November 13-20 promises to be a week with transgender issues front and center for employers in the U.S. and other regions of the world joining in the 2021 observance of Transgender Awareness Week from November 13-20 and the Transgender Day of Remembrance on November 20. Employer can anticipate invitations to join in the observances as well as heightened emphasis and communications about transgender rights and concerns as agencies like the Office of Federal Contracts Compliance Programs (“OFCCP”), Equal Employment Opportunity Commission (“EEOC”) and other federal and state governmental agencies involved in these concerns as well as various transgender advocacy groups participate in these annual observances.
Reportedly first celebrated in 1999, the Transgender Day of Remembrance commemorates victims of anti-transgender hate crimes, During the day, transgender people and their allies take action to bring attention to the transgender community and advance advocacy to address the prejudice, discrimination, and violence the community faces. Leading up to the Transgender Day of Remembrance, Transgender Awareness Week observed November 13th to November 19th annually generally is observed through a series of events intended to educate about transgender and gender non-conforming people and the issues associated with their transition or identity.
In 2020, the United States Supreme Court ruled in Bostock v. Clayton County that the sex discrimination prohibitions of Title VII of the Civil Rights Act protect applicants and employees from employment discrimination based on transgender or other sexual preferences. In keeping with this decision, the Department of Labor Equal Opportunity Commission (“EEOC”) has adopted and administer aggressive educational outreach, investigation and enforcement programs targeting employment discrimination against transgender, lesbian, bisexual, and gay (“LBGT”) individuals based on their sexual orientation. Additionally, the Office of Federal Contract Compliance Programs (“OFCC”) since 2014 has explicitly prohibited federal contractors from discriminating against job applicants and employees based on gender identity and sexual orientation and under the Biden-Harris Administration is committed to firmly administering the prohibitions against discrimination against employees and applicants announced in Executive Order 11246 against federal government contractors and grant recipients.
The Biden-Harris Administration has heightened this emphasis by making sexual orientation discrimination a priority. In March, President Biden became the first President to recognize Transgender Day of Visibility, calling upon all individuals to join in the fight for full equality for all transgender people. On day one of this Administration, President Biden issued Executive Order 13988, Preventing and Combating Discrimination on the Basis of Gender Identity or Sexual Orientation, in which he stated:
Discrimination on the basis of gender identity or sexual orientation manifests differently for different individuals, and it often overlaps with other forms of prohibited discrimination, including discrimination on the basis of race or disability. For example, transgender Black Americans face unconscionably high levels of workplace discrimination, homelessness, and violence, including fatal violence. It is the policy of my Administration to prevent and combat discrimination on the basis of gender identity or sexual orientation, and to fully enforce Title VII and other laws that prohibit discrimination on the basis of gender identity or sexual orientation. It is also the policy of my Administration to address overlapping forms of discrimination.
In keeping with this commitment, OFCCP and EEOC both are stepping up their outreach and enforcement. On June 28, 2021, the EEOC published its Frequently Asked Questions on Sexual Orientation and Gender Identity. and has made LBTG discrimination an investigation and enforcement priority that has resulted in several charges. In August, 2021, for instance, the EEOC sued an Applebee’s franchise for allegedly discriminating based on sexual orientation by subjecting a Black line cook to a hostile work environment based on his sexual orientation and race and then allegedly retaliating against him for complaining.. On October 26, 2021, for instance, the EEOC announced that Minnesota furniture retailer Frizzell Furniture agreed to pay $60,000, revise its policies and conduct training to resolve a finding of gender identity sex discrimination. According to the EEOC, its investigation showed Frizzell Furniture did not hire a job applicant for a sales position because he is transgender. A hiring official informed the applicant he would not “mix well with the customers.” ddition, OFCCP has announced that it also is also exploring a method for voluntary self-identification to solicit and record information for people who have a non-binary gender identity.
Meanwhile, OFCCP also published its own Frequently Asked Questions on Sexual Orientation and Gender Identity in June, 2021. The OFCCP Guidance addresses the responsibility of government contractors and subcontractors to contract not to discriminate based on sexual preference and addresses the OFCCP’s expectations about the basic steps that contractors should take in advertising job positions, screening applicants, administering restroom access and other matters of concern relating to compliance with these obligations. It also subsequently announced that it also is also exploring a method for voluntary self-identification to solicit and record information for people who have a non-binary gender identity.
In the face of these developments, employers and others covered by Title VII should be aware and exhibit sensitivity during this week’s observances. In addition, the observances this week provide an excellent reminder of the advisability of reviewing and tightening existing policies and practices regarding transgender and other policies, practices and training regarding sexual preference nondiscrimination in the workplace.
For Help Or More Information
For help developing, administering or defending your organization’s LBGT or other equal employment opportunity policies and practices, or other workforce, employee benefits, compensation or compliance practices, contact the author.
Solutions Law Press, Inc. also invites you to receive future updates by registering here and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy. 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 your profile here. For specific information about the these or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
About the Author
. Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney who has advised and represented employers, employee benefit plans and others and has spoken and published extensively regarding LBGT and other equal employment opportunity concerns for more than 25 years. Board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years working as an on demand, special project, consulting, general counsel or other basis with domestic and international business, charitable, community and government organizations of all types, sizes and industries and their leaders on labor and employment and other workforce compliance, performance management, internal controls and governance, compensation and benefits, regulatory compliance, investigations and audits, change management and restructuring, disaster preparedness and response and other operational, risk management and tactical concerns.
For more information about these concerns or Ms. Stamer’s work, experience, involvements, other publications, or programs, see www.cynthiastamer.com, on Facebook, on LinkedIn or Twitter or e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns.
The U.S. Department of Labor is proposing to eliminate the Industry-Recognized Apprenticeship Program. In a Notice of Proposed Rulemaking seeking public comment published November 12, the department says elimination of the program will allow the department to direct its resources toward expanding access to good-paying jobs through Registered Apprenticeships and create reliable pathways to middle class.
The proposed rule is the latest of several actions taken by the department in response to President Biden’s Executive Order 14016, including the suspension of review of applications for Standard Recognition Entities in the Industry Recognized Apprenticeship Program. The proposal is part of the Biden-Harris Administration’s larger apprenticeship effort, including expanding and strengthening the proven Registered Apprenticeship model, investing in pipelines to these programs, and improving the quality of apprenticeship programs.
The proposed rule would rescind the regulatory framework used to establish and govern IRAPs. If the proposal is finalized, the department says it will work with previously recognized SREs and IRAPs to explore options to become program sponsors or intermediaries under the Registered Apprenticeship system.
In the NPRM, the department says that IRAPs created a duplicative system that could lead to lower quality standards for training and poorer safety and welfare protections for apprentices compared to Registered Apprenticeship Programs. Unlike IRAPs, Registered Apprenticeships are also required to provide apprentices with progressively increasing wages, which serve as an important incentive to attract and recruit apprentices while developing a pipeline of local, diverse, well-trained workers to meet talent needs across a diverse array of industries, and increase the competitiveness of the U.S. workforce.
Scheduled for publication in the Federal Register on Nov. 15, 2021, the NPRM is available now for public inspection. Interested persons should review and comment on the proposal as soon as possible.
More Information
The author of this update, employment lawyer Cynthia Marcotte Stamer, will discuss these and other federal COVID-19 vaccination and other workforce requirements as a panelist on the “COVID-19 Vaccination Mandates & Incentives” virtual seminar the American Bar Association Joint Committee on Employee Benefits will host on November 12, 2021 beginning at Noon Central Time.
Ms. Stamer also is finalizing an updated summary of the new ETS, which Solutions Law Press, Inc. has arranged to make available to interested readers. If you or someone you know would like a copy of this resource, email here.
Solutions Law Press, Inc. also invites you to receive future updates by registering here and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy. 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 your profile here. For specific information about the these or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
About the Author
For help developing, administering or defending your organization’s COVID-19 Mandatory Vaccine Policy or other workforce, employee benefits, compensation or compliance practices, contact the author. Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years working as an on demand, special project, consulting, general counsel or other basis with domestic and international business, charitable, community and government organizations of all types, sizes and industries and their leaders on labor and employment and other workforce compliance, performance management, internal controls and governance, compensation and benefits, regulatory compliance, investigations and audits, change management and restructuring, disaster preparedness and response and other operational, risk management and tactical concerns.
For more information about these concerns or Ms. Stamer’s work, experience, involvements, other publications, or programs, see www.cynthiastamer.com, on Facebook, on LinkedIn or Twitter or e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns.
December 4, 2022 is the deadline for employers 100 or more employees to comply with the new Occupational Safety and Health Administration COVID-19 Vaccination Emergency Temporary Standard Interim Final Rule (“ETS”) implementing the employer vaccine, masking and testing mandates President Biden announced his administration intended to impose in September. The ETS is scheduled for official publication in the Federal Register tomorrow. (November 5, 2021). The ETS establishes workplace vaccination, vaccination verification, face covering and testing requirements to address “the grave danger of COVID-19 in the workplace for employers of 100 or more employees. The request for comments included in the Preamble to the ETS indicates that OSHA also is considering extending the rules to apply to smaller employers. Businesses employing more than 100 employees must prepare to comply by December 4, 2022, except that the compliance deadline for certain testing requirements for nonvaccinated employees is January 4, 2021. As the request for comments indicates OSHA is considering extending the rule to businesses with fewer than 100 employees, businesses also should critically evaluate the impact of the rules on their operations and submit comments during the comment period.
The ETS implements part of a series of COVID-19 vaccination mandates President Biden announced in September that his administration planned to adopt to substantially increase the number Americans covered by vaccination requirements, including:
OSHA to issue emergency rules that would require all employers with more than 100 employees to get vaccinated or be tested at least weekly;
OSHA and other federal regulations to require vaccinations for all federal workers, contractors and subcontractors;
OSHA and the Centers for Medicare and Medicaid Services (“CMS”) rules to require COVID-19 vaccinations for all health care workers at Medicare and Medicaid participating hospitals and other health care settings;
Using Department of Education and federal funding measures to support vaccination and masking in schools; and
Calling on large entertainment venues to require proof of vaccination or testing for entry.
Regarding the OSHA mandate, President Biden’s “Path out of the Pandemic COVID-19 Action Plan” states OSHA is developing an Emergency Temporary Standard (ETS) that will require all employers with 100 or more employees to ensure their workforce is fully vaccinated or require any workers who remain unvaccinated to produce a negative test result on at least a weekly basis before coming to work.
Along with OSHA’s issuance of the ETS, HHS, OFCCP, the Department of Education also are moving forward to implement the other aspects of the Biden vaccination mandate strategy.
These new mandates are in addition to continuing to encourage employers to use and train workers on using multiple safeguards to avoid And contain the spread of COVID-19 in their workplaces.
Noncompliance with the mandates could put covered employers at significant risk.
Among other things, of course, is the potential OSHA liability. OSHA already has made clear it’s willingness to sanction employers for violating CoVID emergency standards by nailing AMA Health Holdings LLC, for and Lakewood Resource and Referral Center Inc. (“CHEMED”) for failing to comply with COVID-19 safety protocols issued in June.
In June OSHA issued an emergency temporary standard to protect healthcare workers from contracting coronavirus. In March, OSHA launched a national emphasis program focusing enforcement efforts on companies that put the largest number of workers at serious risk of contracting the coronavirus. The program also prioritizes employers who retaliate against workers for complaints about unsafe or unhealthy conditions, or for exercising other rights protected by federal law.
OSHA cited the facility’s operator, AMA Health Holdings LLC, with two citations for failing to develop and implement effective measures to mitigate the spread of the virus and not recording each work-related illness.
The AMA Holdings OSHA action demonstrates OSHA’s commitment to investigate complaints of violations is its COVID emergency standards and fine employers that violate them.
The citations against AMA Health Holdings follow OSHA’s earlier citation of CHEMED for retaliating against employees for questioning the adequacy of COVID safety at the dental practice where they worked.
Government contractor and healthcare employers also could face program exclusions or penalties under other elements of the Biden Administration vaccine strategy.
Additionally, employers should keep in mind that improperly handled employee questions or statements of concern about the adequacy of workplace COVID -19 safeguards could create retaliation or whistleblower risks. The threat for retaliation liability extends well beyond employers actually covered by the impending mandates. Regardless of what the rules actually eventually provide, employees of covered and uncovered employers are likely to have questions about the adequacy of safeguards and their workplace rights. These questions could come from people believing their entitled to work without being vaccinated, employees a certain rate to takeoff time for vaccination or other reasons with or without pay, employees asking or asserting rights to paid time off for vaccination or other reasons or a host of other matters. Retaliation protections can arise even when the employee doesn’t qualify for the rights asserted as long as the employee can demonstrate that the request is based in a good faith belief that the right might exist. Consequently, employers should use care to investigate and respond carefully to these concerns.
More Information
The author of this update, employment lawyer Cynthia Marcotte Stamer, will discuss these and other federal COVID-19 vaccination and other workforce requirements as a panelist on the “COVID-19 Vaccination Mandates & Incentives” virtual seminar the American Bar Association Joint Committee on Employee Benefits will host on November 12, 2021 beginning at Noon Central Time.
Ms. Stamer also is finalizing an updated summary of the new ETS, which Solutions Law Press, Inc. has arranged to make available to interested readers. If you or someone you know would like a copy of this resource, email here.
Solutions Law Press, Inc. also invites you to receive future updates by registering here and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy. 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 your profile here. For specific information about the these or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
About the Author
For help developing, administering or defending your organization’s COVID-19 Mandatory Vaccine Policy or other workforce, employee benefits, compensation or compliance practices, contact the author. Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years working as an on demand, special project, consulting, general counsel or other basis with domestic and international business, charitable, community and government organizations of all types, sizes and industries and their leaders on labor and employment and other workforce compliance, performance management, internal controls and governance, compensation and benefits, regulatory compliance, investigations and audits, change management and restructuring, disaster preparedness and response and other operational, risk management and tactical concerns.
For more information about these concerns or Ms. Stamer’s work, experience, involvements, other publications, or programs, see www.cynthiastamer.com, on Facebook, on LinkedIn or Twitter or e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns.
Businesses, their employee benefit plan fiduciaries, their employer and other sponsors, their record keepers, financial advisors and other service providers and other business partners face growing pressure to shore up cyber security and cyber breach compliance and other safeguards to defend against a slew of new and ongoing federal cyber security and breach regulatory and enforcement the Biden-Harris Administration is rolling out in its effort to stem the rising tide of cybersecurity incidents.
Agencies Targeting Businesses, US Entities & Their Leaders For CyberSecurity & CyberBreach Regulation & Enforcement
The DOJ Civil Cyber-Fraud Initiative is the latest in a growing list of new regulatory and enforcement programs placing pressure on U.S. businesses and their leaders to get serious about cybersecurity. Examples of some of the more far reaching of these new or continuing programs include:
Government Contractors.
Under the Civil Cyber-Fraud Initiative, DOJ plans to use the False Claims Act to prosecute pursue cyber security related fraud by government contractors and grant recipients. According to DOJ, the initiative will hold accountable entities or individuals that put U.S. information or systems at risk by knowingly providing deficient cyber security products or services, knowingly misrepresenting their cyber security practices or protocols, or knowingly violating obligations to monitor and report cyber security incidents and breaches. Federal contractors and grant recipients submitting claims for federal funds will be considered to have filed a false claim in violation of the False Claims Act if their cyber security and cyber breach practices are not compliant with applicable federal requirements when the payment is requested.
Federal Health Program Participating Health Care Providers And Plans.
The DOJ Cyber-Fraud Initiative follows a similar interpretation of the Department of Health & Human Services (“HHS”) Office Inspector General (“OIG”) about the cybersecurity and cyberbreach compliance requirements health care providers and health plan issuers participating in Medicare and certain other federally funded health care programs (“Medicare Participating Providers”) are accountable to meet under the Conditions of Participation for those programs. HHS OIG’s construction of these Conditions of Participation as including cybersecurity and cyberbreach compliance signs that Medical Participating Providers with deficient cybersecurity practices now may risk program disqualification and False Claims Act liability along with their already well-known exposure to civil monetary penalties under the Health Insurance Portability & Accountability Act (“HIPAA”) protected health information privacy, security and data breach rules.
Health & Other Employee Benefit Plans.
Health plans and other employee benefit plans, their fiduciaries, record keepers and service providers also face growing cybersecurity responsibilities and risks. While HHS Office of Civil Rights (“OCR”) continues to clarify and expand its interpretation, investigation and enforcement of HIPAA privacy, security and data breach rules against health plans, health care providers, health care clearinghouses and their business associates, the Department of Labor Employee Benefit Security Administration is turning up the heat on employee benefit plan fiduciaries to prudently protect their employee benefit plan assets and participants against cyberthreats.
On April 14, 2021, the Department of Labor Employee Benefit Security Administration (“EBSA”) made official its interpretation of the duty of prudence applicable to employee benefit plan fiduciaries under Section 404 of the Employee Retirement Income Security Act (“ERISA”) includes a duty for ERISA-covered employee benefit plan fiduciaries to take “appropriate precautions” to mitigate risks to plan participants and assets from both internal and external cybersecurity threats. The April 14 announcement makes official EBSA’s interpretation of the duty of prudence applicable to fiduciaries of ERISA-covered employee benefit plans as extending to a duty to act prudently to safeguard plan assets and plan participants against cybersecurity threats.
Concern about cyberthreats to private employee benefit plans covered by ERISA, their participants and beneficiaries has soared as massive data breaches Federal Thrift Savings Plan, Anthem, Capital One, the Public Employees Retirement Association of New Mexico and other employee benefit plans, their vendors and service providers increasingly have impacted millions of employee benefit plans, their accounts and participants.
While Congress chose to subject health plans to the detailed health privacy, security and breach rules of HIPAA and financial and certain other employee benefit plan service providers to consumer financial disclosure and data information security requirements of laws like Gramm-Leach-Bliley Act and the Fair and Accurate Credit Transactions Act, and even employers and others conducting background and other credit checks to the Fair Credit Reporting Act, growing awareness of the cyberthreat to employee benefits has not prompted Congress to date to extend those laws or otherwise to enact express statutory requirements for employee benefit plans and their fiduciaries. However, private litigants and others increasingly have speculated that a fiduciary duty to safeguard plan asset against cyberthreats might be subsumed in the obligation of fiduciaries under Section 404 of ERISA at all times to act with “the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.” See, e.g., See Record $16M Anthem HIPAA Settlement Signals Need to Tighten Your Health Plan HIPAA Compliance & Risk Management.
While EBSA has worked to formulate its recently announced positions, private litigants increasingly have begun debating the applicability and effect of ERISA on cyberbreaches involving ERISA regulated plans. See e.g., In re Anthem, Inc. Data Breach Litig., No. 15-CV-04739-LHK, 2015 WL 7443779, at *1 (N.D. Cal. Nov. 24, 2015)(holding Anthem entitled under ERISA to remove claims to federal court and refusing employee benefit plan participants’ motion to remand to state court state claims arising from data breach); In re Anthem, Inc. Data Breach Litig., No. 15-MD-02617-LHK, 2016 WL 3029783 (N.D. Cal. May 27, 2016)(refusing to dismiss participant claims against non-Anthem defendants for lack of standing), motion reconsideration denied In re Anthem, Inc. Data Breach Litig., No. 15-CV-04739-LHK, 2016 WL 324386 (N.D. Cal. Jan. 27, 2016); Bartnett v. Abbott Lab’ys, No. 20-CV-02127, 2021 WL 428820, at *5 (N.D. Ill. Feb. 8, 2021) (dismissing breach of fiduciary duty claim based on inadequate evidence); In re: Premera Blue Cross Customer Data Sec. Breach Litig., No. 3:15-MD-2633-SI, 2017 WL 539578, at *21 (D. Or. Feb. 9, 2017). While mostly unsuccessful to date for procedural or factual sufficiency reasons, the preemption issues argued in many of these cases support concerns that under the proper circumstances ERISA could apply to breaches involving plans or their participants. As these and other actions continue to wind their way through the courts, EBSA also has begun to acknowledge that ERISA plan fiduciaries duties of prudence include cybersecurity responsibilities.
EBSA’s first official recognition of a cybersecurity responsibility by plan fiduciaries appears in the Default Electronic Disclosure by Employee Pension Benefit Plans Under ERISA Final Rule (the “Electronic Disclosure Rule”), which took effect July 27, 2020 . In the discussion of its requirements regarding website-based electronic disclosures in Subpart (e)(3), the Electronic Disclosure Rule requires that “[T]he administrator must take measures reasonably calculated to ensure that the website protects the confidentiality of personal information relating to any covered individual.” Similarly, the requirements for using e-mail to provide electronic disclosures in Subsection (k)(4) of the Electronic Disclosure Rule require the plan administrator to take “measures reasonably calculated to protect the confidentiality of personal information relating to the covered individual.” While recognizing these cyber security responsibilities in the Electronic Disclosure Rule, however, EBSA explained in the Preamble to the Electronic Disclosure Rule that it decided not to include more cumbersome cybersecurity requirements in the Electronic Disclosure Rule out of concern over the cost and other burdens of such requirements. Nevertheless, the Electronic Disclosure Rule imposed a responsibility by plan fiduciaries of employee benefit plans making electronic disclosures to ensure that electronic recordkeeping systems have in place reasonable controls, adequate records management practice, and other measures calculated to protect Personally Identifiable Information.
EBSA’s April 14, 2021 reflects EBSA now views the fiduciary responsibilities of ERISA-covered employee benefit plan fiduciaries generally as including the responsibility to take “appropriate precautions” to mitigate risks to plan participants and assets from both internal and external cybersecurity threats. Beyond acknowledging a duty to take prudent steps to protect plans assets and participants against internal and external cybersecurity threats, EBSA also shared the following three resources to help plan sponsors, fiduciaries and participants to safeguard benefit plans and personal information against emerging cyber threats:
Tips for Hiring a Service Provider: Helps plan sponsors and fiduciaries prudently select a service provider with strong cybersecurity practices and monitor their activities, as ERISA requires.
Online Security Tips: Offers plan participants and beneficiaries who check their retirement accounts online basic rules to reduce the risk of fraud and loss.
Participants in Securities Markets, Market Infrastructure Providers & Vendors.
Meanwhile the Securities and Exchange Commission (“SEC”) also has made clear its expectation that all firms participating in the securities markets, market infrastructure providers and vendors will appropriately monitor, assess and manage their cybersecurity risk profiles, including their operational resiliency. Consistent with the shared understanding of best cybersecurity practices shared with the agencies, the SEC guidance makes clear its market involved and impacting regulated entities are accountable for maintaining and enforcing appropriate internal and external controls to prevent, detect and redress cybersecurity threats, including appropriate board governance and risk management, access rights and controls, data loss prevention,mobile security, incident response and resiliency, vendor management, training and awareness and other practices. See SEC Office of Compliance Inspections and Examinations Cybersecurity and Resiliency Observations. Recently announced enforcement actions demonstrate that the SEC is acting on its promise to go after SEC regulated entities that breach these expectations. See, e.g., SEC Announces Three Actions Charging Deficient Cybersecurity Procedures.
These and other recently announced federal regulatory and enforcement developments send a clear message to businesses and their leadership, employee benefit plan sponsors, fiduciaries, record keepers and other vendors, SEC securities market involved organizations and others to clean up their cybersecurity compliance and risk management. Beyond the governmental enforcement risks these developments signal, these and other emerging regulatory developments provide added fuel for the already substantial private litigant and government complaints, investigations and prosecutions against businesses, their leaders, their employee benefit plan fiduciaries, record keepers and other service providers,and others. and their leaders unable to defend the adequacy of their cybersecurity related practices.
Raise Cybersecurity Compliance & Defenses To Mitigate Risks & Liabilities
In the face of these developments, all businesses, employee benefit plan fiduciaries, their employer and other sponsors, record keepers and other vendors and their leaders should prioritize cybersecurity compliance, risk management, oversight and controls. As part of these efforts, organizations and their leaders should move quickly to position themselves to defend against potential investigation and enforcement risks created by these emerging policies. These efforts should seek to ensure compliance with all applicable statutory, regulatory and contractual requirements as well as institutionalize the necessary operational controls to protect systems, data and operations from cyber breaches and other threats, to detect and redress cyber events promptly, and to ensure that the organization otherwise can demonstrate both their compliance efforts, as well as their timely prudent detection, investigation, reporting, mitigation and remediation in response to actual or suspected cyber threats or other compliance breaches.
Efforts should begin by taking carefully crafted, well-documented documented steps to prudently evaluate and strengthen cybersecurity and breach safeguards and compliance, as well as prudently to assess and verify those of their vendors and others involved with their employee benefit plans or their administration within the scope of attorney-client privilege.
Assessments should take into account all existing required statutory, regulatory, and contractual controls and practices, documentation and other procedures. In addition, organizations should consider the advisability of adopting other “best practice” safeguards or actions taking into account relevant agency guidance and resources, government or other contracts, other industry or related standards, known and suspected breaches, “red flags” and threats, their own, their vendor and business partner and other risk profiles and experience, and other factors likely to be viewed as prudent under the circumstances.
In assessing, designing and administering the cybersecurity processes, organizations and their leaders should give due attention to assessing and addressing the adequacy of their internal and external controls to ensure the adequacy of their systems, processes, oversight and response practices and capabilities as of the time of the assessment and on an ongoing basis. Beyond establishing required policies and formal controls, organization should ensure that their organizations have in place the necessary policies and practices to monitor and control cyberthreats arising from conduct and risks created by employees and other internal workforce, vendors and other parties interacting with the business and its operations. As part of these efforts, most organizations will need to evaluate their contractual obligations and requirements for vendors, suppliers and others interacting with their businesses. Beyond general contractual compliance obligations, organizations should weigh requiring contractors, suppliers and other business partners to make specific commitments to maintain and monitor compliance and other risks, to provide timely notice and reports, to cooperate with audits and investigations necessary or advisable to respond to private or government complaints, government or other investigation, reporting or other requirements, their own compliance and risk assessments, audits and investigations and other compliance and risk management efforts. Organizations also should give careful attention and review the adequacy of protections and responsibilities arising from contractual cybersecurity and breach notice, investigation, cooperation, indemnification, insurance and other associated protections and cooperation.
Organizations also should consider establishing and administering processes for independent monitoring of regulatory, news, and other reports that could provide early warning of potential cybersecurity weaknesses, threats and breaches.
All processes should include appropriate governance, oversight and reporting to provide for ongoing monitoring and oversight necessary to identify and respond to evolving risks arising in the course of their operations as well as consistent practices for carefully documenting their compliance and risk management compliance efforts.
Because of the frequently high cost of breach investigation, response and mitigation, most organizations will want to consider securing cyber liability or other coverage, require vendors and other business partners to provide cyber liability indemnifications backed up with insurance or other adequate assurance of their ability to fulfill these financial responsibilities.
More Information
We hope this update is helpful. For more information about or assistance with these or other workforce, internal controls and compliance or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, and author of the “Medical Privacy” Chapter in the BNA/ERISA Litigation Treatise, the “Other Torts Chapter” in the BNA/ABA E-Heath & Other Torts Treatise, “Privacy and the Pandemic Workshop” for the Association of State and Territorial Health Plans, as well as a multitude of other highly regarded data privacy and security, workforce and health care change and crisis management and other highly regarded publications and presentations, Ms. Stamer is widely recognized for her decades of pragmatic, leading edge work, scholarship and thought leadership on health and other privacy and data security and other health industry legal, public policy and operational concerns.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with private and public employer, health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. In the course of this work, she has had extensive involvement in the design, administration and defense of payroll, employee benefit, insurance, securities, trade secret and other confidential information and other internal and external record and data systems and processes as well as investigation, reporting, redress and mitigation of cyber and other incidents.
As a part of this work, she has continuously and extensively worked with domestic and international health and other employee benefit plans, their sponsors, fiduciaries, administrators, and insurers; managed care and insurance organizations; hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, accreditation, peer review and quality committees and organizations; billing, utilization management, management services organizations, group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; consultants; investors; EHR, claims, payroll and other technology, billing and reimbursement and other services and product vendors; products and solutions consultants and developers; investors; managed care organizations, self-insured health and other employee benefit plans, their sponsors, fiduciaries, administrators and service providers, insurers and other payers, health industry advocacy and other service providers and groups and other health and managed care industry clients as well as federal and state legislative, regulatory, investigatory and enforcement bodies and agencies. She also has extensive experience dealing with OCR Privacy and Civil Rights, Department of Labor, IRS, HHS, DOD, FTC, SEC, CDC and other public health, Department of Justice and state attorneys’ general and other federal and state agencies; JCHO and other accreditation and quality organizations; private litigation and other federal and state health care industry actions: regulatory and public policy advocacy; training and discipline; enforcement; and other strategic and operational concerns.
American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting, current RPTE Welfare Benefit Committee Co-Chair and former Chair of its Fiduciary Responsibility, Plan Terminations and Distributions and Defined Contribution Plan Committees, a former JCEB Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former SHRM Consultants Board and Region IV Chair, former Texas Association of Business Board, BACPAC Board and Dallas Chapter Chair, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas.
Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available 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 your profile here.
Federal government contractors and grant recipients should tighten cyber security policies, practices and internal controls to mitigate their exposure to civil False Claims Act claims by the Department of Justice (“DOJ”) under a new DOJ Civil Cyber-Fraud Initiative announced by DOJ last week. The new initiative adds False Claims Act civil liability to the already substantial civil liability that government contractors and other businesses already face for failing to comply with applicable cyber security and cyber breach notifications under federal and state laws. In the face of these added liabilities, federal contractors and grant recipients should act quickly to audit their cyber security and cyber breach practices, tighten cyber security and breach detection; oversight, credentialing and controls over employees, contractors and others with access to facilities and systems and take other appropriate action to prevent and remediate compliance deficiencies and risks.
Federal Government Contractors Bear Cybersecurity Responsibilities
Federal government contractors can face cyber security and breach responsibilities under a myriad of federal laws, regulations and contracting standards which are incorporated into their government contracts as part of conditions for participation in the applicable contract or program. For example, businesses that sell products to the U.S. government generally are required to comply with 15 basic safeguarding requirements and procedures to protect systems used to collect, process, maintain, use, share, disseminate, or dispose of Federal Contract Information (FCI) set forth in FAR 52.202.21. Companies that produce products used by the Department of Defense (DoD) may be required to comply with the minimum cybersecurity standards set by DFARS if those products aren’t commercially available off-the-shelf (COTS). DFARS 252.204-7012 requires contractors with CUI to follow NIST SP 800-171, report cyber incidents, report cybersecurity gaps. DFARS 252.204-7019 (interim) requires primes and subcontractors to submit self-assessment of NIST 800-171 controls through the Supplier Performance Risk System (SPRS). DFARS 252.204-7020 (interim) requires primes and subcontractors give the DoD access to their infrastructure to verify the self-assessment (via DMCA) and requires contractors roll requirements down to subcontractors. Meanwhile, DFARS 252.204-7021 (interim) governs the rollout of the Cybersecurity Maturity Model Certification program over 5 years. These requirements are in addition to any cyber security or cyber breach requirements otherwise applicable to government contractors or grant recipients under laws such as the Fair & Accurate Credit Transactions Act (“FACTA”) that also might apply to other businesses that do not do business with the federal government.
New DOJ Civil Cyber-Fraud Initiative Against Government Contractors Heightens Enforcement & Liability Risks
On October 6, 2021, Deputy Attorney General Lisa O. Monaco announced plans to civilly prosecute federal government contractors that fail to follow required cyber security standards under the False Claims Act under a new Civil Cyber-Fraud Initiative to be led by DOJ’s Civil Division’s Commercial Litigation Branch, Fraud Section.
According to the DOJ announcement, DOJ expects the initiative to:
Build broad resiliency against cyber security intrusions across the government, the public sector and key industry partners.
Hold contractors and grantees to their commitments to protect government information and infrastructure.
Support government experts’ efforts to timely identify, create and publicize patches for vulnerabilities in commonly used information technology products and services.
Ensure that companies that follow the rules and invest in meeting cyber security requirements are not at a competitive disadvantage.
Reimburse the government and the taxpayers for the losses incurred when companies fail to satisfy their cyber security obligations.
Improve overall cyber security practices that will benefit the government, private users and the American public.
Under the Civil Cyber-Fraud Initiative, DOJ plans to use the False Claims Act to prosecute pursue cyber security related fraud by government contractors and grant recipients. According to DOJ, the initiative will hold accountable entities or individuals that put U.S. information or systems at risk by knowingly providing deficient cyber security products or services, knowingly misrepresenting their cyber security practices or protocols, or knowingly violating obligations to monitor and report cyber security incidents and breaches.
The False Claims Act is the government’s primary civil tool to redress false claims for federal funds and property involving government programs and operations. The DOJ’s Civil Cyber-Fraud Initiative does not create new cyber security and cyber breach obligations to promote these goals. Rather, it piggybacks on already existing federal mandates by adding False Claims Act civil liability to the already substantial civil liability that government contractors and grant recipients already risk for failing to maintain and administer their data security and data breach practices in accordance with applicable federal laws. Under the new Civil Cyber-Fraud Initiative, DOJ has signaled it intends to include compliance with applicable cyber security and cyber breach reporting requirements applicable to contractors as part of the obligations of government contractors and grant recipients to comply with applicable law as a condition of eligibility to participate in federal programs and receive federal funds. Federal contractors and grant recipients submitting claims for federal funds will be considered to have filed a false claim in violation of the False Claims Act if their cyber security and cyber breach practices are not compliant with applicable federal requirements when the payment is requested.
Companies and individuals found to have violated the False Claims Act generally are liable for treble damages plus a penalty that is linked to inflation. In addition to allowing the United States to pursue perpetrators of fraud on its own, the FCA allows private citizens to file suits on behalf of the government (called “qui tam” suits) against those who have defrauded the government. Private citizens who successfully bring qui tam actions may receive a portion of the government’s recovery. Many DOJ Fraud Section investigations and lawsuits arise from such qui tam actions and result in often large recoveries by DOJ and the reporting whistleblowers. As a result of availability of whistleblower recoveries, government contractors should anticipate that disgruntled employees, contractors, or others with whom they do business with knowledge of data breaches or other cybersecurity weaknesses may be incentivized to act as whistleblowers.
Cyber Risks Already Substantial Cyber Risks
The False Claims Act exposure under the new DOJ Civil Cyber-Security initiative adds to the already substantial and mounting risks that government contractors already face under an ever-expanding tapestry of federal, state and in some instances, international statutes, regulations and rulings.
Along with any exposures specifically applicable to it as a government contractor, depending on the nature of the business and the data it collects, the business also likely falls subject to duties to safeguard the confidentiality and security of wide range of electronic or other personal financial, tax and other data under various federal and state laws such as FACTA, the Internal Revenue Code, the Health Insurance Portability & Accountability Act (HIPAA), state identity theft, and a host of other statutes and regulations, contractual agreements, or both.
However, government contractors also can face cybersecurity responsibilities, breach notification and other obligations and liabilities under a wide range of other civil laws and regulations. For instance, FACTA generally requires covered entities that collect or use certain personal financial information to conduct due diligence, monitor the security of records and adopt disposal practices that are reasonable and appropriate to prevent the unauthorized access to – or use of – information in a consumer report. As implemented by the Federal Trade Commission regulations, entities with covered accounts must develop and implement written identity theft prevention programs designed to help identify, detect, and respond to patterns, practices, or specific activities – known as “red flags” – that could indicate identity theft.
Beyond these federal obligations, government contractors, like other businesses, also typically are exposed to liability under a wide variety of cyber security, cyber breach notification and other obligations and liabilities under state laws, regulations and common law. See, e.g. here. While the particulars vary based on the state, the nature of the business, where and how the business collects and maintains its data and other factors, the applicable state electronic confidentiality and data security requirements in most states and under some federal laws increasingly include express duties to take steps to protect data, to monitor from breaches and other threats, and/or to notify subjects of the breached data and in some cases, regulators and the public within a short period after a breach happens. Businesses operating in multiple states typically faces exposure under the laws of each jurisdiction where it operates with data impacted by the breach.
Because cyber security events increasingly create business and financial losses, investigation and defense costs, penalties and other liabilities and costs, cyber security breaches and other events also increasingly that fuel shareholder disclosure obligations and shareholder lawsuits. Indeed, former Securities and Exchange Commission Chair Mary Jo White in May, 2016 characterized cyber security as the biggest risk facing the financial system See here. In response to investor risks from cyber security events, the SEC has required regulated entities to make disclosures about these risks to investors since 2011. See CF Disclosure Guidance: Topic No. 2 – Cybersecurity. Given this guidance, it should come as no surprise that the SEC has imposed substantial fines against entities following a breach. See e.g. R.T. Jones reaches settlement with SEC in data breach case; Morgan Stanley Fined $1 Million for Client Data Breach.
Act To Manage Compliance & Risks
In the face of these added liabilities, federal contractors and grant recipients should act quickly to work with qualified legal counsel within the scope of attorney-client privilege to audit the adequacy of their existing cyber security and cyber breach practices under applicable federal statutes and contracts and other relevant laws and regulations as well as to confirm that adequate breach notification has been made for any existing or past breaches. To the extent that the audit uncovers any potential deficiencies in prior breach notification or other compliance, the federal contractor or grant recipient general will want to seek guidance from legal counsel regarding the advisable steps, if any, to take to mitigate and resolve outstanding liabilities, particularly in light of whistleblower liabilities. In addition to examining past and current compliance risks, government contractors and grant recipients also will want to explore advisable steps and documentation that will position their organizations to demonstrate their appropriate monitoring and maintenance of ongoing compliance or otherwise strengthen their defenses against potential cyber breaches as well as whistleblower and retaliation claims arising from employees or others seeking to use these exposures as leverage for settlements or claims. Given the potential magnitude of the liability, businesses generally not only need to take well documented steps properly to safeguard sensitive electronic sensitive personal information and systems holding or using it as well as be prepared to promptly provide notice in the event of any breach with the short time contemplated by law.
As part of these efforts, businesses and their leaders will want to ensure their compliance efforts include both adoption of all required formal policies, appropriate credentialing of employees, contractors and others accessing systems or facilities, well documented operational compliance and risk audits, documented risk assessment and response, compliance hotline reporting and investigation, suitable up-the-ladder reporting, and other appropriate procedures to facilitate rapid identification of potential concerns and other operational compliance.
Effective internal and external workforce credentialing, training, management and oversight are key to the success of these efforts, particularly because cyber breaches and other data threats often leverage internal access created by workforce infiltration, susceptibilities created by social engineering or other opportunities created from lax workforce or contractor compliance with security controls or both. See, e.g., Insider threat: The human element of cyberrisk.
Effective internal monitoring and reporting protocols also are essential to ensure rapid breach identification, investigation and notification. These protocols also should be developed and implemented to ensure timely disclosure and management of any breaches within required time frames.
In recognition of the typically high financial and operational costs of breach investigation, notification and defense, organizations also should weigh the advisability of securing and requiring business partners to secure cyber insurance or other protection to help mitigate these costs in the event of a cyber event.
While the conduct of these assessments inevitably will require the involvement of outside consulting services, business leaders also are cautioned to use care to take appropriate steps to protect these interactions by arranging to engage these services pursuant to attorney-client privilege to help shield sensitive information likely to be uncovered through compliance, risk management or investigation activities. Likewise, given the short time allowed for breach mitigation and notification, businesses should weigh carefully whether to engage regulatory counsel to assist with the initial breach notification and mitigation, separate and apart from cyber litigation defense counsel that might be available under applicable cyber insurance policies unless the proposed litigation defense counsel has proven cyber and other regulatory knowledge, experience and qualifications handling breach mitigation and notification events.
More Information
We hope this update is helpful. For more information about or assistance with these or other workforce, internal controls and compliance or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications. As a significant part of her work, Ms. Stamer has worked extensively on pandemic, business and other crisis planning, preparedness and response for more than 30 years.
Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, Vice Chair of the ABA International Section Life Sciences Committee, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and the ABA RPTE Employee Benefits & Other Compensation Group, Ms. Stamer is most widely recognized for her decades of pragmatic, leading edge work, scholarship and thought leadership on health and other privacy and data security and other health industry legal, public policy and operational concerns. Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. As a part of this work, she has continuously and extensively worked with domestic and international health plans, their sponsors, fiduciaries, administrators, and insurers; managed care and insurance organizations; hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, accreditation, peer review and quality committees and organizations; billing, utilization management, management services organizations, group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; consultants; investors; EHR, claims, payroll and other technology, billing and reimbursement and other services and product vendors; products and solutions consultants and developers; investors; managed care organizations, self-insured health and other employee benefit plans, their sponsors, fiduciaries, administrators and service providers, insurers and other payers, health industry advocacy and other service providers and groups and other health and managed care industry clients as well as federal and state legislative, regulatory, investigatory and enforcement bodies and agencies.
This involvement encompasses helping health care systems and organizations, group and individual health care providers, health plans and insurers, health IT, life sciences and other health industry clients prevent, investigate, manage and resolve sexual assault, abuse, harassment and other organizational, provider and employee misconduct and other performance and behavior; manage Section 1557, Civil Rights Act and other discrimination and accommodation, and other regulatory, contractual and other compliance; vendors and suppliers; contracting and other terms of participation, medical billing, reimbursement, claims administration and coordination, Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA and other payers and other provider-payer relations, contracting, compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; meaningful use, EHR, HIPAA and other technology, data security and breach and other health IT and data; STARK, ant kickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns. to establish, administer and defend workforce and staffing, quality, and other compliance, risk management and operational practices, policies and actions; comply with requirements; investigate and respond to Board of Medicine, Health, Nursing, Pharmacy, Chiropractic, and other licensing agencies, Department of Aging & Disability, FDA, Drug Enforcement Agency, OCR Privacy and Civil Rights, Department of Labor, IRS, HHS, DOD, FTC, SEC, CDC and other public health, Department of Justice and state attorneys’ general and other federal and state agencies; JCHO and other accreditation and quality organizations; private litigation and other federal and state health care industry actions: regulatory and public policy advocacy; training and discipline; enforcement; and other strategic and operational concerns.
Author of “Privacy and the Pandemic Workshop” for the Association of State and Territorial Health Plans, as well as a multitude of other health industry matters, workforce and health care change and crisis management and other highly regarded publications and presentations, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here.
IMPORTANT NOTICE ABOUT THIS COMMUNICATION
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 your profile here.
No business wants to get hit with a bill or judgement for unpaid overtime or other wages and penalties under the Fair Labor Standards Act (“FLSA”). It’s even worse when the back pay and fines are for work performed by employees of another business that didn’t pay.
Today’s U.S. Department of Labor (“DOL”) announcement putting on hold for now its previously announced plan to replace the Trump-era “Joint Employer Status Under the Fair Labor Standards Act” final rule (“Joint Employer Rule”) with a much less business friendly rule is good for business.
Joint Employer Liability
Under the minimum wage and overtime rules of the Fair Labor Standards Act (“FLSA”), an employee can have more than one employer for the work they perform. Joint employment applies when – for the purposes of minimum wage and overtime requirements – the DOJ considers two separate companies to be a worker’s employer for the same work. When this happens, hours of work performed for any business considered within the joint employer group are aggregated for purposes of determining when overtime is worked and each business is jointly and severally liable for any unpaid minimum wage and overtime do regardless of whether those hours of work was performed for that particular business. The Joint Employer Rule governs when that can happen.
While both DOL and private litigants long have used the joint employer rules and precedent to nail businesses for other employer’s wage and hour liability, the Trump Administration adopted the Joint Employer Rule to overrule Obama Administration practices for interpreting and enforcing the rule that replaced the historically applied judicial tests with standards that significantly increase the likelihood of joint employer liability by unrelated businesses.
Historically, joint employer determinations were reached by applying highly subjective, fact specific analysis heavily reliant upon decades of court decisions which required some evidence that the alleged joint employer possessed or exercised some control over the employees to support the finding of joint employment. Under these historical tests, mere benefit from work performed by individuals employed by another employer did not establish a presumption, much less proof of joint employment.
As part of the Obama Administration’s pro-worker agenda, however, DOL made up and began applying new standards without formally issuing new regulations adopted interpretive and enforcement guidelines for finding joint employer status that that significantly broadened the employment relationships that the DOL treated as joint employers in a manner that presumed the existence of a joint employment relationship whenever the alleged joint employer benefitted from the performance of work. Contrary to decades of judicial precedent, these new standards asserted joint employer liability when the facts showed little or any evidence that the alleged joint employer possessed or exercised any control over the employee or the details of his work. A host of businesses were surprised to be nailed by DOL with wage and hour backpay orders and penalties arising from work performed by subcontractors, contractors, and other businesses including overtime liability attributable to work performed for the benefit of other businesses with no connection to the sanctioned business.
The Trump Administration adopted the Joint Employer Rule provide regulations to overrule the practices implemented during the Obama Administration By clarifying and regulation want it perceive to be the historical tests of joint employment established In decades of judicial precedent.
As finalized in January, 2020, the Joint Employer Rule uses a balancing test to the considers the following factors to determine whether a business sufficiently directly or indirectly controls a employee of another business to be liable as a joint employer:
hires or fires the employee;
supervises and controls the employee’s work schedule or conditions of employment to a substantial degree;
determines the employee’s rate and method of payment; and
maintains the employee’s employment records.
Not surprisingly, President Biden announced plans to reinstitute the pro-labor joint employment standards created and applied during the Obama Administration by issuing a new regulation that would have rescinded and replaced the Joint Employer Rule.
The U.S. District Court for the Southern District of New York stymied Biden‘s efforts by ruling his regulation defined joint employment contrary to statutory language and Congressional intent. and failed to take into account the department’s prior joint employment guidance. Accordingly, the court forced the Biden administration to reconsider by vacating Biden’s regulation. A strong joint employer standard is critical because FLSA responsibilities and liability for worker protections do not apply to a business that does not meet the definition of employer.
As the court’s ruling invalidated the regulation that would have withdrawn it, the Joint Employer Rule as adopted during the Trump Administration will take effect October 5, 2021.
Protect Your Business
The Joint Employer Rule mitigates but doesn’t eliminate joint employer liability risks under the FLSA. Accordingly, despite today’s announcement confirming the Joint Employer Rule will go into effect at least temporarily, businesses should use care to mitigate their exposure to joint employer liability.
First, employers should keep in mind the Biden Administration is not giving up. The announcement by the DOL today makes clear that the Biden Administration plans to take another stab at overturning the Joint Employer Rule when it states “Until the effective date of the rescission of the Joint Employer Rule, part 791 of Title 29 of the Code of Federal Regulations remains in effect.” (emphasis added). Accordingly even as businesses enjoy this reprieve, they must stay vigilant for the almost certainty more efforts to rescind or weaken the Joint Employer Rule, enforce joint employment inconsistently with the Joint Employer Rule like the Obama Administration or both.
Second, joint employment findings remain a real and significant risk for many businesses even under the Joint Employer Rule.
Joint employer determinations under the Joint Employer Rule continue to turn on highly subjective analysis of facts and circumstances that support joint employer findings in many circumstances surprising to many business owners,
For these reasons, virtually all businesses should critically evaluate their existing and prospective relationships for potential joint employer liability under the FLSA and respond as needed to mitigate risk both under the Joint Final Rule and under the standards the Biden Administration hopes to use.
As a further backstop to these risks, most businesses also will want to consider revising contracts and business practices to require companies providing services to give contractual guarantees of compliance, agreements to defend, indemnify and hold harmless for joint employer liability claims, and to provide records documenting compliance on an ongoing basis to mitigate or defend against liability should the DOL or a private litigant bring claims.
Before beginning these assessments, businesses and their leaders are encouraged to engage an attorney experienced in FLSA and other joint employer and other worker classification laws in light of the legally sensitive evidence and discussions inherently involved in this process. Conducting this analysis within the scope of attorney-client privilege helps protector limit the discoverability of sensitive discussions and work product in the event of a Labor Department investigation or litigation.
For More Information
We hope this update is helpful. For more information about this or other labor and employment developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER, Texas Top Rated Lawyer” in Law and Labor and Employment Law and Health Care; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management manage FLSA and other workforce, compliance, risk management, and other legal concerns as well as public policy leadership and advocacy, coaching, teachings, and publications.
As a part of this work she has continuously and extensively worked with domestic and international employer and other management, employee benefit and other clients to assess, manage and defend joint employer and other worker classifications and practices under the FLSA and other federal and state laws including both advising and and assisting employers to minimize joint employer and other FLSA liability and defending a multitude of employers against joint employer and other FLSA and other worker classification liability.
Author of hundreds of highly regarded books, articles and other publications, Ms. Stamer also is widely recognized for her scholarship, coaching, legislative and regulatory advocacy, leadership and mentorship on wage and hour, worker classification and a diverse range of other labor and employment, employee benefits, health and safety, education, performance management, privacy and data security, leadership and governance, and other management concerns within the American Bar Association (ABA), the International Information Security Association, the Southwest Benefits Association, and a variety of other international, national and local professional, business and civic organizations including highly regarded works on worker reclassification and joint employment liability under the FLSA and other laws published by the Bureau of National Affairs and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.
Solutions Law Press, Inc. provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc. resources
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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc. disclaim, and have no responsibility to provide any update or otherwise notify anyone any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
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Federal and Wisconsin officials warned buying or selling fake COVID-19 vaccination records is federal crime and cautioned citizens to protect their records from fraudulent use in a joint press release on Friday.
The warning followed President Biden‘s announcement last week of plans to implement COVID-19 vaccination mandates for healthcare workers, federal government contractors, employers with more than 100 employees and all federal employees. See Biden’s Impending Employer Vaccine Mandates: What Is Known Now.
In the joint press release, attorneys from the US Department of Justice and Wisconsin officials warned the public that any act of creating, distributing, selling, or buying of fake COVID-19 vaccination record cards and any act of forging COVID-19 vaccination information is illegal and punishable under federal law.
The unauthorized use of an official government agency’s seal, such as the Centers for Disease Control and Prevention (CDC), is a crime and may be punishable under federal law under Title 18 United States Code, Section 1017, and other applicable laws.
The press release also reminds Wisconsinites to not post vaccine cards on social media as the information could be stolen to commit fraud.
“If you have not been vaccinated, do not make your own cards or buy fake cards,” said Wisconsin Inspector General Anthony Baize. “If you were vaccinated and your card was not filled out correctly, do not fill in the card yourself. Instead, call your vaccine provider.”
“Public and private institutions, including employers, universities, schools, and businesses, need to be able to rely on the legitimacy of COVID-19 vaccine cards. Our office will use all available tools to prosecute individuals who knowingly falsify vaccine cards,” said Acting U.S. Attorney Richard Frohling.
“Legitimate COVID-19 vaccine cards—like the vaccines themselves—are crucial tools to prevent illness and death. People who are foolish or selfish (or both) enough to supply bogus vaccination cards, allowing others to circumvent COVID-19 curtailment efforts, will be prosecuted to the full extent of the law,” said Timothy M. O’Shea, Acting U.S. Attorney for the Western District of Wisconsin.
The press release also invites persons who know or suspect that any healthcare provider, pharmacy, private business, or Wisconsin resident is creating, distributing, selling, buying or forging COVID-19 vaccination cards in-person or online, to report such conduct to the Wisconsin Department of Health Services, Office of Inspector General (877-865-3432 or http://www.reportfraud.wisconsin.gov); U.S. Department of Health and Human Services, Office of Inspector General (1-800-HHS-TIPS or http://www.oig.hhs.gov); or the Internet Crime Complaint Center (www.ic3.gov).
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Solutions Law Press, Inc. invites you to receive future updates by registering here and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy. 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 your profile here. For specific information about the these or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years working as an on demand, special project, consulting, general counsel or other basis with domestic and international business, charitable, community and government organizations of all types, sizes and industries and their leaders on labor and employment and other workforce compliance, performance management, internal controls and governance, compensation and benefits, regulatory compliance, investigations and audits, change management and restructuring, disaster preparedness and response and other operational, risk management and tactical concerns.
For more information about these concerns or Ms. Stamer’s work, experience, involvements, other publications, or programs, see www.cynthiastamer.com, on Facebook, on LinkedIn or Twitter or e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns.
The Biden- Harris Administration today announced it will require a multitude of US employees to adopt and enforce workplace COVID-19 vaccination mandates for their workers.
The mandate requirement generally will apply to all federal workers, government contractors and subcontractors, health care workers of facilities participating in Medicare or Medicaid And any employer with more than 100 employees.All Medicare and Medicaid certified health care facilities, and a broad range of other employers must prepare to meet impending new federal COVID-19 vaccine mandates announced by the Biden-Harris Administration today.
According to today’s announcements all healthcare facilities participating in Medicare or Medicaid, Federal government employees, federal government contractors or subcontractors and any business employing 100 or more employees will be required to ensure all staff are vaccinated against COVID-19.
The Biden-Harris Administration says the new health industry COVID-19 vaccine will be implemented through emergency regulations to be issued in October.
According to today’s announcement, the Centers for Medicare & Medicaid Service (“CMS”) in collaboration with the Centers for Disease Control (“CDC”) will issue an Interim Final Rule with Comment Period for health care providers in October that will apply vaccine mandates hospitals, dialysis facilities, ambulatory surgical settings, nursing homes and home health agencies, among others, as a condition for participating in the Medicare and Medicaid programs. This announcement expends the healthcare industry mandate beyond it’s originally planned applicability to nursing homes when announced last month.
In addition to the health industry mandate, the Biden-Harris Administration also announcementI it would impose new vaccine mandates for all federal government workers, government contractors and subcontractors, and all employers employing more than 100 employees.
In it’s announcement of the impending vaccination requirements, CDC urged health care facilities to prepare now to meet the new mandate in October. CMS expects certified Medicare and Medicaid facilities to act in the best interest of patients and staff by complying with new COVID-19 vaccination requirements.
The Administration is urging covered workers not currently vaccinated to begin the vaccination process immediately and facilities and employers to use all available resources to support employee vaccinations, including employee education and clinics, as they work to meet new federal requirements.
Beyond potential federal program participation losses, the new vaccine mandates likely adds vaccination to the list of safety safeguards that employers can expect to be required to enforce as part of the occupational safety rules of the Occupational Safety and Health Administration (“OSHA”).
While legal challenges to the mandate requirements are likely, most business andw that have not already adopted vaccine mandates are expected to adopt these mandates rather than face business losses and other sanctions.
Businesses that were supportive of mandates but fearful of the burdens of administering required accommodations under the Americans with Disabilities Act (”ADA”) or other civil rights laws are likely to welcome the Administration‘s new position. Unlike voluntary mandates, the ADA accommodation requirements do not apply to vaccination requirements required by law.
The new mandates also mean that businesses generally need to be concerned about potential OSHA exposure for failing to implement or enforce the mandates. OSHA already is sanctioning employers for violating COVID-19 related OSHA requirements. For instance, OSHA nailed Lakewood Resource and Referral Center Inc., dba Center for Education Medicine and Dentistry (CHEMED) with heavy fines for allegedly violating applicable COVID-19 safety guidelines in January, 2021.
In a July 23, 2021 citation letter, OSH proposes to fine CHEMED $273,064.00 for willfully violating OSHA by not providing a medical evaluation to determine each employee’s ability to use a N95 respirator, before the employee was fit tested or required to use the respirator in the workplace to protect against SARS-CoV-2 virus while testing suspected COVID-19 individuals.
In addition to the proposed fine, the citation also orders CHEMED to take a series of corrective actions and to post notices in the workplace informing workers of the violation.
Along with the CHEMED citation, OSH also cited a staffing agency contracted to provide nursing staffing to CHEMED, Homecare Therapies for also failing to conduct medical evaluations and fit tests. It received two violations and a proposed fine of $13,653.
In the face of these potential consequences, most covered health care facilities and other employers impacted by the mandate are likely to implement mandates unless and until these requirements are struct down by the courts or withdrawn.
Assuming the Administration follows appropriate procedures to adopt the rules, most legal commentators do not expect the legal challenges opposing the mandate orders to be successful in the courts particularly after the Supreme Court refused to overturn or hear arguments for overturning a unanimous decision of a three-judge panel of the United States Court of Appeals for the Seventh Circuit in Klassen v. Trustees of Indiana University that refused to enjoin a vaccine mandate imposed by Indiana University as a condition of student or staff in person participation in classes or other activities.
While most healthcare and other covered businesses are not expected to challenge the rules, compliance us likely to trigger backlash from some unvaccinated workers strongly opposed to becoming vaccinated. Employers may find that some employees will resign their employment or take other tactics to avoid becoming vaccinated. Even those who elect to become vaccinated to retain their employment are likely to express opposition and dissatisfaction that could create liability exposures for the employers if it becomes a basis for retaliation claim.
Employers in Texas and certain other states that have adopted rules restricting or prohibiting vaccine, mask or other mandates also may face challenges based on the state rules.
In light of these and other uncertainties and challenges, Healthcare and Other or Employers generally should seek legal advice and assistance from legal counsel experienced with the relevant health care, labor and employment, privacy and other concerns.
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This article is republished by permission of the author, Cynthia Marcotte Stamer. To review the original work, see here.
Solutions Law Press, Inc. invites you to receive future updates by registering here and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy. 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 your profile here. For specific information about the these or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years working as an on demand, special project, consulting, general counsel or other basis with domestic and international business, charitable, community and government organizations of all types, sizes and industries and their leaders on labor and employment and other workforce compliance, performance management, internal controls and governance, compensation and benefits, regulatory compliance, investigations and audits, change management and restructuring, disaster preparedness and response and other operational, risk management and tactical concerns.
Most widely recognized for her work with health care, life sciences, insurance and data and technology organizations, she also has worked extensively with health plan and insurance, employee benefits, financial, transportation, manufacturing, energy, real estate, accounting and other services, public and private academic and other education, hospitality, charitable, civic and other business, government and community organizations. and their leaders.
Ms. Stamer has extensive experience advising, representing, defending, and training domestic and international public and private business, charitable, community and governmental organizations and their leaders, employers, employee benefit plans, their fiduciaries and service providers, insurers, and others has published and spoken extensively on these concerns. As part of these involvements, she has worked, published and spoken extensively on these and other human resources, employee benefits, compensation, worker classification and other workforce and other services; insurance; health care; workers’ compensation and occupational disease; business reengineering, disaster and distress; and many other performance, risk management, compliance, public policy and regulatory affairs, and other operational concerns.
A former lead advisor to the Government of Bolivia on its pension project, Ms. Stamer also has worked internationally and domestically as an advisor to business, community and government leaders on these and other legislative, regulatory and other legislative and regulatory design, drafting, interpretation and enforcement, as well as regularly advises and represents organizations on the design, administration and defense of workforce, employee benefit and compensation, safety, discipline, reengineering, regulatory and operational compliance and other management practices and actions.
Ms. Stamer also serves in leadership of a broad range of professional and civic organizations and provides insights and thought leadership through her extensive publications, public speaking and volunteer service with a diverse range of organizations including as Chair of the American Bar Association (“ABA”) Intellectual Property Section Law Practice Management Committee, Vice Chair of the International Section Life Sciences and Health Committee, Past ABA RPTE Employee Benefits & Other Compensation Group Chair and Council Representative and current Welfare Benefit Committee Co-Chair, Past Chair of the ABA Managed Care & Insurance Interest Group, past Region IV Chair and national Society of Human Resources Management Consultant Forum Board Member, past Texas Association of Business BACPAC Chair, Regional Chair and Dallas Chapter Chair, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation and many others.
For more information about these concerns or Ms. Stamer’s work, experience, involvements, other publications, or programs, see www.cynthiastamer.com, on Facebook, on LinkedIn or Twitter or e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns.
A law firm is the latest employer nailed for Fair Labor Standards Act (“FLSA”) overtime violations by the US Department of Labor Wage and Hour Division (“DOL”).
Following an investigation and federal court order, the U.S. Department of Labor recovered $26,496 in back wages and liquidated damages from the Auburn, Alabama based Slocumb Law Firm LLC for failing to pay overtime to 42 workers.
Investigators also determined Slocumb failed to keep accurate records of hours worked for workers paid on a salary basis who the DOL found we’re not exempt under the FLSA.
In December 2020, the U.S. District Court for the Middle District of Alabama Eastern Division issued a default judgment, affirming the DOL’s findings that the personal injury law firm and owner Michael W. Slocumb failed to pay the workers overtime when they worked more than 40 hours in a workweek.
The court ordered the firm and its owner to pay $13,248 in back wages and an equal amount in liquidated damages.
Slocumb originally filed a motion to set aside the judgement but later withdrew it. The DOL then sent a demand letter requiring payment for the wages that the workers were legally owed.
The action illustrates both the widespread misunderstanding of many law firm and other employers of the rules regarding the treatment of employees as salaried, exempt from FLSA minimum wage, overtime and record keeping requirements and the DOL’s readiness to enforce those rules.
Misunderstandings about when workers are classified as employees versus contractors, exempt versus non-exempt, and regarding the appropriate tracking, counting, and reporting of hours work are recurrent grounds for frequent DOL and private litigant recoveries. Many employers fail to recognize The significance of special FLSA rules for characterization of workers as employees and the narrowness of the rules for treating employees as exempt and eligible for payment on a salary rather than hourly basis. These mistakes also create a heightened risk that the employer will failed to track necessary Information to defend against employee or DOL hours of work claims and and trigger additional liability for failing to comply with FLSA rules forreporting of hours work. These misperceptions also often lead misinformed employers to take actions that provide a basis for retaliation claims. DOL and private litigant leverage these mistakes to achieve their recoveries.
Enforcement by the DOL and private litigants is common.
DOL views FLSA enforcement as a key priority. “Employers must pay employees all the wages they’ve legally earned, including overtime when they work over 40 in a workweek,” said Wage and Hour Division District Director Kenneth Stripling in Birmingham, Alabama in announcing the recovery. “The Wage and Hour Division will use every avenue, including the courts, to protect workers’ rights and ensure they receive the wages they are lawfully owed. Employers should contact the agency and speak with a Wage and Hour professional to avoid these violations and ensure compliance with federal wage laws.”
Employers found in violation of these rules in DOL enforcement actions face actual damages, interest, civil monetary penalties, enforcement costs, and in the case of willful violations, even potential criminal sanctions.
Generous recoveries also makes private enforcement very attractive to employees and plaintiffs’ counsel. Private litigants can recover actual damages plus double damages, interest, attorneys fees and other costs of enforcement. The availability of these extraordinary damages and recoveries makes these highly popular cases to many plaintiffs attorneys.
Along with FLSA claims, these violations also can trigger state wage an hour, payday act and other liabilities.
DOL and private litigant leverage these mistakes to achieve their recoveries. Aside from avoiding potentially costly mistakes, critically reviewing and documenting the basis of characterization of workers as employees versus contractors and exempt versus non-exempt can minimize the risk that violations will be found willful.
Because these audits often uncover violations or lead to sensitive conversations about the classification and payment of workers under the FLSA and other laws, employers and their leaders generally should arrange for this analysis to be conducted within the scope of attorney client privilege under the direction of a lawyer experienced in FLSA and other employment law compliance.
Additionally, employers should keep in mind that improperly handled employee questions or statements of concern about potential FLSA and other related requirements could create retaliation or whistleblower risks. Accordingly, employers should use care to investigate and respond carefully to these concerns and in handling subsequent discipline or other employment decisions involving workers raising them.
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Solutions Law Press, Inc. invites you to receive future updates by registering here and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy. 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 your profile here. For specific information about the these or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years working as an on demand, special project, consulting, general counsel or other basis with domestic and international business, charitable, community and government organizations of all types, sizes and industries and their leaders on labor and employment and other workforce compliance, performance management, internal controls and governance, compensation and benefits, regulatory compliance, investigations and audits, change management and restructuring, disaster preparedness and response and other operational, risk management and tactical concerns.
For more information about these concerns or Ms. Stamer’s work, experience, involvements, other publications, or programs, see www.cynthiastamer.com, on Facebook, on LinkedIn or Twitter or e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns.
The Occupational Safety and Health Administration (“OSHA”) has issued two citations against AMA Health Holdings LLC, for violating an OSHA emergency COVID standard published in June at its Seaside Guest Services transitional housing facility. Like OSHA’s July 23rd $273,064.00 citation of Lakewood Resource and Referral Center Inc. (“CHEMED”), the AMA Holdings citations and proposed penalties illustrate the risks health industry and other employers face for failing to comply with COVID-19 safety protocols.
The AMA Holdings citationsstem from acomplaint-driven OSHA investigation at the Seaside Guest Services’ residential housing facility in Trenton, New Jersey where 11 employees and 28 residents tested positive for the coronavirus by late March found numerous violations.
The residential facility provides transitional housing for people attending area behavioral-health programs and those who have completed some level of addiction treatment.
In June OSHA issued an emergency temporary standard to protect healthcare workers from contracting coronavirus. In March, OSHA launched a national emphasis program focusing enforcement efforts on companies that put the largest number of workers at serious risk of contracting the coronavirus. The program also prioritizes employers who retaliate against workers for complaints about unsafe or unhealthy conditions, or for exercising other rights protected by federal law.
According to OSHA, its investigation of a complaint revealed that while Seaside Guest Services’ continuity of operations plan required that residents with coronavirus be isolated and workers notified, neither happened. Additionally, OSHA inspectors determined the facility provided protective masks to its employees, but did not enforce their use. Seaside also failed to enforce social distancing despite posting signs in its four housing units.
OSHA cited the facility’s operator, AMA Health Holdings LLC, with two citations for failing to develop and implement effective measures to mitigate the spread of the virus and not recording each work-related illness. The agency proposed $10,923 in penalties.
AMA Health Holdings LLC has 15 business days from receipt of its citations and penalties to comply, request an informal conference with OSHA’s area director, or contest the findings before the independent Occupational Safety and Health Review Commission.
The AMA Holdings OSHA actions demonstrate OSHA’s commitment to investigate complaints of violations is its COVID emergency standards and fine employers that violate them.
The citations against AMA Health Holdings follow OSHA’s earlier citation of CHEMED for retaliating against employees for questioning the adequacy of COVID safety at the dental practice where they worked.
In the face of these enforcement actions, all employers should take care to ensure their ability to demonstrate and defend their operation’s compliance with all applicable emergency COVID safety standards and other safety requirements here.
As illustrated by the recently issued Centers for Disease Control (“CDC”) nursing home vaccination mandate announced last week, OSHA requirements evolve are likely to evolve rapidly in response to changing CDC guidance. Consequently, employers should remain vigilant for changing requirements and respond accordingly.
Additionally, employers should keep in mind that improperly handled employee questions or statements of concern about the adequacy of workplace COVID -19 safeguards could create retaliation or whistleblower risks. Accordingly, employers should use care to investigate and respond carefully to these concerns.
More Information
Solutions Law Press, Inc. invites you to receive future updates by registering here and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy. 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 your profile here. For specific information about the these or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years working as an on demand, special project, consulting, general counsel or other basis with domestic and international business, charitable, community and government organizations of all types, sizes and industries and their leaders on labor and employment and other workforce compliance, performance management, internal controls and governance, compensation and benefits, regulatory compliance, investigations and audits, change management and restructuring, disaster preparedness and response and other operational, risk management and tactical concerns.
For more information about these concerns or Ms. Stamer’s work, experience, involvements, other publications, or programs, see www.cynthiastamer.com, on Facebook, on LinkedIn or Twitter or e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns.
September 9, 2021 is the deadline for employers and other interested parties to comment on the Occupational Safety & Health Administration (“OSHA”) information collection requirements regarding its Standard requiring when aerial lifts are ‘‘field modified’’ for uses other than those intended by the manufacturer, the manufacturer or other equivalent entity, such as a nationally recognized testing laboratory, must certify in writing that the modification is in conformity with all applicable provisions of ANSI A92.2–1969 and the OSHA standard and that the modified aerial lift is at least as safe as the equipment was before modification.
Existing standards also require employers to maintain the certification record and make it available to OSHA compliance officers. OSHA believes this certification record provides assurance to employers, workers, and compliance officers that the modified aerial lift is safe for use; thereby, preventing failure while workers are being elevated. The certification record also provides the most efficient means for the compliance officers to determine that an employer is complying with the Standard.
OSHA’s is inviting comments on:
Whether the collection of information is necessary for the proper performance of the functions of the Department, including whether the information will have practical utility;
If the information will be processed and used in a timely manner;
The accuracy of the agency’s estimates of the burden and cost of the collection of information, including the validity of the methodology and assumptions used;
Ways to enhance the quality, utility and clarity of the information collection; and
Ways to minimize the burden of the collection of information on those who are to respond, including the use of automated collection techniques or other forms of information.
Lakewood Resource and Referral Center Inc., dba Center for Education Medicine and Dentistry (CHEMED) faces heavy fines for allegedly violating the Occupational Safety & Health Act (“OSHA”) by violating Occupational Safety and Health Administration (“OSH”) COVID-19 safety guidelines in January, 2021.
In a July 23, 2021 citation letter, OSH proposes to fine CHEMED $273,064.00 for willfully violating OSHA by not providing a medical evaluation to determine each employee’s ability to use a N95 respirator, before the employee was fit tested or required to use the respirator in the workplace to protect against SARS-CoV-2 virus while testing suspected COVID-19 individuals.
In addition to the proposed fine, the citation also orders CHEMED to take a series of corrective actions and to post notices in the workplace informing workers of the violation.
Along with the CHEMED citation, OSH also cited a staffing agency contracted to provide nursing staffing to CHEMED, Homecare Therapies for also failing to conduct medical evaluations and fit tests. It received two violations and a proposed fine of $13,653.
The citations and proposed penalties illustrate the risks health industry and other employers face for failing to comply with COVID-19 safety protocols.
To reduce their exposure for similar violations, health care providers and other employers should carefully monitor and comply with all OSH COVID-19 and other safety standards and ensure their staffing and other contractors also meet these conditions.
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This article is republished by permission of the author, Cynthia Marcotte Stamer. To review the original work, see here.
Solutions Law Press, Inc. invites you to receive future updates by registering here and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy. 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 your profile here. For specific information about the these or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years working as an on demand, special project, consulting, general counsel or other basis with domestic and international business, charitable, community and government organizations of all types, sizes and industries and their leaders on labor and employment and other workforce compliance, performance management, internal controls and governance, compensation and benefits, regulatory compliance, investigations and audits, change management and restructuring, disaster preparedness and response and other operational, risk management and tactical concerns.
Most widely recognized for her work with health care, life sciences, insurance and data and technology organizations, she also has worked extensively with health plan and insurance, employee benefits, financial, transportation, manufacturing, energy, real estate, accounting and other services, public and private academic and other education, hospitality, charitable, civic and other business, government and community organizations. and their leaders.
Ms. Stamer has extensive experience advising, representing, defending, and training domestic and international public and private business, charitable, community and governmental organizations and their leaders, employers, employee benefit plans, their fiduciaries and service providers, insurers, and others has published and spoken extensively on these concerns. As part of these involvements, she has worked, published and spoken extensively on these and other human resources, employee benefits, compensation, worker classification and other workforce and other services; insurance; health care; workers’ compensation and occupational disease; business reengineering, disaster and distress; and many other performance, risk management, compliance, public policy and regulatory affairs, and other operational concerns.
A former lead advisor to the Government of Bolivia on its pension project, Ms. Stamer also has worked internationally and domestically as an advisor to business, community and government leaders on these and other legislative, regulatory and other legislative and regulatory design, drafting, interpretation and enforcement, as well as regularly advises and represents organizations on the design, administration and defense of workforce, employee benefit and compensation, safety, discipline, reengineering, regulatory and operational compliance and other management practices and actions.
Ms. Stamer also serves in leadership of a broad range of professional and civic organizations and provides insights and thought leadership through her extensive publications, public speaking and volunteer service with a diverse range of organizations including as Chair of the American Bar Association (“ABA”) Intellectual Property Section Law Practice Management Committee, Vice Chair of the International Section Life Sciences and Health Committee, Past ABA RPTE Employee Benefits & Other Compensation Group Chair and Council Representative and current Welfare Benefit Committee Co-Chair, Past Chair of the ABA Managed Care & Insurance Interest Group, past Region IV Chair and national Society of Human Resources Management Consultant Forum Board Member, past Texas Association of Business BACPAC Chair, Regional Chair and Dallas Chapter Chair, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation and many others.
For more information about these concerns or Ms. Stamer’s work, experience, involvements, other publications, or programs, see www.cynthiastamer.com, on Facebook, on LinkedIn or Twitter or e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns.
Road construction giant Glenn O. Hawbaker will pay nearly $20.7 million in restitution to more than 1,200 workers after pleading guilty to stealing fringe benefit contributions the Davis-Bacon Act and the Pennsylvania Prevailing wage law required it pay for employees working on government road or other construction projects.
One of the largest road contractors in Pennsylvania, Glenn O. Hawbaker, Inc. pled no contest to four counts of theft relating to violations of the Pennsylvania Prevailing Wage Act and the federal Davis-Bacon Act filed by Pennsylvania Attorney General Josh Shapiro in April.
The $20,696,453 restitution payment is the largest prevailing wage restitution payment on history. In addition to making restitution, the company will have a court-appointed corporate monitor at company expense monitor it’s compliance while serving its probation.
The Davis-Bacon Act and state prevailing wage laws require contractors and subcontractors serving on government funded construction projects to pay workers prevailing wages and a specified fringe benefit contribution. for each hour worked.
The prosecution serves as a warning to other government contractors to carefully comply with these rules.
U.S. Secretary of Labor Marty Walsh warned other contractors to comply in his the statement on Glenn O. Hawbaker Inc. Plea and sentencing, stating:
“Today’s plea and sentencing of Hawbaker Inc. is a victory for the more than 1,200 workers whose hard-earned money was stolen. Ensuring workers get all the money owed them is a priority for the U.S. Department of Labor, and our partners in state government, when they act with courage and conviction as Pennsylvania Attorney General Josh Shapiro has in this case, can help us secure more just outcomes for workers.
All Employers Face ERISA Risks For Failing To Timely Deposit Contributions
Beyond the prevailing wage violations, withholding but failing to timely deposit pension, health or other fringe benefit contributions also can trigger substantial criminal and civil liability for an employing business and its owners and management under the Employee Retirement Income Security Act (“ERISA”). The Department of Justice and Employee Benefits Security Administration vigorously investigate and enforce these rules including seeking criminal convictions against management or others found to have misappropriated these funds. As these criminal violations are felonies, the Federal Sentencing Guidelines organizational liabilities attach. Accordingly, appropriate internal controls to prevent and auditing to catch and address these violations.
Fiduciaries also can face civil liability from the Employee Benefit Security Administration and private plaintiffs.
Risks of these and other workforce liabilities are rising as the current Administration makes investigation and enforcement of wage and other employment, labor and benefit laws a priority.
Employers should keep in mind that the Davis-Bacon and other prevailing wage and wage and hour laws generally place the burden upon the employer to prove the their compliance both with strict pay and recordkeeping requirements.
The Biden-Harris Administration’s revocation of Trump-era rules also are heightening the risk of reclassification of subcontractors or other non-employee workers as employed or joint employees. As reclassification often makes it very difficult to prove compliance, contractors and other employees should reevaluate their non-employee service provider risks and contract to obtain and preserve all evidence relevant to prove compliance for these workers as well as employees.
More Information
This article is republished by permission of the author, Cynthia Marcotte Stamer. To review the original work, see here.
Solutions Law Press, Inc. invites you to receive future updates by registering here and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy. 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 your profile here. For specific information about the these or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years working as an on demand, special project, consulting, general counsel or other basis with domestic and international business, charitable, community and government organizations of all types, sizes and industries and their leaders on labor and employment and other workforce compliance, performance management, internal controls and governance, compensation and benefits, regulatory compliance, investigations and audits, change management and restructuring, disaster preparedness and response and other operational, risk management and tactical concerns.
Most widely recognized for her work with health care, life sciences, insurance and data and technology organizations, she also has worked extensively with health plan and insurance, employee benefits, financial, transportation, manufacturing, energy, real estate, accounting and other services, public and private academic and other education, hospitality, charitable, civic and other business, government and community organizations. and their leaders.
Ms. Stamer has extensive experience advising, representing, defending, and training domestic and international public and private business, charitable, community and governmental organizations and their leaders, employee benefit plans, their fiduciaries and service providers, insurers, and others has published and spoken extensively on these concerns. As part of these involvements, she has worked, published and spoken extensively on these and other human resources, employee benefits, compensation, worker classification and other workforce and other services; insurance; health care; workers’ compensation and occupational disease; business reengineering, disaster and distress; and many other performance, risk management, compliance, public policy and regulatory affairs, and other operational concerns.
A former lead advisor to the Government of Bolivia on its pension project, Ms. Stamer also has worked internationally and domestically as an advisor to business, community and government leaders on these and other legislative, regulatory and other legislative and regulatory design, drafting, interpretation and enforcement, as well as regularly advises and represents organizations on the design, administration and defense of workforce, employee benefit and compensation, safety, discipline, reengineering, regulatory and operational compliance and other management practices and actions.
Ms. Stamer also serves in leadership of a broad range of professional and civic organizations and provides insights and thought leadership through her extensive publications, public speaking and volunteer service with a diverse range of organizations including as Chair of the American Bar Association (“ABA”) Intellectual Property Section Law Practice Management Committee, Vice Chair of the International Section Life Sciences and Health Committee, Past ABA RPTE Employee Benefits & Other Compensation Group Chair and Council Representative and current Welfare Benefit Committee Co-Chair, Past Chair of the ABA Managed Care & Insurance Interest Group, past Region IV Chair and national Society of Human Resources Management Consultant Forum Board Member, past Texas Association of Business BACPAC Chair, Regional Chair and Dallas Chapter Chair, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation and many others.
For more information about these concerns or Ms. Stamer’s work, experience, involvements, other publications, or programs, see www.cynthiastamer.com, on Facebook, on LinkedIn or Twitter or e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns.
Is your organization considering offering or receiving requests from students or others seeking paid or unpaid internships? Properly structured internships can prove highly beneficial for both the sponsoring employer and the intern. Before you jump in, make sure you’ve considered and covered the Fair Labor Standards Act (“FLSA”) traps.
The FLSA generally requires “for-profit” employers to pay interns in accordance with the minimum wage and overtime requirements of the FLSA if the internship results in the intern providing services as an “employee” within the meaning of the FLSA. An employer fails to pay an intern who is an employee for FLSA purposes at least minimum wage for regular hours of work or time and a half for any overtime worked risks being required to pay back pay, interest, and liquidated damages plus attorneys fees and costs of enforcement in the case of private enforcement or administrative penalties in the case of enforcement by the Department of Labor Wage and Hour Division.
As is generally the case under the FLSA, an employer that violates the FLSA by failing to pay an intern who is an employee at least minimum wage for regular hours of work or time and a half for any overtime worked risks being required to pay back pay, interest, and liquidated damages plus attorneys fees and costs of enforcement in the case of private enforcement or administrative penalties in the case of enforcement by the Department of Labor Wage and Hour Division.
One clear way a business can sidestep these FLSA risks is to pay any intern at least minimum wage for regular hours of work and time and time and a half for any overtime hours of work.
Where an employer is unwilling to pay an intern at least the minimum amounts required by wage and hour law, the employer should confirm and preserve evidence to prove the intern and not the organization was the primary beneficiary of the relationship taking into account all of the economic realities of the relationship.
Employers should keep in mind that the FLSA places the burden upon the employer to prove the justification for not treating and paying an intern as an employee under the FLSA by showing that the intern and not the employer is the “primary beneficiary” of the internship. While no single factor is determinative, some of the factors identified by the courts as as relevant for purposes of determining the economic reality of the relationship include:
The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.
Because of the potential risks of misclassification of the relationship, an employer contemplating involvement in an unpaid or below minimum wage internship arrangement should carefully document and preserve all evidence relevant to prove that the internship was not employment under the economic realities. Because of the heightened requirements and liability exposures, this is even more critical when providing internships to an individual who could be covered by child labor laws.
To reduce the risk of missteps or unexpected consequences, employers also may wish to ask legal counsel experienced in the FLSA and other workforce laws to provide guidance about the proposed relationship under the FLSA and other laws. Employers should keep in mind that state minimum wage and other pay laws, OSHA and other safety, tax and other law may apply different definitions for purposes of deciding their treatment of an internship relationship. The business will want to understand and preserve analysis and relevant evidence to help support its characterization under the FLSA and other laws.
Additionally, whether paid or unpaid, employers also should carefully document the understanding between the parties about the relationship and its terms. Employers also keep careful time and other records needed to show or defend compliance and other elements of the relationship. Even where the relationship is not characterized as an employment one, employers also will want to use care not to skip or cut corners on background checks, privacy, security, intellectual property, safety, or other requirements. If the relationship is not one of employment, the employer also should consult with its insurance broker about the availability of or advisability of securing coverage for injuries or other actions or events involving the intern.
More Information
This article is republished by permission of the author, Cynthia Marcotte Stamer. To review the original work, see here.
Solutions Law Press, Inc. invites you to receive future updates by registering here and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy. 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 your profile here. For specific information about the these or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years working as an on demand, special project, consulting, general counsel or other basis with domestic and international business, charitable, community and government organizations of all types, sizes and industries and their leaders on labor and employment and other workforce compliance, performance management, internal controls and governance, compensation and benefits, regulatory compliance, investigations and audits, change management and restructuring, disaster preparedness and response and other operational, risk management and tactical concerns.
Most widely recognized for her work with health care, life sciences, insurance and data and technology organizations, she also has worked extensively with health plan and insurance, employee benefits, financial, transportation, manufacturing, energy, real estate, accounting and other services, public and private academic and other education, hospitality, charitable, civic and other business, government and community organizations. and their leaders.
Ms. Stamer has extensive experience advising, representing, defending, and training domestic and international public and private business, charitable, community and governmental organizations and their leaders, employee benefit plans, their fiduciaries and service providers, insurers, and others has published and spoken extensively on these concerns. As part of these involvements, she has worked, published and spoken extensively on these and other human resources, employee benefits, compensation, worker classification and other workforce and other services; insurance; health care; workers’ compensation and occupational disease; business reengineering, disaster and distress; and many other performance, risk management, compliance, public policy and regulatory affairs, and other operational concerns.
A former lead advisor to the Government of Bolivia on its pension project, Ms. Stamer also has worked internationally and domestically as an advisor to business, community and government leaders on these and other legislative, regulatory and other legislative and regulatory design, drafting, interpretation and enforcement, as well as regularly advises and represents organizations on the design, administration and defense of workforce, employee benefit and compensation, safety, discipline, reengineering, regulatory and operational compliance and other management practices and actions.
Ms. Stamer also serves in leadership of a broad range of professional and civic organizations and provides insights and thought leadership through her extensive publications, public speaking and volunteer service with a diverse range of organizations including as Chair of the American Bar Association (“ABA”) Intellectual Property Section Law Practice Management Committee, Vice Chair of the International Section Life Sciences and Health Committee, Past ABA RPTE Employee Benefits & Other Compensation Group Chair and Council Representative and current Welfare Benefit Committee Co-Chair, Past Chair of the ABA Managed Care & Insurance Interest Group, past Region IV Chair and national Society of Human Resources Management Consultant Forum Board Member, past Texas Association of Business BACPAC Chair, Regional Chair and Dallas Chapter Chair, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation and many others.
For more information about these concerns or Ms. Stamer’s work, experience, involvements, other publications, or programs, see www.cynthiastamer.com, on Facebook, on LinkedIn or Twitter or e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns.
U.S businesses will face sharply increased wage costs if Senate Democrats succeed in their plan to pass as soon as this week the American Rescue Plan Act of 2021(the “Act”) passed by the House of Representatives on Friday, February 24, 2021.
One of many provisions impacting employers and their employee benefit plans in the Act that Congressional Democrats are pushing through as a COVID-19 relief package, Section 2101 of the Act amends the Fair Labor Standards Act of 1938 (“FLSA”) to increase immediately upon enactment the federal minimum wage employers covered by the FLSA must pay to most non-exempt employees (“regular rate”) by $2.25 per hour from the current rate of $7.25 to $9.50 per hour, then provides for additional annual increases the gradual increase of the federal minimum wage that will raise the regular rate to $15.00 per hour over the next four years. Beginning in 2026, the Act also provides for annual increases in the regular rate based on the median hourly wage of all employees as determined by the Bureau of Labor Statistics rounded up to the nearest multiple of $0.05. This means the regular minimum wage employers must pay most hourly employees would more than double by 2025 and continue to increase thereafter.
In addition, the Act also phases out current rules allowing employers to pay tipped employees, new employees under age 20 and handicapped employees less than the regular minimum wage over the next five years and raises the minimum wage the FLSA allows employers to pay those employees gradually over the intervening period, with the initial increases slated to take effect upon enactment.
As Senate Majority Leader Chuck Schumer has announced plans to bring the Act before the Senate for a vote as early as this week and President Biden committed to promptly sign the Act that is the centerpiece of the Democrats latest COVID-19 relief package, businesses are likely to feel the impact of the increased minimum wage and other mandates within days if not by month’s end.
These amendments will directly and immediately increase labor costs for non-exempt workers as well as employee benefit and fringe benefit costs and obligations tied to compensation or based on FLSA classifications. Other Biden-Harris Administration policies expanding the scope of the FLSA and other federal laws through revisions and enforcement of rules for characterizing workers as employees rather than independent contractors and enforcing expansive joint employer liability rules as well as other announced or expected Biden-Harris Administration proworker regulatory and enforcement changes almost certainly will expand the reach and implications of these changes. The Biden-Harris Administration’s January 20, 2021 Memorandum on Regulatory Freeze Pending Review suspended the implementation of the Trump Administration led Labor Department’s Final Rule: Independent Contractor Status under the Fair Labor Standards Act slated to take effect on March 8, 2021, which sought to restore and clarify historical more employer friendly policies for distinguishing employee versus independent contractor relationships for purposes of the FLSA, the WHD’s withdrawal of previously issued Trump Administration era opinions that applied that Administration’s more expansive view of independent contractor status, and WHD’s issuance of new opinions articulating and apply applying significantly narrower definitions of independent contractor and broader definitions of employees.
Based on the agenda announced by the Biden-Harris Administration, businesses also should expect the Biden-Harris Administration and private plaintiffs to use these more employee friendly interpretation and enforcement policies to attack employer characterizations of workers as contractors to justify nonpayment of minimum wage and overtime to those workers. Along with being forced to pay unpaid wages and overtime with interest, businesses unsuccessful in defending their worker classification characterizations can expect to face liquidated damage awards to private litigants equal to two times the amount of the back pay liability or in the case of WHD enforcement for repeated or willful violations, civil monetary penalties.
In assessing and managing these risks, businesses should evaluate their potential joint employer exposure to liability for unpaid minimum wage and overtime violations by other businesses providing labor or other services as the Biden-Harris Administration also is expected to seek to apply the much more expansive interpretation of joint employment applied during the Obama Administration abandoned during the Trump Administration.
These misclassification mistakes can be particularly costly. FLSA liabilities arising from misclassification of workers as independent contractors carry significant risk both because businesses often fail to pay required minimum wages or overtime as well as don’t keep required time records. The Biden-Harris Administration has made clear that it plans to move quickly to reimplement the regulatory and enforcement practices used during the Obama Administration to aggressively challenge employers’ characterization of workers as exempt from the FLSA’s minimum wage and overtime rules as independent contractors.
Considering these developments, all U.S. businesses and business leaders are well-advised both to begin preparing to comply with anticipated increases in federal minimum wage rates, as well as well as assess and take appropriate steps to mitigate their exposure to anticipated aggressive efforts to reclassify service providers considered to perform work as independent contractors, as contractors or employees of subcontractors or other businesses or both.
More Information
The FLSA reforms are only one of a number of provisions of the Act impacting employers and their employee benefit plans. For more a more comprehensive discussion of the FLSA amendments included in the Act, see here.
Solutions Law Press, Inc. also invites you receive future updates by registering here and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy. 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 your profile here. For specific information about the these or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years working as an on demand, special project, consulting, general counsel or other basis with domestic and international business, charitable, community and government organizations of all types, sizes and industries and their leaders on labor and employment and other workforce compliance, performance management, internal controls and governance, compensation and benefits, regulatory compliance, investigations and audits, change management and restructuring, disaster preparedness and response and other operational, risk management and tactical concerns.
Most widely recognized for her work with workforce, health care, life sciences, insurance and data and technology organizations, she also has worked extensively with health plan and insurance, employee benefits, financial, transportation, manufacturing, energy, real estate, accounting and other services, public and private academic and other education, hospitality, charitable, civic and other business, government and community organizations. and their leaders.
Ms. Stamer has extensive experience advising, representing, defending and training domestic and international public and private business, charitable, community and governmental organizations and their leaders, employee benefit plans, their fiduciaries and service providers, insurers, and others has published and spoken extensively on these concerns. As part of these involvements, she has worked, published and spoken extensively on these and other federal and state wage and hour and other compensation, discrimination, performance management, and other related human resources, employee benefits and other workforce and services; insurance; workers’ compensation and occupational disease; business reengineering, disaster and distress; and many other risk management, compliance, public policy and performance concerns.
A former lead advisor to the Government of Bolivia on its pension project, Ms. Stamer also has worked internationally and domestically as an advisor to business, community and government leaders on these and other legislative, regulatory and other legislative and regulatory design, drafting, interpretation and enforcement, as well as regularly advises and represents organizations on the design, administration and defense of workforce, employee benefit and compensation, safety, discipline, reengineering, regulatory and operational compliance and other management practices and actions.
Ms. Stamer also serves in leadership of a broad range of professional and civic organizations and provides insights and thought leadership through her extensive publications, public speaking and volunteer service with a diverse range of organizations including as Chair of the American Bar Association (“ABA”) Intellectual Property Section Law Practice Management Committee, Vice Chair of the International Section Life Sciences and Health Committee, Past ABA RPTE Employee Benefits & Other Compensation Group Chair and Council Representative and current Welfare Benefit Committee Co-Chair, Past Chair of the ABA Managed Care & Insurance Interest Group, past Region IV Chair and national Society of Human Resources Management Consultant Forum Board Member, past Texas Association of Business BACPAC Chair, Regional Chair and Dallas Chapter Chair, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation and many others.
For more information about these concerns or Ms. Stamer’s work, experience, involvements, other publications, or programs, see www.cynthiastamer.com or contact Ms. Stamer via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns.
Solutions Law Press, Inc.™ invites employers, employee benefit plan fiduciaries and vendors and other impacted business leaders participate in a complimentary briefing on the employer and employee benefit requirements of the H.R. 6379, Take Responsibility for Workers and Families Act as approved by the Ways & Means Committee as of February 12, 2021. The live Zoom briefing now will begin at 9:00 a.m. Central Time on Thursday, February 18, 2021 to avoid potential weather-related power and other disruptions associated with winter storms at its originally scheduled presentation time on Monday, February 15.
Employers and employee benefit plan fiduciaries and vendors should get up to speed on a new mandate to subsidize health coverage continuation and other requirements of the Act that the House Ways & Means Committee voted on February 11, 2021 to include in the lasted COVID-19 relief package the Democrat Majority plans to fast track through Congress. By the end of February if not before, Congress is expected to pass a final COVID-19 relief package including these employer and employee benefit plan mandates in substantially the same form as approved by the Ways and Means Committee. As these provisions will require quick action by employers and plans, employers, employee benefit plans, their fiduciaries and plan vendors should begin preparing now to comply with the anticipated new requirements
Registration & Program Details
Solutions Law Press, Inc. will host the 30-minute Zoom briefing beginning at 9:00 a.m. Central Time on Thursday, February 18, 2021 on the current provisions of the Act. The briefing will be conducted attorney Cynthia Marcotte Stamer. Participation is complimentary, but space is limited. Accordingly, registration is required and registration and participation will be granted on a first come, first serve basis here.
About Presenter Cynthia Marcotte Stamer
A Fellow in the American College of Employee Benefits Counsel, Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization and recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney, 30+ years working as an on demand, special project, consulting, general counsel or other basis with domestic and international business, employee benefit plan, health care, insurance, financial service, charitable, community and government organizations of all types, sizes and industries and their leaders on labor and employment and other workforce, employee benefits and compensation, performance management, internal controls, governance, regulatory and operational compliance, investigations and audits, change management and restructuring, disaster preparedness and response and other operational, risk management and tactical concerns. Best known for her leading edge work and thought leadership on workforce management and reengineering and health and other employee benefits concerns, Ms. Stamer regularly advises and represents organizations on the design, administration and defense of workforce, employee benefit and compensation, safety, discipline, reengineering, regulatory and operational compliance and other management practices and actions. Along with advising and representing management organizations, Ms. Stamer also has worked continuously throughout her career internationally and domestically as an advisor to business, community and government leaders on health care, savings and retirement, workforce, and other legislative and regulatory design, drafting, interpretation, enforcement and other domestic and international public policy.
Ms. Stamer also serves in leadership of a broad range of professional and civic organizations and provides insights and thought leadership through her extensive publications, public speaking and volunteer service with a diverse range of organizations including as Chair of the American Bar Association (“ABA”) Intellectual Property Section Law Practice Management Committee, Vice Chair of the International Section Life Sciences and Health Committee, Past ABA RPTE Employee Benefits & Other Compensation Group Chair and Council Representative and current Welfare Benefit Committee Co-Chair, Past Chair of the ABA Managed Care & Insurance Interest Group, past Region IV Chair and national Society of Human Resources Management Consultant Forum Board Member, past Texas Association of Business BACPAC Chair, Regional Chair and Dallas Chapter Chair, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation and many others.
For more information about these concerns or Ms. Stamer’s work, experience, involvements, other publications, or programs, see www.cynthiastamer.com or contact Ms. Stamer via e-mailhere.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns.
Employers and employee benefit plan fiduciaries and vendors should prepare to face a new mandate to subsidize health coverage continuation and other requirements included in the H.R. 6379, Take Responsibility for Workers and Families Act that the House Ways & Means Committee approved for inclusion in the COVID-19 relief package the Democrat Majority plans to fast track to enactment.
The proposed COBRA subsidy mandate is one of several COVID-19 relief provisions impacting employers and their benefit programs the Ways & Means Committee marked up and reported out of committee the week ending February 12, 2021. Other provisions include:
Additional direct assistance that would increase the COVID direct payment for qualifying working families by an additional direct payment of $1,400 per person, bringing their total relief to $2,000 per person;
Extend temporary federal unemployment and benefits with increased weekly benefits;
Significantly enhanced Earned Income Tax Credits for workers without children;
Raising the Child Tax Credit to $3,000 per child ($3,600 for children under 6), and makes it fully refundable and advanceable;
Expanding the Child and Dependent Tax Credit (CDCTC) to allow families to claim up to half of their child care expenses;
Reducing health care premiums for low- and middle-income families by increasing the Affordable Care Act’s (ACA) premium tax credits for 2021 and 2022;
Creating health care subsidies for unemployed workers who are ineligible for COBRA;
A program to bail out insolvent and distressed multiemployer (union) pension plans; and
More.
Revised legislative language of these and other proposals before the Ways and Means Committee markup this week is emerging and could face further changes as Congressional Democrats continue to work to enact their latest COVID-Relief package. Employers and employee benefit leaders and advisors should monitor carefully and begin preparing to respond to these proposals.
Register & Attend Complimentary 2/15 Briefing
Solutions Law Press, Inc. will host the 30-minute Zoom briefing beginning at 9:00 a.m. Central Time on Monday, February 15, 2020 on the current provisions of the Act. The briefing will be conducted attorney Cynthia Marcotte Stamer. Participation is complimentary, but space is limited. Accordingly, registration is required and registration and participation will be granted on a first come, first serve basis here.
For more information contact the author of this update, Texas Board of Legal Specialization Board Certified Labor and Employment Lawyer, Cynthia Marcotte Stamer here.
More Information
We hope this update is helpful. For more information about the these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years working as an on demand, special project, consulting, general counsel or other basis with domestic and international business, charitable, community and government organizations of all types, sizes and industries and their leaders on labor and employment and other workforce compliance, performance management, internal controls and governance, compensation and benefits, regulatory compliance, investigations and audits, change management and restructuring, disaster preparedness and response and other operational, risk management and tactical concerns.
Most widely recognized for her work with health care, life sciences, insurance and data and technology organizations, she also has worked extensively with health plan and insurance, employee benefits, financial, transportation, manufacturing, energy, real estate, accounting and other services, public and private academic and other education, hospitality, charitable, civic and other business, government and community organizations. and their leaders.
Ms. Stamer has extensive experience advising, representing, defending and training domestic and international public and private business, charitable, community and governmental organizations and their leaders, employee benefit plans, their fiduciaries and service providers, insurers, and others has published and spoken extensively on these concerns. As part of these involvements, she has worked, published and spoken extensively on these and federal and state discrimination, affirmative action and accommodation and other related human resources, employee benefits and other workforce and services; insurance; workers’ compensation and occupational disease; business reengineering, disaster and distress; and many other risk management and compliance concerns.
A former lead advisor to the Government of Bolivia on its pension project, Ms. Stamer also has worked internationally and domestically as an advisor to business, community and government leaders on these and other legislative, regulatory and other legislative and regulatory design, drafting, interpretation and enforcement, as well as regularly advises and represents organizations on the design, administration and defense of workforce, employee benefit and compensation, safety, discipline, reengineering, regulatory and operational compliance and other management practices and actions.
Ms. Stamer also serves in leadership of a broad range of professional and civic organizations and provides insights and thought leadership through her extensive publications, public speaking and volunteer service with a diverse range of organizations including as Chair of the American Bar Association (“ABA”) Intellectual Property Section Law Practice Management Committee, Vice Chair of the International Section Life Sciences and Health Committee, Past ABA RPTE Employee Benefits & Other Compensation Group Chair and Council Representative and current Welfare Benefit Committee Co-Chair, Past Chair of the ABA Managed Care & Insurance Interest Group, past Region IV Chair and national Society of Human Resources Management Consultant Forum Board Member, past Texas Association of Business BACPAC Chair, Regional Chair and Dallas Chapter Chair, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation and many others.
For more information about these concerns or Ms. Stamer’s work, experience, involvements, other publications, or programs, see www.cynthiastamer.com or contact Ms. Stamer via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns.
Newly sworn in President Joe Biden chose to make an executive order outlining the core principles for his Administration’s policy for fighting COVID-19 the first signed in his new Administration shortly after he was sworn in as President as well as made public the Biden-Harris Administration’s other key policy priorities upon taking office which promise to significantly impact business and other organizations, taxpayers and others. As the Administration and new Congress get to work on these and other policies, American businesses and citizens should stay informed and provide clear and consistent input to the Administration and members of Congress about the policy and enforcement proposals and actions to help shape the law and prepare to deal with the new rules and priorities.
Key Biden-Harris Administration Policy Priorities
Shortly after being sworn into office, the Biden-Harris Administration also announced other key immediate priorities of the Biden-Harris Administration. The announcement posted on TheWhiteHouse.gov website reads as follows:
President Biden will deliver bold action and immediate relief for American families as the country grapples with converging crises. This will include actions to control the COVID-19 pandemic, provide economic relief, tackle climate change, and advance racial equity and civil rights, as well as immediate actions to reform our immigration system and restore America’s standing in the world.
COVID-19
President Biden will move quickly to contain the COVID-19 crisis by expanding testing, safely reopening schools and businesses, and taking science-driven steps to address the communities — especially communities of color — who have been hardest hit by this virus. And, President Biden will launch a national vaccination program to inoculate the U.S. population efficiently and equitably.
Read more about the Biden-Harris plan to beat COVID-19 [See below].
Climate
President Biden will take swift action to tackle the climate emergency. The Biden Administration will ensure we meet the demands of science, while empowering American workers and businesses to lead a clean energy revolution.
Racial Equity
The promise of our nation is that every American has an equal chance to get ahead, yet persistent systemic racism and barriers to opportunity have denied this promise for so many. President Biden is putting equity at the center of the agenda with a whole of government approach to embed racial justice across Federal agencies, policies, and programs. And President Biden will take bold action to advance a comprehensive equity agenda to deliver criminal justice reform, end disparities in healthcare access and education, strengthen fair housing, and restore Federal respect for Tribal sovereignty, among other actions, so that everyone across America has the opportunity to fulfill their potential.
Economy
President Biden will take bold steps to address the inequities in our economy and provide relief to those who are struggling during the COVID-19 pandemic. The President will also work with Congress to pass the American Rescue Plan to change the course of the pandemic, build a bridge towards economic recovery, and invest in racial justice. And, he will build our economy back better from the pandemic and create millions of jobs by strengthening small businesses and investing in the jobs of the future.
Health Care
President Biden will make a renewed commitment to protect and expand Americans’ access to quality, affordable health care. He will build on the Affordable Care Act to meet the health care needs created by the pandemic, reduce health care costs, and make our health care system less complex to navigate.
Immigration
President Biden will reform our long-broken and chaotic immigration system. President Biden’s strategy is centered on the basic premise that our country is safer, stronger, and more prosperous with a fair and orderly immigration system that welcomes immigrants, keeps families together, and allows people across the country—both newly arrived immigrants and people who have lived here for generations—to more fully contribute to our country.
Restoring America’s Global Standing
President Biden will take steps to restore America’s standing in the world, strengthening the U.S. national security workforce, rebuilding democratic alliances across the globe, championing America’s values and human rights, and equipping the American middle class to succeed in a global economy.
COVID-19 Plan To Beat COVID-19
The first Executive Order signed by President Biden in furtherance of these initiatives was his COVID-19: The Biden-Harris plan to beat COVID-19 Executive Oder, the text of which reads as follows:
The American people deserve an urgent, robust, and professional response to the growing public health and economic crisis caused by the coronavirus (COVID-19) outbreak. President Biden believes that the federal government must act swiftly and aggressively to help protect and support our families, small businesses, first responders, and caregivers essential to help us face this challenge, those who are most vulnerable to health and economic impacts, and our broader communities – not to blame others or bail out corporations.
The Biden-Harris administration will always:
Listen to science Ensure public health decisions are informed by public health professionals Promote trust, transparency, common purpose, and accountability in our government President Biden and Vice President Harris have a seven-point plan to beat COVID-19.
Ensure all Americans have access to regular, reliable, and free testing.
Double the number of drive-through testing sites. Invest in next-generation testing, including at home tests and instant tests, so we can scale up our testing capacity by orders of magnitude. Stand up a Pandemic Testing Board like Roosevelt’s War Production Board. It’s how we produced tanks, planes, uniforms, and supplies in record time, and it’s how we will produce and distribute tens of millions of tests. Establish a U.S. Public Health Jobs Corps to mobilize at least 100,000 Americans across the country with support from trusted local organizations in communities most at risk to perform culturally competent approaches to contact tracing and protecting at-risk populations. Fix personal protective equipment (PPE) problems for good.
President Biden is taking responsibility and giving states, cities, tribes, and territories the critical supplies they need.
Fully use the Defense Production Act to ramp up production of masks, face shields, and other PPE so that the national supply of personal protective equipment exceeds demand and our stores and stockpiles — especially in hard-hit areas that serve disproportionately vulnerable populations — are fully replenished. Build immediately toward a future, flexible American-sourced and manufactured capability to ensure we are not dependent on other countries in a crisis. Provide clear, consistent, evidence-based guidance for how communities should navigate the pandemic – and the resources for schools, small businesses, and families to make it through.
Social distancing is not a light switch. It is a dial. President Biden will direct the CDC to provide specific evidence-based guidance for how to turn the dial up or down relative to the level of risk and degree of viral spread in a community, including when to open or close certain businesses, bars, restaurants, and other spaces; when to open or close schools, and what steps they need to take to make classrooms and facilities safe; appropriate restrictions on size of gatherings; when to issue stay-at-home restrictions. Establish a renewable fund for state and local governments to help prevent budget shortfalls, which may cause states to face steep cuts to teachers and first responders. Call on Congress to pass an emergency package to ensure schools have the additional resources they need to adapt effectively to COVID-19. Provide a “restart package” that helps small businesses cover the costs of operating safely, including things like plexiglass and PPE.
Plan for the effective, equitable distribution of treatments and vaccines — because development isn’t enough if they aren’t effectively distributed.
Invest $25 billion in a vaccine manufacturing and distribution plan that will guarantee it gets to every American, cost-free. Ensure that politics plays no role in determining the safety and efficacy of any vaccine. The following 3 principles will guide the Biden-Harris administration: Put scientists in charge of all decisions on safety and efficacy; publicly release clinical data for any vaccine the FDA approves; and authorize career staff to write a written report for public review and permit them to appear before Congress and speak publicly uncensored. Ensure everyone — not just the wealthy and well-connected — in America receives the protection and care they deserve, and consumers are not price gouged as new drugs and therapies come to market.
Protect older Americans and others at high risk.
President Biden understands that older Americans and others at high-risk are most vulnerable to COVID-19.
Establish a COVID-19 Racial and Ethnic Disparities Task Force, as proposed by Vice President Harris, to provide recommendations and oversight on disparities in the public health and economic response. At the end of this health crisis, it will transition to a permanent Infectious Disease Racial Disparities Task Force. Create the Nationwide Pandemic Dashboard that Americans can check in real-time to help them gauge whether local transmission is actively occurring in their zip codes. This information is critical to helping all individuals, but especially older Americans and others at high risk, understand what level of precaution to take. Rebuild and expand defenses to predict, prevent, and mitigate pandemic threats, including those coming from China.
Immediately restore the White House National Security Council Directorate for Global Health Security and Biodefense, originally established by the Obama-Biden administration. Immediately restore our relationship with the World Health Organization, which — while not perfect — is essential to coordinating a global response during a pandemic. Re-launch and strengthen U.S. Agency for International Development’s pathogen-tracking program called PREDICT. Expand the number of CDC’s deployed disease detectives so we have eyes and ears on the ground, including rebuilding the office in Beijing. Implement mask mandates nationwide by working with governors and mayors and by asking the American people to do what they do best: step up in a time of crisis.
Experts agree that tens of thousands of lives can be saved if Americans wear masks. President Biden will continue to call on:
Every American to wear a mask when they are around people outside their household. Every Governor to make that mandatory in their state. Local authorities to also make it mandatory to buttress their state orders. Once we succeed in getting beyond this pandemic, we must ensure that the millions of Americans who suffer long-term side effects from COVID don’t face higher premiums or denial of health insurance because of this new pre-existing condition. The Biden-Harris Administration will work to ensure that the protections for those with pre-existing conditions that were won with Obamacare are protected. And, they will work to lower health care costs and expand access to quality, affordable health care through a Medicare-like public option.
Monitor & Respond To Emerging Developments & Proposals
As the new Administration and Congress get down to work, all U.S. organizations and communities, their leaders, and individual employees and citizens should carefully follow, and share their input to the Administration, members of Congress, and other federal, state and local officials on the actions and proposals taken to implement this and other policy that impact their interests.
More Information
We hope this update is helpful. For more information about the these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is nationally recognized for her work and thought leadership on health and other health and employee benefit issues.
An attorney board certified in labor and employment law by the Texas Board of Legal Specialization and Fellow in the American College of Employee Benefit Counsel, Ms. Stamer has worked as an on demand, special project, consulting, general counsel or other basis with health and other employee benefit plans, their sponsors, insurers, administrators, providers and others and others has published and spoken extensively on these concerns.
A former lead advisor to the Government of Bolivia on its pension project, Ms. Stamer also has worked internationally and domestically as an advisor and advocate for employer and other plan sponsors, fiduciaries, administrators, insurers, technology and other service providers, managed care organizations, direct primary care and other health care providers and others on these and other legislative, regulatory and other legislative and regulatory design, drafting, interpretation and enforcement, as well as regularly advises and represents organizations on the design, administration and defense of workforce, employee benefit and compensation, safety, discipline, reengineering, regulatory and operational compliance and other management practices and actions.
Ms. Stamer also serves in leadership of a broad range of professional and civic organizations and provides insights and thought leadership through her extensive publications, public speaking and volunteer service with a diverse range of organizations including as Chair of the American Bar Association (“ABA”) Intellectual Property Section Law Practice Management Committee, Vice Chair of the International Section Life Sciences and Health Committee, Past ABA RPTE Employee Benefits & Other Compensation Group Chair and Council Representative and current Welfare Benefit Committee Co-Chair, Past Chair of the ABA Managed Care & Insurance Interest Group, past Region IV Chair and national Society of Human Resources Management Consultant Forum Board Member, past Texas Association of Business BACPAC Chair, Regional Chair and Dallas Chapter Chair, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation and many others.
For more information about these concerns or Ms. Stamer’s work, experience, involvements, other publications, or programs, see www.cynthiastamer.com or contact Ms. Stamer via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
Employers now have the option temporarily to defer paying the employee portion (but not employer’s portion) of certain payroll taxes due between September 1, 2020 to December 31, 2020 for employees earning less than $4000 on a bi-weekly basis.
The Notice implements the Memorandum by confirming that employers may (but are not required to) elect to defer the payment of the Employee Payroll Taxes otherwise due on “applicable wages” until next year, after which payment of the deferred Employee Payroll Taxes will be required in installments between January 1, 2021 and April 30, 2021. The option to defer does not, however, extend to the payment of the employer’s portion of payroll taxes. An employer remains obligated timely to pay its employer payroll taxes whether or not the employer elects to take advantage of the Notice’s option to defer paying its employees’ portion of the taxes until 2021.
Employers contemplating this option must keep in mind that the Notice only delays the deadline for the employer to pay the employee portion of the payroll taxes. Employers deferring payment of Employee Payroll Taxes under the Notice remain obligated to pay these taxes to the federal government by the end of April 2021. Employers also will need to consider what arrangements, if any, the employer will make to collect deferred employee payroll taxes from the employee.
More Information
We hope this update is helpful. For more information about this or other health care, human resources, employee benefits, or other legal, operational or risk management developments and strategies, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Solutions Law Press, Inc. provides a broad range of publications and other information, education and other resources and tools to assist management leaders to manage people, process, risk and operations.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Law and Labor and Employment Law and Health Care; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of human resources, employee benefits, compensation and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services, construction, manufacturing, staffing and workforce and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. As a part of this work, she has continuously and extensively worked with domestic and international employer and other management, employee benefit and other clients on payroll, income and other related tax, workers classification, wage and hour, compensation, benefits, performance, discipline, change and crisis management, internal and agency investigations and defense and a wide range of other workforce matters.
Author of hundreds of highly regarded books, articles and other publications, Ms. Stamer also is widely recognized for her scholarship, coaching, legislative and regulatory advocacy, leadership and mentorship on wage and hour, worker classification and a diverse range of other labor and employment, employee benefits, health and safety, education, performance management, privacy and data security, leadership and governance, and other management concerns within the American Bar Association (ABA), the International Information Security Association, the Southwest Benefits Association, and a variety of other international, national and local professional, business and civic organizations including highly regarded works on worker reclassification and joint employment liability under the FLSA and other laws published by the Bureau of National Affairs and others. Examples of these involvements include her service as the ABA Intellectual Property Law Section Law Practice Management Committee; the ABA International Section Life Sciences and Health Committee Vice Chair-Policy; a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former JCEB Council Representative and Marketing Chair; Past Chair of the ABA RPTE Employee Benefits and Other Compensation Group and Vice Chair of its Law Practice Management Committee; Past Chair of the ABA Managed Care & Insurance Interest Group; former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Southwest Benefits Association Board member; past Texas Association of Business State Board Member, BACPAC Committee Meeting, Regional and Dallas Chapter Chair; past Dallas Bar Association Employee Benefits Committee Executive Committee; former SHRM Region IV Chair and National Consultants Forum Board Member; for WEB Network of Benefit Professionals National Board Member and Dallas Chapter Chair; former Dallas World Affairs Council Board Member; founding Board Member, past President and Patient Empowerment and Health Care Heroes founder for the Alliance for Health Care Excellence; former Gulf States TEGE Council Exempt Organizations Coordinator and Board member; past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see http://www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available 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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc. disclaim, and have no responsibility to provide any update or otherwise notify anyone any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
The Centers for Disease Control (CDC) One-Stop Shop provides quick access to communication resources. Topic-specific toolkits make it easy to access, leverage, and share CDC resources. These new toolkits contain videos, social media posts, PSAs, print resources, checklists, FAQs, and web resources for the following populations
We hope this update is helpful. For more information about this or other labor and employment developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Solutions Law Press, Inc. invites you receive future updates by registering on our Solutions Law Press, Inc. Website and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Law and Labor and Employment Law and Health Care; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services, construction, manufacturing, staffing and workforce and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. As a part of this work, she has continuously and extensively worked with domestic and international employer and other management, employee benefit and other clients to assess, manage and defend joint employer and other worker classifications and practices under the FLSA and other federal and state laws including both advising and and assisting employers to minimize joint employer and other FLSA liability and defending a multitude of employers against joint employer and other FLSA and other worker classification liability. She also has been heavily involved in advocating for the Trump Administration’s restoration of more historical principles for determining and enforcing joint employer liability over the past several years.
Author of hundreds of highly regarded books, articles and other publications, Ms. Stamer also is widely recognized for her scholarship, coaching, legislative and regulatory advocacy, leadership and mentorship on wage and hour, worker classification and a diverse range of other labor and employment, employee benefits, health and safety, education, performance management, privacy and data security, leadership and governance, and other management concerns within the American Bar Association (ABA), the International Information Security Association, the Southwest Benefits Association, and a variety of other international, national and local professional, business and civic organizations including highly regarded works on worker reclassification and joint employment liability under the FLSA and other laws published by the Bureau of National Affairs and others. Examples of these involvements include her service as the ABA Intellectual Property Law Section Law Practice Management Committee; the ABA International Section Life Sciences and Health Committee Vice Chair-Policy; a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former JCEB Council Representative and Marketing Chair; Past Chair of the ABA RPTE Employee Benefits and Other Compensation Group and Vice Chair of its Law Practice Management Committee; Past Chair of the ABA Managed Care & Insurance Interest Group; former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Southwest Benefits Association Board member; past Texas Association of Business State Board Member, BACPAC Committee Meeting, Regional and Dallas Chapter Chair; past Dallas Bar Association Employee Benefits Committee Executive Committee; former SHRM Region IV Chair and National Consultants Forum Board Member; for WEB Network of Benefit Professionals National Board Member and Dallas Chapter Chair; former Dallas World Affairs Council Board Member; founding Board Member, past President and Patient Empowerment and Health Care Heroes founder for the Alliance for Health Care Excellence; former Gulf States TEGE Council Exempt Organizations Coordinator and Board member; past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see http://www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available 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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc. disclaim, and have no responsibility to provide any update or otherwise notify anyone any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Earlier this week, the Internal Revenue Service (“IRS”) announced that employee benefit plan participants that already took a required minimum distribution (RMD) in 2020 from certain retirement accounts now has the opportunity through August 31, 2020 to roll those funds back into a retirement account following the Coronavirus Aid, Relief, and Economic Security (CARES) Act RMD waiver for 2020. The announcement of this relief covers one of a long and growing list of special tax and other COVID-19 responsive special rules and requirements that may change requirements, provide special relief or both for businesses and individuals that every business leader and individual should carefully monitor and respond to appropriately.
Retirement Plan Rollover Relief
On July 23, 2020, the IRS announced its extension of the 60-day rollover period for any RMDs already taken this year to August 31, 2020 to give taxpayers time to take advantage of this opportunity in Notice 2020-51 (PDF). The Notice also answers questions regarding the waiver of RMDs for 2020 under the Coronavirus Aid, Relief, and Economic Security Act, known as the CARES Act.
The CARES Act enabled any taxpayer with an RMD due in 2020 from a defined-contribution retirement plan, including a 401(k) or 403(b) plan, or an IRA, to skip those RMDs this year. This includes anyone who turned age 70 1/2 in 2019 and would have had to take the first RMD by April 1, 2020. This waiver does not apply to defined-benefit plans.
In addition to the rollover opportunity, an IRA owner or beneficiary who has already received a distribution from an IRA of an amount that would have been an RMD in 2020 can repay the distribution to the IRA by August 31, 2020. The notice provides that this repayment is not subject to the one rollover per 12-month period limitation and the restriction on rollovers for inherited IRAs.
The notice provides two sample amendments that employers may adopt to give plan participants and beneficiaries whose RMDs are waived a choice as to whether or not to receive the waived RMD.
Other COVID-19 Tax Rules & Relief
The guidance and relief in Notice 2020-51 highlights only one of a long list of special COVID-19 associated tax rules and relief that could apply to a business, its employees or employee benefit plan participants or both including the following:
Along with these tax rules, businesses and their employees also may be impacted by a broad range of special federal and state labor and employment and other rules adopted in response to the continuing COVID-19 health care emergency and its fallout. Businesses and their leaders should carefully review and monitor these and other COVID-19 specific rules to ensure that their businesses don’t trigger unanticipated liability by failing to meet critical requirements or to ensure that they take full advantage of all available relief.
More Information
We hope this update is helpful. For more information about the these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years legal and operational management work, coaching, public policy and regulatory affairs leadership and advocacy, training and public speaking and publications. As a significant part of her work, Ms. Stamer has worked extensively domestically and internationally on an demand, special project and ongoing basis with health industry, health plan and insurance and other businesses of all types, government and community organizations and their leaders, spoken and published extensively on workforce and other services, compensation and benefits, and related tax; insurance; workers’ compensation and occupational disease; business reengineering, disaster and distress; and many other management concerns.
Board Certified in Labor and Employment Law By the Texas Board of Legal Specialization, Scribe for the ABA JCEB Annual Agency Meeting with OCR, Vice Chair of the ABA International Section Life Sciences Committee, and the ABA RPTE Employee Benefits & Other Compensation Group and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer has extensive experience advising, representing, defending and training health care providers, health plans and insurers, employers, community organizations and others about HIPAA and other privacy concerns and has published and spoken extensively on these concerns.
Her involvement with HIPAA and other privacy and data concerns has taken place as part of her more than 30 years involvement working with with public and private health industry, health insurance and other employers and organizations of all sizes, employee benefit plans, insurance and financial services, health industry and a broad range of public and private domestic and international business, community and government organizations and leaders on pandemic and other health and safety, workforce and performance preparedness, risks and change management, disaster preparedness and response and other operational and tactical concerns throughout her adult life. A former lead advisor to the Government of Bolivia on its pension project, Ms. Stamer also has worked internationally and domestically as an advisor to business, community and government leaders on crisis preparedness and response, privacy and data security, workforce, health care and other policy and enforcement, as well as regularly advises and defends organizations about the design, administration and defense of their organizations workforce, employee benefit and compensation, safety, discipline and other management practices and actions.
Ms. Stamer also serves in leadership of a broad range of professional and civic organizations and shares insights and thought leadership through her extensive publications and public speaking. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
While most COVID-19 test results won’t draw the widespread coverage and public interest that Elliott’s diagnosis did, businesses generally and health care providers, health plans, health care clearinghouses specifically need to recognize that coverage of the Elliott outrage will heighten awareness and therefore their need to properly handle and protect COVID-19 or other infectious disease and other testing, diagnosis, treatment and other medical and disability information collected or encountered in the course of their operation through the current COVID-19 health care emergency and otherwise in their own organizations.
ADA Responsibilities of Employers In Handling Medical Information
Protecting COVID-19 testing and other medical information isn’t just a concern for covered entities and their business associates, however. Businesses that are not covered entities also generally should use care in their collection, use, protection and disclosure of COVID-19 testing and other medical information to mitigate their potential liability under the disability discrimination requirements of the ADA, the Rehabilitation Act and other laws. For instance, along with prohibiting employers covered by the ADA from discriminating against qualified individuals with disabilities and requiring those employers to provide reasonable accommodations to such employees, the ADA also regulates the ability of covered employers to perform or require medical testing and imposes specific medical confidentiality requirements on all covered employers. See e.g., What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws.
The ADA’s medical confidentiality requirements dictate that covered employers maintain medical information and records about employees and applicants in separate, confidential files. Covered employers are responsible for maintaining the confidentiality of medical information and records and cannot disclose it without authorization from the subject employee except under the specific conditions allowed by the ADA.
EEOC guidance provided in its publication entitled Pandemic Preparedness in the Workplace and the Americans With Disabilities Act as updated as of March 19, 2020 emphasizes that covered employers remain accountable for complying with the requirements of the ADA and Rehabilitation Act during the current COVID-19 health care emergency and other pandemics.
While the EEOC Technical Assistance Questions and Answers in its publication What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws
Technical Assistance Questions and Answers as updated on June 11, 2020 recognizes temperature checks and certain other COVID-19 inquiries to screen for COVID-19 exposure or infection might be permitted under the safety exception to the ADA during the current COVID-19 health care emergency, that and other EEOC guidance makes clear that covered employers remain responsible for ensuring that the ADA medical confidentiality requirements are met with regarding to testing and related medical information. As a result, all ADA-covered employers generally and health care employers specifically are urged to use care both in the administration and collection of information regarding COVID-19 testing and diagnosis, and the protection of the confidentiality of COVID-19 and other medical information and records collected in the course of administering employment, safety, medical leave or other absence or other operations throughout the COVID-19 health care emergency.
Added HIPAA & Texas HIPAA Concerns For Health Plans & Other HIPAA Covered Entities
Assuming that the disclosure of Elliott’s information is traced to a testing provider, laboratory or other health care provider, health plan or insurer, health care clearing house subject to HIPAA (“covered entity”), a service provider acting as a business associate to a covered entity, or a member of their workforce, the unauthorized release of Elliott’s test results, that he underwent the testing, or other medical information, Elliott’s complaint about a possible HIPAA violation could be well-founded as both HIPAA and the somewhat broader provisions of the Texas Medical Privacy Act (“Tex-HIPAA”) (hereafter collectively the “HIPAA Laws”) both generally prohibit unauthorized disclosure of protected medical information such as his COVID-19 test or test results to the media.
The COVID-19 test results and of “individually identifiable personal health information” about Elliott and his encounter created, used, access or disclosed by the testing facility or other health care provider, a health plan, health care clearinghouse (“covered entity”) or a member of its workforce or a subcontractor acting as a business associated qualify as “protected health information subject to HIPAA’s privacy, security, breach and privacy rights protections of HIPAA and Tex-HIPAA.
The HIPAA and Tex-HIPAA prohibition against unauthorized disclosure of protected health information to the media stem from the HIPAA Laws’ broader requirement that covered entities and business associates affirmatively safeguard protected health information against unauthorized use, access or disclosure and sweeping prohibition against their disclosing or allowing the disclosure of protected health information without a HIPAA-compliant authorization except under the narrow and specifically delineated exceptions identified in the rule, none of which appear relevant to the media disclosure objected to by Elliott from the currently available public information.
Both HIPAA Laws expressly prohibit unauthorized disclosure of protected health information by covered entities or their business associates except under the specifically detailed conditions specified in one or more exceptions to this general rule. Assuming all relevant conditions to qualify for the exception are met, HIPAA does allow covered entities and business associates treatment, payment, operations, public health activities or another situation meeting all applicable requirements of an express exception to the HIPAA prohibition against disclosure.
The federal agency primarily responsible for the implementation and enforcement of HIPAA, the Department of Health & Human Services Office of Civil Rights (“OCR”) regulatory guidance and enforcement history clearly communicates OCR’s view that covered entities or business associates violate HIPAA by disclosing protected health information to the media or other third parties without first obtaining a HIPAA-compliant authorization from the subject of the information except under the specific circumstances described in an applicable Privacy Rule exception.
In its May 5, 2020 Guidance on Covered Health Care Providers and Restrictions on Media Access to Protected Health Information about Individuals in Their Facilities (“5/5 Guidance”), for instance, OCR specifically reminded HIPAA covered health care providers that the HIPAA Privacy Rule does not permit them to give media and film crews access to protected health information including access to facilities where patients’ protected health information will be accessible without the patients’ prior authorization. has made clear that testing facilities and other health care providers generally remain accountable for complying with the HIPAA Privacy Rule that prohibits unauthorized use, access or disclosure of test results and other protected health information except as specifically allowed in the applicable HIPAA Law.
The 5/5 Guidance specifically states, “The COVID-19 public health emergency does not alter the HIPAA Privacy Rule’s existing restrictions on disclosures of protected health information (PHI) to the media.’ Additionally, it states confirmed that even during the current COVID-19 public health emergency, covered health care providers remain required to obtain a valid HIPAA authorization from each patient whose PHI will be accessible to the media before the media is given access to that PHI. In this regard, the 5/5 Guidance states, As explained in prior guidance,1 HIPAA does not permit covered health care providers to give the media, including film crews, access to any areas of their facilities where patients’ PHI will be accessible in any form (e.g., written, electronic, oral, or other visual or audio form), without first obtaining a written HIPAA authorization from each patient whose PHI would be accessible to the media. 2 Additionally, covered health care providers may not require a patient to sign a HIPAA authorization as a condition of receiving treatment. The guidance clarifies that masking or obscuring patients’ faces or identifying information before broadcasting a recording of a patient is not sufficient, as a valid HIPAA authorization is still required before giving the media such access. Additionally, the guidance describes reasonable safeguards that should be used to protect the privacy of patients whenever the media is granted access to facilities.
OCR’s positions on disclosures to the media in the 5/5 Guidance reaffirm OCR’s longstanding interpretation and enforcement of HIPAA as prohibiting disclosures of PHI and media access to areas where patients or their protected health information might be visible or accessible is long standing.
In June, 2013, for instance, OCR sent a clear message to covered entities and business associates not to make unconsented disclosures of protected health information to or allow media access to areas where patients or their protected health information could be accessed or observed when it required Shasta Regional Medical Center (SRMC) to pay $275,000 to resolve OCR HIPAA charges stemming from SRMC’s unauthorized disclosure of protected health information to multiple media outlets as part of a public relations effort to mitigate damage from fraud and misconduct allegations made against it by the patient. See HIPAA Sanctions Triggered From Covered Entity Statements To Media, Workforce.
OCR subsequently reinforced its warning to covered entities and business associates about unauthorized disclosures of protected health information in a 2016 Frequently Asked Question (Media FAQ) that discussed covered entities HIPAA responsibilities when dealing with the media. The Media FAQ was issued in conjunction with OCR’s collection of its $2.2 million settlement with New York-Presbyterian Hospital and a series of other settlements totaling $999,000 from three other health care providers accused of violating HIPAA by allowing media personnel into treatment or other areas where patients or patient protected health information was accessible without first obtaining a HIPAA compliant written authorization from each patient or other subject present or whose protected health information otherwise would be accessible to the media. See $999K Price Hospitals Pay To Settle HIPAA Privacy Charges From Allowing ABC To Film Patients Without Authorization.
In the Media FAQ, OCR stated HIPAA required covered entities to obtain prior written authorization before disclosing protected health information to the media or allowing media to film or access exam rooms or other areas where patients or protected health information could be observed or accessed. The Media FAQ also stated that masking or blurring the identity of the patient or their specific information was not an adequate substitute for written authorization and that covered entities also were responsible for ensuring that reasonable safeguards were in place to protect against impermissible disclosures or to limit incidental disclosures of other PHI in areas where media is allowed access where prior authorization has not been obtained. While stressing the importance of compliance with these requirements, however, the Media FAQ clarified that the HIPAA Privacy Rule does not require health care providers to prevent members of the media from entering areas of their facilities that are otherwise generally accessible to the public like public waiting areas or areas where the public enters or exits the facility In addition, the Media FAQ states a health care provider or other Covered Entity also highlighted certain other limited circumstances where HIPAA might allow limited disclosure of protected health information to the media in accordance with specific provisions of the Privacy Rule about an incapacitated patient when in the patient’s best interest; or disclose a patient’s location in the facility and condition in general terms that do not communicate specific medical information about the individual to the media or any other person any person where the individual has not objected to his information being included in the facility directory and the media representative or other person asks for the individual by name.
In the intervening years, OCR periodically has issued additional reminders to covered entities about HIPAA’s general prohibition against unconsented disclosures to the media as well as sanctioned harshly various covered entities for violating these prohibitions. In 2017, OCR required the largest not-for-profit health system in Southeast Texas, Memorial Hermann Health System (MHHS), to pay OCR $2.4 million to settle charges it violated HIPAA by issuing a press release to the media that shared the name and other protected health information about a patient suspected of using a fraudulent insurance card to obtain care at a clinic without the patient’s prior HIPAA-compliant authorization. While OCR concluded a report made MHHS made to law enforcement about the patient was allowable under the Privacy Rule, OCR found MHHS violated the Privacy Rule by issuing the press release disclosing the patient’s name and other PHI without authorization from the patient and also by failing to timely document the sanctioning of its workforce members for impermissibly disclosing the patient’s information. See $2.4M HIPAA Settlement Warns Providers About Media Disclosures Of PHI.
Minimize Exposures By Preventing Unauthorized Media & Other Disclosures
Even without Mr. Elliott’s outrage heightening awareness about HIPAA’s prohibitions against unauthorized disclosures of protected health information to the media, the recent warning about HIPAA’s restrictions on media disclosure and access to protected health information and patient treatment areas in OCR’s 5/5 Guidance alone should serve as a strong incentive for covered entities and business associate promptly to reverify that the adequacy of their current policies, practices and training to prevent inappropriate media disclosures of protected health information and otherwise defend their compliance with OCR’s interpretation of HIPAA’s requirements for dealing with the media. Predictable heightened patient and public awareness and expectations about these and other HIPAA responsibilities fueled by the widespread media coverage of Mr. Elliott’s COVID-19 test results and his outrage about the unauthorized disclosure of his test results makes it more important than ever that health care providers and other covered entities and business associates take steps to prepare to respond to foreseeable complaints and questions by other patients, their families and others.
As part of these efforts, most covered entities and business associates may want to consider, at minimum, reconfirming the adequacy and understanding of their current media and other disclosure policies and practices, as well as sending strategic communications to their business associates and members of their workforce reminding them of the covered entity’s policies regarding media access and disclosures.
As part of these activities, covered entities should consider conducting a well-documented assessment of their current policies, practices and workforce training on disclosure of information to the media and other parties generally, as well as policies on allowing media or other parties to enter, film, photograph or record within their facilities or otherwise disclosing or allowing media access to their facilities. Along with these efforts, most covered entities also may want to consider also reminding workforce members that their patient privacy responsibilities also requires that they not share or discuss patient protected health information, film, photograph, or otherwise record, patients or areas where patients or patient protected health information is or might be present without prior written consent of the patient and the consent of their organization.
Since covered entities and members of their workforce also are likely to be subject to other statutory, ethical, contractual or other privacy or confidentiality requirements beyond those imposed by the HIPAA Laws such as medical confidentiality duties applicable to physicians and other health care providers under medical ethics, professional licensure or other similar rules, contractual responsibilities, as well as common law or statutory privacy, theft of likeness or other statutory or common law tort claims and exposures. Covered entities and business associates generally should consider whether other steps are advisable to manage these exposures along with managing their HIPAA Law compliance.
Given the high incidence of COVID-19 exposure and infection within their workplace, covered entities, business associates and other employers should use care fulfill their HIPAA Law relevant employment law confidentiality responsibilities when dealing with testing or other medical information about employees. In this respect, along with any HIPAA Law obligations that a covered entity or business associate has in handling medical information about a patient who also is an employee or family member of an employee, covered entities also should use care to ensure that medical confidentiality requirements of the Americans With Disabilities Act (“ADA”) and other applicable employment laws are met.
Since this analysis and review in most cases will result in the uncovering or discussion of potentially legally or politically sensitive information, Covered Entities should consider consulting with or engaging experienced legal counsel for assistance in structuring and executing these activities to maximize their ability to claim attorney-client privilege or other evidentiary protections against discovery or disclosure of certain aspects of these activities.
Finally, covered entities should keep in mind that HIPAA and other medical privacy compliance and risk management is an ongoing process requiring constant awareness and diligence. Consequently, covered entities and business associates also should use care both to monitor OCR and other regulatory and enforcement developments as well as exercise ongoing vigilance to monitor and maintain compliance within their organizations.
More Information
We hope this update is helpful. For more information about the these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years legal and operational management work, coaching, public policy and regulatory affairs leadership and advocacy, training and public speaking and publications. As a significant part of her work, Ms. Stamer has worked extensively domestically and internationally on an demand, special project and ongoing basis with health industry, health plan and insurance and other business, government and community organizations and their leaders, spoken and published extensively on HIPAA and other privacy and data security concerns, as well as other health care and health benefits; human resources, employee benefits and other workforce and services; insurance; workers’ compensation and occupational disease; business reengineering, disaster and distress; and many other management concerns.
Board Certified in Labor and Employment Law By the Texas Board of Legal Specialization, Scribe for the ABA JCEB Annual Agency Meeting with OCR, Vice Chair of the ABA International Section Life Sciences Committee, and the ABA RPTE Employee Benefits & Other Compensation Group and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer has extensive experience advising, representing, defending and training health care providers, health plans and insurers, employers, community organizations and others about HIPAA and other privacy concerns and has published and spoken extensively on these concerns.
Her involvement with HIPAA and other privacy and data concerns has taken place as part of her more than 30 years involvement working with with public and private health industry, health insurance and other employers and organizations of all sizes, employee benefit plans, insurance and financial services, health industry and a broad range of public and private domestic and international business, community and government organizations and leaders on pandemic and other health and safety, workforce and performance preparedness, risks and change management, disaster preparedness and response and other operational and tactical concerns throughout her adult life. A former lead advisor to the Government of Bolivia on its pension project, Ms. Stamer also has worked internationally and domestically as an advisor to business, community and government leaders on crisis preparedness and response, privacy and data security, workforce, health care and other policy and enforcement, as well as regularly advises and defends organizations about the design, administration and defense of their organizations workforce, employee benefit and compensation, safety, discipline and other management practices and actions.
Ms. Stamer also serves in leadership of a broad range of professional and civic organizations and shares insights and thought leadership through her extensive publications and public speaking. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
Lack of clarity in current tax regulations or guidance creating headaches? The Department of the Treasury (“Treasury Department”) and the Internal Revenue Service (“IRS”) are inviting businesses and individuals to submit recommendations about what issues the 2020-2021 Priority Guidance Plan should include. Businesses and individuals with ideas about tax guidance needed to solve vexing issues should consider submitting their proposed guidance to the the Treasury Department and IRS in response to this invitation.
The Treasury Department’s Office of Tax Policy and the Service uses the Priority Guidance Plan each year to identify and prioritize the tax issues that tax regulations, revenue rulings, revenue procedures, notices, and other published administrative guidance should address during the year.
The 2020-2021 Priority Guidance Plan will identify guidance projects that the Treasury Department and the Service intend to actively work on as priorities during the period from July 1, 2020, through June 30, 2021.
In reviewing recommendations and selecting additional projects for inclusion on the 2020-2021 Priority Guidance Plan, the Treasury Department and the Service will consider the following:
Whether the recommended guidance resolves significant issues relevant to a broad class of taxpayers;
Whether the recommended guidance reduces controversy and lessens the burden on taxpayers or the Service;
Whether the recommended guidance relates to recently enacted legislation;
Whether the recommendation involves existing regulations or other guidance that is outdated, unnecessary, ineffective, insufficient, or unnecessarily burdensome and that should be modified, streamlined, expanded, replaced, or withdrawn;
Whether the recommended guidance would be in accordance with Executive Order 13771 (82 FR 9339), Executive Order 13777 (82 FR 12285), Executive Order 13789 (82 FR 19317), or other executive orders.
Whether the recommended guidance promotes sound tax administration;
Whether the Service can administer the recommended guidance on a uniform basis; and
Whether the recommended guidance can be drafted in a manner that will enable taxpayers to easily understand and apply the guidance.
While suggestions are submitted throughout the year, Notice 2020-47 encourages individuals or businesses desiring to propose issues or other content to be included in the 2020-2021 Priority Guidance to submit their recommendations for guidance by Wednesday, July 22, 2020, for possible inclusion on the original 2020-2021 Priority Guidance Plan. Taxpayers are not required to submit recommendations for guidance in any particular format. Taxpayers should, however, briefly describe the recommended guidance and explain the need for the guidance. In addition, taxpayers may include an analysis of how the issue should be resolved. For recommendations to modify, streamline, or withdraw existing regulations or other guidance, taxpayers should explain
how the changes would reduce taxpayer cost and/or burden or benefit tax administration.
Notice 20-47 also states that taxpayers suggesting more than one guidance project prioritize the projects by order of importance. If a large number of projects are being suggested, it would be helpful if the projects were grouped by subject matter and then in terms of high, medium, or low priority. Requests for guidance in the form of petitions for rulemaking will be considered with other recommendations for guidance in accordance with the considerations described in Notice 2020-47.
More Information
We hope this update is helpful. For more information about the these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years legal and operational management work, coaching, public policy and regulatory affairs leadership and advocacy, training and public speaking and publications. As a significant part of her work, Ms. Stamer has worked extensively domestically and internationally on an demand, special project and ongoing basis with business, government and community organizations and their leaders, spoken and published extensively on human resources, employee benefits and other workforce and services, tax, health care and health benefits, insurance, workers’ compensation and occupational disease, business disaster and distress and many other management topics, As a key focus of this work, Ms. Stamer has worked with public and private employers of all sizes, employee benefit plans, insurance and financial services, health industry and a broad range of public and private domestic and international business, community and government organizations and leaders on pandemic and other health and safety, workforce and performance preparedness, risks and change management, disaster preparedness and response and other operational and tactical concerns throughout her adult life. A former lead advisor to the Government of Bolivia on its pension project, Ms. Stamer also has worked internationally as an advisor to business, community and government leaders on crisis preparedness and response, workforce, health care and other reform, as well as regularly advises and defends organizations about the design, administration and defense of their organizations workforce, employee benefit and compensation, safety, discipline and other management practices and actions.
Board Certified in Labor and Employment Law By the Texas Board of Legal Specialization, Scribe for the ABA JCEB Annual Agency Meeting with OCR, Vice Chair of the ABA International Section Life Sciences Committee, and the ABA RPTE Employee Benefits & Other Compensation Group and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also serves in leadership of a broad range of professional and civic organizations and shares insights and thought leadership through her extensive publications and public speaking. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
IRS Notice 2020-33 released indexing the permissible health FSA carryover. As a consequence, the permissible amount immediately increases from $500 to $550.
IRS Notice 2020-29 released to provide temporary flexibility under cafeteria plans for new or changed health coverage and dependent care and health FSA elections, and extensions in certain circumstances of claims periods before use-or-lose must be applied, in response to the changed circumstances many have experienced with respect to availability of childcare and availability of elective health procedures. And a few other HDHP nuggets in there as well.
More Information
We hope this update is helpful. For more information about the these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Solutions Law Press, Inc. invites you receive future updates by registering on our Solutions Law Press, Inc. Website and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years legal and operational management work, coaching, public policy and regulatory affairs leadership and advocacy, training and public speaking and publications. As a significant part of her work, Ms. Stamer has worked extensively domestically and internationally on an demand, special project and ongoing basis with business, government and community organizations and their leaders, spoken and published extensively on human resources, employee benefits and other workforce and services, tax, health care and health benefits, insurance, workers’ compensation and occupational disease, business disaster and distress and many other management topics, As a key focus of this work, Ms. Stamer has worked with public and private employers of all sizes, employee benefit plans, insurance and financial services, health industry and a broad range of public and private domestic and international business, community and government organizations and leaders on pandemic and other health and safety, workforce and performance preparedness, risks and change management, disaster preparedness and response and other operational and tactical concerns throughout her adult life. A former lead advisor to the Government of Bolivia on its pension project, Ms. Stamer also has worked internationally as an advisor to business, community and government leaders on crisis preparedness and response, workforce, health care and other reform, as well as regularly advises and defends organizations about the design, administration and defense of their organizations workforce, employee benefit and compensation, safety, discipline and other management practices and actions.
Board Certified in Labor and Employment Law By the Texas Board of Legal Specialization, Scribe for the ABA JCEB Annual Agency Meeting with OCR, Vice Chair of the ABA International Section Life Sciences Committee, and the ABA RPTE Employee Benefits & Other Compensation Group and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also serves in leadership of a broad range of professional and civic organizations and shares insights and thought leadership through her extensive publications and public speaking. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
Employer and union-sponsored health plans, their sponsors, fiduciaries and administrators should heed the reminder of the importance of ensuring their health plans properly comply in form and operation with the mental health and substance abuse parity mandes of the Mental Health Parity and Addiction Equity Act (MHPAEA) in when the U.S. Department of Labor (“DOL”) Employee Benefit Security Administration (“EBSA”) released its 2020 Report to Congress: Parity Partnerships: Working Together (the”2020 Report”) available for review here.
In addition to exposing the health plan administrators and othr fiduciaries to potential claims denial or fiduciary responsibility claims brought by participants or beneficiaries, the Department of Labor or both, administrative penalties by the EBSA, or both, the MHPAEA mental health and substance abuse parity rules are among 40 federal mandates that when violated can rigger the automatic $100 per violation per day employer excise tax penalty under Internal Revenue Code Section 6039D. As a consequence, violations of the MHPAEA are particularly risky and potentially expensive for private employers, their health plans and the plan administrators and fiduciaries that administer it.
To avoid violation of the MHPAEA, covered health plans generally must cover mental health and substance abuse care and treatment on the same terms in form and in operation as other similar benefits, as well as comply with special notice and claims administration requirements. Comparability of mental health and substance abuse coverage is determined in accordance with complicated federal regulations, Meeting these requirements in operations is often tricky, particularly when health plans attempt to apply tools to manage hospitalization or other treatments. For additional information about MHPAEA, C. Stamer, What Should I Know About the MHPAEA and 21st Century Cures Act (2018).
Along with the 2020 Report, Along with releasing the report, EBSA also is continuing its efforts to educate plan sponsors, fiduciaries, administrators about the importance of compliance with the federally imposed group health plan mental health and substance abuse coverage mandates of the Mental Health Parity and Addiction Equity Act (“MHPAEA”). Consequently, along with its release of the 2020 Report, EBSA reminded plans, employers and other interested parties of the following previously published EBSA guidance about the MHPAEA mandates:
MHPAEA enforcement is split between the EBSA and the Department of Health & Human Services Centers for Medicare & Medicaid Services (“CMS”) depending on the nature and sponsorship of the health program.
Pursuant to its enforcement authority under Title I of the Employee Retirement Income Security Act of 1974 (ERISA), EBSA is responsible for enforcement of the MHPAEA with respect to approximately 2.4 million private employment-based group health plans. In contrast, CMSenforces MHPAEA and other applicable provisions of Title XXVII of the Public Health Service Act (PHS Act) with respect to non-federal governmental group health plans, such as plans for employees of state and local governments. Sponsors of self-funded, nonfederal governmental plans may elect to exempt those plans from (opt out of) certain requirements of Title XXVII of the PHS Act, including MHPAEA. In addition, CMS enforces MHPAEA with respect to health insurance issuers selling products in the individual and fully insured group markets in states that elect not to enforce or fail to substantially enforce MHPAEA. Currently, CMS is responsible for enforcement of MHPAEA with regard to issuers in four states: Missouri, Oklahoma, Texas and Wyoming. In these states, CMS reviews health insurance policy forms of issuers in the individual and group markets for compliance with MHPAEA prior to the products being offered for sale. In addition, CMS has collaborative enforcement agreements with five states: Alabama, Florida, Louisiana, Montana, and Wisconsin. These states perform state regulatory and oversight functions with respect to the federal requirements, including MHPAEA. However, if the state finds a potential violation and is unable to obtain compliance by an issuer, the state will refer the matter to CMS for possible enforcement action. CMS also performs market conduct examinations, where issuers are audited for compliance with applicable federal requirements, including MHPAEA, in states where CMS is responsible for enforcement and in states with a collaborative enforcement agreement when the state requests assistance.
EBSA FY 2019 Enforcement Against Private Employment Based Health Plans
The Fiscal Year (“FY”) 2019 Fact Sheet reports that in FY 2019, EBSA investigated and closed 186 health plan investigations in FY 2019 (and 3,758 health plan investigations since FY 2011). Of these:
24 investigations involved plans of both types (the plan or service provider offered both fully-insured and self-insured options).
183 of these closed investigations involved plans subject to MHPAEA, which were reviewed for MHPAEA compliance. Of these, 68 investigations involved fully-insured plans, 91 investigations involved self-insured plans, and 24 investigations involved plans of both types (the plan or service provider offered both fully-insured and self-insured options).
EBSA cited 12 MHPAEA violations in 9 of these investigations.
Of these 9 investigations, 1 investigation involved a fully-insured group health plan, 3 investigations involved self-funded group health plans, 2 investigations involved partially self-funded group health plans and 3 were service provider investigations.
EBSA benefits advisors answered 90 public inquiries, including 62 complaints, in FY 2019 related to MHPAEA (and answered 1,445 inquiries related to MHPAEA since FY 2011)
Concerning the focus of the EBSA investigated MHPAEA violations, EBSA reports the investigations focused on the following categories:
Annual dollar limits: dollar limitations on the total amount of specified benefits that may be paid in a 12-month period under a group health plan or health insurance coverage for any coverage unit (such as self-only or family coverage).
Aggregate lifetime dollar limits: dollar limitations on the total amount of specified benefits that may be paid under a group health plan or health insurance coverage for any coverage unit.
Benefits in all classifications: requirement that if a plan or issuer provides mental health or substance use disorder benefits in any classification described in the MHPAEA final regulation, mental health or substance use disorder benefits must be provided in every classification in which medical/surgical benefits are provided.
Financial requirements: deductibles, copayments, coinsurance, or out-of-pocket maximums.
Treatment limitations: includes limits on benefits based on the frequency of treatment, number of visits, days of coverage, days in a waiting period, or other similar limits on the scope or duration of treatment. Treatment limitations include both quantitative treatment limitations (QTLs), which are expressed numerically (such as 50 outpatient visits per year), and nonquantitative treatment limitations (NQTLs), which otherwise limit the scope or duration of benefits for treatment under a plan or coverage.
Cumulative financial requirements and QTLs: financial requirements and treatment limitations that determine whether or to what extent benefits are provided based on certain accumulated amounts including deductibles, out-of-pocket maximums and annual or lifetime day or visit limits.
Other ERISA violations (such as claims processing and disclosure violations) affecting mental health and substance use disorder benefits.
Along with the EBSA enforcement, private participants and beneficiaries of private employer sponsored health plans also can bring lawsuits to recover benefits and other relief for violatons of MHPAEA. Along with the actual damages, attorneys’ fees and other costs of enforcement, a successful MHPAEA enforcement also typically will reveal the sponsoring employer or union’s failure to make the required self-disclosure and excise tax payments mandated for violations under Internal Revenue Code Section 6039D, triggering added penalties beyond the initial penalties triggered by the uncorrected violation. Furthermore, delayed discovery of these violations also makes correction particularly costly for self-insured plans and their sponsors as deadlines for submitting expenses to qualify for stop loss reimbursement often will have passed by the time the liability comes to light. Accordingly, employer and other health plan sponsors, their fiduciaries and adminstrators generally will want to audit and monitor their health plan’s compliance with the MHPAEA throught the calendar year and as plan year or stop loss filing deadlines approach to mitigate these exposures.
More Information
We hope this update is helpful. For more information about the these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Solutions Law Press, Inc. invites you receive future updates by registering on our Solutions Law Press, Inc. Website and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications. As a significant part of her work, Ms. Stamer has worked extensively domestically and internationally with business, government and community leaders to prepare for and deal with pandemic and other health and safety, financial, workforce and other organizational crisis, change and workforce, employee benefit, health care and other operations planning, preparedness and response for more than 30 years. As a part of this work, she regularly advises businesses and government leaders on an an demand and ongoing basis about preparation of workforce, health care and other business and government policies and practices to deal with management in a wide range of contexts ranging from day to day operations, through times of change and in response to operational, health care, natural disaster, economic and other crisis and change.
Author of “Privacy and the Pandemic Workshop” for the Association of State and Territorial Health Plans, “How to Conduct A Reduction In Force,” and a multitude of other highly regarded publications and presentations on workforce, compliance, health care and health benefits, pandemic and other health crisis, workers’ compensation and occupational disease, business disaster and distress and many other topics, Ms. Stamer has worked with employers, insurers, health industry organizations and providers and domestic and international community and government leaders on pandemic and other health and safety, workforce and performance preparedness, risks and change management, disaster preparedness and response and other operational and tactical concerns throughout her adult life. A former lead advisor to the Government of Bolivia on its pension privaitization project, Ms. Stamer also has worked internationally as an advisor to business, community and government leaders on crisis preparedness and response, workforce, health care and other reform, as well as regularly advises and defends organizations about the design, administration and defense of their organizations workforce, employee benefit and compensation, safety, discipline and other management practices and actions.
Board Certified in Labor and Employment Law By the Texas Board of Legal Specialization, Scribe for the ABA JCEB Annual Agency Meeting with OCR, Vice Chair of the ABA International Section Life Sciences Committee, and the ABA RPTE Employee Benefits & Other Compensation Group and and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
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 your profile here.
The financial effects of the COVID-19 pandemic and containment efforts has many businesses flailing to reconfigure their staffing and other business models even as Congress is preparing to impose paid COVID related leave mandate on employers with less than 500 employees. With the sharp falloff in business threatening their current liquidity and operations, many business leaders understandably feel pressure to substantially reduce their workforces or make other radical changes in business operations to stem their business’ resulting COVID-19 created financial crisis. When choosing and implementing their options, however, business leaders should carefully weigh all of their options and use care when designing and implementing their workforce and other business adjustments strategically to best position their businesses to survive the current crisis without triggering unanticipated employment, employee benefit, compensation or other liabilities as well as to best position their organizations and its leaders to retain the trust and respect their business will need to regain the customer, vendor, workforce and other business respect and loyalty their business will need to recover once the crisis has past.
Many business owners and leaders understandably feel the COVID-driven economic downturn forces them to act quickly to implement workforce reductions, close plants, or shut down all or portions of their business operations. Where a distressed business contemplates a plant closing, mass layoff or other substantial change, however, the business and its leaders need to fully understand the various financial and legal effects and costs of the proposed workforce and other business changes and act strategically to manage their resulting obligations and obligations. Businesses owners and leaders dealing with these issues are invited to check out the COVID-19 Workforce Change Planning & Implementation Process Flow tool and other resources available here.
While financial and other business exigencies unquestionably makes speedy action critical for many businesses, owners and management need to recognize that poorly chosen or improperly implemented strategies or actions raises significant risks that unanticipated costs and liabilities will undermine or wipe out anticipated benefits of the contemplated actions, undermine, the business future recovery opportunities, expose the business, its ownership and management to substantial liability and other risks.
While the current economic freefall may tempt many business leaders to see shutting down their operations or other mass layoffs as the best option for protecting their businesses, it is important to keep in mind that layoffs and other employment terminations as well as early terminations of other services contracts typically trigger legal and finanncial exposures. Businesses leaders need to recognize and account for these obligations and their financial and operational costs when weighing their options and plan to manage the obligations and costs and other liabilities when implementing the strategy chosen by their business. This can be particularly important where a realistic likelihood exists that the business may file for bankrutpcy protection and/or fail to meet certain of these obligations as some obligations may create personal liability for business owners or leaders if not fulfilled by the company.
When anticipating or executing potential employment terminations, businesses and their leaders should recognize and address properly the employment, unemployment, employee benefit, compensation and other responsibilities attendant to any employment termination. Whether planning to furlow workers for a short period or planning a longer term layoff or shutdown, businesses leaders must fully understand their probable fixed obligations including any accellerated or added liabilities and costs likely to be triggered by the workforce action. Accordingly businesses should prepare to handle the fallout from COVID-19 impacts to their workforce and other business operations by on their existing or contemplated voluntarily imposed and legally mandated employment, compensation, benefit, safety, contractual and other related obligations obligations.
While planning for workforce or other actions, businesses and leaders also should are urged to confirm the availability of their cash flow to meet current requirements to timely fund payroll and associated taxes, health, disability and defined benefit pension, and other costs where nonpayment or untimely payment carries substantial entity and/or personal exposure to penalties or other liabilities likely to survive bankruptcy or other restructuring. In the case of health and pension benefit liabilities, for instance, nonpayment of premiums and other required funding could carry fiduciary liability for business owners, board members and other management with responsibility or discretion over these programs and their funding. Accordingly, if a business anticipates any risk of inability to fund already accrued or impending funding obligations, management should contact experienced legal counsel for immediate assistance with addressing these potential risks.
Additionally, businesses and their leaders contemplating offering special leave to workers absent or furloughed during leave need to take into account and handle properly both applicable federal, state and local mandated benefits and other rights, the legal requirements for adopting and implementing paid or other voluntarily provided leave, the benefit benefit, recall and other rights of workers terminated, furloughed or absent due COVID-related illness or other events.
COVID-19 Related Since Leave Or Other Absences From Ongoing Workforce
Regardless of whether a business plans additional workforce changes, all businesses need to be prepared to deal with absences resulting from contractions or exposures of COVID-19 by employees or their families or other COVID-19 associated absences.
Employees taking voluntary or involuntary leave likely already are entitled to certain paid or unpaid leave and associated benefit, reinstatement and other rights under a hodgepodge of voluntarily established company policies and other federal, state and even local regulations. Beyond any existing accrued rights to paid or unpaid leave due an employee under voluntary company policies and/or federal, state or local mandates, businesses need to understand and be prepared to meet their obligations to provide continued health benefit coverage and reinstatement to benefits as mandated by the Family & Medical Leave Act (“FMLA”) for FMLA covered workers, health plan continuation coverage rights for employees experiencing reductions in hours triggering losses of health plan eligibility as required by the Consolidated Omnibusiness Budget Reconciliation Act (“COBRA”). These obligations are expected to be expanded later this week if the “Families First Coronavirus Response Act,” (H.R. 6201) passed by the House of Representatives last week passes the Senate and is signed into law by President Trump as expeted later this week as part of efforts to mitigate impacts of disruptions of the COVID-19 containment disruptions. While H.R. 6201 is expected to include tax credits for employers to help mitigate the financial effects of its paid leave mandates for covered employers, employers will want to understand and take into account these requirements and the potential tax credits when deciding what leave to offer beyond the mandated paid leave and properly plan for, anticipate costs of and integrate those obligations with their other leave obligations.
Aside from the likely increase in the frequency of the occurence of these usual employment absence, termination, unemployment, compensation, and benefit liabilities and costs, businesses planning or contemplating some or all of their employees will termiinate employment due to long-term illnesses, employer layoffs or other COVID-related events need to anticipate and prepare to deal with other likely additional consequences. For instance:
Illness and other absences generally trigger added potential exposure for discrimination, retaliation, privacy and other employment claims and risks if not properly recognized and managed;
The selection and implementation of workers to be affected by furloughs, layoffs and other workforce actions should be conducted carefully to manage potential Relatively small declines in the size of a business’ workforce can trigger pricing changes or even termination rights for vendors providing coverage or services for group health or other insurance, stop-loss insurance coverage on self-insured health plans or other human resources, payroll, benefits or other related services or coverage;
Changes in workforce size and compensation can affect whether an employer sponsored health, 401(k) or other savings or retirement plan or other benefit program fulfills applicable coverage, participation and nondiscrimination requirements resulting in tax consequences for the employer and in some instances, key or highly compensated employees, obigations for the business to make additional funding contributions, in the case of employers with health plans covered by Internal Revenue Code Section 4980H, mandatory contributions for health insurance exchange coverage for uncovered employees or other consequences.
Reductions in hours or terminations of employment that reduce participation in 401(k) and other savings or retirement programs by 20 percent or more generally trigger obligations to fully vest and for retirement plans, accellerate funding of benefts of terminating workers under the “partial termination” rules applicable to those programs.
Severance, paid or unpaid leave, and other arrangements voluntarily adopted in response to the COVID-19 disruptions or covered by other voluntarily adopted programs or practices need to be appropriately documented and administered in accordance with the Employee Retirement Income Security Act (“ERISA”) or other applicable federal law as well as properly integrated with other federal, state, and local leave or other mandates to manage unanticipated costs and avoid unanticipated fiduciary and financial liability for the business, its management or both.
Financial disruptions that prevent a business from timely making required contributions to fund defined benefit or other pension plans insured by the Pension Benefit Guarantee Corporation can trigger funding notice, excise tax penalty and other obligations for the employer and its fiduciaries.
For certain employers, reductiions of all or a significant portion of a workforce companywide or at certain locations by a distressed or other business usually triggers a host of special obligations and attendant costs for businesses. Businesses anticipating these changes need to take into account the financial costs and legal obligations and expossures of proposed workforce or other actions and where applicable, make appropriate arrangements to comply or implement their workforce and other business restructurings to restructuring to minimize and meet these obligations.
Of course, For instance, layoffs and other reductions in force or closings by businesses often trigger a host of legal and financial obligations. at certain businesses or business locations often trigger obligations to provide advance notifications under the Worker Adjustment and Retraining Notification Act (WARN) or other statutes or contracts. Where these obligations are triggered, the business not only will need to arrange to provide required notitications but also needs to take into account their business’ likely financial exposure for payment of pay in lieu of notice or other costs and liability arising from the employment. WARN, business contemplating or implementing a plan closing, mass layoff or other reductions in force also should evaluate and make appropriate arrangements to address potential obligations under state plant closing laws, the ARRA Stimulus Bill Extension Rules amended and extended earlier this month and other requirements of COBRA, voluntary or contractually obligated termination pay or other severance obligations, employee benefit, unemployment, and other laws.
The COVID-19 Workforce Change Planning & Implementation Process Flow tool provides an overview of the type of process flow tthat business owners and leaders dealing with these issues may find useful to help guide their process for planning their business’ workforce management response to the unexpected business exigencies created by the ongoing COVID-19 outbreak.
For More Information
We hope this update is helpful. For more information about this or other labor and employment developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Law and Labor and Employment Law and Health Care; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services, construction, manufacturing, staffing and workforce and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. As a part of this work, she has continuously and extensively worked with domestic and international employer and other management, employee benefit and other clients to assess, manage and defend joint employer and other worker classifications and practices under the FLSA and other federal and state laws including both advising and and assisting employers to minimize joint employer and other FLSA liability and defending a multitude of employers against joint employer and other FLSA and other worker classification liability. She also has been heavily involved in advocating for the Trump Administration’s restoration of more historical principles for determining and enforcing joint employer liability over the past several years.
Author of hundreds of highly regarded books, articles and other publications, Ms. Stamer also is widely recognized for her scholarship, coaching, legislative and regulatory advocacy, leadership and mentorship on wage and hour, worker classification and a diverse range of other labor and employment, employee benefits, health and safety, education, performance management, privacy and data security, leadership and governance, and other management concerns within the American Bar Association (ABA), the International Information Security Association, the Southwest Benefits Association, and a variety of other international, national and local professional, business and civic organizations including highly regarded works on worker reclassification and joint employment liability under the FLSA and other laws published by the Bureau of National Affairs and others. Examples of these involvements include her service as the ABA Intellectual Property Law Section Law Practice Management Committee; the ABA International Section Life Sciences and Health Committee Vice Chair-Policy; a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former JCEB Council Representative and Marketing Chair; Past Chair of the ABA RPTE Employee Benefits and Other Compensation Group and Vice Chair of its Law Practice Management Committee; Past Chair of the ABA Managed Care & Insurance Interest Group; former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Southwest Benefits Association Board member; past Texas Association of Business State Board Member, BACPAC Committee Meeting, Regional and Dallas Chapter Chair; past Dallas Bar Association Employee Benefits Committee Executive Committee; former SHRM Region IV Chair and National Consultants Forum Board Member; for WEB Network of Benefit Professionals National Board Member and Dallas Chapter Chair; former Dallas World Affairs Council Board Member; founding Board Member, past President and Patient Empowerment and Health Care Heroes founder for the Alliance for Health Care Excellence; former Gulf States TEGE Council Exempt Organizations Coordinator and Board member; past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
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 your profile here.
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U.S. employers need to prepare for their likely need to deal with paid family medical leave, paid sick leave, unemployment insurance and other employer impacting provisions of the “Families First Coronavirus Response Act,” (H.R. 6201) passed by the House of Representatives last week and expected to pass the Senate in some form this week as part of Congressional efforts to mitigate impacts of disruptions of the COVID-19 containment disruptions. Since the paid leave mandates would take effect 15 days from enactment, employers will want to prepare to comply and take into account the likely mandates when planning and communicating with workers and dealing with other financial and operational disruptions from the crisis.Solutions Law Press, INC. is planning to host a briefing for employers on the requirements after passed by Congress. For an invitation, register at http://www.solutiinslawpress.com or email here.
Paid Family Medical Leave
As passed by the House, the paid leave requirements currently only apply to employers with fewer than 500 employees and are accompanied by tax credit provisions intended to help covered businesses pay the cost of compliance. The bill’s paid leave requirements add special job-protected paid leave to the Family and Medical Leave Act (FMLA) for employees who have been working for at least 30 calendar days. In particular, covered employees would be entitled to 12 weeks of paid family leave, of which the first 14 days may be unpaid, to respond to quarantine requirements or recommendations, to care for family members who are responding to quarantine requirements or recommendations, and to care for a child whose school has been closed as a result of the COVID-19 pandemic (“COVID Leave”). The bill also provides employees may. but employers can’t require employees to use accrued personal or sick leave during the first 14 days. After the initial 14 days, covered employers must compensate employees in an amount that is not less than two-thirds of the employee’s regular rate of pay. Because the leave is FMLA covered, employers should expect to be required to continue health coverage during the leave at usual employee contribution rates and to reinstate the employee to their position with all benefits and employment rights and seniority upon timely return. The provisions will take effect 15 days after the date of enactment and expire on December 31, 2020.
Paid Sick Leave
Employers with fewer than 500 employees will be required to provide full-time employees 2 weeks (80 hours) of paid sick leave for COVID-19 specific circumstances related to COVID-19 such as self-isolating, doctors’ visits or the like. Part-time employees would be entitled to the number of hours of paid sick time equal to the average number of hours worked over a 2-week period.
Employers must pay employees for any paid sick time taken at their regular rates of pay and will be required to post a notice informing employees of their rights to leave.
Since the bill expressly does not, as currently drafted, the bill expressly provides that it does not preempt existing state or local paid sick leave entitlements, employers also could face additional requirements under state or local law.
Like the COVID leave, these provisions also will go into effect 15 days after the date of enactment and expire on December 31, 2020.
Unemployment Insurance
The bill also includes $1 billion in emergency unemployment insurance (UI) relief to the states: $500 million for costs associated with increased administration of each state’s unemployment insurance (“UI”) program and places $500 million in reserve to help states with a 10 percent increase in unemployment. To receive a portion of this grant money, states mustveclerience the required increase in unemployment and temporarily ease certain UI eligibility requirements, such as waiting periods and work search requirements.
Prospects For Enactment
Although some Senators raised questions about certain provisions of the bill, it is expected to pass in some form this week as Congress and the Administration rush to provide relief for workers and business impacted by the economic effects of the COVID-18 pandemic containment efforts. Accordingly, covered employers should expect Congress to pass and President Trump to sign the bill this week. Meanwhile all employers also should brace for added legislation and regulation as well as continued operational and financial disruption as the COVID-19 virus impacts continue to roll out across the U.S. and around the World.
More Information
We hope this update is helpful. For more information about the these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Solutions Law Press, Inc. invites you receive future updates by registering on our Solutions Law Press, Inc. Website and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications. As a significant part of her work, Ms. Stamer has worked extensively domestically and internationally with business, government and community leaders to prepare for and deal with pandemic and other health and safety, financial, workforce and other organizational crisis, change and workforce, employee benefit, health care and other operations planning, preparedness and response for more than 30 years. As a part of this work, she regularly advises businesses and government leaders on an an demand and ongoing basis about preparation of workforce, health care and other business and government policies and practices to deal with management in a wide range of contexts ranging from day to day operations, through times of change and in response to operational, health care, natural disaster, economic and other crisis and change.
Author of “Privacy and the Pandemic Workshop” for the Association of State and Territorial Health Plans, “How to Conduct A Reduction In Force,” and a multitude of other highly regarded publications and presentations on workforce, compliance, health care and health benefits, pandemic and other health crisis, workers’ compensation and occupational disease, business disaster and distress and many other topics, Ms. Stamer has worked with employers, insurers, health industry organizations and providers and domestic and international community and government leaders on pandemic and other health and safety, workforce and performance preparedness, risks and change management, disaster preparedness and response and other operational and tactical concerns throughout her adult life. A former lead advisor to the Government of Bolivia on its pension privaitization project, Ms. Stamer also has worked internationally as an advisor to business, community and government leaders on crisis preparedness and response, workforce, health care and other reform, as well as regularly advises and defends organizations about the design, administration and defense of their organizations workforce, employee benefit and compensation, safety, discipline and other management practices and actions.
Board Certified in Labor and Employment Law By the Texas Board of Legal Specialization, Scribe for the ABA JCEB Annual Agency Meeting with OCR, Vice Chair of the ABA International Section Life Sciences Committee, and the ABA RPTE Employee Benefits & Other Compensation Group and and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see http://www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available 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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation considering the specific facts and circumstances presented in their unique circumstance at the particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law constantly and often rapidly evolves, subsequent developments that could impact the currency and completeness of this discussion are likely. The author and Solutions Law Press, Inc. disclaim, and have no responsibility to provide any update or otherwise notify anyone of any fact or law specific nuance, change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Following up on the White House’s announcement yesterday that by major health insurers, Medicare and Medicaid to cover medically necessary testing and expand coverage for treatment of 2019 Novel Coronavirus (“coronavirus), without applying deductibles or coinsurance and offer expanded telemedicine and other coverage for coronavirus care, the Internal Revenue Service (“IRS”) today issued guidance giving health plans confirming health plans waiving deductibles won’t violate the Internal Revenue Code health savings account high deductible health plan rules. However many employer or other sponsors of self-insured health plans may need to amend their health plans and take other steps if they want their health plans to provide similar coverage. Meanwhile the Centers for Disease Control (“CDC”) released updated guidance to help businesses, schools, and other organizations to operate safely during the current outbreak.
Coronavirus Testing & Other Health Coverage
Major health insurers agreed in a Whitehouse Coronavirus Taskforce meeting yesterday to cover medically necessary testing and extend coverage to medically necessary treatment. The agreement only technically binds Medicare, Medicaid and other government programs and private insurers participating in the meeting. It does not automatically extend coverage or waive deductibles for self-insured employer or union sponsored health plans which provide coverage for an estimated 61 percent of covered U.S. worker and their families. Self-insured plan sponsors wishing to provide similar coverage and waive deductibles generally will need to take specific action to amend their plans and related contractracts and communications.
Vice President Pence announced the agreement with insurers yesterday saying among other things:
I’m pleased to report, as you requested, Mr. President, that all the insurance companies here — either today or before today — have agreed to waive all copays on coronavirus testing and extend coverage for coronavirus treatment in all of their benefit plans.
And, at your direction, Medicare and Medicaid, last week, already made it clear to Medicare and Medicaid beneficiaries that coronavirus testing and treatment would be covered. These private insurance carriers have extended that as well.
They’ve also agreed to cover telemedicine so that anyone, particularly among the vulnerable senior population, would not feel it necessary to go to a hospital or go to their doctor. They’ll know that telemedicine is covered.
While the announcement indicates that insurers involved in the meeting plan to expand coverage and waive deductibles, self-insured employer and union sponsored plans aren’t technically covered by the agreement. While many employers sponsoring self-insured health plans will want their health plan to provide similar coverage as part of their risk management response to the coronavirus outbreak. Self-insured plan sponsors and fiduciaries should confirm appropriate plan language is adopted and that their stop loss insurance carriers are on board or other arrangements are made to plan for and cover costs, and that other plan vendors are on board to handle responsibilities. This is particularly critical as failing to make the necessary amendments could result in an absence of stoploss insurance to cover additional cost. And relatively small workforce is with few people seeking the care, this might not make a material difference in plan costs. If several workers seek treatment, however, the absence of stoploss insurance coverage for the claims could both impact coverage for those particular items if the deductible under the policy has been met as well as could affect whether those claims count overall aggregate coverage losses. The bottom line is, make sure that your documentation matches your Promise or your extension of coverage will likely be truly 100% self insured. Likewise employers and other plan sponsors in the plan administrators of these plans are reminded that the law generally requires that they provide written notice of the changes to plan members in a timely fashion. Having plan administration services and other vendors on board also is important to ensure that the claims are appropriately and timely processed to avoid violation of plan terms and other rules.
In the meantime, the widespread lack of understanding among plan members about the distinction between insured and self-insured plans coupled with the breadth of the unqualified announcement by the White House is likely to fuel confusion by covered individuals and their providers. Not only will covered persons and providers need to know whether the program is insured or self-insured, they also will need to confirm how each of these programs implements the expanded coverage.
IRS Guidance Clears Way For High Deductible Health Plans To Raise Deductibles
Employers and health plans wishing to waive deductibles for coronavirus testing will not have to worry that waiving the deductible will violate IRS high deductible health plan (“HDHP”) rules, however. Earlier today, the IRS provided relief allowing high deductible health plans to pay these expenses without disqualifying their programs for high deductible health plan treatment under the Code in Notice 2020-15. The Notice provides that, until further guidance is issued, a health plan that otherwise satisfies the requirements to be a HDHP under Code section 223(c)(2)(A) will not fail to be an HDHP under section 223(c)(2)(A) merely because the health plan provides health benefits associated with testing for and treatment of COVID-19 without a deductible, or with a deductible below the minimum deductible (self only or family) for an HDHP. Also due to this guidance, an individual covered by the HDHP will not be disqualified from being an eligible individual under section 223(c)(1) who may make tax-favored contributions to a health savings account (HSA).
Business & Other Disruptions Response
Government, healthcare and other leaders are urging businesses and individuals to limit contact and care to guard against the virus because of its strength and ability to spread quickly. The U.S.’s top infectious-disease specialist told lawmakers the pathogen “is 10 times more deadly than the seasonal flu.”
Accordingly, health and government officials are urging all segments of society to take precautions. CDC, for instance has published the resources to help businesses, schools and others keep their people and locations safe here.
Unfortunately the strategy for ending the pandemic brings its own draconian side effects. Along with dealing with the threat of the disease itself, the efforts to manage the disease outbreak, many businesses also are forced to deal with demand losses, supply and business interruptions, staffing shortages, unanticipated expenses and a wide range of other operational and financial disruptions that are side effects of the outbreak and its management.
The outbreak has and continues to prompt the cancellation of a plethora of business, trade, government, school, and sports and entertainment events. Notable for its involvement in heath care and related insurance matters, the National Association of Insurance Commissioners (“NAIC”) is one of a growing number of event sponsors that are allowing workers to work from home, are cancelling or banning participation in live meetings and other events and/or are converting from live to virtual formats in response to the outbreak. Trade and business associations, entertainment and sports and otehr venures also are impacted. For instance, the NAIC announced its decision to move its meetings to a purely virtual format today. According to the announcement, the National Spring Meeting that had been scheduled to take place in Phoenix next week is cancelled. Instead, the NAIC announced the following tentative schedule:
A revised schedule with dates, times and call-in numbers will be available on Naic.org next week.
Concerning the reasons for its decision, the NAIC explained:
Recently, the number of confirmed cases of COVID-19 has exceeded 100,000 worldwide, including over 1000 confirmed U.S. cases in 36 jurisdictions. Given rapidly changing information and out of an abundance of caution for the safety of our members, guests and staff, the NAIC officers, in consultation with NAIC members, have decided to hold the Spring National Meeting in a virtual-only format.
Along with limiting contact, for instance, many businesses and organizations are “deep cleaning” their facilities to address potential virus contamination. Some biological experts point out however that this deep cleaning involves substantial expenditures which do little to guard against new exposures brought by others coming into a business, school or other workplace. Some biological contamination experts suggest that organizations should consider investing in resources specified ultraviolet lights or other tools that could help control exposures on a longer-term and more recurrent basis. Experts emphasize that remediation and prevention efforts need to recognize that exposures are likely to occur recurrently over a period of time across the life of this and future virus outbreaks.
The financial consequences of staffing or supply shortages, declines in product or services demands, event cancellations, cleaning and other costs and a host of other side effects present such a widespread risk to many businesses that many are facing layoffs or even bankruptcy or other restrucuring. While President Trump and other federal and state leaders are promising employment tax holidays and other relief to try to mitigate some of these financial effects, businesses impacted by these disruptions should begin assessing and planning to execute options to mitigate losses and manage these risks as soon as possible to maximize their potential ability to take advantage of options to restructure debt or contractual obligations, adjust workforce staffing, and make other adjustments successfully to weather the pandemic storm and fallout. When considering these options, businesses will want to understand the relative complete costs of reductions in hours, furloughs, contractual adjustments and other options to make and execute their choices as well as possible.
More Information
We hope this update is helpful. For more information about the these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Solutions Law Press, Inc. invites you receive future updates by registering on our Solutions Law Press, Inc. Website and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications. As a significant part of her work, Ms. Stamer has worked extensively domestically and internationally with business, government and community leaders to prepare for and deal with pandemic and other health and safety, financial, workforce and other organizational crisis, change and workforce, employee benefit, health care and other operations planning, preparedness and response for more than 30 years. As a part of this work, she regularly advises businesses and government leaders on an an demand and ongoing basis about preparation of workforce, health care and other business and government policies and practices to deal with management in a wide range of contexts ranging from day to day operations, through times of change and in response to operational, health care, natural disaster, economic and other crisis and change.
Author of “Privacy and the Pandemic Workshop” for the Association of State and Territorial Health Plans, “How to Conduct A Reduction In Force,” and a multitude of other highly regarded publications and presentations on workforce, compliance, health care and health benefits, pandemic and other health crisis, workers’ compensation and occupational disease, business disaster and distress and many other topics, Ms. Stamer has worked with employers, insurers, health industry organizations and providers and domestic and international community and government leaders on pandemic and other health and safety, workforce and performance preparedness, risks and change management, disaster preparedness and response and other operational and tactical concerns throughout her adult life. A former lead advisor to the Government of Bolivia on its pension privaitization project, Ms. Stamer also has worked internationally as an advisor to business, community and government leaders on crisis preparedness and response, workforce, health care and other reform, as well as regularly advises and defends organizations about the design, administration and defense of their organizations workforce, employee benefit and compensation, safety, discipline and other management practices and actions.
Board Certified in Labor and Employment Law By the Texas Board of Legal Specialization, Scribe for the ABA JCEB Annual Agency Meeting with OCR, Vice Chair of the ABA International Section Life Sciences Committee, and the ABA RPTE Employee Benefits & Other Compensation Group and and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
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 your profile here.
Employers and their payroll service provider should prepare for income and employment tax withholding changes expected when the Department of Treasury and Internal Revenue Service (IRS) finalize recently proposed rules on Income Tax Withholding From Wages intended to update the federal income tax withholding rules to reflect changes made by the Tax Cuts and Jobs Act (TCJA) and other legislation.
Staying on top of employment tax compliance is important because business owners and operators and the business’ tax, accounting and other service providers increasingly risk criminal prosecution as well as stiff civil tax penalties upon their businesses for failing properly to report wages and withhold and pay federal income tax and employees’ share of social security and Medicare taxes (collectively known as “FICA taxes”). Learn more here.
The proposed rules officially published in the Federal Register on February 13, 2020 available here follow up the agencies’ previous release of the resigned 2020 W-4, Employee’s Withholding Certificate by providing guidance to employers about the amount of federal income tax to withhold from employee’s wages following the TCJA.
The proposed regulations address numerous income tax withholding and reporting changes made by TCJA to sections 3401 and 3402, but do not address withholding withholding on pensions, annuities, and certain other deferred income under section 3405(a) as the agencies separately addrress those rules in Notice 2020-3.
The agencies describe the proposed rules as providing “flexible and administrable rules for income tax withholding from wages intended to work with both the 2020 Form W-4 and its related tables and computational procedures described in Publication 15-T, and Forms W-4 and related tables and computational procedures provided in 2019 and earlier years.
As the proposed regulations are expected to impact the wage based tax information collection, withholding and reporting practices of most employers, every business paying wages subject to withholding will want to act quickly to review the proposed regulations to identify and begin preparations to implement the necessary changes in their systems and practices to comply with the proposed rules when finalized. Small or other employers or other stakeholders that wish to provide feedback on the proposed rules also will want to submit any comments before the comment period closes on April 13, 2020.
More Information
We hope this update is helpful. For more information about the Coix Order or other health or other employee benefits, human resources, or health care developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation; Former Chair of the RPTE Employee Benefits and Compensation Committee, the current Co-Chair of its Welfare Benefit Committee and former Chair of its Welfare Benefit, Plan Terminations, Fiduciary Responsibility and Defined Compensation Plan Committees; former RPTE Joint Committee on Employee Benefits Council (JCEB) Representative, Cynthia Marcotte Stamer is a Martindale-Hubble “AV-Preeminent” practicing attorney and management consultant, author, public policy advocate, author and lecturer repeatedly recognized for her 30 plus years’ of work and pragmatic thought leadership, publications and training on health, pension and other employee benefit, insurance, labor and employment, and health care fiduciary responsibility, payment, investment, contracting and other design, administration and compliance concerns as among the “Top Rated Labor & Employment Lawyers in Texas,” a “Legal Leader,” a “Top Woman Lawyer” and with other awards by LexisNexis® Martindale-Hubbell®; as among the “Best Lawyers In Dallas” for her work in the field of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, in International Who’s Who of Professionals and with numerous other awards and distinctions.
Highly valued for combining extensive legal and industry knowledge and experience with pragmatic creativity to help clients find and implement workable client-centric solutions, Ms. Stamer advises, represents and defends employers and other management clients and organizations; employer, union, multi-employer, association and other employee benefit plan plans, their sponsors, insurers and fiduciaries, plan administrators, administrative services, technology and other service providers, foreign and domestic governments, and others about employment and other services; health and welfare, pension, profit sharing other employee benefit and insurance program and policy management, administration, design and innovation, compliance, funding, documentation, communication, data security and use, contracting, plan, public and regulatory reforms and enforcement, and other risk management, compliance and operations matters. Her experience encompasses leading and supporting the development and defense of innovative new policies, programs, practices and solutions; advising and representing clients on routine plan establishment, plan documentation and contract drafting and review, administration, change and other compliance and operations; crisis prevention and response, compliance and risk management audits and investigations, enforcement actions and other dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, Federal Trade Commission, Justice, Securities and Exchange Commission, Education and other federal agencies, state legislatures, attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators, and various other foreign and domestic governmental bodies and agencies. She also provides strategic and other supports clients in defending litigation as lead strategy counsel, special counsel and as an expert witness.
Alongside her extensive legal and operational experience, Ms. Stamer also is recognized for her work as a public and regulatory policy advocate and community leader with a gift for finding pragmatic solutions and helping to forge the common ground necessary to build consensus. Best known for her domestic public policy and community leadership on health care and insurance reform, Ms. Stamer’s lifelong public policy and community service involvement includes service as a lead consultant to the Government of Bolivia on its pension privatization project, as well as extensive legislative and regulatory reform, advocacy and input workforce, worker classification, employee benefit, public health and healthcare, social security and other disability and aging in place, education, migration reforms domestically and internationally throughout her adult life. In addition to her public and regulatory policy involvement, Ms. Stamer also contributes her service and leadership to a professional and civic organizations and efforts. Beyond her RPTE leadership involvements, these include her involvement as the Founder and Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE; Coalition on Patient Empowerment, a founding Board Member and past President of the Alliance for Healthcare Excellence; former Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; Vice Chair, Policy for the Life Sciences Committee of the ABA International Section, Chair of the ABA Intellectual Property Section Law Practice Management Committee, Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group; former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, former Board Member, Continuing Education Chair and Treasurer of the Southwest Benefits Association; Vice President and Executive Director of the North Texas Healthcare Compliance Professionals Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; past Dallas World Affairs Council Board Member, and leadership of many other professional, civic and community organizations. Ms. Stamer also is a highly popular lecturer, symposia chair and author, who publishes and speaks extensively on health and managed care industry, human resources, employment and other privacy, data security and other technology, regulatory and operational risk management for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, the Society of Professional Benefits Administrators, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients, serves on the faculty and planning committee of many workshops, seminars, and symposia, and on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.
Beyond these involvements, Ms. Stamer also is active in the leadership of a broad range of other public policy advocacy and other professional and civic organizations and involvements. Through these and other involvements, she helps develop and build solutions, build consensus, garner funding and other resources, manage compliance and other operations, and take other actions to identify promote tangible improvements in health care and other policy and operational areas.
Before founding her current law firm, Cynthia Marcotte Stamer, P.C., Ms. Stamer practiced law as a partner with several prominent national and international law firms for more than 10 years before founding Cynthia Marcotte Stamer, P.C. to practice her unique brand of “Solutions law™” and to devote more time to the pragmatic policy and system reform, community education and innovation, and other health system improvement efforts of her PROJECT COPE: the Coalition on Patient Empowerment initiative.
Scribe for the ABA JCEB Annual Agency Meeting with OCR, Vice Chair of the ABA International Section Life Sciences Committee, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and the ABA RPTE Employee Benefits & Other Compensation Group, Ms. Stamer is most widely recognized for her decades of pragmatic, leading edge work, scholarship and thought leadership on health and other privacy and data security and other health industry legal, public policy and operational concerns. Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. As a part of this work, she has continuously and extensively worked with domestic and international health plans, their sponsors, fiduciaries, administrators, and insurers; managed care and insurance organizations; hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, accreditation, peer review and quality committees and organizations; billing, utilization management, management services organizations, group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; consultants; investors; EMR, claims, payroll and other technology, billing and reimbursement and other services and product vendors; products and solutions consultants and developers; investors; managed care organizations, self-insured health and other employee benefit plans, their sponsors, fiduciaries, administrators and service providers, insurers and other payers, health industry advocacy and other service providers and groups and other health and managed care industry clients as well as federal and state legislative, regulatory, investigatory and enforcement bodies and agencies.
This involvement encompasses helping health care systems and organizations, group and individual health care providers, health plans and insurers, health IT, life sciences and other health industry clients prevent, investigate, manage and resolve sexual assault, abuse, harassment and other organizational, provider and employee misconduct and other performance and behavior; manage Section 1557, Civil Rights Act and other discrimination and accommodation, and other regulatory, contractual and other compliance; vendors and suppliers; contracting and other terms of participation, medical billing, reimbursement, claims administration and coordination, Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA and other payers and other provider-payer relations, contracting, compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, ant kickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns. to establish, administer and defend workforce and staffing, quality, and other compliance, risk management and operational practices, policies and actions; comply with requirements; investigate and respond to Board of Medicine, Health, Nursing, Pharmacy, Chiropractic, and other licensing agencies, Department of Aging & Disability, FDA, Drug Enforcement Agency, OCR Privacy and Civil Rights, Department of Labor, IRS, HHS, DOD, FTC, SEC, CDC and other public health, Department of Justice and state attorneys’ general and other federal and state agencies; JCHO and other accreditation and quality organizations; private litigation and other federal and state health care industry actions: regulatory and public policy advocacy; training and discipline; enforcement; and other strategic and operational concerns.
Author of leading works on HIPAA and a multitude of other health care, health plan and other health industry matters, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation considering the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law constantly and often rapidly evolves, subsequent developments that could impact the currency and completeness of this discussion are likely. The author and Solutions Law Press, Inc. disclaim, and have no responsibility to provide any update or otherwise notify anyone of any fact or law specific nuance, change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Employers and their payroll service provider should prepare for income and employment tax withholding changes expected when the Department of Treasury and Internal Revenue Service (IRS) finalize recently proposed rules on Income Tax Withholding From Wages intended to update the federal income tax withholding rules to reflect changes made by the Tax Cuts and Jobs Act (TCJA) and other legislation.
The proposed rules officially published in the Federal Register on February 13, 2020 available here follow up the agencies’ previous release of the resigned 2020 W-4, Employee’s Withholding Certificate by providing guidance to employers about the amount of federal income tax to withhold from employee’s wages following the TCJA.
The proposed regulations address numesrous income tax withholding and reporting changes made by TCJA to sections 3401 and 3402, but do not address withholding withholding on pensions, annuities, and certain other deferred income under section 3405(a) as the agencies separately addrress those rules in Notice 2020-3.
The agencies describe the proposed rules as providing “flexible and administrable rules for income tax withholding from wages intended to work with both the 2020 Form W-4 and its related tables and computational procedures described in Publication 15-T, and Forms W-4 and related tables and computational procedures provided in 2019 and earlier years.
As the proposed regulations are expected to impact the wage based tax information collection, withholding and reporting practices of most employers, every business paying wages subject to withholding will want to act quickly to review the proposed regulations to identify and begin preparations to implement the necessary changes in their systems and practices to comply with the proposed rules when finalized. Small or other employers or other stakeholders that wish to provide feedback on the proposed rules also will want to submit any comments before the comment period closes on April 13, 2020.
More Information
We hope this update is helpful. For more information about the Coix Order or other health or other employee benefits, human resources, or health care developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation; Former Chair of the RPTE Employee Benefits and Compensation Committee, the current Co-Chair of its Welfare Benefit Committee and former Chair of its Welfare Benefit, Plan Terminations, Fiduciary Responsibility and Defined Compensation Plan Committees; former RPTE Joint Committee on Employee Benefits Council (JCEB) Representative, Cynthia Marcotte Stamer is a Martindale-Hubble “AV-Preeminent” practicing attorney and management consultant, author, public policy advocate, author and lecturer repeatedly recognized for her 30 plus years’ of work and pragmatic thought leadership, publications and training on health, pension and other employee benefit, insurance, labor and employment, and health care fiduciary responsibility, payment, investment, contracting and other design, administration and compliance concerns as among the “Top Rated Labor & Employment Lawyers in Texas,” a “Legal Leader,” a “Top Woman Lawyer” and with other awards by LexisNexis® Martindale-Hubbell®; as among the “Best Lawyers In Dallas” for her work in the field of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, in International Who’s Who of Professionals and with numerous other awards and distinctions.
Highly valued for combining extensive legal and industry knowledge and experience with pragmatic creativity to help clients find and implement workable client-centric solutions, Ms. Stamer advises, represents and defends employers and other management clients and organizations; employer, union, multi-employer, association and other employee benefit plan plans, their sponsors, insurers and fiduciaries, plan administrators, administrative services, technology and other service providers, foreign and domestic governments, and others about employment and other services; health and welfare, pension, profit sharing other employee benefit and insurance program and policy management, administration, design and innovation, compliance, funding, documentation, communication, data security and use, contracting, plan, public and regulatory reforms and enforcement, and other risk management, compliance and operations matters. Her experience encompasses leading and supporting the development and defense of innovative new policies, programs, practices and solutions; advising and representing clients on routine plan establishment, plan documentation and contract drafting and review, administration, change and other compliance and operations; crisis prevention and response, compliance and risk management audits and investigations, enforcement actions and other dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, Federal Trade Commission, Justice, Securities and Exchange Commission, Education and other federal agencies, state legislatures, attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators, and various other foreign and domestic governmental bodies and agencies. She also provides strategic and other supports clients in defending litigation as lead strategy counsel, special counsel and as an expert witness.
Alongside her extensive legal and operational experience, Ms. Stamer also is recognized for her work as a public and regulatory policy advocate and community leader with a gift for finding pragmatic solutions and helping to forge the common ground necessary to build consensus. Best known for her domestic public policy and community leadership on health care and insurance reform, Ms. Stamer’s lifelong public policy and community service involvement includes service as a lead consultant to the Government of Bolivia on its pension privatization project, as well as extensive legislative and regulatory reform, advocacy and input workforce, worker classification, employee benefit, public health and healthcare, social security and other disability and aging in place, education, migration reforms domestically and internationally throughout her adult life. In addition to her public and regulatory policy involvement, Ms. Stamer also contributes her service and leadership to a professional and civic organizations and efforts. Beyond her RPTE leadership involvements, these include her involvement as the Founder and Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE; Coalition on Patient Empowerment, a founding Board Member and past President of the Alliance for Healthcare Excellence; former Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; Vice Chair, Policy for the Life Sciences Committee of the ABA International Section, Chair of the ABA Intellectual Property Section Law Practice Management Committee, Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group; former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, former Board Member, Continuing Education Chair and Treasurer of the Southwest Benefits Association; Vice President and Executive Director of the North Texas Healthcare Compliance Professionals Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; past Dallas World Affairs Council Board Member, and leadership of many other professional, civic and community organizations. Ms. Stamer also is a highly popular lecturer, symposia chair and author, who publishes and speaks extensively on health and managed care industry, human resources, employment and other privacy, data security and other technology, regulatory and operational risk management for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, the Society of Professional Benefits Administrators, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients, serves on the faculty and planning committee of many workshops, seminars, and symposia, and on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.
Beyond these involvements, Ms. Stamer also is active in the leadership of a broad range of other public policy advocacy and other professional and civic organizations and involvements. Through these and other involvements, she helps develop and build solutions, build consensus, garner funding and other resources, manage compliance and other operations, and take other actions to identify promote tangible improvements in health care and other policy and operational areas.
Before founding her current law firm, Cynthia Marcotte Stamer, P.C., Ms. Stamer practiced law as a partner with several prominent national and international law firms for more than 10 years before founding Cynthia Marcotte Stamer, P.C. to practice her unique brand of “Solutions law™” and to devote more time to the pragmatic policy and system reform, community education and innovation, and other health system improvement efforts of her PROJECT COPE: the Coalition on Patient Empowerment initiative.
Scribe for the ABA JCEB Annual Agency Meeting with OCR, Vice Chair of the ABA International Section Life Sciences Committee, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and the ABA RPTE Employee Benefits & Other Compensation Group, Ms. Stamer is most widely recognized for her decades of pragmatic, leading edge work, scholarship and thought leadership on health and other privacy and data security and other health industry legal, public policy and operational concerns. Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. As a part of this work, she has continuously and extensively worked with domestic and international health plans, their sponsors, fiduciaries, administrators, and insurers; managed care and insurance organizations; hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, accreditation, peer review and quality committees and organizations; billing, utilization management, management services organizations, group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; consultants; investors; EMR, claims, payroll and other technology, billing and reimbursement and other services and product vendors; products and solutions consultants and developers; investors; managed care organizations, self-insured health and other employee benefit plans, their sponsors, fiduciaries, administrators and service providers, insurers and other payers, health industry advocacy and other service providers and groups and other health and managed care industry clients as well as federal and state legislative, regulatory, investigatory and enforcement bodies and agencies.
This involvement encompasses helping health care systems and organizations, group and individual health care providers, health plans and insurers, health IT, life sciences and other health industry clients prevent, investigate, manage and resolve sexual assault, abuse, harassment and other organizational, provider and employee misconduct and other performance and behavior; manage Section 1557, Civil Rights Act and other discrimination and accommodation, and other regulatory, contractual and other compliance; vendors and suppliers; contracting and other terms of participation, medical billing, reimbursement, claims administration and coordination, Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA and other payers and other provider-payer relations, contracting, compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, ant kickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns. to establish, administer and defend workforce and staffing, quality, and other compliance, risk management and operational practices, policies and actions; comply with requirements; investigate and respond to Board of Medicine, Health, Nursing, Pharmacy, Chiropractic, and other licensing agencies, Department of Aging & Disability, FDA, Drug Enforcement Agency, OCR Privacy and Civil Rights, Department of Labor, IRS, HHS, DOD, FTC, SEC, CDC and other public health, Department of Justice and state attorneys’ general and other federal and state agencies; JCHO and other accreditation and quality organizations; private litigation and other federal and state health care industry actions: regulatory and public policy advocacy; training and discipline; enforcement; and other strategic and operational concerns.
Author of leading works on HIPAA and a multitude of other health care, health plan and other health industry matters, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation considering the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law constantly and often rapidly evolves, subsequent developments that could impact the currency and completeness of this discussion are likely. The author and Solutions Law Press, Inc. disclaim, and have no responsibility to provide any update or otherwise notify anyone of any fact or law specific nuance, change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
February 28, 2020 is the new deadline for employers to comment on a National Labor Relations Board (“NLRB”) proposal to exempt undergraduate and graduate students performing services for financial compensation in connection with their studies from the NLRB’s definition of “employee” for purposes of the National Labor Relations Act (NLRA) and other collective bargaining and union organizing and representation laws under the NLRB’s jurisdiction.
The original notice of proposed rulemaking published here on September 23, 2019 would exempt ”every student performing teaching, research and any services for compensation, at a private college or university in connection with his or her studies from treatment as an “employee” for purposes of Section 2(3) of the NLRA. The extended deadline unofficially announced by the NLRB on January 28, 2020 is the NLRB’s second extension of the comment deadline. The official announcement from the NLRB of its extension of the comment submission window for responses to initial comments to Friday, February 28, 2020 is expected to be published in the Federal Register the week of February 3, 2020. The NLRB previously extended the comment deadline on October 17, 2019. That first extended comment deadline expired in December, 2019.
The NLRB says this proposed rulemaking t exempt students from employees covered by the NLRA “is intended to bring stability to an area of federal labor law in which the NLRB, through adjudication, has reversed its approach three times since 2000. The NLRB has stated this proposed standard on the exclusion of students from the NLRA definition of employee is consistent with the purposes and policies of the NLRA, which contemplates jurisdiction over economic relationships, not those that are primarily educational in nature.
The proposed regulation to exclude students from NLRA coverage is one of several regulatory projects that the now Trump-appointee dominated NLRB has undertaken in the past year in its effort to undue a host of pro-labor changes to NLRB policy changes initiated and enforced during the Obama Administration when President Obama appointees dominated the NLRB and its policies. Another example of these regulatory efforts include the NLRB’s current efforts to reverse a change in interpretation and enforcement of the “joint employer” rules of the NLRA and Fair Labor Standards Act that substantially expanded the imputation of liability for collective bargaining and other labor-management and wage and hour law violations by treating companies as joint employers that received the benefit of work performed even when the recipient company did not control the details of the work or the nominal employer. Aside from submitting any relevant feedback to the student rule, business leaders and organizations generally will want to carefully monitor developments to update their policies and practices as well as to provide appropriate input on these and other developments.
For More Information
We hope this update is helpful. For more information about this or other labor and employment developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Solutions Law Press, Inc. invites you receive future updates and join discussions about these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Solutions Law Press HR & Benefits Update Compliance Update Group and registering for updates on our Solutions Law Press Website.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders. As part of this work, she has worked extensively on employee benefit communication and other employee benefit plan legislative and regulatory policy, design, compliance and enforcement including testifying to the EBSA Advisory Council on Employee Welfare and Pension Benefit Plans in on the effectiveness of employee benefit plan disclosures during 2017 hearings on on reducing the burdens and increasing the effectiveness of ERISA mandated disclosures.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; manage labor-management relations, comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
A Fellow in the American College of Employee Benefit Counsel and Past Chair of both the ABA Managed Care & Insurance Interest Group and it’s RPTE Employee Benefits and Other Compensation Group, Ms. Stamer also has leading edge experience in health benefit, health care, health, financial and other plan, program and process design, administration, documentation, contracting, risk management, compliance and related process and systems development, policy and operations; training; legislative and regulatory affairs, and other legal and operational concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here such as:
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 your profile here. We also invite you to join the discussion of these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Health Plan Compliance Group or COPE: Coalition On Patient Empowerment Groupon LinkedIn or Project COPE: Coalition on Patient Empowerment Facebook Page.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission and its content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion.otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
No business wants to get hit with a bill or judgement for unpaid overtime or other wages and penalties under the Fair Labor Standards Act (“FLSA”). It’s even worse when the order to pay is for back pay another business owed but didn’t pay. New FLSA joint employer regulations released today update the rules about when your business could get stuck paying another business’ backpay. That’s why all U.S. employers should re-evaluate their potential minimum wage, overtime, recordkeeping and other Fair Labor Standards Acts (“FLSA”) liability exposure from work performed by workers employed by subcontractors or contractors, staffing, leasing, manpower and workforce and other separate business entities in light of the new Final Rule: Joint Employer Status under the Fair Labor Standards Act (“Final Rule”) on determining joint employer status under the FLSA released by the Department of Labor Wage and Hour Division (“Labor Department”). The Labor Department released a copy of the Final Rule to the public today today (January 13, 2020) in anticipation of its scheduled official publication in the Federal Register on January 16, 2019.
Joint Employer Liability Long Standing FLSA Risk
Many businesses and their management are unaware that if their business meets the definition of a “joint employer” for purposes of the FLSA, their businesses could be required to pay unpaid wages and penalties another business owes for failing to pay minimum wage or overtime or other FLSA violations. even though their business never directly employed those workers. This is because the FLSA also makes business that are “joint employers” as defined for purposes of the FLSA jointly and severally liable with the direct employer for proper payment of wages and other compliance with the FLSA. The FLSA requires covered employers to pay their employees at least the federal minimum wage for every hour worked and overtime for every hour worked over 40 in a workweek. To be liable for paying minimum wage or overtime, an individual or entity must be an “employer,” which the FLSA defines in Section 3(d) to include “any person acting directly or indirectly in the interest of an employer in relation to an employee[.]” Under the FLSA, an employee may have—in addition to his or her employer—one or more joint employers. A joint employer is any additional “person” (i.e., an individual or entity) who is jointly and severally liable with the employer for the employee’s wages under the applicable Labor Department regulations.
While both the Labor Department and private litigants have used the joint employer rules and precedent to nail businesses for other employer’s wage and hour liability frequently for the past sixty plus years, Obama Administration changes in the Labor Department’s interpretation and enforcement of the joint employer rule have significantly broadened the scope of relationships found to constitute joint employment to include a broad range of subcontractor and other business relationships not historically recognized as triggering joint employer liability. Historically, joint employer determinations were reached by applying highly subjective, fact specific analysis heavily reliant upon decades of court decisions which required some evidence that the alleged joint employer possessed or exercised some control over the employees to support the finding of joint employment. Under these historical tests, mere benefit from work performed by individuals employed by another employer did not establish a presumption, much less proof of joint employment.
During the Obama Administration, however, the Department of Labor both stepped up its efforts to identify and enforce these joint employer provisions and concurrently without formally issuing new regulations adopted interpretive and enforcement guidelines for finding joint employer status that that significantly broadened the employment relationships that the Labor Department treated as joint employers in a manner that presumed the existence of a joint employment relationship whenever the alleged joint employer benefitted from the performance of work even when the facts showed little or any evidence that the alleged joint employer possessed or exercised any control over the employee or the details of his work. As a consequences, construction and other businesses uses contractors, health care organizations, and a host of other entities were surprised to be nailed with wage and hour liabilities arising from work performed by subcontractors, contractors, and other businesses including overtime liability attributable to work performed for the benefit of other customers of the employer.
Final Joint Employer Rule Changes Rules Effective March 16, 2020
Prompted by the Trump Administration’s broader effort to roll back these and other Obama Era pro-labor rulemaking and enforcement, the new Final Rule seeks to restore and reaffirm the requirement of evidence of the possession of authority or exercise of some traditional employer control by the alleged joint employer. Scheduled to take effect on March 16, 2020, the new Final Rule will continue to recognize two potential scenarios where an employee may have one or more joint employers based on a highly subjective analysis of the factual realities of an alleged joint employer with another business or businesses under two scenarios:
The employee has an employer who suffers, permits, or otherwise employs the employee to work, but another individual or entity simultaneously benefits from that work (“Scenario One”); versus
One employer employs an employee for one set of hours in a workweek, and another employer employs the same employee for a separate set of hours in the same workweek (“Scenario Two”).
The Final Rule modifies and clarifies the Labor Department’s historical joint employer rule as it relates to the determination of joint employment status in Scenario One situations but leaves substantially unchanged its existing rules on joint employer determinations in Scenario Two situations.
Finally, the Final Rule provides several examples of how the Department’s joint employer guidance should be applied in various factual circumstances
Final Rule Modifications To Existing Rules On Joint Employment in Scenario One Situations
Under the Final Rule in a Scenario One situation under which an employee performs work for the employer that simultaneously benefits another individual or entity, the Final Rule adopts a four-factor balancing test to determine whether the potential joint employer is directly or indirectly controlling the employee, assessing whether the potential joint employer:
hires or fires the employee;
supervises and controls the employee’s work schedule or conditions of employment to a substantial degree;
determines the employee’s rate and method of payment; and
maintains the employee’s employment records.
Businesses should keep in mind that proof of the exercise of exercise direct control over these details of employment of an employee is not required for a finding of joint employment. Indirect exercise of control is sufficient. Examples of indirect exercise of control recognized in the Final Regulations as supporting joint employer liability include control over an employee through mandatory directions to another employer that directly control the employee. However, indirect control does not include the direct employer’s voluntary decision to accommodate the potential joint employer’s request, recommendation, or suggestion. Similarly, acts that incidentally impact the employee do not indicate joint employer status. For example, a restaurant could request lower fees from its cleaning contractor, which, if agreed to, could impact the wages of the cleaning contractor’s employees. However, this request would not constitute an exercise of indirect control over the employee’s rate of payment.
Like under the prior rules and standards, whether a person is a joint employer under the new standards established in the Final Rule will continue to depend upon all the facts in a particular case, and the appropriate weight to give each factor will vary depending on the circumstances. Moreover, all of these factors need not be present for joint employment to exist. However, the Final Rule states the potential joint employer’s maintenance of the employee’s employment records alone will not lead to a finding of joint employer status. For purposes of its provisions, the Final Rule defines the “employment records” referred to in the fourth factor to mean only those records, such as payroll records, that reflect, relate to, or otherwise record information pertaining to the hiring or firing, supervision and control of the work schedules or conditions of employment, or determining the rate and method of payment of the employee.
Additionally, the Final Rule also notes that additional factors may also be relevant in determining whether another person is a joint employer in this situation, but only when they show whether the potential joint employer is exercising significant control over the terms and conditions of the employee’s work.
The Final Rule also identifies factors that are not relevant to the determination of FLSA joint employer status. For example, the Final Rule specifies that whether the employee is economically dependent on the potential joint employer, including factors traditionally used to establish whether a particular worker is a bona fide independent contractor (e.g., the worker’s opportunity for profit or loss, their investment in equipment and materials, etc.), are not relevant to determine joint employer liability. Economic dependence was an evidentiary factor promoted as evidence of joint employment in several Obama Administration era enforcement actions.
The Final Rule also identifies certain other factors that do not make joint employer status more or less likely under the Act which had been relied upon by the Labor Department under the Obama Administration era interpretation of the FLSA, including:
operating as a franchisor or entering into a brand and supply agreement, or using a similar business model;
the potential joint employer’s contractual agreements with the employer requiring the employer to comply with its legal obligations or to meet certain standards to protect the health or safety of its employees or the public;
the potential joint employer’s contractual agreements with the employer requiring quality control standards to ensure the consistent quality of the work product, brand, or business reputation; and
the potential joint employer’s practice of providing the employer with a sample employee handbook, or other forms, allowing the employer to operate a business on its premises (including “store within a store” arrangements), offering an association health plan or association retirement plan to the employer or participating in such a plan with the employer, jointly participating in an apprenticeship program with the employer, or any other similar business practice.
Additionally, the Final Rule makes clear that a finding of joint employer status in Scenario One situations must be based on an actual exercise of control by the alleged joint employer. In this respect, the Final Rule provides that although an individual or entity’s power, ability, or reserved contractual right to exercise control relating to one or more of the factors may be relevant in determining whether they are an FLSA joint employer, such power, ability, or reserved contractual rights are not in themselves sufficient to establish FLSA joint employer status without some actual exercise of control.
Final Rule Retains Existing Rules On Joint Employment In Scenario Two Situations
The Final Rule did not make any substantive changes to the standard for determining joint employer liability in Scenario Two situations. If the employers are acting independently of each other and are disassociated with respect to the employment of the employee, the Final Rule continues to provide that each employer may disregard all work performed by the employee for the other employer in determining its liability under the FLSA. However, if the factual realities show that the employers are sufficiently associated with respect to the employment of the employee, the Final Rule continues to state that the two businesses are joint employers and must aggregate the hours worked for each for purposes of determining if they are in compliance.
For purposes of the Scenario Two analysis, the Final Rule provides that employers generally will be sufficiently associated if there is an arrangement between them to share the employee’s services, the employer is acting directly or indirectly in the interest of the other employer in relation to the employee, or they share control of the employee, directly or indirectly, by reason of the fact that one employer controls, is controlled by, or is under common control with the other employer. Employers using manpower, staffing, employee leasing or other shared or part time workforces should keep in mind that a finding that their business is a joint employer with the supplier of the workers can result in liability for their business associated both for hours of work performed for the benefit of their business as well as any work the employee worked for another client of the supplier business. As these shared workforces often perform work for several competitors, ironically this often means that a joint employer often ends up payment overtime liability attributable to unpaid overtime or other wages performed for a competitor business or businesses that also are clients of the same partial workforce supplier.
Businesses Should Act To Assess & Mitigate Joint Employer & Other FLSA Liability
The Labor Departments that its adoption of the revisions to the joint employer rule made by the Final Rule will add greater certainty regarding what business practices may result in joint employer status: and promote greater uniformity among court decisions by providing a clearer interpretation of FLSA joint employer status. While the clarifications may help businesses to better predict certain relationships and arrangements that carry a higher risk of joint employer liability exposure, businesses must keep in mind that joint employer determinations under the Final Rule will continue to turn on highly subjective analysis of facts and circumstances that existing precedent suggests often finds the requisite evidence to find a joint employer relationship in many circumstances surprising to many business owners even taking into account the modifications made by the Final Rule, For this reason, virtually all businesses generally will want to critically evaluate their existing and prospective relationships for potential joint employer liability under the FLSA in light of the Final Regulations.
Businesses should look to the guidance in the new Final Rule initially to evaluate whether their existing or prospective relationships meet, or could be restructured to meet all of the requisites to avoid or reduce the risk of findings of joint employer status. When possible, businesses should seek to structure their contractual relationships and business dealings with other businesses to fit as closely as possible with those arrangements that the new Final Regulations identify as not constituting joint employer relationships in form and operation. When engaging in these efforts, businesses need to look beyond their contractual agreements to examine the factual realities of their relationships with other businesses realistically based upon a clear understanding of the historical precedent to avoid mischaracterizing their relationships and their associated risks. For added protection, businesses also should consider seeking contractual representations of compliance, coupled with requirements that other businesses whose employment practices could create joint employment risk provide records and other documentation needed to verify compliance and defend against potential joint employer liability claims.
Concurrently, businesses looking at FLSA joint employer liability risk management also should keep in mind that the new Final Rule only addresses joint employer determinations under the FLSA. This Final Rule does not address “joint employer” status or other characterizations of relationships under other federal employment laws, such as the National Labor Relations Act (NLRA), the Employee Retirement Income Security Act of 1974 (ERISA), the Migrant and Seasonal Agricultural Worker Protection Act, Title VII of the Civil Rights Act, state labor, tax, unemployment, workers’ compensation or other laws, which often apply different standards for finding joint employment or other imputed liability of businesses other than the direct or nominal employer. While different rules apply for those laws, government agencies and private litigants also increasingly successfully assert joint employer or other theories to impute liability to businesses that are not the nominal employer of workers protected by these laws. To effectively plan for a control their broader joint employer risk, most businesses benefit from looking at their exposure holistically taking into account the potential characterization and liabilities under all of these rules concurrently.
Before beginning these assessments, businesses and their leaders are encouraged to engage an attorney experienced in FLSA and other joint employer and other worker classification laws in light of the legally sensitive evidence and discussions inherently involved in this process. Conducting this analysis within the scope of attorney-client privilege helps protector limit the discoverability of sensitive discussions and work product in the event of a Labor Department investigation or litigation.
For More Information
We hope this update is helpful. For more information about this or other labor and employment developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Law and Labor and Employment Law and Health Care; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services, construction, manufacturing, staffing and workforce and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. As a part of this work, she has continuously and extensively worked with domestic and international employer and other management, employee benefit and other clients to assess, manage and defend joint employer and other worker classifications and practices under the FLSA and other federal and state laws including both advising and and assisting employers to minimize joint employer and other FLSA liability and defending a multitude of employers against joint employer and other FLSA and other worker classification liability. She also has been heavily involved in advocating for the Trump Administration’s restoration of more historical principles for determining and enforcing joint employer liability over the past several years.
Author of hundreds of highly regarded books, articles and other publications, Ms. Stamer also is widely recognized for her scholarship, coaching, legislative and regulatory advocacy, leadership and mentorship on wage and hour, worker classification and a diverse range of other labor and employment, employee benefits, health and safety, education, performance management, privacy and data security, leadership and governance, and other management concerns within the American Bar Association (ABA), the International Information Security Association, the Southwest Benefits Association, and a variety of other international, national and local professional, business and civic organizations including highly regarded works on worker reclassification and joint employment liability under the FLSA and other laws published by the Bureau of National Affairs and others. Examples of these involvements include her service as the ABA Intellectual Property Law Section Law Practice Management Committee; the ABA International Section Life Sciences and Health Committee Vice Chair-Policy; a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former JCEB Council Representative and Marketing Chair; Past Chair of the ABA RPTE Employee Benefits and Other Compensation Group and Vice Chair of its Law Practice Management Committee; Past Chair of the ABA Managed Care & Insurance Interest Group; former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Southwest Benefits Association Board member; past Texas Association of Business State Board Member, BACPAC Committee Meeting, Regional and Dallas Chapter Chair; past Dallas Bar Association Employee Benefits Committee Executive Committee; former SHRM Region IV Chair and National Consultants Forum Board Member; for WEB Network of Benefit Professionals National Board Member and Dallas Chapter Chair; former Dallas World Affairs Council Board Member; founding Board Member, past President and Patient Empowerment and Health Care Heroes founder for the Alliance for Health Care Excellence; former Gulf States TEGE Council Exempt Organizations Coordinator and Board member; past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
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NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc. disclaim, and have no responsibility to provide any update or otherwise notify anyone any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
The $65,000 payment and corrective action plan commitments West Georgia Ambulance, Inc. (“West Georgia”) is making to settle Department of Health & Human Services Office for Civil Rights (“OCR”) charges it recurrently violated the Health Insurance Portability and Accountability Act (“HIPAA”) Security Rule and other 2019 HIPAA enforcement sends a clear warning to other HIPAA-covered health plans, health care providers, health care clearighouses and their business associates (“covered entities”) to maintain and be prepared to defend their own HIPAA compliance.
The Western Georgia Resolution Agreement and Corrective Action Plan(“Resolution Agreement”) OCR announced on December 30, 2019 resolves charges resulting from an OCR investigation initiated in response to a HIPAA breach report the Georgia based ambulance company filed in 2013 in which the company, which provides emergency and non-emergency ambulance services in Carroll County, Georgia, disclosed the loss of an unencrypted laptop containing the protected health information (PHI) of 500 individuals. The breach occurred when an unencrypted laptop fell off the back bumper of an ambulance. The laptop was not recovered. West Georgia reported that exactly 500 individuals were affected by the breach.
In the course of its investigation of the breach report, OCR’s investigation uncovered long-standing noncompliance with the HIPAA Rules, including failures to conduct a risk analysis, provide a security awareness and training program, and implement HIPAA Security Rule policies and procedures. Specifically, the Resolution Agreement states that West Georgia:
Did not conduct an accurate and thorough risk analysis of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of all of its ePHI. See 45 C.F.R. § 164.308(a)(1)(ii)(A);
Failed to have a HIPAA security training program, and failed to provide security training to its employees. See 45 C.F.R. § 164.308(a)(5);
Failed to implement Security Rule policies or procedures. See 45 C.F.R. § 164.316; and
Despite OCR’s investigation and technical assistance, “did not take meaningful steps to address their systemic failures.”
To resolve its exposure to the substantially higher civil monetary penalties that OCR could impose for violations of this nature, West Georgia agreed to pay a $65,000 resolution payment to OCR and implement and comply with a corrective action plan that in addition to requiring West Georgia to correct the compliance deficiencies, also subjects West Georgia to two years of OCR monitoring and oversight.
The Resolution Agreement and corrective action plan carry a number of important messages for other health care providers and other Covered Entities. First, the OCR enforcement action against West Georgia coming at the end of yet another heavy HIPAA enforcement year by OCR reminds Covered Entities that OCR is serious about HIPAA enforcement on the heels of its 2018 HIPAA record setting collection of $28.7 million in civil monetary penalties and resolution payments including the single largest individual HIPAA settlement in history of $16 million with Anthem, Inc. SeeOCR Concludes 2018 with All-Time Record Year for HIPAA Enforcement. While not topping this record, OCR during 2019 now has collected civil monetary penalties and resolution payments totaling more than $15 million from HIPAA Covered Entities and their business associates including:
Second, the Resolution Agreement and various other smaller settlements during the year show HIPAA compliance and enforcement is a concern for smaller provideres and other covered entities, not juswt the huge ones. While the $65,000 settlement payment required by the Resolution Agreement is substantially smaller than the amounts of the civil monetary penalties and many of resolution payments OCR collected in its other 2019 enforcement actions, the West Georgia and other 2019 enforcement actions demonstrate the teeth behind the warning in the OCR Press Release announcing the West Georgia Resolution Agreement from OCR Director Roger Severino that“All providers, large and small, need to take their HIPAA obligations seriously.” With OCR promises to keep up its vigorous investigation and enforcement of the HIPAA requirements, every Covered Entity and business associate should take the necessary steps to verify and maintain their HIPAA compliance and to be prepared to defend their compliance under the Privacy, Security, Breach Notification and HIPAA access and other individual rights mandates of HIPAA.
Third, OCR’s statement in the Resolution Agreement about the failure by West Georgia to meaningfully act to correct compliance deficiencies and cooperate in other corrective action during the period following the breach report highlights the importance for covered entities involved in a breach or other dealings with OCR on a potential compliance concern to behave appropriately to express and exhibit the necessary concern OCR expects regarding the compliance issue to position themselves to request and receive the clemency OCR is empowered under HIPAA to extend when deciding the sanctions for any noncompliance.
Of course meeting the requirements of HIPAA is not the only concern that covered entities should consider as they review and tightened their HIPAA and other privacy and data security procedures. Health care providers and other covered entities also should keep in mind their other obligations to protect patient and other confidential information under other federal laws, the requirements of which also are ever-evolving. For instance, on January 1, 2020 Texas providers like other Texas businesses will become subject to a shortened deadline for providing notice of data breaches under a new law enacted by the Texas Legislature in its last session. Arrangements should be designed to fulfill all of these requirements as well as any ethical or contractual.
Covered entities also should keep in mind that violations of HIPAA can have implications well beyond HIPAA.ramifications beyond HIPAA itself. For instance, heath care providers can face disqualification from federal program participation, licensing and ethics discipline and other professional consequences. Health plans and their fiduciaries also may face Department of Labor and other fiduciary claims, while insurers can face licensing and other regulatory consequences. The Labor Department followed up on previous warnings that health plan fiduciaries duties include a fiduciary duty to protect health plan data by adding HIPAA compliance to certain health plan audits. Insurers, third of art administrators and others also can face duties and liabilities under state insurance and data privacy laws from regulator or private litigant actions.
For More Information
We hope this update is helpful. For more information about this or other labor and employment developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at(214) 452 -8297.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Scribe for the ABA JCEB Annual Agency Meeting with the Department of Health & Human Services Office of Civil Rights, Vice Chair of the ABA International Section Life Sciences Committee, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and the ABA RPTE Employee Benefits & Other Compensation Group, Ms. Stamer has extensive legal, operational, and public policy experience advising and representing health care, health care and other entities about HIPAA and other privacy, data security, confidentiality and other matters.
Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services, public and private primary, secondary, and other educational institutions, and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. As a part of this work, she has recurrently worked extensively with public school districts and public and private primary and secondary schools, colleges and universities, academic medical, and other educational institutions, insured and self-insured health plans; domestic and international hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, accreditation, peer review and quality committees and organizations; billing, utilization management, management services organizations, group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; consultants; investors; EMR, claims, payroll and other technology, billing and reimbursement and other services and product vendors; products and solutions consultants and developers; investors; managed care organizations, employers; and federal and state legislative, regulatory, investigatory and enforcement bodies and agencies on health care, education, and other data privacy, security, use, protection and disclosure; disability and other educational rights; workforce, and a host of other risk management and compliance concerns.
Ms. Stamer is most widely recognized for her decades-long leading edge work, scholarship and thought leadership on health and other privacy and data security and other health industry legal, public policy and operational concerns. This involvement encompasses helping health care systems and organizations, group and individual health care providers, health plans and insurers, health IT, life sciences and other health industry clients prevent, investigate, manage and resolve sexual assault, abuse, harassment and other organizational, provider and employee misconduct and other performance and behavior; manage Section 1557, Civil Rights Act and other discrimination and accommodation, and other regulatory, contractual and other compliance; vendors and suppliers; contracting and other terms of participation, medical billing, reimbursement, claims administration and coordination, Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA and other payers and other provider-payer relations, contracting, compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, ant kickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns. to establish, administer and defend workforce and staffing, quality, and other compliance, risk management and operational practices, policies and actions; comply with requirements; investigate and respond to Board of Medicine, Health, Nursing, Pharmacy, Chiropractic, and other licensing agencies, Department of Aging & Disability, FDA, Drug Enforcement Agency, OCR Privacy and Civil Rights, Department of Labor, IRS, HHS, DOD, FTC, SEC, CDC and other public health, Department of Justice and state attorneys’ general and other federal and state agencies; JCHO and other accreditation and quality organizations; private litigation and other federal and state health care industry actions: regulatory and public policy advocacy; training and discipline; enforcement; and other strategic and operational concerns.
Author of leading works on HIPAA and a multitude of other health care, health plan and other health industry matters, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at(214) 452-8297or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc. disclaim, and have no responsibility to provide any update or otherwise notify anyone any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance.The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
A civil health care fraud lawsuit filed by the Department of Justice (“DOJ”) in the U.S. District Court for the Southern District of New York today (December 17, 2019) against the nation’s largest long term care pharmacy provider, Omnicare, and its parent, CVS Healthcare Corporation may signal the advisability for insurers, fiduciaries, administrators and sponsors of insured and self-insured health and other benefit plans providing pharmacy benefits to tighten claims and audit past claims payments for prescription drug claims submitted by Omnicare and other CVS pharmacy providers as well as other pharmacy claims to the pharmacy possessed a valid, current prescription to dispense the drug.
Omnicare Complaint Highlights Potential Prescription Drug Fraud By Billing For Filling Expired Prescriptions
In its U.S. ex rel Bassan complaint in intervention (Omnicare and CVS) complaint DOJ joined by 29 states and the District of Colombia filed suit against Omnicare, and its parent company, CVS Healthcare Corporation for damages and civil penalties under the False Claims Act for fraudulently billing federal healthcare programs for hundreds of thousands of non-controlled prescription drugs that DOJ claims Omnicare illegally dispensed to elderly and disabled individuals in assisted living facilities, group homes, independent living communities, and other non-skilled residential long-term care facilities (“LTC facilities”) without a valid, current prescription.. The States of California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nevada, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Rhode Island, Tennessee, Texas, Vermont, Virginia, Washington, Wisconsin, and the District Of Columbia are joining the DOJ in the complaint as co-plaintiffs.
Omnicare is the country’s largest provider of pharmacy services to LTC facilities. It currently operates approximately 160 pharmacies in 47 states across the United States, which dispense tens of millions of prescription drugs to LTC facilities that serve elderly and disabled individuals. CVS acquired Omnicare in May 2015, and shortly thereafter assumed an active role in overseeing Omnicare’s operations, including pharmacy dispensing practices and systems.
The DOJ complaint in the Federal District Court in Manhattan, New York charges that Omnicare illegally dispensed and billed the federal government and patients for antipsychotics, anticonvulsants, and antidepressants Omnicare dispensed to elderly and disabled residents in LTC facilities without proper prescriptions. According to the DOJ complaint from 2010 until 2018, Omnicare and CVS allowed Omnicare pharmacies to dispense non-controlled prescription drugs to tens of thousands of elderly and disabled individuals living in LTC facilities based on prescriptions that had expired, were out of refills, or were otherwise invalid. Omnicare repeatedly disregarded prescription refill limitations and expiration dates that required doctor visits to reevaluate whether the drug should be renewed. Instead of requesting new prescriptions when old ones expired, Omnicare allowed prescriptions to “roll over.” At Omnicare, “rolling over” a prescription meant that when a prescription expired, Omnicare’s computer systems would assign the old prescription a new number and the pharmacy would continue to dispense the drug indefinitely without the need for a prescription renewal. Depending on the computer system used, DOJ claims Omnicare also sometimes assigned a fake number of authorized refills to a prescription – usually 99 allowable refills for Medicare patients – to allow for continuous refilling. DOJ claims that Omnicare pharmacies “rolled over” prescriptions for elderly and disabled individuals living in more than 3,000 residential long-term care facilities, including assisted living facilities operated by the largest long-term care providers in the country, such as Brookdale Senior Living, Atria Senior Living, Sunrise Senior Living Services, and Five Star Senior Living. DOJ charges that Omnicare used these practices to refill prescriptions for patients after the required prescription for refill expired for months, and sometimes years, after the prescriptions expired. The complaint alleged that Omnicare internally referred to these renumbered expired prescriptions as “rollover” prescriptions.
Many of the prescription drugs dispensed by Omnicare without valid prescriptions treat serious, chronic conditions, such as dementia, depression, and heart disease. They include antipsychotics, anticonvulsants, cardiovascular medications, anti-depressants, and other drugs that can have dangerous side effects and need to be closely monitored by doctors, particularly when taken in combination with other drugs by elderly patients.
DOJ says these Omnicare practices of illegally dispensing drugs to elderly and disabled individuals living in LTC facilities exposed these vulnerable individuals to a significant risk of harm. In contrast to traditional skilled nursing homes, where residents have access to 24-hour medical care supervised by doctors, assisted living and other non-skilled residential facilities offer more limited medical care, or none at all. In particular, these LTC facilities generally do not have doctors on staff to oversee and monitor residents’ drug therapy. By repeatedly dispensing potent drugs without current and valid prescriptions, Omnicare jeopardized the health and safety of tens of thousands of individuals who continued to take the same drugs for months, and sometimes years, without consulting their doctors to determine whether the medications were still clinically appropriate.
A large percentage of the long-term care residents served by Omnicare are beneficiaries of federal healthcare programs. The complaint charges that along with illegally filling the expired prescriptions, Omnicare knowingly transmitted false information to these federal healthcare programs that made it appear that drug dispensations were supported by current, valid prescriptions from physicians when in fact they were not. By dispensing drugs without valid prescriptions, Omnicare presented, or caused to be presented, hundreds of thousands of false claims to Medicare, Medicaid, and TRICARE that were ineligible for payment in violation of the False Claims Act. In fact, the complaint charges that Omnicare managers exerted pressure on overwhelmed pharmacy staff to fill prescriptions quickly so that Omnicare could submit claims and collect payments on these rollover claims.
Moreover, DOJ says that it possesses evidence that senior management at Omnicare and CVS knew of the practices. The DOJ complaint charges among other things that the Omnicare’s Compliance Department succinctly acknowledged the problem in an internal April 2015 email in which one Regional Compliance Officer stated: “An issue that I am running into more and more in multiple states concerns the ability of our systems to allow prescriptions to continue to roll after a year to a new prescription number without any documentation or pharmacist intervention.” A compliance officer then forwarded the email to the head of Omnicare’s Third Party Audit group, who responded that she had a “potential solution (programmed last year) but no one is rolling it out now.”
In today’s announcement of the lawsuit, Manhattan U.S. Attorney Geoffrey S. Berman said: “As alleged, Omnicare put at risk the health of tens of thousands of elderly and disabled individuals living in assisted living and other residential long-term care facilities by dispensing drugs for months, and sometimes years, without obtaining current, valid prescriptions from doctors. A pharmacy’s fundamental obligation is to ensure that drugs are dispensed only under the supervision of treating doctors who monitor patients’ drug therapies. Omnicare blatantly ignored this obligation in favor of pushing drugs out the door as quickly as possible to make more money. This Office will continue to hold accountable those who put at risk people’s health and safety just to turn a profit.”
Meanwhile, HHS-OIG Special Agent in Charge Scott J. Lampert said: “Failing to consult doctors as to whether prescriptions should be refilled places patients’ health and medical care at serious risk. These automatic rollover refills could have significant consequences for vulnerable people in long term-care facilities. We will continue working with law enforcement partners to protect people depending on these taxpayer-funded government health programs.”
Charges Suggest Potential Advisability For Plan Audit of Prescription Drug Charges To Confirm Supported By Valid Prescription For Dispensed Drugs
The charges made in the complaint filed against Omnicare highlight an area of claims payment eligibility not regularly verified by many pharmacy benefit and other health claims administrators when administering pharmacy benefit claims- the existence of a current valid prescription to support the dispensation of the billed prescription medication. Except for pain management and certain other medications flagged by regulators or benefit systems as subject to heightened abuse risks, many plan administrators regularly take for granted existence of a current, valid script for many common, frequently issued and renewed, low cost prescriptions issued within frequency and other guidelines based upon the assumption that legal and ethical obligations of pharmacists and pharmacies under licensing, Drug Enforcement Agency and other rules generally provides adequate deterrence against abuses like those the DOJ accuses Omnicare of engaging in its complaint. However, growing corporate or other nonprofessional ownership or management of pharmacies and their management coupled with very limited, virtually all complaint driven oversight of federal and state regulatory and ethical agencies is diminishing the frequency and effectiveness of such oversight. As evidenced by the Omnicare complaint, scrupulous pharmacies may leverage opportunities allowed by this limited oversight to dispense and bill for commonly renewed prescription medication without proper orders in a manner that potentially places patients at risk at the expense of plans and their participants, beneficiaries, sponsors and insurers. Plans, insurers, fiduciaries, plan sponsors and administrators concerned about these risks may want to use the Omnicare lawsuit announcement as an opportunity to educate plan members and their caregivers about the importance of monitoring prescriptions, their refills and claims for abuse; audit and encourage plan members and their caregivers of members with claims paid with respect to Omnicare and other pharmacy claims’ and take other steps to assess the adequacy and tighten as appropriate their existing pharmacy benefit review procedures for verification of the existence of a current, valid prescription to mitigate these exposures. These exposures are further heightened by the widespread practice of outsourcing of pharmacy claims to prescription benefit management or other speciality pharmacy claims providers in many health plan designs including vendoirsand service providers owned or managed by parents or related companies of the pharmacy filling and billing for the scripts.
Health plan fiduciaries, administrators and sponsors that discover potential deficiencies in the validity of a prescription or other elements of a received or previously paid prescription benefit or other claim are cautioned to review and follow the applicable ERISA and for insured plans, state insurance, Patient Protection and Affordable Care Act (“ACA”) and contractual claims and appeals timelines and processes. Failure to follow these requirements can undermine the enforceability of plan remedies as well as expose the plan, its insurer or fiduciary to administrative penalties and other liabilities. Additionally, violations of the ACA mandated procedures also in the case of employment based plans also could expose the sponsoring employer or ubnion to liability for self reporting, self-assessment and payment of penalties under Internal Revenue Code Section 6039D. Where relevant regulatory or contractual time periods for denial have already expired either because the claim already was paid or the analysis otherwise was not timely completed in time to meet the deadline, plans may need to rely upon filing health care fraud or other avenues of relief in lieu of attempting to retroactively deny and recoup the questioned amounts in order to avoid violating the ACA and other rules. Plan fiduciaries and administrators also may need to consider the applicability of offering review by an independent medical review organization to fulfill ACA or other similar mandatesfor medical judgement based determinations.
More Information
We hope this update is helpful. For more information about this or other labor and employment developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Scribe for the ABA JCEB Annual Agency Meeting with OCR, Vice Chair of the ABA International Section Life Sciences Committee, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and the ABA RPTE Employee Benefits & Other Compensation Group, Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. As a part of this work, she has continuously and extensively worked with domestic and international hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, accreditation, peer review and quality committees and organizations; billing, utilization management, management services organizations, group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; consultants; investors; EMR, claims, payroll and other technology, billing and reimbursement and other services and product vendors; products and solutions consultants and developers; investors; managed care organizations, self-insured health and other employee benefit plans, their sponsors, fiduciaries, administrators and service providers, insurers and other payers, health industry advocacy and other service providers and groups and other health and managed care industry clients as well as federal and state legislative, regulatory, investigatory and enforcement bodies and agencies.
Ms. Stamer is most widely recognized for her decades-long leading edge work, scholarship and thought leadership on health and other privacy and data security and other health industry legal, public policy and operational concerns. This involvement encompasses helping health care systems and organizations, group and individual health care providers, health plans and insurers, health IT, life sciences and other health industry clients prevent, investigate, manage and resolve sexual assault, abuse, harassment and other organizational, provider and employee misconduct and other performance and behavior; manage Section 1557, Civil Rights Act and other discrimination and accommodation, and other regulatory, contractual and other compliance; vendors and suppliers; contracting and other terms of participation, medical billing, reimbursement, claims administration and coordination, Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA and other payers and other provider-payer relations, contracting, compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, ant kickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns. to establish, administer and defend workforce and staffing, quality, and other compliance, risk management and operational practices, policies and actions; comply with requirements; investigate and respond to Board of Medicine, Health, Nursing, Pharmacy, Chiropractic, and other licensing agencies, Department of Aging & Disability, FDA, Drug Enforcement Agency, OCR Privacy and Civil Rights, Department of Labor, IRS, HHS, DOD, FTC, SEC, CDC and other public health, Department of Justice and state attorneys’ general and other federal and state agencies; JCHO and other accreditation and quality organizations; private litigation and other federal and state health care industry actions: regulatory and public policy advocacy; training and discipline; enforcement; and other strategic and operational concerns.
Author of leading works on HIPAA and a multitude of other health care, health plan and other health industry matters, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc. disclaim, and have no responsibility to provide any update or otherwise notify anyone any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
On December 10, 2019, the Occupational Safety and Health Administration (OSHA) notified the Small Business Administration Office of Advocacy that it plans to convene a small business panel on a possible OSHA Tree Care Operations safety standard in early 2020. OSHA’s potential tree care standard could cover employees who perform tree care operations, such as pruning, maintaining, repairing, or removing trees, as well as establish safe work practices for such operations. Potentially regulated entities would include employers who engage in daily tree care operations, as well as companies, municipalities, and organizations that occasionally perform tree care and removal as part of their primary operations (e.g., residential and commercial construction and remodeling, landscaping, golf course maintenance, power and pipeline clearing, certain agricultural operations, etc.).
The Office of Advocacy is seeking small entity representatives from the potentially regulated sectors to assist the OSHA panel in its review of this possible regulation. Small entity representatives, or SERS, may include small businesses, small non-profits organizations, and small governmental jurisdictions.
Any small business employer who would be affected by this potential regulation, please contact Bruce Lundegren at (202) 205-6144 or Bruce.Lundegren@sba.gov.
We hope this update is helpful. For more information about this or other labor and employment developments, please contact the author Cynthia Marcotte Stamer viae-mailor via telephone at(214) 452 -8297.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Law and Labor and Employment Law and Health Care; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. As a part of this work, she has continuously and extensively worked with domestic and international employer and other management clients including hospitals, health care systems and other health care organizations, management services organizations, group purchasing organizations; creditors, debtors, bankruptcy trustees and other change organizations; consultants; investors; payroll and other technology and other services and product vendors; products and solutions consultants and developers; self-insured health and other employee benefit plans, their sponsors, fiduciaries, administrators and service providers, insurers and other insurance and risk management clients; as well as federal and state legislative, regulatory, investigatory and enforcement bodies and agencies.
Author of hundreds of highly regarded books, articles and other publications, Ms. Stamer also is widely recognized for her scholarship, coaching, legislative and regulatory advocacy, leadership and mentorship on labor and employment, employee benefits, health and safety, education, performance management, privacy and data security, leadership and governance, and other management concerns within the American Bar Association (ABA), the International Information Security Association, the Southwest Benefits Association, and a variety of other international, national and local professional, business and civic organizations. Examples of these involvements include her service as the ABA Intellectual Property Law Section Law Practice Management Committee; the ABA International Section Life Sciences and Health Committee Vice Chair-Policy; a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former JCEB Council Representative and Marketing Chair; Past Chair of the ABA RPTE Employee Benefits and Other Compensation Group and Vice Chair of its Law Practice Management Committee; Past Chair of the ABA Managed Care & Insurance Interest Group; former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Southwest Benefits Association Board member; past Texas Association of Business State Board Member, BACPAC Committee Meeting, Regional and Dallas Chapter Chair; past Dallas Bar Association Employee Benefits Committee Executive Committee; former SHRM Region IV Chair and National Consultants Forum Board Member; for WEB Network of Benefit Professionals National Board Member and Dallas Chapter Chair; former Dallas World Affairs Council Board Member; founding Board Member, past President and Patient Empowerment and Health Care Heroes founder for the Alliance for Health Care Excellence; former Gulf States TEGE Council Exempt Organizations Coordinator and Board member; past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, seewww.cynthiastamer.comor contact Ms. Stamer via telephone at(214) 452-8297or via e-mailhere.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
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 your profilehere.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc. disclaim, and have no responsibility to provide any update or otherwise notify anyone any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
In Valley Hospital Medical Center, Inc. d/b/a Valley Hospital Medical Center, 368 NLRB No. 139 (2019), issued today, the National Labor Relations Board overruled 2015 changes governing dues checkoff obligations when a collective bargaining agreement ends implemented during the Obama Presidency when Obama appointees dominated the Board. Today’s decision overturns the pro-labor Lincoln Lutheran of Racine, 362 NLRB 1655 (2015) ruling issued by the Board when it was dominated by a Democrat majority appointed by President Barak Obama as part of his aggressively pro-union agenda.
The decision restores the previously long-standing precedent established and in place since the Board’s 1962 decision in Bethlehem Steel, 136 NLRB 1500 (1962). Under today’s decision, the Board Majority made up by Republican appointees Chairman John F. Ring and Members Marvin Kaplan and William Emanuel held that an employer’s statutory obligation to check off union dues ends upon expiration of the collective-bargaining agreement containing the checkoff provision. The majority found that dues checkoff provisions belong in the limited category of mandatory-bargaining subjects that are exclusively created by the contract and are enforceable through Section 8(a)(5) of the National Labor Relations Act only for the duration of the contractual obligation created by the parties. In the majority’s view, there is no independent statutory obligation to check off and remit employees’ union dues after the expiration of the collective-bargaining agreement even where the contract does not contain a union-security provision. Board Member Lauren McFerran dissented.
Today’s decision overturns a pro-labor ruling entered by the Obama-appointee dominated Board. which expanded the power of unions to compel workers to continue to pay union dues even after expiration of the collective bargaining agreement. It is one in a series of recent actions taken or proposed by the Board in recent months to restore the balance between management and labor upset during the Obama President when the Board was dominated by his nominees.
For More Information
We hope this update is helpful. For more information about this or other labor and employment developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Law and Labor and Employment Law and Health Care; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. As a part of this work, she has continuously and extensively worked with domestic and international employer and other management clients including hospitals, health care systems and other health care organizations, management services organizations, group purchasing organizations; creditors, debtors, bankruptcy trustees and other change organizations; consultants; investors; payroll and other technology and other services and product vendors; products and solutions consultants and developers; self-insured health and other employee benefit plans, their sponsors, fiduciaries, administrators and service providers, insurers and other insurance and risk management clients; as well as federal and state legislative, regulatory, investigatory and enforcement bodies and agencies.
Author of hundreds of highly regarded books, articles and other publications, Ms. Stamer also is widely recognized for her scholarship, coaching, legislative and regulatory advocacy, leadership and mentorship on labor and employment, employee benefits, health and safety, education, performance management, privacy and data security, leadership and governance, and other management concerns within the American Bar Association (ABA), the International Information Security Association, the Southwest Benefits Association, and a variety of other international, national and local professional, business and civic organizations. Examples of these involvements include her service as the ABA Intellectual Property Law Section Law Practice Management Committee; the ABA International Section Life Sciences and Health Committee Vice Chair-Policy; a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former JCEB Council Representative and Marketing Chair; Past Chair of the ABA RPTE Employee Benefits and Other Compensation Group and Vice Chair of its Law Practice Management Committee; Past Chair of the ABA Managed Care & Insurance Interest Group; former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Southwest Benefits Association Board member; past Texas Association of Business State Board Member, BACPAC Committee Meeting, Regional and Dallas Chapter Chair; past Dallas Bar Association Employee Benefits Committee Executive Committee; former SHRM Region IV Chair and National Consultants Forum Board Member; for WEB Network of Benefit Professionals National Board Member and Dallas Chapter Chair; former Dallas World Affairs Council Board Member; founding Board Member, past President and Patient Empowerment and Health Care Heroes founder for the Alliance for Health Care Excellence; former Gulf States TEGE Council Exempt Organizations Coordinator and Board member; past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources available here such as:
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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc. disclaim, and have no responsibility to provide any update or otherwise notify anyone any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
The National Labor Relations Board today (December 12, 2019) ordered an administrative law judge to approve settlements resolving complaints against McDonald’s USA LLC, McDonald’s Restaurants of Illinois, Inc. and 29 franchisees that alleged in a series of complaints that McDonald’s Restaurants of Illinois and the franchisees as joint employers. While the order resolves complaints prosecuted over the past three years against the franchisees which also sought to impose joint and several liability against McDonald’s USA LLC and McDonald’s Restaurants of Illinois, Inc. as joint employers, it highlights the continuing joint employer liability risks that franchisors, general contractors and others with significant involvement in other businesses’ operations to potential joint and several liability for NLRA violations by other businesses.
The order available here resolves a series of complaints filed by the unions that alleged that McDonald’s entities and the franchisees as joint employers:
violated Section 8(a)(1) of the NLRA by threatening food service employees, promising benefits to them, interrogating them, and surveilling their protected activity
violated Section 8(a)(3) and (1) of the NLRA by unlawfully discharging 3 employees and suspending, reducing work hours of, or sending home early 17 others, all in retaliation for their union and other protected concerted activity;
Without charging that McDonald’s USA or McDonald’s Restaurants of Illinois with independently violating NLRA, claimed they should be held jointly and severally liable for alleged violations by the franchisees because they allegedly “possessed and/or exercised” sufficient control over the labor relations policies of the franchisees that to constitute joint employers
After nearly three years of proceedings, the NLRB General Counsel and McDonald’s USA, LLC presented a series of informal settlement agreements resolving all the alleged unfair labor practices that among other things would require the 10 franchisees alleged in the consolidated complaints to have committed violations resulting in back pay liability to contribute to a Settlement Fund totaling $250,000 to benefit potential victims of discrimination or retaliation for concerted activity entitled to a monetary remedy as a result of a breach of a settlement agreement. The proposed settlement would hold McDonald’s of Illinois, Inc. liable along with the franchisees. Notably, however, the proposed settlements would not impose joint and several liability on McDonald’s USA, LLC as a joint employer, to contribute to the Settlement Funds, but does impose obligations on McDonald’s USA, LLC to support the remedies agreed to by McDonald’s Restaurants of Illinois and the franchisees in a series of specific ways. Specifically, the settlements would obligate McDonald USA, LLC to collect the funds ordered to fund the Settlement Fund from the Franchisees and deposit them with the NLRB as well as to issue a Special Notice if a Franchisee, within 9 months of approval of its settlement agreement, breaches its settlement agreement obligations by discharging, reducing hours or suspending a worker or engaging in other prohibited conduct like that alleged in the complaint. In the case of such a violation, a worker discriminated against in violation of the settlement could seek reinstatement or make a claim for payment from the Settlement Fund. Additionally, the settlement agreements also would obligate McDonald’s USA, LLC to send a special notice in the event that a franchisee violates the settlement agreements by repeating one of the practices alleged in the charge that would state that, by the conduct described in the Special Notice, the defaulting Franchisee has violated the NLRA and is not in compliance with a settlement agreement. The Special Notice additionally states that McDonald’s “disavows” the conduct “[s]olely in its role as a party to the [s]ettlement [a]greement,” and that its issuance of the Special Notice does not constitute an admission of joint-employer status.
After the administrative law judge refused to approve the proposed settlement agreements despite the recommendation from the NLRB General Counsel , the NLRB reviewed the administrative law judge’s decision on special appeal.
In overturning and ordering the administrative law judge to approve the settlements, NLRB members Marvin E. Kaplan and William J. Emanuel formed the majority that ruled that applying the “reasonableness” factors set forth in Independent Stave, 287 NLRB 740 (1987), the settlement agreements are reasonable, that they provide a full remedy to all affected employees, and that accepting the settlement agreements would serve the policies underlying the NLRA as well as the NRLB’s longstanding policy of encouraging the amicable resolution of disputes. Member Lauren McFerran dissented in this finding.
While the NLRB order to approve the settlement will resolve the pending actions against the McDonald’s entities and its franchisees, the three year prosecution reminds franchisors and other entities of the continuing readiness of the NLRB and union organizers to pursue joint employer prosecution and joint and several liability against franchisors and other entities that it perceives to possess influence or control over the conduct of separately established businesses found to engage in unfair labor practices or other labor law violations. When evaluating these risks, businesses and their leaders should keep in mind that the test for joint employment under the NLRA as well as the Fair Labor Standards Act, makes it much easier to find joint employment than in tax or certain other areas of employment law. Consequently, employers dealing with union organizing or other concerted action and those doing business with them should ensure they have a clear understanding of these rules and take steps to manage their risk to avoid incurring liability for actions of a franchisee or other entity with whom it does business. Businesses and their leaders also should take note that the NLRB under the Trump Administration recently has adopted new rules intended to role back much more aggressive interpretations of the NLRA’s joint employment rule applied by the democrat appointed majority of the NLRB during the Obama Administration. As the McDonald’s prosecutions resolved by today’s order predated this policy change, it remains to be seen how the new rules will effect joint employer prosecutions going forward. Businesses facing organizing, collective bargaining or other union activity potentially covered by the NLRA should proceed with caution to mitigate their potential exposure to charges.
We hope this update is helpful. If you have questions or need more information about this or other labor and employment developments, please contact the author Cynthia Marcotte Stamer via e-mail Or via telephone at invite or via telephone at (214) 452 -8297.
Solutions Law Press, Inc. invites you receive future updates and join discussions about these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Solutions Law Press HR & Benefits Update Compliance Update Group and registering for updates on our Solutions Law Press Website
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; manage labor-management relations, comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
A Fellow in the American College of Employee Benefit Counsel and Past Chair of both the ABA Managed Care & Insurance Interest Group and it’s RPTE Employee Benefits and Other Compensation Group, Ms. Stamer also has leading edge experience in health benefit, health care, health, financial and other plan, program and process design, administration, documentation, contracting, risk management, compliance and related process and systems development, policy and operations; training; legislative and regulatory affairs, and other legal and operational concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources 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 your profile here. We also invite you to join the discussion of these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our groups on LinkedIn accessible here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission and its content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion.otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Total U.S. national healthcare spending in 2018 grew 4.6 percent according to a study conducted by the Office of the Actuary at the Centers for Medicare & Medicaid Services (CMS). CMS reports this growth rate was slower than the 5.4 percent overall economic growth as measured by Gross Domestic Product (GDP). Consequently, the share of the economy devoted to health spending decreasedfrom 17.9percent in 2017 to 17.7 percent in 2018.
Growth in overall healthcare spending has averaged 4.5 percent for 2016-2018, slower than the 5.5 percent average growth for 2014-2015, that was affected by expanded Medicaid and private insurance coverage and increased spending for prescription drugs, particularly for drugs used to treat hepatitis C.
The growth in total national healthcare expenditures was approximately 0.4 percentage point higher than the rate in 2017 and reached $3.6 trillion in 2018, or $11,172 per person.
According to the report, private health insurance, Medicare, and Medicaid experienced faster growth in 2018. The faster growth for these payers was influenced by the reinstatement of the health insurance tax which was applied to private health insurance, Medicare Advantage, and Medicaid Managed care plans. The health insurance tax was a fee imposed on all health insurance providers beginning in 2014 as a part of the funding for the Affordable Care Act (ACA) and was subsequently amended to institute a one-year moratorium on the fee for 2017.
Private health insurance spending(34 percent of total health care spending) increased 5.8 percent to $1.2 trillion in 2018, which was faster than the 4.9 percent growth in 2017. The acceleration was driven in part by an increase in the net cost of private health insurance, which was a result of the reinstatement of the health insurance tax in 2018 following a one-year moratorium in 2017.
Medicare spending(21 percent of total health care spending) grew 6.4 percent to $750.2 billion in 2018, which was faster than the 4.2 percent growth in 2017. The faster growth in Medicare spending in 2018 was influenced by faster growth in the net cost of insurance of Medicare private health plans (mostly Medicare Advantage plans) due to the reinstatement of the health insurance tax in 2018, faster growth in Medicare spending for medical goods and services, and an increase in government administration spending after a reduction in 2017.
Medicaid spending(16 percent of total health care spending) increased 3.0 percent to $597.4 billion in 2018. This was faster than the rate of growth in 2017 of 2.6 percent. The faster rate of growth in 2018 was driven by faster growth in the net cost of insurance for Medicaid managed care plans, also due in part to the reinstatement of the health insurance tax.
Out-of-pocket spending(10 percent of total health care spending) includes direct consumer payments such as copayments, deductibles, and spending not covered by insurance. Out-of-pocket spending grew 2.8 percent to $375.6 billion in 2018, which was faster than the 2.2 percent growth in 2017. Faster out-of-pocket spending growth for retail prescription drugs, durable medical equipment, and dental services more than offset a slowdown in out-of-pocket spending for hospital care.
Health care spending growth was mixed in 2018 for the three largest goods and service categories – hospital care, physician and clinical services, and retail prescription drugs.
Hospital spending(33 percent of total healthcare spending) increased at about the same rate in 2018 as in 2017, growing 4.5 percent and 4.7 percent, respectively, to reach $1.2 trillion in 2018. The steady growth in 2018 was driven by an acceleration in hospital price growth that was offset by slower growth in the use and intensity of hospital services.
Physician and clinical services spending(20 percent of total healthcare spending) increased 4.1 percent to reach $725.6 billion in 2018. This was slower than the rate of growth in 2017 of 4.7 percent. The deceleration in 2018 was driven by slower growth in the use and intensity of physician and clinical services, as physician and clinical price growth accelerated in 2018.
Retail prescription drug spending(9 percent of total healthcare spending) grew 2.5 percent in 2018 to $335.0 billion following slower growth of 1.4 percent in 2017. This faster rate of growth was driven by non-price factors, such as the use and mix of drugs consumed, which more than offset a decline of 1.0 percent in prices for retail prescription drugs.
Additional highlights from the report include:
Sponsors of Healthcare.In 2018, the federal government’s spending on health care increased 5.6 percent, accelerating from growth of 2.8 percent in 2017, and was driven by faster growth in the federally-funded portions of Medicare and Medicaid expenditures. Private businesses’ health care spending increased 6.2 percent in 2018 due primarily to faster growth in employer-sponsored private health insurance premiums. The federal government and households accounted for the largest shares of spending (28 percent each), followed by private businesses (20 percent), state and local governments (17 percent), and other private revenues (7 percent).
The National Health Expenditure estimates have been revised to reflect the most recent and up-to-date source data that is available (and may not have been available for last year’s vintage of the National Health Expenditure Accounts).
The 2018 National Health Expenditures data and supporting information will appear here.
For More Information
We hope this update is helpful. For more information about this or other labor and employment developments, please contact the author Cynthia Marcotte Stamervia e-mailor via telephone at(214) 452 -8297.
Solutions Law Press, Inc. invites you receive future updates and join discussions about these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our LinkedIn Solutions Law Groups and registering for updates on ourSolutions Law Press Website.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
As a primary focus of this work, Ms. Stamer has worked extensively with domestic and international hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, accreditation, peer review and quality committees and organizations; billing, utilization management, management services organizations, group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; consultants; investors; technology, billing and reimbursement and other services and product vendors; products and solutions consultants and developers; investors; managed care organizations, insurers, self-insured health plans and other payers, health industry advocacy and other service providers and groups and other health industry clients as well as federal and state legislative, regulatory, investigatory and enforcement bodies and agencies.
Scribe for the ABA JCEB Annual Agency Meeting with OCR, Vice Chair of the ABA International Section Life Sciences Committee, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, the ABA RPTE Employee Benefits & Other Compensation Group, Ms. Stamer is noted for her decades-long leading edge work, scholarship and thought leadership on health and other privacy and data security and other health industry legal, public policy and operational concerns. This involvement encompasses helping health care systems and organizations, group and individual health care providers, health plans and insurers, health IT, life sciences and other health industry clients prevent, investigate, manage and resolve sexual assault, abuse, harassment and other organizational, provider and employee misconduct and other performance and behavior; manage Section 1557, Civil Rights Act and other discrimination and accommodation, and other regulatory, contractual and other compliance; vendors and suppliers; contracting and other terms of participation, medical billing, reimbursement, claims administration and coordination, Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA and other payers and other provider-payer relations, contracting, compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, antikickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns. to establish, administer and defend workforce and staffing, quality, and other compliance, risk management and operational practices, policies and actions; comply with requirements; investigate and respond to Board of Medicine, Health, Nursing, Pharmacy, Chiropractic, and other licensing agencies, Department of Aging & Disability, FDA, Drug Enforcement Agency, OCR Privacy and Civil Rights, Department of Labor, IRS, HHS, DOD, FTC, SEC, CDC and other public health, Department of Justice and state attorneys’ general and other federal and state agencies; JCHO and other accreditation and quality organizations; private litigation and other federal and state health care industry actions: regulatory and public policy advocacy; training and discipline; enforcement; and other strategic and operational concerns.
Author of leading works on HIPAA and a multitude of other health care, health plan and other health industry matters, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her experience and involvements, see here or contact Ms. Stamer via telephone at(214) 452-8297or via e-mailhere.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources availablehere.
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 your profilehere
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc. disclaim, and have no responsibility for the suitability, completeness, accuracy or other content or to provide any update or otherwise notify anyone any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
The Small Business Administration (“SBA”) Advocacy Office will is host an Employee Benefits Roundtable on Thursday, Nov. 21 from 10:00 AM until 12:00 noon at the SBA Headquarters in Washington, D.C. with the following agenda:
Welcome and Introductions (10:00 am – 10:15 am)
Charles G. Jeane, Assistant Chief Counsel, SBA Office of Advocacy
Discussion of Small Business Use of Cafeteria Plans (10:15 am – 10:45 am)
Gary Kushner, President and CEO of Kushner & Company
Discussion of MEPs and Open MEPs (10:45 am – 11:15 am)
Sandra Turner, President of Retirement Plan Specialists, Inc.
Discussion of Adding Annuities as An Option for Plan Participants (11:15 am – 11:45 am)
Chantel Sheaks, Executive Director, Retirement Policy, U.S. Chamber of Commerce
Open Discussion/Other Small Business Issues (11:45 am – 12:00 pm).
The purpose of these roundtable meetings is to exchange opinions, facts, and information and to obtain the attendees’ individual views and opinions regarding small business concerns. The meetings are not intended to communicate or achieve any consensus positions of the attendees.
Roundtable meetings are open to all interested persons, except the press. Press are excluded in order to facilitate an open and frank discussion about small business-related issues.
About The Author
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation; Former Chair of the RPTE Employee Benefits and Compensation Committee, a current Co-Chair of the Committee, and the former Chair of its Welfare Benefit and its Defined Compensation Plan Committees and former RPTE Joint Committee on Employee Benefits Council (JCEB) Representative, Cynthia Marcotte Stamer is a Martindale-Hubble “AV-Preeminent” practicing attorney and management consultant, author, public policy advocate, author and lecturer repeatedly recognized for her 30 plus years’ of work and pragmatic thought leadership, publications and training on health, pension and other employee benefit, insurance, labor and employment, and health care fiduciary responsibility, payment, investment, contracting and other design, administration and compliance concerns as among the “Top Rated Labor & Employment Lawyers in Texas,” a “Legal Leader,” a “Top Woman Lawyer” and with other awards by LexisNexis® Martindale-Hubbell®; as among the “Best Lawyers In Dallas” for her work in the field of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, in International Who’s Who of Professionals and with numerous other awards and distinctions.
Highly valued for her ability to meld her extensive legal and industry knowledge and experience with her talents as an insightful innovator and pragmatic problem solver, Ms. Stamer advises, represents and defends employer, union, multi-employer, association and other employee benefit plan sponsors, insurers and managed care organizations, fiduciaries, plan administrators, technology and other service providers, government and community leaders and others about health and other employee benefit and insurance program and policy design and innovation, funding, documentation, administration, communication, data security and use, contracting, plan, public and regulatory reforms and enforcement, and other risk management, compliance and operations matters.
Her experience encompasses leading and supporting the development and defense of innovative new policies, programs, practices and solutions; advising and representing clients on routine plan establishment, plan documentation and contract drafting and review, administration, change and other compliance and operations; crisis prevention and response, compliance and risk management audits and investigations, enforcement actions and other dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, Federal Trade Commission, Justice, Securities and Exchange Commission, Education and other federal agencies, state legislatures, attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators, and various other foreign and domestic governmental bodies and agencies.
She also provides strategic and other supports clients in defending litigation as lead strategy counsel, special counsel and as an expert witness. Alongside her extensive legal and operational experience, Ms. Stamer also is recognized for her work as a public and regulatory policy advocate and community leader with a gift for finding pragmatic solutions and helping to forge the common ground necessary to build consensus. Best known for her domestic public policy and community leadership on health care and insurance reform, Ms. Stamer’s lifelong public policy and community service involvement includes service as a lead consultant to the Government of Bolivia on its pension privatization project, as well as extensive legislative and regulatory reform, advocacy and input workforce, worker classification, employee benefit, public health and healthcare, social security and other disability and aging in place, education, migration reforms domestically and internationally throughout her adult life.
In addition to her public and regulatory policy involvement, Ms. Stamer also contributes her service and leadership to a professional and civic organizations and efforts including her involvement as the Founder and Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE; Coalition on Patient Empowerment, a founding Board Member and past President of the Alliance for Healthcare Excellence; Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; Vice Chair, Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group; current Fiduciary Responsibility Committee Co-Chair and Membership Committee member of the ABA RPTE Section; former RPTE Employee Benefits and Other Compensation Group Chair, former Chair and Co-Chair of its Welfare Plans Committee, and Defined Contribution Plans Committee; former RPTE Representative to ABA Joint Committee on Employee Benefits Council; former RPTE Representative to the ABA Health Law Coordinating Counsel; former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, former Board Member, Continuing Education Chair and Treasurer of the Southwest Benefits Association; Vice President of the North Texas Healthcare Compliance Professionals Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; past Dallas World Affairs Council Board Member, and in leadership of many other professional, civic and community organizations.
Ms. Stamer also is a highly popular public speaker, symposia chair and author, who publishes and speaks extensively on health and managed care industry, human resources, employment and other privacy, data security and other technology, regulatory and operational risk management for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, the Society of Professional Benefits Administrators, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients, serves on the faculty and planning committee of many workshops, seminars, and symposia, and on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.
Beyond these involvements, Ms. Stamer also is active in the leadership of a broad range of other public policy advocacy and other professional and civic organizations and involvements. Through these and other involvements, she helps develop and build solutions, build consensus, garner funding and other resources, manage compliance and other operations, and take other actions to identify promote tangible improvements in health care and other policy and operational areas.
Before founding her current law firm, Cynthia Marcotte Stamer, P.C., Ms. Stamer practiced law as a partner with several prominent national and international law firms for more than 10 years before founding Cynthia Marcotte Stamer, P.C. to practice her unique brand of “Solutions law™” and to devote more time to the pragmatic policy and system reform, community education and innovation, and other health system improvement efforts of her PROJECT COPE: the Coalition on Patient Empowerment initiative.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources at SolutionsLawPress.com.
If you or someone else you know would like to receive future updates about developments on these and other concerns, please provide your current contact information and preferences including your preferred e-mail by creating or updating your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Lanier Technical College, a unit of the Technical College System of Georgia, will pay $53,000 in back pay and compensatory damages and revise its policies and procedures to settle a Justice Department lawsuit alleging the College violated the Americans with Disabilities Act (ADA) by terminating along-time College employee based on her multiple sclerosis filed in the Northern District Of Georgia on November 4, 2019. In addition to this disability discrimination allegation, the Justice Department complaint also alleges the removed the employee from the teaching schedule for an entire school semester, thus reducing her hours and pay to zero, due to her multiple sclerosis after the employee took three days of sick leave one summer. The lawsuit and its settlement reminds academic health care and other public and private employers about the need to use appropriate care to avoid inappropriate discrimination against individuals with disabilities in employment and other operations.
The College had employed the terminated employee as a part-time emergency medical technician (EMT) lab assistant for over three years before the events prompting the lawsuit took place. The essential functions of her job involved assisting instructors in the classroom and in the lab, and perform “check offs” to authorize and certify that the students mastered particular technical competencies (e.g., properly taking blood pressure, starting a patient’s I.V., assessing a patient’s vital signs). In addition to her employment with the College, the former employee also worked as a paramedic for an unrelated employer. She continued to work as a full-time paramedic for nearly three years after the College terminated her employment as a part-time lab assistant.
Less than a year into her employment at the College, the former employee was diagnosed with multiple sclerosis (MS) in 2010. Shortly after her diagnosis the former employee notified among others, notified the Director of the Lanier Paramedicine Technology (PMT) Department, Sam Stone, of her condition and Mr. Stone subsequently discussed her MS and treatment with her over the course of her employment with the College. According to the Justice Department complaint, the former employee did not require any reasonable accommodations for her disability, remained qualified to perform the essential functions of the part-time lab assistant job, and did so successfully until College discharged her or otherwise altered her compensation, terms, conditions, or privileges of employment.
In 2012, the former employee assisted with classes and labs taught by Instructor Andy Booth. Instructor Booth managed the work schedule for all the part-time EMT lab assistants who assisted with his classes, including that of the former employee. This included the ability to remove lab assistants from any shifts they requested. Director Stone then completed a final review of the semester and approved the schedule and any changes to it.
During the summer of 2012, the former employee had to miss her assigned workdays on two or three occasions due to her MS and its treatment. She also was on disability leave from her paramedic job for a period during that summer, returning to work full-time in early August. Following these absences, Instructor Booth on August 30, 2012 sent an email to lab assistants, including the former employee requesting that lab assistants sign up for open shifts on the work schedule, as he was “still short on help.” The schedule with available shifts was posted for September through December 2012. The former employee signed up for seven or eight four-hour shifts over the course of the fall semester that same day and emailed Instructor Booth the evening of August 30 to inform him of this. In her email, she indicated that she was no longer on disability leave from her other job.
Two weeks later, on September 12, 2012, the College removed the former employee from the work schedule for the entire fall semester schedule on the written instructions of Instructor Booth with the approval of Director Stone. Instructor Booth’s September 12 email instructions to his assistant provided a link to the online work schedule for the lab assistants and stated: “Any day you see [the former employee], just take her off.” Director Stone was copied on this email. That same day, Director Stone replied to Instructor Booth’s email, stating that he had reviewed all of the dates up to December and approved the schedule. The College knew that, by removing the former employee from the schedule, it was terminating her employment with Lanier.
When the former employee realized that someone removed her from the schedule for the entire semester, she contacted Instructor Booth. He told the former employee, by text message, that it was Director Stone’s decision and that Director Stone wanted to give the former employee “some time to heal.” Instructor Booth also stated that Director Stone seemed upset about the former employee missing a few days in the summer due to her MS. Instructor Booth then directed the former employee to speak to Director Stone. He did not offer to reinstate her for any of the days she signed up for or for any future dates.
Thereafter, on September 26, 2012, the former employee contacted Director Stone by email. After telling Director Stone i her email that Instructor Booth said Director Stone was managing the schedule and had wanted to give her “some time to heal,” she reassured him that she appreciated his concern but that she felt she was “OK.” When Director Stone responded on September 23, he confirmed the correctness of Director Stone’s email and also confirmed that he was concerned with the former employee’s health. He offered to discuss these concerns further with her in private. He did not offer to reinstate her for any of the days she signed up for or for any future dates.
Later that day, the former employee called Director Stone. On the call, Director Stone expressed concern about legal and liability issues and whether the former employee was fit to work because of her MS. He said that he, as the Department Director, had to be concerned about her health and medical issues, because a student could challenge a grade on the basis that her MS made her unfit to evaluate students. Director Stone also referenced a couple days that the former employee missed work due to her MS during the summer, and stated that she was less reliable than other lab assistants were at that point. He did not offer to reinstate her for any of the days she signed up for or for any future dates.
Approximately six months later, College removed the former employee from the payroll and changed her payroll status to “terminated.”
On September 26, 2012, the former employee filed a timely charge of discrimination with the United States Equal Employment Opportunity Commission (EEOC), alleging that College terminated her because of her disability in violation of the ADA. The Justice Department filed the lawsuit after the EEOC referred the former employee’s complaint to it.
Title I of the ADA prohibits covered entities including the College from discriminating against a qualified individual on the basis of disability in regard to job application procedures, the hiring, advancement, or discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of employment. 42 U.S.C. § 12112(a); 29 C.F.R. § 1630.4.
The Justice Department complaint against the College charged that the College violated the ADA by discriminating against her on the basis of her disability by:
Removing her from the lab assistant work schedule for a semester and reducing her work hours and compensation to zero; and
Terminating her on the basis of her disability
As a consequence of these discriminatory actions, the complaint charged the former employee suffered lost earnings, benefits and job advancement opportunities, as well as substantial emotional distress, pain and suffering and other nonpecuniary losses. The complaint asked the District Court to redress these injuries by:
Declaring the College in violation of the Title I of the ADA and its accompanying regulation;
Enjoining the College and its agents, employees, successors, and all persons in active concert or participation with it, from engaging in discriminatory employment policies and practices that violate Title I of the ADA;
Requiring the College to modify its policies, practices, and procedures as necessary to bring its employment practices into compliance with Title I of the ADA and its implementing regulation;
Ordering the College to train its supervisors and human resource staff regarding the requirements of Title I of the ADA; and
Awarding the former employee back pay with interest; the value of any lost benefits with interest; and compensatory damages, including damages for emotional distress, for injuries suffered as a result of Defendant’s failure to comply with the requirements of the ADA;
Under the settlement agreement announced November 7, 2019 by the Justice Department, the College must pay the former employee $53,000 in back pay and compensatory damages, revise its policies and training staff on the ADA to ensure compliance with the ADA, train staff on the ADA, and report to the Justice Department on implementation of the settlement agreement.
Reaching this settlement allowed the College to eliminate its exposure to potentially much greater liability. In addition to actual lost compensation and benefit damages, a loss at trial could have resulted in a jury award that also ordered the College to pay attorneys’ fees and other costs, interest and exemplary damages of up to $300,000.
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We hope this update is helpful. For more information about employment discrimination or other labor and employment, compensation, benefits or other related management and compliance concerns or developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Solutions Law Press, Inc. invites you receive future updates and join discussions about these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Solutions Law Press HR & Benefits Update Compliance Update Group and registering for updates on our Solutions Law Press Website..
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, health care, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications including extensive work with businesses on compliance, risk management and defense.
Author of numerous highly regarding publications on disability and other discrimination and other employment, employee benefit, compensation, regulatory compliance and internal controls and other management concerns affecting health care, education, insurance, housing and other operations, Ms. Stamer’s clients include health care, insurance and financial services, educational and other employer and services organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders. In addition to her legal and management operations work. Ms. Stamer’s experience includes 30 plus years’ of legislative and regulatory policy advocacy and drafting, design, compliance and enforcement including testifying to the EBSA Advisory Council on Employee Welfare and Pension Benefit Plans in on the effectiveness of employee benefit plan disclosures during 2017 hearings on on reducing the burdens and increasing the effectiveness of ERISA mandated disclosures as well as advice, representation, advocacy and testimony to and before and other work with various foreign governments, Congress, state legislatures, and a multitude of federal, state and local agencies.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; manage labor-management relations, comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
A Fellow in the American College of Employee Benefit Counsel and Past Chair of both the ABA Managed Care & Insurance Interest Group and it’s RPTE Employee Benefits and Other Compensation Group, Ms. Stamer also has leading edge experience in health benefit, health care, health, financial and other plan, program and process design, administration, documentation, contracting, risk management, compliance and related process and systems development, policy and operations; training; legislative and regulatory affairs, and other legal and operational concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her work, services, experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
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NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission and its content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion.otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
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Business owners and operators and the business’ tax, accounting and other service providers increasingly risk criminal prosecution when involved with a business caught shirking its obligations under the Internal Revenue Code (the “Code”) to report wages and withhold and pay federal income tax and employees’ share of social security and Medicare taxes (collectively known as “FICA taxes”) from employees’ wages and to pay the employer’s share of FICA taxes in addition to the substantial civil tax penalties that the business faces for these actions.
While various Internal Revenue Service (“IRS”) educational and enforcement initiatives across the past decade have expanded awareness among business leaders and their accounting and tax advisors more aware of the the potentially significant civil tax penalties risks aggressive employment tax practices can create for the business, many business owners and operators, and the tax, accounting and payroll service providers often overlook or fail to take seriously their potential personal exposure to civil and increasingly, even criminal liability that can arise from management, consulting or other involvement with businesses engaged in aggressive employment tax practices under the Code. With the Justice Department now increasingly using criminal prosecution of individuals as well as businesses involved in employment tax evasion a key weapon in its effort to combat the “substantial problem” of employment tax fraud, however, business owners, operators, tax counsel, accounting, payroll, staffing and others increasingly must exercise care to avoid subjecting themselves to criminal prosecution and other personal liability when dealing with businesses engaged in aggressive employment tax practices.
Employment Tax Compliance Now High Enforcement Priority
Business noncompliance with their employment tax obligations is a widespread and persistent problem in the United States for a multitude of reasons, not the least of which is budgetary. Employment taxes on employee wages represent nearly 70% of all revenue collected by the IRS and, as of June 30, 2016, more than $59.4 billion of tax reported on Employer’s Quarterly Federal Tax Returns (Forms 941) remained unpaid. When last measured prior to the Justice Department’s kickoff of its current enforcement initiative in 2018, uncollected employment tax violations represented more than $91 billion of the gross Tax Gap and, after collection efforts, $79 billion of the net Tax Gap in the U.S. See Employment Tax Enforcement.
Aside from the budgetary concerns created by the widespread business noncompliance with employment tax responsibilities, the Justice Department considers nonpayment of employment taxes a serious crime. According to its Employment Tax Enforcement page states, “When employers willfully fail to collect, account for and deposit with the IRS employment tax due, they are stealing from their employees and ultimately, the United States Treasury. In addition, employers who willfully fail to comply with their obligations and unlawfully line their own pockets with amounts withheld are gaining an unfair advantage over their honest competitors.”
To stem employment tax violations and encourage greater business compliance with these requirements, the IRS and Justice Department are using a variety of taxpayer outreach, voluntary compliance resolution, and civil and criminal enforcement tools. Along with ongoing educational outreach, for instance, the IRS tries to encourage businesses to voluntarily clean up outstanding employment tax compliance issues by making available various voluntary resolution programs. For instance, the IRS Voluntary Closing Agreement Process – Employment Tax (VCAP – ET) program offers an administrative process businesses not currently under audit may use to “permanently and conclusively” resolve outstanding IRS employment tax liabilities not involving worker classification while its Voluntary Classification Settlement Program (VCSP) for businesses not under audit and Classification Settlement Program for businesses under examination offer options for businesses may use to resolve worker classification associated employment tax liabilities.
Employment Tax Prosecution Rising
Coupled with efforts to obtain greater voluntary compliance through these voluntary resolution programs, however, the IRS and Justice Department Tax Division increasingly partner to investigate and prosecute aggressively businesses and their owners, operators and tax and other service providers for employment tax violations. As the agency responsible for conducting the civil and criminal prosecutions necessary to enforce these rules, the Justice Department brings both civil suits and criminal prosecutions against both businesses and the owners, operators and others that participate or assist businesses to willfully violate the Code’s employment tax rules. While in the past, IRS and Justice Department employment tax enforcement generally focused on high dollar employment tax fraud cases, since making employment tax fraud enforcement a priority in May 2018, the IRS and Justice Department no longer place a dollar threshold on the amount of unpaid employment taxes that could trigger more severe enforcement action. Since this change, Justice Department civil and criminal employment tax fraud prosecutions and convictions have risen significantly, resulting in the Justice Department achieving a long and growing list of civil money judgements to recover unpaid taxes, interest and penalties, permanent injunctions and criminal convictions against businesses and individuals involved in employment tax fraud over the past year.
On the civil front, the Justice Department brings litigation on behalf of the United States to enforce the IRS’ authority to collect unpaid taxes and penalties and pursues permanent injunctions against businesses, payroll and tax advisors and others for violating the Code’s employment tax requirements.
Criminal Employment Tax Fraud Prosecutions & Convictions Show Justice Department Ready To Nail Businesses & Individuals Cheating On Employment Taxes
While these and other civil enforcement successes are powerful tools in the arsenal of the Justice Department and IRS employment tax enforcement efforts, however, it is the Justice Department’s growing prosecution and success in securing criminal convictions resulting in prison sentences against business owners and operators, tax advisors and others for employment tax fraud that most clearly demonstrates the Justice Department’s announced commitment to employment tax fraud enforcement has real teeth. Over the past year, the Justice Department as racked up an impressive and growing number of federal grand jury criminal tax fraud indictments, convictions and sentences, many of which include prison sentences ordered against business owners, operators, advisors and other individuals convicted of employment tax fraud. See e.g., North Carolina Office Manager Sentenced to Prison for Employment Tax Fraud; see also Recent Criminal Employment Enforcement News.
The criminal employment tax prosecution actions reported by the Justice Department during the just ended month of October 2019 are typical of this prosecutorial trend over the past year. Among others, during October the Justice Department Tax Division announced its employment tax enforcement efforts resulting in it securing separate federal grand jury criminal indictments against staffing business operators in New York and North Carolina.
October Criminal Employment Tax Indictments
On October 24, for instance, the Justice Department announced that a New York grand jury had issued criminal tax indictments against the owner/operator of a Long Island City, New York temporary employment staffing businesses including PTP Staffing Associates Inc. (PTP), and PPS Associates Inc. (PPS). The indictments charge that as the alleged sole owner of PTP and PPS, Heppenheimer was required to collect, account for, and pay to the IRS federal employment taxes withheld from the wages of PTP and PPS employees, but from 2013 through 2017, failed to report more than $270,000 in employment taxes to the IRS. If convicted, Heppenheimer faces a statutory maximum sentence of five years imprisonment for each count charged, plus substantial monetary penalties, supervised release, and restitution. Owner of New York City Temporary Staffing Firms Indicted for Employment Tax Fraud
Mere days later, the Justice Department also announced that a North Carolina federal grand jury had indicted Rebecca Adams and her daughter Elizabeth Wood with conspiring to defraud the United States government by withholding taxes from employees’ paychecks and failing to pay those taxes over to the Internal Revenue Service (IRS). See e.g., Owners of Greensboro Temporary Staffing Firms Indicted for Employment Tax Fraud. The indictment alleges Adams and Wood created Forms W-2 for the staffing business employees but failed to file these forms with the government as required. Instead of paying the taxes withheld from employees, the indictment alleges that Adams and Wood used the funds to pay for personal expenses, such as a personal maid, personal landscaping services, and pet spa services. The staffing business allegedly changed names twice, even though it did not otherwise change its actual business operations. Adams was also charged with tax evasion based on her allegedly evading payment of more than $400,000 in previously assessed employment taxes and penalties to the IRS. If convicted, both defendants face significant punishment. If convicted on these charges both Adam and Woods can expect their punishment will include prison time. Adams and Wood each face a statutory maximum sentence of five years in prison for each charge of conspiracy, employment tax fraud, and tax evasion, plus probation and monetary penalties.
October Criminal Employment Tax Convictions
Along with securing these new criminal tax indictments, the Justice Department also was successful in obtaining new criminal tax convictions against business owners in West Virginia and Florida for employment tax violations.
On October 21, two West Virginian business owners plead guilty today to conspiring to defraud the United States regarding their employment taxes and individual income taxes in a Federal District Court in West Virginia. According to court documents, Russell and Karen Rucker, a married couple, operated Rucker, Billups and Fowler Inc. (RBF), an insurance agency located in Huntington, West Virginia. Russell Rucker was the president of RBF and since approximately late 2013, Karen Rucker served as a financial officer. Between September 2015 and September 2018, the Ruckers withheld approximately $143,226 in payroll taxes from the wages of RBF’s employees, which they did not pay over to the IRS. Instead, the Justice Department charged the Ruckers diverted portions of the withheld funds for their own personal benefit. For instance, from 2014 through 2016 the Ruckers continued to pay themselves over $500,000 in salary. The Justice Department also charges that in response to IRS collection efforts in an attempt to conceal funds from the IRS, the Ruckers deposited money into the bank account of another individual, attempted to evade IRS levies by using a series of bank accounts that they did not disclose to the IRS, and by paying their mortgage and many other bills in cash. The Justice Department also claims the Ruckers also attempted to evade payment of $114,911 of Russell Rucker’s 2001, 2002, and 2005 individual income taxes by disguising paychecks issued to Russell Rucker as non-taxable “note proceeds and failed to file their individual income tax returns and RBF’s corporate returns for 2014 through 2017. The Justice Department valued the intended tax loss caused to the IRS by their conduct is more than $250,000. Currently awaiting sentencing scheduled on January 27, 2020, the Ruckers each face a statutory maximum sentence of five years in prison as well as monetary penalties, a period of supervised release, and restitution. See West Virginian Business Owners Plead Guilty to Failing to Pay Employment Taxes and Individual Income Taxes.
Less than a week later, the Justice Department achieved another prosecutorial success when Miami, Florida business owner Ricardo Betancourt plead guilty on October 29 to causing the multiple parcel delivery businesses he owned and operated in South Florida to fail to pay over employment taxes. According to the Justice Department, Betancourt’s multiple South Florida parcel delivery businesses earned gross revenues of more than $100 million and employed hundreds of employees. Betancourt as the owner and operator of these businesses was responsible for ensuring the businesses collected and paid over to the IRS the employment taxes withheld from employees’ paychecks. The Justice Department charged that Betancourt withheld payroll taxes from his employees, but deliberately failed to pay over those withholdings and other associated taxes to the IRS. The Justice Department claimed that in 2013 and 2014, Betancourt did not pay over approximately 97 percent of the federal employment taxes he withheld from his employees. In 2015 and 2016, Betancourt did not pay over any of the federal employment taxes he withheld from his employees. For the quarter ending December 2016, Betancourt admitted that he failed to truthfully account for and pay over payroll taxes of approximately $727,478. In his sentencing currently scheduled for February 12, 2020, Betancourt faces a statutory maximum sentence of five years in prison as well as a period of supervised release, restitution, and monetary penalties. See Miami Business Owner Pleads Guilty to Employment Tax Fraud.
October Criminal Employment Tax Prison Sentencings
The prison sentences imposed during October against individuals convicted of employment tax fraud also show business owners, operators and others criminally convicted on employment tax related tax evasion and tax fraud charges should expect to serve time in prison. Take the sentencing of Gail Cooper, who was sentenced for the employment tax crimes she committed as owner of a commercial and residential glass installation company, Greenville Architectural Glass (GAG). According to the Justice Department, as the owner of GAG responsible for GAG’s finances, Cooper was legally responsible for ensuring that GAG properly withheld and paid over to the IRS federal income, Social Security and Medicare taxes on the wages GAG paid to its employees during the years 2013 through 2015. Cooper was also required to file quarterly employment tax returns with the IRS. Although Cooper caused GAG to withhold taxes from employees’ wages, the Justice Department shared she neither filed the required quarterly returns for the first quarter of 2013 through the second quarter of 2015, nor paid the withheld amounts over to the IRS. Cooper also failed to pay over to the IRS unemployment taxes. In all, Cooper caused more than $280,000 in payroll taxes not to be paid. Furthermore, the Justice Department also charged Cooper filed false individual income tax returns for 2008, 2009, and 2010, on which she understated GAG’s gross receipts and overstated its expenses. Cooper caused GAG’s bookkeeper to manipulate and delete entries in the company’s accounting records. Specifically, she directed the bookkeeper to delete invoices from the software after GAG received payment from a client to make it appear as if GAG had not received the payment. Cooper also paid personal expenses with business funds, including utility bills for her residence and rental properties, and caused these to be classified as business expenses. After filing fraudulent returns for 2008-2010, Cooper did not file any individual income tax returns for the next several years. In total, the Justice Department charged Cooper’s conduct caused a tax loss of $587,516 to the United States. As punishment for these criminal convictions, U.S. District Judge Thomas M. Rose on October 29th ordered Cooper to serve 14 months in prison, two years of supervised release and pay restitution to the IRS in the amount of $659,262.39. Ohio Glass Company Owner Sentenced to Prison For Not Paying Employment Taxes.
That same day, Justice Department Tax Division prosecutors also obtained a 24-month prison sentence against a Tulsa, Oklahoma computer software development company owner for his criminal conviction on failing to account for and pay over employment taxes withheld from his employees’ wages. According to documents and information provided to the Court, as the owner and operator of Tulsa-based Zealcon Corporation, Earnest J. Grayson Jr. was responsible for withholding, and paying over to the IRS payroll taxes on the wages paid to Zealcon employees. For the period January 2014 through June of 2016, Justice Department prosecutors showed Grayson caused a tax loss of approximately $1 million by intentionally not paying to the IRS income and social security taxes withheld from Zealcon employees’ wages and the employer portion of social security taxes due from Zealcon on those wages. As punishment for these crimes, Grayson was sentenced to serve a 24 month prison sentence, ordered to pay restitution to the IRS in the amount of $904,091, and to serve three years of supervised release. Owner of Tulsa Software Company Sentenced to Prison for Employment Tax Fraud.
With the Justice Department promising to continue to pursue ongoing enforcement effort, businesses, individuals with ownership or management authority over the collection and payment of employment taxes, and their tax, accounting, payroll, staffing and other service providers need to use care to avoid exposing themselves to liability when advising, assisting or dealing with a business engaged in aggressively classifying workers as contractors rather than employees, or otherwise failing to properly track, account for, report and pay over income tax and employment taxes properly.
When evaluate these potential risks, businesses and business leaders responsible for income and employment tax withholding, reporting and payment and those negotiating, reviewing or engaging in transactions with them should be particularly careful when participating in arrangements that the IRS might consider employment tax fraud schemes such as:
“Pyramiding” of employment taxes, which the IRS views as a fraudulent practice where a business withholds taxes from its employees but intentionally fails to remit them to the IRS. Businesses involved in pyramiding frequently file for bankruptcy to discharge the liabilities accrued and then start a new business under a different name and begin a new scheme.
Abusive employee leasing arrangements where the business contracts with outside businesses to handle all administrative, personnel, and payroll concerns for employees where the leasing entity fails to properly report wages and withhold and payover income or employment taxes to the IRS. The IRS and other agencies often pursue tax collection and other enforcement actions against businesses that have used leasing or other staffing businesses when the leasing or staffing company fails to properly report, withhold or pay over income and employment taxes to the IRS.
Paying workers in whole or partially, in cash without properly accounting for, withholding and paying income or employment taxes due on a worker’s wages where the facts and circumstances indicated the worker qualified as a common law employee of the business; or
Filing false payroll tax returns understating the amount of wages on which taxes are owed, or failing to file employment tax returns to evade employment or other taxes.
When evaluating the adequacy of employment tax compliance, proper worker classification is a critical starting point. Business owners, operators and others in the scope of employment tax liability risk should scrutinize the defensibility of how a business classifies those performing services or other work as employees versus independent contractors, employees or contractors of another business or in some other status and document the evidence supporting these characterization and other compliance efforts.
When performing these activities, business owners and operators are encouraged to resist the urge to assume that they can rely upon the contractual or labels of workers as contractors or employed by a staffing, leasing or other service provider to avoid characterization and resulting liability for employment and income tax obligations as the employer of workers. Under the Code the defensibility of these characterizations of workers generally is determined based on whether the facts and circumstances reflect that the business in operation possessed the requisite control to qualify as a common law employer with little or no deference to how the parties have labeled the arrangement or the historical duration of the practices within the organization or its respective industry. Rather, the analysis must focus on evaluating these and other potentially suspect arrangements to realistically assess the likelihood that the IRS or Justice Department could challenge the business’ employment tax practices as willful or other violations of the Code’s employment tax requirements. Wise individuals and businesses operating or dealing with businesses involved in arrangements or practices identified as potentially suspect by the IRS and Justice Department also should pursue contractual, audit and other operational safeguards to document their efforts to require, enforce and monitor compliance and to capture and retain records and other evidence that would be helpful to defend the business’ or their own action in the event the IRS or Justice Department audits or initiates enforcement action with respect to the arrangements in the future.
Tax preparers, tax and other attorneys, accountants and others that participating in operations, preparation of returns, transactions or other activities also should be sensitive to special ethical and legal requirements and standards that can attach to advice or involvement in operations, transactions or providing advice or representation potentially involving practices that might raise employment tax fraud or other employment tax withholding and payment, wage reporting, or related employment tax concerns might arise. See, e.g., IRS Circular 230. Along side of the Justice Department’s civil and criminal employment tax enforcement, tax practitioners, tax preparers, and other third parties expose themselves to discipline for failing to properly report, pay and file employment tax or other returns or other violations of professional standards of tax practice when giving advice or other engaging in other activities adhere to professional standards and follow the law.
Additionally, tax and other professionals are reminded that tax return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website.
Leaders, legal and other advisors, and service providers of businesses involved in these arrangements generally should use care to critically evaluate these should react to the growing enforcement risks and acting to mitigate their own and their organization’s potential exposure to criminal or civil tax or other enforcement. These efforts should start by assessing realistically the likely defensibility of their arrangements and risks of liabily from their own or other associated businesses employment tax or worker classification practices in the event of a challenge based on a realistic assessment of the real acts and circumstances within the scope of attorney-client priviledge as well as seek contractual, audit and other operational safeguards to require and document compliance and to capture and retain records and other evidence that the business might need to defend itself against a future audit or enforcement action associated with these suspect arrangements.
Businesses leaders, advisors and service providers also should keep in mind that aggressive worker classification and employment tax practices generally also extend to a business’ other relationships with workers and service providers such as minimum wage, over time, recordkeeping and other wage and hour; I-9 eligibility to work verification, occupational heath and safety, workers’ compensation, employment discrimination and other worker associated legal obligations also currently subject to heavy worker misclassification and other enforcement. As a consequence, businesses, legal counsel, accounting and other service providers should recognize the need for a holistic review and assessment of risk and planning to manage these risks, as well as the need to use care to safeguard attorney-client privilege and avoid unprotected discussion of sensitive facts and analysis outside the scope of attorney-client privilege with other parties without prior approval of their legal counsel.
For More Information
We hope this update is helpful. For more information about worker classification and employment tax compliance and enforcement or other labor and employment developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Solutions Law Press, Inc. invites you receive future updates and join discussions about these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Solutions Law Press HR & Benefits Update Compliance Update Group and registering for updates on our Solutions Law Press Website.
About the Author
Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine.
Author of numerous highly regarding publications on worker classification and other employment, payroll, and employee benefit tax compliance publications, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders. As part of this work, she has worked extensively on employee benefit communication and other employee benefit plan legislative and regulatory policy, design, compliance and enforcement including testifying to the EBSA Advisory Council on Employee Welfare and Pension Benefit Plans in on the effectiveness of employee benefit plan disclosures during 2017 hearings on on reducing the burdens and increasing the effectiveness of ERISA mandated disclosures.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; manage labor-management relations, comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
A Fellow in the American College of Employee Benefit Counsel and Past Chair of both the ABA Managed Care & Insurance Interest Group and it’s RPTE Employee Benefits and Other Compensation Group, Ms. Stamer also has leading edge experience in health benefit, health care, health, financial and other plan, program and process design, administration, documentation, contracting, risk management, compliance and related process and systems development, policy and operations; training; legislative and regulatory affairs, and other legal and operational concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or herexperience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources 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 your profile here. We also invite you to join the discussion of these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Health Plan Compliance Group or COPE: Coalition On Patient Empowerment Groupon LinkedIn or Project COPE: Coalition on Patient Empowerment Facebook Page.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission and its content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion.otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Health plans and insurers and their service providers should heed as a warning of the potential perils they could face for violating the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Security and Breach Notification Rules the just-announced $2.15 million plus civil monetary penalty that Jackson Health System (JHS) paid the Department of Health & Human Services Office of Civil Rights (OCR).
While the HIPAA-covered entity that paid the $2,154,000 civil monetary penalty, JHS, is a Florida-based nonprofit academic medical system, rather than a health plan, the $1,500,000 HIPAA resolution payment OCR previously collected from Blue Cross Blue Shield of Tennessee (BCBST) in 2012 for its breaches of HIPAA make clear that health plans and insurers risk similar penalties for HIPAA violations. Consequently, health plans, health insurers and other health care providers and their business associates should construe the JHS civil monetary penalty as evidence of the need to re-verify and remain constantly vigilant about maintaining compliance with HIPAA’s privacy, security and breach notification rules currently and on an ongoing basis.
JHS HIPAA Breaches Found By OCR
The $2.1 million plus payment was required to satisfy a civil monetary penalty assessment OCR imposed in a Notice of Proposed Determination and Notice of Final Determination made public by OCR on October 23, 2019 in response to findings from a series of investigations of HIPAA breach and compliance concerns raised between 2013 and 2016 raised by various HIPAA-mandated breach reports and media reports that raised concerns about improper access disclosure and use of patient PHI between 2013 and 2016. When JHS did not challenge the findings or determination became final. OCR reports JHS has paid the specified $2.154,000 civil monetary penalty.
JHS operates six major hospitals, a network of urgent care centers, multiple primary care and specialty care centers, long-term care nursing facilities, and corrections health services clinics, provides health services to approximately 650,000 patients annually, and employs about 12,000 individuals.
On August 22, 2013, JHS submitted a breach report to OCR stating that its Health Information Management Department lost paper records containing the protected health information (PHI) of 756 patients in January 2013. JHS’s internal investigation determined that an additional three boxes of patient records also were lost in December 2012; however, JHS did not report the additional loss or the increased number of individuals affected to 1,436, until June 7, 2016.
In July 2015, OCR initiated an investigation following a media report that disclosed the PHI of a JHS patient. A reporter had shared a photograph of a JHS operating room screen containing the patient’s medical information on social media. JHS subsequently determined that two employees had accessed this patient’s electronic medical record without a job-related purpose.
On February 19, 2016, JHS submitted a breach report to OCR reporting that an employee had been selling patient PHI. The employee had accessed inappropriately over 24,000 patients’ records since 2011.
According to OCR Director Roger Severino, “OCR’s investigation revealed a HIPAA compliance program that had been in disarray for a number of years. …This hospital system’s compliance program failed to detect and stop an employee who stole and sold thousands of patient records; lost patient files without notifying OCR as required by law; and failed to properly secure PHI that was leaked to the media.”
These and other findings led to the OCR determination in the Notice of Proposed Determination and Notice of Final Determination that JHS failed to provide timely and accurate breach notification to the Secretary of HHS, conduct enterprise-wide risk analyses, manage identified risks to a reasonable and appropriate level, regularly review information system activity records, and restrict authorization of its workforce members’ access to patient ePHI to the minimum necessary to accomplish their job duties. OCR assessed the $2.1 million civil monetary penalty based on these determinations.
The JHS civil monetary penalty is The latest in a growing series of OCR enforcement and regulatory actions that drive home the perils HIPAA-covered health care providers, health plans and insurers, healthcare clearinghouses and business associates risk by failing to responsibly and effectively manage their HIPAA compliance including the one against mega-health plan and business associate, BCBST, that resulted in its payment of a $1,500,000 resolution payment. For details of the BCBS Resolution Agreement and Settlement payment, see here.
OCR enforcement data documents a steady rise in OCR investigation and enforcement activity. OCR set all-time records for HIPAA Enforcement in 2018. Heavy enforcement activity has continued in 2019. Before its October 23, 2019 announcement of the JHS civil monetary penalties, OCR already had announced:
Its first HIPAA right of access resolution agreement against a health care provider for violating HIPAA’s right of access rules on September 9, 2019 as part of its recently announced HIPAA access rule enforcement initiative;
The collection of a $3 million resolution payment collected from a Tennessee diagnostic medical imaging services company to settle HIPAA civil monetary penalty exposures arising from a breach that exposed the protected health information of more than 300,000 patients; and
A multitude of other audits and enforcement activities resolved through corrective action without collection of any resolution payment or civil monetary penalties.
Given these and other previously announced enforcement initiatives and actions, all HIPAA covered entities and their business associates are urged to maintain hypervigilance about their own HIPAA compliance with long standing as well as emerging HIPAA requirements taking into account old, recent, and emerging guidance and enforcement activities of OCR. Of course health plans and other covered entities also need to additionally weigh their exposure under various other state and federal law likely to arise from such breaches and the investigation, mitigation and public and customer trust consequences that almost always accompany and frequently exceed the actual HIPAA liability imposed. Considered together, these and other consequences of HIPAA vioations or other sloppy dealings with protected health inforamtion or ther sensitive health care or financial information make a clear case for investing appropriately in HIPAA and related compliance.
For More Information
We hope this update is helpful. For more information about this or other labor and employment developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Solutions Law Press, Inc. invites you receive future updates and join discussions about these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Solutions Law Press HR & Benefits Update Compliance Update Group and registering for updates on our Solutions Law Press Website.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders. As part of this work, she has worked extensively on employee benefit communication and other employee benefit plan legislative and regulatory policy, design, compliance and enforcement including testifying to the EBSA Advisory Council on Employee Welfare and Pension Benefit Plans in on the effectiveness of employee benefit plan disclosures during 2017 hearings on on reducing the burdens and increasing the effectiveness of ERISA mandated disclosures.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; manage labor-management relations, comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
A Fellow in the American College of Employee Benefit Counsel and Past Chair of both the ABA Managed Care & Insurance Interest Group and it’s RPTE Employee Benefits and Other Compensation Group, Ms. Stamer also has leading edge experience in health benefit, health care, health, financial and other plan, program and process design, administration, documentation, contracting, risk management, compliance and related process and systems development, policy and operations; training; legislative and regulatory affairs, and other legal and operational concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources 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 your profile here. We also invite you to join the discussion of these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Health Plan Compliance Group or COPE: Coalition On Patient Empowerment Groupon LinkedIn or Project COPE: Coalition on Patient Empowerment Facebook Page.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission and its content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion.otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Monday, December 16, 2019 is the new comment deadline for providing feedback to the National Labor Relations Board (NLRB) ion a proposed rule that would exempt undergraduate and graduate students performing services for financial compensation in connection with their studies from the NLRB’s definition of “employee” for purposes of the National Labor Relations Act (NLRA) and other collective bargaining and union organizing and representation laws under the NLRB’s jurisdiction. The extended comment deadline was announced here October 17, 2019.
The original notice of proposed rulemaking published here on September 23, 2019 would exempt ” every student performing teaching, research and any services for compensation, at a private college or university in connection with his or her studies from treatment as an “employee” for purposes of Section 2(3) of the NLRA.
The NLRB says this proposed rulemaking “is intended to bring stability to an area of federal labor law in which the NLRB, through adjudication, has reversed its approach three times since 2000. The NLRB has stated this proposed standard on the exclusion of students from the NLRA definition of employee is consistent with the purposes and policies of the NLRA, which contemplates jurisdiction over economic relationships, not those that are primarily educational in nature.
The proposed regulation is one of several regulatory projects that the now Trump-appointee dominated NLRB has undertaken in the past year in its effort to undue a host of pro-labor changes to NLRB policy changes initiated and enforced during the Obama Administration when President Obama appointees dominated the NLRB and its policies. Another example of these regulatory efforts include the NLRB’s current efforts to reverse a change in interpretation and enforcement of the “joint employer” rules of the NLRA and Fair Labor Standards Act that substantially expanded the imputation of liability for collective bargaining and other labor-management and wage and hour law violations by treating companies as joint employers that received the benefit of work performed even when the recipient company did not control the details of the work or the nominal employer. Employers generally will want to carefully monitor and provide appropriate input on these and other developments.
For More Information
We hope this update is helpful. For more information about this or other labor and employment developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Solutions Law Press, Inc. invites you receive future updates and join discussions about these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Solutions Law Press HR & Benefits Update Compliance Update Group and registering for updates on our Solutions Law Press Website.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders. As part of this work, she has worked extensively on employee benefit communication and other employee benefit plan legislative and regulatory policy, design, compliance and enforcement including testifying to the EBSA Advisory Council on Employee Welfare and Pension Benefit Plans in on the effectiveness of employee benefit plan disclosures during 2017 hearings on on reducing the burdens and increasing the effectiveness of ERISA mandated disclosures.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; manage labor-management relations, comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
A Fellow in the American College of Employee Benefit Counsel and Past Chair of both the ABA Managed Care & Insurance Interest Group and it’s RPTE Employee Benefits and Other Compensation Group, Ms. Stamer also has leading edge experience in health benefit, health care, health, financial and other plan, program and process design, administration, documentation, contracting, risk management, compliance and related process and systems development, policy and operations; training; legislative and regulatory affairs, and other legal and operational concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources 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 your profile here. We also invite you to join the discussion of these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Health Plan Compliance Group or COPE: Coalition On Patient Empowerment Groupon LinkedIn or Project COPE: Coalition on Patient Empowerment Facebook Page.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission and its content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion.otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Employer and other retirement plan sponsors, plan administrators and other service providers desiring to use website or other electronic communications to distribute retirement plan disclosures required by the Employee Retirement Income Security Act (“ERISA”) in lieu of the much more expensive and time consuming process of sending volumes of paper documents through the mail or other ERISA-compliant means should share their recommendations and support for a proposed regulation announced by the . U.S. Department of Labor Employee Benefit Security Administration (“EBSA”) today (October 22, 2019).
ERISA requires retirement plan administrators to furnish multiple documents per year to participants and beneficiaries on a variety of topics. Currently, retirement plan disclosures generally are provided through paper documents distributed by first class mail. because existing regulations requiring plan administrators to use delivery methods “reasonably calculated to ensure actual receipt of the documents” make paper distribution safest.
Historically, the general standards for delivery of required disclosures set forth in 29 CFR 2520.104b-1 require retirement plans and their administrators to incur substantial expense to print and deliver the required disclosure communications via mail or hand delivery. Preparing and providing these disclosures in printed form is costly and time consuming. Since many plan participants never read or cannot find copies of these high dollar printed materials, plan sponsors and administrators long have questioned the appropriateness of these expensive mandates.
As internet accessibility and use have expanded, calls to modernize the general delivery rule to allow electronic delivery or access have picked up steam. Employer and other plan sponsors, plan administrators increasingly have urged EBSA to update is regulations to allow electronic delivery to reduce plan costs and administrative burdens as well as to facilitate participant access to these disclosures on demand through the internet.
In an initial effort to respond to these developments and pressures, EBSA amended the general standards for delivery of required disclosures in 2002 by establishing a regulatory safe harbor for the use of electronic media (the “2002 safe harbor”) under 29 CFR 2520.104b-1(c). Unfortunately, the conditions the 2002 safe harbor imposed on electronic distribution hindered use of electronic delivery as the default method of delivery of retirement plan documents. make n administration recently prompted EBSA to reconsider the 2002 safe harbor. In the new proposed regulation, EBSA proposes to allow retirement plans and their administrators greater latitude to use electronic media to provide ERISA required retirement disclosures under the terms set forth in the proposed regulation. EBSA says this rule change would reduce retirement plan communication costs while enhancing the accessibility of communications to plan participants by leveraging internet technology.
Under the proposed regulation’s safe harbor, retirement plans and their plan administrators still would have to provide ERISA retirement plan disclosures, but their options for distributing these disclosures would expand. In addition to distributing paper notifications by mail, hand delivery or other means “reasonably calculated to ensure delivery,” the proposed regulation would provide an option to use website posting as the default means of distribution provided the participant does not elect to continue to receive paper notification. To take advantage of the option to use website posting, however, plan administrators would have to comply with the safe harbor requirements in the proposed regulation including requirements that:
The plan post the required disclosures on a website that meets the requirements of the safe harbor rule, including system checks for invalid electronic addresses;
Retirement plan administrators would satisfy their obligation to furnish ERISA-required disclosures by making the information accessible online and by furnishing to participants and beneficiaries a notice of internet availability of these disclosures.
A notice of internet availability would be sent to the electronic address of the participant, for example to the participant’s email address.
A notice of internet availability must include, among other things, a brief description of the document being posted online, a website address where the document is posted, and instructions for requesting a free paper copy or electing paper delivery in the future.
A notice of internet availability generally must be sent each time a retirement plan disclosure is posted to the internet website.
To prevent “email overload,” the proposal allows a notice of internet availability to incorporate or combine other notices of internet availability in limited circumstances.
The framework in the proposal is similar to the approach the Securities and Exchange Commission takes for certain investor disclosures. EBSA says the proposed regulation safe harbor also is intended to align with Internal Revenue Service rules about delivering retirement plan disclosures electronically while protecting the option for those participants who prefer paper notices to elect to continue to do so.
EBSA projects the adoption of the proposed regulation would substantially reduce the administrative and financial burden of meeting the ERISA disclosure requirements. In fact, EBSA estimates that elimination or reduction of printed materials, printing and mailing costs associated with furnishing printed disclosures allowed through the expanded use of internet technology to furnish covered disclosures to workers allowed by the safe harbor would produce approximately $2.4 billion net cost savings over the next 10 years for ERISA-covered retirement plans. Meanwhile, EBSA says the requirement in the proposed regulation for plans to continue to provide disclosures in paper form to participants that prefer that option would protect the reliability of disclosures to those participants.
EBSA is inviting plan sponsors, administrators and other stakeholders to submit comments on the proposed regulation generally. In addition, the Notice of Proposed Ruling on the proposed regulation also specifically invites stakeholders to assist EBSA to evaluate whether additional changes to the disclosure requirements in the regulations in the future by inviting input on a broad range of disclosure-related questions and topics, including scope, content, design and delivery of ERISA disclosures.
For More Information
We hope this update is helpful. For more information about this or other labor and employment developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
Solutions Law Press, Inc. invites you receive future updates and join discussions about these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Solutions Law Press HR & Benefits Update Compliance Update Group and registering for updates on our Solutions Law Press Website.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders. As part of this work, she has worked extensively on employee benefit communication and other employee benefit plan legislative and regulatory policy, design, compliance and enforcement including testifying to the EBSA Advisory Council on Employee Welfare and Pension Benefit Plans in on the effectiveness of employee benefit plan disclosures during 2017 hearings on on reducing the burdens and increasing the effectiveness of ERISA mandated disclosures.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; manage labor-management relations, comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
A Fellow in the American College of Employee Benefit Counsel and Past Chair of both the ABA Managed Care & Insurance Interest Group and it’s RPTE Employee Benefits and Other Compensation Group, Ms. Stamer also has leading edge experience in health benefit, health care, health, financial and other plan, program and process design, administration, documentation, contracting, risk management, compliance and related process and systems development, policy and operations; training; legislative and regulatory affairs, and other legal and operational concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources 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 your profile here. We also invite you to join the discussion of these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Health Plan Compliance Group or COPE: Coalition On Patient Empowerment Groupon LinkedIn or Project COPE: Coalition on Patient Empowerment Facebook Page.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission and its content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion.otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Beginning January 1, 2020, only employees earning at least $684 per week (equivalent to $35,568 per year for a full year worker) can qualify for payment on a salaried basis as employees exempt from the Fair Labor Standards Act (“FLSA”) minimum wage and overtime requirements under the “White Collar Exemption” for executive, administrative, professional, outside sales, computer employees and at least $107, 342 per year to qualify as exempt from the minimum wage and overtime requirements as a “highly compensated employee” (“HCE”).
As the Department estimates that these changes will cause more than 1.3 million additional workers to qualify for minimum wage and overtime pay, employers who treat any employees as exempt from FLSA overtime, minimum wage and recordkeeping requirements based on the FLSA White Collar or HCE Exemption should reconfirm continued applicability of the exemption and take other steps in preparation for the January 1 rule change.
White Collar & HCE Exemption Salary Threshold Increase On January 1, 2020
A final rule announced by the U.S. Department of Labor Wage and Hour Division (“WHD”) on September 24, 2019 and currently awaiting assignment for official publication in the Federal Register will raise the minimum earnings threshold that WHD regulations require as a prerequisite to an employer treating an employee as exempt from the FLSA under the White Collar Exemption for the first time since 2004[1]. WHD estimates that the increase in the salary threshold implemented by the final rule will make 1.2 million additional workers entitled to minimum wage and overtime pay and that an additional 101,800 workers will be entitled to overtime pay as a result of the increase to the HCE compensation level.
Under the final rule, beginning January 1, 2020, the salary threshold amount for the White Collar Exemption will increase from $455 per week to $684 per week.
In addition to these changes in the White Collar Exemption salary threshold, the final rule also will:
Increase the total annual compensation level for “highly compensated employees (HCE)” from the currently-enforced level of $100,000 to $107,432 per year;
Revise the special salary levels for workers in U.S. territories and in the motion picture industry as follows:
Maintain the current special salary level of $380 per week for American Samoa because minimum wage rates there have remained lower than the federal minimum wage;
Set a special salary level of $455 per week for employees in Puerto Rico, the U.S. Virgin Islands, Guam, and the Commonwealth of the Northern Mariana Islands; and
Increase the special “base rate” threshold for employees in the motion picture producing industry. proportionally to the increase in the standard salary level test, resulting in a new base rate of $1,043 per week (or a proportionate amount based on the number of days worked).
Permit nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to an employee to be counted as compensation to the employee to satisfy up to 10% of the standard White Collar Exemption salary threshold ($68.40 per week) for purposes of determining if the employee earns sufficient compensation to satisfy the salary threshold for the White Collar Exemption but not the HCE Exemption; and
Announce the intention by the WHD to increase these threshold amounts more regularly in response to inflation through notice and rulemaking, while abandoning a prior proposal to accomplish these updates automatically through inflation indexing.
Treatment of Nondiscretionary Bonuses and Incentive Payments
In the final rule, in recognition of evolving pay practices, the Department also permits employers to use nondiscretionary bonuses and incentive payments to satisfy up to 10 percent of the standard salary level. For employers to credit nondiscretionary bonuses and incentive payments toward a portion of the standard salary level test, they must make such payments on an annual or more frequent basis. This is just one of the fringe benefit related refinements WHD recently made or proposed to make to its regulations that impact the implications of noncash compensation and other perks in the past couple years. See e.g., Proposed FLSA Base Pay Rule Clarifies Overtime Treatment Of Perks. Understanding the existing and proposed rules and enforcement positions is important for employers to properly manage their FLSA obligations.
If an employee does not earn enough in nondiscretionary bonus or incentive payments in a given year (52-week period) to retain his or her exempt status, the Department permits the employer to make a “catch-up” payment within one pay period of the end of the 52-week period. This payment may be up to 10 percent of the total standard salary level for the preceding 52-week period. Any such catch-up payment will count only toward the prior year’s salary amount and not toward the salary amount in the year in which it is paid
Employer Actions Required
Employers paying or planning to any employee on a salaried basis in reliance upon the employer’s treatment of that employee as covered by the White Collar Exemption or HCE Exemption to the FLSA minimum wage and overtime rules should evaluate whether that employee continues to qualify for coverage under the applicable exemption taking into account the modifications implemented by the final rule. By December 31, 2020, employers of any employee currently classified and paid on a salaried basis in reliance upon the White Collar or HCE Exemptions will need to:
Confirm whether the employee earns sufficient compensation to qualify for continued coverage by the applicable exemption taking into account the changes implemented by the final rule;
For employees disqualified for continued classification as exempt due to the increase in the required salary threshold, either increase the compensation that the employer pays the employee to meet the increased threshold or reclassify as nonexempt and treat the disqualified employee as covered by the FLSA minimum wage, overtime, timekeeping and recordkeeping requirements no later than January 1, 2020; and
For any employee who will not qualify for exemption after January 1, 2020, implement necessary procedures to ensure that the applicable time and other recordkeeping, minimum wage and overtime requirements are met.
Employers anticipating that they will employ employees impacted by the changes of the final rule also generally will want to take into account these impending changes when reviewing and designing their base, incentive and other compensation and benefit practices for these employees as well as in compensation, budget, product or service bidding and contracting and other impacted business practices.
When conducting this analysis and planning employers should keep in mind that while the final rule allows employers satisfy up to 10% of the salary threshold for the White Collar Exemption with nondiscretionary bonuses and incentive payments paid to the employee, nondiscretionary bonuses and incentive payments will not count as compensation for purposes of the HCE threshold. Employers also should carefully review existing guidance to verify their understanding of what bonuses and incentive payments qualify as nondiscretionary for purposes of the WHD regulations as employers frequently underestimate and inappropriately fail to take into account bonus or other incentive compensation when calculating overtime that WHD views as nondiscretionary and therefore required to be included when calculating and paying overtime.
Additionally, employers relying upon the White Collar Exemption to treat employees as exempt from the FMLA are encouraged to reconfirm that any employee paid on a salary basis otherwise continues to fulfill all conditions required to qualify for that exemption. WHD enforcement history contains an already voluiminous and continuously growing list of employers nailed for FLSA minimum wage and overtime violations due to their reliance upon overly optimistic or otherwise inappropriate determinations regarding the applicability of the White Collar Exemption to various members of their workforces. Employers should keep in mind that employers bear the burden of proof when raising the White Collar or other exemptions as a defense to a minimum wage, overtime, recordkeeping or other FMLA violation.
Employers staffing or making use of labor or services provided by employee leasing, temporary staffing, day labor, contractors, or other contingent worker sources also are encouraged to keep in mind the growing aggressiveness by WHD and private litigants in challenging and obtaining reclassification of contingent workers as employees of the businesses receiving these services, holding the recipient of these contingent worker services liable as a joint employer or both. Given the growth in both the frequency and success of these challenges, businesses using contingent workforce workers generally should (1) realistically reevaluate their potential exposure to minimum wage and overtime liability from services received from contingent workers; and (2) pursue opportunities to mitigate these exposures by reconfiguring these relationships, contracting for assurances and access to documentation necessary to prove that the contingent workforce provider properly classifies and pays minimum wage and overtime and maintains time and other records, and ensuring that the business can access records that it likely would need to investigate and defend itself against potential FLSA liability claims that the WHD or a private litigant might assert against it with regard to services performed by contingent workers.
Need more information about this article or have questions about your company’s responsibilities under the FLSA or other wage and hour, leave or other workforce, compensation or employee benefit concerns? You can contact the author of this update, Cynthia Marcotte Stamer, by e-mail here or telephone her at (214) 452.8297.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Labor and Employment Law and Health Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, and a Fellow in the American College of Employee Benefit Counsel, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and public speaker widely known for 30+ years of management focused employment, compensation and employee benefits and other workforce and performance management, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for using her detailed legal and operational knowledge and experience to help clients find and implement pragmatic strategies and solutions, Ms. Stamer’s clients include health industry, employee benefit, insurance and financial services and a diverse array of other employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; manage labor-management relations, comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as ongoing engagements on compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Current ABA Intellectual Property Section Law Practice Management Committee Chair; ABA International Section Life Sciences & Health Committee Vice Chair; ABA RPTE Section Employee Benefits & Other Compensation Group Past Group Chair and a current or past Chair of various of its committees, ABA Health Law Managed Care & Insurance Interest Group Past Chair and , a Fellow in the American Bar Foundation and the Texas Bar Foundation and the author of a multitude of highly regarded publications on wage and hour and other labor and employment, compensation and benefits, performance management and other related concerns, Ms. Stamer also is widely recognized for her extensive authorship, work and leadership on leading edge employment, health care, employee benefits and other compensation, benefits, health and safety, insurance and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here such as the following:
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 your profile here. We also invite you to register to receive future Solutions Law Press, Inc. updates here and join the discussion of these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our HR & Employee Benefits Compliance Group or COPE: Coalition On Patient Empowerment Group on LinkedIn or Project COPE: Coalition on Patient Empowerment Facebook Page.
NOTICE: Copyright to the article set forth above is retained by Cynthia Marcotte Stamer, who has granted Solutions Law Press, Inc. a limited nonexclusive license to republish this work but otherwise retains the copyright to this work and content. These and other intellectual property rights are protected by federal and state law against unauthorized use or republication. For information about republication or other use, contact the author..
These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
[1] A 2016 final rule to change the overtime thresholds was enjoined by the U.S. District Court for the Eastern District of Texas on November 22, 2016, and was subsequently invalidated by that court. As of November 6, 2017, the U.S. Court of Appeals for the Fifth Circuit has held the appeal in abeyance pending further rulemaking regarding a revised salary threshold. As the 2016 final rule was invalidated, the Department has consistently enforced the 2004 level throughout the last 15 years.
Federal contractors and subcontractors must update the National Labor Relations Act rights notice that Executive Order 13496, “Notification of Employee Rights Under Federal Labor Law.” requires be displayed.
The U.S. Department of Labor updated the poster to reflect a new telephone number for the National Labor Relations Board (NLRB), the agency responsible for enforcing the NLRA, as well as contact information for individuals who are deaf or hard of hearing. No other changes or updates were made at this time.
Federal contractors and subcontractors can obtain the updated poster at no cost by downloading it from the Department’s Office of Labor-Management Standards (OLMS) website at https://www.dol.gov/olms/regs/compliance/EO13496.htm.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; manage labor-management relations, comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; HIPAA administrative simplification, meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, antikickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA, HEDIS and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; 1557 and other Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here such as the following:
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 your profile here. We also invite you to join the discussion of these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Health Plan Compliance Group or COPE: Coalition On Patient Empowerment Groupon LinkedIn or Project COPE: Coalition on Patient Empowerment Facebook Page.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
On Wednesday, May 8, 2019, Health and Human Services(“HHS”) Secretary Alex Azar announced the adoption of a Medicare and Medicaid Programs; Regulation to Require Drug Pricing Transparency Final Rule (the “Rule”) by the Centers for Medicare & Medicaid Services (“CMS”) requiring direct-to-consumer television advertisements for prescription pharmaceuticals covered by Medicare or Medicaid to include the list price – the Wholesale Acquisition Cost – if that price is equal to or greater than $35 for a month’s supply or the usual course of therapy.
Part of President Trump’s American Patients First blueprint, the 102 page Rule seeks to increase transparency for patients and bring down overall drug costs both for patients and for the Medicare and Medicaid programs.
Effective 60 days after its official publication in the Federal Register on May 10, 2019, the Rule will require direct-to-consumer television advertisements for prescription drug and biological products covered by Medicare or Medicaid to include the list price – the Wholesale Acquisition Cost – if that price is equal to or greater than $35 for a month’s supply or the usual course of therapy, with the prices updated quarterly.
According to CMS, the 10 most commonly advertised drugs have list prices ranging from $488 to $16,938 per month or usual course of therapy. CMS believes patients should know what a drug costs as they discuss their options with their doctor.
While pharmaceutical drug manufactures generally must obtain approval from the FDA Office of Prescription Drug Promotion (ODPD) for advertising, OPDP does not review price information in prescription drug advertisements. Consequently, HHS says ODPD will not require a manufacturer that simply adds price information to a direct-to-consumer advertisement as required by § 403.1202 of the Rule unless the price information explicitly or implicitly incorporates safety or efficacy information about the drug, or makes express or implied claims about the safety or efficacy of the drug.
In addition to the Rule, HHS continues to review a number of other rules and proposals it hopes to further advance the American Patients First blueprint initiative to improve drug price transparency and inform consumer decision making by fixing opaque systems, changing incentives that drive costs or other undesirable behaviors by pharmaceutical companies, prescription benefit management (“PBM”) companies, health insurers and plans, providers and patients.
Health plan, their employer and other sponsors, insurers, PBM and other vendors and others should anticipate that the new Rule and other elements and initiatives of the Trump Administration American Patients First blueprint will impact plan design and administration both by directly impacting PBM and pharmaceutical costs, products, formularies and arrives and by fueling a host of new discussions by patients and their providers about pharmaceutical drug selection. In addition to impacting existing plan features and their administration, health plans, their fiduciaries, administrators and insurers should prepare for a predictable surge in scrutiny by plan
members about health plan prescription drug formularies that in many cases will fuel new appeals and challenges to the plan denials, formularies and other impacted features. Health plan fiduciaries, administrators, PBMs and other vendors, employer and other sponsors should anticipate and begin preparing both to handle these new health plan demands and ideally, to educate patients and their caregivers to use the new information to
make better health care choices.
If you have questions or would like more information about the new Rule or other developments impacting your health plan design or administration, please contact the author directly.
If you found this article of interest, Solutions Law Press, Inc. invites you to check out other Solutions Law Press, Inc. publications. We also invite you to share your own best practices ideas and resources and join the discussions about these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Solutions Law Press HR & Benefits Update Group or COPE: Coalition On Patient Empowerment Groupon LinkedIn or Project COPE: Coalition on Patient Empowerment Facebook Page.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; HIPAA administrative simplification, meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, antikickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA, HEDIS and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; 1557 and other Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here such as the following:
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 your profile here. We also invite you to join the discussion of these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Health Plan Compliance Group or COPE: Coalition On Patient Empowerment Groupon LinkedIn or Project COPE: Coalition on Patient Empowerment Facebook Page.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
U.S. employers should start giving clear feedback to Congress about proposals to impose new federal paid family leave requirements on U.S. employers likely to move quickly through Congress given strong bipartisan Congressional and Presidential support. The push for enactment of federal paid leave legislation comes amid the enactment of a patchwork of state and local state paid leave laws over the past decade.
In fact, Republican Representative Tom Brady, the Ranking Minority Member of the Committee, stated in his opening statement at the start of the hearing, “Today the question isn’t whether to expand paid family leave, but how best to achieve it.”
With the majority of Congress supporting federal legislation to expand the availability of paid family leave, U.S. employers should make sure to communicate their preferences about the “how” to Congress whole time remains to influence those decisions.
While both parties and the President Trump support expanded federal support for paid leave, the two Parties differ widely about the how federal legislation should promote paid family leave.
Republicans generally are urging the extension and support the “carrot” incentive approach they began in the last Congress when they led the enactment of The Paid Family and Medical Leave Tax Credit, doubling of the Child Tax Credit to its largest amount in history, increase of the Child Tac Credit refundability, and expansion of its availability to 8 million more families as part of the Tax Cuts and Jobs Act. The new paid leave credit reimburses qualifying businesses up to 25 percent of the cost of providing paid leave to their workers. In this first-ever pilot program, businesses can get help for offering up to 12 weeks of paid leave. Republicans now support continuation and possible expansion of these incentives.
In contrast, Democrats advocate Congress using a “stick” approach by mandating that employers provide paid family leave or government sponsored programs through a plethora of proposals including, for instance instance:
S. 840, the Healthy Families Act and H.R. 1784, the Healthy Families Act would require covered employees of 15 or more employees to provide 1 hour of paid sick leave for care of self or a family member for every 30 hours an employee works that employees could carryover to subsequent years if not used with substantial penalties imposed employers; and
H.R. 1185: FAMILY Act introduced by Democrat Representative Rosa DeLauro with 185 co-sponsors would establish government sponsored accounts to provide paid family leave.
In his comments this morning, Representative Brady noted the need to tailor paid mandates to account for differences in employer needs, stating: “As we work to expand access to paid medical leave, there are real concerns that a new one-size-fits-all Washington mandate limits family flexibility, could be extremely costly, and will lead to higher taxes on workers, reduced job benefits, or harmful cuts in education, Social Security, or Medicare to pay for the new mandate.
in addition, before the hearing the highest ranking Republicans on the Subcommittees for Select Revenue Measures, Worker and Family Support, and Social Security respectively, Representatives Kevin Brady, Adrian Smith, Jackie Walorski, and Tom Reed, sent a letter to Ways and Means Chairman Richard Neal (D-MA), urging the emphasis of incentives over “one size, fits all mandates.”
With both parties pushing to enact their preferred paid family leave approach, employers concerned about the cost and other challenges of a federal paid family leave mandate should review and provide feedback to key Congressional committees and members as soon as possible.
If you want addition information or assistance in reviewing or responding to these proposals, please contact the author directly.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; HIPAA administrative simplification, meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, antikickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA, HEDIS and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; 1557 and other Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here such as the following:
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 your profile here. We also invite you to join the discussion of these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Health Plan Compliance Group or COPE: Coalition On Patient Empowerment Groupon LinkedIn or Project COPE: Coalition on Patient Empowerment Facebook Page.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Health plans, their sponsoring employers and unions, insurers, fiduciaries, administrators, insurers and other service providers should learn from the $3 million lesson a Franklin, Tennessee-based diagnostic medical imaging services provider is learning about the heavy penalties a health plan, health care provider, health care clearinghouse or business associate (“Covered Entity”) risks if a post-data breach investigation by the U.S. Department of Health and Human Services (“HHS”) Office for Civil Rights (“OCR”) shows the Covered Entity breached the privacy, data security, business associate agreement and breach notificataion rules of the Health Insurance Portability and Accountability Act (HIPAA) Security and Breach Notification Rules before or after the breach.
Under a new OCR Resolution Agreement and Corrective Action Plan announced May 6, 2019, Touchstone Medical Imaging (“Touchstone”) must pay $3,000,000 to OCR and adopt a corrective action plan to settle OCR charges it violated HIPAA arising from an OCR investigation of Touchstone’s handling of a 2014 breach. Around May 9, 2014, the Federal Bureau of Investigation (“FBI”) and OCR notified Touchstone that one of its FTP servers allowed uncontrolled access to PHI that allowed search engines to index the PHI of more than 300,000 of Touchstone’s patients, which remained visible on the Internet even after the server was taken offline. While Touchstone initially claimed that no patient PHI was exposed, in the course of OCR’s investigation, Touchstone subsequently admitted PHI of more than 300,000 patients was exposed including, names, birth dates, social security numbers, and addresses. As a result of its delayed acknowledgement of the occurrence of the breach on May 9, 2014, Touchstone did not provide notice of the breach until October, 2014, months after OCR and FBI notified it of the breach. See here.
OCR’s investigation found Touchstone breached HIPAA before and after the breach. OCR’s investigation found before the breach, Touchstone failed to conduct an accurate and thorough risk analysis of potential risks and vulnerabilities to the confidentiality, integrity, and availability of all of its electronic PHI (ePHI), and failed to have business associate agreements in place with its vendors, including their IT support vendor and a third-party data center provider as required by HIPAA. OCR also found Touchstone did not thoroughly investigate the security incident until several months after notice of the breach from both the FBI and OCR. Consequently, Touchstone’s notification to individuals affected by the breach also was untimely.
To resolve OCR charges arising from these events, Touchstone agreed to pay OCR $3,000,000. In addition to the monetary settlement, Touchstone will undertake a robust corrective action plan that includes the adoption of business associate agreements, completion of an enterprise-wide risk analysis, and comprehensive policies and procedures to comply with the HIPAA Rules.
The Resolution Agreement illustrates the expensive price Covered Entities risk from failing to conduct risk assessments, obtain business associate agreements and fulfill other HIPAA requirements before a breach, then failing to promptly investigate, provide notification and redress a breach when discovered. Covered Entities should learn from the painful lesson learned by Touchstone by reconfirming the adequacy of their current HIPAA compliance and using care to timely and adequately investigate and provide notification if and when a breach occurs.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry, health and other benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; managed care organizations, insurers, self-insured health plans and other payers and their management; public and private, domestic and international hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, health care accreditation, peer review and quality committees and organizations; managed care organizations, insurers, third party administrative services organizations and other payer organizations; billing, utilization management, management services organizations; group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; claims, billing and other health care and insurance technology and data service organizations; other health, employee benefit, insurance and financial services product and solutions consultants, developers and vendors; and other health, employee benefit, insurance, technology, government and other management clients.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompassess advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Beyond her public policy and regulatory affairs involvement, Ms. Stamer also has extensive experience helping these and other clients to design, implement, document, administer and defend workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government; accreditation and quality organizations; private litigation and other federal and state health care industry investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; training and discipline; enforcement, and a host of other related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, and change management; workforce and operations management, and other opportunities and challenges arising in the course of their operations.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; HIPAA administrative simplification, meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, antikickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA, HEDIS and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; 1557 and other Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns.
Ms. Stamer has extensive health care reimbursement and insurance experience advising and defending plan sponsors, administrators, insurance and managed care organizations, health care providers, payers, and others about Medicare, Medicaid, Medicare and Medicaid Advantage, Tri-Care, self-insured group, association, individual and employer and association group and other health benefit programs and coverages including but not limited to advising public and private payers about coverage and program design and documentation, advising and defending providers, payers and systems and billing services entities about systems and process design, audits, and other processes; provider credentialing, and contracting; providers and payer billing, reimbursement, claims audits, denials and appeals, coverage coordination, reporting, direct contracting, False Claims Act, Medicare & Medicaid, ERISA, state Prompt Pay, out-of-network and other nonpar insured, and other health care claims, prepayment, post-payment and other coverage, claims denials, appeals, billing and fraud investigations and actions and other reimbursement and payment related investigation, enforcement, litigation and actions. Scribe for the ABA JCEB annual agency meeting with HHS OCR, she also has worked extensively on health and health benefit coding, billing and claims, meaningful use and EMR, billing and reimbursement, quality measurement and reimbursement, HIPAA, FACTA, PCI, trade secret, physician and other medical, workforce, consumer financial and other data confidentiality and privacy, federal and state data security, data breach and mitigation, and other information privacy and data security concerns.
Author of leading works on a multitude of health care, health plan and other health industry matters, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting, former Vice President of the North Texas Health Care Compliance Professionals Association, past Chair of the ABA Health Law Section Managed Care & Insurance Section, past ABA JCEB Council Representative and CLE and Marketing Committee Chair, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer’s health industry clients include public health organizations; public and private hospitals, healthcare systems, clinics and other health care facilities; physicians, physician practices, medical staff, and other provider organizations; skilled nursing, long term care, assisted living, home health, ambulatory surgery, dialysis, telemedicine, DME, Pharma, clinics, and other health care providers; billing, management and other administrative services organizations; insured, self-insured, association and other health plans; PPOs, HMOs and other managed care organizations, insurance, claims administration, utilization management, and other health care payers; public and private peer review, quality assurance, accreditation and licensing; technology and other outsourcing; healthcare clearinghouse and other data; research; public and private social and community organizations; real estate, technology, clinical pathways, and other developers; investors, banks and financial institutions; audit, accounting, law firm; consulting; document management and recordkeeping, business associates, vendors, and service providers and other professional and other health industry organizations; academic medicine; trade associations; legislative and other law making bodies and others.
A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, privacy and data security, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; a ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources 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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
The owner of a Greenville, Ohio, glass company faces sentencing to up to five years in prison and a $250,000 fine in addition to paying $500,000 plus in restitution to the Internal Revenue Service (“IRS”) after she plead guilty to failing to truthfully account for and pay employment taxes. The guilty plea of 64- year old Gail Cooper announced by Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division is one of a multitude of criminal tax convictions the Justice Department already has obtained in 2019.
Cooper was the sole owner of Greenville Architectural Glass LLC (GAG) during the years 2007 through 2015. GAG primarily installed glass in commercial and residential buildings for clients in Ohio. GAG paid wages to its employees during the years 2013 through 2015. As the person responsible for GAG’s finances, Cooper was required to withhold federal income taxes and Social Security and Medicare taxes from employees’ wages and pay those amounts to the Internal Revenue Service (IRS). Cooper was also required to file quarterly employment tax returns with the IRS. Although Cooper caused GAG to withhold taxes from employees’ wages, she neither paid those amounts over to the IRS, nor filed the required quarterly returns for the first quarter of 2013 through the second quarter of 2015. Cooper also failed to pay over to the IRS unemployment taxes.
As part of her plea agreement, Cooper also admitted that she filed false individual income tax returns for the years 2008 – 2010 on which she understated GAG’s gross receipts and overstated its expenses.
Cooper also admitted in plea documents that she willfully failed to file income tax returns for the years 2011 through 2014, which would have reported her income from GAG and other sources. Cooper paid a professional tax return preparer to complete returns for those years, but Cooper never filed them.
U.S. District Judge Thomas M. Rose set sentencing for Aug. 2, 2019. Cooper faces up to five years in prison and a $250,000 fine. Cooper admitted that her conduct caused a loss to the government of more than $500,000, and agreed to pay restitution to the IRS.
This and other criminal tax convictions drive home the criminal exposures employers and their management leaders face for failing to properly withhold and pay employment taxes and employee income withholding as required by the Internal Revenue Code. Businesses and their leaders involved with businesses that have failed to properly withhold and pay income or employment tax withheld should seek advice of qualified legal counsel admitted to practice before the U.S. Tax Court and IRS for assistance understanding and taking corrective action to resolve or mitigate their potent civil or criminal liability exposure.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; HIPAA administrative simplification, meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, antikickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA, HEDIS and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; 1557 and other Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here such as the following:
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 your profile here. We also invite you to join the discussion of these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Health Plan Compliance Group or COPE: Coalition On Patient Empowerment Groupon LinkedIn or Project COPE: Coalition on Patient Empowerment Facebook Page.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Health plans must deliver electronic protected health information (“ePHI”) to electronic applications or software (“apps”) used by plan members, and are responsible under the Health Insurance Portability & Accountability Act (“HIPAA”) Privacy and Security Rules for the security of electronic protected health information (“ePHI”) on apps they sponsor or provide, according to new guidance from the Department of Health & Human Services (“HHS”) Office of Civil Rights (“OCR”).
With health plans and their sponsors and insurers increasingly offering or promoting the use of apps to plan members members to access, maintain and use their health information, health plans, health care providers, health care clearinghouses and their business associates (“covered entities”) covered by HIPAA must understand and be prepared meet their HIPAA responsibilities to provide and protect ePHI to and on these apps, but may want to rethink sponsoring or providing a particular app for that purpose.
New HIPAA FAQ guidance (the “FAQs”) from OCR that addresses the implications of HIPAA on covered entities responsibility when asked to share or for ePHI shared or stored on apps or application programming interfaces (“APIs”) systems, covered entities have a legal obligation to disclose ePHI to an app when subjects of the ePHI or their personal representatives request such disclosures. However, the FAQs also state a covered entity or its business associates won’t be responsible for the security of the data shared to the app unless it sponsors or provides it.
pends upon whether the AP or API interface provider is a business associate of the covered entity versus just a third-party provider whose involvement and receipt of the PHI is requested and arranged by the subject of the PHI.
Covered Entities Obligated To Disclose ePHI to Apps Chosen By Individuals
The FAQs make crystal clear that covered entities do not have the option of refusing to share ePHI to an app when requested to do so by the subject of the ePHI or its personal representative. The FAQs states that covered entities cannot refuse to disclose ePHI to an app chosen by an individual because of concerns about how the app will use or disclose the ePHI it receives. In this regard, the FAQs state that the HIPAA Privacy Rule generally prohibits a covered entity from refusing to disclose ePHI to a third-party app designated by the individual if the ePHI is readily producible in the form and format used by the app. See 45 CFR 164.524(a)(1), (c)(2)(ii), (c)(3)(ii).According to the FAQ, the HIPAA Rules do not impose any restrictions on how an individual or the individual’s designee, such as an app, may use the health information that has been disclosed pursuant to the individual’s right of access. For instance, a covered entity is not permitted to deny an individual’s right of access to their ePHI where the individual directs the information to a third-party app because the app will share the individual’s ePHI for research or because the app does not encrypt the individual’s data when at rest.According to the FAQs, the liability a covered entity or business associate bears for sharing ePHI to an App under the HIPAA Privacy, Security, or Breach Notification Rules (HIPAA Rules) depends on the relationship between the covered entity and the app.
Breaches of Health Information Disclosed To An App
If an app that is neither a covered entity nor a business associate of the covered entity under HIPAA receives ePHI at the request of the subject or its personal representative, the FAQ states that the shared ePHI is no longer subject to the protections of the HIPAA Rules. Thus if the individual’s app – chosen by an individual to receive the individual’s requested ePHI – was not provided by or on behalf of the covered entity (and, thus, does not create, receive, transmit, or maintain ePHI on its behalf), the covered entity would not be liable under the HIPAA Rules for any subsequent use or disclosure of the requested ePHI received by the app. For example, the covered entity would have no HIPAA responsibilities or liability if such an app that the individual designated to receive their ePHI later experiences a breach. See also, See also OCR FAQ 2039, “What is the liability of a covered entity in responding to an individual’s access request to send the individual’s PHI to a third party.In contrast, however, the FAQ states that if the app was developed for, or provided by or on behalf of the covered entity – and, thus, creates, receives, maintains, or transmits ePHI on behalf of the covered entity – the covered entity could be liable under the HIPAA Rules for a subsequent impermissible disclosure because of the business associate relationship between the covered entity and the app developer. For example, if the individual selects an app that the covered health care provider uses to provide services to individuals involving ePHI, the FAQs state that the health care provider may be subject to liability under the HIPAA Rules if the app impermissibly discloses the ePHI received.
Transmission of ePHI to App Using Unsecured Method
The FAQs also address the potential exposures of covered entities and their business associates arising from the transmission of ePHI to an App using an unsecure method. According to the FAQs, the access rights HIPAA guarantees to individuals allows an individual to request that a covered entity to direct their ePHI to a third-party app in an unsecure manner or through an unsecure channel. See 45 CFR 164.524(a)(1), (c)(2)(ii), (c)(3)(ii). For instance, an individual may request that their unencrypted ePHI be transmitted to an app as a matter of convenience. The FAQ states that a covered entity that transmits ePHI through an unsecured means under such circumstances would not be responsible for unauthorized access to the individual’s ePHI while in transmission to the app. With respect to such apps, however, the FAQs also suggest that the covered entity may want to consider informing the individual of the potential risks involved the first time that the individual makes the request.
Post Transmission Exposure of Covered Entity’s EHR Systems Developer
The FAQ also discusses the potential exposure of a covered entity’s electronic health record (EHR) system developer under HIPAA after completing the transmission on behalf of a covered entity of ePHI to an app designated by the subject of the ePHI. According to the FAQs, the exposure of the HER system developer depends on the relationship, if any, between the covered entity, the EHR system developer, and the app chosen by the individual to receive the individual’s ePHI. A business associate relationship exists if an entity creates, receives, maintains, or transmits ePHI on behalf of a covered entity (directly or through another business associate) to carry out the covered functions of the covered entity. A business associate relationship exists between an EHR system developer and a covered entity. If the EHR system developer does not own the app, or if it owns the app but does not provide the app to, through, or on behalf of, the covered entity – e.g., if it creates the app and makes it available in an app store as part of a different line of business (and not as part of its business associate relationship with any covered entity) – the EHR system developer would not be liable under the HIPAA Rules for any subsequent use or disclosure of the requested ePHI received by the app.If the EHR system developer owns the app or has a business associate relationship with the app developer, and provides the app to, through or on behalf of, the covered entity (directly or through another business associate), however, the FAQs state the EHR system developer then potentially could face HIPAA liability (as a business associate of a HIPAA covered entity) for any impermissible uses and disclosures of the health information received by the app. For example, if an EHR system developer contracts with the app developer to create the app on behalf of a covered entity and the individual later identifies that app to receive ePHI, then the EHR system developer could be subject to HIPAA liability if the app impermissibly uses or discloses the ePHI received.
Covered Entity’s Duty To Enter Into Business Associate Agreement Depends Upon Relationship
Likewise, the FAQs also state that whether HIPAA requires a a covered entity or its EHR system developer to enter into a business associate agreement with an app designated by the individual in order to transmit ePHI to the app depends upon the relationship between the app developer and the covered entity and/or its EHR system developer. A business associate is a person or entity who creates, receives, maintains or transmits PHI on behalf of (or for the benefit of) a covered entity (directly or through another business associate) to carry out covered functions of the covered entity. An app’s facilitation of access to the individual’s ePHI at the individual’s request alone does not create a business associate relationship. Such facilitation may include API terms of use agreed to by the third-party app (i.e., interoperability arrangements).HIPAA does not require a covered entity or its business associate (e.g., EHR system developer) to enter into a business associate agreement with an app developer that does not create, receive, maintain, or transmit ePHI on behalf of or for the benefit of the covered entity (whether directly or through another business associate). However if the app was developed to create, receive, maintain, or transmit ePHI on behalf of the covered entity, or was provided by or on behalf of the covered entity (directly or through its EHR system developer as the covered entity’s business associate), then a business associate agreement would be required.
Health Plan & Other Covered Entity Take Aways
The new FAQ raises several action items for health plans, their sponsoring employers or unions, fiduciaries, administrators, brokers and insurers as well as other covered entities. Among other things, health plans and other covered entities must recognize and be prepared currently to provide PHI to subjects of that information on the apps of the requesting individual’s preference within the time frames dictated by HIPAA. Health plans and other covered entities need to recognize that the FAQs reflect this is a current, not future responsibility.
Second, health plans, health care providers and others that have or are considering providing apps or other tools to health plan members or patients for use in accessing or using PHI also generally need to recognize that the health plan or health care provider generally will bear responsibility under HIPAA for the adequacy of the security of the apps provided by or on behalf of the health plan or health care provider. Given the general responsibility to provide PHI to any apps designated by a subject of PHI, many health plans and health care providers may wish to reconsider whether providing or endorsing a particular app continues to make sense taking into account the HIPAA data privacy and security responsibilities and risks attendent to maintaining the security of PHI stored and accessed using those tools. Those electing to provide apps or other tools need to take steps to ensure the current and future adequacy of the data security of the app and its associated storage and other components including any future modifications to those tools.
Furthermore, health plans and other covered entities also should consider the advisability of revising existing notices and authorizations in response to the new FAQs. For instance, health plans, health care providers and others supplying PHI to an app designated by the requesting individual may want to consider revising forms to document the direction and consent of the requestor to the electronic delivery of the PHI to the designated app to better position themselves to claim the protection against liability for breaches on these subject designate apps described in the FAQs. Meanwhile, health plans or other covered entities providing apps also may wish to weigh options for supplementing disclosures to mitigate potential risks from use or failure to upgrade apps that might be viewed as covered entity provided or sponsored.
Certainly, before sponsoring or allowing a business associate to offer or provide an app or other similar solution, health care providers and other covered entities must ensure that the business associate agreement requirements of HIPAA are met from the app developer and others providing services or the app as business associates to the covered entity. Covered entities also should take steps to ensure that the interfaces between the apps and other systems are properly secured at the point of implementation and during any subsequent upgrades keeping in mind that OCR guidance expects covered entities to reconfirm security for any system, software or app upgrades. Meeting this expectation for apps within the possession of patients or plan members can present special challenges requiring careful planning.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry, health and other benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; managed care organizations, insurers, self-insured health plans and other payers and their management; public and private, domestic and international hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, health care accreditation, peer review and quality committees and organizations; managed care organizations, insurers, third party administrative services organizations and other payer organizations; billing, utilization management, management services organizations; group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; claims, billing and other health care and insurance technology and data service organizations; other health, employee benefit, insurance and financial services product and solutions consultants, developers and vendors; and other health, employee benefit, insurance, technology, government and other management clients.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompassess advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Beyond her public policy and regulatory affairs involvement, Ms. Stamer also has extensive experience helping these and other clients to design, implement, document, administer and defend workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government; accreditation and quality organizations; private litigation and other federal and state health care industry investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; training and discipline; enforcement, and a host of other related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, and change management; workforce and operations management, and other opportunities and challenges arising in the course of their operations.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; HIPAA administrative simplification, meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, antikickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA, HEDIS and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; 1557 and other Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns.
Ms. Stamer has extensive health care reimbursement and insurance experience advising and defending plan sponsors, administrators, insurance and managed care organizations, health care providers, payers, and others about Medicare, Medicaid, Medicare and Medicaid Advantage, Tri-Care, self-insured group, association, individual and employer and association group and other health benefit programs and coverages including but not limited to advising public and private payers about coverage and program design and documentation, advising and defending providers, payers and systems and billing services entities about systems and process design, audits, and other processes; provider credentialing, and contracting; providers and payer billing, reimbursement, claims audits, denials and appeals, coverage coordination, reporting, direct contracting, False Claims Act, Medicare & Medicaid, ERISA, state Prompt Pay, out-of-network and other nonpar insured, and other health care claims, prepayment, post-payment and other coverage, claims denials, appeals, billing and fraud investigations and actions and other reimbursement and payment related investigation, enforcement, litigation and actions. Scribe for the ABA JCEB annual agency meeting with HHS OCR, she also has worked extensively on health and health benefit coding, billing and claims, meaningful use and EMR, billing and reimbursement, quality measurement and reimbursement, HIPAA, FACTA, PCI, trade secret, physician and other medical, workforce, consumer financial and other data confidentiality and privacy, federal and state data security, data breach and mitigation, and other information privacy and data security concerns.
Author of leading works on a multitude of health care, health plan and other health industry matters, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting, former Vice President of the North Texas Health Care Compliance Professionals Association, past Chair of the ABA Health Law Section Managed Care & Insurance Section, past ABA JCEB Council Representative and CLE and Marketing Committee Chair, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer’s health industry clients include public health organizations; public and private hospitals, healthcare systems, clinics and other health care facilities; physicians, physician practices, medical staff, and other provider organizations; skilled nursing, long term care, assisted living, home health, ambulatory surgery, dialysis, telemedicine, DME, Pharma, clinics, and other health care providers; billing, management and other administrative services organizations; insured, self-insured, association and other health plans; PPOs, HMOs and other managed care organizations, insurance, claims administration, utilization management, and other health care payers; public and private peer review, quality assurance, accreditation and licensing; technology and other outsourcing; healthcare clearinghouse and other data; research; public and private social and community organizations; real estate, technology, clinical pathways, and other developers; investors, banks and financial institutions; audit, accounting, law firm; consulting; document management and recordkeeping, business associates, vendors, and service providers and other professional and other health industry organizations; academic medicine; trade associations; legislative and other law making bodies and others.
A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, privacy and data security, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; a ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
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A Wisconsin employer did not violate the National Labor Relations Act (“NLRA”) by ceasing to deduct union dues from employees’ paychecks for remittance to their certified union in response to Wisconsin’s enactment of a right-to-work law that curtailed dues checkoff, or communicating with employees about this action according the National Labor Relations Board ruling in Metalcraft of Mayville, Inc. (April 17, 2019).
In Metalcraft of Mayville, Inc., a Board Majority made up of Board Chairman John Ring and Board member William Emmanuel ruled found that the Wisconsin based employer Metalcraft of Mayville, Inc. (“Metalcraft”) lawfully discontinued dues checkoff following the effective date of a Wisconsin right to work law that included provisions addressing permissible dues checkoff arrangements because the employer reasonably believed that its employees’ dues-checkoff authorizations did not conform to Wisconsin’s recently enacted right-to-work law. The Board Majority also found that communications that Metalcraft sent directly to workers about its cessation of dues deductions did not violate the NLRA.
The Metalcraft of Maryville, Inc. decision arose from a complaint filed against Metalcraft, a fabricator of metal and manufacturer of lawn maintenance equipment by the union certified to represent the assemblers, maintenance employees, and welders at the Metalcraft plant located in Mayville, Wisconsin.
On March 9, 2015, the Wisconsin legislature enacted a right to work law that among other things provided that “[n]o person may require, as a condition of obtaining or continuing employment, an individual to . . . [b]ecome or remain a member of a labor organization [or p]ay any dues, fees, assessments, or other charges or expenses of any kind or amount, or provide anything of value to a labor organization.” Wis. Stat. Sec. 111.04(3)(a). The Wisconsin law also provided that contract provisions that violated its dues checkoff prohibitions were void, Wis. Stat. Sec. 111.04(3)(b) and that any person violating Section 111.04(3)(a) would be guilty of a Class A misdemeanor and subject to a fine of up to $10,000 or imprisonment up to 9 months, or both. Wis. Stat. Sec. 939.51, 947.20. Additionally, the Wisconsin law prohibits dues-checkoff authorizations unless they are revocable by the employee upon 30 days’ notice. Id. Sec. 111.06(l)(i).
The Wisconsin right-to-work law first applied to the parties’ collective bargaining agreement when it renewed on June 5, 2016. See 2015 Wis. Act. 1 Sec. 13. When the law took effect, the existing collective bargaining agreement included a number of union-security and dues-checkoff provisions including a provision that required Metalcraft to deduct union dues from the employee’s “first payroll check in each month” pursuant to authorizations signed by employees before the new right to work law took effect and to remit those dues to the Union by the 15th of the month.
On June 2, 2016, the Union sent the Metalcraft a letter, acknowledging the law’s applicability to the parties’ agreement and stating the Union’s position that, “[a]s dues check-off is governed by federal law, that issue need not be addressed. Your employees have the right to opt out of the Union during the 15 day window period listed on their dues check-off authorization.” However the union apparently did not make any effort to communicate this new option to its members at the plant.
On June 3, Metalcraft notified the Union that it believed the dues check requirement and checkoff authorization form did not comply with the right-to-work law and that it would no longer enforce them after June 4. Thereafter, Metalcraft did not deduct or remit union dues in June, July, August, or September 4.
In connection with its cession to deduct union dues, Metalcraft also sent employees represented by the union various correspondence about its decision to cease deducting union dues from their pay. In a June 4 letter to employees, Metalcraft among other things, told these employees:
… [A]fter June 4, the law prohibits requiring employees to pay Union dues. To do so would be a Class A Misdemeanor or a crime under Wisconsin law. If you want to pay Union dues, it is now your decision and it’s entirely voluntary. . . . . Currently you pay $59.30 per month or $711.60 per year in Union dues. All together our employees’ payments of Union dues are about $255,000 per year. Based on the signed authorization for Union dues, we believe it is a violation of the Right-to-Work law. Therefore, effective after June 4, we will no longer deduct the $59.30 from your paycheck per month.
On June 7, Metalcraft sent union employees another letter containing several questions and answers, including the following:
Q: Look at the yearly total we pay the union, where is all that money going?
A: Much of the information about the distribution of union dues is publicly accessible. For example you can Google IAM and find answers to your questions directly from the source or other sources if you want to find out more.
Q: Why should I pay them anything after they screwed up the contract negotiations?
A: This is a personal choice that every individual has to decide on their own and how they will handle their money.
Q: Do I have to sign a new authorization card? The union has not shown me anything.
A: This is a personal choice that every individual has to decide on their own of whether they will continue to be a paying member of the union or not.
On June 24, Metalcraft sent a letter to the Union indicating that it would resume deducting and remitting dues if the Union submitted new, legally compliant checkoff authorizations signed by employees after June 5.
On June 27, Metalcraft sent employees another letter with more questions and answers, including these:
Q: Other people had told me that I should pay union dues myself with a direct deduction from my checking account. Should I do that?
A: Whether to pay union dues, and whether to give the union access to your checking account is up to each individual to decide. Such a decision is voluntary and it is your choice. The Company has been as clear as possible with the Union that we acknowledge that we have a legal obligation to collect Union dues from employees as soon as the union presents signed dues checkoff authorization forms that comply with the state law requirement that such decisions are voluntary. The Company intends to honor and follow Article 25 of the contract. The Company does not wish to break the law by collecting dues under the current authorization forms that were signed by employees prior to June 5, 2016 when they were told that such a payment was a condition of employment. The Company will not break the law. ….
Q: Do I have to pay union dues and sign a new authorization form to check-off dues to work at Metalcraft? A: No. The Law in Wisconsin changed and after June 4, 2016, the mandatory payment of union dues is illegal and you cannot be forced to pay union dues.
The Union wants you to pay $59.30 per month. You do not have to pay union dues to work at Metalcraft; that’s $711.60 per year or .34 cents for each hour you work.
The decision is yours and it’s purely voluntary!
You do not have to sign a new authorization card; it is your decision and it is purely voluntary.
By the IAM giving you a new authorization form, the union now recognizes that the old forms were signed when dues were required and mandatory. That’s changed!
On October 3, the Union gave the Respondent new “Membership Application and/or Check-Off Authorization” forms signed by employees. The first page of the new form was identical to that of the old form. However, the new forms in the record do not contain the Notice that was printed on the old forms. The Respondent promptly resumed deducting and remitting dues for employees who signed authorizations after June 4.
Based on this evidence, the Board Majority ruled that Metalcraft did not unlawfully modify the collective bargaining agreement when it stopped honoring dues-checkoff authorizations because it reasonably believed the dues-checkoff authorizations did not conform to applicable law.
The Board Majority explained that the Board ordinarily will not find a midterm contract modification if the respondent establishes that it had a sound arguable basis for its belief that the contract authorized its action. See Bath Iron Works Corp., 345 NLRB 499, 502 (2005), affd. sub nom. Bath Marine Draftsmen’s 5 156 NLRB 411 (1965), enfd. 376 F.2d 52 (2d Cir. 1967), cert. denied 389 U.S. 843 (1967). Assn. v. NLRB, 475 F.3d 14 (1st Cir. 2007). Where the dispute is solely one of contract interpretation and there is no evidence of animus, bad faith, or intent to undermine the union, the Board does not seek to determine which of two equally plausible contract interpretations is correct. Phelps Dodge Magnet Wire Corp., 346 NLRB 949, 951 (2006); NCR Corp., 271 NLRB 1212, 1213 (1984). Applying these positions to the evidence, the Board Majority took note that the Wisconsin statute expressly voided checkoff provisions inconsistent with its provisions and the collective bargaining agreement expressly provided that dues checkoff would be administered in accordance with applicable law. Accordingly, the Board Majority ruled that Metalcraft did not violate the NLRA by ceasing to withhold and transmit the dues because it had a “sound, arguable basis” for interpreting the parties’ agreement as not requiring the continuation of dues checkoff under those circumstances.
The Board Majority also ruled that Metalcraft’s communications to employees regarding its cessation to withhold dues from paychecks also were lawful and did not constitute direct dealing in violation of its duty to bargain with the Union.
An employer engages in direct dealing in violation of Section 8(a)(5) where:
The employer communicates directly with union-represented employees,
For the purpose of establishing or changing wages, hours, and terms and conditions of employment or undercutting the union’s role in bargaining, and
Such communication was made to the exclusion of the union.
See Southern California Gas Co., 316 NLRB 979 (1995).
While the Board Majority found the first and third elements met, it ruled that the employer was not seeking to establish or change a term or condition of employment or undercut the Union’s role in bargaining when making the communication but rather reminding employees that they now had the option not to authorize the dues checkoff. The Board Majority also concluded that since the communication related to a change in law the Board Majority construed as incorporated by reference into the collective bargaining agreement, the Board also concluded that Metalcraft had no duty to bargain with the Union over the validity of the authorizations before ceasing to honor them. Accordingly, the Board Majority concluded that Metalcraft did not unlawfully bypass the Union in communicating its decision to employees directly.
Based on these findings, the Board Majority overruled and reversed the prior Administrative Law Judge finding that the employer had illegally modified its collective bargaining agreement with the union by failing to deduct and remit dues to the Union from June to September 2016 in violation of Section 8(a)(5) and (1) of the NLRA and that the employer’s related communications to employees constituted direct dealing with employees prohibited by NLRA §§ 8(a)(5) and (1) that undermined the Union in violation of NLRA § 8(a)(1), its cessation of dues checkoff was lawful.
While the current Board Majority ruled Metalcraft’s cessation to withhold dues and direct communications with employees covered by the collective bargaining agreement in response to Wisconsin’s enactment of the right to work law restricting dues checkoffs did not violate the NLRA, employers should take note that the lone remaining democratic appointee on the Board, Board Member Lauren McFerran disagreed with the ruling of the Board Majority. In her dissenting opinion, Board Member McFerran argued among other things that the Taft-Hartley Act totally preempted the Wisconsin law’s dues checkoff provisions. She also argued that Metalcraft’s cessation to withhold dues and communications with employees directly inherently were in opposition to the union and conducted in bad faith and without adequate communication to the union. As a result, she proposed that the Board issue an order finding that Metalcraft’s cessation to withhold dues and direct communication with workers both violated the NLRA which would have compelled Metalcraft to take various corrective actions as set forth in her dissenting opinions. Employers should keep in mind that the views expressed in this dissenting opinions likely would become the majority view if and when the political make up of the Board is changed in the future by the appointment of a future board member during a Democratic Presidency. As a result, while enjoying the current more employer friendly attitude of the existing NLRB, employers dealing with collective bargaining concerns should continue to exercise care when handling these and other union-management relations matters.
Solutions Law Press, Inc. hopes you found this update of interest and nvites you to share your thoughts and ideas and join the discussion about these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our HR & Benefits Updates Group on LinkedIn.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused labor-management relations and other employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; HIPAA administrative simplification, meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, antikickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA, HEDIS and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; 1557 and other Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here such as the following:
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 your profile here. We also invite you to join the discussion of these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Health Plan Compliance Group or COPE: Coalition On Patient Empowerment Groupon LinkedIn or Project COPE: Coalition on Patient Empowerment Facebook Page.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
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Employers and their health plans should encourage employees, health plan members and their families to dispose of outdated and unused medications cost effectively on the upcoming National Prescription Drug Take Back Day on April 27, 2019.
Led by the Drug Enforcement Administration (DEA), for several years, the National Prescription Drug Take Back Day celebrations provide U.S. families an opportunity to safety dispose of unused or expired prescription pain and other medications cost effectively by dropping them off at one of 4,000 collection sites.
Expired and unused medications present a host of safety risks.
Educating employees, plan members and their family about the importance of properly disposing of unused and expired medication is important. Medications generally only should be used by the patient for whom they are prescribed and within the period before their scheduled expiration. Keeping unused or expired medication creates a host of risks for patients and others in their families and communities. Unneeded or unused painkillers, attention and anxiety medications and other prescriptions often are diverted to recreational or other use by patients other than the individual for whom they were prescribed.
Risk also can arise when a patient prescribed a medication consumes it after its originally intended consumption period. Pain, anxiety or other prescription medications used after their originally intended period of use may create safety issue due to interactions with conditions or medications not contemplated when originally ordered, may be used with good intentions for the wrong purposes, or even used by patients in an unsafe or abusive manner. Patients may delay or underminetheir recovery from a new condition by self-treating a new condition by taking previously physician prescribed antibiotics or other medications ineffective or contraindicated for the new condition the patient seeks to treat.
Expired medications also create risks from loss of potency or other instability that can occur after their expiration date. As a consequence, disposing of extra or expired medication is an important part of safe medication management.
On the other hand, disposing of unused or outdated medication can be challenging. Throwing medication in unsecured trash disposal creates risks of improper access, contamination of water and other environment or both. Washing unused medications down the drain or flushing them down toilets also creates contamination concerns. However, finding a no or low-cost place to dispose of unneeded or expired medication historically has been challenging. While many pharmacies offer disposal packages, chargers to use these services generally are expensive.
National Prescription Drug Take Back Day helps educate Americans about the need for timely proper medication disposal and management while also providing a cost effective means for disposing of unused medications safely. Individuals can drop off unneeded prescription drugs at one of the 4,000 collection sites identifiable using the Site Collection Locator.
Health plans, employers, health care providers, churches, schools, parent teacher associations and other community organizations are encouraged to help spread the word and encourage participation in the April 27 observances using the free promotional materials or other related resources included in the National Prescription Drug Take Back Day Toolbox.
Tips and tools for medication management arejustsome of the tools and training included in the Family Health Care Toolkit Resources and Program authored by Ms. Stamer. Want to learn more? Know other challenges, issues or resources? Solutions Law Press invites you to join the discussion and learn and share more about health, disability and aging challenges, needs, resources and victories on Facebook @projectcopecoationand/or in the Project Cope LinkedIn Group. Learn and discuss about Human Resources and employee benefit practices and requirements by joining the discussion in our HR & Benefits Compliance Group.
About The Author
Recognized by LexisNexis® Martindale-Hubbell® as a “AV-Preeminent” (Top 1%/ the highest) and “Top Rated Lawyer,” with special recognition as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Health Care,” “Labor & Employment,” “Tax: Erisa & Employee Benefits” and “Business and Commercial Law” by D Magazine, the author of this update is widely known for her 29 plus years’ of work in health care, health benefit, health policy and regulatory affairs and other health industry concerns as a practicing attorney and management consultant, thought leader, author, public policy advocate and lecturer.
Throughout her adult life and nearly 30-year legal career, Ms. Stamer’s legal, management and governmental affairs work has focused on helping health industry, health benefit and other organizations and their management use the law, performance and risk management tools and process to manage people, performance, quality, compliance, operations and risk. Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer supports these organizations and their leaders on both a real-time, “on demand” basis as well as outsourced operations or special counsel on an interim, special project, or ongoing basis with strategic planning and product and services development and innovation; workforce and operations management, crisis preparedness and response as well as to prevent, stabilize and cleanup legal and operational crises large and small that arise in the course of operations.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also has extensive health care reimbursement and insurance experience advising and defending health care providers, payers, and others about Medicare, Medicaid, Medicare and Medicaid Advantage, Tri-Care, self-insured group, association, individual and group and other health benefit programs and coverages including but not limited to advising public and private payers about coverage and program design and documentation, advising and defending providers, payers and systems and billing services entities about systems and process design, audits, and other processes; provider credentialing, and contracting; providers and payer billing, reimbursement, claims audits, denials and appeals, coverage coordination, reporting, direct contracting, False Claims Act, Medicare & Medicaid, ERISA, state Prompt Pay, out-of-network and other nonpar insured, and other health care claims, prepayment, post-payment and other coverage, claims denials, appeals, billing and fraud investigations and actions and other reimbursement and payment related investigation, enforcement, litigation and actions. Heavily involved in health care and health information technology, data and related process and systems development, policy and operations innovation and a Scribe for ABA JCEB annual agency meeting with OCR for many years who has authored numerous highly-regarded works and training programs on HIPAA and other data security, privacy and use, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues including meaningful use and EMR, billing and reimbursement, quality measurement and reimbursement, HIPAA, FACTA, PCI, trade secret, physician and other medical confidentiality and privacy, federal and state data security and data breach and other information privacy and data security rules and many other concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy and governmental and regulatory affairs experience, Ms. Stamer also is widely recognized for regulatory and policy work, advocacy and outreach on healthcare, education, aging, disability, savings and retirement, workforce, ethics, and other policies. Throughout her adult life and career, Ms. Stamer has provided thought leadership; policy and program design, statutory and regulatory development design and analysis; drafted legislation, proposed regulations and other guidance, position statements and briefs, comments and other critical policy documents; advised, assisted and represented health care providers, health plans and insurers, employers, professional. and trade associations, community and government leaders and others on health care, health, pension and retirement, workers’ compensation, Social Security and other benefit, insurance and financial services, tax, workforce, aging and disability, immigration, privacy and data security and a host of other international and domestic federal, state and local public policy and regulatory reforms through her involvement and participation in numerous client engagements, founder and Executive Director of the Coalition for Responsible Health Policy and its PROJECT COPE: the Coalition on Patient Empowerment, adviser to the National Physicians Congress for Healthcare Policy, leadership involvement with the US-Mexico Chamber of Commerce, the Texas Association of Business, the ABA JCEB, Health Law, RPTE, Tax, Labor, TIPS, International Life Sciences, and other Sections and Committees, SHRM Governmental Affairs Committee and a host of other involvements and activities. The American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting, former Vice President of the North Texas Health Care Compliance Professionals Association, past Chair of the ABA Health Law Section Managed Care & Insurance Section, past ABA JCEB Council Representative, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer has worked closely with a diverse range of health care providers, managed care, insurance and other health care payers, quality assurance, credentialing, technical, research, public and private social and community organizations, foreign and US federal, state and local agencies and others on health care, aging, disability, savings and other process improvement, change management; regulatory affairs and public policy and other concerns.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; a ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
Recognized for her pragmatic and insightful thoughleadership, Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, Insurance Thought Leadership and many other prominent publications and speaks and conducts training for a broad range of professional organizations.. Health Care Compliance Association, Atlantic Information Service, and others.
For more information about Ms. Stamer or her services, credentials, publications, involvements or presentations, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources 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 your profile here.
U.S. businesses should move quickly to express strong support for the Joint Employer Status under the Fair Labor Standards Act Rule proposed by the Department of Labor today to help reduce their exposure to liability to pay overtime or other liabilities of subcontractors or other businesses under the Fair Labor Standards Act (FLSA).
The FLSA allows the Labor Department and private litigants to hold businesses jointly and severally liable with the actual employer for minimum wage or overtime back pay and penalties as joint employers when a business is a “joint employer” within the meaning of the FLSA. Many businesses have learned the hard way that they meet the definition of “joint employer” when presented with a Labor Department demand that their business pay the back pay and penalties for another business’ FLSA violations. See, e.g.,U.S. Department of Labor Recovers $3.2 Million in Back Wages, Damages, And Penalties from Portland, Oregon, Courier Servicemen.
Since the existing regulations adopted more than 58 years ago don’t expressly define “joint employment,” whether a joint appointment relationship existed mostly has been decided for a painful facts and circumstances analysis applying judicial precedent for most of the past 50 years. Traditionally the courts have applied a version of the fact intensive analysis of common control like that applied to identify joint employers for collective bargaining purposes under the National Labor Relations Act. Without any statutory or formal regulatory action, however, the Labor Department during the Obama Administration began applying a new definition of joint employment it adopted in sub-regulatory guidance without seeking public comment or following other requirements to adopt a formal regulatory change. As reinterpreted, the Labor Department began enforcing the joint employment rule to hold businesses liable based on even very limited indirect influence over wages or other employment conditions. Under these new standards, for instance, Labor Department auditors have asserted and enforced joint employment liability under the FLSA based on evidence of limited indirect influence over working conditions arising out of the alleged joint employer business operations such as restriction of schedules resulting from access to the worksite restricted by the ordinary business hours of operations of the business or the business’ requirement that the employer and its worker comply with federal government contracting requirements. The Labor Department has continued to enforce the joint employee rule using this Obama Era interpretation even after it withdrew the sub-regulatory guidance when the Administration invalidated and barred agencies from enforcing sub-regulatory guidance.
This interpretive change made it significantly more likely that a businesses could face joint employer FLSA liability for a subcontractor or other business’ minimum wage, overtime and other FLSA responsibilities. Because the finding of joint employment also results in aggregation of hours worked for the direct employer and all other joint employers, these regulations also made it significantly more likely workers would be considered entitled to overtime in contract labor, manpower and certain other situations where the primary employer’s workers worked at multiple job sites. Since the change in interpretation was adopted during the Obama Administration, the Labor Department has Use this modified joint employer interpretation to nail many unsuspecting businesses with liability for overtime due from another employer who provided services with respect to that businesses job sites Even where the worker did not work the overtime hours on that businesses job and the business had no control over deciding whether the overtime hours would be worked at all.
The Proposed Regulation would overrule the hangover Obama-Era interpretation as well as issue a new definition more consistent with judicial precedent and more friendly to business. It calls for a clear, four-factor test—based on well-established precedent—that would consider whether the potential joint employer actually exercises the power to:
hire or fire the employee;
supervise and control the employee’s work schedules or conditions of employment;
determine the employee’s rate and method of payment; and
maintain the employee’s employment records.
Since the Proposed Regulation continues to require fact specific determination, the Proposed Regulation also includes a set of examples that illustrates the application of the Proposed Regulation. While a review of the test and examples makes clear businesses still risk joint employer liability if they intertwine their operations or exercise too much control over another business’ employees, the new 4-part test would treat businesses much more fairly than the existing rules. Business is concerned about managing these risks definitely need to act to submit supportive comments during the currently running 60-day comment period. Whether the Proposed Regulation becomes final, all businesses also should evaluate their joint employer liability exposure under the FLSA and other laws from their existing business relationships. Most businesses also will want to consider tightening their existing practices to minimize the risk, regardless of which test ultimately applies going forward. Business is dealing with workers who raise a potential risk of joint employment liability also may want to tighten procedures for verification of compliance with the employers of these workers as well as explore insurance, indemnification or other contractual safeguards to mitigate the risk.
In considering the new Proposed Regulation, businesses and their leaders should keep in mind that wage and hour and worker classification issues are key liability and enforcement areas. Over the past twenty years, the rise in the use of staffing, professional employment, manpower, independent contractor and other outsourcing relationships have prompted growing enforcement and regulatory interest by both Democrat and Republic Administrations and Congress including under the FLSA and other wage and hour laws. See e.g., $1.4M FLSA Back Pay Award Demonstrates Worker Misclassification Risks. Today’s Proposed Regulation comes as key Congressional Democrats have continued to fuss about the National Labor Relations Board’s proposal last Fall of a joint employer rule substantially similar to the 4-part rule contained in the Proposed Regulation. Businesses Urged To Comment Positively On Proposed NLRB Joint Employment Rule By 12/13/18; NLRB Responds To House Democrats About Private Contractor Participation In Joint Employment Rule Comment Processing. Supporters of the Proposed Rule should prepare to ward off a backlash like the one the NLRB is experiencing to its proposed joint employer rule, even as both parties continue to support stepped up scrutiny and enforcement against overly aggressive worker classification. Employer and other business leaders also should keep in mind that the Proposed Regulation follows the the Labor Department Wage and Hour Division’s proposal last month of of an employer-friendly change to its Regular Rate Regulations and an employee friendly Salary Theshold Rule that instantly will convert more than 1 million currently salaried workers to hourly workers See, Proposed FLSA Base Pay Rule Clarifies Overtime Treatment Of Perks; Give Labor Department Feedback On Proposed $124 Per Week Increase In FLSA Salary Threshold & Other Burdensome Rules. Employers and others should submit their written comments to these proposed rules as soon as possible and within the 60-day comment period applicable to that proposed rule change.
Other Defensive Actions To Minimize FLSA Exposures
Whether or not any of these proposed rule changes takes effect, U.S. businesses will want to strengthen their existing practices for classifying and compensating workers under existing Federal and state wage and hour laws, tighten contracting and other compliance oversight in relation to outsourced services, weigh options to clean up exposure areas, review insurance coverages and consider other options to minimize their potential liability under applicable wages and hour laws. Conducting this analysis within the scope of attorney-client privilege is important because the analysis and discussions are highly sensitive both as potential evidence for wage and hour and other legal purposes. Consequently, businesses and their leaders generally will want to arrange for this work to be protected to the extent by attorney-client privilege, work product and other evidentiary protections against discovery by Department, employees or others for FLSA or other workforce enforcement actions.
As a part of this process, businesses and their leaders generally should plan to:
Review subcontractor, temporary, lease employee, independent contractor and other outsourced labor and services relationship for potential risk of worker reclassification and tighten contracting and other procedures;
Audit the position of each employee currently 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;
If the employer hires any individuals under age 18, audit and implement appropriate procedures to ensure its ability to demonstrate compliance with all applicable FLSA child labor rules;
If the employer is a government contractor or subcontractor or otherwise performs any services on projects funded with federal or state funds, evaluate the applicability and fulfillment of any special wage, fringe benefit, recordkeeping or other government contracting wage and hour requirements;
If the employer hires foreign agricultural or other workers subject to special conditions and requirements, to review compliance with those special requirements;
Review and tighten 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 employer uses leased, temporary, or other outsourced labor, evaluate contractual, process and other options to support the employer’s ability cost effectively to respond to an audit, investigation or enforcement action by the Labor Department or private litigants and if necessary, obtain indemnification or other recovery in the event the employer incurs liability due to the use or practices of the outsourced labor supplier;
If the audit raises questions about the appropriateness of the classification of an employee as exempt, self-initiation of proper corrective action after consultation with qualified legal counsel;
Review and document all workers classified as exempt;
Review of existing documentation and record keeping practices for hourly employees;
Evaluate potential exposures under other employment, labor, tax or related laws or contracts that might be impacted by the findings or actions taken in response to those findings;
Explore available options and alternatives for calculating required wage payments to non-exempt employees and assessing and resolving other concerns;
Identify and calculate other employee benefit, tax or other corrections and associated costs and procedures that may be required as a result of findings or corrective actions resulting from their redress;
Re-engineer work rules, policies, contracts and practices to minimize costs and liabilities as appropriate in light of the regulations and enforcement exposures;
Explore insurance, indemnification and other options for mitigating risks and associated investigation and defense costs; and
Consider self-correction within the new PAID Program or otherwise.
If you need more information or have questions, contact the author, Cynthia Marcotte Stamer. We also invite you to share your own best practices ideas and resources and join the discussions about these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions on LinkedIn.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused wage and hour and other employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders.
Ms. Stamer has extensive experience advising and defending businesses and their management on wage and hour and other workforce, compensation and employee benefit concerns. Throughout her career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; transactional and other change management; regulatory affairs and public policy; process, product and service improvement, development and innovation; and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on wage and hour and a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about the matters discussed in this article, Ms. Stamer or her services, experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here such as the following:
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 your profile here. We also invite you to join the discussion of these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions Linkedin or Facebook
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Employers frustrated with the current Fair Labor Standards Act (“FLSA”) rules defining what forms of payment employers must count as part of an employee’s “regular rate” when calculating overtime should evaluate and consider expressing support for the Department of Labor’s proposal announced today (March 28, 2019) to update its more than 50-year old regulations implementing the regular rate requirements under section 7(e) of FLSA in 29 C.F.R. Parts 548 and 778. Officially scheduled for publication in the May 28, 2019 Federal Register, employers and other interested persons may review the unofficial text of the Notice of Proposed Rulemaking (“Proposed Rule”) released with the Labor Department’s announcement of its proposal today. The Proposed Rule also will make substantive changes to the Labor Department’s current FLSA regulations about the treatment of “call back pay” and its base pay rules.
Regular Rate For Overtime
The FLSA generally requires employers to pay non-exempt employees overtime pay of at least one and one-half times the “regular rate” of pay for all hours worked in excess of 40 hours per workweek. Regular rate requirements define what forms of payment employers include and exclude in the “time and one-half” calculation when determining workers’ overtime rates. The existing rules define the regular rate to include both the base hourly rate of pay and certain bonus and other compensation and perks. As the Trump Administration supports these proposed changes, employers should start evaluating their implications in anticipation of the Labor Department’s adoption of a Final Rule. At the same time, businesses supporting the rule or desiring refinements to its provisions also will want to submit comments to the Labor Department no later than the May 18 comment deadline.
Ambiguities in the current more than 50-year-old Labor Department regulations implementing the regular rate requirement rules discourage employers from offering more perks to their employees because of uncertainty about whether the perks are required to be included in the regular rate of pay for purposes of calculating overtime pay. In many other cases, employers that mistakenly fail to include bonuses, benefits and other perks often experience the unfortunate surprise of getting nailed with unexpected back pay and penalties obligations through Labor Department audits or private litigation.
The Proposed Rule primarily focuses on defining when employers must count bonuses, benefits, and other perks in an employee’s regular rate of pay when calculating overtime. As proposed, the Proposed Rule would confirm that employers may exclude the following from an employee’s regular rate of pay:
the cost of providing wellness programs, onsite specialist treatment, gym access and fitness classes, and employee discounts on retail goods and services;
payments for unused paid leave, including paid sick leave;
reimbursed expenses, even if not incurred “solely” for the employer’s benefit;
reimbursed travel expenses that do not exceed the maximum travel reimbursement under the Federal Travel Regulation System and that satisfy other regulatory requirements;
discretionary bonuses, by providing additional examples and clarifying that the label given a bonus does not determine whether it is discretionary;
benefit plans, including accident, unemployment, and legal services; and
tuition programs, such as reimbursement programs or repayment of educational debt.
that employers do not need a prior formal contract or agreement with the employee(s) to exclude certain overtime premiums described in sections 7(e)(5) and (6) of the FLSA; and
that employers may exclude pay for time that would not otherwise qualify as “hours worked,” including bona fide meal periods,from an employee’s regular rate unless an agreement or established practice indicates that the parties have treated the time as hours worked.
In addition, the Proposed Rule also would make two substantive changes to the existing regulations on “call-back pay” and to its “basic rate” regulations.
Call-Back Pay
The Proposed Regulation would eliminate the current restriction in Labor Regulation §§ 778.221 and 778.222 that “call-back” pay and other payments similar to call-back pay must be “infrequent and sporadic” to be excludable from an employee’s regular rate, while maintaining that such payments must not be so regular that they are essentially prearranged.
Basic Rate
The Proposed Rule also proposes an update the Labor Department’s “basic t rate” regulations.
Under the current regulations, employers using an authorized basic rate may exclude from the overtime computation any additional payment that would not increase total overtime compensation by more than $0.50 a week on average for overtime work weeks in the period for which the employer makes the payment.
The Proposed Regulation would change the current $0.50 limit to 40 percent of the federal minimum wage (currently $2.90.” The Labor Department is inviting comments on if 40 percent is an appropriate threshold in its request for comments on the Proposed Regulations.
Comment on the Proposed Rule & Other FLSA Rule Changes
Employers commenting on the Proposed Rule also should keep in mind that its publication comes on the heals of the Labor Department’s proposal of a new Proposed Salary Threshold Rule that if adopted will increase to $679 per week the minimum salary an employee must earn to qualify for coverage by the “white collar” overtime exemption. This would effectively raise the amount an employer must pay any worker it wants to treat as exempt under the white collar overtime exemption from $23,660 annually to $35,308 annually. The adoption of this proposed Salary Threshold Rule as proposed overnight will disqualify a million plus currently salaried workers to hourly employees entitled to overtime under the FLSA.
Businesses concerned about the Proposed Rule or the Proposed Salary Threshold Rule should submit their feedback as comments to the applicable proposal during the applicable comment period. May 28 is the deadline for employers and other interested persons to submit comments of support or other input on the Proposed Rule to change the regular rate determination rules.
Other Defensive Actions To Minimize FLSA Exposures
Whether or not the either of these proposed rule changes takes effect, U.S. businesses will want to strengthen their existing practices for classifying and compensating workers under existing Federal and state wage and hour laws, tighten contracting and other compliance oversight in relation to outsourced services, weigh options to clean up exposure areas, review insurance coverages and consider other options to minimize their potential liability under applicable wages and hour laws. Conducting this analysis within the scope of attorney-client privilege is important because the analysis and discussions are highly sensitive both as potential evidence for wage and hour and other legal purposes. Consequently, businesses and their leaders generally will want to arrange for this work to be protected to the extent by attorney-client privilege, work product and other evidentiary protections against discovery by Department, employees or others for FLSA or other workforce enforcement actions.
As a part of this process, businesses and their leaders generally should plan to:
Review subcontractor, temporary, lease employee, independent contractor and other outsourced labor and services relationship for potential risk of worker reclassification and tighten contracting and other procedures;
Audit the position of each employee currently 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;
If the employer hires any individuals under age 18, audit and implement appropriate procedures to ensure its ability to demonstrate compliance with all applicable FLSA child labor rules;
If the employer is a government contractor or subcontractor or otherwise performs any services on projects funded with federal or state funds, evaluate the applicability and fulfillment of any special wage, fringe benefit, recordkeeping or other government contracting wage and hour requirements;
If the employer hires foreign agricultural or other workers subject to special conditions and requirements, to review compliance with those special requirements;
Review and tighten 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 employer uses leased, temporary, or other outsourced labor, evaluate contractual, process and other options to support the employer’s ability cost effectively to respond to an audit, investigation or enforcement action by the Labor Department or private litigants and if necessary, obtain indemnification or other recovery in the event the employer incurs liability due to the use or practices of the outsourced labor supplier;
If the audit raises questions about the appropriateness of the classification of an employee as exempt, self-initiation of proper corrective action after consultation with qualified legal counsel;
Review and document all workers classified as exempt;
Review of existing documentation and record keeping practices for hourly employees;
Evaluate potential exposures under other employment, labor, tax or related laws or contracts that might be impacted by the findings or actions taken in response to those findings;
Explore available options and alternatives for calculating required wage payments to non-exempt employees and assessing and resolving other concerns;
Identify and calculate other employee benefit, tax or other corrections and associated costs and procedures that may be required as a result of findings or corrective actions resulting from their redress;
Re-engineer work rules, policies, contracts and practices to minimize costs and liabilities as appropriate in light of the regulations and enforcement exposures;
Explore insurance, indemnification and other options for mitigating risks and associated investigation and defense costs; and
Consider self-correction within the new PAID Program or otherwise.
If you need more information or have questions, contact the author, Cynthia Marcotte Stamer. We also invite you to share your own best practices ideas and resources and join the discussions about these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions onLinkedIn.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused wage and hour and other employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders.
Throughout her career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; transactional and other change management; regulatory affairs and public policy; process, product and service improvement, development and innovation; and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on wage and hour and a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her services, experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here such as the following:
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 your profile here. We also invite you to join the discussion of these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions Linkedin or Facebook
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
The just announced March 31, 2019 update of the the Annual Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) hiring benchmark for federal government contractors and subcontractors changes to 5.9% provides an important reminder to U.S. employers to review and tighten the compliance of their recruiting, hiring, employment, compensation and benefits, and other policies and practices to withstand growing scrutiny and enforcement risks under federal laws.
Government contractors, subcontractors and other U.S businesses should reconfirm their compliance with the new benchmark and other VEVRAA requirements for dealing with veterans in light of the Trump Administration’s continuing emphasis on enforcing it and other federal laws protecting active duty military and veteran servicemen and women. As part of these enforcement efforts the Office of Federal Contract Compliance Programs (“OFCCP”) has announced it plans to incorporate VEVRAA Focused Reviews into the Corporate Scheduling Announcement List next fiscal year.
The Department of Labor announced the new 5.9% 2019 benchmark today (March 27, 2019). At the same time, it also updated national and state information in the VEVRAA Benchmark Database for federal contractors and subcontractors who calculate an individualized hiring benchmark using the five-factor method.
VEVRRA & USERRA Protections For Active Duty Military & Veterans
Affirmative action hiring by government contractors and subcontractors is one of the VEVRRA requirements for government contractors and subcontractors to provide assistance to and protect returning veterans from employment discrimination.
One of two key federal laws specifically prohibiting discrimination against returning veterans, VEVRRA applies only to government contractors and subcontractors. The other law, the Uniformed Services Employment and Reemployment Rights Act (USERRA), applies to virtually all U.S. employers.
Among other things, VEVRAA and its implementing regulations impose affirmative action requirements that require federal contractors and subcontractors to monitor and improve efforts to recruit and hire “protected veterans.” Protected veterans generally include veterans who are:
Disabled veterans: Those who are “entitled to compensation…under laws administered by the Secretary of Veterans Affairs” or “those who were released from active duty because of a service-connected disability;
Recently separated veterans;
Active duty wartime or campaign veterans;
Campaign badge veterans; and
Armed Forces service medal veterans.
Among other things, VEVRAA and its implementing Final Regulations generally require government contractors and subcontractors:
To set a hiring benchmark by either: (1) adopting a benchmark based on the national percentage of veterans currently in the workforce (5.9% effective March 31, 2019); or (2) creating an individualized benchmark based on their own interpretation of the best available data nationally and within their state/region.
Invite voluntary self-identification of applicants and employees as protected veterans. Pre-offer invitation to self-identify will involve asking whether the applicant believes that s/he is a protected veteran under VEVRAA without asking about the particular category of protection. Post-offer self-identification will request information regarding the specific category of protected veteran status. For Sample self-identification forms for both pre- and post-offer forms, see Appendix B Part 60-300 of the Final Regulation.
Comply with OFCCP reviews including providing on-site and off-site access to documents needed for compliance and focused reviews.
Track and report the effectiveness of veteran recruiting and hiring efforts by collecting specified data, which also must be retained for three years.
Provide access to job listings that identify the employer as a federal contractor in a format that can be used by veterans’ Employment Service Delivery Systems (ESDS).
Use mandated language in federal contracts (including subcontracts) to communicate the contractor’s obligations to employ and advance protected veterans.
While VEVRRA only applies to government contractors and subcontractors, USERRA generally applies to all employers.
USERRA generally provides that an individual who leaves a job to serve in the uniformed services is generally entitled to continue medical coverage for up to 26 months while absent for a qualifying military leave, reemployment by the previous employer upon timely return from military leave and, upon reemployment, to restoration of service, promotion, benefits and other rights of employment.
As part of these reemployment rights, qualifying service members timely returning from military leave are entitled to receive credit for benefits, including employee pension plan benefits, that would have accrued but for the employee’s absence due to the military service. USERRA’s pension-related provisions generally require that pension plans treat a service member who is called to active duty as if the service member had no break in service for purpose of the administration of pension benefits when the service member timely returns to employment at the end of a military leave. In addition to these pension rights, USERRA also requires employers honor other rights to employment, promotion and other benefits and rights of employment.
Beyond these VEVRRA and USERRA employment rights, service members taking or returning from active duty often enjoy various other employment and other protections under various other federal and state laws, many of which have been expanded in recent years.
As many veterans suffer return with physical, cognitive or emotional injuries and conditions, veteran applicants and employees may qualify for the disability discrimination, accommodation, privacy and other protections of the Americans with Disabilities Act (ADA) and, in the case of government contractors and subcontractors, the Section 503 of the Rehabilitation Act.
Under requirements of the Soldiers’ and Sailors’ Civil Relief Act (SSCRA), creditors including a pension plan, employer loan program or credit union generally are required to drop interest charges down to 6 percent on debt owed by those called to active duty for the period of such military service. Further, under the Employee Retirement Income Security Act (ERISA), the loan will not fail to be a qualified loan under ERISA solely because the interest rate is capped by SSCRA. These and other provisions of federal law often require pension and profit-sharing plans that allow plan loans to change loan terms and tailor other special treatment of participants who are on military leave.
In addition to the specific protection given to a service member, employers also need to be ready to honor certain family leave protections afforded to qualifying family members or caregivers of service members added to the Family & Medical Leave Act (FMLA) in recent years. As amended to include these military leave related protections, the FMLA may require certain employees who are the spouse, son, daughter, or parent of a military member to take to 12 weeks of FMLA leave during any 12-month period to address the most common issues that arise when a military member is deployed to a foreign country, such as attending military sponsored functions, making appropriate financial and legal arrangements, and arranging for alternative childcare. This provision applies to the families of members of both the active duty and reserve components of the Armed Forces. Meanwhile, the “Military Caregiver Leave” provisions added to the FMLA may entitle certain employees who are the spouse, son, daughter, parent or next of kin of a covered service member to up to 26 weeks of FMLA leave during a single 12-month period to care for the service member who is undergoing medical treatment, recuperation, or therapy, is otherwise in outpatient status, or is otherwise on the temporary disability retired list, for a serious injury or illness incurred or aggravated in the line of duty on active duty. These provisions apply to the families of members of both the active duty and reserve components of the Armed Forces. The expansion of these requirements, updating of regulation, and rising enforcement by private plaintiffs and the government make it advisable that businesses take all necessary steps to ensure their employment practices, employee benefit plans, fringe benefit programs and other practices are updated and administered to comply with the current requirements of VEVRRA, USERAA, SSCRA, the FMLA and other applicable federal and state laws.
Special care also generally is needed when designing and administering employment based health benefit programs to avoid violating federal eligibility rules prohibiting discrimination against service members, to properly offer continuation coverage and reinstatement during and following periods of service by employees and family members, and to avoid improper denial of coverage or coordination of benefit rules with military and veteran health benefits.
Given the potential liabilities that can result from noncompliance with these and other federal employment rules and requirements protecting active military and veteran service men and women, U.S. employer generally should reconfirm and carefully monitor and document their compliance with these laws to minimize their liability exposure. Where employers use subcontractors or otherwise outsource work, these businesses also should consider require their subcontractors and other service providers to contract to comply with these requirements, to supply data and other documentation that the employer might need to complete reports or otherwise defend its compliance, to cooperate in audits and other investigations, and to participate and cooperate with employer initiated compliance audits as well as government audits and investigations.
Need more information about veterans’ employment or other Human Resources, employee benefits, compensation or other performance and compliance management, check out the extensive training and other resources available on the author’s website or contact the author, Cynthia Marcotte Stamer.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer has advised, trained, coached and defended businesses, employee benefit plans and others, published, and problem solved on opportunities and challenges relating to employment, benefits consumer, health care, disability and other rights and needs of active duty and veteran service people and their families.
Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; HIPAA health care, financial, tax, HR and technology, privacy, data security and breach; health care, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA, HEDIS and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; 1557 and other Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her services, experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here such as the following:
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 your profile here. We also invite you to join the discussion of these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Health Plan Compliance Group or COPE: Coalition On Patient Empowerment Groupon LinkedIn or Project COPE: Coalition on Patient Empowerment Facebook Page.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Adding employee recess to the workday schedule could be a cost effective wellness tool based on health research recently reported by the National Institutes on Health (“NIH”).
Sedentary work and lifestyles fuel many of the heath risks and costs targeted by employer and health benefit employee wellness programs.
With most American adults now spending an average of 11 to 12 hours a day sitting, sedentary work and life styles present leading disease and health cost drivers. Research showing long periods of sitting increase the risk of heart disease and death overall make finding ways to counteract the negative health effects of sedentary lifestyles a key objective of many wellness and public health initiatives. However questions exist about the effectiveness and return on investment of many of the wellness program strategies and tools in the marketplace in producing meaningful changes in employee health or health related behavior.
Findings of research recently announced by NIH suggests giving employees movement breaks for as little as 30 minutes a day could counteract the adverse health effects of their sedentary work. See Light activity may lower harmful effects of sitting.
According to NIH, a study of nearly 8000 people aged 45 or older found as little as 30 minutes of light activity per day may reduce the risk of death incurred by sitting. Replacing sitting with just a few minutes of movement at a time provided health benefits.
NIH reports researchers found that any amount of activity was better than sitting. People who swap 30 minutes of sitting for 30 minutes of light-intensity activity per day would have a 17% lower risk of death. Light-intensity activities include walking and doing chores that require moving around.
People who swap 30 minutes of sitting for 30 minutes of moderate to vigorous physical activity per day would have a 35% lower risk of death from any cause. These types of activities can include jogging, bicycling, and playing sports.
But people didn’t have to move for a full 30 minutes in a row to benefit. Even smaller intervals to break up periods of sitting—including from just 1 to 5 minutes of activity—reduced the risk of death.
NIH also reports positive effects of movement were seen regardless of age, race, weight, smoking and drinking patterns, or existing health problems.
Small amounts of movement mainly benefitted people who didn’t already have an active lifestyle. For people who had a low activity level overall, taking modest activity breaks made a big difference in the risk of death. For people who already had a high level of activity during the day, however, no additional benefit was seen from a little extra movement.
The findings of the health benefit of movement breaks is consistent with findings of a growing series of other recent health studies showing getting adults and children moving during the day even for short periods during the day can produce major heath benefits. See, e.g. Brief Activity Breaks May Benefit Children’s Health; Physical Activity Program Helps Maintain Mobility; Moderate Exercise May Improve Memory in Older Adults. The message is clear: Even modest increases in activity can reduce risk for many serious conditions, including heart disease, diabetes,certain kinds of cancer, and some types of depression and cognitive disorders.
The research also shows that the health benefits can come from engaging in light or moderate movement activities as little as 30 minutes a day even if these activities are broken up and not participation in traditional exercise. Healthful physical activity includes exercise as well as many everyday activities, such as doing active chores around the house, yard work, or walking the dog.
Aerobic activities that make heart and blood vessels by healthier by causing individuals to breathe harder can include brisk walking, dancing, swimming, and playing basketball. Strengthening activities, like push-ups and lifting weights, help make your muscles and bones stronger and can also improve balance.
While the benefits of movement are clear, too many employees fail to do it. Although most people know that physical activity is a good thing, most adults nationwide don’t meet even the minimum recommended amounts of physical activity of at least 30 minutes of brisk walking or other moderate activity, 5 days a week.
NIH-funded research has found that environment—where people live, work, or go to school—can have a big impact on how much individuals move and even how much they weigh. These findings suggest employers and communities can do many things to encourage their people to fit movement into their sedentary lifestyles.
To create a work or other environment that encourages employees to get moving, NIH suggests looking for opportunities to change the environment so activity is an easier choice for workers to make.
Some suggestions include:
Structuring meetings, job duties and other activities to require or encourage sedentary workers to stand up, walk and move around periodically throughout the day;
Providing access to walking sidewalks, trails and other places workers can walk and encouraging workers to use them;
Encouraging workers to walk or take public transportation to lunch or other meetings when feasible rather than drive;
Encouraging people to walk and talk rather than sitting while holding discussions;
Encouraging workers to find waking buddies to walk to lunch or share other exercise breaks or activities with in and outside the workplace;
Encouraging management and employees to incorporate stretching or other movement breaks into meetings and other gatherings; and
Encouraging people to take the stairs and walk to meet fellow employees in person rather than communicating by phone or e-mail when practical.
While each workplace presents different opportunities and challenges, the message from the research is clear: Getting your people moving can produce meaningful health and health and disability cost savings. Maybe it’s time for your company to add short movement recesses to its employees’ day to capitalize on these benefits.
Want to learn, share or discuss other human resources, benefits and compensation, or health and wellness management developments and ideas? We invite you to share your own best practices ideas and resources and join the discussions about these and other human resources, health and other employee benefit and patient empowerment concerns by participating in and contributing to the discussions in our Health Plan Compliance Group or COPE: Coalition On Patient Empowerment Groupon LinkedIn or Project COPE: Coalition on Patient Empowerment Facebook Page.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, she is nationally recognized for her leading edge work, publications, advocacy and programs on making compliant wellness and disease management programs that work and other health and disability plans and management strategies and concerns.
Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; HIPAA administrative simplification, meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, antikickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA, HEDIS and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; 1557 and other Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here such as the following:
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 your profile here. We also invite you to join the discussion of these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Health Plan Compliance Group or COPE: Coalition On Patient Empowerment Groupon LinkedIn or Project COPE: Coalition on Patient Empowerment Facebook Page.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Employers, health plans and others concerned about managing the high medical, disability and other costs of Type 2 Diabetes should use today’s annual Diabetes Awareness Day observances and resources to beef up their efforts and tools.
With 1 in 3 adult Americans at risk for Type 2 diabetes, the Centers for Disease Control (“CDC”) and other public and private organizations partnering in The National Diabetes Prevention Program are urging all Americans, their health plans, state and local agencies and communities to protect themselves and join their fight to prevent or delay Type 2 diabetes.
Celebrated every year on the fourth Tuesday in March, Diabetes Alert Day promotes awareness of the prevalence and risks of undiagnosed or unmanaged Type 2 Diabetes to Americans, American taxpayers, health benefit programs and their communities.
More than 30 million people in the United States have diabetes and an additional 84 million adults—over a third—have prediabetes, and 90% of them don’t know they have it.
Diabetes is the 7th leading cause of death in the United States (and may be underreported).
Type 2 diabetes accounts for about 90% to 95% of all diagnosed cases of diabetes; type 1 diabetes accounts for about 5%.
In the last 20 years, the number of adults diagnosed with diabetes has more than tripled as the American population has aged and become more overweight or obese
Undiagnosed or unmanaged Type 2 diabetes threatens serious and disabling medical risks for afflicted individuals that also are financially costly for patients and their families, their health plans, taxpayers and communities.
Type 2 diabetes usually starts during adulthood; however, children, teens, and young adults increasingly also are developing it. Since Type 2 diabetes symptoms often develop over several years and can go on for a long time without being noticed it’s important individuals know the factors for Type 2 Diabetes and that people with these symptoms visit their doctor promptly.
Fortunately, Type 2 Diabetes and its costs often can be prevented or minimized through appropriate diagnosis and treatment. That’s why the CDC and its partners are urging all Americans, the employers, health plans, health care providers and communities to join the fight against Type 2 Diabetes.
To start with, the CDC and its partners ask every American to learn their risk for diabetes by taking the online Type 2 Diabetes Risk and promote use of CDC-recognized lifestyle change programs to individuals suffering or at risk for Type 2 diabetes.
The CDC and its partners also are asking American families, health care providers, employers and their health benefit programs, federal, local and state governments and communities to help identify and get people at risk or suffering from Type 2 diabetes involved in making appropriate lifestyle changes and other activities to help manage their Type 2 Diabetes and offers a multitude of free tools and resources to help promote Type 2 Diabetes Awareness and assist in its prevention and treatment.
Employers and their health plans and insurers should consider participating in Diabetes Alert Day and using some of the resources provided by CDC and other partners to beef up their Type 2 and other Diabetes prevention, screening and management efforts. Appropriate use of these resources could help mitigate exposure to the high medical, disability, productivity and other costs that employers and their health plans generally incur when employees or their family members suffer from undiagnosed or unmanaged diabetes. When utilizing these resources, however, employers and their health plan fiduciaries, insurers and administrators are reminded to use care to implement and administer these wellness and other programs in a manner that complies with the Americans With Disabilities Act (“ADA”), Health Insurance Portability & Accountability Act, Internal Revenue Code and other federal and state requirements concerning the design and administration of wellness and disease management programs including recent updates in the Equal Employment Opportunity Commission’s regulations and enforcement positions under the ADA.
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, FMLA and other leave, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; audits, investigations, enforcement and defense; Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here such as the following:
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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
The NLRB has engaged outside contractors to assist the NLRB to process, classify and code the nearly 29,000 comments it received in response to the Proposed Rule during the comment period that ended in December, 2018. In their March 14, 2019 letter, Congressman Scott and Congresswoman Wilson expressed “concern” about reports that the NLRB planned to outsource “review of public comments” to a private contractor the and demanded the NRLB respond to their demand for information and documents.
The Proposed Rule
The Proposed Rule published by the NRLB last year would overrule a definition of joint employment implemented by NLRB order during the Obama Administration when Democratic appointees dominated NLRB during the Obama Administration. A finding of joint employment by the NLRB results in the NLRB treating a separate business that does not directly employ workers employed by a second business as a single employer, both of which are jointly and severally liable for complying with and breaches of NLRB rules on union organizing, collective bargaining and other NLRA protected activities even where the business is not under common ownership or control with the business that actually is the true employer of the workers.
The Proposed Rule seeks to overrule an interpretive position adopted by the NLRB during the Obama administration under which unions could use limited indirect involvement or control by a business Including limited involvement by general contractors subcontractors as the basis for having that business be treated as a joint player for purposes of union organizing in collective-bargaining obligations under the NLRB.
During the Obama Administration, the NLRB by Board order and without following regulatory rulemaking procedures or providing any opportunity for public comment expanded the circumstances where a business is treated as a joint employer to include situations where the business does not have direct control over the worker in such a way that it imperils businesses that contract to receive services under independent contractor or subcontractor agreements from businesses with unionized workers or involved in organizing campaigns. As modified during the Obama Administration, the NLRB could find a business liable as a joint employer based on very limited, indirect influence on terms of work such as setting the hours that a job site is available for the performance of work or requiring compliance with workplace safety or other contractual standards including those required to comply with federally imposed government contracting requirements. Congressman Scott and Congresswoman Wilson, both members of the current Democratic Majority in the House well known for their pro-labor positions, oppose the changes set forth in the Proposed Rule.
Outsourcing Inquiry & Response
In his March 22, 2019 Letter, Chairman made clear that the NRLB has not outsourced the substantive analysis of the comments to a private contractor. Rather, he explained that the NRLB merely has engaged an outside private contractor a General Services Administration (“GSA”)-approved temporary employment agency, contracted through the GSA bid process to provide temporary support on a limited, short-term basis to
perform the initial sorting and coding of the public comments. The Chairman stated that the use of these outside service providers to sort and code the response is a more cost effective alternative to completing this work than using NLRB legal staff and frees up the NLRB lawyers to perform their legal responsibilities for the NLRB.
The Proposed Rule enjoys significant support within the business community and among Republican leaders, but is widely opposed among Congressional Democrats. The Trump Administration is expected to approve some version of the Proposed Rule soon.
About The Author
Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation; Former Chair of the RPTE Employee Benefits and Compensation Committee, a current Co-Chair of the Committee, and the former Chair of its Welfare Benefit and its Defined Compensation Plan Committees and former RPTE Joint Committee on Employee Benefits Council (JCEB) Representative, Cynthia Marcotte Stamer is a Martindale-Hubble “AV-Preeminent” practicing attorney and management consultant, author, public policy advocate, author and lecturer repeatedly recognized for her 30 plus years’ of work and pragmatic thought leadership, publications and training on health, pension and other employee benefit, insurance, labor and employment, and health care fiduciary responsibility, payment, investment, contracting and other design, administration and compliance concerns as among the “Top Rated Labor & Employment Lawyers in Texas,” a “Legal Leader,” a “Top Woman Lawyer” and with other awards by LexisNexis® Martindale-Hubbell®; as among the “Best Lawyers In Dallas” for her work in the field of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, in International Who’s Who of Professionals and with numerous other awards and distinctions.
Highly valued for her ability to meld her extensive legal and industry knowledge and experience with her talents as an insightful innovator and pragmatic problem solver, Ms. Stamer advises, represents and defends employer, union, multi-employer, association and other employee benefit plan sponsors, insurers and managed care organizations, fiduciaries, plan administrators, technology and other service providers, government and community leaders and others about health and other employee benefit and insurance program and policy design and innovation, funding, documentation, administration, communication, data security and use, contracting, plan, public and regulatory reforms and enforcement, and other risk management, compliance and operations matters. Her experience encompasses leading and supporting the development and defense of innovative new policies, programs, practices and solutions; advising and representing clients on routine plan establishment, plan documentation and contract drafting and review, administration, change and other compliance and operations; crisis prevention and response, compliance and risk management audits and investigations, enforcement actions and other dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, Federal Trade Commission, Justice, Securities and Exchange Commission, Education and other federal agencies, state legislatures, attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators, and various other foreign and domestic governmental bodies and agencies. She also provides strategic and other supports clients in defending litigation as lead strategy counsel, special counsel and as an expert witness. Alongside her extensive legal and operational experience, Ms. Stamer also is recognized for her work as a public and regulatory policy advocate and community leader with a gift for finding pragmatic solutions and helping to forge the common ground necessary to build consensus. Best known for her domestic public policy and community leadership on health care and insurance reform, Ms. Stamer’s lifelong public policy and community service involvement includes service as a lead consultant to the Government of Bolivia on its pension privatization project, as well as extensive legislative and regulatory reform, advocacy and input workforce, worker classification, employee benefit, public health and healthcare, social security and other disability and aging in place, education, migration reforms domestically and internationally throughout her adult life. In addition to her public and regulatory policy involvement, Ms. Stamer also contributes her service and leadership to a professional and civic organizations and efforts including her involvement as the Founder and Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE; Coalition on Patient Empowerment, a founding Board Member and past President of the Alliance for Healthcare Excellence; Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; Vice Chair, Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group; current Fiduciary Responsibility Committee Co-Chair and Membership Committee member of the ABA RPTE Section; former RPTE Employee Benefits and Other Compensation Group Chair, former Chair and Co-Chair of its Welfare Plans Committee, and Defined Contribution Plans Committee; former RPTE Representative to ABA Joint Committee on Employee Benefits Council; former RPTE Representative to the ABA Health Law Coordinating Counsel; former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, former Board Member, Continuing Education Chair and Treasurer of the Southwest Benefits Association; Vice President of the North Texas Healthcare Compliance Professionals Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; past Dallas World Affairs Council Board Member, and in leadership of many other professional, civic and community organizations. Ms. Stamer also is a highly popular lecturer, symposia chair and author, who publishes and speaks extensively on health and managed care industry, human resources, employment and other privacy, data security and other technology, regulatory and operational risk management for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, the Society of Professional Benefits Administrators, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients, serves on the faculty and planning committee of many workshops, seminars, and symposia, and on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.
Beyond these involvements, Ms. Stamer also is active in the leadership of a broad range of other public policy advocacy and other professional and civic organizations and involvements. Through these and other involvements, she helps develop and build solutions, build consensus, garner funding and other resources, manage compliance and other operations, and take other actions to identify promote tangible improvements in health care and other policy and operational areas.
Before founding her current law firm, Cynthia Marcotte Stamer, P.C., Ms. Stamer practiced law as a partner with several prominent national and international law firms for more than 10 years before founding Cynthia Marcotte Stamer, P.C. to practice her unique brand of “Solutions law™” and to devote more time to the pragmatic policy and system reform, community education and innovation, and other health system improvement efforts of her PROJECT COPE: the Coalition on Patient Empowerment initiative.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources at SolutionsLawPress.com such as the following:
If you or someone else you know would like to receive future updates about developments on these and other concerns, please provide your current contact information and preferences including your preferred e-mail by creating or updating your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Employers, employees and other taxpayers should use care to properly take into account recent changes in Internal Revenue Code (“Code”) rates and deduction rules reporting or when projecting, reporting or claiming mileage reimbursements or deductions for 2018 and 2019.
Employers, employees and other taxpayers should use care properly to take into account recent changes in the rates and rules for deducting mileage and business, charitable and medical mileage and other travel expenses under the Internal Revenue Code (“Code”).
Historically, the Code has allowed individual taxpayers to claim deduct either actual expenses incurred or the applicable standard deduction for business, medical or charitable mileage and other travel expenses. While most employers, employees and other taxpayers understand the Internal Revenue Service (“IRS”) adjusts applicable standard mileage rates annually, many are unaware the recent tax law changes generally prohibit employees, but not certain other income earners, from claiming a mileage deduction for business mileage. Many employees or other individual taxpayers also do not realize that different deduction rates apply to businesses versus charitable and medical mileage expenses. Understanding these nuances is important to avoid making mistakes in projecting, reporting or deducting mileage expenses and reimbursements.
2019 Standard Mileage Deduction Rates
The Code generally allows a taxpayer to elect either to claim a deduction for substantiated actual mileage and other transportation expenses or or an amount computed using the applicable standard mileage rate declared by IRS for that taxable year under mileage reimbursement policy, whichever is greater from the gross total income. However, different applicable standard mileage rates apply to mileage for business, charitable, medical or moving expenses and the IRS adjusts each of these standard mileage rates annually.
Notice 2019-02 sets 2019 standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical or moving expense purposes. The notice also provides the amount taxpayers must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan. For 2019, the applicable standard mileage rates are as follows:
The standard mileage rate for transportation or travel expenses is 58 cents per mile for all miles of business use (business standard mileage rate);
The standard mileage rate is 14 cents per mile for use of an automobile in rendering gratuitous services to a charitable organization under § 170;
The standard mileage rate is 20 cents per mile for use of an automobile: (1) for medical care described in § 213; or (2) as part of a move for which the expenses are deductible under § 217(g).
Even though the IRS has published standard mileage rates for use of an automobile for medical care or as part of a deductible move, most taxpayers incurring these expenses will not be able to claim any deduction for these expenses. While the Code historically allowed employees and other taxpayers to claim an itemized deduction for business, charitable or medical care related transportation expenses, Section 11045 of the Tax Cuts and Jobs Act, Public Law 115-97, 131. Stat. 2054 (December 22, 2017) (the “Tax Act”) suspends the deductions of unreimbursed employee travel expenses and for relocation expenses for the 2018 through 2026 tax years. Specifically, the Tax Act amended the Code to prohibit employees from claiming unreimbursed employee travel and relocation mileage deductions for the 2018 through 2026 tax years. Historically, the Code allowed employees filing itemized tax returns to include unreimbursed employee transportation expenses among the itemized expenses deductible in excess of the two percent of their adjusted gross income. In connection with its expansion of the standard individual deductions, however, the Tax Act suspends all miscellaneous itemized deductions subject to the two-percent of adjusted gross income floor under Code § 67, including unreimbursed employee travel expenses, for taxable years beginning after December 31, 2017 and before January 1, 2026. In contrast, however, the Tax Act does not suspend the deduction in determining adjusted gross income of travel expenses or other expenses incurred in the production of income by independent contractors or other non-employee taxpayers. Since unreimbursed travel expenses of employees are subject to the adjusted gross income floor under Code § 67, employees cannot claim an itemized deduction for unreimbursed employee travel expenses for 2018 or 2019. In contrast, the Tax Act did not suspend the deduction for expenses incurred in the production of income. Consequently, independent contractors and other non-employees still can deduct travel expenses as expenses incurred in connection with the production of income on line 24 of Schedule 1 of Form 1040 (2018), not as an itemized deduction on Schedule A of Form 1040 (2018), using either their actual expenses or the annually applicable business standard mileage rate.
In addition, Section 11049 of the Tax Act also generally suspends the deduction for moving expenses for the 2018 through 2026 . However, this suspension does not apply to members of the Armed Forces on active duty who move pursuant to a military order and incident to a permanent change of station to whom § 217(g) applies. Thus, except for taxpayers to whom § 217(g) applies, the standard mileage rate for the use of an automobile as part of a move occurring during the suspension will not apply during the suspension period.
Proper calculation of applicable mileage related tax deduction depends upon taxpayers properly taking into account the suspension of the deductions for unreimbursed employee travel and relocation expenses for the 2018 through 2026 tax years and using the correct standard mileage rate. Employees impacted by these expenses should take into account these modifications when calculating and completing their tax withholding forms and projecting their tax liability. Because many employees may not be aware of these changes, employees with employees likely to be impacted by these changes may wish to alerting their employees to these changes. Employers that previously provided employee handbooks or other communications to employees containing explanations discussions of the implications of travel or relocation expenses inconsistent with the current tax rules also should take immediate steps to withdraw or correct those communications.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, FMLA and other leave, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; audits, investigations, enforcement and defense; Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here such as the following:
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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
A new U.S. Department of Labor’s Wage and Hour Division (WHD) Family and Medical Leave Act (“FMLA”)opinion letter says warns employers not to delay providing FMLA notice or designating a leave as FMLA-covered when coordinating FMLA protected leave with otherwise available paid or unpaid leave.
FMLA Opinion 2019-1-A states that a FMLA-covered employer must designate as FMLA protected and, absent extenuating circumstances, must provide notice of the designation of the leave as FMLA protected within five business days of the date the employer has enough information to determine an employee has experienced a FMLA qualifying event. The Opinion says this designation and notice must happen even if the employee would prefer that the employer delay the designation of the absence as a FMLA protected leave until the employee exhausts other available leave.
According to WHD, its FMLA regulations require employers to provide a written “designation notice” to an employee within five business days—absent extenuating circumstances—after the employer “has enough information to determine whether the leave is being taken for a FMLA-qualifying reason.” Failure to provide timely notice requirement may constitute an interference with, restraint on, or denial of the exercise of an employee’s FMLA rights. 29 C.F.R. §§ 825.300(e), 825.301(e). Consequently, the Opinion concludes that the employer is responsible in all circumstances for designating leave as FMLA-qualifying and giving notice of the designation to the employee within five days of learning if events triggering the FMLA eligibility. 29 C.F.R. § 825.300(d).
The Opinion also emphasizes that employers cannot delay the designation of a leave as FMLA protected and provision of notice while a FMLA-eligible employee uses otherwise available leave. While acknowledging that the FMLA permits an employer to require, or to permit an employee to elect, to “substitute” accrued paid leave (e.g., paid vacation, paid sick leave, etc.) to cover any part of the unpaid FMLA entitlement period,the Opinion states that “[t]he term substitute means that the paid leave provided by the employer … will run concurrently with the unpaid FMLA leave.” 29 C.F.R. § 825.207(a) (emphasis added). While acknowledging that the FMLA allows employers to adopt leave policies more generous than those required by the FMLA. 29 U.S.C. § 2653; see 29 C.F.R. § 825.700, the Opinion also says an employer may not designate more than 12 weeks of leave—or more than 26 weeks of military caregiver leave—as FMLA-protected. See, e.g., Weidner v. Unity Health Plans Ins. Corp., 606 F. Supp. 2d 949, 956 (W.D. Wis. 2009) (citing cases for the principle that “a plaintiff cannot maintain a cause of action under the FMLA for an employer’s violation of its more-generous leave policy”).
Furthermore, the Opinion also openly rejects and disagrees with the Ninth Circuit’s holding in Escriba v. Foster Poultry Farms, Inc., 743 F.3d 1236, 1244 (9th Cir. 2014) that an employee may use non-FMLA leave for an FMLA-qualifying reason and decline to use FMLA leave in order to preserve FMLA leave for future use. Instead, the Opinion adopts the position that once an eligible employee communicates a need to take leave for an FMLA-qualifying reason, neither the employee nor the employer may decline FMLA protection for that leave. See 29 C.F.R. § 825.220(d) (“Employees cannot waive, nor may employers induce employees to waive, their prospective rights under FMLA.”); Strickland v. Water Works and Sewer Bd. of City of Birmingham, 239 F.3d 1199, 1204 (11th Cir. 2001) (noting that the employer may not “choose whether an employee’s FMLA-qualifying absence” is protected or unprotected by the FMLA). Accordingly, the Opinion concludes that when an employer determines that leave is for an FMLA-qualifying reason, the qualifying leave is FMLA-protected and counts toward the employee’s FMLA leave entitlement. Once the employer has enough information to make this determination, the employer must, absent extenuating circumstances, provide notice of the designation within five business days. Therefore, the employer may not delay designating leave as FMLA-qualifying or providing notification, even if the employee would prefer that the employer delay the designation.
The Opinion also clarifies the WHD’s interpretation of the FMLA limits the protection of the FMLA to the statutory period set by the FMLA. In this respect, the Opinion states, “An employer is also prohibited from designating more than 12 weeks of leave (or 26 weeks of military caregiver leave) as FMLA leave.” Thus, while acknowledging that “[a]n employer must observe any employment benefit program or plan that provides greater family or medical leave rights to employees than the rights established by the FMLA.” under 29 C.F.R. § 825.700, the Opinion also states that “providing such additional leave outside of the FMLA cannot expand the employee’s 12-week (or 26-week) entitlement under the FMLA.” Therefore, the Opinion states that if an employee substitutes paid leave for unpaid FMLA leave, the employee’s paid leave counts toward his or her 12-week (or 26-week) FMLA entitlement and does not expand that entitlement.
As many employers currently coordinate and administer their FMLA and other leaves inconsistently with the positions stated in the Opinion, employers generally should consult with experienced legal counsel within the scope of attorney client privilege about the implications of the guidance set forth in the Opinion on their existing practices and about whether any corrective action or modifications are advisable in light of the Opinion to minimize potential exposure to FMLA liability. In connection with this review, employers also generally will want to evaluate their other paid and unpaid military, medical, maternity/paternity, adoption and other absence and leave policies and associated employee benefit plans to confirm that these designs continue to operate as intended and that current coordination practices comport with existing guidance.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, FMLA and other leave, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; audits, investigations, enforcement and defense; Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here such as the following:
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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Employers concerned about minimum wage, overtime and other liability from the Proposed Salary Threshold Rule (“Proposal”) that if adopted will increase the minimum salary for the Fair Labor Standards Act (“FLSA”) “white collar” overtime exemption from $23,660 annually to $35,308 annually. If adopted as proposed, the Proposal overnight will disqualify a million plus currently salaried workers to hourly employees that their employers will be required to pay minimum wage and overtime under the FLSA. Businesses concerned about the Proposal or other burdensome minimum wage or overtime requirements under the FLSA need to tell the Labor Department about these rules burdensome effects on business.
Proposal To Raise Minimum Salary For Overtime Exemption
The Labor Department Proposal if adopted will increase to $679 per week the minimum amount that an employer must pay an employee to treat that employee as exempt from the minimum wage or overtime rules of the FLSA regardless of the role or position of the employee. This means that an additional million plus employees overnight no longer would qualify to be paid as salaried rather than hourly employees. The Proposal
Under currently enforced FLSA rules, employers generally must treat any employee earning less than $455 per week ($23,660 annually) as a non-exempt employee. This generally means that the employer must pay the employee at least minimum wage for regular time and must pay overtime to the worker for any hours worked in excess of 40 hours per week.
The Labor Department set the minimum weekly earnings level of $455 per week in 2004. The Proposal if adopted will increase the minimum required earnings an employee must earn to qualify for exemption from minimum wage and overtime rules more than $124 per week to $679 per week (equivalent to $35,308 per year).
The Department also is asking for public comment on the Proposal’s language for periodic review to update the salary threshold. An update would continue to require notice-and-comment rule making rather than calling for automatic adjustments to the salary threshold for inflation.
Speak Up About Proposal & Other FLSA Burdens On Business
Businesses concerned about Proposal to increase the salary threshold or other burdensome FLSA rules or enforcement policies should seize the opportunity to provide feedback.
To start with, businesses should submit comments about the Proposed Rule electronically at www.regulations.gov as soon as possible before the 60-day comment period runs in mid-May.
Additionally, concerned businesses also should consider participating in events like the Small Business Roundtables that the Small Business Administration (“SBA”) Office of Advocacy plans to host to discuss the Proposal to hear directly from small businesses about the impact of the proposed rule. Currently SBA plans to host three roundtables:
Thursday April 4, 2019 – 2:00 pm – 4:00 pm (EDT) at the University of South Florida Port Tampa Bay, Building 1101 Channelside Dr., Suite 210, Tampa, FL 33602;
Thursday April 11, 2019 – 2:00 pm – 4:00 pm (EDT) at the SBA Headquarters, Eisenhower Room B 409 Third Street SW, Washington, DC 20416 (Call-in option available); and
Tuesday April 30, 2019 – 9:00 am – 11:00 am (CDT) at the Mobile Area Chamber of Commerce 451 Government St., Mobile, Alabama 36602
Interested parties must RSVP to Janis.Reyes@sba.gov to participate. Note that while SBA reports that SBA has invited Labor Department staff, the Labor Department has not confirmed its acceptance of these invitations yet. Also, because comments expressed during these roundtables do not take the place of submitting written comments to the regulatory docket, concerned businesses should also still comment on the Proposal. However adverse feedback from business expressed at this meeting could help to motivate SBA to express opposition or other negative feedback on the Proposal.
Other Defensive Actions To Minimize FLSA Exposures
Whether or not the Proposal takes effect, all U.S. businesses will want to strengthen their existing practices for classifying and compensating workers under existing Federal and state wage and hour laws, tighten contracting and other compliance oversight in relation to outsourced services, weigh options to clean up exposure areas, review insurance coverages and consider other options to minimize their potential liability under applicable wages and hour laws. Conducting this analysis within the scope of attorney-client privilege is important because the analysis and discussions are highly sensitive both as potential evidence for wage and hour and other legal purposes. Consequently, businesses and their leaders generally will want to arrange for this work to be protected to the extent by attorney-client privilege, work product and other evidentiary protections against discovery by Department, employees or others for FLSA or other workforce enforcement actions.
As a part of this process, businesses and their leaders generally should plan to:
Review subcontractor, temporary, lease employee, independent contractor and other outsourced labor and services relationship for potential risk of worker reclassification and tighten contracting and other procedures;
Audit the position of each employee currently 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;
If the employer hires any individuals under age 18, audit and implement appropriate procedures to ensure its ability to demonstrate compliance with all applicable FLSA child labor rules;
If the employer is a government contractor or subcontractor or otherwise performs any services on projects funded with federal or state funds, evaluate the applicability and fulfillment of any special wage, fringe benefit, recordkeeping or other government contracting wage and hour requirements;
If the employer hires foreign agricultural or other workers subject to special conditions and requirements, to review compliance with those special requirements;
Review and tighten existing practices for tracking compensible 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 employer uses leased, temporary, or other outsourced labor, evaluate contractual, process and other options to support the employer’s ability cost effectively to respond to an audit, investigation or enforcement action by the Labor Department or private litigants and if necessary, obtain indemnification or other recovery in the event the employer incurs liability due to the use or practices of the outsourced labor supplier;
If the audit raises questions about the appropriateness of the classification of an employee as exempt, self-initiation of proper corrective action after consultation with qualified legal counsel;
Review and document all workers classified as exempt;
Review of existing documentation and record keeping practices for hourly employees;
Evaluate potential exposures under other employment, labor, tax or related laws or contracts that might be impacted by the findings or actions taken in response to those findings;
Explore available options and alternatives for calculating required wage payments to non-exempt employees and assessing and resolving other concerns;
Identify and calculate other employee benefit, tax or other corrections and associated costs and procedures that may be required as a result of findings or corrective actions resulting from their redress;
Re-engineer work rules, policies, contracts and practices to minimize costs and liabilities as appropriate in light of the regulations and enforcement exposures;
Explore insurance, indemnification and other options for mitigating risks and associated investigation and defense costs; and
Consider self-correction within the new PAID Program or otherwise.
If you need more information or have questions, contact the author, Cynthia Marcotte Stamer.
About The Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for management work, coaching, teachings, and publications.
Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce, internal controls and regulatory compliance, change management and other performance and operations management and compliance. Her day-to-day work encompasses both labor and employment issues, as well as independent contractor, outsourcing, employee leasing, management services and other nontraditional service relationships. She supports her clients both on a real-time, “on demand” basis and with longer term basis to deal with all aspects for workforce and human resources management, including, recruitment, hiring, firing, compensation and benefits, promotion, discipline, compliance, trade secret and confidentiality, noncompetition, privacy and data security, safety, daily performance and operations management, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.
The author of the “Texas Payday Act,” and numerous other highly regarded publications on wage and hour and other human resources, employee benefits and compensation publications, Ms. Stamer is well-known for her 30 years of extensive wage and hour, compensation and other management advice and representation of restaurant and other hospitality, health, insurance, financial services, technology, energy, manufacturing, retail, governmental and other domestic and international businesses of all types and sizes.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other concerns by her service as a management consultant, business coach and consultant and policy strategist as well through her leadership participation in professional and civic organizations such her involvement as the Vice Chair of the North Texas Healthcare Compliance Association; Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE: Coalition on Patient Empowerment; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; former Gulf Coast TEGE Council Exempt Organization Coordinator; a founding Board Member and past President of the Alliance for Healthcare Excellence; former board member and Vice President of the Managed Care Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; a member and policy adviser to the National Physicians’ Council for Healthcare Policy; current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section; Past Chair of the ABA Health Law Section Managed Care & Insurance Section; ABA Real Property Probate and Trust (RPTE) Section former Employee Benefits Group Chair, immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative, and Defined Contribution Committee Co-Chair, past Welfare Benefit Committee Chair and current Employee Benefits Group Fiduciary Responsibility Committee Co-Chair, Substantive and Group Committee member, Membership Committee member and RPTE Representative to the ABA Health Law Coordinating Council; past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a former member of the Board of Directors, Treasurer, Member and Continuing Education Chair of the Southwest Benefits Association and others.
Ms. Stamer also is a widely published author, highly popular lecturer, and serial symposia chair, who publishes and speaks extensively on human resources, labor and employment, employee benefits, compensation, occupational safety and health, and other leadership, performance, regulatory and operational risk management, public policy and community service concerns for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.
Want to know more? See here for details about the author of this update, attorney Cynthia Marcotte Stamer, e-mail her here or telephone Ms. Stamer at (469) 767-8872.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources 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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Tax exempt organizations and tax exempt employee benefit plans take note. The Internal Revenue Service (IRS) exempt organization determination procedures are changing.
Adding references to “new” Form 1024-A, Application for Recognition of Exemption Under Section 501(c)(4) of the Internal Revenue Code
Clarifying that the IRS won’t rule on a request under IRC Section 501(c)(6) for an organization whose purpose relates to a controlled substance that is illegal under federal law
Increasing user fees for certain miscellaneous determinations from $1,000 to $2,000
Changing the name of the Office of Associate Chief Counsel, Tax Exempt and Government Entities, to the Office of Associate Chief Counsel, Employee Benefits, Exempt Organizations and Employment Taxes.
These changes will impact processes for submitting approval applications and other exempt organization, VEBA, fraternal benefit association and qualified employee plan dealings with the IRS. Impacted organizations, their leaders and advisors will want to adjust accordingly.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; HIPAA administrative simplification, meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, antikickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA, HEDIS and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; 1557 and other Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here such as the following:
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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Employee benefit plan sponsors, fiduciaries, administrators and advisors should review and update their benefit and compensation plan designs and testing in response to the just released tables of covered compensation under § 401(l)(5)(E) of the Internal Revenue Code and related regulations for the 2019 plan year in new Revenue Ruling 2019-06.
The new tables are available in the advance release copy of Revenue Ruling 2019-06, scheduled for official publication in Internal Revenue Bulletin 2019-14on April 1, 2019.
The Revenue Ruling provides tables of covered compensation under § 401(l)(5)(E) of the Internal Revenue Code and related regulations for the 2019 plan year.
For this purpose, covered compensation is average of the contribution and benefit bases in effect under section 230 of the Social Security Act for each year in the 35 year period ending with the year in which an employee attains social security retirement age.
As the change will impact plan contribution limits, discrimination testing and other plan and contribution design and administration, employer and other plan sponsors, fiduciaries, administrators and service providers should evaluate the effects of the adjustments so as to maximize their ability to anticipate and respond to the adjustments.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; HIPAA administrative simplification, meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, antikickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA, HEDIS and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; 1557 and other Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here such as the following:
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NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Employers concerned about managing their overtime liability should review and provide prompt feedback to the U.S. Department of Labor (Department) on a Notice of Proposed Rulemaking (NPRM) that would make an additional million plus American workers eligible for overtime under the Fair Labor Standards Act (“FLSA”) by increasing the minimum amount an employee must earn to be eligible for treatment as FLSA exempt to $679 per week.
Under currently enforced FLSA rules, employers generally must treat any employee earning less than $455 per week ($23,660 annually) as a non-exempt employee. This generally means that the employer must pay the employee at least minimum wage for regular time and must pay overtime to the worker for any hours worked in excess of 40 hours per week.
The minimum weekly earnings level of $455 per week was set in 2004. The proposed regulation would increase the salary threshold using current wage data projected to January 1, 2020 from $455 to $679 per week (equivalent to $35,308 per year).
The Department also is asking for public comment on the NPRM’s language for periodic review to update the salary threshold. An update would continue to require notice-and-comment rulemaking.
The NPRM maintains overtime protections for police officers, fire fighters, paramedics, nurses, and laborers including: non-management production-line employees and non-management employees in maintenance, construction and similar occupations such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, and construction workers. The proposal does not call for automatic adjustments to the salary threshold.
The proposal to change the salary threshold in the NPRM follows a prior attempt by the Department of raise the threshold in 2016. The U.S. District Court for the Eastern District of Texas enjoined a 2016 final regulation that would have raised the threshold on November 22, 2016. Since November 6, 2017, the U.S. Court of Appeals for the Fifth Circuit has held in abeyance the Department’s appeal of the District Court’s ruling pending further rulemaking by the Department. In the 15 years since the District Court enjoined its 2016 final rule, the Department consistently has enforced the 2004 salary threshold level.
Employers concerned about the proposed increase in the salary threshold or other elements of the NPRM should submit comments about the proposed rule electronically at www.regulations.gov within the 60 day period following publication, in the rulemaking docket RIN 1235-AA20.
The NPRM proposing to increase the salary threshold for qualification as a FLSA-exempt employee is only one of a number of proposed rule changes that could significantly impact employer liabilities and costs.
Coupled with the Department’s continuing aggressive attacks against contract labor and other worker misclassification as well as other minimum wage, overtime and other FLSA rules, all employers should shore up the defensibility of their existing practices for classifying and compensating workers under existing Federal and state wage and hour laws, tighten contracting and other compliance oversight in relation to outsourced services, weigh options to clean up exposure areas, review insurance coverages and consider other options to minimize their potential liability under applicable wages and hour laws. Conducting this analysis within the scope of attorney-client privilege is important because the analysis and discussions are highly sensitive both as potential evidence for wage and hour and other legal purposes. Consequently, businesses and their leaders generally will want to arrange for this work to be protected to the extent by attorney-client privilege, work product and other evidentiary protections against discovery by Department, employees or others for FLSA or other workforce enforcement actions.
As a part of this process, businesses and their leaders generally should plan to:
Review subcontractor, temporary, lease employee, independent contractor and other outsourced labor and services relationship for potential risk of worker reclassification and tighten contracting and other procedures;
Audit the position of each employee currently 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;
If the employer hires any individuals under age 18, audit and implement appropriate procedures to ensure its ability to demonstrate compliance with all applicable FLSA child labor rules;
If the employer is a government contractor or subcontractor or otherwise performs any services on projects funded with federal or state funds, evaluate the applicability and fulfillment of any special wage, fringe benefit, recordkeeping or other government contracting wage and hour requirements;
If the employer hires foreign agricultural or other workers subject to special conditions and requirements, to review compliance with those special requirements;
Review and tighten 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 employer uses leased, temporary, or other outsourced labor, evaluate contractual, process and other options to support the employer’s ability cost effectively to respond to an audit, investigation or enforcement action by WHD or private litigants and if necessary, obtain indemnification or other recovery in the event the employer incurs liability due to the use or practices of the outsourced labor supplier;
If the audit raises questions about the appropriateness of the classification of an employee as exempt, self-initiation of proper corrective action after consultation with qualified legal counsel;
Review and document all workers classified as exempt;
Review of existing documentation and record keeping practices for hourly employees;
Evaluate potential exposures under other employment, labor, tax or related laws or contracts that might be impacted by the findings or actions taken in response to those findings;
Explore available options and alternatives for calculating required wage payments to non-exempt employees and assessing and resolving other concerns;
Identify and calculate other employee benefit, tax or other corrections and associated costs and procedures that may be required as a result of findings or corrective actions resulting from their redress;
Re-engineer work rules, policies, contracts and practices to minimize costs and liabilities as appropriate in light of the regulations and enforcement exposures;
Explore insurance, indemnification and other options for mitigating risks and associated investigation and defense costs; and
Consider self-correction within the new PAID Program or otherwise.
If you need more information or have questions, contact the author, Cynthia Marcotte Stamer.
About The Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for management work, coaching, teachings, and publications.
Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce, internal controls and regulatory compliance, change management and other performance and operations management and compliance. Her day-to-day work encompasses both labor and employment issues, as well as independent contractor, outsourcing, employee leasing, management services and other nontraditional service relationships. She supports her clients both on a real-time, “on demand” basis and with longer term basis to deal with all aspects for workforce and human resources management, including, recruitment, hiring, firing, compensation and benefits, promotion, discipline, compliance, trade secret and confidentiality, noncompetition, privacy and data security, safety, daily performance and operations management, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.
The author of the “Texas Payday Act,” and numerous other highly regarded publications on wage and hour and other human resources, employee benefits and compensation publications, Ms. Stamer is well-known for her 30 years of extensive wage and hour, compensation and other management advice and representation of restaurant and other hospitality, health, insurance, financial services, technology, energy, manufacturing, retail, governmental and other domestic and international businesses of all types and sizes.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other concerns by her service as a management consultant, business coach and consultant and policy strategist as well through her leadership participation in professional and civic organizations such her involvement as the Vice Chair of the North Texas Healthcare Compliance Association; Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE: Coalition on Patient Empowerment; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; former Gulf Coast TEGE Council Exempt Organization Coordinator; a founding Board Member and past President of the Alliance for Healthcare Excellence; former board member and Vice President of the Managed Care Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; a member and policy adviser to the National Physicians’ Council for Healthcare Policy; current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section; Past Chair of the ABA Health Law Section Managed Care & Insurance Section; ABA Real Property Probate and Trust (RPTE) Section former Employee Benefits Group Chair, immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative, and Defined Contribution Committee Co-Chair, past Welfare Benefit Committee Chair and current Employee Benefits Group Fiduciary Responsibility Committee Co-Chair, Substantive and Group Committee member, Membership Committee member and RPTE Representative to the ABA Health Law Coordinating Council; past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a former member of the Board of Directors, Treasurer, Member and Continuing Education Chair of the Southwest Benefits Association and others.
Ms. Stamer also is a widely published author, highly popular lecturer, and serial symposia chair, who publishes and speaks extensively on human resources, labor and employment, employee benefits, compensation, occupational safety and health, and other leadership, performance, regulatory and operational risk management, public policy and community service concerns for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.
Want to know more? See here for details about the author of this update, attorney Cynthia Marcotte Stamer, e-mail her here or telephone Ms. Stamer at (469) 767-8872.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources 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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Health plans and their employer and other sponsors, fiduciaries, administrators and other service providers, as well as health care providers, health care clearinghouses and their business associates (“Covered Entities”) should reconfirm the adequacy of their Health Insurance Portability and Accountability Act (“HIPAA”) compliance and risk management in light the U.S Department of Health and Human Services Office of Civil Rights (“OCR”) February 7, 2019 announcement that its 2018 year-end $3 Million Resolution Agreement with California-based Cottage Health increased OCR’s already record-setting enforcement recoveries in 2018 to nearly $28.7 million in a year already distinguished by OCR’s collection of a record-setting $16 million resolution payment against health insurance giant Anthem. Along with acting to ensure their own organization’s ability to defend their HIPAA compliance, Covered Entities and their leaders also should take advantage of the opportunity to provide input to OCR on opportunities for simplifying and improving OCR’s HIPAA regulations and enforcement by submitting relevant comments by February 12, 2019 to a Request for Information published by OCR in December that invites suggestions for simplifying or making other improvements to OCR’s current HIPAA guidance as well as monitoring and responding to other new and proposed regulatory developments.
2018 Cottage Health Resolution Agreement
According to OCR’s February 7, 2019 announcement, Cottage Health agreed in OCR’s final settlement of 2017 to pay OCR $3 million and to adopt a substantial corrective action plan to settle charges of HIPAA violations resulting from OCR’s investigations into two HIPAA Breach notifications Cottage Health filed regarding breaches of unsecured electronic protected health information (ePHI) affecting over 62,500 individuals.
A December 2, 2013 breach notification that the removal of electronic security protections by a Cottage Health contractor rendered ePHI such as patient names, addresses, dates of birth, diagnoses/conditions, lab results and other treatment information of 33,349 individuals on a Cottage Health server accessible for download without a username or password from the internet to anyone outside Cottage Health. In an update to its original report filed on July 2, 2014, Cottage Health increased the number of individuals affected by this breach to 50,917. OCR’s investigation determined that security configuration settings of the Windows operating system permitted access to files containing ePHI without requiring a username and password. As a result, patient names, addresses, dates of birth, diagnoses, conditions, lab results and other treatment information were available to anyone with access to Cottage Health’s server.
A December 1, 2015, that the misconfiguration of a server following an IT response to a troubleshooting ticket, exposed unsecured ePHI including patient names, addresses, dates of birth, social security numbers, diagnoses, conditions, and other treatment information of 11,608 individuals over the internet.
Based upon its investigation into the two breach reports, OCR concluded Cottage Health violated HIPAA by failing to conduct an accurate and thorough assessment of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of the ePHI; failed to implement security measures sufficient to reduce risks and vulnerabilities to a reasonable and appropriate level; failed to perform periodic technical and non-technical evaluations in response to environmental or operational changes affecting the security of ePHI; and failed to obtain a written business associate agreement with a contractor that maintained ePHI on its behalf.
To resolve its exposure to potentially must greater civil monetary sanctions that OCR might seek for such potential violations under HIPAA’s civil monetary sanction rules, Cottage Health entered into December, 2018 Resolution Agreement to pay the $3 million settlement and undertake what OCR characterizes as “a robust corrective action plan to comply with the HIPAA Rules.” Among other things, the corrective action plan requires Cottage Health to:
Conduct an enterprise-wide risk analysis of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of ePHI held by Cottage Health (“Risk Analysis”) that OCR views as satisfactory to meet the requirements of 45 CFR 164.308(a)(1)(ii)(A);
Develop and implement a risk management plan to address and mitigate any security risks and vulnerabilities identified in the Risk Analysis acceptable to OCR;
Implement a process for regularly evaluating environmental and operational changes that affect the security of Cottage Health’s ePHI;
Develop, maintain, and revise, as necessary, written policies and procedures to comply with the Federal standards that govern the privacy and security of individually identifiable health information under 45 C.F.R. Part 160 and Subparts A, C, and E of Part 164 (the “Privacy Rule” and “Security Rule”).
Distribute to and conduct training on the HIPAA policies and procedures from all existing and new members of the Cottage Health workforce with access to PHI. Additionally, Cottage Health require all workforce members that have access to PHI to certify their receipt of, understanding and commitment to comply with the HIPAA Policies before allowing access to PHI and must deny access to PHI to any workforce member that has not provided the required certification.
Submit to ongoing notification and reporting requirements to keep OCR informed about its compliance efforts.
2018 Record Setting HIPAA Enforcement Year
The final Resolution Agreement negotiated by OCR in 2018, the $3 million Cottage Health Resolution Agreement signed on December 11, 2018 added to an already record-setting year of HIPAA enforcement recoveries by OCR. In addition to recovering the single largest individual HIPAA settlement in history of $16 million with Anthem, Inc. OCR’s recovery of the following HIPAA settlements and fines totaling nearly $28.7 million surpassed its previous 2016 record of $23.5 million by 22 percent.
Date
Name
Amount
Jan. 2018
Filefax, Inc (settlement)
$ 100,000
Jan. 2018
Fresenius Medical Care North America (settlement)
$ 3,500,000
June 2018
MD Anderson (judgment)
$ 4,348,000
Aug. 2018
Boston Medical Center (settlement)
$ 100,000
Sep. 2018
Brigham and Women’s Hospital (settlement)
$ 384,000
Sep. 2018
Massachusetts General Hospital (settlement)
$ 515,000
Sep. 2018
Advanced Care Hospitalists (settlement)
$ 500,000
Oct. 2018
Allergy Associates of Hartford (settlement)
$ 125,000
Oct. 2018
Anthem, Inc (settlement)
$ 16,000,000
Nov. 2018
Pagosa Springs (settlement)
$ 111,400
Dec. 2018
Cottage Health (settlement)
$ 3,000,000
Total (settlements and judgment)
$ 28,683,400
Aside from the previously discussed Cottage Health Resolution Agreement OCR announced on February 7, 2019, these OCR 2018 enforcement recoveries included:
FileFax Resolution Agreement. In January 2018, OCR settled for $100,000 with Filefax, Inc., a medical records maintenance, storage, and delivery services provider. OCR’s investigation found that Filefax impermissibly disclosed protected health information (PHI) by leaving the PHI in an unlocked truck in the Filefax parking lot, or by granting permission to an unauthorized person to remove the PHI from Filefax, and leaving the PHI unsecured outside the Filefax facility.
Fresenius Medical Care North America Resolution Agreement. In January 2018, OCR also settled for $3.5 million with Fresenius Medical Care North America (FMCNA), a provider of products and services for people with chronic kidney failure. FMCNA filed five breach reports for separate incidents occurring between February 23, 2012 and July 18, 2012, implicating the electronic protected health information (ePHI) of five FMCNA owned covered entities. OCR’s investigation revealed that FMCNA failed to conduct an accurate and thorough risk analysis of potential risks and vulnerabilities to the confidentiality, integrity, and availability of all of its ePHI. Additional potential violations included failure to implement policies and procedures and failure to implement a mechanism to encrypt and decrypt ePHI, when it was reasonable and appropriate to do so under the circumstances.
MD Anderson ALJ Ruling. In June 2018, an HHS Administrative Law Judge ruled in favor of OCR and required The University of Texas MD Anderson Cancer Center (MD Anderson), a Texas cancer center, to pay $4.3 million in civil money penalties for HIPAA violations. OCR investigated MD Anderson following three separate data breach reports in 2012 and 2013 involving the theft of an unencrypted laptop from the residence of an MD Anderson employee and the loss of two unencrypted universal serial bus (USB) thumb drives containing the unencrypted ePHI of over 33,500 individuals. OCR’s investigation found that MD Anderson had written encryption policies going back to 2006 and that MD Anderson’s own risk analyses had found that the lack of device-level encryption posed a high risk to the security of ePHI. Despite the encryption policies and high risk findings, MD Anderson did not begin to adopt an enterprise-wide solution to encrypt ePHI until 2011, and even then it failed to encrypt its inventory of electronic devices containing ePHI between March 24, 2011 and January 25, 2013. This matter is under appeal with the HHS Departmental Appeals Board.
MMC/BWH/MGH Resolution Agreements. In September 2018, OCR announced that it has reached separate settlements totaling $999,000, with Boston Medical Center (BMC), Brigham and Women’s Hospital (BWH), and Massachusetts General Hospital (MGH) for compromising the privacy of patients’ PHI by inviting film crews on premises to film an ABC television network documentary series, without first obtaining authorization from patients.
ACH Resolution Agreement. In September 2018, OCR also settled with Advanced Care Hospitalists (ACH), a contractor physician group, for $500,000. ACH filed a breach report confirming that ACH patient information was viewable on a medical billing services’ website. OCR’s investigation revealed that ACH never had a business associate agreement with the individual providing medical billing services to ACH, and failed to adopt any policy requiring business associate agreements until April 2014. Although ACH had been in operation since 2005, it had not conducted a risk analysis or implemented security measures or any other written HIPAA policies or procedures before 2014.
Allergy Associates Resolution Agreement. In October 2018, OCR settled with Allergy Associates, a health care practice that specializes in treating individuals with allergies, for $125,000. In February 2015, a patient of Allergy Associates contacted a local television station to speak about a dispute that had occurred between the patient and an Allergy Associates’ doctor. OCR’s investigation found that the reporter subsequently contacted the doctor for comment and the doctor impermissibly disclosed the patient’s PHI to the reporter.
Anthem Resolution Agreement. In October 2018, Anthem, Inc. also paid $16 million to OCR and agreed to take substantial corrective action to settle potential violations of the HIPAA Rules after a series of cyberattacks led to the largest U.S. health data breach in history. Anthem filed a breach report after discovering cyber-attackers had gained access to their IT system via an undetected continuous and targeted cyberattack for the apparent purpose of extracting data, otherwise known as an advanced persistent threat attack. After filing their breach report, Anthem discovered cyber-attackers had infiltrated their system through spear phishing emails sent to an Anthem subsidiary after at least one employee responded to the malicious email and opened the door to further attacks. OCR’s investigation revealed that between December 2, 2014 and January 27, 2015, the cyber-attackers stole the ePHI of almost 79 million individuals, including names, social security numbers, medical identification numbers, addresses, dates of birth, email addresses, and employment information.
Pegosa Springs Medical Center. In November 2018, Pagosa Springs Medical Center (PSMC), a critical access hospital, paid $111,400 to OCR to resolve potential violations concerning a former PSMC employee that continued to have remote access to PSMC’s web-based scheduling calendar, which contained patients’ ePHI, after separation of employment. OCR’s investigation revealed that PSMC impermissibly disclosed the ePHI of 557 individuals to its former employee and to the web-based scheduling calendar vendor without a business associate agreement in place.
These 2018 Resolution Agreements reaffirm the growing risks that Covered Entities and their business associates run by failing to take adequate steps to prevent and respond to breaches of ePHI and otherwise to maintain their compliance with HIPAA. Covered entities and business associates and their leaders should recognize and respond to these growing risks by reevaluating and strengthening their HIPAA compliance and risk management efforts to minimize the likelihood of violations and enhance their ability to mitigate potential liability that can result from breaches of HIPAA by responding efficiently and effectively.
Other Regulatory & Enforcement Developments
In addition to reaffirming their ongoing compliance with the longstanding requirements of HIPAA and other related federal and state laws, Covered Entities also should use care to carefully monitor and respond to new regulatory and other developments that might create new responsibilities or new opportunities to simplify their HIPAA compliance. In this respect, Covered Entities should take note of the 2018 and ongoing efforts by OCR to develop and publish new rules and other guidance intended to help health care providers and other Covered Entities, patients and caregivers and others understand their rights and responsibilities when dealing with protected health information in relation to patients afflicted with substance abuse and mental illness. Undertaken as part of the Trump Administration’s broader effort to combat opiate and other substance abuse within the United States, OCR in October published a package of guidance on How HIPAA Allows Doctors To Respond To The Opioid Crisis. Covered Entities and others concerned with the management of patients afflicted with substance abuse and mental illness should evaluate this guidance to understand and tailor their practices to respond to OCR’s perspectives of how HIPAA impacts the use, access and disclosure of protected health information as part of these efforts.
Covered Entities and others concerned about HIPAA compliance and interpretation also should carefully monitor and provide appropriate and timely input on developing HIPAA guidance that could impact their operations. In this regard, Covered Entities with ideas about opportunities for improving existing HIPAA guidance are encouraged to submit comments to OCR by February 12, 2019 in response to its Request for Information on improving care coordination and reducing the regulatory burdens of the HIPAA Rules published on December 12, 2018. In that RFI, OCR invites input from the public on how the HIPAA Privacy Rule, could be modified to:
Encourage information-sharing for treatment and care coordination;
Facilitate parental involvement in care;
Address the opioid crisis and serious mental illness;
Account for disclosures of PHI for treatment, payment, and health care operations as required by the HITECH Act;
Change the current requirement for certain providers to make a good faith effort to obtain an acknowledgment of receipt of the Notice of Privacy Practices; and/or
Otherwise simplify or improve the existing HIPAA rules.
As a part of these efforts, Covered Entities and other concerned parties also should anticipate that OCR will be focusing heavily in the upcoming year on the potential HIPAA privacy and security implications of efforts by its sister agency, the Office of the National Coordinator for Health Information Technology (“ONC”), to promote greater interoperability of electronic medical records discussed in ONC’s recent 2018 Report to Congress: Annual Update on the Adoption of a Nationwide System for the Electronic Use and Exchange of Health Information (“Report”).
Under the 21st Century Cures Act, Congress gave ONC authority to enhance innovation, scientific discovery, and expand the access and use of health information through provisions related to:
The development and use of upgraded health IT capabilities;
Transparent expectations for data sharing, including through open application programming interfaces (APIs); and
Improvement of the health IT end-user experience, including by reducing administrative burden.
These priorities seek to increase nationwide interoperability of health information and reduce clinician burden. The Report says increases in the adoption of health IT means most Americans receiving health care services now have their health data recorded electronically. However, this information is not always accessible across systems and by all end users—such as patients, health care providers, and payers—in the market in productive ways. While the Report states ONC intends to move forward to promote efforts to help ensure that electronic health information can be shared safely and securely where appropriate to improve the health and care of all Americans, these activities inherently will raise many HIPAA concerns and challenges. Covered Entities and others concerned with these activities will want to carefully monitor the concurrent activities of OCR and ONC as these efforts progress, both to help tailor their planning and compliance efforts to respond to the anticipated demand for greater interoperability as required by ONC and to help shape these rules by providing timely input as appropriate in response to these developments.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of managed care and other health industry, health and other benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer has been continuously involved the design, regulation, administration and defense of managed care and other health and employee benefit, health care, human resources and other staffing and workforce arrangements, contracts, systems, and processes. As a continuous component of this work, Ms. Stamer has worked closely with these and other clients on the design, development, administration, defense, and breach and data recovery of health care, workforce, insurance and financial services, trade secret and other information technology, data and related process and systems development, policy and operations throughout her career.
Scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues.
Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; managed care organizations, insurers, self-insured health plans and other payers and their management; public and private, domestic and international hospitals, health care systems, clinics, skilled nursing, long-term care, rehabilitation and other health care providers and facilities; medical staff, health care accreditation, peer review and quality committees and organizations; managed care organizations, insurers, third-party administrative services organizations and other payer organizations; billing, utilization management, management services organizations; group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; claims, billing and other health care and insurance technology and data service organizations; other health, employee benefit, insurance and financial services product and solutions consultants, developers and vendors; and other health, employee benefit, insurance, technology, government and other management clients.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Beyond her public policy and regulatory affairs involvement, Ms. Stamer also has extensive experience helping these and other clients to design, implement, document, administer and defend workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government; accreditation and quality organizations; private litigation and other federal and state health care industry investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; training and discipline; enforcement, and a host of other related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, and change management; workforce and operations management, and other opportunities and challenges arising in the course of their operations.
Ms. Stamer also has extensive health care reimbursement and insurance experience advising and defending plan sponsors, administrators, insurance and managed care organizations, health care providers, payers, and others about Medicare, Medicaid, Medicare and Medicaid Advantage, Tri-Care, self-insured group, association, individual and employer and association group and other health benefit programs and coverages including but not limited to advising public and private payers about coverage and program design and documentation, advising and defending providers, payers and systems and billing services entities about systems and process design, audits, and other processes; provider credentialing, and contracting; providers and payer billing, reimbursement, claims audits, denials and appeals, coverage coordination, reporting, direct contracting, False Claims Act, Medicare & Medicaid, ERISA, state Prompt Pay, out-of-network and other nonpar insured, and other health care claims, prepayment, post-payment and other coverage, claims denials, appeals, billing and fraud investigations and actions and other reimbursement and payment related investigation, enforcement, litigation and actions. Scribe for the ABA JCEB annual agency meeting with HHS OCR, she also has worked extensively on health and health benefit coding, billing and claims, meaningful use and EMR, billing and reimbursement, quality measurement and reimbursement, HIPAA, FACTA, PCI, trade secret, physician and other medical, workforce, consumer financial and other data confidentiality and privacy, federal and state data security, data breach and mitigation, and other information privacy and data security concerns.
Author of leading works on a multitude of health care, health plan and other health industry matters, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting, former Vice President of the North Texas Health Care Compliance Professionals Association, past Chair of the ABA Health Law Section Managed Care & Insurance Section, past ABA JCEB Council Representative and CLE and Marketing Committee Chair, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer’s health industry clients include public health organizations; public and private hospitals, healthcare systems, clinics and other health care facilities; physicians, physician practices, medical staff, and other provider organizations; skilled nursing, long-term care, assisted living, home health, ambulatory surgery, dialysis, telemedicine, DME, Pharma, clinics, and other health care providers; billing, management and other administrative services organizations; insured, self-insured, association and other health plans; PPOs, HMOs and other managed care organizations, insurance, claims administration, utilization management, and other health care payers; public and private peer review, quality assurance, accreditation and licensing; technology and other outsourcing; healthcare clearinghouse and other data; research; public and private social and community organizations; real estate, technology, clinical pathways, and other developers; investors, banks and financial institutions; audit, accounting, law firm; consulting; document management and recordkeeping, business associates, vendors, and service providers and other professional and other health industry organizations; academic medicine; trade associations; legislative and other law making bodies and others.
A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about contracting, credentialing and quality assurance, compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, privacy and data security, and other risk management and operational matters. Author of works on Payer and Provider Contracting and many other managed care concerns, Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here such as:
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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Businesses and representatives involved in labor-management relations disputes likely to fuel actions before the National Labor Relations Board (NLRB) should brush up theirs understanding of NLRB procedures by reviewing the updated Bench Book just released by the just-released NLRB Judges Division.
The Bench Book serves as an NLRB Trial Manual and is designed to provide NLRB judges with a reference guide during hearings. It is also a useful tool for trial practitioners before the Board because it sets forth Board precedent and other rulings and authorities on certain recurring procedural and evidentiary issues that may arise during a hearing.
As discussed in the Foreword, the basic sources that govern Board ULP hearings are the National Labor Relations Act (NLRA), the Administrative Procedure Act (APA), the Board’s Rules and Regulations and Statements of Procedure, and Board decisions. The Board also applies, so far as practicable, the Federal Rules of Evidence (FRE), and frequently seeks guidance from the Federal Rules of Civil Procedure (FRCP).
The new Bench Book replaces an earlier version issued in January 2018. The new January 2019 edition contains citations to numerous additional Board and court decisions and other authorities. It also contains several new sections, including sections addressing compliance/backpay proceedings and consolidated unfair labor practice (ULP) and representation cases. In addition, certain sections have been substantially reorganized, including those addressing privileged or protected material.
Like the 2018 edition, the new 2019 edition was edited by NLRB Administrative Law Judge (ALJ) Jeffrey Wedekind and contains a Foreword by Chief ALJ Robert Giannasi describing the Bench Book’s history and purpose.
About The Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for management work, coaching, teachings, and publications.
Ms. Stamer is nationally and internationally recognized for her work assisting businesses, governments, and other entities to develop, implement, administer and defend pragmatic strategies for dealing with employment and other workforce and related compensation, employee benefit, performance management and internal controls, insurance, health care and finance concerns to manage risk, operations and other business objectives.
Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce, internal controls and regulatory compliance, change management and other performance and operations management and compliance. Her day-to-day work encompasses both labor and employment issues, as well as independent contractor, outsourcing, employee leasing, management services and other nontraditional service relationships. She supports her clients both on a real-time, “on demand” basis and with longer term basis to deal with all aspects for workforce and human resources management, including, recruitment, hiring, firing, compensation and benefits, promotion, discipline, compliance, trade secret and confidentiality, noncompetition, privacy and data security, safety, daily performance and operations management, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.
The author of the “Texas Payday Act,” and numerous other highly regarded publications on wage and hour and other human resources, employee benefits and compensation publications, Ms. Stamer is well-known for her 30 years of extensive wage and hour, compensation and other management advice and representation of restaurant and other hospitality, health, insurance, financial services, technology, energy, manufacturing, retail, governmental and other domestic and international businesses of all types and sizes.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other concerns by her service as a management consultant, business coach and consultant and policy strategist as well through her leadership participation in professional and civic organizations such her involvement as the Vice Chair of the North Texas Healthcare Compliance Association; Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE: Coalition on Patient Empowerment; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; former Gulf Coast TEGE Council Exempt Organization Coordinator; a founding Board Member and past President of the Alliance for Healthcare Excellence; former board member and Vice President of the Managed Care Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; a member and policy adviser to the National Physicians’ Council for Healthcare Policy; current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section; Past Chair of the ABA Health Law Section Managed Care & Insurance Section; ABA Real Property Probate and Trust (RPTE) Section former Employee Benefits Group Chair, immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative, and Defined Contribution Committee Co-Chair, past Welfare Benefit Committee Chair and current Employee Benefits Group Fiduciary Responsibility Committee Co-Chair, Substantive and Group Committee member, Membership Committee member and RPTE Representative to the ABA Health Law Coordinating Council; past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a former member of the Board of Directors, Treasurer, Member and Continuing Education Chair of the Southwest Benefits Association and others.
Ms. Stamer also is a widely published author, highly popular lecturer, and serial symposia chair, who publishes and speaks extensively on human resources, labor and employment, employee benefits, compensation, occupational safety and health, and other leadership, performance, regulatory and operational risk management, public policy and community service concerns for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.
Want to know more? Seeherefor details about the author of this update, attorney Cynthia Marcotte Stamer, e-mail herhereor telephone Ms. Stamer at(469) 767-8872.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources 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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
The planned shift to demand greater interoperability promises to create new demands for employer-sponsored health plans, health insurers and others involved in the healthcare delivery and payment processes. Health plans and their insurers and sponsors should begin preparing for these new demands, as well as to leverage the new opportunities and manage the new risks they will create.
The Report describes barriers, actions taken, and recommendations as well as ONC’s path forward to implement the 21st Century Cures Act.
Under the 21st Century Cures Act, Congress gave HHS authority to enhance innovation, scientific discovery, and expand the access and use of health information through provisions related to:
The development and use of upgraded health IT capabilities;
Transparent expectations for data sharing, including through open application programming interfaces (APIs); and
Improvement of the health IT end user experience, including by reducing administrative burden.
These priorities seek to increase nationwide interoperability of health information and reduce clinician burden..
Current Status
The Report says increases in the adoption of health IT means most Americans receiving health care services now have their health data recorded electronically. However, this information is not always accessible across systems and by all end users—such as patients, health care providers, and payers—in the market in productive ways. For example:
Despite the individual right to access health information about themselves established by the HIPAA Privacy Rule, patients often lack access to their own health information, which hinders their ability to manage their health and shop for medical care at lower prices;
Health care providers often lack access to patient data at the point of care, particularly when multiple health care providers maintain different pieces of data, own different systems, or use health IT solutions purchased from different developers; and
Payers often lack access to clinical data on groups of covered individuals to assess the value of services provided to their customers.
The Report says these limitations create several problems, including:
Patients should be able to easily and securely access their medical data through their smartphones. Currently, patients electronically access their health information through patient portals that prevent them from easily pulling from multiple sources or health care providers. Patient access to their electronic health information also requires repeated use of logins and manual data updates.
For health care providers and payers, interoperable access and exchange of health records is focused on accessing one record at a time.
Payers cannot effectively represent their members if they lack computational visibility into which health care providers offer the highest quality care at the lowest cost. Without the capability to access multiple records across a population of patients, health care providers and payers will not benefit from the value of using modern computing solutions—such as machine learning and artificial intelligence—to inform care decisions and identify trends.
Payers and employer group health plans which purchase health care have little information on health outcomes. Often, health care providers and payers negotiate contracts based on the health care provider’s reputation rather than on the quality of care that health care provider offers to patients. Health care providers should instead compete based on the entire scope of the quality and value of care they provide, not on how exclusively they can craft their networks. Outcome data will allow payers to apply machine learning and artificial intelligence to have better insight into the value of the care they purchase.
Current Barriers
According to the Report, HHS heard from stakeholders over the past year that barriers to interoperable access to health information remain, including technical, financial, trust, and business practice barriers. These barriers impede the movement of health information to where it is needed across the care continuum. In addition, burden arising from quality reporting, documentation, administrative, and billing requirements that prescribe how health IT systems are designed also hamper the innovative usability of health IT.
Current and Upcoming Actions
The Report states HHS has many efforts to help ensure that electronic health information can be shared safely and securely where appropriate to improve the health and care of all Americans.
ONC also reports Federal agencies, states, and industry have taken steps to address technical, trust, and financial challenges to interoperable health information access, exchange, and use for patients, health care providers, and payers (including insurers). HHS aims to build on these successes through the ONC Health IT Certification Program, HHS rulemaking, health IT innovation projects, and health IT coordination.
In accordance with the Cures Act, HHS is actively leading and coordinating a number of key programs and projects. These include continued work to deter and penalize poor business practices and that HHS conducted multiple outreach efforts to engage the clinical community and health IT stakeholders to better understand these barriers, challenges, and health care provider burden.
Recommendations
The Report makes the following overarching recommendations for future actions HHS plans to support through its policies and that the health IT community as a whole can take to accelerate progress:
Focus on improving interoperability and upgrading technical capabilities of health IT, so patients can securely access, aggregate, and move their health information using their smartphones (or other devices) and health care providers can easily send, receive, and analyze patient data.
Increase transparency in data sharing practices and strengthen technical capabilities of health IT so payers can access population-level clinical data to promote economic transparency and operational efficiency to lower the cost of care and administrative costs.
Prioritize improving health IT and reducing documentation burden, time inefficiencies, and hassle for health care providers, so they can focus on their patients rather than their computers.
The Report also says interoperable access underpins HHS’s efforts to pursue a health care system where data are available when and where needed.
ONC intends to particularly focus on promoting open APIs. Open APIs are technology that allow one software program to access the services provided by another software program and can improve access and exchange of health information. ONC says APIs can:
Support patients’ ability to have more access to information electronically through, for example, smartphones and mobile applications. HHS applauds the emergence of patient-facing applications that allow patients to access, aggregate, and act on their health information; and
Allow payers to receive necessary and appropriate information on a group of members without having to access one record at a time.
Increase institutional accountability, support value- based care models, and lead to competitive medical care pricing that benefits patients.
The Report claims patients, health care providers, and payers with appropriate access to health information can use modern computing solutions to generate value from the data. Improved interoperability can strengthen market competition, result in greater quality, safety, and value for the healthcare system, and enable patients, health care providers, and payers to experience the benefits of health IT.
Prepare For Enhanced Operability Requirements
ONC’s plan to achieve greater interoperability presents new business and compliance planning opportunities and challenges for health care providers, health insurers and other payers, health data and information technology (IT) providers and others. Among other things, participants in the healthcare system and their suppliers will need to prepare to comply with new expectations and mandates for interoperability. Meeting these demands will require financial expenditures as well as present technological challenges.The increased availability and accessto electronica medical records and information resulting from these changes also a can be expected to drive new challenges and demands. Among other things, businesses relying on control of health information or records to influence or control patience, reimbursement, or other business value need to reevaluate and adjust their business models accordingly.
Improve accessibility and interoperability also is likely to create new expectations and demands by patients, payers, other providers and perhaps most significantly for providers and payers, regulators. Participants in the system will need to understand these applications and prepare to both defend their business performance as well as their compliance taking into account these new demands.
Amid all of this, of course, providers, pears, and their business associates can anticipate continued if not enhanced demands for enhanced data security and privacy protections and accompanying enforcement of these standards.
As ONC move forward on its plans to enhance interoperability, all concerned stakeholders will want to monitor developments and provide thoughtful and timely input. The time to get started is now. ONC and it’s sister agency, the Office of Civil Rights currently are inviting public comments about how to achieve these and other health IT and privacy improvements. Those interested in providing input should make sure their comments are submitted by the applicable deadlines next month.
ONC and it’s sister agency, the Office of Civil Rights currently are inviting public comments about how to achieve these and other health IT and privacy improvements. Read the full Report here and share your input by the specified deadlines.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of managed care and other health industry, health and other benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer has been continuously involved the design, regulation, administration and defense of managed care and other health and employee benefit, health care, human resources and other staffing and workforce arrangements, contracts, systems, and processes. As a continuous component of this work, Ms. Stamer has worked closely with these and other clients on the design, development, administration, defense, and breach and data recovery of health care, workforce, insurance and financial services, trade secret and other information technology, data and related process and systems development, policy and operations throughout her career.
Scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues.
Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; managed care organizations, insurers, self-insured health plans and other payers and their management; public and private, domestic and international hospitals, health care systems, clinics, skilled nursing, long-term care, rehabilitation and other health care providers and facilities; medical staff, health care accreditation, peer review and quality committees and organizations; managed care organizations, insurers, third-party administrative services organizations and other payer organizations; billing, utilization management, management services organizations; group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; claims, billing and other health care and insurance technology and data service organizations; other health, employee benefit, insurance and financial services product and solutions consultants, developers and vendors; and other health, employee benefit, insurance, technology, government and other management clients.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Beyond her public policy and regulatory affairs involvement, Ms. Stamer also has extensive experience helping these and other clients to design, implement, document, administer and defend workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government; accreditation and quality organizations; private litigation and other federal and state health care industry investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; training and discipline; enforcement, and a host of other related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, and change management; workforce and operations management, and other opportunities and challenges arising in the course of their operations.
Ms. Stamer also has extensive health care reimbursement and insurance experience advising and defending plan sponsors, administrators, insurance and managed care organizations, health care providers, payers, and others about Medicare, Medicaid, Medicare and Medicaid Advantage, Tri-Care, self-insured group, association, individual and employer and association group and other health benefit programs and coverages including but not limited to advising public and private payers about coverage and program design and documentation, advising and defending providers, payers and systems and billing services entities about systems and process design, audits, and other processes; provider credentialing, and contracting; providers and payer billing, reimbursement, claims audits, denials and appeals, coverage coordination, reporting, direct contracting, False Claims Act, Medicare & Medicaid, ERISA, state Prompt Pay, out-of-network and other nonpar insured, and other health care claims, prepayment, post-payment and other coverage, claims denials, appeals, billing and fraud investigations and actions and other reimbursement and payment related investigation, enforcement, litigation and actions. Scribe for the ABA JCEB annual agency meeting with HHS OCR, she also has worked extensively on health and health benefit coding, billing and claims, meaningful use and EMR, billing and reimbursement, quality measurement and reimbursement, HIPAA, FACTA, PCI, trade secret, physician and other medical, workforce, consumer financial and other data confidentiality and privacy, federal and state data security, data breach and mitigation, and other information privacy and data security concerns.
Author of leading works on a multitude of health care, health plan and other health industry matters, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting, former Vice President of the North Texas Health Care Compliance Professionals Association, past Chair of the ABA Health Law Section Managed Care & Insurance Section, past ABA JCEB Council Representative and CLE and Marketing Committee Chair, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer’s health industry clients include public health organizations; public and private hospitals, healthcare systems, clinics and other health care facilities; physicians, physician practices, medical staff, and other provider organizations; skilled nursing, long-term care, assisted living, home health, ambulatory surgery, dialysis, telemedicine, DME, Pharma, clinics, and other health care providers; billing, management and other administrative services organizations; insured, self-insured, association and other health plans; PPOs, HMOs and other managed care organizations, insurance, claims administration, utilization management, and other health care payers; public and private peer review, quality assurance, accreditation and licensing; technology and other outsourcing; healthcare clearinghouse and other data; research; public and private social and community organizations; real estate, technology, clinical pathways, and other developers; investors, banks and financial institutions; audit, accounting, law firm; consulting; document management and recordkeeping, business associates, vendors, and service providers and other professional and other health industry organizations; academic medicine; trade associations; legislative and other law making bodies and others.
A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about contracting, credentialing and quality assurance, compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, privacy and data security, and other risk management and operational matters. Author of works on Payer and Provider Contracting and many other managed care concerns, Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
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Today’s diverse business environment creates a demand for businesses to think creatively about their employment relationships, including creative scheduling and pay arrangements. While many of these arrangements produce win/win solutions for both the business and its employees, businesses need to use care properly to evaluate and manage minimum wage, overtime, and other wage and hour law responsibilities under the Fair Labor Standards Act (“FLSA”) and applicable state law.
A new Department of Labor Wage and Hour Division (WHD) Fair Labor Standards Act (FLSA) opinion letter published December 21 illustrates this point. WHD Opinion Letter FLSA 2018-28 (Dec. 21, 2018) evaluates FLSA minimum wage and overtime compliance of one employer’s innovative strategy of paying certain hourly employees one hourly rate while the employee was working with clients and a second, lower hourly rate of pay for time that the employee spent traveling between client sites throughout the day.
In WHD Opinion Letter FLSA 2018-28 (Dec. 21, 2018), the WHD expresses reservations about whether the specific practices of the requesting employer for calculating overtime for workers paid different hourly rates for different categories of work during the same work week fulfill the FLSA overtime requirements under certain circumstances, but blessed the compliance of the practice of the employer with the FLSA minimum wage rules.
While only the employer that actually requested the ruling that resulted in the Opinion actually may rely upon the Opinion, the ruling highlights both the potential opportunity for businesses to structure innovative compensation and scheduling arrangements within the requirements of the FLSA and other laws, as well as the legal exposures that employers using innovative staffing and compensation arrangement risk by failing to appropriately manage these responsibilities.
FLSA Minimum Wage & Overtime Requirements Generally
The FLSA generally requires that employers pay covered, nonexempt employees receive at least the federal minimum wage (currently $7.25 per hour) for all hours worked. See 29 U.S.C. § 206(a)(1). According to previously published WHD guidance, WHD will consider an employer to have fulfilled this requirement “if the employee’s total wages for the workweek divided by compensable hours equal or exceed the applicable minimum wage.” See WHD Opinion Letter FLSA2004-8NA (Aug. 12, 2004)(different pay rates for trucking company workers); WHD Field Operations Handbook § 30b02.
In addition to the requirement to pay at least the minimum wage, the FLSA also requires that covered, nonexempt employees receive overtime compensation of at least one and one-half times their regular rate of pay for time worked in excess of 40 hours per workweek. See 29 U.S.C. § 207(a)(1). To determine the regular rate of pay for purposes of calculating the required overtime, an employer generally divides the employee’s “remuneration for employment” (subject to the exclusions in 29 U.S.C. § 207(e)) by the total hours worked for the workweek. See 29 C.F.R. § 778.109.
WHD Opinion Letter FLSA 2018-28
In WHD Opinion Letter FLSA 2018-28 (Dec. 21, 2018), WHD addressed its views regarding a home health provider’s practice for calculating the wages due to home health aide services that traveled to home health clients’ homes, who were required to travel to different client home locations during the workday. The employer establishes different rates of pay for time spent working with clients versus time spent traveling from location to location. To calculate weekly pay, that employer multiplied an employee’s time with clients by his hourly pay rate established by the employer for time spent working with clients. The employer then divides the product by the employee’s total hours worked, which includes both the client time and the travel time. The employer guarantees that the quotient meets both federal and state minimum wage rate requirements.
According to the facts published in the WHD Opinion Letter, the home health provider represented that a typical standard rate of pay is $10.00 per hour with a client including travel time,” and that “[i]f any employee works over 40 hours (total paid hours and [travel] time) in any given workweek, the employer pays the employee time and a half for all time over 40 hours at a rate of $10.00.”
Based upon the factual representations made by the home health agency, WHD ruled the employer’s compensation plan complies with the FLSA’s minimum wage requirements but expressed concern about whether the employer’s practices for calculating overtime complied with the FLSA.
Concerning the FLSA minimum wage compliance, the WHD found that the employers practice fulfilled the FLSA minimum wage requirements because even though the employee’s average hourly pay rate varied from workweek to workweek, the employer always ensured that the average hourly pay rate exceeded the FLSA’s minimum wage requirement for all hours worked.
In contrast, however, WHD expressed concern about the compliance of the employer’s compensation plan with the FLSA’s overtime requirements under certain circumstances. WHD states in the Opinion that the employer will not pay all overtime due to employees whose actual rate of pay exceeds $10 per hour if the employer always assumes a regular rate of pay of $10 per hour when calculating overtime due. See 29 C.F.R. § 778.107.
The Opinion notes that “neither an employer nor an employee may arbitrarily choose the regular rate of pay; it is an “actual fact” based on “mathematical computation.” Walling v. Youngerman-Reynolds Hardwood Co., Inc., 325 U.S. 419, 424–25 (1945); 29 C.F.R. § 778.108.
On the other hand, the Opinion also states that the employer’s compensation plan would comply with the FLSA’s overtime requirements for all employees whose actual regular rates of pay are less than $10 per hour, as an employer may choose to pay an overtime premium in excess of the required amount. See, e.g., Molina v. First Line Solutions LLC, 566 F. Supp. 2d 770, 779 (N.D. Ill. 2007).
The cautionary lessons from FLSA Opinion 2018-28 echo those WHD previously has issued alerting businesses to the need to use care to properly understand and meet FLSA requirements when structuring and administering two-tier hourly pay or other innovative pay and scheduling arrangements.
The need to attend to the details of FLSA compliance when adopting and administering customized pay arrangements is further illustrated by WHD’s review of the FLSA compliance of a school district employer’s customized pay arrangement for its drivers in FLSA2004-8NA in 2004. While the WHD found issues with the FLSA compliance of the special arrangement as administered by the school district, guidance provided by the Opinion also makes clear the type of adjustments to the arrangement the employer would need to adopt and apply to continue using the arrangement in its modified form.
Specifically, FLSA 2004-8NA considered a school district’s contractually negotiated arrangement to pay its drivers pursuant to a contractual arrangement under which the employer agreed to pay regular drivers a specified hourly rate with a minimum guarantee of two hours driving time pay per route/additional assignment. The contract also provided that for an assigned trip of less than two hours, a driver that wanted to receive pay for hte minimum guaranteed time had to perform regular maintenance in the bus garage or other work as assigned by the School District to complete the two hours. Furthermore, the contract also specified that “Any regular driver may complete a voucher for payment for additional time if their morning or afternoon route exceeds his/her assigned time by one half hour or more” and that the employers only would pay additional wages for the actual added time worked to employees that worked at least 30 minutes or more without rounding to the next hour for calculating wages. Thus, an employee that worked an additional twenty-five minutes beyond his/her normal shiftwould not be compensated for the extra time worked. Meanwhile, a bus driver that returned fifty minutes past the scheduled time received pay for an additional 50 minutes of work.
WHD’s issue with the arrangement was that the rounding practices applied under the arrangement meant that the school district did not ensure that workers were paid at least the minimum wage per hour for all hours worked and might under some circumstances not properly pay overtime due to workers.
While acknowledging that Labor Regulation Section 785.47 allows employers to disregard ‘insubstantial or insignificant periods of time outside the scheduled working hours that cannot practically be precisely recorded as de minimis, WHD noted that the de minimis rule applies only where a few seconds or minutes of work are involved and where the failure to count such time is due to considerations justified by industrial realities. It does not allow an employer by contract or otherwise to arbitrarily fail to count as hours worked any part, however small, of the employee’s fixed or regular working time. Where an employer fails to pay an employee for any part of the employee’s fixed or regular working time, however small, this would be considered a violation of the FLSA.
Concerning the FLSA’s requirement that the employer pay hourly employees at least the minimum wage, WHD noted that in non-overtime workweeks or in workweeks in which the overtime provisions do not apply, WHD would consider the employer to have met the minimum wage requirement if the employee’s total wages for the workweek divided by compensable hours equal or exceed the applicable minimum wage. WHD added that this principle would apply even if the employer technically did not compensate the emploeye for time which is compensable under the FLSA.
Concerning the overtime requirements of the FLSA, however, WHD had greater reservations. As WHD noted in the 2004 Opinion, when a covered and non-exempt employee works overtime, a different rule applies. The FLSA overtime rule requires that an employer pay the employee for all hours worked at the agreed rate plus the overtime premium (one-half the regular rate) for all overtime hours. Therefore, before an employee can be said to be paid statutory overtime compensation due, the employee must first be paid all straight time wages due for all hours worked under any express or implied contract or under any applicable statute (see 29 CFR Part 778.315). As a result, WHD found that the FLSA overtime requirements would require the employer both to ensure that the employee actually was paid for each hour of straight time at the regular rate of pay plus time and a half of the regular rate of pay for each overtime hour worked.
WHD additionally noted in the 2004 Opinion that the employer also risked violation of Labor Regulation 516.2(a)(7)’s requirement that the employer maintain accurate recordkeeping of hours worked each workday and total hours worked each workweek for covered, nonexempt employees if the payroll records do not accurately record the number of hours worked in one or more of the workdays.
Takeaways For Other Employers About Using Variable Pay Rates & Other Innovative Scheduling & Pay Practices
While other employers actually cannot rely upon either WHD Opinion Letter FLSA 2018-28, FLSA 2004-8NA, or most other WHD Opinion Letters, WHD Opinion Letters and other publishe guidance, as well as judicial precedent and the enforcement conduct by WHD provide a wealth of valuable insights for other employers about the potential FLSA opportunities and pitfalls of using variable rates of pay or other innovative compensation, scheduling and timekeeping practices for compensating hourly employees. Employers using or contemplating using innovative compensation, scheduling or recordkeeping practices should should seek assistance from experienced legal counsel with accessing and using this guidance to help reduce the risk that a proposed innovative compensation or other practice for scheduling or paying nonexempt hourly workers will trigger unanticipated FLSA or other liabilities..
Make Wage & Hour Compliance & Risk Management Priority To Reduce Exposures
Aside from using caution to properly calculate and pay overtime for workers paid different rates for different types of work, employers also need to use care to avoid other common FLSA and other wage and hour overtime violations.
With the Trump Administration U.S. Department of Labor Wage and Hour Division (WHD) continuing its aggressive investigation and enforcement of minimum wage, overtime and other Fair Labor Standards Act (FLSA) and other wage and hour laws it used to recover more than $1.2 billion in back pay for workers over the past five years, Agriculture, Amusement, Apparel Manufacturing, Auto Repair, Child Care Services, Construction, Food Services, Guard Services, Hair, Nail & Skin Care Services, Health Care, Hotels and Motels, Janitorial Services, Landscaping Services, Retail, and Temporary Help and other U.S. employers should evaluate their current and past potential liability exposures and consider using the new pilot WHD self-audit Payroll Audit Independent Determination (PAID) program announced by WHD on March 6 or other options to mitigate their liability for their own or temporary or other contract labor’s existing or past minimum wage and hour law violations.
U.S. employers and leaders with wage and hour management authority risk substantial liability from unresolved violations of the FLSA and other federal and state wage and hour laws.
One of the most frequently violated and litigated federal employment laws, the FLSA generally requires that U.S. employers pay nonexempt employees at least $7.25 per hour for all regular compensable hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. In general, FLSA “hours worked” includes all time an employee must be on duty, or on the employer’s premises or at any other prescribed place of work, from the beginning of the first principal work activity to the end of the last principal activity of the workday. Similar state or local laws often also impose higher minimum wage, compensable hour, break and other requirements than federal law requires.
The FLSA and most applicable state and local wage and hour laws also 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 and prohibit retaliation by an employer or other person again an employee or other person for asserting rights under the law or cooperating in a WHD investigation about FLSA compliance.
Beyond these FLSA minimum wage and overtime requirements, WHD regulations and court decisions provide guidance on when an employer must treat “on-call” time, travel time, meal and break times, and certain other time periods as compensable hours worked by a non-exempt employee, when “comp time” in lieu of the payment of wages is permitted, various alternative methods for calculating overtime under certain special circumstances, and various other rules applicable to various special circumstances. Other special rules also can apply to businesses employing tipped employees, home workers, child labor, certain farm workers, workers working with special visas, and other special classes or workers. Furthermore, collective bargaining agreements or other contracts or other federal, state or local laws also sometimes impose additional requirements for employers to pay higher “prevailing wages,” apply special rules for counting compensable work hours, and provide specified fringe benefits or other special compensation or protections or other wages, when the employer is a government contractor or subcontractor covered by the Service Contract Act, the Davis Bacon Act or other similar federal or state statutes.
Over the past decade, WHD and private enforcement of the FLSA and other wage and hour laws generally has skyrocketed in part driven by the Obama Administration’s prioritization on raising the minimum wage, extending federal wage and hour protections, and expanding WHD and other enforcement. WHD’s success in recovering more than $1.2 billion in back pay for workers over the past five years and other achievements in expanding its own and private oversight and enforcement and the continuation of these efforts under the Trump Administration means all employers need to view wage and hour law as a major liability risk requiring conscientious management. However, the risk of enforcement is particularly acute for businesses in the following industries, designed for heightened enforcement and other attention as “Low Wage High Violation Industries” based on their particularly high record of noncompliance: Agriculture, Amusement, Apparel Manufacturing, Auto Repair, Child Care Services, Construction, Food Services, Guard Services, Hair, Nail & Skin Care Services, Health Care, Hotels and Motels, Janitorial Services, Landscaping Services, Retail, and Temporary Help.
Scrutiny & Challenges To Contract & Outsourced Labor Relationships Rising
Beyond assessing their FLSA and other wage and hour compliance and associated exposures from the worker on their own payroll, U.S. employers and their leaders also should take care to carefully evaluate potential exposures from nontraditional services relationships and act to manage those risks.
Misclassification of workers providing services as non-employees increasingly causes U.S. businesses to incur unanticipated FLSA and other wage and hour law liability for back pay, liquidated punitive damages, civil monetary penalties and other liability, in part because of WHD’s stepped up worker education, scrutiny, investigation, and enforcement challenging employers’ treatment of workers as non-employees.
The FLSA and state and local rules generally apply to any workers that the employer who receives its services cannot prove is not its common law employee or an exempt employee within the meaning of the FLSA. The FLSA and most other wage and hour laws generally rules presume that workers rendering services are common law employees of the business in most circumstances. Businesses should evaluate their FLSA exposures from both workers they recognize as common law employees and those performing services in capacities that the business typically does not view as common law or otherwise covered by the FLSA when managing FLSA compliance and evaluating exposures, employers should exercise care not to overlook potential responsibilities and exposures associated with outsourced services provided through relationships characterized by the employer as subcontractors, independent contractors, lease employees, or other common outsourced relationships.
Court decisions and regulations provide guidance for determining when leased, contract, jointly employed, independent contractor or other non-traditionally employed workers will be treated as employees of a business, As in many other enforcement areas, The WHD and many other agencies increasingly view the misclassification of workers as something other than employees, such as independent contractors, leased employees and other common “outsourced” relationship as a serious problem for affected employees, employers and to the entire economy.
According to the Labor Department, misclassified employees are often denied access to critical benefits and protections, such as family and medical leave, overtime, minimum wage and unemployment insurance and other rights. The Labor Department also says employee misclassification also generates substantial losses to state and federal treasuries, and to the Social Security and Medicare funds, as well as to state unemployment insurance and workers compensation funds. To address these and other concerns, the Labor Department has joined other agencies like the Internal Revenue Service increasingly is challenging employers’ treatment of workers as exempt from FLSA and other legal obligations as independent contractors or otherwise.
In response to these concerns, WHD published guidance warning employers about misclassification of workers about potential violation of the FLSA by improper misclassification of workers as independent contractors or non-employed. See Department of Labor Issues Guidance of Misclassification of Workers. DOL’s key points in the guidance are that:
Most workers are employees under the broad definitions of the FLSA;
No single factor is determinative;
Employers should be wary of classifying workers as independent contractors merely because the workers control some aspects of their work; and
The ultimate question is whether a worker “is really in business for him or herself (and thus is an independent contractor) or is economically dependent on the employer (and thus is an employee).
Other guidance makes clear that WHD and other agencies concerns about misclassification extend beyond workers labeled independent contractors to include scrutiny of subcontractor, day labor, temporary, leased employee and a broad range of other outsourced services relationships. See here,
Employers often face substantial challenges responding to, much less, containing their FLSA exposures when a WHD or a private litigant successfully challenges the employer’s classification of the worker as a non-employee for a variety of reasons. Beyond the likelihood of violations resulting from the employer’s failure to recognize it might owe minimum wage and overtime duties to the worker, an employer often lacks records and other data needed to fulfill recordkeeping and posting requirements and to accurately demonstrate hours worked and hourly rates to limit resulting back pay exposures because these workers are not treated as part of the employer’s workforce. Obtaining the necessary records to respond to a WHD or other investigation, lawsuit or other action often proves challenging because the independent contractor, leasing company, or other provider or of the services often becomes unavailable, is disincentivized by its own noncompliance or other interests, has failed to maintain necessary documentation or otherwise fails to cooperate in the delivery of these materials. Furthermore, as leased employee, staffing, independent contractor and other outsourced arrangements invoice services at higher rates of compensation payment than the employer might otherwise have paid a traditionally employed worker, the lack of records and elevated compensation rates tend to push up the compensation used to calculate back pay and other awards. Accordingly, employers utilizing these arrangements should use care in structuring and administering these arrangements properly to evaluate their likely FLSA and other treatment and to manage these risks.
FLSA Big Liability Risk
Under the FSLA and applicable state wage and hour laws, violations of the FLSA and other federal or state wage and hour laws expose employers to substantial back pay, interest and punitive damages, civil monetary penalties for willful or and in the case of willful or repeated violations and in the case of willful violations, criminal prosecution.
Because of the ability to recover liquidated damages and attorneys’ fees in addition to unpaid back pay, private enforcement of the FLSA is common. The FLSA generally allows employees wrongfully denied wages in violation of the FLSA to bring lawsuits to enforce their rights provided that the WHD has not or does not intervene to enforce those rights on the worker’s behalf. Workers successfully proving an employer violated their FLSA rights typically can recover back pay, plus liquidated damages, interest, attorneys’ fees and other costs of enforcement from the breaching employer. In some cases, Corporate officers such as CEOs, CFOs or COOs and other management leaders with control over the breaching employer’s financial affairs also be held personally liable for the unpaid wages See e.g., Lamonica v. Safe Hurricane Shutters, +2013 U.S. App. LEXIS 4599 (11th Cir. 2013)(ruling personal liability for FLSA violations can attach to any individual with control over an employer’s financial affairs who could potentially cause an employer to violate FLSA).
As an alternative to private litigation, the FLSA empowers the WHD to supervise or if necessary, enforce through litigation the rights of workers against a breaching employer to recover back pay plus liquidated damages in an amount equal to the wrongfully denied wages. WHD also can pursue injunctive relief against noncompliant employers.
When the employer is a repeat offender or willfully violated the FLSA, additional consequences attach. A violation is “willful” for purposes of FLSA criminal prosecution if it is deliberate, voluntary, and intentional. A fine of up to $10,000 on the first conviction
When an employer’s violation of the FLSA is repetitious or willful, the FLSA empowers WHD to impose civil money penalties (CMPs) against the noncompliant employer in addition to the recovery of back pay and liquidated damages. Intended to discourage future noncompliance by an employer guilty of violating the FLSA, CMPs for a “repeated” violation are assessable when the employer had previously violated the minimum wage or overtime requirements of the FLSA. CMPs for a “willful” violation may be assessed when it can be shown that the employer knew that its conduct was prohibited by the FLSA or showed reckless disregard for the requirements of the FLSA. CMPs ordinarily are imposed based on violations occurring within the normal two-year investigation period. Where violations are determined to be willful, the investigation will cover a three-year period.
The applicable 2018 CMP amounts, which are adjusted annually for inflation, are as follows:
Type of Violation
Statutory Citation
CFR Citation
Maximum Civil Monetary Penalty on or before 1/2/2018
Maximum Civil Monetary Penalty on or after 1/3/2018
Homeworker:
Violation of recordkeeping, monetary, certificate or other statutes, regulations or employer assurances.
29 USC 211(d)
29 CFR 530.302
$1,005
$1,026
Child labor:
(1) Violation of child labor standards (sec 212 or 213(c));
29 USC 216(e)(1)(A)(i)
29 CFR 570.140(b)(1) and 29 CFR 579.1(a)(1)(i)(A)
$12,278
$12,529
(2) Violation of child labor standards (sec 212 or 213(c)) that causes the serious injury or death of a minor;
29 USC 216(e)(1)(A)(ii)
29 CFR 570.140(b)(2) and 29 CFR 579.1(a)(1)(i)(B)
$55,808
$56,947
(3) Willful or repeated violation of child labor standards (sec 212 or 213(c)) that causes the serious injury or death of a minor
29 USC 216(e)(1)(A)(ii)
29 CFR 570.140(b)(2) and 29 CFR 579.1(a)(1)(i)(B)
$111,616
$113,894
(4) Repeated or willful violation of section 206 or 207.
29 USC 216(e)
29 CFR 579.1(a)(2)
$1,925
$1,964
Minimum Wage and Overtime:
Repeated or willful violation of section 206 or 207.
29 USC 216(e)(2)
29 CFR 578.3(a)
$1,925
$1,964
Although typically reserved for more egregious violations, “willful” violations of the FLSA can trigger criminal prosecution by the Department of Justice. A fine of up to $10,000, or a term of imprisonment of up to six months, or both, on all convictions after the first conviction
In addition to or instead of lawsuits by the Secretary of Labor for back wages or injunctive relief, willful violation of the FLSA also can trigger criminal prosecutions against an employer by the Department of Justice. Criminal penalties for willful FLSA violations include a fine of up to $10,000, or a term of imprisonment of up to six months, or both, on all convictions after the first conviction. Since enforcement actions by the DOJ can be brought instead of or in addition to lawsuits by WHD for back wages or injunctive relief, an employer that willfully violates the FLSA can be ordered to pay liquidated damages and back-pay, as well as any court imposed criminal fine or penalty.
Always popular, WHD and private enforcement of the FLSA initially spiked upward following the highly publicized George W. Bush Administration’s implementation of updated FLSA “white collar” regulations regarding the classification of workers as exempt. The Obama Administration’s highly publicized, but unsuccessful, campaign to increase the minimum wage and aggressive FLSA educational outreach and enforcement further fueled this trend. While President Trump has opposed proposals to increase the federal minimum wage, he has expressed his commitment to protect workers’ FLSA rights through continued vigorous enforcement of the FLSA minimum wage, overtime and other rules.
As a result of its aggressive enforcement commitments, WHD takes credit for having recovered more than $1.2 billion in back wages on behalf of more than 1.3 million workers over the past five years. See here. The following WHD enforcement statistics reflect that its commitment to FLSA enforcement has continued during President Trump’s tenure in office.
Cases with Violations
Back Wages
Employees Receiving Back Wages(duplicated 1)
FY 2011
Minimum Wage
12,450
$29,327,527
89,305
Overtime
11,990
$140,328,012
204,243
FY 2012
Minimum Wage
12,532
$35,270,524
107,005
Overtime
12,462
$148,560,700
218,137
FY 2013
Minimum Wage
12,403
$38,470,100
103,671
Overtime
12,108
$130,703,222
174,197
FY 2014
Minimum Wage
11,042
$36,732,407
106,184
Overtime
11,238
$136,239,001
174,365
FY 2015
Minimum Wage
10,642
$37,828,554
86,229
Overtime
10,496
$137,701,703
173,330
FY 2016
Minimum Wage
10,722
$34,964,350
81,870
Overtime
10,884
$171,917,225
209,819
FY 2017
Minimum Wage
10,687
$31,213,737
69,588
Overtime
10,823
$157,592,682
183,272
Pilot PAID Program May Offer New Option To Resolve WHD Exposures
When an audit uncovers potential violations, some employers may want to explore options to voluntarily resolve their exposures. To encourage voluntary compliance, the WHD on March 6, 2018 announced a new pilot self-audit Payroll Audit Independent Determination (PAID) program that offered employers accepted into the program after voluntarily disclosing violations to resolve their exposure WHD penalties and liquidated damages commonly assessed by WHD against employers for violating the FLSA minimum wage and overtime violations by:
Voluntarily disclosing the violations to WHD before becoming subject to investigation or enforcement and requesting admission to the program;
Paying affected workers 100 percent of the unpaid back pay due wrongfully denied by the end of the next full pay period after receiving the summary of unpaid wages from WHD confirming the back pay amount;
Working with WHD prospectively to correct noncompliant practices; and
Taking other actions to correct and prevent a recurrence of those violations.
Originally slated as a pilot program set to expire after six months, the PAID program remains an opportunity offered by WHD on its website, which also shares “testimonials” from various employers that report having participated in the PAID program.
While participation in the PAID program purpoerts to offer allows a participating employer to settle its exposure to prosecution for those violations by WHD without incurring some of themore extraordinary penalties that WHD is authorized to assess, many practitioners and employers report having achieved similar and in some cases even more favorable outcomes through negotiations conducted outside the PAID program. Furthermore, many employers may face challenges in using the program as a result of the inability to marshal the required capital to pay 100 percent of the back pay due within the required time period.
Beyond this challenge, employers evaluating whether to seek relief through the new PAID program also may need to weigh a variety of other concerns.
For instance, employers considering participation need to understand that the settlement only addresses potential liability from WHD enforcement. While WHD’s requirement that a participating employer pay affect 100 percent of any wrongfully denied back pay to the impacted employees generally would reduce the actual back pay damages recoverable by an employee in a private enforcement action, WHD says settlements reached with the WHD under the PAID program does not prevent employees wrongfully denied wages in violation of FSLA from bringing private lawsuits. Rather, WHD states that it will be purely the employee’s choice whether to accept the payment of back wages the employer agrees to pay under the PAID program settlement. If the employee chooses to not accept the payment, the employee will not release any private right of action. Additionally, if the employee chooses to accept the payment, the employee will not grant a broad release of all potential claims under the FLSA. Rather, the releases are tailored to only the identified violations and time period for which the employer is paying the back wages. The WHD also cautions that regardless of whether the employee accepts or rejects the back pay specified in the PAID program, the FLSA will prohibit employers from retaliating against the employee for his or her choice. Furthermore, while the payment of previously unpaid amounts could reduce the amount of unpaid wages for purposes of determining liability for state wage and hour law violations, the WHD settlement does not directly impact or release liability for any state wage and hour violations.
While any FLSA covered employer may use the program, interested employers should understand that acceptance into the program is not automatic and is not available for all FLSA violations. Rather, the PAID program only covers potential violations of the FLSA’s overtime and minimum wage requirements that an employer self-identifies and voluntarily discloses and resolves in accordance with its PAID program settlement with WHD. An employer cannot use the PAID program to resolve any issues for which WHD is already investigating the employer, or which the employer is already litigating in court, arbitration, or otherwise. An employer likewise may not initiate the process when an employee’s representative or counsel has already communicated an interest in litigating or settling the issue. Employers using the Paid program also must be prepared to correct the noncompliant practices that resulted in the violations settled under the PAID program. According to the WHD, WHD will not allow employers to use the program to repeatedly resolve the same violations, as this program is designed to identify and correct non-compliant practices. By allowing employers to participate in the PAID program, WHD also does not waive its right to conduct any future investigations of the employer.
Employers contemplating participation in the PAID program generally should conduct a self-audit after updating their understanding of WHD program and compliance assistance materials and other WHD guidance. Because the information, analysis and discussions conducted in this process may be legally sensitive, employers generally will want to engage qualified legal counsel before initiating these processes to advise and assist the employer about the adequacy and risks of its existing practices, recommendations for redressing known compliance issues and other risks as well as opportunities and procedures for qualifying certain of these actions and discussions for coverage under attorney-client privilege, attorney work product or other evidentiary protections.
Whether or not an employer decides based on the audit to pursue compliance resolution through the PAID program, employers generally should work with their legal counsel within the scope of attorney client privilege to organize and retain documentation of their audit, its findings of compliance and, for any potential compliance issues, corrective actions taken to redress those issues retrospectively and prospectively, and other documentation that the employer might need to pursue resolution under the PAID program or otherwise respond to and defend against a WHD or private charges brought by an employee in the future.
If the employer wishes to pursue resolution of potential violations under the PAID program based on review of the audit findings in conjunction with their legal counsel, the employer in coordination with the legal counsel within the scope of attorney client privilege should work together to prepare and assemble the records and information WHD will expect the employer to provide in the initial phases of the process including:
A list of the specific potential violations uncovered
The specific employees affected
The specific timeframes in which each employee was affected, and
The calculation of the amount of back wages the employer believes are owed to each employee.
Each of the calculations described above—accompanied by both evidence and explanation concerning how the calculations were made;
A concise explanation of the scope of the potential violations for possible inclusion in a release of liability;
A certification that the employer reviewed all of the information, terms, and compliance assistance materials;
A certification that the employer is not litigating the compensation practices at issue in court, arbitration, or otherwise, and likewise has not received any communications from an employee’s representative or counsel expressing interest in litigating or settling the same issues; and
A certification that the employer will adjust its practices to avoid the same potential violations in the future.
After preparing this information, the employer generally will want to arrange for legal counsel to make the preliminary contact to the WHD to request that the WHD admit the employer to the PAID program. During the preliminary contact, the WHD will require that a list of the specific potential violations, and the identity, specific time frame and back pay amount that employer believes it owes to each affected employee as a prerequisite to considering the request for admission to the program. If the WHD approves the employer’s request, WHD will require that the employer or its legal counsel on its behalf provide the remaining information listed above. After evaluating this information, WHD will provide notification of the next steps, including the collection of any other information necessary for WHD to assess and confirm the back wages due for the identified violations.
Current published guidance states that after WHD assesses the back wages due, it will issue a summary of unpaid wages. WHD will also issue forms describing the settlement terms for each employee, which employees may sign to receive payment. The release of claims provided in the form will match the previously agreed-upon language and, again, must be limited to only the potential violations for which the employer had paid back wages. The PAID program settlement will require the employers to pay the back pay amounts confirmed in the summary of unpaid wages promptly and in full by the end of the next payroll period after receiving the WHD summary of wages confirming the back pay amounts required.
Audit & Act To Mitigate FLSA & Other Wage & Hour Risks
Regardless of whether an employer elects to pursue using the new PAID program, all FLSA covered employers generally should consult with legal counsel within the scope of attorney-client privilege to assess the defensibility of their existing practices for classifying and compensating workers under existing Federal and state wage and hour laws, tighten contracting and other compliance oversight in relation to outsourced services, and about using the PAID program and other options to minimize their potential liability under applicable wages and hour laws. Conducting this analysis within the scope of attorney-client privilege is important because the analysis and discussions are highly sensitive both as potential evidence for wage and hour and other legal purposes. Consequently, businesses and their leaders generally will want to arrange for this work to be protected to the extent by attorney-client privilege, work product and other evidentiary protections against discovery by WHD, employees or others for FLSA or other workforce enforcement actions.
As a part of this process, businesses and their leaders generally should plan to:
Review subcontractor, temporary, lease employee, independent contractor and other outsourced labor and services relationship for potential risk of worker reclassification and tighten contracting and other procedures;
Audit the position of each employee currently 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;
If the employer hires any individuals under age 18, audit and implement appropriate procedures to ensure its ability to demonstrate compliance with all applicable FLSA child labor rules;
If the employer is a government contractor or subcontractor or otherwise performs any services on projects funded with federal or state funds, evaluate the applicability and fulfillment of any special wage, fringe benefit, recordkeeping or other government contracting wage and hour requirements;
If the employer hires foreign agricultural or other workers subject to special conditions and requirements, to review compliance with those special requirements;
Review and tighten 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 employer uses leased, temporary, or other outsourced labor, evaluate contractual, process and other options to support the employer’s ability cost effectively to respond to an audit, investigation or enforcement action by WHD or private litigants and if necessary, obtain indemnification or other recovery in the event the employer incurs liability due to the use or practices of the outsourced labor supplier;
If the audit raises questions about the appropriateness of the classification of an employee as exempt, self-initiation of proper corrective action after consultation with qualified legal counsel;
Review and document all workers classified as exempt;
Review of existing documentation and record keeping practices for hourly employees;
Evaluate potential exposures under other employment, labor, tax or related laws or contracts that might be impacted by the findings or actions taken in response to those findings;
Explore available options and alternatives for calculating required wage payments to non-exempt employees and assessing and resolving other concerns;
Identify and calculate other employee benefit, tax or other corrections and associated costs and procedures that may be required as a result of findings or corrective actions resulting from their redress;
Re-engineer work rules, policies, contracts and practices to minimize costs and liabilities as appropriate in light of the regulations and enforcement exposures;
Explore insurance, indemnification and other options for mitigating risks and associated investigation and defense costs .
Pursue self-correction within the new PAID Program or otherwise.
Many employers also will want to consider adopting or strengthening their use of arbitration agreements, strengthening contract compliance, audit, indemnification and other contractual safeguards in staffing and other outsourcing contracts and broadening employment practices and other liability insurance coverage to mitigate and manage these exposures.
For additional information, please contact the author or other qualified legal counsel with health industry wage and hour and other labor and employment experience.
About The Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for management work, coaching, teachings, and publications.
Ms. Stamer is nationally and internationally recognized for her work assisting businesses, governments, and other entities to develop, implement, administer and defend pragmatic strategies for dealing with employment and other workforce and related compensation, employee benefit, performance management and internal controls, insurance, health care and finance concerns to manage risk, operations and other business objectives.
Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce, internal controls and regulatory compliance, change management and other performance and operations management and compliance. Her day-to-day work encompasses both labor and employment issues, as well as independent contractor, outsourcing, employee leasing, management services and other nontraditional service relationships. She supports her clients both on a real-time, “on demand” basis and with longer term basis to deal with all aspects for workforce and human resources management, including, recruitment, hiring, firing, compensation and benefits, promotion, discipline, compliance, trade secret and confidentiality, noncompetition, privacy and data security, safety, daily performance and operations management, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.
The author of the “Texas Payday Act,” and numerous other highly regarded publications on wage and hour and other human resources, employee benefits and compensation publications, Ms. Stamer is well-known for her 30 years of extensive wage and hour, compensation and other management advice and representation of restaurant and other hospitality, health, insurance, financial services, technology, energy, manufacturing, retail, governmental and other domestic and international businesses of all types and sizes.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other concerns by her service as a management consultant, business coach and consultant and policy strategist as well through her leadership participation in professional and civic organizations such her involvement as the Vice Chair of the North Texas Healthcare Compliance Association; Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE: Coalition on Patient Empowerment; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; former Gulf Coast TEGE Council Exempt Organization Coordinator; a founding Board Member and past President of the Alliance for Healthcare Excellence; former board member and Vice President of the Managed Care Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; a member and policy adviser to the National Physicians’ Council for Healthcare Policy; current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section; Past Chair of the ABA Health Law Section Managed Care & Insurance Section; ABA Real Property Probate and Trust (RPTE) Section former Employee Benefits Group Chair, immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative, and Defined Contribution Committee Co-Chair, past Welfare Benefit Committee Chair and current Employee Benefits Group Fiduciary Responsibility Committee Co-Chair, Substantive and Group Committee member, Membership Committee member and RPTE Representative to the ABA Health Law Coordinating Council; past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a former member of the Board of Directors, Treasurer, Member and Continuing Education Chair of the Southwest Benefits Association and others.
Ms. Stamer also is a widely published author, highly popular lecturer, and serial symposia chair, who publishes and speaks extensively on human resources, labor and employment, employee benefits, compensation, occupational safety and health, and other leadership, performance, regulatory and operational risk management, public policy and community service concerns for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.
Want to know more? See here for details about the author of this update, attorney Cynthia Marcotte Stamer, e-mail her here or telephone Ms. Stamer at (469) 767-8872.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources 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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Businesses that reimburse employee moving expenses should review their practices in response to changes to the Internal Revenue Code rules on qualified moving expenses. The requirement to treat moving expenses as taxable is just one of many changes to the treatment of fringe benefits and compensation under the Internal Revenue Code (“IRC”) as part of the tax reforms enacted last year.
Under previous law, payment or reimbursement of an employee’s qualifiedmoving expenseswere not subject to income or employment taxes.
Under last year’s tax reform legislation, however, employers generally must include all moving expenses, in employees’ wages, subject to income and employment taxes.
Exception
Generally, members of the U.S. Armed Forces can still exclude qualified moving expense reimbursements from their income if:
They are on active duty
They move pursuant to a military order and incident to a permanent change of station
The moving expenses would qualify as a deduction if the employee didn’t get a reimbursement
Transition rule
There is a transition rule under the new law. Under this rule, certain payments or reimbursements aren’t subject to federal income or employment taxes. This includes amounts that:
An employer pays a third party in 2018 for qualified moving services provided to an employee prior to 2018.
An employer reimburses an employee in 2018 for qualified moving expenses incurred prior to 2018.
To qualify for the transition rule, the payments or reimbursements must be for qualified expenses which would have been deductible by the employee if the employee had directly paid them before Jan. 1, 2018. The employee must not have deducted them in 2017.
Corrections
Employers who have included amounts covered by the exception or the transition rule in individuals’ wages or compensation cantake stepsto correct taxable wages and employment taxes.
The changes to the tax treatment of moving expense reimbursements is one of many changes passed last year. For moreinformation or help with theseor other workforce, compensation and benefits concerns, contact the author.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; HIPAA administrative simplification, meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, antikickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA, HEDIS and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; 1557 and other Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here such as the following:
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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
A ruling by a Federal District judge on Friday (December 14, 2018) ruled unconstitutional the Patient Protection and Affordable Care Act (ACA) touches off a new wave of uncertainty about the future of the massive healthcare reform law commonly known as Obamacare just as the enrollment period for 2019 health coverage ended. While Federal District Judge Reed O’Connor finds in his ruling released on Friday that amendments passed by Congress last December robbed the ACA of its original constitutionality, only time will tell if the ruling actually will end the ACA reforms or the effect of such ruling on the hotly debated ACA reforms and other statutory and regulatory reforms Congress and the Trump Administration subsequently prospectively or retrospectively. Consequently, health plans, their employer and other sponsors, insurers, administrators, and fiduciaries; health care providers, consumers and others will need to watch developments closely.
Justice O’Connor’s decision was released one day before the last day of the enrollment period for Americans to elect whether and what coverage, if any, to enroll in through the Obamacare exchanges for calendar 2019.
In Texas v. US, Texas Governor Greg Abbott and other Republican governors challenged the constitutionality of the ACA following passage of the Tax Cuts and Jobs Act of 2017 (TCJA). The plaintiffS argued the TCJA rendered the ACA unconstitutional because it repealed the individual mandate of the ACA upon which the Supreme Court previously found the ACA constitutional.
In the 2012 decision in Nat’l Fed’n of Indep. Businesses v. Sebelius (NFIB), 567 U.S. 519, 530–38 (2012) written by Chief Justice Roberts, the Supreme Court ruled that Congress could not rely upon the Commerce Clause for Constitutional authority to enact the ACA. However, the Supreme Court nevertheless found the Individual Mandate provisions of the ACA preserved the constitutionality of the ACA as a constitutional exercise of Congress’ Taxing Power.
In Texas v. US, the plaintiff governors argue that the repeal of the Individual Mandate as part of Congress’ passage of the TCJA last December robbed the ACA of its constitutionality. They say it is no longer fairly readable as an exercise of Congress’s Tax Power and continues to be unsustainable under the Interstate Commerce Clause. They further urge that if they are correct, the balance of the ACA is untenable as inseverable from the Invalid Mandate. Judge O’Connor agreed with the plaintiff’s in his ruling on Friday. Now it remains to be seen if his ruling will face and withstand the appeal and if so, what effect it will have on Obamacare overall and other subsequent statutory and regulatory reforms.
While only time will tell whether the decision stands and its effect, the path to clarity promises to be filled with more drama and uncertainty. Former US Attorney General Jeff Sessions previously had stated that the Justice Department under his leadership would not expend resources to defend the ACA. It remains to be seen how the Justice Department will not respond in light of his recent resignation. Even if the Justice Department does not step up to defend Obamacare, it is likely that states like California that have intervened in support of the ACA in the litigation will attempt to appeal the action. Assuming that an appeal proceeds, a Court of Appeals would hear the appeal before an almost certain appeal by the losing side in that appeal to the United States Supreme Court, where President Trump’s new appointee would hear the action. Along with the possibility that these Courts will uphold the trial court’s ruling, either of these appeals courts could overrule the trial court in whole or in part. Thus, subsequent appeals decisions could:
Reverse Judge O’Connor’s ruling entirely, leaving The ACA intact in its current form; or
Uphold part but not all of the decision, leaving some parts in place but not others.
pending further decisions, it remains unclear if subsidies, prohibitions against preexisting conditions, guaranteed issue, cost regulations, benefit and coverage mandates and other insurance reforms, health care billing and other reforms will survive.
Meanwhile, regardless of the outcome of the appeals, the decision and its fallout almost certainly will touch off more debate in Congress. With health care reform already a hot topic, more Congressional battles were inevitable. However the decision adds a new and significant wrinkle to the politics of the health reform fight.
In January November’s election will cause the leadership of the House of Representatives is set to transfer from Republicans to Democrats while leaving control over the Senate in the hands of Republications. With leadership of the two legislative bodies split, Democrats are unlikely to be able to use their new control of the House to enact legislation that would overrule outright an adverse decision by the courts. Consequently, Democrats will have an uphill battle if the court decision stands unless and until they can regain Senate control. Instead they are likely to be related to the role occupied by the House the past 4 years in which bills to enact the Democrat vision will pass the House only to die a quick death in the Republican controlled Senate or face veto by the Republican President.
On the other hand, Republicans also could not overcome a decision unfavorable to their agenda for the opposite reason: Despite control of the majority in the Senate and having a Republican President opposed to the ACA, Republicans can’t enact legislation without winning a majority of votes in the House.
On the other hand, either party can and almost certainly will use its veto power over the other party’s agenda. The fight likely will spill over into budget, immigration, workforce and other jet legislation that otherwise might and should enjoy bipartisan support in Congress.
As the litigation proceeds, concerned parties will want to keep a close eye of the Courts, the regulation and enforcement actions of the Trump Administration and the Congress.
Meanwhile, it is important to keep in mind that implementation of Judge O’Connor’s decision is stayed pending appeal.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of managed care and other health industry, health and other benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Past Chair of the ABA Managed Care & Insurance Interest Group, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer is nationally recognized as a thoughtleader in health benefits and health care matters domestically and internationally. She has been continuously involved the design, regulation, administration and defense of managed care and other health and employee benefit, health care, human resources and other staffing and workforce arrangements, contracts, systems, and processes. As a continuous component of this work, Ms. Stamer has worked closely with these and other clients on the design, development, administration, defense, and breach and data recovery of health care, workforce, insurance and financial services, trade secret and other information technology, data and related process and systems development, policy and operations throughout her career.
Scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues.
Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; managed care organizations, insurers, self-insured health plans and other payers and their management; public and private, domestic and international hospitals, health care systems, clinics, skilled nursing, long-term care, rehabilitation and other health care providers and facilities; medical staff, health care accreditation, peer review and quality committees and organizations; managed care organizations, insurers, third-party administrative services organizations and other payer organizations; billing, utilization management, management services organizations; group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; claims, billing and other health care and insurance technology and data service organizations; other health, employee benefit, insurance and financial services product and solutions consultants, developers and vendors; and other health, employee benefit, insurance, technology, government and other management clients.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Beyond her public policy and regulatory affairs involvement, Ms. Stamer also has extensive experience helping these and other clients to design, implement, document, administer and defend workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government; accreditation and quality organizations; private litigation and other federal and state health care industry investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; training and discipline; enforcement, and a host of other related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, and change management; workforce and operations management, and other opportunities and challenges arising in the course of their operations.
Ms. Stamer also has extensive health care reimbursement and insurance experience advising and defending plan sponsors, administrators, insurance and managed care organizations, health care providers, payers, and others about Medicare, Medicaid, Medicare and Medicaid Advantage, Tri-Care, self-insured group, association, individual and employer and association group and other health benefit programs and coverages including but not limited to advising public and private payers about coverage and program design and documentation, advising and defending providers, payers and systems and billing services entities about systems and process design, audits, and other processes; provider credentialing, and contracting; providers and payer billing, reimbursement, claims audits, denials and appeals, coverage coordination, reporting, direct contracting, False Claims Act, Medicare & Medicaid, ERISA, state Prompt Pay, out-of-network and other nonpar insured, and other health care claims, prepayment, post-payment and other coverage, claims denials, appeals, billing and fraud investigations and actions and other reimbursement and payment related investigation, enforcement, litigation and actions. Scribe for the ABA JCEB annual agency meeting with HHS OCR, she also has worked extensively on health and health benefit coding, billing and claims, meaningful use and EMR, billing and reimbursement, quality measurement and reimbursement, HIPAA, FACTA, PCI, trade secret, physician and other medical, workforce, consumer financial and other data confidentiality and privacy, federal and state data security, data breach and mitigation, and other information privacy and data security concerns.
Author of leading works on a multitude of health care, health plan and other health industry matters, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting, former Vice President of the North Texas Health Care Compliance Professionals Association, past Chair of the ABA Health Law Section Managed Care & Insurance Section, past ABA JCEB Council Representative and CLE and Marketing Committee Chair, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer’s health industry clients include public health organizations; public and private hospitals, healthcare systems, clinics and other health care facilities; physicians, physician practices, medical staff, and other provider organizations; skilled nursing, long-term care, assisted living, home health, ambulatory surgery, dialysis, telemedicine, DME, Pharma, clinics, and other health care providers; billing, management and other administrative services organizations; insured, self-insured, association and other health plans; PPOs, HMOs and other managed care organizations, insurance, claims administration, utilization management, and other health care payers; public and private peer review, quality assurance, accreditation and licensing; technology and other outsourcing; healthcare clearinghouse and other data; research; public and private social and community organizations; real estate, technology, clinical pathways, and other developers; investors, banks and financial institutions; audit, accounting, law firm; consulting; document management and recordkeeping, business associates, vendors, and service providers and other professional and other health industry organizations; academic medicine; trade associations; legislative and other law making bodies and others.
A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about contracting, credentialing and quality assurance, compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, privacy and data security, and other risk management and operational matters. Author of works on Payer and Provider Contracting and many other managed care concerns, Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here such as:
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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
February 12, 2019 is the deadline for health plans and their sponsoring employers, fiduciaries and business associates, as well as health care providers, health care clearinghouses, health care consumers, employer and other concerned persons to provide input on reducing the regulatory burdens of the Health Insurance Portability and Accountability Act (HIPAA) Privacy, Security and Breach Notification Rules in response to the December 12, 2018 invitation of the U.S. Department of Health and Human Services (HHS), Office for Civil Rights (OCR).
OCR issued the invitation for public comment in a December 12, 2019 Request for Information (RFI). The RIF seeks input from the public on how OCR’s HIPAA Privacy and other Rules could be modified to further the HHS Secretary’s goal of promoting coordinated, value-based healthcare. This RFI is a part of the Regulatory Sprint to Coordinated Care, an initiative led by HHS Deputy Secretary Eric Hargan.
HHS developed the HIPAA Rules to protect individuals’ health information privacy and security interests, while permitting information sharing needed for important purposes. However, in recent years, OCR has heard calls to revisit aspects of the Rules that may limit or discourage information sharing needed for coordinated care or to facilitate the transformation to value-based health care. The RFI requests information on any provisions of the HIPAA Rules that may present obstacles to these goals without meaningfully contributing to the privacy and security of protected health information (PHI) and/or patients’ ability to exercise their rights with respect to their PHI.
OCR’s December 12, 2018 press release concerning the RFI indicates that OCR is looking for candid feedback about how the existing HIPAA regulations are working in the real world and how OCR can improve them to improve quality of care and eliminate undue burdens on covered entities while maintaining robust privacy and security protections for individuals’ health information.
In addition to requesting broad input on the HIPAA Rules, the RFI also seeks comments on specific areas of the HIPAA Privacy Rule, including:
Encouraging information-sharing for treatment and care coordination
Facilitating parental involvement in care
Addressing the opioid crisis and serious mental illness
Accounting for disclosures of PHI for treatment, payment, and health care operations as required by the HITECH Act
Changing the current requirement for certain providers to make a good faith effort to obtain an acknowledgment of receipt of the Notice of Privacy Practices
Public comments on the RFI are due by February 11, 2019.
The RFI follows up on OCR’s announcement of another series of high dollar resolution agreements against covered entities and business associates for alleged breaches of HIPAA’s Privacy or Security Rules, as well as publication of various new guidance intended to help patients, their families, covered entities, business associates and others understand when HIPAA restricts or allows the release of protected health information by covered entities and business associates in mass shooting or other disaster situations, when dealing with patients with substance abuse or mental health conditions and in various other scenarios. Covered entities, their business associates as well as employer and other health plan sponsors, fiduciaries and others involved with protected health information transactions and disclosures should review this new guidance and evaluate its implications on their actions and practices in addition to sharing input with OCR about opportunities to improve existing HIPAA Rules.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of managed care and other health industry, health and other benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer has been continuously involved the design, regulation, administration and defense of managed care and other health and employee benefit, health care, human resources and other staffing and workforce arrangements, contracts, systems, and processes. As a continuous component of this work, Ms. Stamer has worked closely with these and other clients on the design, development, administration, defense, and breach and data recovery of health care, workforce, insurance and financial services, trade secret and other information technology, data and related process and systems development, policy and operations throughout her career.
Scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues.
Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; managed care organizations, insurers, self-insured health plans and other payers and their management; public and private, domestic and international hospitals, health care systems, clinics, skilled nursing, long-term care, rehabilitation and other health care providers and facilities; medical staff, health care accreditation, peer review and quality committees and organizations; managed care organizations, insurers, third-party administrative services organizations and other payer organizations; billing, utilization management, management services organizations; group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; claims, billing and other health care and insurance technology and data service organizations; other health, employee benefit, insurance and financial services product and solutions consultants, developers and vendors; and other health, employee benefit, insurance, technology, government and other management clients.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Beyond her public policy and regulatory affairs involvement, Ms. Stamer also has extensive experience helping these and other clients to design, implement, document, administer and defend workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government; accreditation and quality organizations; private litigation and other federal and state health care industry investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; training and discipline; enforcement, and a host of other related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, and change management; workforce and operations management, and other opportunities and challenges arising in the course of their operations.
Ms. Stamer also has extensive health care reimbursement and insurance experience advising and defending plan sponsors, administrators, insurance and managed care organizations, health care providers, payers, and others about Medicare, Medicaid, Medicare and Medicaid Advantage, Tri-Care, self-insured group, association, individual and employer and association group and other health benefit programs and coverages including but not limited to advising public and private payers about coverage and program design and documentation, advising and defending providers, payers and systems and billing services entities about systems and process design, audits, and other processes; provider credentialing, and contracting; providers and payer billing, reimbursement, claims audits, denials and appeals, coverage coordination, reporting, direct contracting, False Claims Act, Medicare & Medicaid, ERISA, state Prompt Pay, out-of-network and other nonpar insured, and other health care claims, prepayment, post-payment and other coverage, claims denials, appeals, billing and fraud investigations and actions and other reimbursement and payment related investigation, enforcement, litigation and actions. Scribe for the ABA JCEB annual agency meeting with HHS OCR, she also has worked extensively on health and health benefit coding, billing and claims, meaningful use and EMR, billing and reimbursement, quality measurement and reimbursement, HIPAA, FACTA, PCI, trade secret, physician and other medical, workforce, consumer financial and other data confidentiality and privacy, federal and state data security, data breach and mitigation, and other information privacy and data security concerns.
Author of leading works on a multitude of health care, health plan and other health industry matters, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting, former Vice President of the North Texas Health Care Compliance Professionals Association, past Chair of the ABA Health Law Section Managed Care & Insurance Section, past ABA JCEB Council Representative and CLE and Marketing Committee Chair, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer’s health industry clients include public health organizations; public and private hospitals, healthcare systems, clinics and other health care facilities; physicians, physician practices, medical staff, and other provider organizations; skilled nursing, long-term care, assisted living, home health, ambulatory surgery, dialysis, telemedicine, DME, Pharma, clinics, and other health care providers; billing, management and other administrative services organizations; insured, self-insured, association and other health plans; PPOs, HMOs and other managed care organizations, insurance, claims administration, utilization management, and other health care payers; public and private peer review, quality assurance, accreditation and licensing; technology and other outsourcing; healthcare clearinghouse and other data; research; public and private social and community organizations; real estate, technology, clinical pathways, and other developers; investors, banks and financial institutions; audit, accounting, law firm; consulting; document management and recordkeeping, business associates, vendors, and service providers and other professional and other health industry organizations; academic medicine; trade associations; legislative and other law making bodies and others.
A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about contracting, credentialing and quality assurance, compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, privacy and data security, and other risk management and operational matters. Author of works on Payer and Provider Contracting and many other managed care concerns, Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here such as:
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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Employers should invite employees to update their Form W-4 withholding and finalize other 2019 payroll and income tax withholding arrangements based on guidance for 2019 published by the IRS and Treasury Department in Notice 2018-92 on November 26, 2018.
Many U.S. employers had delayed making changes to their income and payroll tax withholding pending the anticipated release by the IRS and Treasury Department of a revised Form W-4 and related income and payroll tax guidance updated to reflect changes to the Internal Revenue Code enacted as part of the Tax Cut and Jobs Act (P.L. 115-97)(“Trump Tax”) at the end of 2017.
Following the enactment of Trump Tax, most businesses have operated in reliance upon interim guidance published by the agencies at the beginning of the year to carryout their 2018 withholding obligations.
Until recently, the IRS and Treasury Department were expected to complete for use in 2019 the major overhaul of the Form W-4 and related guidance in response to the Trump Tax amendments to Sections 3402, 3405 and other Code rules. When the revision of the Form W-4 proved more complex than anticipated, however, the IRS and Treasury Department in September, 2018 announced that release of the newly designed and updated Form W-4 would be delayed from 2019 to 2020.
In Notice 2018-92, IRS and the Treasury Department provides interim guidance to employers and their workers on income tax withholding for 2019 pending agencies issuance of regulations implementing the changes, as well as requests comments on certain withholding procedures from concerned parties. For the most part, Notice 2018-92 continues the interim guidance that IRS and Treasury previously published for 2018. Specifically, Notice 2018-92:
Announces that the 2019 Form W-4 will be similar to the 2018 Form W-4,
Addresses new TCJA “withholding allowance” terminology,
Continues until April 30, 2019 Notice 2018-14’s temporary suspension of the requirement to furnish new Forms W-4 within 10 days for changes resulting solely from the TCJA,
Provides that, for 2019, the default rule when an employee fails to furnish a Form W-4 will continue to be single with zero withholding allowances,
Allows taxpayers to take into account the qualified business income deduction under section 199A to reduce withholding under section 3402(m),
Announces that the IRS and Treasury intend to update the regulations under section 3402 to explicitly allow taxpayers to use the online withholding calculator or Publication 505, Tax Withholding and Estimated Tax, in lieu of the worksheets to Form W-4,
Requests comments on alternative withholding methods under section 3402(h),
Announces that the IRS and the Treasury Department intend to eliminate the combined income tax withholding and employee FICA tax withholding tables under Treas. Reg. § 31.3402(h)(4)-1(b),
Modifies notification requirements for the withholding compliance program, and
Provides that for 2019, withholding on annuities or similar periodic payments where no withholding certificate is in effect is based on treating the payee as a married individual claiming 3 withholding allowances under § 3405(a)(4).
The Code generally requires employees that experience a change that reduces the number of withholding exemptions that the employee qualifies to claim to notify their employer and complete a new Form W-4 within 10 days of a specified event date. Interim relief published by the IRS and Treasury Department provides relief to workers whether the change in withholding eligibility results solely due to a Code change enacted as part of Trump Tax. Otherwise, however, employees generally still remain obligated to keep their withholding up-to-date. Since employees often are unaware of or overlook this responsibility, employers generally should encourage workers to review and update their Form W-4 withholding elections in connection with annual enrollment periods and in conjunction with other life or other changes likely to affect the withholding eligibility of the worker.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; HIPAA administrative simplification, meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, antikickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA, HEDIS and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; 1557 and other Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here such as the following:
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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
The U.S. Department of Labor reported today (December 7, 2018) that the economy continues to grow.
The US economy added 155,000 jobs in November and the unemployment rate was 3.7 percent.
The continued growth signals employers need to continue to focus on tailoring recruitment and retention strategies to retain existing valued employees and trade secrets and other sensitive know how. With many economy watchers anticipating a possible slowdown when leadership in the House changes in January, however, businesses also should review their policies and take steps to positing their organizations to be change ready for any potential downturn or other developments that might impact their business.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer works extensively with businesses and government on managing people, performance, process and risk and design, administration and defense of compensation, employed benefits, internal and external controls and other practices. She also advises and represents these and other clients about legislative and regulatory reform impacting these concerns. Her work includes advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here such as the following:
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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
The Internal Revenue Service is warning human resources and other business leaders about a growing wave of identity theft and W-2 scams targeting sensitive tax data employers collect on their employees. The warning highlights one of the many growing data breach exposures businesses must manage as identity thieves become ever more sophisticated.
Such data like Form W-2 data – is highly valued by identity thieves. While identity thieves use a variety of tactics to steal this information including hacking into the IRS’ own systems, the IRS this week is warning about one scheme that the IRS says has become one of the more dangerous email scams.
All employers are targets for the W-2 scam, according to the IRS.
Here’s how it works:
These emails appear to be from an executive or organization leader to a payroll or human resources employee.
The message usually starts with a simple greeting, like: “Hey, you in today?”
By the end of the email exchange, all of an organization’s Forms W-2 for their employees may be in the hands of cybercriminals.
Because payroll officials believe they are corresponding with an executive, it may take weeks for someone to realize a data theft has occurred.
Generally, the criminals are trying to quickly take advantage of their theft, sometimes filing fraudulent tax returns a day or two.
The IRS warns this scam is such a threat to taxpayers that a special IRS reporting process has been established. The IRS says employers victimized should:
Emaildataloss@irs.govto notify the IRS of a W-2 data loss and provide contact information. In the subject line, type “W2 Data Loss” so that the email can be routed properly. The business should not attach any employee personally identifiable information data.
Email the Federation of Tax Administrators atStateAlert@taxadmin.orgto get information on how to report victim information to the states.
File a complaint with theFBI’s Internet Crime Complaint Center. Businesses and payroll service providers may be asked to file a report with their local law enforcement agency.
Notify employees. The employee may then take steps to protect themselves from identity theft. The Federal Trade Commission’swww.identitytheft.govprovides guidance on general steps employees should take.
The IRS alert reminds businesses again about the growing challenges they face guarding sensitive tax, health and other employee benefit plan and other data about employees, customers, business partners and others. Aside from the disruptions businesses incur to organizations and relationships with employees, customers, business partners or others and often tremendous costs of investigation and mitigation, breaches also commonly trigger substantial legal liability under a myriad of federal and state laws and regulations, contracts, and common law tort claims. Businesses generally and Human Resources, tax and other systems and operations should take well documented steps to prevent and prepare for a potential breach.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving and author of “What To Do When Your Employee’s Personal Life Becomes Your Business@ and a multitude of other highly regarded works on data protection and breach, her work includes career-long, leading edge involvement counseling and representing human resources, employee benefit, insurance and financial, tax, healthcare and other businesses about data and other sensitive information privacy and breach.
Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; HIPAA administrative simplification, meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, antikickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA, HEDIS and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; 1557 and other Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here such as the following:
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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
State and local political subdivisions employing fewer than 20 employees should reconfirm the defensibility of their employment policies and practices under the Age Discrimination and Employment Act (ADEA) and the Fair Labor Standards Act (FLSA) and various other laws in light of the unanimous[1] ruling issued this morning by the United State Supreme Court holding that the ADEA applies to all state and local political subdivisions regardless of size.
In its ruling in Mount Lemmon Fire District v. Guido, – U.S. -, 2018 WL 5794639 (November 6, 2018) released this morning, the United States Supreme Court unanimously ruled that the ADEA applies to all state and local subdivisions regardless of the number of employees the political subdivision employs.
The Supreme Court’s ruling arose from an ADEA lawsuit brought by John Guido and Dennis Rankin against a small Arizona fire department, the Mount Lemmon Fire District (District) challenging their layoff by the District. Faced with a budget shortfall, the District laid off Guido and Rankin, who at the time were the District’s two oldest full-time firefighters. Guido and Rankin sued the Fire District, alleging that their termination violated the Age Discrimination in Employment Act of 1967 (ADEA), 81 Stat. 602, as amended, 29 U. S. C. §621 et seq. The Fire District sought dismissal of the suit on the ground that the District was too small to qualify as an “employer” within the ADEA’s compass.
In response to Guido and Rankin’s lawsuit, the District asserted that was not covered by the ADEA because its employment of fewer than 20 employees rendered it “too small” to qualify as an “employer” as defined by 29 U. S. C. §630(b). In its ruling against the Fire District this morning, the Supreme Court rejected this numerosity defense, holding instead that the ADEA applies to all political subdivisions regardless of the size of their workforce.
In the unanimous opinion authored by Justice Ginsburg, the Supreme Court pointed out that the ADEA definition of “employer” distinguishes between private sector employers and State and local political subdivisions. The Supreme Court noted that before 1974, State and local political subdivisions were exempt from the ADEA. In 1974, however, Congress added a special definition of “employer” for States and political subdivisions to the ADEA and FLSA when it amended the ADEA and FLSA to apply to all State and local government employers regardless of their size. Thus, since 1974, the ADEA and FLSA definitions of “employer” have read as follows:
“The term ‘employer’ means a person engaged in an industry affecting commerce who has twenty or more employees . . . . The term also means (1) any agent of such a person, and (2) a State or political subdivision of a State . . . .” 29 U. S. C. §630(b); 29 U. S. C. §203(d), (x).
In construing this definition, the Supreme Court weighed whether the phrase “also means” added new categories to the definition of “employer” or merely clarified that States and their political subdivisions are a type of “person” included in §630(b)’s first sentence. While acknowledging that various Courts of Appeals previously have reached differing conclusions concerning the appropriate interpretation, the Supreme Court ruled that the phase “also means” added a new category to the definition of “employer” for purposes of the ADEA. Accordingly, the Supreme Court rejected the District’s claim that the ADEA definition of “employer” includes the requirement of employment of at least 20 employees applicable to the ADEA’s private sector definition of “employer. Accordingly, the Supreme Court unanimously ruled that the ADEA applies to all State and local political subdivisions.
In light of the Supreme Court’s ruling, any State or local subdivision that has operated in reliance upon the now discredited interpretations of the ADEA or FLSA definitions of “employer” as applicable only to State or local governmental entities employing at least 20 employees immediately should take all necessary corrective action to bring their policies into compliance with the ADEA and FLSA. These governmental entities also should seek the advice of qualified legal counsel about the advisability of taking any retrospective action to self-correct any potential past deficiencies in compliance, if any, for which the entity might bear potential liability to the extent that the applicable state of limitations has not run on those claims.
[1]Justice Kavanaugh did not join in the opinion as he took no part in the consideration or decision of the case.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders.
Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline; handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; HIPAA administrative simplification, meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, antikickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA, HEDIS and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; 1557 and other Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here such as the following:
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NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Employers should submit comments supporting proposed changes in the National Labor Relations Board (NLRB) rules defining joint employment by the newly extended December 13, 2018 deadline announced today.
On September 14, 2018, the NLRB published in the Federal Register a Notice of Proposed Rulemaking (“NPRM”) setting forth a proposed standard for determining joint-employer status under the National Labor Relations Act, with an original comment deadline of November 13, 2018.
The employer friendly proposed rule change would overrule a definition of joint employment created by the then Obama Administration dominated NLRB during the Obama administration that has been highly unfavorable to business and beneficial to labor unions. The joint employment rule allows the labor unions to have the NLRB treat as a deemed employer a separate business that does not directly employ workers involved in union organizing campaigns or covered by collective bargaining agreements or other NLRA protected activities even where the business is not under common ownership or control with the business that actually is the true employer of the workers. During the Obama Administration, the NLRB expanded the circumstances where a business is treated as a joint employer to include situations where the business does not have direct control over the worker in such a way that it imperils businesses that contract to receive services under independent contractor or subcontractor agreements from businesses with unionized workers or involved in organizing campaigns.
The proposed rule change would require proof that an employer have more than intermittent direct control over the day-to-day details of the performance of work by an employee before that employer could be held to be a joint employer for purposes of the collective-bargaining organizing and labor practices rules of the NLRA. This proposed rule change would overrule an interpretive position adopted by the NLRB during the Obama administration under which unions could use limited in direct involvement or control by a business Including limited involvement by general contractors subcontractors as the basis for having that business be treated as a joint player for purposes of union organizing in collective-bargaining obligations under the NLRB.
Strong employer comment in favor of the rule is needed to help deter union opposition, particularly as the NLRB granted the extended deadline for comment in part in response to union calls for an extended comment period on the proposed rule. Thus, employers concerned about joint or other employer liability for collective-bargaining union organizing liabilities should comment on the proposed rule on or before December 13, 2018. Comments replying to comments submitted during the initial comment period must be received by the Board on or before December 20, 2018. See here.
Employers desiring more information about the proposed regulations or how to respond with comments I contact the author of this update.
About The Author
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation; Former Chair of the RPTE Employee Benefits and Compensation Committee, a current Co-Chair of the Committee, and the former Chair of its Welfare Benefit and its Defined Compensation Plan Committees and former RPTE Joint Committee on Employee Benefits Council (JCEB) Representative, Cynthia Marcotte Stamer is a Martindale-Hubble “AV-Preeminent” practicing attorney and management consultant, author, public policy advocate, author and lecturer repeatedly recognized for her 30 plus years’ of work and pragmatic thought leadership, publications and training on health, pension and other employee benefit, insurance, labor and employment, and health care fiduciary responsibility, payment, investment, contracting and other design, administration and compliance concerns as among the “Top Rated Labor & Employment Lawyers in Texas,” a “Legal Leader,” a “Top Woman Lawyer” and with other awards by LexisNexis® Martindale-Hubbell®; as among the “Best Lawyers In Dallas” for her work in the field of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, in International Who’s Who of Professionals and with numerous other awards and distinctions.
Highly valued for her ability to meld her extensive legal and industry knowledge and experience with her talents as an insightful innovator and pragmatic problem solver, Ms. Stamer advises, represents and defends employer, union, multi-employer, association and other employee benefit plan sponsors, insurers and managed care organizations, fiduciaries, plan administrators, technology and other service providers, government and community leaders and others about health and other employee benefit and insurance program and policy design and innovation, funding, documentation, administration, communication, data security and use, contracting, plan, public and regulatory reforms and enforcement, and other risk management, compliance and operations matters. Her experience encompasses leading and supporting the development and defense of innovative new policies, programs, practices and solutions; advising and representing clients on routine plan establishment, plan documentation and contract drafting and review, administration, change and other compliance and operations; crisis prevention and response, compliance and risk management audits and investigations, enforcement actions and other dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, Federal Trade Commission, Justice, Securities and Exchange Commission, Education and other federal agencies, state legislatures, attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators, and various other foreign and domestic governmental bodies and agencies. She also provides strategic and other supports clients in defending litigation as lead strategy counsel, special counsel and as an expert witness. Alongside her extensive legal and operational experience, Ms. Stamer also is recognized for her work as a public and regulatory policy advocate and community leader with a gift for finding pragmatic solutions and helping to forge the common ground necessary to build consensus. Best known for her domestic public policy and community leadership on health care and insurance reform, Ms. Stamer’s lifelong public policy and community service involvement includes service as a lead consultant to the Government of Bolivia on its pension privatization project, as well as extensive legislative and regulatory reform, advocacy and input workforce, worker classification, employee benefit, public health and healthcare, social security and other disability and aging in place, education, migration reforms domestically and internationally throughout her adult life. In addition to her public and regulatory policy involvement, Ms. Stamer also contributes her service and leadership to a professional and civic organizations and efforts including her involvement as the Founder and Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE; Coalition on Patient Empowerment, a founding Board Member and past President of the Alliance for Healthcare Excellence; Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; Vice Chair, Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group; current Fiduciary Responsibility Committee Co-Chair and Membership Committee member of the ABA RPTE Section; former RPTE Employee Benefits and Other Compensation Group Chair, former Chair and Co-Chair of its Welfare Plans Committee, and Defined Contribution Plans Committee; former RPTE Representative to ABA Joint Committee on Employee Benefits Council; former RPTE Representative to the ABA Health Law Coordinating Counsel; former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, former Board Member, Continuing Education Chair and Treasurer of the Southwest Benefits Association; Vice President of the North Texas Healthcare Compliance Professionals Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; past Dallas World Affairs Council Board Member, and in leadership of many other professional, civic and community organizations. Ms. Stamer also is a highly popular lecturer, symposia chair and author, who publishes and speaks extensively on health and managed care industry, human resources, employment and other privacy, data security and other technology, regulatory and operational risk management for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, the Society of Professional Benefits Administrators, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients, serves on the faculty and planning committee of many workshops, seminars, and symposia, and on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.
Beyond these involvements, Ms. Stamer also is active in the leadership of a broad range of other public policy advocacy and other professional and civic organizations and involvements. Through these and other involvements, she helps develop and build solutions, build consensus, garner funding and other resources, manage compliance and other operations, and take other actions to identify promote tangible improvements in health care and other policy and operational areas.
Before founding her current law firm, Cynthia Marcotte Stamer, P.C., Ms. Stamer practiced law as a partner with several prominent national and international law firms for more than 10 years before founding Cynthia Marcotte Stamer, P.C. to practice her unique brand of “Solutions law™” and to devote more time to the pragmatic policy and system reform, community education and innovation, and other health system improvement efforts of her PROJECT COPE: the Coalition on Patient Empowerment initiative.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources at SolutionsLawPress.com such as the following:
If you or someone else you know would like to receive future updates about developments on these and other concerns, please provide your current contact information and preferences including your preferred e-mail by creating or updating your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Following on the heels of Monday’s announcement that Anthem, Inc. is paying a record setting $16 million to resolve charges its violations of the enterprise risk assessment and other requirements of the Health Insurance Portability & Accountability Act (HIPAA) Security Rule allowed cybercriminals to breach the electronic protected health information (ePHI) of more than 79 million patients, physicians and other health care providers, health plans and health insurers, health care clearinghouses (covered entities) and their service providers acting as their business associates (business associates) (hereafter collectively “HIPAA Entities”) should reconfirm their own and their business associates’ compliance with the HIPAA Security Rule’s enterprise risk assessment and other ePHI security requirements. In addition, employer, union, association and other health plan sponsors and fiduciaries should consider incorporating enterprise risk assessments of their health plans and its vendors as well as specific contractual assurance requirements into their business associate agreements to help mitigate their health plan related liabilities and risks.
When conducting these assessments, HIPAA Entities generally will want to ensure that their new enterprise risk assessment documents their consideration of the newly updated Security Risk Assessment (SRA) Tool jointly announced yesterday (October 16, 2018) by the Department of Health & Human Services (HHS) Office of the National Coordinator for Health Information Technology (ONC) and OCR, lessons shared in OCR’s $16 million Anthem, Inc. resolution agreement, $5.55 million resolution agreement with Memorial Healthcare System and other OCR HIPAA resolution agreements, civil monetary penalty assessments and other Security Rule guidance, as well as other emergent internal and external data suggesting potential susceptibilities of their own systems and data to breach or loss.
HIPAA Entities are reminded that HIPAA requires that all HIPAA covered entities and business associates to conduct an accurate and thorough assessment of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of electronic protected health information held by their organization. Any HIPAA Entity that hasn’t already conducted a recent, appropriately documented enterprise wide risk analysis or updated their analysis in response to changes in equipment, vendors or emerging threats and developments should do so as soon as possible.
HIPAA’s requirement that HIPAA entities conduct and maintain an appropriately comprehensive and timely updated enterprise-wide risk analysis of potential security threats to ePHI both an affirmative requirement of the HIPAA Security Rule and an indispensable process to help healthcare organizations understand their security posture to prevent, detect, respond to and mitigate potential legal, operational and reputational costs that commonly result when ePHI or other sensitive information is breached or destroyed.
The importance of HIPAA entities having and being able to produce in the event of a breach or OCR audit an up-to-date, comprehensively enterprise risk assessment and response plan cannot be overstated. Beyond OCR’s publication of extensive regulatory guidance and educational outreach discussing the responsibility to conduct and maintain documentation of appropriate enterprise risk assessments, virtually every announced HIPAA Security Rule civil monetary penalty assessment and other enforcement action identifies violation of the HIPAA Security Rule’s enterprise risk assessment requirements among the material transgressions committed and required to be corrected by HIPAA entities like Anthem, Inc. subjected to Security Rule enforcement.
The updated SRA Tool jointly released by OCR and ONC on October 16, 2018 further reinforces the importance of complying with the enterprise wide risk assessment requirement while simultaneously encouraging and facilitating compliance by small to medium sized health care practices. Particularly designed with an eye to helping health care providers that work as solo practitioners or in groups with 10 or less health care providers and their business associates identify risks and vulnerabilities to ePHI, OCR says the updated SRA Tool “provides enhanced functionality to document how such organizations can implement or plan to implement appropriate security measures to protect ePHI” and incorporates new features to make the tool “more user friendly.” New features OCR hopes will make the SRA tool more user friendly include:
Enhanced User Interface
Modular workflow with question branching logic
Custom Assessment Logic
Progress Tracker
Improved Threats & Vulnerabilities Rating
Detailed Reports
Business Associate and Asset Tracking
Overall improvement of the user experience
HIPAA Entities should take note, however, that as of its October 16, 2018 released date, the updated version of the SRA Tool currently is only available in Windows format. OCR has indicated that the OCR and ONC have not yet updated the OS iPad version of the previously published version of the SRA Tool. While the previous OS iPad version remains available at the Apple App Store exit disclaimer icon (search under “HHS SRA Tool”), HIPAA Entities that presently use or plan to use the OS iPad tool should consider comparing the prior tool against the updated Windows SRA Tool to verify the continued suitability of its continued use and any adjustments in understanding or application that might be warranted by these differences. Additionally, HIPAA Entities also should review the revised User Guide available on the SRA Tool’s website before starting the assessment.
While the SRA Tool provides valuable guidance to help HIPAA Entities to conduct their own enterprise wide risk assessment, HIPAA Entities should keep in mind that the responsibility to assess their enterprise wide risk and to update their security safeguards to respond to these risks is a continuous one. While using the SRA Tool is an excellent starting point for beginning this assessment, HIPAA Entities need to realize that OCR expects HIPAA Entities to tailor their assessments to identify and respond to the full range of risks and exposures to their ePHI and associated systems and to constantly reevaluate and adjust these assessments in response to emerging system and ePHI threats identified in the course of their operations as well as external developments suggesting previously unidentified or inadequately appreciated threats. Moreover, in addition to conducting the risk assessment, OCR regulatory guidance and guidance drawn from OCR’s civil monetary settlements resolution agreements and other enforcement and audit activities also make clear that in addition to conducting the enterprise wide risk analysis, HIPAA entities also need to be prepared to produce documentation that their organizations took appropriate and timely action to address the risks identified in the risk assessment in accordance with the HIPAA Security Rule.
In addition to mitigate their exposure to potentially substantial HIPAA civil monetary penalties for violating the HIPAA Security Rule, HIPAA Entities also should keep in mind the potential role that their conduct and maintenance of appropriately comprehensive enterprise wide security risk assessments can play in helping to mitigate other legal, financial, operational and reputational risks that commonly also arise along with the HIPAA exposures associated with a breach of HIPAA. In addition to HIPAA’s Security Rules for ePHI, HIPAA Entities typically also are subject to a hodgepodge of non-HIPAA statutory, regulatory and/or contractual obligations to safeguard patient, employee, business partners and other individual, financial, health, tax, peer review and credentialing, trade secrets and other confidential information against improper use, access, destruction or disclosure. Examples of such obligations include the privacy and data security rules of the Fair and Accurate Credit Transaction Act (FACTA), the Internal Revenue Code and other tax laws, federal and state consumer debt and information, electronic crime, data security and identity theft statutes; federal and state trade secret and intellectual property laws; and others, for which violations often equal or substantially exceed the civil monetary penalty liability that commonly arise under the HIPAA Security Rule. The experience of Anthem, Inc. illustrates this point. While the $16 million resolution payment that OCR announced Anthem, Inc. is paying to resolve its HIPAA civil monetary penalty exposures for allowing the breach of the ePHI of 79 million individuals, this payment reflects only a very small portion of the overall liability that Anthem, Inc. incurred from data breach that lead to this resolution payment. Anthem, Inc. also separately already reportedly also has paid more than $115 million to settle other statutory and contractual liabilities arising from the breach separate as well as substantial investigatory and defense costs in addition to the HIPAA liabilities settled under the resolution agreement announced Monday. Other HIPAA Entities subjected to HIPAA civil monetary penalties or paying resolution payments to OCR also typically also have incurred substantial non-HIPAA sanctions and settlements, as well as other defense, investigation, operational and reputational losses as a result of their breaches. HIPAA Entities should strive to ensure that their HIPAA enterprise wide risk assessment and compliance efforts are properly coordinated and administered to manage these overall risks and responsibilities in addition to their HIPAA-specific responsibilities and liabilities.
Beyond these generally applicable breach related risks, health plan sponsors and fiduciaries also need to be concerned about potential fiduciary responsibility obligations of fiduciaries under the Employee Retirement Income Security Act, plan and employer confidentiality requirements under the Internal Revenue Code, and other legal or contractual obligations to participants or employees, indemnification obligations to vendors and operational and trust disruptions that can result from a breach of sensitive health plan data or associated systems or records. Meanwhile, third party administrators, insurers, brokers, consultants, accountants and other vendors also typically face their own unique their own unique licensure, ethics and contractual responsibilities.
Because enterprise wide risk assessments and discussions of their structuring, scope and findings are likely to produce legally sensitive evidence, HIPAA Entities are encouraged to seek the advice of qualified and suitably experienced legal counsel about the advisability of conducting all or certain aspects of an enterprise wide risk analysis and their documentation of their risk evaluation and response to take advantage of possible attorney-client privilege, work-product or other evidentiary rules before or throughout the risk assessment and response process and deliberations.
About The Author
A practicing attorney and Managing Shareholder of Cynthia Marcotte Stamer, P.C, Cynthia Marcotte Stamer’s more than 30 years’ of leading edge work as an practicing attorney, author, lecturer and industry and policy thought leader have resulted in her recognition as a “Top” attorney in employee benefits, labor and employment and health care law.
Board certified in labor and employment law by the Texas Board of Legal Specialization, a Fellow in the American College of Employee Benefit Counsel, Scribe for the American Bar Association (ABA) Joint Committee on Employee Benefits (JCEB) Annual Agency Meeting with the Office of Civil Rights and a former JCEB Council Representative; former Chair of the ABA Health Law Section Managed Care & Insurance Interest Group; and past Chair, former Welfare Benefit Committee Co-Chair and current Fiduciary Responsibility Committee Co-Chair of the American Bar Association (ABA) RPTE Section Employee Benefits Group, former Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, Ms. Stamer is recognized nationally and internationally for her practical and creative insights and leadership on HIPAA and other health care, managed care and insurance, and other employee benefit, human resources, and related antitrust, corporate, privacy and data security, tax and other internal controls, regulatory affairs and public policy concerns.
Ms. Stamer’s legal and management consulting work throughout her career has focused on helping organizations and their management use the law and process to manage people, process, compliance, operations and risk. Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer helps public and private, domestic and international health, insurance and financial security, and other businesses, governments, and other organizations and their leaders manage their employees, vendors and suppliers, and other workforce members, customers and other’ performance, compliance, compensation and benefits, operations, risks and liabilities, as well as to prevent, stabilize and cleanup legal and operational crises large and small that arise in the course of operations.
In this respect, Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce, regulatory compliance and operational and performance management. She supports her clients both on a real time, “on demand” basis and with longer term basis to deal with daily performance management and operations, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.
Well known for her extensive work with health care, insurance and other highly regulated entities on corporate compliance, internal controls and risk management, her clients range from highly regulated entities like employers, contractors and their employee benefit plans, their sponsors, management, administrators, insurers, fiduciaries and advisors, technology and data service providers, health care, managed care and insurance, financial services, government contractors and government entities, as well as retail, manufacturing, construction, consulting and a host of other domestic and international businesses of all types and sizes.
As a key part of this work, Ms. Stamer uses her deep and highly specialized health, insurance, labor and employment and other knowledge and experience to help health industry, insurance and financial services and other employers and other employee benefit plan sponsors; health, pension and other employee benefit plans, their fiduciaries, administrators and service providers, insurers, and others design legally compliant, effective compliance and internal controls, risk management, human resources and other workforce performance, discipline, compensation, employee benefits and related programs, products and arrangements.
In the course of this work, Ms. Stamer has accumulated an impressive resume of experience advising and representing clients on HIPAA and other privacy and data security concerns. The scribe for the American Bar Association (ABA) Joint Committee on Employee Benefits annual agency meeting with the Department of Health & Human Services Office of Civil Rights for several years, Ms. Stamer has worked extensively with health plans, health care providers, health care clearinghouses, their business associates, employer and other sponsors, banks and other financial institutions, and others on risk management and compliance with HIPAA and other information privacy and data security rules, investigating and responding to known or suspected breaches, defending investigations or other actions by plaintiffs, OCR and other federal or state agencies, reporting known or suspected violations, business associate and other contracting, commenting or obtaining other clarification of guidance, training and enforcement, and a host of other related concerns. Her clients include public and private health plans, health insurers, health care providers, banking, technology and other vendors, and others. Beyond advising these and other clients on privacy and data security compliance, risk management, investigations and data breach response and remediation, Ms. Stamer also advises and represents clients on OCR and other HHS, Department of Labor, IRS, FTC, DOD and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. She also is the author of numerous highly acclaimed publications, workshops and tools for HIPAA or other compliance including training programs on Privacy & The Pandemic for the Association of State & Territorial Health Plans, as well as HIPAA, FACTA, PCI, medical confidentiality, insurance confidentiality and other privacy and data security compliance and risk management for Los Angeles County Health Department, ISSA, HIMMS, the ABA, SHRM, schools, medical societies, government and private health care and health plan organizations, their business associates, trade associations and others.
Ms. Stamer also is deeply involved in helping to influence the health care, workforce, insurance and financial services, employee benefit, privacy and data security and other federal, state and local laws, regulations and enforcement actions. She both helps her clients respond to and resolve emerging regulations and laws, government investigations and enforcement actions and helps them shape the rules through dealings with Congress and other legislatures, regulators and government officials domestically and internationally. A former lead consultant to the Government of Bolivia on its Social Security reform law and most recognized for her leadership on U.S. health and pension, wage and hour, tax, education and immigration policy reform, Ms. Stamer works with U.S. and foreign businesses, governments, trade associations, and others on workforce, social security and severance, health care, immigration, privacy and data security, tax, ethics and other laws and regulations. Founder and Executive Director of the Coalition for Responsible Healthcare Policy and its PROJECT COPE: the Coalition on Patient Empowerment and a Fellow in the American Bar Foundation and State Bar of Texas. She also works as a policy advisor and advocate to health, insurance and financial services, employee benefits and other business, professional and civic organizations.
Author of the thousands of publications and workshops these and other employment, employee benefits, health care, insurance, workforce and other management matters, Ms. Stamer also is a highly sought out speaker and industry thought leader known for empowering audiences and readers. Ms. Stamer’s insights on employee benefits, insurance, health care and workforce matters in Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, 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 has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications. Ms. Stamer also regularly serves on the faculty and planning committees for symposia of LexisNexis, the American Bar Association, ALIABA, the Society of Employee Benefits Administrators, the American Law Institute, ISSA, HIMMs, and many other prominent educational and training organizations and conducts training and speaks on these and other management, compliance and public policy concerns.
Ms. Stamer also has a lifelong history of involvement with and service with a diverse range of professional, community and charitable organizations and causes including as founder and Executive Director of the Coalition for Responsible Health Care Policy and its PROJECT COPE: Coalition for Patient Empowerment; technical advisor to the National Physicians’ Council for Health Care Policy; a founding Board Member and President of the Alliance for Healthcare Excellence and its Patient Empowerment and Health Care Heroes Projects; a Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; the Board President of the early childhood development intervention agency, The Richardson Development Center for Children; a member of the Dallas United Way Long Range Planning Committee; as well as leadership involvement in the ABA Joint Committee on Employee Benefits Council, the North Texas Healthcare Compliance Professionals Association; the ABA RPTE Employee Benefits & Other Compensation Committee, the ABA Health Law Section, the ABA International Section Life Sciences Committee, and the ABA TIPS Employee Benefit Committee; TEGE Coordinator of the Gulf Coast TEGE Council TE Division; Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a member of the Board of Directors of the Southwest Benefits Association; Dallas, Regional and State BACPAC Chair of the Texas Association of Business; SHRM Regional Chair and National Advisory Board Chair; WEB Network of Benefits Professionals National and Dallas Boards; as a contributing author and the Advisory Board member of the BNA EBCD CD, InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications and as chair or planning faculty of a multitude of symposia.. For additional information about Ms. Stamer, see www.cynthiastamer.com, or contact Ms. Stamer via email here or via telephone to (214) 452.8297.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also may be interested reviewing other Solutions Law Press, Inc.™ resources at www.solutionslawpress.com such as:
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Health plans, their employer and other sponsors and fiduciaries, health insurers, health care providers, health care clearinghouses and their business associates should study and learn from the just announced, record-setting $16 million resolution agreement between health insurance giant, Anthem, Inc., to resolve Department of Health & Human Services Office of Civil Rights (OCR) charges that Anthem, Inc.’s violations of the Health Insurance Portability & Accountability Act (HIPAA) Privacy and Security Rules exposed the electronic protected health information (ePHI) of almost 79 million people. In addition to reviewing the adequacy of their own HIPAA privacy and security practices, health plans, their employer and union sponsors and fiduciaries also should consider assessing the advisability of tightening their business associate and other agreements with health insurers, third party administrative services providers and other vendors in light of the resolution agreement and experiences arising out of the Anthem breach to better position themselves to assess and enforce HIPAA compliance, receive notice and respond in the event of an insurer or other vendor breach and mitigate financial costs and liabilities resulting from breaches or other compliance deficiencies.
Anthem’s Record Setting HIPAA Breach & Resolution Agreement
The settlement agreement announced October 15, 2018 by OCR requires Anthem, Inc. to pay a $16 million resolution payment to OCR and take a series of corrective actions to resolve HIPAA liabilities to OCR for allowing the largest known U.S. health data breach in history in 2015. The record $16 million resolution payment eclipses the prior record resolution payment of $5.55 million Memorial Healthcare System (MHS) paid OCR to settle HIPAA charges in 2016. Moreover, the $16 million resolution payment it’s just a small portion of the amount that Anthem has been required to shell out as a consequence of the breach. In addition to the $16 million paid under the OCR resolution agreement, anthem already has paid more than $115 million to settle lawsuits arising out of the breach under other laws.
An independent licensee of the Blue Cross and Blue Shield Association and one of the nation’s largest health benefits companies, Anthem provides medical care coverage to one in eight Americans through its affiliated health plans. The breach that resulted in the settlement agreement affected ePHI Anthem maintained for its affiliated health plans including many employer or union sponsored self-insured and insured group health plans and other HIPAA-covered entity health plans.
On March 13, 2015, Anthem filed a breach report with the HHS Office for Civil Rights that disclosed that Anthem discovered on January 29, 2015 that cyber-attackers had gained access to and engaged in continuous and targeted cyberattack on Anthem’s IT system for the apparent purpose of extracting data, otherwise known as an advanced persistent threat attack. After filing its breach report, Anthem discovered cyber-attackers had infiltrated their system through spear phishing emails sent to an Anthem subsidiary after at least one employee responded to the malicious email and opened the door to further attacks. OCR’s investigation revealed that between December 2, 2014 and January 27, 2015, the cyber-attackers stole the ePHI of almost 79 million individuals, including names, social security numbers, medical identification numbers, addresses, dates of birth, email addresses, and employment information.
In addition to the impermissible disclosure of ePHI, OCR’s investigation revealed that Anthem failed to conduct an enterprise-wide risk analysis, had insufficient procedures to regularly review information system activity, failed to identify and respond to suspected or known security incidents, and failed to implement adequate minimum access controls to prevent the cyber-attackers from accessing sensitive ePHI, beginning as early as February 18, 2014.
In addition to the consequences for the millions of individuals whose ePHI was disclosed through the breach, the breach also triggered responsibilities and concerns for fiduciaries and sponsors of the employer and union-sponsored group health plans administered or insured by Anthem. Sponsors and fiduciaries of private sector employer or union sponsored plans struggled to obtain information and cooperation from Anthem necessary to evaluate and fulfill their health plans’ HIPAA obligations as well as the fiduciary responsibility requirements of the Employee Retirement Income Security Act (ERISA).
In addition to the $16 million settlement that Anthem is paying to resolve OCR’s HIPAA charges stemming from the breach, the OCR settlement agreement also requires Anthem to undertake a robust corrective action plan to comply with the HIPAA Rules.
Health Plans, Sponsors, Fiduciaries & Vendors Should Act To Manage Compliance & Risks
Unquestionably, other health insurers, employer, union and association sponsored group health plans, and their vendors and business associates should evaluate the adequacy and defensibility of their own health plan privacy and security practices in light of the Anthem breach and resolution agreement. In addition, employer, union or association health plan sponsors, administrative service providers and fiduciaries also should consider the advisability of strengthening their business associate agreements with insurers, third party administrators and other health plan service providers to incorporate safeguards, audit, oversight or other provisions and practices to help prudently monitor potential risks and improve their ability to receive timely notice, respond to, and preserve rights of recourse against insurers or other vendors in the event of a breach or other deficiency.
About The Author
A practicing attorney and Managing Shareholder of Cynthia Marcotte Stamer, P.C, Cynthia Marcotte Stamer’s more than 30 years’ of leading edge work as an practicing attorney, author, lecturer and industry and policy thought leader have resulted in her recognition as a “Top” attorney in employee benefits, labor and employment and health care law.
Board certified in labor and employment law by the Texas Board of Legal Specialization, a Fellow in the American College of Employee Benefit Counsel, Scribe for the American Bar Association (ABA) Joint Committee on Employee Benefits (JCEB) Annual Agency Meeting with the Office of Civil Rights and a former JCEB Council Representative; former Chair of the ABA Health Law Section Managed Care & Insurance Interest Group; and past Chair, former Welfare Benefit Committee Co-Chair and current Fiduciary Responsibility Committee Co-Chair of the American Bar Association (ABA) RPTE Section Employee Benefits Group, former Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, Ms. Stamer is recognized nationally and internationally for her practical and creative insights and leadership on HIPAA and other health care, managed care and insurance, and other employee benefit, human resources, and related antitrust, corporate, privacy and data security, tax and other internal controls, regulatory affairs and public policy concerns.
Ms. Stamer’s legal and management consulting work throughout her career has focused on helping organizations and their management use the law and process to manage people, process, compliance, operations and risk. Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer helps public and private, domestic and international health, insurance and financial security, and other businesses, governments, and other organizations and their leaders manage their employees, vendors and suppliers, and other workforce members, customers and other’ performance, compliance, compensation and benefits, operations, risks and liabilities, as well as to prevent, stabilize and cleanup legal and operational crises large and small that arise in the course of operations.
In this respect, Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce, regulatory compliance and operational and performance management. She supports her clients both on a real time, “on demand” basis and with longer term basis to deal with daily performance management and operations, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.
Well known for her extensive work with health care, insurance and other highly regulated entities on corporate compliance, internal controls and risk management, her clients range from highly regulated entities like employers, contractors and their employee benefit plans, their sponsors, management, administrators, insurers, fiduciaries and advisors, technology and data service providers, health care, managed care and insurance, financial services, government contractors and government entities, as well as retail, manufacturing, construction, consulting and a host of other domestic and international businesses of all types and sizes.
As a key part of this work, Ms. Stamer uses her deep and highly specialized health, insurance, labor and employment and other knowledge and experience to help health industry, insurance and financial services and other employers and other employee benefit plan sponsors; health, pension and other employee benefit plans, their fiduciaries, administrators and service providers, insurers, and others design legally compliant, effective compliance and internal controls, risk management, human resources and other workforce performance, discipline, compensation, employee benefits and related programs, products and arrangements.
In the course of this work, Ms. Stamer has accumulated an impressive resume of experience advising and representing clients on HIPAA and other privacy and data security concerns. The scribe for the American Bar Association (ABA) Joint Committee on Employee Benefits annual agency meeting with the Department of Health & Human Services Office of Civil Rights for several years, Ms. Stamer has worked extensively with health plans, health care providers, health care clearinghouses, their business associates, employer and other sponsors, banks and other financial institutions, and others on risk management and compliance with HIPAA and other information privacy and data security rules, investigating and responding to known or suspected breaches, defending investigations or other actions by plaintiffs, OCR and other federal or state agencies, reporting known or suspected violations, business associate and other contracting, commenting or obtaining other clarification of guidance, training and enforcement, and a host of other related concerns. Her clients include public and private health plans, health insurers, health care providers, banking, technology and other vendors, and others. Beyond advising these and other clients on privacy and data security compliance, risk management, investigations and data breach response and remediation, Ms. Stamer also advises and represents clients on OCR and other HHS, Department of Labor, IRS, FTC, DOD and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. She also is the author of numerous highly acclaimed publications, workshops and tools for HIPAA or other compliance including training programs on Privacy & The Pandemic for the Association of State & Territorial Health Plans, as well as HIPAA, FACTA, PCI, medical confidentiality, insurance confidentiality and other privacy and data security compliance and risk management for Los Angeles County Health Department, ISSA, HIMMS, the ABA, SHRM, schools, medical societies, government and private health care and health plan organizations, their business associates, trade associations and others.
Ms. Stamer also is deeply involved in helping to influence the health care, workforce, insurance and financial services, employee benefit, privacy and data security and other federal, state and local laws, regulations and enforcement actions. She both helps her clients respond to and resolve emerging regulations and laws, government investigations and enforcement actions and helps them shape the rules through dealings with Congress and other legislatures, regulators and government officials domestically and internationally. A former lead consultant to the Government of Bolivia on its Social Security reform law and most recognized for her leadership on U.S. health and pension, wage and hour, tax, education and immigration policy reform, Ms. Stamer works with U.S. and foreign businesses, governments, trade associations, and others on workforce, social security and severance, health care, immigration, privacy and data security, tax, ethics and other laws and regulations. Founder and Executive Director of the Coalition for Responsible Healthcare Policy and its PROJECT COPE: the Coalition on Patient Empowerment and a Fellow in the American Bar Foundation and State Bar of Texas. She also works as a policy advisor and advocate to health, insurance and financial services, employee benefits and other business, professional and civic organizations.
Author of the thousands of publications and workshops these and other employment, employee benefits, health care, insurance, workforce and other management matters, Ms. Stamer also is a highly sought out speaker and industry thought leader known for empowering audiences and readers. Ms. Stamer’s insights on employee benefits, insurance, health care and workforce matters in Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, 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 has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications. Ms. Stamer also regularly serves on the faculty and planning committees for symposia of LexisNexis, the American Bar Association, ALIABA, the Society of Employee Benefits Administrators, the American Law Institute, ISSA, HIMMs, and many other prominent educational and training organizations and conducts training and speaks on these and other management, compliance and public policy concerns.
Ms. Stamer also has a lifelong history of involvement with and service with a diverse range of professional, community and charitable organizations and causes including as founder and Executive Director of the Coalition for Responsible Health Care Policy and its PROJECT COPE: Coalition for Patient Empowerment; technical advisor to the National Physicians’ Council for Health Care Policy; a founding Board Member and President of the Alliance for Healthcare Excellence and its Patient Empowerment and Health Care Heroes Projects; a Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; the Board President of the early childhood development intervention agency, The Richardson Development Center for Children; a member of the Dallas United Way Long Range Planning Committee; as well as leadership involvement in the ABA Joint Committee on Employee Benefits Council, the North Texas Healthcare Compliance Professionals Association; the ABA RPTE Employee Benefits & Other Compensation Committee, the ABA Health Law Section, the ABA International Section Life Sciences Committee, and the ABA TIPS Employee Benefit Committee; TEGE Coordinator of the Gulf Coast TEGE Council TE Division; Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a member of the Board of Directors of the Southwest Benefits Association; Dallas, Regional and State BACPAC Chair of the Texas Association of Business; SHRM Regional Chair and National Advisory Board Chair; WEB Network of Benefits Professionals National and Dallas Boards; as a contributing author and the Advisory Board member of the BNA EBCD CD, InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications and as chair or planning faculty of a multitude of symposia.. For additional information about Ms. Stamer, see www.cynthiastamer.com, or contact Ms. Stamer via email here or via telephone to (214) 452.8297.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also may be interested reviewing other Solutions Law Press, Inc.™ resources at www.solutionslawpress.com such as:
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.
On Thursday, August 13, the House Ways & Means Committee will hold hearings on retirement rule reforms intended to change multiemployer plan rules to make it easier for small businesses to offer and their employees and independent contractors to participate in retirement plans and provide retirement plan relief for participants proposed in the Family Savings Act of 2018, H.R. 6757.
Part of recently 3-bill tax package dubbed “Tax Reform 2.0” introduced on Monday, September 10, H.R. 6757 would remove certain regulatory barriers restricting the types of small-business employers who are permitted to band together to offer a retirement plan through a multiple employer plan (MEP).
H.R. 6757 also includes relief for certain plan participants. Among other things, it would:
End required minimum distributions of funds from 401(k) plans and other retirement savings accounts for retirees with balances under $50,000; and
Protect the ability of participants invested in lifetime income options through an employment-based retirement plan against losing these investment guarantees when their employer changes recordkeepers.
Sponsored by Rep. Mike Kelly (R-PA), and cosponsored by Rep. Paul Mitchell (R-MI), House Ways and Means Committee Chairman Kevin Brady (R-TX), and all other Ways and Means Committee Republicans, H.R. 6757, the bill enjoys strong support among House Republicans and President Trump.
House Ways and Means Committee Chair Kevin Brady expressed strong support for its reforms, saying: “We are creating financial security. The Family Savings Act focuses on helping families save more and earlier for the future by making it easier for businesses to offer retirement savings plans while ensuring workers can easily participate in these plans. This will help give our families the financial stability they need for whatever life throws their way.”
The Ways and Means Committee will address the H.R. 6757 proposals during its scheduled Tax Reform 2.0 markup on Thursday, September 13, 2018 at 10:00 a.m. in Room 1100 of the Longworth House Office Building. Use these links to read these bills:
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation; Former Chair of the RPTE Employee Benefits and Compensation Committee, a current Co-Chair of the Committee, and the former Chair of its Welfare Benefit and its Defined Compensation Plan Committees and former RPTE Joint Committee on Employee Benefits Council (JCEB) Representative, Cynthia Marcotte Stamer is a Martindale-Hubble “AV-Preeminent” practicing attorney and management consultant, author, public policy advocate, author and lecturer repeatedly recognized for her 30 plus years’ of work and pragmatic thought leadership, publications and training on health, pension and other employee benefit, insurance, labor and employment, and health care fiduciary responsibility, payment, investment, contracting and other design, administration and compliance concerns as among the “Top Rated Labor & Employment Lawyers in Texas,” a “Legal Leader,” a “Top Woman Lawyer” and with other awards by LexisNexis® Martindale-Hubbell®; as among the “Best Lawyers In Dallas” for her work in the field of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, in International Who’s Who of Professionals and with numerous other awards and distinctions.
Highly valued for her ability to meld her extensive legal and industry knowledge and experience with her talents as an insightful innovator and pragmatic problem solver, Ms. Stamer advises, represents and defends employer, union, multi-employer, association and other employee benefit plan sponsors, insurers and managed care organizations, fiduciaries, plan administrators, technology and other service providers, government and community leaders and others about health and other employee benefit and insurance program and policy design and innovation, funding, documentation, administration, communication, data security and use, contracting, plan, public and regulatory reforms and enforcement, and other risk management, compliance and operations matters. Her experience encompasses leading and supporting the development and defense of innovative new policies, programs, practices and solutions; advising and representing clients on routine plan establishment, plan documentation and contract drafting and review, administration, change and other compliance and operations; crisis prevention and response, compliance and risk management audits and investigations, enforcement actions and other dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, Federal Trade Commission, Justice, Securities and Exchange Commission, Education and other federal agencies, state legislatures, attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators, and various other foreign and domestic governmental bodies and agencies. She also provides strategic and other supports clients in defending litigation as lead strategy counsel, special counsel and as an expert witness. Alongside her extensive legal and operational experience, Ms. Stamer also is recognized for her work as a public and regulatory policy advocate and community leader with a gift for finding pragmatic solutions and helping to forge the common ground necessary to build consensus. Best known for her domestic public policy and community leadership on health care and insurance reform, Ms. Stamer’s lifelong public policy and community service involvement includes service as a lead consultant to the Government of Bolivia on its pension privatization project, as well as extensive legislative and regulatory reform, advocacy and input workforce, worker classification, employee benefit, public health and healthcare, social security and other disability and aging in place, education, migration reforms domestically and internationally throughout her adult life. In addition to her public and regulatory policy involvement, Ms. Stamer also contributes her service and leadership to a professional and civic organizations and efforts including her involvement as the Founder and Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE; Coalition on Patient Empowerment, a founding Board Member and past President of the Alliance for Healthcare Excellence; Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; Vice Chair, Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group; current Fiduciary Responsibility Committee Co-Chair and Membership Committee member of the ABA RPTE Section; former RPTE Employee Benefits and Other Compensation Group Chair, former Chair and Co-Chair of its Welfare Plans Committee, and Defined Contribution Plans Committee; former RPTE Representative to ABA Joint Committee on Employee Benefits Council; former RPTE Representative to the ABA Health Law Coordinating Counsel; former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, former Board Member, Continuing Education Chair and Treasurer of the Southwest Benefits Association; Vice President of the North Texas Healthcare Compliance Professionals Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; past Dallas World Affairs Council Board Member, and in leadership of many other professional, civic and community organizations. Ms. Stamer also is a highly popular lecturer, symposia chair and author, who publishes and speaks extensively on health and managed care industry, human resources, employment and other privacy, data security and other technology, regulatory and operational risk management for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, the Society of Professional Benefits Administrators, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients, serves on the faculty and planning committee of many workshops, seminars, and symposia, and on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.
Beyond these involvements, Ms. Stamer also is active in the leadership of a broad range of other public policy advocacy and other professional and civic organizations and involvements. Through these and other involvements, she helps develop and build solutions, build consensus, garner funding and other resources, manage compliance and other operations, and take other actions to identify promote tangible improvements in health care and other policy and operational areas.
Before founding her current law firm, Cynthia Marcotte Stamer, P.C., Ms. Stamer practiced law as a partner with several prominent national and international law firms for more than 10 years before founding Cynthia Marcotte Stamer, P.C. to practice her unique brand of “Solutions law™” and to devote more time to the pragmatic policy and system reform, community education and innovation, and other health system improvement efforts of her PROJECT COPE: the Coalition on Patient Empowerment initiative.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources at SolutionsLawPress.com such as the following
If you or someone else you know would like to receive future updates about developments on these and other concerns, please provide your current contact information and preferences including your preferred e-mail by creating or updating your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
The official poster for the upcoming National Disability Employment Awareness Month 2018 in October is now available in both English and Spanish. You can download the free poster from the Office of Disability Employment (ODEP) website hereor order it in hard copy here.
Observed each October, NDEAM celebrates the contributions of workers with disabilities and educates about the value of a workforce inclusive of their skills and talents.
The 2018 National Disability Employment Awareness Month (NDEAM) theme is “America’s Workforce: Empowering All.”
In keeping with this theme, the 2018 poster features an office scene of coworkers with and without disabilities, and highlights the theme of “America’s Workforce: Empowering All.”
Employees should heed the warning provided by a federal grand jury’s indictment today charging a Walled Lake, Michigan restaurant owner with 24 counts of failing to account for and pay over employment taxes and one count of willful failure to file an income tax return, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
According to the indictment, Johni Semma owned Bayside Sports Bar & Grill (“Bayside”), a restaurant, and The Coliseum, an adult entertainment business. As the owner of Bayside, Semma was allegedly responsible for collecting and paying over Bayside’s employment taxes. The indictment charges that during 2008 to 2015, Bayside accrued employment tax liabilities of more than $1 million and that Semma withheld those taxes from the pay of the restaurant’s employees. Semma then allegedly failed to fully pay over the amounts he withheld to the Internal Revenue Service (IRS).
The indictment further alleges that in 2012, Semma sold The Coliseum for more than $6 million with approximately $3.5 million of the purchase price paid during 2012. Despite receiving considerable income from the sale of The Coliseum and other sources, Semma allegedly did not file a 2012 income tax return.
If convicted, Semma faces a statutory maximum of five years in prison for each count of failure to pay over the employment taxes. He faces a statutory maximum of one year in prison for the one count of willful failure to file his income tax return. In addition, he faces a period of supervised release, restitution, and monetary penalties. An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Employers should recognize the indictment as a reminder to ensure they timely collect and deposit all employment taxes withheld in accordance with applicable law.
About The Author
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation; Former Chair of the RPTE Employee Benefits and Compensation Committee, a current Co-Chair of the Committee, and the former Chair of its Welfare Benefit and its Defined Compensation Plan Committees and former RPTE Joint Committee on Employee Benefits Council (JCEB) Representative, Cynthia Marcotte Stamer is a Martindale-Hubble “AV-Preeminent” practicing attorney and management consultant, author, public policy advocate, author and lecturer repeatedly recognized for her 30 plus years’ of work and pragmatic thought leadership, publications and training on health, pension and other employee benefit, insurance, labor and employment, and health care fiduciary responsibility, payment, investment, contracting and other design, administration and compliance concerns as among the “Top Rated Labor & Employment Lawyers in Texas,” a “Legal Leader,” a “Top Woman Lawyer” and with other awards by LexisNexis® Martindale-Hubbell®; as among the “Best Lawyers In Dallas” for her work in the field of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, in International Who’s Who of Professionals and with numerous other awards and distinctions.
Highly valued for her ability to meld her extensive legal and industry knowledge and experience with her talents as an insightful innovator and pragmatic problem solver, Ms. Stamer advises, represents and defends employer, union, multi-employer, association and other employee benefit plan sponsors, insurers and managed care organizations, fiduciaries, plan administrators, technology and other service providers, government and community leaders and others about health and other employee benefit and insurance program and policy design and innovation, funding, documentation, administration, communication, data security and use, contracting, plan, public and regulatory reforms and enforcement, and other risk management, compliance and operations matters. Her experience encompasses leading and supporting the development and defense of innovative new policies, programs, practices and solutions; advising and representing clients on routine plan establishment, plan documentation and contract drafting and review, administration, change and other compliance and operations; crisis prevention and response, compliance and risk management audits and investigations, enforcement actions and other dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, Federal Trade Commission, Justice, Securities and Exchange Commission, Education and other federal agencies, state legislatures, attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators, and various other foreign and domestic governmental bodies and agencies. She also provides strategic and other supports clients in defending litigation as lead strategy counsel, special counsel and as an expert witness. Alongside her extensive legal and operational experience, Ms. Stamer also is recognized for her work as a public and regulatory policy advocate and community leader with a gift for finding pragmatic solutions and helping to forge the common ground necessary to build consensus. Best known for her domestic public policy and community leadership on health care and insurance reform, Ms. Stamer’s lifelong public policy and community service involvement includes service as a lead consultant to the Government of Bolivia on its pension privatization project, as well as extensive legislative and regulatory reform, advocacy and input workforce, worker classification, employee benefit, public health and healthcare, social security and other disability and aging in place, education, migration reforms domestically and internationally throughout her adult life. In addition to her public and regulatory policy involvement, Ms. Stamer also contributes her service and leadership to a professional and civic organizations and efforts including her involvement as the Founder and Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE; Coalition on Patient Empowerment, a founding Board Member and past President of the Alliance for Healthcare Excellence; Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; Vice Chair, Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group; current Fiduciary Responsibility Committee Co-Chair and Membership Committee member of the ABA RPTE Section; former RPTE Employee Benefits and Other Compensation Group Chair, former Chair and Co-Chair of its Welfare Plans Committee, and Defined Contribution Plans Committee; former RPTE Representative to ABA Joint Committee on Employee Benefits Council; former RPTE Representative to the ABA Health Law Coordinating Counsel; former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, former Board Member, Continuing Education Chair and Treasurer of the Southwest Benefits Association; Vice President of the North Texas Healthcare Compliance Professionals Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; past Dallas World Affairs Council Board Member, and in leadership of many other professional, civic and community organizations. Ms. Stamer also is a highly popular lecturer, symposia chair and author, who publishes and speaks extensively on health and managed care industry, human resources, employment and other privacy, data security and other technology, regulatory and operational risk management for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, the Society of Professional Benefits Administrators, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients, serves on the faculty and planning committee of many workshops, seminars, and symposia, and on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.
Beyond these involvements, Ms. Stamer also is active in the leadership of a broad range of other public policy advocacy and other professional and civic organizations and involvements. Through these and other involvements, she helps develop and build solutions, build consensus, garner funding and other resources, manage compliance and other operations, and take other actions to identify promote tangible improvements in health care and other policy and operational areas.
Before founding her current law firm, Cynthia Marcotte Stamer, P.C., Ms. Stamer practiced law as a partner with several prominent national and international law firms for more than 10 years before founding Cynthia Marcotte Stamer, P.C. to practice her unique brand of “Solutions law™” and to devote more time to the pragmatic policy and system reform, community education and innovation, and other health system improvement efforts of her PROJECT COPE: the Coalition on Patient Empowerment initiative.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources at SolutionsLawPress.com such as the following
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NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
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A flurry of activity in the House Ways & Means Committee and other Congressional committees over the past few weeks signals the advisability of keeping a close eye on health care and health benefit reform proposals this Summer in anticipation of both the Fall health benefit enrollment and renewal season and the mid-term November Congressional elections.
Coupled with the Trump Administration’s recent rollout of its long promised association health plan, short-term coverage and other regulatory reforms and promises of more changes to come, the ongoing attention paid by the Administration and Congress to health insurance and health care reform raises a strong possibility that employer, association, and other health plan sponsors, fiduciaries and their vendors that they and their plan members should be on watch for late-breaking developments that may require or warrant last minute changes to health benefit plan designs, communications, contracts or other key decisions.
With President Trump continuing to push for a wide range of health care reforms and health care and health benefit issues recognized as key voter concerns for the upcoming mid-term elections in November, the continued emphasis of the Republican-led Congress and federal regulators talking about their health care reform legislative agenda is not surprising. What may be more surprising to many is the intensity of the ongoing efforts in Congress to try to pass reform over the summer when many members of the House and Senate face tightly contested races in November.
Certainly continued Congressional commitment to pursue reform is evident from the House Ways & Means Committee’s health care heavy agenda of hearings and votes that this week alone resulted in its voting in favor of 11 health care reform bills promising new flexibility for employers about how to design their health plans and American families more health care choices and choice about how to pay for it and what coverage to buy popular with many providers, patients and employer and other health plan sponsors. While it remains to be seen if the House and Senate can agree on any or all of these proposal, the bi-partisan sponsorship of many of these proposals and the intensity of the focus of the Committee and others in Congress reflects a strong interest in health care reform by both parties leading up to November that could impact health benefit and other health care choices for providers, employers and American families in the Fall annual enrollment season.
The legislation passed by the Ways & Means Committee this weeks include bills that would:
Provide relief for employers relief from the Obamacare’s employer mandate and delay for an additional year the effective date of the widely disliked “Cadillac Tax;”
Overrule the “Use it Or Lose It” requirement in current Internal Revenue Regulations for healthcare flexible spending arrangement plans (HFSAs) that currently forces employers sponsoring HFSAs to draft their plans to require employees to forfeit unused salary reduction contributions in their HFSA accounts at the end of the year;
Offer individuals and families eligible for Obamacare created health premium subsidies more choice about where to obtain that coverage using their subsidies; and
Expand expand the availability and usability of HSAs in a multitude of ways.
Furthermore, a review of the Committee’s schedule makes clear that it isn’t finished with health care reform. After holding hearings on health savings account reforms and passing a flurry of health care reform bills intended to give employers relief from two key Obamacare mandates, to allow Obamacare subsidy-eligible Americans the choice to use the subsidies to purchase health care coverage not offered by the Obamacare exchanges, and a host of bills that would expand availability and usability of health savings account (HSA) and health care flexible spending account (HFSA) programs this week, the House Ways and Means Committee will turn its attention to health care fraud oversight and reform next week by holding hearings Tuesday on those health concerns. Health care providers, employer and other health plan sponsors, individual Americans and their families, and others interested in health benefit and health care reform will want to keep a close eye on these and other developments as Congress continues to debate health care reform in the runup to the upcoming 2018 health benefit plan renewal and annual enrollment season and November’s mid-term elections.
Committee Approved 11 Health Care Reform Bills This Week
As a part of its health reform efforts this week, the Committee voted to advance 11 health care reform bills offering new flexibility for employers about how to design their health plans and American families more health care choices and choice about how to pay for it and what coverage to buy popular with many providers, patients and employer and other health plan sponsors.
Among the approved legislation is a bill that would provide key relief for employers from certain key Obamacare mandates that have been widely unpopular with employers. H.R. 4616, the “Employer Relief Act of 2018,” sponsored by Rep. Devin Nunes (R-CA) and Rep. Mike Kelly (R-PA), which would give employers sponsoring health plans for their employees retroactive relief from Obamacare’s onerous employer mandate and delay for an additional year the effective date of another Obamacare requirement that when effective, will forces employers to pay the 40 percent tax on amounts paid for employer sponsored health care coverage that exceeds cost limits specified in the Obamacare legislation commonly known as the “Cadillac Tax.” Relief from the Cadillac Tax is widely perceived as benefiting bother employers and their employees, as its provisions penalize employers for spending more for employee health coverage than limits specified in the Obamacare law. These provisions also are particularly viewed by many as unfair because rising health plan costs since Obamacare’s passage make it likely that many employers will incur the tax penalty simply by sponsoring relatively basic health plans meeting the Obamacare mandates.
In addition to H.R. 4616, the Committee also voted to approve H.R. 6313, the “Responsible Additions and Increases to Sustain Employee Health Benefits Act of 2018,” sponsored by Rep. Steve Stivers (R-OH), which would overrule the “Use it Or Lose It” requirement in current Internal Revenue Regulations for HFSAs. Currently, this rule forces employers sponsoring HFSAs to draft their plans to require employees to forfeit unused salary reduction contributions in their HFSA accounts at the end of the year. The bill would allow employers to eliminate this forfeiture requirement so that employees could carry over any remaining unused balances in their HFSAs at the end of the year to use in a later year.
The Committee also voted to advance legislation to offer individuals and families eligible for Obamacare created health premium subsidies more choice about where to obtain that coverage. H.R. 6311, the “Increasing Access to Lower Premium Plans Act of 2018,” sponsored by Chairman Peter Roskam (R-IL) and Rep. Michael C. Burgess, M.D. (R-TX), would provide individuals receiving subsidies to help purchase health care coverage through the Obamacare-created health insurance exchange the option to use their premium tax credit to purchase health care coverage from qualified plans offered outside of the exchanges. Currently, subsidies may only be used to purchase coverage from health plans offered through the exchange, which often are much more costly and offer substantially fewer coverage options and less provider choice. In addition, the bill would expand access to the lowest-premium plans available for all individuals purchasing coverage in the individual market and allows the premium tax credit to be used to offset the cost of such plans.
Along with these reforms, the Committee also voted to pass a host of bills that would expand the availability and usability of HSAs including:
H.R. 6301, the “Promoting High-Value Health Care Through Flexibility for High Deductible Health Plans Act of 2018,” co-sponsored by Health Subcommittee Chairman Peter Roskam (R-IL) and Rep. Mike Thompson (D-CA), which seeks to expand access and enhance the utility of Health Savings Accounts (HSAs) by offering patients greater flexibility in designing their plan design while still being able to maintain their eligibility for HSA contributions.
H.R. 6305, the “Bipartisan HSA Improvement Act of 2018,” sponsored by Rep. Mike Kelly (R-PA) and Rep. Earl Blumenauer (D-OR), which also would expand HSA access and utility by allowing spouses to also make contributions to HSAs is their spouse has an FSA and lets employers offer certain services to employees through on-site or retail clinics.
H.R. 6317, the “Primary Care Enhancement Act of 2018,” co-sponsored by Rep. Erik Paulsen (R-MN) and Rep. Earl Blumenauer (D-OR), which seeks to protect HSA-eligible individuals who participate in a direct primary care (DPC) arrangement from losing their HSA-eligibility merely because of their participation in a DPC. In addition, it allows DPC provider fees to be covered with HSAs.
H.R. 6312, the “Personal Health Investment Today (PHIT) Act,” sponsored by Rep. Jason Smith (R-MO) and Rep. Ron Kind (D-WI), which seeks to fight obesity and promote wellness by allowing taxpayers to use tax-preferred accounts to pay costs of gym membership or exercise classes, children’s school sports programs and certain other wellness programs and activities.
H.R. 6309, the “Allowing Working Seniors to Keep Their Health Savings Accounts Act of 2018,” sponsored by Rep. Erik Paulsen (R-MN), which would expand HSA eligibility to include Medicare eligible seniors who are still in the workforce.
H.R.6199, the “Restoring Access to Medication Act of 2018,” sponsored by Rep. Lynn Jenkins (R-KS) and Rep. Grace Meng (D-NY), which would reverse Obamacare’s prohibition on using tax-favored health accounts to purchase over-the-counter medical products and would add feminine products to the list of qualified medical expenses for the purposes of these tax-favored health accounts.
H.R. 6306, the “Improve the Rules with Respect to Health Savings Accounts,” sponsored by Rep. Erik Paulsen (R-MN), which would increase the contribution limits for HSAs and further enhances flexibility in plans by allowing both spouses to contribute to make catch-up contributions to the same account and creating a new grace period for medical expenses incurred before the HSA was established.
H.R. 6314, the “Health Savings Act of 2018,” sponsored by Rep. Burgess (R-TX) and Rep. Roskam (R-IL), would expand eligibility and access to HSAs by allowing plans categorized as “catastrophic” and “bronze” in the exchanges to qualify for HSA contributions.
Committee Considers Health Care Fraud Next Week
The Committee next week will turn its attention to health care fraud by holding two hearings on Tuesday.
Both hearings are scheduled to take place in Room 1100 Longworth and their proceedings will be live streamed on YouTube.
The Committee’s health care reform focus this week and next are reflective of the continued emphasis of members of Congress in both parties on health care reform legislation as they prepare for the impending mid-term elections in November. As a part of these efforts, the House and Senate already over the past several months have held a wide range of hearings in various committees and key votes on a multitude of reform proposals. Numerous other hearings and votes are planned over the next several months as Congressional leaders from both parties work to advance their health care agendas in anticipation of the upcoming elections.
Key health care and health benefit reform proposals that the Republican Majority has designated for priority consideration include:
Prescription drug costs by checking perceived negative effects of health industry and health plan consolidations involving large health insurers, pharmacy benefit management companies (PBMs), pharmacy companies and other health industry and health insurance organizations on health care costs and patient, plan sponsor and plan sponsor choice and health care quality;
Oversight and reform of existing STARK, anti-kickback and other federal health care rules and exemptions relied upon by PBMs and other health industry organizations;
Efforts to understand and address health care treatment, health care and coverage costs and related social concerns associated with mental health and opioid and other substance abuse conditions and their treatment;
Efforts promote health benefit and health care choice, affordability and coverage; improve patient and employer choice; promote broader health care access and quality; reduce counterproductive regulation; and other health insurance and care improvements through expanded availability of health savings accounts, direct primary care and other consumer directed health care options, association health plan and other program options, streamlining quality reporting and regulation, billing and coding, physician and other health care provider electronic billing and recordkeeping, and other provider, payer, employer, individual and other health insurance mandates and other federal health care and health plan rules; and
While the recurrent stalling of past reform efforts over the past few years calls into question whether any or all of these proposals can make it through the highly politicized and divided Congress, bi-partisian sponsorship of most of the bills reported out this week at least raises the possibility that some of these proposals enjoy sufficient bi-partisan support to potentially pass before the elections. With both parties viewing health care reform as a key issue in the upcoming elections, voter feedback on these proposals could play a big role in determining the prospects for passage this Summer.
Along with the ongoing Congressional reform efforts, the Trump Administration also continues to move forward on a series of regulatory reforms that also could impact health care and health benefit decisions and responsibilities later this year. Beyond the Administration’s implementation of its long promised and recently finalized and released association health plan, short term coverage and other health benefit rules, the Administration’s continued consideration of changes to essential health benefits and other Obamacare regulations, ongoing mental health, substance abuse, and prescription drug reform projects, and other proposed regulatory and enforcement changes are likely to require health plans, their sponsors, insurers, administrators, members and even providers to adapt to changes in federal health plan rules between now and year end.
Amid this shifting legal landscape, employer and other health plan sponsors, their insurers, vendors, providers and participants will want to remain vigilant and work to preserve the flexibility to respond to new rules or guidance likely to rollout over the next several months.
Staying on top of proposed reforms as the Summer progresses is important:
To provide timely input to Congress on proposed reforms of particular benefit or concern;
To help plan for and deal with rules changes that could impact their options and choices during the upcoming health plan renewal and enrollment season this Fall and going forward; and
To be prepared to make informed choices when voting in the upcoming mid-term Congressional elections in November.
Keeping informed about potential changes is only part of the challenge, however. Employer and other health plan sponsors, fiduciaries and service providers also generally should seek to negotiate vendor contracts that allow them the greatest possible flexibility to respond to changing rules, opportunities and requirements with minimum penalties and disruption when designing, negotiating and implementing vendor contracts, plan designs and plan enrollment and other processes and communications.
About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry, health and other benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors; managed care organizations, insurers, self-insured health plans and other payers and their management; public and private, domestic and international hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, health care accreditation, peer review and quality committees and organizations; managed care organizations, insurers, third party administrative services organizations and other payer organizations; billing, utilization management, management services organizations; group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; claims, billing and other health care and insurance technology and data service organizations; other health, employee benefit, insurance and financial services product and solutions consultants, developers and vendors; and other health, employee benefit, insurance, technology, government and other management clients.
A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompassess advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.
Beyond her public policy and regulatory affairs involvement, Ms. Stamer also has extensive experience helping these and other clients to design, implement, document, administer and defend workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government; accreditation and quality organizations; private litigation and other federal and state health care industry investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; training and discipline; enforcement, and a host of other related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, and change management; workforce and operations management, and other opportunities and challenges arising in the course of their operations.
Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; HIPAA administrative simplification, meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, antikickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA, HEDIS and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; 1557 and other Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns.
Ms. Stamer has extensive health care reimbursement and insurance experience advising and defending plan sponsors, administrators, insurance and managed care organizations, health care providers, payers, and others about Medicare, Medicaid, Medicare and Medicaid Advantage, Tri-Care, self-insured group, association, individual and employer and association group and other health benefit programs and coverages including but not limited to advising public and private payers about coverage and program design and documentation, advising and defending providers, payers and systems and billing services entities about systems and process design, audits, and other processes; provider credentialing, and contracting; providers and payer billing, reimbursement, claims audits, denials and appeals, coverage coordination, reporting, direct contracting, False Claims Act, Medicare & Medicaid, ERISA, state Prompt Pay, out-of-network and other nonpar insured, and other health care claims, prepayment, post-payment and other coverage, claims denials, appeals, billing and fraud investigations and actions and other reimbursement and payment related investigation, enforcement, litigation and actions. Scribe for the ABA JCEB annual agency meeting with HHS OCR, she also has worked extensively on health and health benefit coding, billing and claims, meaningful use and EMR, billing and reimbursement, quality measurement and reimbursement, HIPAA, FACTA, PCI, trade secret, physician and other medical, workforce, consumer financial and other data confidentiality and privacy, federal and state data security, data breach and mitigation, and other information privacy and data security concerns.
Author of leading works on a multitude of health care, health plan and other health industry matters, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting, former Vice President of the North Texas Health Care Compliance Professionals Association, past Chair of the ABA Health Law Section Managed Care & Insurance Section, past ABA JCEB Council Representative and CLE and Marketing Committee Chair, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer’s health industry clients include public health organizations; public and private hospitals, healthcare systems, clinics and other health care facilities; physicians, physician practices, medical staff, and other provider organizations; skilled nursing, long term care, assisted living, home health, ambulatory surgery, dialysis, telemedicine, DME, Pharma, clinics, and other health care providers; billing, management and other administrative services organizations; insured, self-insured, association and other health plans; PPOs, HMOs and other managed care organizations, insurance, claims administration, utilization management, and other health care payers; public and private peer review, quality assurance, accreditation and licensing; technology and other outsourcing; healthcare clearinghouse and other data; research; public and private social and community organizations; real estate, technology, clinical pathways, and other developers; investors, banks and financial institutions; audit, accounting, law firm; consulting; document management and recordkeeping, business associates, vendors, and service providers and other professional and other health industry organizations; academic medicine; trade associations; legislative and other law making bodies and others.
A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, privacy and data security, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; a ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.
For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources 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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Construction industry and other employers of employees working in summer heat impacted environments need to take appropriate steps to prevent heat related injuries and illnesses
Every year, dozensof workers die and thousands more become ill while working in extreme heat or humid conditions. More than 40 percent of heat-related worker deaths occur in the construction industry, but workers in every field are susceptible.
Working in extreme heat without appropriate precautions creates heightened risk of a range of heat illnesses. These risks can affect anyone, regardless of age or physical condition.
Employer Responsibility to Protect Workers
Protecting workers from extreme heat generally is part of the responsibility of an employer to provide a safe workplace under the Occupational Health & Safety Act (OSHA) and state occupational health and safety statutes.
Aside from the worker’s compensation, medical and disability costs and workplace disruptions that heat related illness can create, heat related injuries or illnesses to workers also create risks of civil penalties and other liabilities under OSHA.
To minimize risks of heat related OSHA violations and other exposures, an employer of workers exposed to high temperatures should establish and document their training and administration of a complete heat illness prevention program that meets or exceeds applicable OSHA standards.
Resources
OSHA’s Occupational Exposure to Heat page explains what employers can do to keep workers safe and what workers need to know – including factors for heat illness, adapting to working in indoor and outdoor heat, protecting workers, recognizing symptoms, and first aid training. The page also includes resources for specific industries and OSHA workplace standards.
Employers can help promote compliance and reduce heat related injury risks by training and requiring workers and their management to use three common sense elements for preventing heat related injuries and deaths to workers – Water. Rest. Shade.
OSHA guidance urges employers to prevent heat-related injuries by taking the following steps:
Provide workers with water, rest and shade.
Allow new or returning workers to gradually increase workloads and take more frequent breaks as they acclimatize, or build a tolerance for working in the heat.
Plan for emergencies and train workers on prevention.
Monitor workers for signs of illness.
Take prompt action to provide appropriate intervention and medical care in response to signs of potential heat related health issues.
To ensure that they can prove these expectations are met, Most employers will want to adopt specific policies require in well-documented compliance with these requirements.
About The Author
If you need more information about or help with these or other workplace concerns, the author of this article may be able to help.
Board Certified in Labor and Employment Law, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation; Former Chair of the RPTE Employee Benefits and Compensation Committee, a current Co-Chair of the Committee, and the former Chair of its Welfare Benefit and its Defined Compensation Plan Committees and former RPTE Joint Committee on Employee Benefits Council (JCEB) Representative, Cynthia Marcotte Stamer is a Martindale-Hubble “AV-Preeminent” practicing management attorney, consultant, coach, author, public policy advocate, author and lecturer repeatedly recognized for her 30 plus years’ of work and pragmatic thought leadership, publications and training on labor and employment, compensation, health, pension and other employee benefit, insurance, and health care fiduciary responsibility, payment, investment, contracting and other design, administration and compliance concerns as among the “Top Rated Labor & Employment Lawyers in Texas,” a “Legal Leader,” a “Top Woman Lawyer” and with other awards by LexisNexis® Martindale-Hubbell®; as among the “Best Lawyers In Dallas” for her work in the field of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, in International Who’s Who of Professionals and with numerous other awards and distinctions.
Highly valued for her ability to meld her extensive legal and industry knowledge and experience with her talents as an insightful innovator and pragmatic problem solver, Ms. Stamer advises, represents and defends employer, union, multi-employer, association and other employee benefit plan sponsors, insurers and managed care organizations, fiduciaries, plan administrators, technology and other service providers, government and community leaders and others about health and other employee benefit and insurance program and policy design and innovation, funding, documentation, administration, communication, data security and use, contracting, plan, public and regulatory reforms and enforcement, and other risk management, compliance and operations matters. Her experience encompasses leading and supporting the development and defense of innovative new policies, programs, practices and solutions; advising and representing clients on routine plan establishment, plan documentation and contract drafting and review, administration, change and other compliance and operations; crisis prevention and response, compliance and risk management audits and investigations, enforcement actions and other dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, Federal Trade Commission, Justice, Securities and Exchange Commission, Education and other federal agencies, state legislatures, attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators, and various other foreign and domestic governmental bodies and agencies. She also provides strategic and other supports clients in defending litigation as lead strategy counsel, special counsel and as an expert witness. Alongside her extensive legal and operational experience, Ms. Stamer also is recognized for her work as a public and regulatory policy advocate and community leader with a gift for finding pragmatic solutions and helping to forge the common ground necessary to build consensus. Best known for her domestic public policy and community leadership on health care and insurance reform, Ms. Stamer’s lifelong public policy and community service involvement includes service as a lead consultant to the Government of Bolivia on its pension privatization project, as well as extensive legislative and regulatory reform, advocacy and input workforce, worker classification, employee benefit, public health and healthcare, social security and other disability and aging in place, education, migration reforms domestically and internationally throughout her adult life. In addition to her public and regulatory policy involvement, Ms. Stamer also contributes her service and leadership to a professional and civic organizations and efforts including her involvement as the Founder and Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE; Coalition on Patient Empowerment, a founding Board Member and past President of the Alliance for Healthcare Excellence; Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; Vice Chair, Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group; current Fiduciary Responsibility Committee Co-Chair and Membership Committee member of the ABA RPTE Section; former RPTE Employee Benefits and Other Compensation Group Chair, former Chair and Co-Chair of its Welfare Plans Committee, and Defined Contribution Plans Committee; former RPTE Representative to ABA Joint Committee on Employee Benefits Council; former RPTE Representative to the ABA Health Law Coordinating Counsel; former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, former Board Member, Continuing Education Chair and Treasurer of the Southwest Benefits Association; Vice President of the North Texas Healthcare Compliance Professionals Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; past Dallas World Affairs Council Board Member, and in leadership of many other professional, civic and community organizations. Ms. Stamer also is a highly popular lecturer, symposia chair and author, who publishes and speaks extensively on health and managed care industry, human resources, employment and other privacy, data security and other technology, regulatory and operational risk management for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, the Society of Professional Benefits Administrators, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients, serves on the faculty and planning committee of many workshops, seminars, and symposia, and on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.
Beyond these involvements, Ms. Stamer also is active in the leadership of a broad range of other public policy advocacy and other professional and civic organizations and involvements. Through these and other involvements, she helps develop and build solutions, build consensus, garner funding and other resources, manage compliance and other operations, and take other actions to identify promote tangible improvements in health care and other policy and operational areas.
Before founding her current law firm, Cynthia Marcotte Stamer, P.C., Ms. Stamer practiced law as a partner with several prominent national and international law firms for more than 10 years before founding Cynthia Marcotte Stamer, P.C. to practice her unique brand of “Solutions law™” and to devote more time to the pragmatic policy and system reform, community education and innovation, and other health system improvement efforts of her PROJECT COPE: the Coalition on Patient Empowerment initiative.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources at SolutionsLawPress.com such as the following
If you or someone else you know would like to receive future updates about developments on these and other concerns, please provide your current contact information and preferences including your preferred e-mail by creating or updating your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Today the U.S. Department of Labor issued a press release about the publication of a new OFCCP Directive extending the enforcement moratorium relating to the affirmative obligations of TRICARE providers for two years. This moratorium has been in effect for four years, and will now expire on May 7, 2021; it will also now apply to Veterans Affairs Health Benefits Program providers.
This extension will provide OFCCP time to receive feedback from stakeholders, relieve uncertainty, and give OFCCP an opportunity to evaluate and address legislation that may be enacted on this issue.
About The Author
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation; Former Chair of the RPTE Employee Benefits and Compensation Committee, a current Co-Chair of the Committee, and the former Chair of its Welfare Benefit and its Defined Compensation Plan Committees and former RPTE Joint Committee on Employee Benefits Council (JCEB) Representative, Cynthia Marcotte Stamer is a Martindale-Hubble “AV-Preeminent” practicing attorney and management consultant, author, public policy advocate, author and lecturer repeatedly recognized for her 30 plus years’ of work and pragmatic thought leadership, publications and training on health, pension and other employee benefit, insurance, labor and employment, and health care fiduciary responsibility, payment, investment, contracting and other design, administration and compliance concerns as among the “Top Rated Labor & Employment Lawyers in Texas,” a “Legal Leader,” a “Top Woman Lawyer” and with other awards by LexisNexis® Martindale-Hubbell®; as among the “Best Lawyers In Dallas” for her work in the field of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, in International Who’s Who of Professionals and with numerous other awards and distinctions.
Highly valued for her ability to meld her extensive legal and industry knowledge and experience with her talents as an insightful innovator and pragmatic problem solver, Ms. Stamer advises, represents and defends employer, union, multi-employer, association and other employee benefit plan sponsors, insurers and managed care organizations, fiduciaries, plan administrators, technology and other service providers, government and community leaders and others about health and other employee benefit and insurance program and policy design and innovation, funding, documentation, administration, communication, data security and use, contracting, plan, public and regulatory reforms and enforcement, and other risk management, compliance and operations matters. Her experience encompasses leading and supporting the development and defense of innovative new policies, programs, practices and solutions; advising and representing clients on routine plan establishment, plan documentation and contract drafting and review, administration, change and other compliance and operations; crisis prevention and response, compliance and risk management audits and investigations, enforcement actions and other dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, Federal Trade Commission, Justice, Securities and Exchange Commission, Education and other federal agencies, state legislatures, attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators, and various other foreign and domestic governmental bodies and agencies. She also provides strategic and other supports clients in defending litigation as lead strategy counsel, special counsel and as an expert witness. Alongside her extensive legal and operational experience, Ms. Stamer also is recognized for her work as a public and regulatory policy advocate and community leader with a gift for finding pragmatic solutions and helping to forge the common ground necessary to build consensus. Best known for her domestic public policy and community leadership on health care and insurance reform, Ms. Stamer’s lifelong public policy and community service involvement includes service as a lead consultant to the Government of Bolivia on its pension privatization project, as well as extensive legislative and regulatory reform, advocacy and input workforce, worker classification, employee benefit, public health and healthcare, social security and other disability and aging in place, education, migration reforms domestically and internationally throughout her adult life. In addition to her public and regulatory policy involvement, Ms. Stamer also contributes her service and leadership to a professional and civic organizations and efforts including her involvement as the Founder and Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE; Coalition on Patient Empowerment, a founding Board Member and past President of the Alliance for Healthcare Excellence; Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; Vice Chair, Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group; current Fiduciary Responsibility Committee Co-Chair and Membership Committee member of the ABA RPTE Section; former RPTE Employee Benefits and Other Compensation Group Chair, former Chair and Co-Chair of its Welfare Plans Committee, and Defined Contribution Plans Committee; former RPTE Representative to ABA Joint Committee on Employee Benefits Council; former RPTE Representative to the ABA Health Law Coordinating Counsel; former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, former Board Member, Continuing Education Chair and Treasurer of the Southwest Benefits Association; Vice President of the North Texas Healthcare Compliance Professionals Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; past Dallas World Affairs Council Board Member, and in leadership of many other professional, civic and community organizations. Ms. Stamer also is a highly popular lecturer, symposia chair and author, who publishes and speaks extensively on health and managed care industry, human resources, employment and other privacy, data security and other technology, regulatory and operational risk management for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, the Society of Professional Benefits Administrators, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients, serves on the faculty and planning committee of many workshops, seminars, and symposia, and on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.
Beyond these involvements, Ms. Stamer also is active in the leadership of a broad range of other public policy advocacy and other professional and civic organizations and involvements. Through these and other involvements, she helps develop and build solutions, build consensus, garner funding and other resources, manage compliance and other operations, and take other actions to identify promote tangible improvements in health care and other policy and operational areas.
Before founding her current law firm, Cynthia Marcotte Stamer, P.C., Ms. Stamer practiced law as a partner with several prominent national and international law firms for more than 10 years before founding Cynthia Marcotte Stamer, P.C. to practice her unique brand of “Solutions law™” and to devote more time to the pragmatic policy and system reform, community education and innovation, and other health system improvement efforts of her PROJECT COPE: the Coalition on Patient Empowerment initiative.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources at SolutionsLawPress.com such as the following
If you or someone else you know would like to receive future updates about developments on these and other concerns, please provide your current contact information and preferences including your preferred e-mail by creating or updating your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
The 2018 maximum deductible Health Savings Account (HSA) contribution for individuals with family coverage under a high deductible health plan (HDHP) is $6,900, rather than the lower $$6850 limitation that the Internal Revenue Service (IRS) and Department of Treasury originally identified as the 2018 maximum deduction amount last March.
The mid-year change in the 2018 annual limit that Internal Revenue Code § 223(b)(2)(B) sets for the maximum deductible HSA contribution for individuals with family coverage under a HDHP announced in Revenue Procedure 2018-27 on April 26 corrects a mistake in the amount of the 2018 annual limit amount that the Treasury Department and the IRS previously announced in Rev. Proc. 2018-18 on March 2, 2018. Revenue Procedure does not change any other annual limitation or any other requirement under section 223 for calendar year 2018.
Before Revenue Procedure 2018-27, the annual limitation on deductions under section 223(b)(2)(B) for an individual with family coverage under an HDHP at $6,850 for 2018 – a $50 reduction in the amount of the 2018 limit amount set in Revenue Procedure 2018-18, which reduced the originally announced 2018 limit amount of $6,900 that the Treasury Department and IRS previously had announced in May 4, 2017 in Revenue Procedure 2017-37. After publishing the original $6,900 limit in Revenue Procedure 2017-37, Congress changed the rules on inflation adjustments as part of “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018” (the Act), Pub. L. 115–97, 131 Stat. 2504, enacted December 22, 2017. Consequently, on March 2, 2018, the Treasury Department and the IRS released Rev. Proc. 2018-18, announcing the reduction of the 2018 limit to $6,850 to reflect the statutory amendments to the inflation adjustments under the Act. However, IRS and Treasury say that the recently announced change in the 2018 annual limitation resulted after stakeholders informed the Treasury Department and the IRS that implementing the $50 reduction to the limitation on deductions for individuals with family coverage would impose numerous unanticipated administrative and financial burdens. Specifically, stakeholders informed the Treasury Department and the IRS that the costs of modifying the various systems to reflect the reduced maximum, as well as the costs associated with distributing a $50 excess contribution (and earnings), would be significantly greater than any tax benefit associated with an unreduced HSA contribution (and in some instances may exceed $50). Some stakeholders also pointed to section 223(g)(1), which requires annual inflation adjustments for HSAs to be published by June 1 of the preceding calendar year, as another indication that a current year change would be unduly burdensome.
In response to these concerns, the Treasury Department and the IRS have determined that it is in the best interest of sound and efficient tax administration to allow taxpayers to treat the $6,900 annual limitation originally published in Rev. Proc. 2017-37 as the 2018 inflation adjusted limitation on HSA contributions for eligible individuals with family coverage under an HDHP. Accordingly, $6,900 now is the annual limitation on deductions under section 223(b)(2)(B) for an individual with family coverage under an HDHP for calendar year 2018.
Before this announced change, some individuals may have received distributions of HSA contribution amounts that were treated as in excess of the annual contribution limit amount before publication of Revenue Procedure 2018-27. Revenue Procedure 2018-27 outlines two alternatives for dealing with these distributions.
Under the first alternative, an individual who receives a distribution from an HSA of an excess contribution (with earnings) based on the $6,850 deduction limit published in Rev. Proc. 2018-18 may repay the distribution to the HSA and treat the distribution as the result of a mistake of fact due to reasonable cause under Q&A-37 of Notice 2004-50. The portion of a distribution (including earnings) that an individual repays to an HSA by April 15, 2019, is not included in the individual’s gross income under section 223(f)(2) or subject to the 20 percent additional tax under section 223(f)(4). The repayment is not subject to the excise tax on excess contributions under section 4973(a)(5). Also, mistaken distributions that are repaid to an HSA are not required to be reported on Form 1099-SA or Form 8889 and are not required to be reported as additional HSA contributions. However, in accordance with Q&A-76 of Notice 2004-50, a trustee or custodian is not required to allow individuals to repay mistaken distributions.
Alternatively, Revenue Procedure 2018-27 states that an individual who receives a distribution from an HSA of an excess contribution (with earnings) based on the $6,850 deduction limit published in Rev. Proc. 2018-18 and does not repay the distribution to the HSA may treat the distribution in accordance with section 223(f)(3), which describes the treatment of excess contributions returned before the due date of return. Thus, the excess contribution generally would not be included in gross income under section 223(f)(2) or subject to the 20 percent additional tax under section 223(f)(4), provided the distribution is received on or before the last day prescribed by law (including extensions of time) for filing the individual’s 2018 tax return. However, Revenue Procedure 2018-27 adds that the tax treatment under this alternative does not apply to distributions from an HSA that are attributable to employer contributions (pursuant to a cafeteria plan election or otherwise) if the employer does not include any portion of the contributions in the employee’s wages because the employer treats $6,900 as the annual limitation on deductions under section 223(b)(2)(B). In that case, unless the distribution from the HSA is used to pay qualified medical expenses, the distribution is includible in the employee’s gross income under section 223(f)(2) and subject to the 20 percent additional tax under section 223(f)(4).
About The Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for management work, coaching, teachings, and publications.
Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce, internal controls and regulatory compliance, change management and other performance and operations management and compliance. Her day-to-day work encompasses both labor and employment issues, as well as independent contractor, outsourcing, employee leasing, management services and other nontraditional service relationships. She supports her clients both on a real-time, “on demand” basis and with longer term basis to deal with all aspects for workforce and human resources management, including, recruitment, hiring, firing, compensation and benefits, promotion, discipline, compliance, trade secret and confidentiality, noncompetition, privacy and data security, safety, daily performance and operations management, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.
The author of the “Texas Payday Act,” and numerous other highly regarded publications on wage and hour and other human resources, employee benefits and compensation publications, Ms. Stamer is well-known for her 30 years of extensive wage and hour, compensation and other management advice and representation of restaurant and other hospitality, health, insurance, financial services, technology, energy, manufacturing, retail, governmental and other domestic and international businesses of all types and sizes.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other concerns by her service as a management consultant, business coach and consultant and policy strategist as well through her leadership participation in professional and civic organizations such her involvement as the Vice Chair of the North Texas Healthcare Compliance Association; Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE: Coalition on Patient Empowerment; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; former Gulf Coast TEGE Council Exempt Organization Coordinator; a founding Board Member and past President of the Alliance for Healthcare Excellence; former board member and Vice President of the Managed Care Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; a member and policy adviser to the National Physicians’ Council for Healthcare Policy; current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section; Past Chair of the ABA Health Law Section Managed Care & Insurance Section; ABA Real Property Probate and Trust (RPTE) Section former Employee Benefits Group Chair, immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative, and Defined Contribution Committee Co-Chair, past Welfare Benefit Committee Chair and current Employee Benefits Group Fiduciary Responsibility Committee Co-Chair, Substantive and Group Committee member, Membership Committee member and RPTE Representative to the ABA Health Law Coordinating Council; past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a former member of the Board of Directors, Treasurer, Member and Continuing Education Chair of the Southwest Benefits Association and others.
Ms. Stamer also is a widely published author, highly popular lecturer, and serial symposia chair, who publishes and speaks extensively on human resources, labor and employment, employee benefits, compensation, occupational safety and health, and other leadership, performance, regulatory and operational risk management, public policy and community service concerns for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.
Want to know more? See here for details about the author of this update, attorney Cynthia Marcotte Stamer, e-mail her here or telephone Ms. Stamer at (469) 767-8872.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources 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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Employers should consider inviting their workers to conduct a Paycheck Checkup to review their withholding elections to confirm they have the right amount of tax deducted from their paychecks in response to tax law changes enacted by the Tax Cuts and Jobs Act (Trump Tax) and other recent legislation. Helping workers properly to take into account tax relief or other changes reducing their income tax liability can help boost workers’ take home pay, helping them to see more benefit from the wages paid by the employer at payday.
The amount of withholding that an employer withholds from an employee’s pay generally depends upon two factors:
The amount the employee can earn; and
The accuracy of the personal information the employee uses to complete the Form W-4 to notify the employer of his withholding elections; and
The tax rules that decide how much tax the employee ultimately will owe when their personal income tax returns become due on April 15, 2018.
Although most employees don’t think about the potential need to re-evaluate the withholding elections on their current Form W-4 unless reminded by an employer or professional advisor, it’s generally a good idea for workers to periodically review and update their withholding elections since these often change from time to time. Encouraging workers to periodically review and update their W-4 elections can help workers maximize their take home pay while minimizing the risk of being surprised with an unexpected income tax or even under withholding penalty when they file their annual income tax return.
A number of recent events make it particularly likely that employees will benefit from re-evaluating their W-4 withholding now. For one thing, the Tax Cuts and Jobs Act recently changed the way income tax is calculated for most individual taxpayers. As many of these changes were enacted to provide individual tax relief for many taxpayers, workers qualifying for this relief that do not review and update their withholding elections likely are having the employer withhold more tax than necessary from their paychecks. Beyond these tax rule changes, many workers also may need to update their withholding elections in response to changes in their income, marital or other family status or other changes in their personal situation that also can affect the income tax withholding of the individual worker.
The Internal Revenue Service recently updated the Withholding Calculator the IRS provides on its website to help individuals estimate their annual income tax for purposes of deciding the withholding they should enter on their Form W-4 in light of the Tax Cuts and Jobs Act changes. Individuals can use the Withholding Calculator to estimate their 2018 and to compare their current tax withholding to help the individual decide if the individual needs to change his withholding with an employer.
More details about the Withholding Calculator and the new 2018 withholding tables can be found using the following internet links on the IRS’ Frequently Asked Question pages:
Employers should consider sending a reminder to workers to review their Form W-4 using these tools to determine if they can increase their take home pay by changing their withholding to take into account any potential income tax and withholding reductions they qualify for, if any, as a result of the Tax Cuts and Jobs Act or other changes in factors that impact their withholding and income tax liability or if other changes are warranted. Because most employees just completed their annual tax returns and likely have not considered the potential need to change their elections for tax reform or other changes, employees are likely to be particularly receptive and responsive to these reminders now. Employers and benefit plan administrators also may wish to consider helping employees remember to review and update their Form W-4 withholding when sending benefit enrollment packages, processing benefit enrollment elections when announcing pay increases or bonuses, in employee handbooks or payroll stuffers, at annual enrollment times or in response to mid-year election or beneficiary change notifications and at other times when the employer or their benefit plans deal with life event or benefit election events that could impact an employee’s withholding.
About The Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for management work, coaching, teachings, and publications.
Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce, internal controls and regulatory compliance, change management and other performance and operations management and compliance. Her day-to-day work encompasses both labor and employment issues, as well as independent contractor, outsourcing, employee leasing, management services and other nontraditional service relationships. She supports her clients both on a real-time, “on demand” basis and with longer term basis to deal with all aspects for workforce and human resources management, including, recruitment, hiring, firing, compensation and benefits, promotion, discipline, compliance, trade secret and confidentiality, noncompetition, privacy and data security, safety, daily performance and operations management, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.
The author of the “Texas Payday Act,” and numerous other highly regarded publications on wage and hour and other human resources, employee benefits and compensation publications, Ms. Stamer is well-known for her 30 years of extensive wage and hour, compensation and other management advice and representation of restaurant and other hospitality, health, insurance, financial services, technology, energy, manufacturing, retail, governmental and other domestic and international businesses of all types and sizes.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other concerns by her service as a management consultant, business coach and consultant and policy strategist as well through her leadership participation in professional and civic organizations such her involvement as the Vice Chair of the North Texas Healthcare Compliance Association; Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE: Coalition on Patient Empowerment; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; former Gulf Coast TEGE Council Exempt Organization Coordinator; a founding Board Member and past President of the Alliance for Healthcare Excellence; former board member and Vice President of the Managed Care Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; a member and policy adviser to the National Physicians’ Council for Healthcare Policy; current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section; Past Chair of the ABA Health Law Section Managed Care & Insurance Section; ABA Real Property Probate and Trust (RPTE) Section former Employee Benefits Group Chair, immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative, and Defined Contribution Committee Co-Chair, past Welfare Benefit Committee Chair and current Employee Benefits Group Fiduciary Responsibility Committee Co-Chair, Substantive and Group Committee member, Membership Committee member and RPTE Representative to the ABA Health Law Coordinating Council; past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a former member of the Board of Directors, Treasurer, Member and Continuing Education Chair of the Southwest Benefits Association and others.
Ms. Stamer also is a widely published author, highly popular lecturer, and serial symposia chair, who publishes and speaks extensively on human resources, labor and employment, employee benefits, compensation, occupational safety and health, and other leadership, performance, regulatory and operational risk management, public policy and community service concerns for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.
Want to know more? See here for details about the author of this update, attorney Cynthia Marcotte Stamer, e-mail her here or telephone Ms. Stamer at (469) 767-8872.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources 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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
With the Trump Administration U.S. Department of Labor Wage and Hour Division (WHD) continuing its aggressive investigation and enforcement of minimum wage, overtime and other Fair Labor Standards Act (FLSA) and other wage and hour laws it used to recover more than $1.2 billion in back pay for workers over the past five years, Agriculture, Amusement, Apparel Manufacturing, Auto Repair, Child Care Services, Construction, Food Services, Guard Services, Hair, Nail & Skin Care Services, Health Care, Hotels and Motels, Janitorial Services, Landscaping Services, Retail, and Temporary Help and other U.S. employers should evaluate their current and past potential liability exposures and consider using the new pilot WHD self-audit Payroll Audit Independent Determination (PAID) program announced by WHD on March 6 or other options to mitigate their liability for their own or temporary or other contract labor’s existing or past minimum wage and hour law violations.
About The Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for management work, coaching, teachings, and publications.
Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce, internal controls and regulatory compliance, change management and other performance and operations management and compliance. Her day-to-day work encompasses both labor and employment issues, as well as independent contractor, outsourcing, employee leasing, management services and other nontraditional service relationships. She supports her clients both on a real-time, “on demand” basis and with longer term basis to deal with all aspects for workforce and human resources management, including, recruitment, hiring, firing, compensation and benefits, promotion, discipline, compliance, trade secret and confidentiality, noncompetition, privacy and data security, safety, daily performance and operations management, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.
The author of the “Texas Payday Act,” and numerous other highly regarded publications on wage and hour and other human resources, employee benefits and compensation publications, Ms. Stamer is well-known for her 30 years of extensive wage and hour, compensation and other management advice and representation of restaurant and other hospitality, health, insurance, financial services, technology, energy, manufacturing, retail, governmental and other domestic and international businesses of all types and sizes.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other concerns by her service as a management consultant, business coach and consultant and policy strategist as well through her leadership participation in professional and civic organizations such her involvement as the Vice Chair of the North Texas Healthcare Compliance Association; Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE: Coalition on Patient Empowerment; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; former Gulf Coast TEGE Council Exempt Organization Coordinator; a founding Board Member and past President of the Alliance for Healthcare Excellence; former board member and Vice President of the Managed Care Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; a member and policy adviser to the National Physicians’ Council for Healthcare Policy; current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section; Past Chair of the ABA Health Law Section Managed Care & Insurance Section; ABA Real Property Probate and Trust (RPTE) Section former Employee Benefits Group Chair, immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative, and Defined Contribution Committee Co-Chair, past Welfare Benefit Committee Chair and current Employee Benefits Group Fiduciary Responsibility Committee Co-Chair, Substantive and Group Committee member, Membership Committee member and RPTE Representative to the ABA Health Law Coordinating Council; past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a former member of the Board of Directors, Treasurer, Member and Continuing Education Chair of the Southwest Benefits Association and others.
Ms. Stamer also is a widely published author, highly popular lecturer, and serial symposia chair, who publishes and speaks extensively on human resources, labor and employment, employee benefits, compensation, occupational safety and health, and other leadership, performance, regulatory and operational risk management, public policy and community service concerns for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.
Want to know more? See here for details about the author of this update, attorney Cynthia Marcotte Stamer, e-mail her here or telephone Ms. Stamer at (469) 767-8872.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources 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 your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
March 30 is the deadline to comment on changes the U.S. Small Business Administration (SBA) and Department if Veteran Affrairs are proposing to make to regulations implementing The National Defense Authorization Act for Fiscal Year 2017 (NDAA 2017).
The proposed changes will affect qualification for veterans preferences under a wide range of federal programs.
The NDAA 2017 placed the responsibility for issuing regulations relating to ownership and control for the Department of Veterans Affairs verification of Veteran-Owned (VO) and Service-Disabled Veteran-Owned (SDVO) Small Business Concern (SBC) with the SBA.
Under NDAA 2017, there will be one definition of ownership and control for that will apply for purposes of the Department of Veterans Affairs in its verification and Vets First Contracting Program procurements, and all other government acquisitions which require self-certification. The legislation also provides that in certain circumstances a firm can qualify as VO or SDVO when there is a surviving spouse or an employee stock ownership plan (ESOP).
Read the proposed rule hereand the companion rule issued by VA and additional information is here.
Health plans and insurers, their service providers that act as business associates within the meaning of the Health Insurance Portability & Accountability Act (HIPAA) and employer and other health plan sponsors, fiduciaries, and other management leaders should heed the warnings contained in the new Resolution Agreement (FileFax Resolution Agreement) with former HIPAA business associate FileFax, Inc. announced by the Department of Health & Human Services (HHS) Office of Civil Rights (OCR) about their own need to ensure that they and their business associates comply with HIPAA’s business associate and other Privacy, Security, Breach Notification rules as well as the advisability of tightening up their risk management and oversight of business associates that handle protected health information (PHI).
Significant for business associates as what appears to be the first announced resolution agreement with a business associate directly charged by OCR with violating HIPAA and the second resolution agreement pursued and reached with a HIPAA-regulated entity in bankruptcy, the FileFax, Inc. Resolution Agreement OCR announced February 13, 2018 also contains critical lessons for Covered Entities about their dealings with their own business associates when read in conjunction with the April, 2017 resolution agreement the Center for Children’s Digestive Health (CCDH) agreed to resolve OCR charges CCDC, as a Covered Entity, violated HIPAA by allowing FileFax, Inc. to act as its business associate without adequately complying with HIPAA’s business associate requirements.
With widespread media coverage over large scale breaches of health care and other sensitive information placing further pressure upon OCR and other governmental agencies to act to protect Americans’ privacy and data fueling even greater demands for OCR and other agencies to take meaningful action to enforce HIPAA and other privacy and data security requirements, health plans, health care providers, health care clearinghouses (Covered Entities) and their business associates can expect OCR and other agencies to continue to turn up the heat on investigation and enforcement of HIPAA compliance.
In the face of these developments, Covered Entities, their business associates and those responsible for their leadership and operations need to recognize and take the necessary steps both effectively to manage their own HIPAA compliance and risk management as well as to anticipate and make provision to deal with the likelihood that they may face HIPAA responsibilities, exposures and other fallout from their own or another business partner’s breach of PHI or other sensitive data or other HIPAA violations, bankruptcy or other business distress, or other compliance or business event.
The Privacy Rule requires that health plans, health care providers, health care clearinghouses (Covered Entities) and their vendors that qualify as “business associates” under HIPAA comply with detailed requirements concerning the protection, use, access, destruction and disclosure of protected health information. As part of these requirements, Covered Entities and their business associates must adopt, administer and enforce detailed policies and practices, assess, monitor and maintain the security of electronic protected health information (ePHI) and other protected health information, provide notices of privacy practices and breaches of “unsecured” ePHI, afford individuals that are the subject of protected health information certain rights and comply with other requirements as specified by the Privacy, Security and Breach Notification Rules. In addition, Covered Entities and business associates also must enter into a written and signed business associate agreement that contains the elements specified in Privacy Rule § 164.504(e) before the business associate creates, uses, accesses or discloses PHI of the Covered Entity. Furthermore, the Privacy Rule includes extensive documentation and keeping requirements require that Covered Entities and BAs maintain copies of these BAAs for a minimum of six years and to provide that documentation to OCR upon demand.
Violations of the Privacy Rule can carry stiff civil monetary penalties or even criminal penalties. Pursuant to amendments to HIPAA enacted as part of the HITECH Act, civil penalties typically do not apply to violations punished under the criminal penalty rules of HIPAA set forth in Social Security Act , 42 U.S.C § 1320d-6 (Section 1177).
Resolution Agreements the just announced FileFax Resolution Agreement allow Covered Entities and business associates to resolve potentially substantially larger civil monetary penalty liabilities that OCR can impose under the civil enforcement provisions of HIPAA for HIPAA violations through a negotiated settlement process. As amended by the HITECH Act, the civil enforcement provisions of HIPAA empower OCR to impose Civil Monetary Penalties on both Covered Entities and BAs for violations of any of the requirements of the Privacy or Security Rules. The penalty ranges for civil violations depends upon the circumstances associated with the violations and are subject to upward adjustment for inflation. As most recently adjusted here effective September 6, 2016, the following currently are the progressively increasing Civil Monetary Penalty tiers:
A minimum penalty of $100 and a maximum penalty of $50,000 per violation, for violations which the CE or BA “did not know, and by exercising reasonable diligence would not have known” about using “the business care and prudence expected from a person seeking to satisfy a legal requirement under similar circumstances;”
A minimum penalty of $1,000 and a maximum penalty of $50,000 per violation, for violations for “reasonable cause” which do not rise to the level of “willful neglect” where “reasonable cause” means the “circumstances that would make it unreasonable for the Covered Entity, despite the exercise of ordinary business care and prudence, to comply with the violated Privacy Rule requirement;”
A minimum penalty of $10,000 and a maximum penalty of $50,000 per violation, for violations attributed to “willful neglect,” defined as “the conscious, intentional failure or reckless indifference to the obligation to comply” with the requirement or prohibition; and
A minimum penalty of $50,000 and a maximum penalty of $1.5 million per violation, for violations attributed to “willful neglect” not remedied within 30 days of the date that the Covered Entity or BA knew or should have known of the violation.
For continuing violations such as failing to implement a required BAA, OCR can treat each day of noncompliance as a separate violation. However, sanctions under each of these tiers generally are subject to a maximum penalty of $1,500,000 for violations of identical requirements or prohibitions during a calendar year. For violations such as the failure to implement and maintain a required BAA where more than one Covered Entity bears responsibility for the violation, OCR an impose Civil Monetary Penalties against each culpable party. OCR considers a variety of mitigating and aggravating facts and circumstances when arriving at the amount of the penalty within each of these applicable tiers to impose.
In addition to these potential civil liability exposures, Covered Entities, their business associates and other individuals or organizations that wrongfully use, access or disclose electronic or other protected health information also can face civil liability under various circumstances. The criminal enforcement provisions of HIPAA authorize the Justice Department to prosecute a person who knowingly in violation of the Privacy Rule (1) uses or causes to be used a unique health identifier; (2) obtains individually identifiable health information relating to an individual; or (3) discloses individually identifiable health information to another person, punishable by the following criminal sanctions and penalties:
A fine of up to $50,000, imprisoned not more than 1 year, or both;
If the offense is committed under false pretenses, a fine of up to $100,000, imprisonment of not more than 5 years, or both; and
If the offense is committed with intent to sell, transfer, or use individually identifiable health information for commercial advantage, personal gain, or malicious harm, a fine of up to $250,000, imprisoned not more than 10 years, or both.
Because HIPAA Privacy Rule criminal violations are Class A Misdemeanors or felonies, Covered Entities and business associates should include HIPAA compliance in their Federal Sentencing Guideline Compliance Programs and practices and need to be concerned both about criminal exposure for their own direct violations, as well as imputed organizational liability for violations committed by their employees or agents under the Federal Sentencing Guidelines, particularly where their failure to implement or administer these required compliance policies and practices or failure to properly investigate or redress potential violations enables, perpetuates or covers up the criminal breach.
FileFax, Inc. Breach & Resolution Agreement
While Congress amended the Civil Monetary Penalty provisions of HIPAA enforced by OCR to make many of the requirements and Civil Monetary Penalty sanctions of HIPAA directly enforceable by OCR against business associates as part of the Health Information Technology for Economic and Clinical Health (HITECH) Act, enacted as part of the American Recovery and Reinvestment Act of 2009, the FileFax Resolution Agreement appears to be the first HIPAA resolution agreement with a business associate announced by OCR.
Indeed, OCR’s enforcement action that resulted in the FileFax Resolution Agreement would never have occurred had FileFax, Inc. not become involved in handling medical records containing PHI in the capacity of a business associate for Covered Entities.
Before filing for bankruptcy in 2016, FileFax, Inc. advertised it provided HIPAA-compliant storage, maintenance, and delivery of medical records for HIPAA Covered Entities including Illinois based health care provider CCDC, which entered into a resolution agreement with OCR in April, 2017 to resolve OCR charges that it violated HIPAA by allowing FileFax, Inc. to handle PHI without fulfilling HIPAA’s business associate agreement requirements.
Like the CCDC Resolution Agreement, the FileFax, Inc. Resolution Agreement resulted from an investigation of FileFax, Inc. that OCR began in response to a February 10, 2015 anonymous complaint filed with OCR about FileFax, Inc. about deficiencies in its delivery of these HIPAA services in its capacity as a business associate to Covered Entities. The complaint to OCR alleged that FileFax, Inc. violated these requirements because an individual transported medical records obtained from FileFax, Inc. to a shredding and recycling facility to sell on February 6 and 9, 2015.
OCR’s investigation of the complaint against FileFax, Inc. confirmed that an individual had left medical records of approximately 2,150 patients at the shredding and recycling facility, and that these medical records contained patients’ PHI. OCR’s investigation additionally found that between January 28, 2015, and February 14, 2015, FileFax, Inc. impermissibly disclosed the PHI of 2,150 individuals by leaving the PHI in an unlocked truck in the FileFax, Inc. parking lot, or by granting permission to an unauthorized person to remove the PHI from FileFax, Inc. and leaving the PHI unsecured outside the FileFax, Inc. facility.
After OCR commenced its investigation of the complaint, FileFax, Inc. was placed into bankruptcy and a receiver was appointed to liquidate FileFax, Inc.’s assets for distribution to creditors and others in 2016. Despite the bankruptcy, OCR continued to pursue enforcement against FileFax, Inc. for the HIPAA violations it found through its investigation. On February 13, 2018, OCR announced that that the receiver on behalf of FileFax, Inc. had agreed in the FileFax Resolution Agreement to pay a $100,000 monetary settlement out of the bankruptcy estate and to arrange to properly store and dispose of remaining medical records found at FileFax, Inc.’s facility in compliance with HIPAA to resolve OCR’s HIPAA charges against FileFax, Inc.
OCR Previously Sanctioned Covered Entity For Involvement With FileFax, Inc.
Beyond affirming the exposure business associates to OCR civil monetary penalties or other enforcement for violating HIPAA, the FileFax Resolution Agreement in conjunction with OCR’s previously announced April 20, 2017 resolution agreement (CCDC Resolution Agreement) with CCDC also demonstrates the need for Covered Entities to recognize that their organizations are likely to face HIPAA investigations or enforcement from HIPAA violations by or OCR audits or investigations of the conduct of their business associates.
In fact, this is exactly what happened to CCDC. A small, Illinois based Covered Entity, CCDC used FileFax, Inc. to store and dispose of medical records. As a consequence of the FileFax, Inc. investigation, OCR conducted a compliance review of CCDC. OCR reports that its compliance review revealed that while CCDC had disclosed to and allowed FileFax, Inc. to store records containing PHI for CCDC since in 2003, neither party could produce a signed business associate agreement (BAA) prior to October 12, 2015. As a consequence, OCR charged CCDC with violating HIPAA by disclosing PHI to FileFax, Inc. in violation of HIPAA’s business associate requirements.
To resolve its exposure to potentially much greater civil monetary penalties associated with this charge, CCDC agreed under the CCDC Resolution Agreement to pay OCR a $31,000 resolution payment and take a variety of corrective actions. Beyond requiring CCDC to implement and maintain written business associate agreements before allowing business associates to possess or access PHI, the corrective action plan imposed as part of the CCDC Resolution Agreement also expressly requires CCDC to promptly investigate information of a possible violation of its HIPAA policies and procedures by a “workforce member,” which the Privacy Rule defines to include a business associate, and if the investigation reveals a violation, to report the violation and corrective action taken to OCR.
OCR Enforces HIPAA Against Covered Entities & Business Associates In Bankruptcy
OCR’s announcement of the FileFax Resolution Agreement also is significant in its reaffirmation of OCR to its commitment to HIPAA enforcement, even if the HIPAA-violating Covered Entity or business associate goes bankruptcy.
OCR’s enforcement action against FileFax, Inc. despite its bankruptcy and its successful negotiation of the FileFax Resolution Agreement within the bankruptcy should alert Covered Entities and business associates that OCR does not consider the bankruptcy of a Covered Entity or business associate as an obstacle to OCR enforcement against Covered Entities or business associates that violate HIPAA. The seriousness of OCR’s commitment to enforcement, even in the face of bankruptcy is driven home by its announcement of the FileFax Resolution Agreement on the heels of its December, 2017 announcement of its first OCR HIPAA resolution agreement secured with the formal approval of a bankruptcy court, a resolution agreement (21CO Resolution Agreement) against bankrupt health care provider, 21CO.
Secured with bankruptcy court approval, the 21CO Resolution Agreement resolved potentially much larger civil monetary penalties that the Fort Myers, Florida based provider of cancer care services and radiation oncology could have faced for alleged HIPAA breaches OCR charged it committed in connection with its failure to adequately act to prevent and respond to hacking and misappropriation of records containing sensitive electronic protected health information (ePHI) of up to 2,213597 individuals.
The OCR charges against 21CO arose from an OCR investigation commenced after the Federal Bureau of Investigation (FBI) notified 21CO on November 13, 2015 and a second time on December 13, 2015 than unauthorized third party illegally obtained 21CO sensitive patient information and produced 21CO patient files purchased by a FBI informant. As part of its internal investigation, 21CO hired a third party forensic auditing firm in November 2015. 21CO determined that the attacker may have accessed 21CO’s network SQL database as early as October 3, 2015, through Remote Desktop Protocol from an Exchange Server within 21CO’s network. 21CO determined that it is possible that 2,213,597 individuals may have been affected by the impermissible access to their names, social security numbers, physicians’ names, diagnoses, treatment and insurance information.
Although it knew of the breaches in November and December, 2015, 21CO waited more than three months after the FBI notified it of the breaches before it sent HIPAA or other breach notifications about the data breach to patients or notified investors in March, 2016. Its March 4, 2016 Securities and Exchange Commission 8-K on Data Security Incident (Breach 8-K) states 21CO delayed notification at the request of the FBI to avoid interfering in the criminal investigation of the breach.
When announcing the breach, 21CO provided all individuals affected by the breach with a free one-year subscription to the Experian ProtectMyID fraud protection service. At that time, 21CO said it had no evidence that any patient information actually had been misused. However some victims of the breach subsequently have claimed being victimized by a variety of scams since the breach in news reports and lawsuits about the breach.
At the time of the breach and its March 4, 2016 announcement of the breach, 21CO already was working to resolve other compliance issues. On December 16, 2015, 21CO announced that a 21CO subsidiary had agreed to pay $19.75 million to the United States and $528,000 in attorneys’ fees and costs and comply with a corporate integrity agreement related to a qui tam action in which it was accused of making false claims to Medicare and other federal health programs. See 21CO 8-K Re: Entry into a Material Definitive Agreement (December 22, 2015). Among other things, the corporate integrity agreement required by that settlement required 21CO to appoint a compliance officer and take other steps to maintain compliance with federal health care laws. In addition, five days after releasing the March 4, 2017 Breach 8-K, 21CO notified investors that its subsidiary, 21st Century Oncology, Inc. (“21C”), had agreed to pay $37.4 million to settle health care fraud law charges relating to billing and other protocols of certain staff in the utilization of state-of-the-art radiation dose calculation system used by radiation oncologists called GAMMA. See 21CO 8-K Re: GAMMA Settlement March 9, 2016 ; See also United States Settles False Claims Act Allegations Against 21st Century Oncology for $34.7 Million.
Based on OCR’s subsequent investigation into these breaches, OCR found:
21CO impermissibly disclosed certain PHI of 2,213,597 of its patients in violation of 45 C.F.R. § 164.502(a);
21CO failed to conduct an accurate and thorough assessment of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of the electronic protected health information (ePHI) held by 21CO in violation of 45 C.F.R. § 164.308(a)(1)(ii)(A);
21CO failed to implement certain security measures sufficient to reduce risks and vulnerabilities to a reasonable and appropriate level to comply with 45 C.F.R. § 164.306(A) in violation of 45 C.F.R. § 164.308(a)(1)(ii)(B);
21CO failed to implement procedures to regularly review records of information system activity, such as audit logs, access reports, and security incident tracking reports as required by 45 C.F.R. §164.308(a)(1)(ii)(D);
21CO disclosed protected health information to a third party vendors, acting as its business associates, without obtaining satisfactory assurances in the form of a written business associate agreement in violation of HIPAA’s business associate rule requirements under 45 C.F.R. §§ 164.502(e) and 164.308(b)(3).
In return for OCR’s agreement not to further pursue charges or penalties relating to the breach investigation, the Resolution Agreement entered into with the approval of the Bankruptcy Court requires that 21CO pay OCR a $2.3 million Resolution Amount and implement to OCR’s satisfaction a corrective action plan that among other things requires that 21CO complete a detailed series of corrective actions to the satisfaction of OCR.
These and other developments also had significant consequences on 21CO’s financial status and leadership. By March 31, 2015, 21CO notified the SEC and investors that it needed added time to complete its financial statements. Subsequent SEC filings document its restatement of financial statements, the departure of board members and other leaders, default on credit terms, and ultimately its filing for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of New York on May 25, 2017.
Because 21CO sought bankruptcy court protection from the fallout of its HIPAA breaches and other compliance and business issues, the 21CO Resolution Agreement required bankruptcy court approval. Funds for payment of the required $2.3 million resolution payment and other charges associated with the investigation apparently are being provided in part from breach liability insurance coverage provided under a policy issued by Beazley Insurance, as the Bankruptcy Court order directs Beazley Breach Response Policy No. W140E2150301 to make immediate payment to the OCR of the resolution amount and the payment of fees incurred by 21CO in connection with regulatory defense issues.
HIPAA & Data Breach Enforcement A Growing Health Plan Risk
Health plans and other Covered Entities, plan sponsors and plan fiduciaries, their business associates and other consultants and service providers and members of their workforce need to recognize that the FileFax, CCDC, 21CO and other resolution agreements are part of a growing trend, rather than isolated incidents of enforcement and that their exposure to investigation and enforcement is likely to continue to rise in the face of growing public and Congressional concern about privacy and data security.
While civil monetary penalty enforcement remains much more common than criminal prosecution, Covered Entities, their business associates and members of their workforce must understand that HIPAA enforcement and resulting liability is growing and that this trend is likely to continue if not increase.
While Department of Justice federal criminal prosecutions and convictions under HIPAA remain relatively rare, they occur and are growing. See e.g., Former Hospital Employee Sentenced for HIPAA Violations (Texas man sentenced to 18 months in federal prison for obtaining protected health information with the intent to use it for personal gain); Three Life Sentences Imposed On Man Following Convictions For Drug Trafficking, Kidnapping, Using Firearms and HIPAA Violations (drug king pin gets multiple 10 year consecutive prison terms for unauthorized access to private health information in violation of HIPAA; his health care worker friend sentenced for accessing electronic medical files and reporting information to him);Former Therapist Charged In HIPAA Case;Hefty Prison Sentence in ID Theft Case(former assisted living facility worker gets 37 months in prison after pleading guilty to wrongful disclosure of HIPAA protected information and other charges); Hefty Prison Sentence in ID Theft Case (former medical supply company owner sentenced to 12 years for HIPAA violations and fraud). While the harshest sentences tend to be associated with health care fraud or other criminal conduct, lighter criminal sentences are imposed against defendants in other cases as well. See e.g., Sentencing In S.C. Medicaid Breach Case (former South Carolina state employee sentenced to three years’ probation, plus community service, for sending personal information about more than 228,000 Medicaid recipients to his personal e-mail account.); HIPAA Violation Leads To Prison Term (former UCLA Healthcare System surgeon gets four months in prison after admitting he illegally read private electronic medical records of celebrities and others.)
The experiences of FileFax, Inc., CCDC, 21CO and these other OCR HIPAA Resolution Agreements provide strong evidence that that health plans and other Covered Entities and their business associates can anticipate that OCR will continue to zealously investigate HIPAA breaches and other HIPAA violations. Aside from OCR’s recurrent affirmations of its commitment to HIPAA enforcement, Covered Entities, their business associates and their leaders must recognize that public and Congressional privacy and data security concerns fueled by the ever growing stream of massive data breaches at Alteryx, eBay, Paypal owner TIO Networks, Uber, Equifax and a long list of other previously trusted prominent businesses are creating additional pressure upon OCR and other agencies to pursue even stronger and more aggressive HIPAA oversight and enforcement. Amid this growing concern, OCR, the FTC and other federal and state agencies with regulatory or enforcement authority over HIPAA or other data security and privacy concerns face increasing scrutiny and pressure to take meaningful action to regulate and enforce HIPAA and other laws intended to protect sensitive data even as private litigants enjoy increasing success in obtaining civil judgments from damages resulting from breaches of their PHI or other sensitive personal information using an expanding arsenal of legal theories of recovery. In the face of these growing concerns about privacy and data security, OCR can be expected to continue, if not increase its HIPAA compliance enforcement and oversight by OCR.
Furthermore, the experiences of FileFax, Inc., 21CO, CCDC and other Covered Entities and business associates that already have become the subject of OCR investigation or enforcement also reflect that HIPAA resolution payments or penalties paid to OCR and other costs and expenses associated with the defense and resolution of OCR’s investigations and enforcement actions typically only a portion of the financial and other business consequences that Covered Entities or business associates might expect to incur as a consequence of a breach of PHI or other substantial HIPAA violation or charge.
Beyond their potential HIPAA enforcement exposures following a HIPAA covered data breach or other violation, health care or other Covered Entities and members of their workforce experiencing breaches of ePHI or other PHI often also face FTC or other government investigations and enforcement relating their data breaches under the Fair and Accurate Credit Transactions Act (FACTA) and other federal or state identity theft, data privacy and security, electronic crimes and other laws. They or members of their workforce may face licensing board, credentialing, accreditation, contractual or other investigations or sanctions. Victims, business partners, investors and others often bring civil litigation to address losses or other injures associated with the breach or other misconduct. In addition, losses and disruptions in patients, plan member, vendor, investor, employee, management and other business relationships, and other business disruptions also are common.
Where the breach of other HIPAA violation involves a health plan, health plans, their fiduciaries and sponsors also need to give due consideration to the implications and exposures that might arise under the fiduciary responsibility rules of the Employee Retirement Income Security Act (ERISA). Beyond the direct exposure of their health plan to HIPAA and other compliance liabilities, health plan fiduciaries generally will want to consider whether their fiduciary responsibility under ERISA requires that prudent or other steps be taken to safeguard health plan information and maintain and administer their health plan in accordance with HIPAA and other laws. As a consequence, fiduciaries generally will want to ensure that they take and document prudent steps to evaluate, monitor and address HIPAA and other privacy and data security safeguards to minimize not only the liability exposures of their health plans, but also to help mitigate their own potential personal liability exposures that could arise or be asserted in response to a HIPAA breach or other HIPAA violation involving their health plans.
In the face of these growing risks and liabilities, Covered Entities and their business leaders face a strong imperative to clean up and maintain their HIPAA compliance and other data security to minimize their exposure to similar consequences. In addition to reaffirming the need for Covered Entities and their business associates to take the necessary steps to maintain and effectively demonstrate the adequacy of their own HIPAA compliance, the CCDC and FileFax Resolution Agreements alert Covered Entities and business associates of the advisability of greater oversight and risk management of their dealings and relationships with the other Covered Entities and business associates with access to or involvement with their PHI or other critical functions.
In light of these rises, leaders, investors, insurers, lenders and others involved with Covered Entities and their business associates should take steps to verify that the Covered Entities and their business associates not only maintain compliance with HIPAA and its business associate and other privacy, data security and breach notification and response requirements, but also maintain appropriate practices, insurance and other safeguards to prevent, respond to and mitigate exposures in the event of a breach of protected health information or other sensitive data. The bankruptcies and other financial and business fallout of HIPAA or other data breaches experienced by FileFax, Inc. 21CO and other HIPAA-covered and non-HIPAA regulated entities also makes clear that Covered Entities and business associates should anticipate that their own fallout from a breach or other HIPAA event and resulting responsibilities and consequences could be impacted by their own or a business associate’s financial distress or bankruptcy. Beyond the risk that their own or another entity’s breach, compliance issues, or other financial or business issues could trigger breach investigation, notice or other responsibilities for their own organizations, Covered Entities, business associates and their leaders also should evaluate and revise their HIPAA risk assessments and security plans to address foreseeable threats to the availability, access, retention and security of PHI and associated records and systems.
The Bankruptcy Court’s order to 21CO’s cyber liability insurer to pay the resolution payment required under the 21CO Resolution Agreement and other costs of investigation and defense also strongly suggests that the purchase of insurance and other arrangements for funding costs of defense or settlement should be included in these evaluations.
In light of these rises, leaders, investors, insurers, lenders and others involved with Covered Entities and their business associates should take steps to verify that the Covered Entities and their business associates not only maintain compliance with HIPAA, but also comply with data security, privacy and other information protection requirements arising under other laws, regulations, and contracts, as well as the practical business risks that typically follow the announcement of a breach. Considering these risks, Covered Entities and their business associates should recognize the advisability of taking meaningful, documented action to verify their existing compliance and ongoing oversight to ensure their organizations can demonstrate appropriate action to maintain appropriate practices, insurance and other safeguards to prevent, respond to and mitigate exposures in the event of a breach of protected health information or other sensitive data.
As part of these efforts, Covered Entities and their business associates should ensure that they have conducted, and maintain and are ready to produce appropriate policies and procedures backed up by a well-documented, up-to-date industry wide risk assessment of their organization’s susceptibility to breaches or other misuse of electronic or other protected health information. The starting point of these efforts should be to adopt and enforce updated written policies, procedures, technical and physical safeguards, processes and training to prevent the improper use, access, destruction or disclosure of patient PHI. Processes also should create, retain and be designed to cost effectively track, capture, and retain both all protected health information, its use, access, protection, destruction and disclosure, and the requisite supportive documentation supporting the appropriateness of those action to position the organization cost-effectively and quickly to fulfill required accounting, reporting and other needs in the event of a data breach, audit, participant inquiry or other event.
As part of this process, Covered Entities and business associates should maintain strong and ongoing processes for assessing and monitoring the adequacy of their policies and practices. In addition to ensuring that their organization has a comprehensive risk management and compliance assessment, Covered Entities and business associates need to conduct documented periodic audits and spot HIPAA audits and assessments. In doing so, they must use care to look outside the four corners of their Privacy Policies and core operating systems to ensure that their policies, practices, oversight and training address all protected health information within their operations on an entity wide basis. This entity-wide assessment should include communications and requests for information normally addressed to the Privacy Officer as well as requests and communications that could arise in the course of media or other public relations, practice transition, workforce communication and other operations not typically under the direct oversight and management of the Privacy Officer.
In connection with these efforts, the enforcement actions make clear that Covered Entities and business associates should adopt, implement and monitor PHI privacy, and security on an entity wide basis. These efforts should include general policies, practices and procedures as well as specifically tailored policies, processes and training to protect PHI and preserve HIPAA compliance throughout their organization. Testing and analysis should be conducted on a regular basis. Documented reassessments and testing should be performed in response to software, hardware or other changes or events that could impact security or other operations. Beyond security, attention also should cover business or system interruption including losses that might occur from the bankruptcy, termination of business or other disruptions of business associates or other parties. Attention should be paid both to protecting access and use of PHI and ePHI in the course of business as well as the transmission, transport, storage and destruction of records or systems containing such information.
Careful attention should be devoted to ensuring that business associate agreements as well and other processes provide for HIPAA compliance with respect to all PHI created, used, accessed or disclosed to business associates or others not part of their direct workforce or operating outside the core boundaries of their facilities.
Covered entities and their business associates also must recognize and design their compliance efforts and documentation recognizing that HIPAA compliance is a living process, which require both constant diligence about changes in systems or other events that may require reevaluation or adjustments, whether from changes in software, systems or processes or external threats.
Because the cost of responding to and investigating breaches or other compliance concern can be quite burdensome, Covered Entities and their business associates also generally will want to pursue options to plan for and minimize potential expenses in the design and administration of their programs as well as to minimize and cover the potentially extraordinary costs of breach or other compliance investigation and results that commonly arise following a breach or other compliance event. As a part of this planning, Covered Entities and their business associates also generally will want to add consideration of changes to federal tax rules on the deductibility of compliance penalty and other related compliance expenditures.
While the Internal Revenue Code traditionally has prohibited businesses and individuals from deducting penalties, fines and other expenditures arising from violations of federal or state laws under Section 162(f) of the Internal Revenue Code, Section 13306 of the Tax Cuts and Jobs Creation Act creates a new exception for amounts (other than amounts paid or incurred any amount paid or incurred as reimbursement to the government or entity for the costs of any investigation or litigation) that a taxpayer establishes meet the following requirements:
Constitute restitution (including remediation of property) for damage or harm which was or may be caused by the violation of any law or the potential violation of any law, or
Are paid to come into compliance with any law which was violated or otherwise involved in the investigation or inquiry into a violation or potential violation of any law;
Are identified as restitution or as an amount paid to come into compliance with such law, as the case may be, in the court order or settlement agreement, and
In the case of any amount of restitution for failure to pay any tax imposed under this title in the same manner as if such amount were such tax, would have been allowed as a deduction under this chapter if it had been timely paid.
Because the true effect of these modifications will be impacted by implementing regulations and a number of other special conditions and rules may impact the deductibility of these payments and the reporting obligations attached to their payment, Covered Entities will want to consult with legal counsel about these rules and monitor their implementation to understand their potential implications on compliance expenditures and penalties.
About The Author
Repeatedly recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, a Fellow in the American College of Employee Benefit Council, the American Bar Foundation and the Texas Bar Foundation and board certified in labor and employment law by the Texas Board of Legal Specialization, Cynthia Marcotte Stamer is a practicing attorney, management consultant, author, public policy advocate and lecturer widely known for health and managed care, employee benefits, insurance and financial services, data and technology and other management work, public policy leadership and advocacy, coaching, teachings, and publications. Nationally recognized for her work, experience, leadership and publications on HIPAA and other medical privacy and data use and security, FACTA, GLB, trade secrets and other privacy and data security concerns, Ms. Stamer has worked extensively with clients and the government on cybersecurity, technology and processes and other issues involved in the use and management of medical, insurance and other financial, workforce, trade secrets and other sensitive data and information throughout her career. Scribe or co-scribe of the ABA Joint Committee on Employee Benefits Agency meeting with OCR since 2011 and author of a multitude of highly regarded publications on HIPAA and other health care, insurance, financial and other privacy and data security, Ms. Stamer is widely known for her extensive and leading edge experience, advising, representing, training and coaching health care providers, health plans, healthcare clearinghouses, business associates, their information technology and other solutions providers and vendors, and others on HIPAA and other privacy, data security and cybersecurity design, documentation, administration, audit and oversight, business associate and other data and technology contracting, breach investigation and response, and other related concerns including extensive involvement representing clients in dealings with OCR and other Health & Human Services, Federal Trade Commission, Department of Labor, Department of Treasury, state health, insurance and attorneys’ general, Congress and state legislators and other federal officials.
Ms. Stamer also has an extensive contributes her leadership and insights with other professionals, industry leaders and lawmakers. Her insights on HIPAA risk management and compliance often appear in medical privacy related publications of a broad range of health care, health plan and other industry publications Among others, she has conducted privacy training for the Association of State & Territorial Health Plans (ASTHO), the Los Angeles Health Department, SHRM, HIMMS, the American Bar Association, the Health Care Compliance Association, a multitude of health plan, insurance and financial services, education, employer employee benefit and other clients, trade and professional associations and others. You can get more information about her HIPAA and other experience here. For additional information about Ms. Stamer, see here, e-mail her hereor telephone Ms. Stamer at (214) 452-8297.
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The $3.5 million payment that Fresenius Medical Care North America (FMCNA) is paying to the U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR) to settle potential liability for potentially much higher Civil Monetary Penalties (CMPs) to OCR for Health Insurance Portability and Accountability Act (HIPAA) Privacy and Security Rules violation charges under a voluntary resolution agreement illustrates the need for group health plans and their employer and other sponsors, fiduciaries, and vendors to make HIPAA compliance a key priority for 2018.
Widespread publicity and fallout from data breaches involving Equifax, Blue Cross, the Internal Revenue Service and many other giant organizations have ramped up public awareness and government concern about health care and other data security. The resulting pressure is adding additional fuel to the already substantial concern of OCR and other agencies about compliance with HIPAA and other data security and breach laws. Like the $2.3 million HIPAA resolution agreement OCR announced with now bankrupt radiation oncology and cancer care provider 21st Century Oncology, Inc. (21CO) earlier this year, see, e.g., $23M Penalty Small Part of 21st Century’s Data Breach Fallout; Offers Data Breach Lessons For Other Businesses, the growing list of OCR resolution agreements and other enforcement actions against FMCNA, 21CO and other covered entities and other legal and market fallout that covered entities and other organizations experience following the announcement of breaches or other security deficiencies make the case for why HIPAA-covered health care providers, health plans, health care clearinghouses and their business associates (covered entities) must prioritize HIPAA compliance and other medical and other data security protection, privacy and risk management a top priority in 2018.
When weighing the importance of HIPAA compliance and risk management for their health plans, health plans, their employer or other sponsors, fiduciaries, insurers, administrators and their business associates should resist the temptation to underestimate the exposure because providers, rather than health plans, have been the most common target of the majority of the announced OCR enforcement actions resulting in substantial civil monetary penalties or resolution payments.
Rather, they should take note of resolution agreements and other enforcement actions against health plans such as the $2.2 million settlement payment APFRE Life Insurance Company of Puerto Rico (MAPFRE) paid under a 2017 resolution agreement to resolve HIPAA violation charges OCR brought based on its investigation of a September 29, 2011 breach report MCPFRE made to OCR. The breach report indicated that a USB data storage device (described as a “pen drive”) containing ePHI was stolen from its IT department, where the device was left without safeguards overnight. According to the report, the USB data storage device included complete names, dates of birth and Social Security numbers. The report noted that the breach affected 2,209 individuals. MAPFRE informed OCR that it was able to identify the breached ePHI by reconstituting the data on the computer on which the USB data storage device was attached. OCR’s investigation revealed MAPFRE’s noncompliance with the HIPAA Rules, specifically a failure to conduct its risk analysis and implement risk management plans, contrary to its prior representations, and a failure to deploy encryption or an equivalent alternative measure on its laptops and removable storage media until September 1, 2014. MAPFRE also failed to implement or delayed implementing other corrective measures it informed OCR it would undertake.
The Privacy Rule requires that health plans, health care providers, health care clearinghouses (covered entities) and their vendors that qualify as “business associates” under HIPAA comply with detailed requirements concerning the protection, use, access, destruction and disclosure of protected health information. As part of these requirements, covered entities and their business associates must adopt, administer and enforce detailed policies and practices, assess, monitor and maintain the security of electronic protected health information (ePHI) and other protected health information, provide notices of privacy practices and breaches of “unsecured” ePHI, afford individuals that are the subject of protected health information certain rights and comply with other requirements as specified by the Privacy, Security and Breach Notification Rules. In addition, covered entities and business associates also must enter into a written and signed business associate agreement that contains the elements specified in Privacy Rule § 164.504(e) before the business associate creates, uses, accesses or discloses PHI of the covered entity. Furthermore, the Privacy Rule includes extensive documentation and keeping requirements require that covered entities and BAs maintain copies of these BAAs for a minimum of six years and to provide that documentation to OCR upon demand.
Violations of the Privacy Rule can carry stiff civil monetary penalties or even criminal penalties. Pursuant to amendments to HIPAA enacted as part of the HITECH Act, civil penalties typically do not apply to violations punished under the criminal penalty rules of HIPAA set forth in Social Security Act , 42 U.S.C § 1320d-6 (Section 1177).
Resolution Agreements like the $3.2 million FMCNA resolution agreement allow covered entities and business associates to resolve potentially substantially larger civil monetary penalty liabilities that OCR can impose under the civil enforcement provisions of HIPAA. As amended by the HITECH Act, the civil enforcement provisions of HIPAA empower OCR to impose Civil Monetary Penalties on both covered entities and BAs for violations of any of the requirements of the Privacy or Security Rules. The penalty ranges for civil violations depends upon the circumstances associated with the violations and are subject to upward adjustment for inflation. As most recently adjusted here effective September 6, 2016, the following currently are the progressively increasing Civil Monetary Penalty tiers:
A minimum penalty of $100 and a maximum penalty of $50,000 per violation, for violations which the CE or BA “did not know, and by exercising reasonable diligence would not have known” about using “the business care and prudence expected from a person seeking to satisfy a legal requirement under similar circumstances;”
A minimum penalty of $1,000 and a maximum penalty of $50,000 per violation, for violations for “reasonable cause” which do not rise to the level of “willful neglect” where “reasonable cause” means the “circumstances that would make it unreasonable for the covered entity, despite the exercise of ordinary business care and prudence, to comply with the violated Privacy Rule requirement;”
A minimum penalty of $10,000 and a maximum penalty of $50,000 per violation, for violations attributed to “willful neglect,” defined as “the conscious, intentional failure or reckless indifference to the obligation to comply” with the requirement or prohibition; and
A minimum penalty of $50,000 and a maximum penalty of $1.5 million per violation, for violations attributed to “willful neglect” not remedied within 30 days of the date that the covered entity or BA knew or should have known of the violation.
For continuing violations such as failing to implement a required BAA, OCR can treat each day of noncompliance as a separate violation. However, sanctions under each of these tiers generally are subject to a maximum penalty of $1,500,000 for violations of identical requirements or prohibitions during a calendar year. For violations such as the failure to implement and maintain a required BAA where more than one covered entity bears responsibility for the violation, OCR an impose Civil Monetary Penalties against each culpable party. OCR considers a variety of mitigating and aggravating facts and circumstances when arriving at the amount of the penalty within each of these applicable tiers to impose.
In addition to these potential civil liability exposures, covered entities, their business associates and other individuals or organizations that wrongfully use, access or disclose electronic or other protected health information also can face civil liability under various circumstances. The criminal enforcement provisions of HIPAA authorize the Justice Department to prosecute a person who knowingly in violation of the Privacy Rule (1) uses or causes to be used a unique health identifier; (2) obtains individually identifiable health information relating to an individual; or (3) discloses individually identifiable health information to another person, punishable by the following criminal sanctions and penalties:
A fine of up to $50,000, imprisoned not more than 1 year, or both;
If the offense is committed under false pretenses, a fine of up to $100,000, imprisonment of not more than 5 years, or both; and
If the offense is committed with intent to sell, transfer, or use individually identifiable health information for commercial advantage, personal gain, or malicious harm, a fine of up to $250,000, imprisoned not more than 10 years, or both.
Because HIPAA Privacy Rule criminal violations are Class A Misdemeanors or felonies, Covered Entities and business associates should include HIPAA compliance in their Federal Sentencing Guideline Compliance Programs and practices and need to be concerned both about criminal exposure for their own direct violations, as well as imputed organizational liability for violations committed by their employees or agents under the Federal Sentencing Guidelines, particularly where their failure to implement or administer these required compliance policies and practices or failure to properly investigate or redress potential violations enables, perpetuates or covers up the criminal breach.
The FMCNA resolution agreement is another example of a growing list of resolution agreements various HIPAA covered entities have entered into to resolve their exposure to potentially greater liability should OCR assess civil monetary penalties under HIPAA’s civil sanction scheme.
The breach reports filed on January 21, 2017 reported five separate breach incidents occurring between February 23, 2012 and July 18, 2012 implicating the electronic protected health information (ePHI) of five separate FMCNA owned covered entities (FMCNA covered entities): Bio-Medical Applications of Florida, Inc. d/b/a Fresenius Medical Care Duval Facility in Jacksonville, Florida (FMC Duval Facility); Bio-Medical Applications of Alabama, Inc. d/b/a Fresenius Medical Care Magnolia Grove in Semmes, Alabama (FMC Magnolia Grove Facility); Renal Dimensions, LLC d/b/a Fresenius Medical Care Ak-Chin in Maricopa, Arizona (FMC Ak-Chin Facility); Fresenius Vascular Care Augusta, LLC (FVC Augusta); and WSKC Dialysis Services, Inc. d/b/a Fresenius Medical Care Blue Island Dialysis (FMC Blue Island Facility).
OCR concluded its investigation showed the breaches resulted because FMCNA failed to conduct an accurate and thorough risk analysis of potential risks and vulnerabilities to the confidentiality, integrity, and availability of all of its ePHI. OCR also concluded:
The FMCNA covered entities impermissibly disclosed the ePHI of patients by providing unauthorized access for a purpose not permitted by the Privacy Rule.
FMC Ak-Chin failed to implement policies and procedures to address security incidents.
FMC Magnolia Grove failed to implement policies and procedures that govern the receipt and removal of hardware and electronic media that contain ePHI into and out of a facility; and the movement of these items within the facility.
FMC Duval and FMC Blue Island failed to implement policies and procedures to safeguard their facilities and equipment therein from unauthorized access, tampering, and theft, when it was reasonable and appropriate to do so under the circumstances.
FMC Magnolia Grove and FVC Augusta failed to implement a mechanism to encrypt and decrypt ePHI, when it was reasonable and appropriate to do so under the circumstances.
In addition to a $3.5 million monetary settlement, a corrective action plan requires the FMCNA covered entities to complete a risk analysis and risk management plan, revise policies and procedures on device and media controls as well as facility access controls, develop an encryption report, and educate its workforce on policies and procedures.
HIPAA & Data Breach Enforcement A Growing Health Plan Risk
Health plans and other covered entities, plan sponsors and plan fiduciaries, their business associates and other consultants and service providers and members of their workforce need to recognize that the FMCNA and other resolution agreements are part of a growing trend, rather than isolated incidents of enforcement.
While civil monetary penalty enforcement remains much more common than criminal prosecution, covered entities, their business associates and members of their workforce must understand that HIPAA enforcement and resulting liability is growing.
While Department of Justice federal criminal prosecutions and convictions under HIPAA remain relatively rare, they occur and are growing. See e.g., Former Hospital Employee Sentenced for HIPAA Violations (Texas man sentenced to 18 months in federal prison for obtaining protected health information with the intent to use it for personal gain); Three Life Sentences Imposed On Man Following Convictions For Drug Trafficking, Kidnapping, Using Firearms and HIPAA Violations (drug king pin gets multiple 10 year consecutive prison terms for unauthorized access to private health information in violation of HIPAA; his health care worker friend sentenced for accessing electronic medical files and reporting information to him);Former Therapist Charged In HIPAA Case;Hefty Prison Sentence in ID Theft Case(former assisted living facility worker gets 37 months in prison after pleading guilty to wrongful disclosure of HIPAA protected information and other charges); Hefty Prison Sentence in ID Theft Case (former medical supply company owner sentenced to 12 years for HIPAA violations and fraud). While the harshest sentences tend to be associated with health care fraud or other criminal conduct, lighter criminal sentences are imposed against defendants in other cases as well. See e.g., Sentencing In S.C. Medicaid Breach Case (former South Carolina state employee sentenced to three years’ probation, plus community service, for sending personal information about more than 228,000 Medicaid recipients to his personal e-mail account.); HIPAA Violation Leads To Prison Term (former UCLA Healthcare System surgeon gets four months in prison after admitting he illegally read private electronic medical records of celebrities and others.)
Beyond the direct exposure of their health plan to HIPAA and other compliance liabilities, health plan fiduciaries also should note that their fiduciary responsibility under the Employee Retirement Income Security Act (ERISA) likely includes taking prudent steps to safeguard health plan information and maintain and administer their health plan in accordance with HIPAA. As a consequence, fiduciaries generally will want to ensure that they take and document prudent steps to evaluate, monitor and address HIPAA and other privacy and data security safeguards to minimize not only the liability exposures of their health plans, but also to help mitigate their own potential personal liability exposures that could arise or be asserted in response to a HIPAA breach or other HIPAA violation involving their health plans.
Coming on the heels of an already lengthy and growing list of OCR high dollar HIPAA enforcement actions, the FMCNA and other resolution agreements and civil monetary penalties these and other announced enforcement actions clearly reflect that OCR takes HIPAA compliance seriously and stands ready to impose substantial penalties when it finds violations in connection with breach notice investigations. Viewed in the context of these and other enforcement actions, the FMCNA Resolution Agreement and others clearly reflect the time for complacency in HIPAA compliance and leniency in HIPAA HIPAA enforcement are passed. Rather, these and other enforcement actions make clear why health care providers, health plans, healthcare clearinghouses and their business associates must make HIPAA compliance a priority now.
Covered entities and business associates also should recognize their potential responsibilities and risks for breaches or other improper conduct concerning patient or other sensitive personal financial information, trade secrets or other data under a wide range of laws beyond HIPAA and its state law equivalents. As documented by the media coverage of the legal and business woes of Alteryx, eBay, Paypal owner TIO Networks, Uber, Equifax and a long list of other previously trusted prominent businesses have and continue to incur from data breaches within their organizations, health care or other covered entities experiencing breaches often also face FTC or other government investigations and enforcement under the Fair and Accurate Credit Transactions Act (FACTA) and other federal or state identity theft, data privacy and security, electronic crimes and other rules as well as business losses and disruptions; civil litigation from breach victims, shareholders and investors, and business partners as well as OCR, FTC, and state data security regulation enforcement. Amid this growing concern, OCR has indicated that it intends to continue to diligently both seek to support and encourage voluntary compliance by covered entities and their business associates and investigate and enforce HIPAA against HIPAA covered entities and their business associates that fail to adequately safeguard PHI and ePHI in accordance with HIPAA. In the face of these growing risks and liabilities, covered entities and their business leaders face a strong imperative to clean up and maintain their HIPAA compliance and other data security to minimize their exposure to similar consequences.
In light of these rises, leaders, investors, insurers, lenders and others involved with covered entities and their business associates should take steps to verify that the covered entities and their business associates not only maintain compliance with HIPAA, but also comply with data security, privacy and other information protection requirements arising under other laws, regulations, and contracts, as well as the practical business risks that typically follow the announcement of a breach. Considering these risks, covered entities and their business associates must recognize and take meaningful, documented action to verify their existing compliance and ongoing oversight to ensure their organizations can demonstrate appropriate action to maintain appropriate practices, insurance and other safeguards to prevent, respond to and mitigate exposures in the event of a breach of protected health information or other sensitive data.
In response to these growing risks and concerns, covered entities and their business associates should ensure that they have conducted, and maintain and are ready to produce appropriate policies and procedures backed up by a well documented, up-to-date industry wide risk assessment of their organization’s susceptibility to breaches or other misuse of electronic or other protected health information. The starting point of these efforts should be to adopt and enforce updated written policies, procedures, technical and physical safeguards, processes and training to prevent the improper use, access, destruction or disclosure of patient PHI. Processes also should create, retain and be designed to cost effectively track, capture, and retain both all protected health information, its use, access, protection, destruction and disclosure, and the requisite supportive documentation supporting the appropriateness of those action to position the organization cost-effectively and quickly to fulfill required accounting, reporting and other needs in the event of a data breach, audit, participant inquiry or other event.
As part of this process, covered entities and business associates should start by reviewing and updating their policies, HIPAA audits and assessments and other documentation and processes. In doing so, they must use care to look outside the four corners of their Privacy Policies and core operating systems to ensure that their policies, practices, oversight and training address all protected health information within their operations on an entity wide basis. This entity-wide assessment should include both communications and requests for information normally addressed to the Privacy Officer as well as requests and communications that could arise in the course of media or other public relations, practice transition, workforce communication and other operations not typically under the direct oversight and management of the Privacy Officer.
In connection with these efforts, the enforcement actions make clear that Covered Entities and business associates should adopt, implement and monitor PHI privacy, and security on an entity wide basis. These efforts should include both general policies, practices and procedures as well as specifically tailored policies, processes and training to protect PHI and preserve HIPAA compliance throughout their organization as well as the business associate agreements and other processes to provide for HIPAA compliance with respect to protected health information created, used, accessed or disclosed to business associates or others not part of their direct workforce or operating outside the core boundaries of their facilities.
Covered entities and their business associates also must recognize and design their compliance efforts and documentation recognizing that HIPAA compliance is a living process, which require both constant diligence about changes in systems or other events that may require reevaluation or adjustments, whether from changes in software, systems or processes or external threats.
Because the cost of responding to and investigating breaches or other compliance concern can be quite burdensome, covered entities and their business associates also generally will want to pursue options to plan for and minimize potential expenses in the design and administration of their programs as well as to minimize and cover the potentially extraordinary costs of breach or other compliance investigation and results that commonly arise following a breach or other compliance event. As a part of this planning, covered entities and their business associates also generally will want to add consideration of changes to federal tax rules on the deductibility of compliance penalty and other related compliance expenditures.
While the Internal Revenue Code traditionally has prohibited businesses and individuals from deducting penalties, fines and other expenditures arising from violations of federal or state laws under Section 162(f) of the Internal Revenue Code, Section 13306 of the Tax Cuts and Jobs Creation Act creates a new exception for amounts (other than amounts paid or incurred any amount paid or incurred as reimbursement to the government or entity for the costs of any investigation or litigation) that a taxpayer establishes meet the following requirements:
Constitute restitution (including remediation of property) for damage or harm which was or may be caused by the violation of any law or the potential violation of any law, or
Are paid to come into compliance with any law which was violated or otherwise involved in the investigation or inquiry into a violation or potential violation of any law;
Are identified as restitution or as an amount paid to come into compliance with such law, as the case may be, in the court order or settlement agreement, and
In the case of any amount of restitution for failure to pay any tax imposed under this title in the same manner as if such amount were such tax, would have been allowed as a deduction under this chapter if it had been timely paid.
Because the true effect of these modifications will be impacted by implementing regulations and a number of other special conditions and rules may impact the deductibility of these payments and the reporting obligations attached to their payment, covered entities will want to consult with legal counsel about these rules and monitor their implementation to understand their potential implications on compliance expenditures and penalties.
About The Author
Repeatedly recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, a Fellow in the American College of Employee Benefit Council, the American Bar Foundation and the Texas Bar Foundation and board certified in labor and employment law by the Texas Board of Legal Specialization, Cynthia Marcotte Stamer is a practicing attorney, management consultant, author, public policy advocate and lecturer widely known for health and managed care, employee benefits, insurance and financial services, data and technology and other management work, public policy leadership and advocacy, coaching, teachings, and publications. Nationally recognized for her work, experience, leadership and publications on HIPAA and other medical privacy and data use and security, FACTA, GLB, trade secrets and other privacy and data security concerns, Ms. Stamer has worked extensively with clients and the government on cybersecurity, technology and processes and other issues involved in the use and management of medical, insurance and other financial, workforce, trade secrets and other sensitive data and information throughout her career. Scribe or co-scribe of the ABA Joint Committee on Employee Benefits Agency meeting with OCR since 2011 and author of a multitude of highly regarded publications on HIPAA and other health care, insurance, financial and other privacy and data security, Ms. Stamer is widely known for her extensive and leading edge experience, advising, representing, training and coaching health care providers, health plans, healthcare clearinghouses, business associates, their information technology and other solutions providers and vendors, and others on HIPAA and other privacy, data security and cybersecurity design, documentation, administration, audit and oversight, business associate and other data and technology contracting, breach investigation and response, and other related concerns including extensive involvement representing clients in dealings with OCR and other Health & Human Services, Federal Trade Commission, Department of Labor, Department of Treasury, state health, insurance and attorneys’ general, Congress and state legislators and other federal officials.
Ms. Stamer also has an extensive contributes her leadership and insights with other professionals, industry leaders and lawmakers. Her insights on HIPAA risk management and compliance often appear in medical privacy related publications of a broad range of health care, health plan and other industry publications Among others, she has conducted privacy training for the Association of State & Territorial Health Plans (ASTHO), the Los Angeles Health Department, SHRM, HIMMS, the American Bar Association, the Health Care Compliance Association, a multitude of health plan, insurance and financial services, education, employer employee benefit and other clients, trade and professional associations and others. You can get more information about her HIPAA and other experience here. For additional information about Ms. Stamer, see here, e-mail her hereor telephone Ms. Stamer at (214) 452-8297.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here including:
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NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Businesses with employees that travel regularly or for the occasional training or other isolated business trip should review and update their travel related policies, practices, and procedures for evolving laws, risks and management needs.
To start with, 2017 tax reforms impact the tax treatment of various employee relocation and travel related expense. Businesses should review these changes and make appropriate updates now to avoid headaches for the business and its employees later.
While many employers mostly focus upon travel expense management, reporting and reimbursement, smart employers also understand there’s much more to consider.
First and foremost, since employees often forget that the purpose of business travel is carrying out the business of the company and not a boondoggle, business travel policies and communications should make clear to employees that their trip is about work. Policies should make clear to employees their tesponsibility for attending meetings and performing other business-related responsibilities as well as for conducting themselves at all times consistent with company policy and to promote a positive impression of the employer and the company.
Naturally all travel policies also should require compliance with all applicable laws and customs. For international travel, this includes compliance with the Foreign Corrupt Practices Act, the Patriot Act, U.S. and foreign immigration and customs, and other relevant laws, rules and customs. However, domestic travelers also should be reminded if their duty to comply with local laws as well.
Amid the current “Me Too” frenzy, however, companies also should consider addressing other potentially risky behavior that tends to arise when employees travel on business. Unfortunately history proves that many employees actually do need to be told and reminded to abstain from inappropriate alcohol, sexual harassment or other behavior that could create liability or embarrassment for the company when traveling for business or engaging in other activities. Because business travel tends to blur distinctions between business and personal time, most businesses will want to establish and communicate high expectations concerning on and off-duty conduct when traveling on business to head off potential problems. Updated direction about hosting or participating in entertainment and other social activities with co-workers, customers, vendors, prospects and others also often are warranted.
Beyond communicating expectations of employees while on business travel, businesses also should confirm their company’s compensation, expense reimbursement, timekeeping and reporting, hours of work, and other policies comply with current laws and capture and retain appropriate documentation.
Businesses must recognize, for instance, that training and other work related travel typically is considered hours of work for wage an hour, safety and various other purposes. Employers should confirm their policies and practices properly capture and count all required hours of compensable work and pay hourly workers for time on the road properly in accordance with Labor Department requirements. Many employers unfortunately get nailed for overtime violations because of assumptions or misunderstandings of rules. For instance, many employers improperly fail to count air travel and certain other travel time as compensable when required to do so under Labor Department Fair Labor Standards Act (FLSA) rules. Likewise, improperly structured expense reimbursement policies or practices can bump up overtime pay liability by requiring the employer to include otherwise excludable expense reimbursements payments in the hourly rate of pay when calculating regular and overtime pay. Employers must ensure they understand these rules and take appropriate steps to capture, track, report and pay for time and expenses upfront to defend an audit or other challenge effectively and efficiently.
Reviewing and tightening workforce travel related policies, practices and procedures to meet current laws, business and social expectations and management needs can boost the bang businesses realize for their business travel buck while mitigating a host of legal and business risks.
About The Author
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation; Former Chair of the RPTE Employee Benefits and Compensation Committee, a current Co-Chair of the Committee, and the former Chair of its Welfare Benefit and its Defined Compensation Plan Committees and former RPTE Joint Committee on Employee Benefits Council (JCEB) Representative, Cynthia Marcotte Stamer is a Martindale-Hubble “AV-Preeminent” practicing attorney and management consultant, author, public policy advocate, author and lecturer repeatedly recognized for her 30 plus years’ of work and pragmatic thought leadership, publications and training on health, pension and other employee benefit, insurance, labor and employment, and health care fiduciary responsibility, payment, investment, contracting and other design, administration and compliance concerns as among the “Top Rated Labor & Employment Lawyers in Texas,” a “Legal Leader,” a “Top Woman Lawyer” and with other awards by LexisNexis® Martindale-Hubbell®; as among the “Best Lawyers In Dallas” for her work in the field of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, in International Who’s Who of Professionals and with numerous other awards and distinctions.
Highly valued for her ability to meld her extensive legal and industry knowledge and experience with her talents as an insightful innovator and pragmatic problem solver, Ms. Stamer advises, represents and defends employer, union, multi-employer, association and other employee benefit plan sponsors, insurers and managed care organizations, fiduciaries, plan administrators, technology and other service providers, government and community leaders and others about health and other employee benefit and insurance program and policy design and innovation, funding, documentation, administration, communication, data security and use, contracting, plan, public and regulatory reforms and enforcement, and other risk management, compliance and operations matters. Her experience encompasses leading and supporting the development and defense of innovative new policies, programs, practices and solutions; advising and representing clients on routine plan establishment, plan documentation and contract drafting and review, administration, change and other compliance and operations; crisis prevention and response, compliance and risk management audits and investigations, enforcement actions and other dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, Federal Trade Commission, Justice, Securities and Exchange Commission, Education and other federal agencies, state legislatures, attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators, and various other foreign and domestic governmental bodies and agencies. She also provides strategic and other supports clients in defending litigation as lead strategy counsel, special counsel and as an expert witness. Alongside her extensive legal and operational experience, Ms. Stamer also is recognized for her work as a public and regulatory policy advocate and community leader with a gift for finding pragmatic solutions and helping to forge the common ground necessary to build consensus. Best known for her domestic public policy and community leadership on health care and insurance reform, Ms. Stamer’s lifelong public policy and community service involvement includes service as a lead consultant to the Government of Bolivia on its pension privatization project, as well as extensive legislative and regulatory reform, advocacy and input workforce, worker classification, employee benefit, public health and healthcare, social security and other disability and aging in place, education, migration reforms domestically and internationally throughout her adult life. In addition to her public and regulatory policy involvement, Ms. Stamer also contributes her service and leadership to a professional and civic organizations and efforts including her involvement as the Founder and Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE; Coalition on Patient Empowerment, a founding Board Member and past President of the Alliance for Healthcare Excellence; Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; Vice Chair, Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group; current Fiduciary Responsibility Committee Co-Chair and Membership Committee member of the ABA RPTE Section; former RPTE Employee Benefits and Other Compensation Group Chair, former Chair and Co-Chair of its Welfare Plans Committee, and Defined Contribution Plans Committee; former RPTE Representative to ABA Joint Committee on Employee Benefits Council; former RPTE Representative to the ABA Health Law Coordinating Counsel; former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, former Board Member, Continuing Education Chair and Treasurer of the Southwest Benefits Association; Vice President of the North Texas Healthcare Compliance Professionals Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; past Dallas World Affairs Council Board Member, and in leadership of many other professional, civic and community organizations. Ms. Stamer also is a highly popular lecturer, symposia chair and author, who publishes and speaks extensively on health and managed care industry, human resources, employment and other privacy, data security and other technology, regulatory and operational risk management for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, the Society of Professional Benefits Administrators, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients, serves on the faculty and planning committee of many workshops, seminars, and symposia, and on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.
Beyond these involvements, Ms. Stamer also is active in the leadership of a broad range of other public policy advocacy and other professional and civic organizations and involvements. Through these and other involvements, she helps develop and build solutions, build consensus, garner funding and other resources, manage compliance and other operations, and take other actions to identify promote tangible improvements in health care and other policy and operational areas.
Before founding her current law firm, Cynthia Marcotte Stamer, P.C., Ms. Stamer practiced law as a partner with several prominent national and international law firms for more than 10 years before founding Cynthia Marcotte Stamer, P.C. to practice her unique brand of “Solutions law™” and to devote more time to the pragmatic policy and system reform, community education and innovation, and other health system improvement efforts of her PROJECT COPE: the Coalition on Patient Empowerment initiative.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources at SolutionsLawPress.com such as the following
If you or someone else you know would like to receive future updates about developments on these and other concerns, please provide your current contact information and preferences including your preferred e-mail by creating or updating your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Department of Labor (DOL) and other agencies’ spending reports posted at USASpending.gov to comply withthe Digital Accountability and Transparency Act of 2014 (DATA Act) are intended to help taxpayers, government leaders and others monitor and evaluate agency spending. However a new report from the DOL Office of Inspector General (OIG) found data reporting and other issues have compromised the reliability of the data reported in DOL reports posed on USASpending.gov.
The Data Act requires federal agencies to report spending data in accordance with new government-wide data standards developed by the Office of Management and Budget (OMB) and the Department of Treasury (Treasury). The data reports are posted on so taxpayers and policy makers understand how the Department is spending its funds. The Act requires federal agencies to report spending data in accordance with new government-wide data standards developed by the Office of Management and Budget (OMB) and the Department of Treasury (Treasury). The Act also requires the Inspectors General of each federal agency to conduct a review of the agency’s DATA Act compliance every two years and report on the completeness, timeliness, accuracy, and quality of the agency’s data.
The new report reports OIG’s findings from a performance audit OIG performed to assess: (1) the completeness, timeliness, accuracy, and quality of data submitted by the Department; and (2) the Department’s implementation and use of the Government-wide data standards established by OMB and Treasury for the Fiscal Year 2017 second quarter. While OIG found DOL effectively implemented and used the Government-wide data standards established by OMB and Treasury to prepare the reports and timely submitted the DATA Act required reports, it found numerous issues with the overall quality of the spending data it submitted for publication on USAspending.gov. Among other things, OIG reports that DOL:
Did not report all the required data elements for 19 percent of the transactions sampled. OIG found 77% of these errors occurred because the Department did not include Unique Record Identifiers for transactions when it was required to. This could cause issues when linking financial data with grant data on USAspending.gov.
74% of the transactions sampled contained an error in one or more data elements. OIG reports many of these errors resulted from issues in the Treasury’s DATA Act broker data extraction process.
Excluding those errors, 52% of the transactions sampled contained inaccurate information.
In addition to errors uncovered from OIG’s sampling audit, DOL also reported inaccurate program activity and object class codes for 5 and 7 percent of transactions, respectively, in its File B submission.
OIG attributes these errors in accuracy and completeness occurred because of data entry mistakes, data extraction issues, and weak data validation processes and concluded that these control deficiencies will have a negative impact on the quality of the data DOL reports until corrected.
Based on these findings, OIG has made eight recommendations to DOL’s Principal Deputy Chief Financial Officer to improve the quality of the data the DOL reports to USAspending.gov in the future and to strengthen internal controls over its data management processes.
While OIG reports DOL has concurred with these recommendations and has stated it has implemented additional controls, resulting in fewer errors with each submission, taxpayers and others using past reports need to consider the reported deficiencies in their evaluation and use of the data as well as assess the validity of future reported data for possible issues for future assessments. Even considering these issues, however, taxpayers and government leaders should consider consulting the data when investigating or evaluating DOL or other program activities or expenditures for policy, enforcement priority or other purposes.
About The Author
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation; Former Chair of the RPTE Employee Benefits and Compensation Committee, a current Co-Chair of the Committee, and the former Chair of its Welfare Benefit and its Defined Compensation Plan Committees and former RPTE Joint Committee on Employee Benefits Council (JCEB) Representative, Cynthia Marcotte Stamer is a Martindale-Hubble “AV-Preeminent” practicing attorney and management consultant, author, public policy advocate, author and lecturer repeatedly recognized for her 30 plus years’ of work and pragmatic thought leadership, publications and training on health, pension and other employee benefit, insurance, labor and employment, and health care fiduciary responsibility, payment, investment, contracting and other design, administration and compliance concerns as among the “Top Rated Labor & Employment Lawyers in Texas,” a “Legal Leader,” a “Top Woman Lawyer” and with other awards by LexisNexis® Martindale-Hubbell®; as among the “Best Lawyers In Dallas” for her work in the field of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, in International Who’s Who of Professionals and with numerous other awards and distinctions.
Highly valued for her ability to meld her extensive legal and industry knowledge and experience with her talents as an insightful innovator and pragmatic problem solver, Ms. Stamer advises, represents and defends employer, union, multi-employer, association and other employee benefit plan sponsors, insurers and managed care organizations, fiduciaries, plan administrators, technology and other service providers, government and community leaders and others about health and other employee benefit and insurance program and policy design and innovation, funding, documentation, administration, communication, data security and use, contracting, plan, public and regulatory reforms and enforcement, and other risk management, compliance and operations matters. Her experience encompasses leading and supporting the development and defense of innovative new policies, programs, practices and solutions; advising and representing clients on routine plan establishment, plan documentation and contract drafting and review, administration, change and other compliance and operations; crisis prevention and response, compliance and risk management audits and investigations, enforcement actions and other dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, Federal Trade Commission, Justice, Securities and Exchange Commission, Education and other federal agencies, state legislatures, attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators, and various other foreign and domestic governmental bodies and agencies. She also provides strategic and other supports clients in defending litigation as lead strategy counsel, special counsel and as an expert witness. Alongside her extensive legal and operational experience, Ms. Stamer also is recognized for her work as a public and regulatory policy advocate and community leader with a gift for finding pragmatic solutions and helping to forge the common ground necessary to build consensus. Best known for her domestic public policy and community leadership on health care and insurance reform, Ms. Stamer’s lifelong public policy and community service involvement includes service as a lead consultant to the Government of Bolivia on its pension privatization project, as well as extensive legislative and regulatory reform, advocacy and input workforce, worker classification, employee benefit, public health and healthcare, social security and other disability and aging in place, education, migration reforms domestically and internationally throughout her adult life. In addition to her public and regulatory policy involvement, Ms. Stamer also contributes her service and leadership to a professional and civic organizations and efforts including her involvement as the Founder and Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE; Coalition on Patient Empowerment, a founding Board Member and past President of the Alliance for Healthcare Excellence; Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; Vice Chair, Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group; current Fiduciary Responsibility Committee Co-Chair and Membership Committee member of the ABA RPTE Section; former RPTE Employee Benefits and Other Compensation Group Chair, former Chair and Co-Chair of its Welfare Plans Committee, and Defined Contribution Plans Committee; former RPTE Representative to ABA Joint Committee on Employee Benefits Council; former RPTE Representative to the ABA Health Law Coordinating Counsel; former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, former Board Member, Continuing Education Chair and Treasurer of the Southwest Benefits Association; Vice President of the North Texas Healthcare Compliance Professionals Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; past Dallas World Affairs Council Board Member, and in leadership of many other professional, civic and community organizations. Ms. Stamer also is a highly popular lecturer, symposia chair and author, who publishes and speaks extensively on health and managed care industry, human resources, employment and other privacy, data security and other technology, regulatory and operational risk management for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, the Society of Professional Benefits Administrators, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients, serves on the faculty and planning committee of many workshops, seminars, and symposia, and on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.
Beyond these involvements, Ms. Stamer also is active in the leadership of a broad range of other public policy advocacy and other professional and civic organizations and involvements. Through these and other involvements, she helps develop and build solutions, build consensus, garner funding and other resources, manage compliance and other operations, and take other actions to identify promote tangible improvements in health care and other policy and operational areas.
Before founding her current law firm, Cynthia Marcotte Stamer, P.C., Ms. Stamer practiced law as a partner with several prominent national and international law firms for more than 10 years before founding Cynthia Marcotte Stamer, P.C. to practice her unique brand of “Solutions law™” and to devote more time to the pragmatic policy and system reform, community education and innovation, and other health system improvement efforts of her PROJECT COPE: the Coalition on Patient Empowerment initiative.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources at SolutionsLawPress.com such as the following:
If you or someone else you know would like to receive future updates about developments on these and other concerns, please provide your current contact information and preferences including your preferred e-mail by creating or updating your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Health plans, their employer, union, insurer or other sponsors, fiduciaries, administrative or other service providers and their vendors and advisors should act immediately to investigate if any action is needed to protect electronic protected health information or other sensitive data and systems in response to the following cyber risk alert from the Department Of Health and Human Services Office of Civil Rights.
DISCLAIMER: This product is provided “as is” for informational purposes only. The Department of Health and Human Services (HHS) does not provide warranties of any kind regarding any information contained within. HHS does not endorse any commercial product or service referenced in this product or otherwise. Further dissemination of this product is governed by the Traffic Light Protocol (TLP) marking in the header.
TLP: WHITE information may be distributed without restriction (subject to standard copyright rules).
Healthcare and Public Health Sector partners-
The attached report is a technical update to the previously distributed HPH Cyber Notice covering chip vulnerabilities named Meltdown and Spectre. Both Meltdown and Spectre are vulnerabilities in how computer chips handle data that have the potential to expose sensitive information, such as protected health information (PHI), being processed on the chip. As this information is protected from disclosure under HIPAA, Healthcare and Public Health (HPH) entities should employ risk management processes to address these vulnerabilities and ensure the security of medical records and other PHI.
Major concerns for the HPH sector include but are not limited to:
• Challenges identifying vulnerable medical devices and accessory medical equipment and ensuring patches are validated to prevent impacts to the intended use.
• Cloud Computing: Potential PHI or Personally Identifiable Information (PII) data leakage in shared computing environments
• Web browsers: Possible PHI/PII data leakage
• Patches: Potential for service degradation and/or interruption from patches
Employer and sponsors, fiduciaries, administrators and insurers of employee benefitplansof any type covered by the Employee Retirement Income Security Act (ERISA) making any disability based determinations now have until April 1, 2018 to bring their plans’ claims and appeals procedures for disability-based decisions and related notices and communications into compliance with substantially more complicated requirements in new Department of Labor Employee Benefit Security Administration (EBSA) regulations.
The EBSA announced on January 5, 2018 the extension of the effective date of new requirements for benefit plan processing and providing notification about claims or appeals involving disability determinations from their originally scheduled effective date of January 1, 2018 to April 1, 2018.
While the extension gives employer and other sponsors, fiduciaries, administrators and insurers of employee benefit plans making disability-based benefit determinations a few extra months to review and update their plan documents, summary plan descriptions, procedures, processes and claims and appeals notices to meet tightened new federal rules on disability-based benefit determinations applicable to all post December 31, 2017 claims under the restated Final Rule on Claims Procedure for Plans Providing Disability Benefits (“Disability Claims Rule”), the nature and scope of these new requirements will require updates to virtually all ERISA-covered benefit plans with any disability dependent provisions. These updates are likely to include changes to plan documents, summary plan descriptions, notices, contracts, processes and procedures for a broad range of plans. Consequently, employer and other plan sponsors, fiduciaries, administrators, insurers and others responsible for any benefit plan not already reviewed and updated to comply should get moving to complete the necessary review and update to meet the April 1, 2018 deadline.
Cynthia Marcotte Stamer and others will lead a free telephone study group discussion of “Claims Regulations and Other Developments Affecting Plan Fiduciaries” on January 26, 2018 beginning at 1 PM (Eastern), Noon (Central), 11 AM (Mountain), and 10 AM (Pacific). For more details about the Study Group, see here.
New Disability Claims Rule Overview
Originally published in final form by the EBSA on December 16, 2016, the Disability Claims Rule generally require all ERISA-covered employee benefit plans making any disability benefit or other determination conditioned upon a finding of disability to comply with the new Disability Claims Rule for any claim received after March 31, 2018.
Based on EBSA’s previously adopted Patient Protection and Affordable Care Act (“ACA”) group health plan claims and appeals rules, the new Final Disability Claims Rule will apply to all disability determinations made under any ERISA-covered plan after March 31, 2018, regardless of how the plan characterizes the benefit or whether the plan is a health or other welfare, pension, 401(k) plan or other savings plan.
The new Disability Claims Rule will apply to a broad range of plans, most of which historically have not followed the detailed claims and appeals notification, independent and impartial decision-making, rescission, deemed exhaustion, “culturally and linguistically appropriate” and other procedural protections and safeguards that the Disability Claims Rule extends from the current group health plan rules to all ERISA-covered plans making benefit determinations based on disability. Consequently covered plans making disability-based benefit or other covered determinations are likely to require updates to plan documents, insurance or administrative services contracts, summary plan descriptions and other plan communications, claims and appeals notices, and other related processes, procedures and documentation to meet these new requirements. Since certain requirements of the Disability Claims Rules like the summary plan description advance disclosure requirements are required to be provided before the claim is received, plans and their sponsors, fiduciaries, insurers and administrators risk being accused of violating these requirements by waiting to update plans, their processes and materials until after claim involving a disability based determination arises.
Ensuring that impacted plans are updated before the April 1, 2018 deadline is important because the Disability Claims Rule, like the group health plan claims and appeals rules upon which it is based, also states that noncompliance with any of its requirements empowers a participant to immediately sue the plan for enforcement if his rights without further complying the the plan’s administrative procedures. Moreover, failing to comply with summary plan disclosure or claims or appeal adverse benefit determination notification requirements also may subject the plan administrator to administrative penalties under ERISA section 514(c); fiduciaries to ERISA fiduciary liability, and compromise the ability to defend otherwise defensible decisions. Consequently, employers and other plan sponsors, fiduciaries, administrators and insurers will want to act quickly to ensure that their plans, their summary plan descriptions and other communications, notices, processes, contracts and procedures are updated appropriately before April 1, 218.
About The Author
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation; Former Chair of the RPTE Employee Benefits and Compensation Committee, a current Co-Chair of the Committee, and the former Chair of its Welfare Benefit and its Defined Compensation Plan Committees and former RPTE Joint Committee on Employee Benefits Council (JCEB) Representative, Cynthia Marcotte Stamer is a Martindale-Hubble “AV-Preeminent” practicing attorney and management consultant, author, public policy advocate, author and lecturer repeatedly recognized for her 30 plus years’ of work and pragmatic thought leadership, publications and training on health, pension and other employee benefit, insurance, labor and employment, and health care fiduciary responsibility, payment, investment, contracting and other design, administration and compliance concerns as among the “Top Rated Labor & Employment Lawyers in Texas,” a “Legal Leader,” a “Top Woman Lawyer” and with other awards by LexisNexis® Martindale-Hubbell®; as among the “Best Lawyers In Dallas” for her work in the field of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, in International Who’s Who of Professionals and with numerous other awards and distinctions.
Highly valued for her ability to meld her extensive legal and industry knowledge and experience with her talents as an insightful innovator and pragmatic problem solver, Ms. Stamer advises, represents and defends employer, union, multi-employer, association and other employee benefit plan sponsors, insurers and managed care organizations, fiduciaries, plan administrators, technology and other service providers, government and community leaders and others about health and other employee benefit and insurance program and policy design and innovation, funding, documentation, administration, communication, data security and use, contracting, plan, public and regulatory reforms and enforcement, and other risk management, compliance and operations matters. Her experience encompasses leading and supporting the development and defense of innovative new policies, programs, practices and solutions; advising and representing clients on routine plan establishment, plan documentation and contract drafting and review, administration, change and other compliance and operations; crisis prevention and response, compliance and risk management audits and investigations, enforcement actions and other dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, Federal Trade Commission, Justice, Securities and Exchange Commission, Education and other federal agencies, state legislatures, attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators, and various other foreign and domestic governmental bodies and agencies. She also provides strategic and other supports clients in defending litigation as lead strategy counsel, special counsel and as an expert witness. Alongside her extensive legal and operational experience, Ms. Stamer also is recognized for her work as a public and regulatory policy advocate and community leader with a gift for finding pragmatic solutions and helping to forge the common ground necessary to build consensus. Best known for her domestic public policy and community leadership on health care and insurance reform, Ms. Stamer’s lifelong public policy and community service involvement includes service as a lead consultant to the Government of Bolivia on its pension privatization project, as well as extensive legislative and regulatory reform, advocacy and input workforce, worker classification, employee benefit, public health and healthcare, social security and other disability and aging in place, education, migration reforms domestically and internationally throughout her adult life. In addition to her public and regulatory policy involvement, Ms. Stamer also contributes her service and leadership to a professional and civic organizations and efforts including her involvement as the Founder and Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE; Coalition on Patient Empowerment, a founding Board Member and past President of the Alliance for Healthcare Excellence; Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; Vice Chair, Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group; current Fiduciary Responsibility Committee Co-Chair and Membership Committee member of the ABA RPTE Section; former RPTE Employee Benefits and Other Compensation Group Chair, former Chair and Co-Chair of its Welfare Plans Committee, and Defined Contribution Plans Committee; former RPTE Representative to ABA Joint Committee on Employee Benefits Council; former RPTE Representative to the ABA Health Law Coordinating Counsel; former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, former Board Member, Continuing Education Chair and Treasurer of the Southwest Benefits Association; Vice President of the North Texas Healthcare Compliance Professionals Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; past Dallas World Affairs Council Board Member, and in leadership of many other professional, civic and community organizations. Ms. Stamer also is a highly popular lecturer, symposia chair and author, who publishes and speaks extensively on health and managed care industry, human resources, employment and other privacy, data security and other technology, regulatory and operational risk management for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, the Society of Professional Benefits Administrators, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients, serves on the faculty and planning committee of many workshops, seminars, and symposia, and on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.
Beyond these involvements, Ms. Stamer also is active in the leadership of a broad range of other public policy advocacy and other professional and civic organizations and involvements. Through these and other involvements, she helps develop and build solutions, build consensus, garner funding and other resources, manage compliance and other operations, and take other actions to identify promote tangible improvements in health care and other policy and operational areas.
Before founding her current law firm, Cynthia Marcotte Stamer, P.C., Ms. Stamer practiced law as a partner with several prominent national and international law firms for more than 10 years before founding Cynthia Marcotte Stamer, P.C. to practice her unique brand of “Solutions law™” and to devote more time to the pragmatic policy and system reform, community education and innovation, and other health system improvement efforts of her PROJECT COPE: the Coalition on Patient Empowerment initiative.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources at SolutionsLawPress.com such as the following:
If you or someone else you know would like to receive future updates about developments on these and other concerns, please provide your current contact information and preferences including your preferred e-mail by creating or updating your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Arizona legislators are considering adopting legislation banning and rendering unenforceable agreements by employers or others to keep confidential or otherwise restrict the disclosure of allegations or other information about sexual harassment or sexual assault. If enacted as proposed, the proposed legislation could significantly impact employers, sexual harassment and sexual assault victims and witnesses, persons accused of sexual assault or harassment and others’ ability to negotiate, enforce or comply with provisions in new or preexisting employment policies, and settlement, severance and other agreements requiring confidentiality of or restricting disclosure of information about findings or allegations of sexual harassment or assault and related factual information.
As currently proposed, Arizona House Bill 2020 (HB 2020) would amend Section 1. Title 12, chapter 6, article 12, Arizona Revised Statutes, to include add a new section 12-720 that would read as follows
12-720. Confidentiality agreements; disclosure of information relating to sexual assault or sexual harassment; applicability
A. A CONFIDENTIALITY AGREEMENT THAT RESTRICTS THE DISCLOSURE OF FACTUAL INFORMATION THAT IS RELATED TO A SEXUAL ASSAULT OR SEXUAL HARASSMENT, INCLUDING FACTUAL INFORMATION THAT IS RELATED TO AN ALLEGATION OF OR ATTEMPTED SEXUAL ASSAULT OR SEXUAL HARASSMENT, IS AGAINST THIS STATE’S PUBLIC SAFETY AND POLICY AND IS VOID AND UNENFORCEABLE.
B. A PERSON MAY NOT ENTER INTO A CONFIDENTIALITY AGREEMENT THAT RESTRICTS THE DISCLOSURE OF FACTUAL INFORMATION THAT IS RELATED TO AN ALLEGATION OF OR ATTEMPTED SEXUAL ASSAULT OR SEXUAL HARASSMENT BY AN ELECTED OFFICIAL.
C. THIS SECTION DOES NOT APPLY TO THE DISCLOSURE OF A MINOR CRIME VICTIM’S MEDICAL OR PERSONAL IDENTIFYING INFORMATION OR TO OTHER INFORMATION THAT IS SPECIFICALLY PROTECTED FROM DISCLOSURE BY LAW.
Based on this currently proposed language, enactment of HB 2020’s sexual harassment and assault confidentiality restrictions almost certainly will dramatically impact both the financial, reputation and legal liability exposures of individuals accused of sexual harassment or assault and their employers or others potentially responsible for the investigation, management or liability for the alleged harasser’s behavior, behavior, as well as the privacy, retaliation and other concerns of sexual harassment or assault victims and witnesses. Certainly, HB 2020 would preclude or limit the ability of executives or other individuals accused of sexual harassment or assault from hiding their isolated or recurrent actual or alleged misconduct behind confidentiality or nondisclosure provisions in settlement or other contracts, handbooks, investigation, compliance or other policies. Likewise, HB 2020’s prohibitions against agreements requiring the maintenance of confidentiality of information about alleged or actual sexual harassment or assaults also can be expected to make it more difficult for employers to defend or mitigate their exposure to liability for alleged sexual harassment or assaults by making it much easier for alleged victims, their attorneys and the Equal Employment Opportunity Commission and other government agencies to investigate and obtain evidence about the conduct of the accused and the actions of his or her employer to other events or charges of sexual harassment or assault. Among other things, more free availability of this information is likely to make it easier for sexual harassment or assault victims, their plaintiff’s lawyers and the EEOC or other agencies and advocates to uncover, pursue enforcement and recover damages from employers through individual, class action or serial sexual harassment investigations and lawsuits as well as to rebut efforts of employers and those accused to mitigate damages and other liability.
While many might celebrate these expected effects of HB 2020 in helping to hold harassers and their employers more accountable for misconduct and to safeguard others from becoming future victims, HB 2020 also carries the risk of a number of potentially undesirable side effects for sexual harassment and assault victims and witnesses, employer and other investigators and those wrongfully accused. Because victims and witnesses to sexual harassment often fear embarrassment, retaliation or other adverse consequences from their report or involvement in a charge or investigation, sexual harassment and other policies and the employers and others responsible for administering and enforcing sexual harassment policies typically offer assurances of confidentiality and other nondisclosure to encourage and reassure victims and witnesses to report concerning behavior and to help prevent retaliation against victims and witnesses reporting or cooperating in sexual harassment and assault investigations. While HB 2020 includes a provision that appears intended to preserve the confidentiality of the identity and medical information of victims, the technical concealment of names and medical information as a practical matter generally provides an inadequate shield for victims or witnesses when other information otherwise remains discoverable. Consequently, confidentiality restrictions like those proposed in HB 2020 could backfire against these victims and witnesses and employers legitimately working to protect them by enhancing victim and witness reluctance to report or cooperate in sexual harassment investigations as well as inflict substantial and irreversible injury upon the personal and professional reputations of individuals wrongfully accused. The confidentiality prohibitions of HB 2020 are likely to undermine the ability of employers, victims and witnesses to use confidentiality requirements legitimately to prevent unjustified retaliation, loss of privacy and other adverse consequences to victims, witnesses and those wrongfully accused. Likewise, restrictions on confidentiality also can be expected to undermine the ability of victims to secure compensation from guilty parties and their employers without litigation as accused parties and their employer as the inability to enforce confidentiality will undermine the settlement value of questionable charges by enhancing the potential need to dispute and defend such charges to avoid becoming targeted by other accusations concurrently or in the future.
Obviously, these and other potential implications of HB 2020 make it highly advisable that businesses, management, individuals, insurers and others potentially subject to HB 2020 will want to carefully assess the implications of HB 2020 and provide input to the Arizona legislature. Given the wave of recent publicity triggered over the past year from widespread reporting of sexual harassment and related charges and resulting resignations and lawsuits and settlements involving sexual harassment charges levied against high profile entertainers, business leaders and others, employers, management and business leaders, victims, witnesses, insurers and other operating outside the jurisdiction of Arizona law can anticipate that they also may face similar legislative, regulatory or other challenges to confidentiality and nondisclosure policies and agreements concerning sexual harassment and assault allegations, investigations and settlements. Because of these and other concerns, employers, victims, witnesses, investigators, insurers and others with responsibility for or involvement with sexual harassment and assault concerns across the nation should both carefully monitor these developments as well as the reliability and effectiveness of their past and existing sexual harassment, investigations, anti-retaliation, confidentiality and other related policies, confidentiality and nondisclosure provisions in settlement agreements, and other potentially impacted agreements, policies and practices. Employers and other individuals or organizations in the scope of potential liability for sexual harassment or assault charges also may wish to consider strengthening existing anti-harassment policies, investigation practices, insurance coverage and other prevention and risk management arrangements to mitigate their sexual harassment risks.
About The Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for management work, coaching, teachings, and publications.
Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce, internal controls and regulatory compliance, change management and other performance and operations management and compliance. Her day-to-day work encompasses both labor and employment issues, as well as independent contractor, outsourcing, employee leasing, management services and other nontraditional service relationships. She supports her clients both on a real-time, “on demand” basis and with longer term basis to deal with all aspects for workforce and human resources management, including, recruitment, hiring, firing, compensation and benefits, promotion, discipline, compliance, trade secret and confidentiality, noncompetition, privacy and data security, safety, daily performance and operations management, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.
Well-known for her extensive work with health, insurance, financial services, technology, energy, manufacturing, retail, hospitality, governmental and other highly regulated employers, her nearly 30 years’ of experience encompasses domestic and international businesses of all types and sizes including extensive involvement for more than providing training for management and others and helping management, liability insurers and others to develop, administer, enforce, defend and mitigate sexual harassment and other related employment risks.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other concerns by her service as a management consultant, business coach and consultant and policy strategist as well through her leadership participation in professional and civic organizations such her involvement as the Vice Chair of the North Texas Healthcare Compliance Association; Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE: Coalition on Patient Empowerment; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; former Gulf Coast TEGE Council Exempt Organization Coordinator; a founding Board Member and past President of the Alliance for Healthcare Excellence; former board member and Vice President of the Managed Care Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; a member and policy adviser to the National Physicians’ Council for Healthcare Policy; current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section; Past Chair of the ABA Health Law Section Managed Care & Insurance Section; ABA Real Property Probate and Trust (RPTE) Section former Employee Benefits Group Chair, immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative, and Defined Contribution Committee Co-Chair, past Welfare Benefit Committee Chair and current Employee Benefits Group Fiduciary Responsibility Committee Co-Chair, Substantive and Group Committee member, Membership Committee member and RPTE Representative to the ABA Health Law Coordinating Council; past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a former member of the Board of Directors, Treasurer, Member and Continuing Education Chair of the Southwest Benefits Association and others.
Ms. Stamer also is a widely published author, highly popular lecturer, and serial symposia chair, who publishes and speaks extensively on sexual harassment and other human resources, labor and employment, employee benefits, compensation, occupational safety and health, and other leadership, performance, regulatory and operational risk management, public policy and community service concerns, who has received high praise for workshops and training programs she conducts on “What To Do When Your Employee’s Personal Life Becomes Your Business,” “Sex, Drugs & Rock ‘N Role in the Workplace,” and other sexual harassment, investigations, privacy and related programs for SHRM, the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.
Want to know more? See here for details about the author of this update, attorney Cynthia Marcotte Stamer, e-mail her here or telephone Ms. Stamer at (469) 767-8872.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources at SolutionsLawPress.com such as the following:
If you or someone else you know would like to receive future updates about developments on these and other concerns, please provide your current contact information and preferences including your preferred e-mail by creating or updating your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Want to know what tax changes are included in the Tax Cuts and Jobs Act (H.R. 1) (Act”) and expected to pass Congress tomorrow (December 20, 2017)? Check out the House Conference Committee Report, H. Rept. 115-466 (the “Conference Report”) released on Friday, December 15, 2017.
The House Conference Committee Report details the negotiated reconciliation of House Bill (H.R. 1) as passed by the House of Representatives on November 16, 2017 and the provisions of H.R. 1 with amendments passed by the Senate on December 2, 2017. Over the past few weeks, a joint committee made up of key representatives from the House and Senate have engaged in highly publicized negotiations to reconcile differences in the House and Senate versions of the Act. The House Conference Committee Report signed off by the Conference Committee and filed in the House of Representatives of December 15, 2017 documents the agreements reached by House and Senate Conferees reconciling the House and Senate versions of H.R. 1, which Congress will vote upon this week. Solutions Law Press, Inc. will publish analysis of various provisions of these reforms over the next few days. In the meantime, taxpayers interested in learning about the Act may use the links in this article to begin familiarizing themselves with its provisions.
About The Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for management work, coaching, teachings, and publications.
Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce, internal controls and regulatory compliance, change management and other performance and operations management and compliance. Her day-to-day work encompasses both labor and employment issues, as well as independent contractor, outsourcing, employee leasing, management services and other nontraditional service relationships. She supports her clients both on a real-time, “on demand” basis and with longer term basis to deal with all aspects for workforce and human resources management, including, recruitment, hiring, firing, compensation and benefits, promotion, discipline, compliance, trade secret and confidentiality, noncompetition, privacy and data security, safety, daily performance and operations management, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.
Well-known for her extensive work with health, insurance, financial services, technology, energy, manufacturing, retail, hospitality, governmental and other highly regulated employers, her nearly 30 years’ of experience encompasses work with domestic and international businesses of all types and sizes as well as extensive work with Congress and U.S. federal and state regulatory agencies on workforce, compensation and benefits, and performance and operational compliance challenges. A primary drafter of the Bolivian Pension Privitization law who also has worked on workforce, tax, employee benefits, health care, insurance, safety, immigration, privacy and data security and other federal and state legal reforms domestically and internationally throughout her adult life, Ms. Stamer also has been extensively involved in various aspects of Congressional considerations of the current Act and other legislation considered by the current Congress.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other concerns by her service as a management consultant, business coach and consultant and policy strategist as well through her leadership participation in professional and civic organizations such her involvement as the Vice Chair of the North Texas Healthcare Compliance Association; Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE: Coalition on Patient Empowerment; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; former Gulf Coast TEGE Council Exempt Organization Coordinator; a founding Board Member and past President of the Alliance for Healthcare Excellence; former board member and Vice President of the Managed Care Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; a member and policy adviser to the National Physicians’ Council for Healthcare Policy; current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section; Past Chair of the ABA Health Law Section Managed Care & Insurance Section; ABA Real Property Probate and Trust (RPTE) Section former Employee Benefits Group Chair, immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative, and Defined Contribution Committee Co-Chair, past Welfare Benefit Committee Chair and current Employee Benefits Group Fiduciary Responsibility Committee Co-Chair, Substantive and Group Committee member, Membership Committee member and RPTE Representative to the ABA Health Law Coordinating Council; past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a former member of the Board of Directors, Treasurer, Member and Continuing Education Chair of the Southwest Benefits Association and others.
Ms. Stamer also is a widely published author, highly popular lecturer, and serial symposia chair, who publishes and speaks extensively on human resources, labor and employment, employee benefits, compensation, occupational safety and health, and other leadership, performance, regulatory and operational risk management, public policy and community service concerns for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations, for clients and others.
Want to know more? See here for details about the author of this update, attorney Cynthia Marcotte Stamer, e-mail her here or telephone Ms. Stamer at (469) 767-8872.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources at SolutionsLawPress.com such as the following:
If you or someone else you know would like to receive future updates about developments on these and other concerns, please provide your current contact information and preferences including your preferred e-mail by creating or updating your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Employers, employee benefit plan sponsors and administrators, vendors and their advisors and service providers should re-evaluate their existing payroll and other settings and elections, planning, testing and related strategies and assumptions in light of the 2018 annual cost-of-living adjustments (COLAs) to the dollar limitations applicable to the Internal Revenue Code Section 415 qualified retirement plans benefit and contribution limits announced by the Internal Revenue Service (IRS) in Notice 2017-64, IRB 2017-45 on November 6, 2017.
H.R. 1, Tax Cuts and Jobs Act (Tax Refirm Bill) reported out of the Conference Committee last week and scheduled for a vote before Congress tomorrow leaves these limits substantially unchanged.
Notice 2017-64 adjusts the dollar limitations applicable to the Internal Revenue Code Section 415 qualified retirement plans benefit and contribution limits. The Section 415 limitations COLAs are made and published annually to comply with Section 415(d)’s requirement that the Treasury Security annually adjust these limits for cost-of-living increases. Other limitations applicable to deferred compensation plans are also affected by these adjustments under § 415. Under § 415(d), the adjustments are to be made under adjustment procedures similar to those used to adjust benefit amounts under § 215(i)(2)(A) of the Social Security Act.
In addition to impacting contribution limits permitted to defined benefit, 401(k) and other defined contribution and other plans, the changes can impact the definition of highly compensated employees, discrimination testing, plan funding and a broad range of employee benefit, compensation, tax, payroll, union or other contracting and other concerns for employers, employee benefit plan sponsors, fiduciaries, administrators, payroll, plan and other vendors, participants and beneficiaries and others.
The following is a chart of the adjusted limits compared to the currently applicable 2017 limitations. (Download chart)
Employers, employee benefit plan sponsors, fiduciaries, administrators and other vendors, participants and beneficiaries and others working with employee benefit plans or compensation contributed to these arrangements should review these new 2018 COLA limitations to assess their potential impact and make appropriate adjustments to avoid compliance challenges or other unfortunate surprises in 2018. If they already have not already done so, reviewing the 2018 Social Security Act COLAs also would be wise. See 2018 Social Security COLAs Set.
About The Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for management work, coaching, teachings, and publications.
Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce, internal controls and regulatory compliance, change management and other performance and operations management and compliance. Her day-to-day work encompasses both labor and employment issues, as well as independent contractor, outsourcing, employee leasing, management services and other nontraditional service relationships. She supports her clients both on a real-time, “on demand” basis and with longer term basis to deal with all aspects for workforce and human resources management, including, recruitment, hiring, firing, compensation and benefits, promotion, discipline, compliance, trade secret and confidentiality, noncompetition, privacy and data security, safety, daily performance and operations management, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.
Well-known for her extensive work with health, insurance, financial services, technology, energy, manufacturing, retail, hospitality, governmental and other highly regulated employers, her nearly 30 years’ of experience encompasses domestic and international businesses of all types and sizes.
A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other concerns by her service as a management consultant, business coach and consultant and policy strategist as well through her leadership participation in professional and civic organizations such her involvement as the Vice Chair of the North Texas Healthcare Compliance Association; Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE: Coalition on Patient Empowerment; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; former Gulf Coast TEGE Council Exempt Organization Coordinator; a founding Board Member and past President of the Alliance for Healthcare Excellence; former board member and Vice President of the Managed Care Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; a member and policy adviser to the National Physicians’ Council for Healthcare Policy; current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section; Past Chair of the ABA Health Law Section Managed Care & Insurance Section; ABA Real Property Probate and Trust (RPTE) Section former Employee Benefits Group Chair, immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative, and Defined Contribution Committee Co-Chair, past Welfare Benefit Committee Chair and current Employee Benefits Group Fiduciary Responsibility Committee Co-Chair, Substantive and Group Committee member, Membership Committee member and RPTE Representative to the ABA Health Law Coordinating Council; past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a former member of the Board of Directors, Treasurer, Member and Continuing Education Chair of the Southwest Benefits Association and others.
Ms. Stamer also is a widely published author, highly popular lecturer, and serial symposia chair, who publishes and speaks extensively on human resources, labor and employment, employee benefits, compensation, occupational safety and health, and other leadership, performance, regulatory and operational risk management, public policy and community service concerns for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.
Want to know more? See here for details about the author of this update, attorney Cynthia Marcotte Stamer, e-mail her here or telephone Ms. Stamer at (469) 767-8872.
About Solutions Law Press, Inc.™
Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources at SolutionsLawPress.com such as the following:
If you or someone else you know would like to receive future updates about developments on these and other concerns, please provide your current contact information and preferences including your preferred e-mail by creating or updating your profile here.
NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.
Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.
Posted by Cynthia Marcotte Stamer 
slphrbenefitsupdate.com 
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