with many new federal mandates beginning with the first day of the plan or contract year that begins after September 22, 2010. If a group health plan or health insurance policy existed on March 23, 2010 and otherwise qualifies as a “grandfathered health plan,” however, it may qualify as exempted or for a delayed effective date from some but not these new mandates. By shaping the mandates applicable to group health plans, the grandfather rules will impact both the cost and the design of affected group health plans.

Original Rule About Insurance Changes

Interim Final Regulations issued by jointly by the Departments of Labor, Health & Human Services and Treasury (Agencies) last June established a series of detailed requirements that a group health plan or health insurance policy must meet to qualify as a grandfathered health plan or policy beyond merely existing on March 23, 2010. As part of these requirements, the Interim Final Regulations identified a number of changes and other events that would disqualify a group health plan or insurance policy as a grandfathered plan.

In the case of insured group health plans, changing insurance policies or insurers was not an allowable change for a plan desiring to qualify as grandfathered. As originally interpreted by the Agencies in the Interim Final Regulations, self-insured group health plans were permitted to change third-party administrators without forfeiting grandfathered health plan status as long as the change did not otherwise change the plan terms or design in a way that would disqualify the plan for grandfathered status. In contrast, however, the Agencies original interpretation stated that entering into a new policy, certificate, or contract of insurance for an insured non-collectively bargained group health plan in and of itself would disqualify the group health plan as a grandfathered health plan. The modified rule published on November 16, 2010 (Amended Rule) eliminates this distinction in response to public comments received since its publication of the original guidance.

Amended Rule About Insurance Changes

Under the Amended Rule, the same standards now will determine the effect of a change in vendor or contract on the grandfathered health plan status of a group health plan whether the plan is insured or self-insured. Accordingly, with respect to changes in group health coverage contracts, the Interim Regulations, as modified by the Amended Rule, now provides where insured or self-insured, a group health plan (including a group health plan that was self-insured on March 23, 2010) or its sponsor that enters into a enters into a new policy, certificate, or contract of insurance after March 23, 2010 that is effective before November 15, 2010 generally will cease to be a grandfathered health plan unless the plan meets certain specified conditions. The group health plan must provide to the new health insurance issuer (and the new health insurance issuer must require) documentation of plan terms (including benefits, cost sharing, employer contributions, and annual limits) under the prior health coverage sufficient to demonstrate that except for the contract change, the group health plan otherwise has not been modified or experienced any other event that would otherwise result in its disqualification for grandfathered health plan status under the Interim Final Regulations as modified by the Amended Rule.

As currently drafted, the relief provided in the Amended Rule does not expressly apply to a change in insurer or insurance contract made by a non-collectively bargained group health plan after November 14, 2010 regardless of whether the change in made before deadline for the group health plan to begin complying with the Affordable Care Act (i.e., the first day of the first plan year beginning after March 22, 2010). Additionally, the relief set forth in the Amended Rule does not apply to individual health insurance policies. Where insured coverage is provided not through a group health plan but instead in the individual market, a change in issuer still remains a change in the health insurance coverage after March 22, 2010 that disqualifies the new individual policy, certificate, or contract of insurance for status as a grandfathered health plan for purposes of the Affordable Care Act.

For a more detailed discussion of the grandfathered plan rules and the changes made this week, see here.

For More Information Or Assistance

If you need help reviewing or responding to the grandfather regulations or other health benefit regulations or other related matters please contact Cynthia Marcotte Stamer here or (469) 767-8872.

About Ms. Stamer

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, Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, management attorney and consultant Cynthia Marcotte Stamer has more than 23 years experience advising and representing employers, health and other employee benefit plans, their sponsors, fiduciaries and plan administrators, consultants, vendors, outsourcers, insurers, governments and others about employment, employee benefit, compensation, and a wide range of other performance, legal and operational risk management practices and concerns. As a part of this work, Ms. Stamer has worked extensively with clients on health care reforms and regulations under the Affordable Care Act and other federal and state laws. A prolific author and popular speaker, Ms. Stamer also publishes, conducts client and other training, speaks and consults extensively on GINA and other employment and employee benefit risk management 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 Solutions Law Press updates 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 for review here. If you or someone else you know would like to receive future updates and notices about other upcoming Solutions Law Press 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 concerning this communication click here.

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Posted by Cynthia Marcotte Stamer

Update Employment Practices To Manage Genetic Info Discrimination Risks Under New EEOC Final GINA Regulations

November 9, 2010

The U.S. Equal Employment Opportunity Commission (EEOC) today issued final regulations (“Final Regulations”) implementing the employment provisions (Title II) of the Genetic Information Nondiscrimination Act of 2008 (GINA). Employers, employment agencies, labor organizations, joint labor-management committees, and others impacted by GINA should carefully review and update their hiring and background check, sick and family leave, disability accommodation, and other existing policies and practices to comply with the updated guidance provided by the Final Regulations to avoid liability under new GINA’s rules governing genetic information collection, use, protection and disclosure

Effective since November 21, 2009, Title II of GINA prohibits employers of 15 or more employees from discriminating in employment based on genetic information and restricts the acquisition and disclosure of genetic information by covered employers and certain other parties.

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. Under GINA, employees and individuals can sue for damages and other relief like currently available under Title VII of the Civil Rights Act of 1964 and other nondiscrimination laws.

Meanwhile, Title I of GINA prohibits group health plans and health insurers from discriminating in eligibility or premium based on genetic information and requires these plans and insurers to protect the privacy of genetic information (Title I) for plan years beginning after May 20, 2009.

When assessing potential GINA risks and exposures, employers and others covered by its provisions must exercise care not to overlook or underestimate the genetic information collected or possessed by their organizations and the risks attendant to collecting or using this information. Many employers will be surprised by the breadth of the depth of “genetic information.” Because of GINA’s broad definition of “genetic information,” its provisions create potential liability concerns for a surprisingly wide range of employment and health plan practices.

The Final Regulations published today implement the employment discrimination rules of GINA Title II. The EEOC previously published proposed regulations interpreting Title II of GINA in March, 2009. Concurrent with its release of the Final Regulations, the Commission also issued two question-and-answer documents on the final GINA regulations. For links to today’s guidance and more details, see here.

Failing to properly address GINA compliance could expose employers to substantial risk. Violation of the employment provisions of Title II subjects an employer to potentially significant civil judgments like those that generally are available for race, sex, and other federal employment discrimination claims covered by the Civil Rights Act. Accordingly, employers and others who have not already done so should act quickly to review and update their policies and procedures to manage their new compliance and liability exposures under GINA. Employers and others covered by GINA also should assess their leave and other records and practices for data that could be considered genetic information and take appropriate steps to safeguard this information to comply with the confidentiality, nondiscrimination and anti-retaliation rules of GINA, the Americans with Disabilities Act and other applicable laws.

For More Information Or Assistance

If you need assistance evaluating or defending existing or proposed practices under GINA or with other workforce, employee benefit, compensation, internal controls or risk management practices, please contact the author of this update, Board Certified Labor & Employment attorney Cynthia Marcotte Stamer at (469) 767-8872 or via e-mail here.

About Ms. Stamer

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, Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, management attorney and consultant Cynthia Marcotte Stamer has more than 23 years experience advising and representing employers, health and other employee benefit plans, their sponsors, fiduciaries and plan administrators, consultants, vendors, outsourcers, insurers, governments and others about employment, employee benefit, compensation, and a wide range of other performance, legal and operational risk management practices and concerns. As a part of this work, Ms. Stamer has worked extensively with client to manage risks and defend practices under GINA, the ADA and a wide range of employment discrimination, privacy and other laws. A prolific author and popular speaker, Ms. Stamer also publishes, conducts client and other training, speaks and consults extensively on GINA and other employment and employee benefit risk management 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 Solutions Law Press updates including:

About Solutions Law Press

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. To unsubscribe, send an e-mail with “Unsubscribe” in the subject here. For important information concerning this communication click here.

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Posted by Cynthia Marcotte Stamer

DOL Proposes To Expand Investment Related Services Giving Rise to ERISA Fiduciary Status As Investment Fiduciary

October 21, 2010

The U.S. Department of Labor Employee Benefit Security Administration (EBSA) today published a Proposed Regulation that would expand the circumstances when individuals giving investment advice to an employee benefit or employee benefit plan or individual retirement account participant for purposes of the fiduciary definition of Employee Retirement Income Security Act (ERISA) § 3(21) and the prohibited transaction provisions of Internal Revenue Code (Code) § 4975(e)(3)(B).

If adopted as proposed, the Proposed Regulation would broaden the persons considered fiduciaries based on their provision of investment related advice or services to plans, participants or beneficiaries. Additionally, the restatement of these standards also likely will necessitate that both plan fiduciaries and providers of these services tighten agreements and other practices and procedures governing the engagement and delivery of services in order to maintain or protect desired allocations of fiduciary responsibility over these activities.

The deadline for individuals and organizations to comment on the proposed rule is January 19, 2011. Plan sponsors, fiduciaries, service providers and others concerned about the potential impact of the proposed changes should assess the potential implications of the rule and timely submit any comments or concern to the EBSA by this date.

To learn more about the Proposed Rule and its implications, see the more detailed article here.

If your organization needs assistance to evaluate or respond to the Proposed Regulation or reviewing, updating, administering or defending your employee benefit, human resources, compensation or internal control and risk management procedures, documentation, or policies or procedures, please contact the author of this update, Board Certified Labor & Employment attorney Cynthia Marcotte Stamer at (469) 767-8872 or via e-mail here.

Other Resources

If you found this information of interest, you also may be interested in reviewing other recent Solutions Law Press updates including:

About Ms. Stamer

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, Cynthia Marcotte Stamer is nationally recognized for her extensive work helping clients develop, implement and defend innovative, practical, legally defensible solutions to their particular health and other employee benefit, employment and insurance needs. Ms. Stamer has more than 23 years experience advising and representing employer, association and other plan sponsors, health and other employee benefit plans, their fiduciaries, plan administrators, consultants, vendors, outsourcers, insurers, governments and others about health plan and product design; administration, legal and operational risk management, vendor and fiduciary credentialing, managed care and vendor contracting, cost-containment, documentation, public policy, enforcement, privacy, technology, litigation and other concerns. Ms. Stamer also publishes, conducts client and other training, speaks and consults extensively on these and other health and managed care program concerns and practices for the ABA, 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.

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Posted by Cynthia Marcotte Stamer

EEOC Attacks Medical Leave Denials As Prohibited Disability Discrimination

October 19, 2010

Two new Equal Employment Opportunity Commission (EEOC) lawsuits filed against a Texas concrete manufacturer and Los Angeles garment manufacturer highlight the need for U.S. employers with more than 14 employees to consider and prepare to defend against potential disability discrimination exposures when dealing with medical leave requests by employees who might be considered disabled under the Americans with Disabilities Act (ADA) as well as other expanding ADA enforcement exposures. Read more.

The lawsuits reflect that employers considering an employee’s request for medical leave should evaluate if the ADA requires the employer to grant the requested medical leave in addition to considering any otherwise applicable leave entitlement the requesting employee qualifies for under the Family & Medical Leave Act, state leave laws or otherwise applicable employer policies. As a result, all employers of 15 or more employees generally should review and tighten their policies and processes for evaluating requests for medical leave to minimize their exposure to claims that the denial of a requested medical leave violated the ADA.

Furthermore, employers also should consider the advisability of other more generalized policy or procedure updates to strengthen their defensibility against potential ADA and other disability claims generally in light of stepped up enforcement by the EEOC and private plaintiffs changes to the ADA made by the ADA Amendments Act of 2008 (ADAAA) that makes it easier for employees to win ADA suits. To mitigate growing exposures to these claims, employers covered by the ADA and/or the Rehabilitation Act of 1973 should review and strengthen their existing hiring and other employment practices and documentation to strengthen their defensibility in the face of these new challenges.

If you need assistance responding an employee’s request for medical leave or other accommodations, or otherwise to review, update or defend your disability discrimination or other employment, compensation, benefits or other workforce, internal controls or risk management practices, please contact the author of this update, Board Certified Labor & Employment attorney Cynthia Marcotte Stamer at (469) 767-8872 or via e-mail here.

Other Resources

If you found this information of interest, you also may be interested in reviewing other recent Solutions Law Press updates including:

About Ms. Stamer

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. When working with clients, Ms. Stamer combines a client-oriented approach with an extensive practical and technical knowledge of human resources, insurance, employee benefits, health care, privacy & security, corporate compliance and other legal matters to assist clients to formulate and administer pragmatic operational and risk management strategies and effective internal controls taking into account the financial, operational, political, legal and other realities confronting the client.

Recognized in the International Who’s Who of Professionals and bearing the Martindale Hubble Premier AV-Rating, Ms. Stamer also is a highly regarded author and speaker who serves in the leadership of many professional and civil organizations. She regularly conducts management and other training on a wide range of workforce management, employee benefits, compensation, risk management internal controls, and other related matters for businesses, trade and professional associations and others. Her insights on human resources risk management matters appear 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. To request Ms. Stamer’s assistance, for information about arranging for Ms. Stamer to provide workshops and other training, to access other publications or resources or for more details about Ms. Stamer’s experience and other credentials, contact Ms. Stamer at via telephone at 469.767.8872 or via e-mail at cstamer@solutionslawyer.net or see CynthiaStamer.com.

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Posted by Cynthia Marcotte Stamer

Annual Benefit Limitation Waiver Guidance Offers Fast Acting Employers, Insurers Expanded Options To Meet Affordable Care Act Health Plan Rule

October 3, 2010

Many employers and insurers that act quickly may qualify for a temporary reprieve from the obligation to redesign their group health plans and health insurance policies to comply with the annual benefit limitations on health plan benefits imposed under the Patient Protection and Affordable Care Act (Affordable Care Act) applicable to most health insurance plans and policies beginning with post-September 22, 2010 plan years.

On September 3, 2010, the U.S. Department of Health & Human Service published rules that enable qualifying employers and insurers to obtain a waiver of the application of ACA’s annual limits to their health plan for 2011 (Annual Limit Waiver). In addition to the Annual Limit Waiver relief, HHS on October 1, 2010 also announced plans in the near future to publish additional guidance to provide some relief for mini-meds and certain other plans from the medical loss ratio rules of ACA. Plan sponsors and insurers struggling to redesign their benefit programs to meet ACA’s annual limit and medical loss ration mandates for their 2011 plan year should act quickly to evaluate and where applicable take advantage of the added flexibility that this new guidance may afford regarding their 2011 plan design.

With compliance deadlines impending, however, plan sponsors and insurers must act quickly to leverage these opportunities and make other necessary arrangements to update their health programs to meet new federal requirements. When deciding how to respond to ACA and other new federal health plan rules, plan sponsors and insurers who maintain plans that can qualify as grandfathered plans under ACA should carefully consider all alternatives before deciding to forego this status. Many plan sponsors and insurers feel soaring health coverage costs require that they make cost-saving plan design changes that preclude them from maintaining a grandfathered plan. Creative use of the new Annual Benefit Limitation Waiver, grandfathered plan and other guidance may help mitigate the cost and other challenges of complying with these new federal rules. Read more details.

If your organization needs assistance to apply for an ACA Annual Limit Waiver, reviewing or updating your heath care program design, documentation, policies or procedures in response to ACA or other requirements or with other employee benefit, insurance or human resources matters, please contact the author of this update, Board Certified Labor & Employment attorney Cynthia Marcotte Stamer at (469) 767-8872 or via e-mail here.

Other Resources

If you found this information of interest, you also may be interested in reviewing other recent Solutions Law Press updates including:

About Ms. Stamer

About Solutions Law Press

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Posted by Cynthia Marcotte Stamer

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