Most Employers, Plans Still Have Work To Do To Comply With Stimulus Bill COBRA Rules

May 14, 2009

Many employers have used the Model Notices posted March 19, 2009 by the Department of Labor (DOL) to meet the April 17, 2009 deadline to provide initial notification to employees and dependents whose group health coverage terminated as a result of an involuntary termination of employment between September 1, 2008 and February 17, 2009 under the temporary rules added to the group health plan medical coverage continuation requirements of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) by the American Recovery and Reinvestment Act of 2009 (“Stimulus Bill”).  However, most employers including many distressed and reorganizing companies and their group health plan administrators, fiduciaries and insurers have additional work to do to complete the arrangements to comply with these new Stimulus Bill COBRA rules

Although many employers and group health plans have taken preliminary action to comply, most employers and group health plan insurers, administrators and fiduciaries have not fully completed the steps needed to complete compliance arrangements.  Among the companies sponsoring group health plans most likely to be behind in their compliance efforts are those in bankruptcy and distressed companies, where internal human resources and employee benefit staff and outside vendor relationships are likely to be reduced, overextended, or otherwise distracted.

In some instances, parties responsible for sending notifications and making other compliance arrangements have not begun to comply.  More typically, however, employers sponsoring group health plans, their administrators, insurers or fiduciaries may mistakenly believe that preliminary compliance efforts fulfilled their compliance responsibilities.  As a result, many have failed to complete all of the steps necessary to comply.  For instance:

  • Many employers, health plan fiduciaries and administrators have not formally amended their group health plans, updated their COBRA initital notifications and summary plan descriptions, implemented required procedures and finished other arrangements necessary to bring their group health plans into compliance with the Stimulus Bill COBRA requirements.  
  • Many employers, insurers, administrators and fiduciaries  who used the Model Notices initially to provide required notices are finding additional refinements to their notices and procedures to reduce questions and confusion by recipients attributable to poor tailoring of the information to their particular plan design. 
  • Many employers who outsource the collection of COBRA premiums or other aspects of COBRA administration will want to revise Model Notice language to avoid unnecessarily undermining previously negotiated allocations of fiduciary responsibility to those third parties for responsibilities outsourced.

Employers, health plan administrators, and health insurers involved in the sponsorship or administration of COBRA-covered group health plans should consult with counsel about the suitability of using the Model Notices to provide required notifications of the new Stimulus Bill COBRA rules and other steps necessary to comply with the new requirements.  Compliance with the Stimulus Bill COBRA rules is mandatory for all COBRA-covered group health plans and certain other arrangements including group health plans sponsored by businesses in bankruptcy where the entity or a commonly controlled or affiliated entity continues to maintain a group health plan.

Stimulus Bill COBRA Rule Basics

The Stimulus Bill provisions that took effect on February 17, 2009 require special COBRA treatment for “assistance eligible individuals.” See “Stimulus Bill COBRA Amendments Require Immediate Group Health Plan Action” for more information. The Stimulus Bill COBRA amendments are intended to help certain involuntarily terminated former employees and their dependents maintain COBRA coverage.  Employers must amend their plans to comply with these mandates and, if they wish to seek reimbursement for COBRA Subsidies, must comply with IRS requirements. Meanwhile, group health plan administrators and insurers must take immediate action to provide required notifications and implement other administrative changes necessary to comply with the new rules.

The Stimulus Bill definition of “assistance eligible individual” generally includes any COBRA “qualified beneficiary” who meets all of the following requirements:

  • Is eligible for COBRA continuation coverage at any time during the period beginning September 1, 2008 and ending December 31, 2009;
  • Elects COBRA coverage (when first offered or during the additional election period): and
  • Has a qualifying event for COBRA coverage that is the employee’s involuntary termination during the period beginning September 1, 2008 and ending December 31, 2009.

This definition includes both involuntarily terminated employees and their dependents who lost coverage under a group health plan due to the involuntary termination. 

As part of their COBRA amendments, the Stimulus Bill limits the COBRA premium that a COBRA-covered group health plan can charge an “assistance eligible individual” to 35% of the otherwise applicable COBRA premium for a period of up to 9 months (the “Subsidy Period”) beginning March 1, 2009.  Employers sponsoring these group health plans must pay the remaining 65% of the COBRA premium (the “COBRA Subsidy”) for the assistance eligible individual during the Subsidy Period.  However, the Stimulus Bill allows an employer to seek reimbursement by claiming a payroll tax credit for these COBRA Subsidy payments by complying with applicable IRS procedures.  

The Stimulus Bill also requires certain assistance eligible individuals whose employment terminated between September 1, 2008 and February 16, 2009 and did not elect COBRA coverage when previously offered or who allowed COBRA coverage to lapse after electing that coverage be offered a second COBRA enrollment period in which to elect prospectively to enroll in COBRA coverage.  It also requires that group health plans that offer employees different plan options allow assistance eligible individuals the option to change their coverage choice.  Also Group health plan administrators must provide certain notifications to assistance eligible individuals concerning these changes.

March 19, 2009 & Other Piecemeal Guidance

The March 19, 2009 DOL Guidance containing the Model Notices is part of a series of interim and evolving guidance separately issued by the IRS and DOL between February and April.  The March 19, 2009 DOL Guidance includes:

  • Various  Model Notices
  •  New FAQs for Employers on the COBRA Premium Reduction
  •  Expanded FAQs for Employees on the COBRA Premium Reduction
  •  Updated FAQs for Employees on General COBRA Provisions

In addition to the March 19, 2009 Guidance, the DOL and IRS previous also had issued a series of other guidance relating to the implementation and application of the Stimulus Bill COBRA rules on a piecemeal basis.  These include separately issued IRS guidance detailing the documentation and procedures that the IRS has indicated that employers or others who collect discounted COBRA premiums from Stimulus Bill assistance eligible individuals must meet in order to comply with the COBRA Stimulus Bill mandates and to recover additional amounts that the employer pays as a COBRA premium subsidy on behalf of assistance eligible individuals through the payroll tax credit provisions of the Stimulus Bill COBRA rules.  You can review:

While the Model Notices and other guidance provides helpful insights about the new requirements, many group health plan sponsors, administrators and fiduciaries are likely to find it necessary or desirable to specifically tailor the notifications and other procedures they provide to more clearly communicate the workings of the new requirements as they relate to their specific plans so as to minimize administrative burdens of compliance and fiduciary risks.

More Resources, Information & Assistance

Curran Tomko Tarski LLP Partner Cynthia Marcotte Stamer consults with clients and writes and speaks extensively about COBRA and other group health plan matters.  Author of the “Health Care Eligibility Toolkit” and nationally known for her experience on COBRA matters, her  Solutions Law Press article discussing the highlights of these IRS requirements and other previous guidance at http://www.cynthiastamer.com/documents/alerts/20090303_NEW%20IRS%20&%20DOL%20Guidance%20On%20Stimulus%20Bill%20COBRA%20Relief.pdf  is just one of many helpful publications she has written on the Stimulus Bill COBRA Rules and other related matters. The Stimulus Bill COBRA rules were among the updates discussed by Cynthia Marcotte Stamer during a March 11, 2009 Health Plan Update Teleconference she presented for Solutions Law Press. 

If you are an employer or other group health plan sponsor, administrator, insurer or fiduciary and need assistance in preparing required notifications or with other matters relating to the Stimulus Bill COBRA Rules or any other health or other employee benefits matter, contact Cynthia Marcotte Stamer at CStamer@SolutionsLawyer.net or via telephone at 972.419.7188. For information about how to purchase a recording of this teleconference or to review other breaking news updates about these Stimulus Bill COBRA Rules, e-mail CStamer@cttlegal.com.

You also can register to receive these and other updates by registering for this blog or by registering to receive other helpful Curran Tomko Tarski LLP publications at CTTLegal.com.

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Posted by Cynthia Marcotte Stamer

Mitigating Workplace Fallout of Pandemic Response

May 5, 2009

As the U.S. rushes to try to contain the spread of the swine influenza A (H1N1) virus infection (swine flu), businesses increasingly are facing employee leave requests and other employment and operational disruptions plans caused by school, day care or other closures and other business disruptions resulting from efforts to contain the disease while also working to take appropriate steps to prevent the spread of the disease within their own organizations.

Regardless of how deadly it ultimately proves to be, the pandemic proportion of the swine flu outbreak now ensures that most U.S. businesses will experience some disruption in operations as a result of the epidemic and efforts to contain it.

According to officials from the Centers for Disease Control and Prevention (CDC), as of 11:00 a.m. Eastern Time, 36 states had reported a total of 236 confirmed cases of swine flu and more cases are expected. That number includes the first U.S. swine flu fatality: a 22-month-old child from Mexico who died of the illness at a Houston, Texas hospital while visiting the United States last week. States currently hardest hit include New York (73 cases), Texas (41 cases), California (30 cases), Delaware (20 cases) and Arizona (17 cases). In the near future, however, CDC officials anticipate confirmed cases in all 50 states.

CDC officials and other experts continue to emphasize that the success of efforts to prevent the unnecessary spread of the disease depends largely on good health habits, limiting exposure to the virus and prompt diagnosis and treatment of afflicted persons. Employers can help reduce the risk that members of their workforce and their families will catch the virus by promoting good health habits and encouraging workers and their families to stay home and seek prompt treatment in the event of an illness. Simultaneously planning for and dealing with absences and other staffing challenges result from school, day care and other closings prevents a greater challenge for many employers, however.

Easy Preventive Safeguards

While the CDC says getting employees and their families to get a flu shot remains the best defense against a flu outbreak, it also says getting employees and family members to consistently practice good health habits like covering a cough and washing hands also is another important key to prevent the spread of germs and prevent the spread of respiratory illnesses like the flu. To help promote health habits within their workforce, many businesses may want to download and circulate to employees and families the free resources published by the CDC at http://www.cdc.gov/flu/protect/habits.htm. These and other resources make clear that Employers should encourage employees and their families to practice good health habits by telling employees and their families to take the following steps:

  • Avoid close contact with people who are sick. When you are sick, keep your distance from others to protect them from getting sick too.
  • Stay home when you are sick to help prevent others from catching your illness. Cover your mouth and nose.
  • Cover your mouth and nose with a tissue when coughing or sneezing. It may prevent those around you from getting sick.
  • Clean your hands to protect yourself from germs.
  • Avoid touching your eyes, nose or mouth.
  • Germs are often spread when a person touches something that is contaminated with germs and then touches his or her eyes, nose, or mouth.
  • Practice other good health habits. Get plenty of sleep, be physically active, manage your stress, drink plenty of fluids, and eat nutritious food.

Many businesses are promoting these and other conducts that help prevent the spread of disease by sharing educational materials such as the growing range of free materials provided by the CDC and others available at the government sponsored website, http://www.pandemicflu.gov. For instance, business can access and download free copies of the following publications at http://www.cdc.gov/flu/protect/habits.htm:

  • Cover Your Cough
  • Be a Germ Stopper: Healthy Habits Keep You Well
  • Flu Prevention Toolkit: Real People. Real Solutions
  • Stopping the Spread of Germs at Home, Work & School

Dealing With Lost Time & Productivity Challenges

Businesses also should begin preparing backup staffing and production strategies to prepare for disruptions likely to result if a significant outbreak occurs. Whether or not the disease afflicts any of its workers, businesses can anticipate the swine flu outbreak will impact their operations -either as a result of occurrences affecting their own or other businesses or from workflow disruptions resulting from safeguards that the business or other businesses implement to minimize swine flu risks for its workforce or its customers.

For many employers, however, planning for and dealing with requests for time off or other workplace disruptions resulting from pandemic containment efforts presents special challenges. While most employers have well established policies and procedures for providing medical leave to employees during periods of their own or a family member’s illness under the Family & Medical Leave Act (FMLA) or otherwise, many employers are experiencing difficulty in responding to leave requests of healthy employees necessitated by school or day care closings, suspected exposures, or other pandemic response disruptions.

Certainly, whether or not legally mandated, the CDC and other official advisories make clear that sick employees should not be in the workplace. Employers of course must provide medical leave as required by the FMLA or other similar state laws as well as any contractually agreed to leave. To better insulate their workforce against potential exposure to the virus, however, many employers also may wish consider temporarily modifying existing leave or other work policies with an eye to better defending their workforce against a major outbreak. In this respect, employers need to consider both how to respond to the present wave of the virus and to plan for the possible need to respond to another potentially stronger outbreak of the swine flu virus that the CDC and other experts caution likely may arise in the Fall or Winter.

As part of their efforts to insulate their workplaces against exposure to the virus, employers generally should discourage workers from coming to work if they or a family member are experiencing symptoms or have been exposed to the virus. For this reason, businesses generally evaluate workplace policies or practices that may pressure or encourage employees with swine flu or any other contagious disease to report to work. Employers should consider whether the potential risks make advisable adjustments to their current attendance, telecommuting, leave and paid time off and other policies.

In light of the current situation, many businesses may want to consider temporarily adjust their leave, telecommuting and other policies in light of the impending health risk. For instance, recognizing that the decision to close a school or child care facility in response to a known or suspected infection seeks to minimize the spread of the disease through exposure to other then undiagnosed cases, businesses generally should think twice about allowing employees to bring these potentially exposed children into the workplace. Instead, employers may wish to consider being more flexible in allowing employees to work from home or take leave to care for children whose schools or child care facilities are closed due to concerns about possible exposure to reduce the risk of creating unnecessary exposure in their workplace.

To help minimize financial pressures on workers to report to work when they may be ill or exposed to the virus, many employers also may want to consider providing or offering short-term disability insurance, expanding the availability of paid or unpaid leave or both.

Regardless of the specific choices a particular business makes, businesses need to take appropriate steps to document, implement, and communicate their decisions. If considering allowing or requiring employees to work from home, employers need to implement appropriate safeguards to monitor and manage employee performance, and to protect the employer’s ability to comply with applicable wage and hour, worker’s compensation, safety, privacy and other legal and operational requirements. They also should review and update family and medical leave act and other sick leave policies, group health plan medical coverage continuation rules and notices and other associated policies and plans for compliance with existing regulatory requirements, which have been subject to a range of statutory and regulatory amendments in recent years.

If considering allowing or requiring employees to work from home, for instance, employers need to implement appropriate safeguards to monitor and manage employee performance, and to protect the employer’s ability to comply with applicable wage and hour, worker’s compensation, safety, privacy and other legal and operational requirements. They also should review and update family and medical leave act and other sick leave policies, group health plan medical coverage continuation rules and notices and other associated policies and plans for compliance with existing regulatory requirements, which have been subject to a range of statutory and regulatory amendments in recent years.

In light of the growing responsibilities and exposures of business to medical privacy and disability liabilities associated with knowledge, collection, protection and use of information about the health and medical conditions of workers and their families, businesses also should review and update their procedures regarding the use, collection, disclosure, and protection of this and other sensitive information. Businesses, health care providers, schools, government agencies and others concerned about preparing to cope with pandemic or other infectious disease challenges also may want to review the publication “Planning for the Pandemic” authored by Curran Tomko Tarski LLP partner Cynthia Marcotte Stamer available at http://www.cynthiastamer.com/documents/speeches/20070530%20Pan%20Flu%20Workplace%20Privacy%20Issues%20Final%20Merged.pdf. Schools, health care organizations, restaurants and other businesses whose operations involve significant interaction with the public also may need to take special precautions. These and other businesses may want to consult the special resources posted at http://www.pandemicflu.gov/health/index.html.

Cynthia Marcotte Stamer and other members of Curran Tomko and Tarski LLP are experienced with advising and assisting employers with these and other labor and employment, employee benefit, compensation, and internal controls matters. Ms. Stamer in particular has worked extensively with health care providers, government officials, and businesses to plan for and deal with pandemic and other absence, disease management and disaster preparedness concerns. If your organization needs assistance with assessing, managing or defending its wage and hour or other labor and employment, compensation or benefit practices, please contact Ms. Stamer at cstamer@cttlegal.com, (214) 270-2402, or your favorite Curran Tomko Tarski, LLP attorney. For additional information about the experience and services of Ms. Stamer and other members of the Curran Tomko Tarksi, LLP team, see the http://www.cttlegal.com.

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Posted by Cynthia Marcotte Stamer

IRS Gives Underfunded Multiemployer Defined Benefit Plans More Time to Make WRERA Elections

May 2, 2009

On March 27, 2009, the Internal Revenue Service issued Notice 2009-31, 2009-16 I.R.B. 856, providing guidance to multiemployer defined plans making elections described in sections 204 and 205 of the Worker, Retiree, and Employer Recovery Act of 2008, P.L. 110-458 (WRERA).  These elections relate to provisions of Section 432 of the Internal Revenue Code (Code) by the Pension Protection Act of 2006, P.L. 109-280 (PPA) that impose requirements on multiemployer defined benefit plans that are significantly underfunded.  

Notice 2009-42 to be published at I.R.B. 2009-20 on May 18, 2009, extends the time period for making elections described in section 204 of the WRERA. In addition, if (1) as of the otherwise applicable deadline (i.e., the deadline for a plan as modified by this notice) for making an election under section 204 or 205, a plan sponsor has been unable to reach agreement as to whether to make the election, so that the decision must be resolved through an arbitration process; (2) the plan sponsor makes an election by the otherwise applicable deadline that is contingent on the resolution of the arbitration; and (3) the resolution is to not make an election, then the IRS will automatically approve a request to revoke the election.

Cynthia Marcotte Stamer and other members of Curren Tomko and Tarski LLP are experienced with advising and assisting employers with these and other labor and employment, employee benefit, compensation, and internal controls matters. If your organization needs assistance with assessing, managing or defending its wage and hour or other labor and employment, compensation or benefit practices, please contact Ms. Stamer at e-mail, (214) 270-2402; or your favorite Curren Tomko Tarski, LLP attorney.  For additional information about the experience and services of Ms. Stamer and other members of the Curren Tomko Tarksi, LLP team, see the Curren Tomko Tarski Website or Cynthia Marcotte Stamer, P.C. Website.

More Information

We hope that this information is useful to you. You can register to receive future updates and information about upcoming programs, access other publications by Ms. Stamer and access other helpful resources at CynthiaStamer.com For additional information about Ms. Stamer and her experience, see here or contact Ms. Stamer directly. If you or someone else you know would like to receive updates about developments on these and other human resources and employee benefits concerns, please be sure that we have your current contact information – including your preferred e-mail- by creating or updating your profile at CynthiaStamer.com.  If you would prefer not to receive these updates, please send a reply e-mail with “Remove” in the subject line to support@SolutionsLawyer.net. You also can register to participate in the distribution of these updates by registering to participate in the Solutions Law Press HR & Benefits Update Blog here.

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Posted by Cynthia Marcotte Stamer

COBRA Premium Reduction and Extended Eligibility Provisions in the American Recovery and Reinvestment Act of 2009

May 2, 2009

The U.S. Department of Labor (“DOL”) today (May 1, 2009) continued its efforts to increase awareness of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) provisions in the American Recovery and Reinvestment Act of 2009 (“ARRA”) by sharing information with state agencies and asking their assistance in helping dislocated workers, businesses, and partners in understanding the new law.

Under ARRA, employees involuntarily terminated between September 1, 2008 and December 31, 2009 and their dependents may be able to qualify for a 65% discount in the required premium they must pay to maintain COBRA coverage under their former employer’s group health plan for up to 9 months.  Special rules also apply to former employees who qualify for Trade Adjustment Assistance or affected by certain Pension Benefit Guarantee Corporation insurance programs.

Employers must pay the remaining amount of the otherwise required COBRA premium, but can request reimbursement from the Internal Revenue Service by filing for a payroll tax credit under the provisions of ARRA. 

Group health plans were required to begin complying with the new ARRA rules beginning February 17, 2009 and to notify workers of the new rules no later than April 18, 2009.  Many employers and their group health plan sponsors are still working to complete the necessary arrangements to comply with these new requirements.

The communication of information about the new provisions by the DOL, group health plans, employers and the media have prompted an outpouring of questions from many employees and their dependents, confused about their eligibility for the ARRA COBRA Subsidy and its workings.

In Training And Employment Notice No. 42-08, which is addressed to state workforce agencies, labor commissioners and other state workforce regulators, the Employment and Training Administration (“ETA”):

  •  Shared certain basic information about ARRA’s COBRA, Trade Adjustment Assistance and other workforce assistance relief;
  • Detailed some of the training and other resources provided by the DOL to help States and their citizens understand these new provisions and the procedures for their use; and
  • Asked the regulators to assist in communicating and disseminating the information to individuals who might qualify for benefits and other interested parties.

Interested persons can review the announcement at http://wdr.doleta.gov/directives/attach/TEN/ten2008/TEN42-08acc.pdf.

Cynthia Marcotte Stamer is nationally known for her knowledge and experience on COBRA and other health benefit and employee benefit matters,.  You will find several of these previous publications on the new ARRA COBRA provisions on prior editions of the Solutions Law Press HR & Benefits Update.  You also can access some of the many practical updates that she has prepared on these and other COBRA matters by e-mailing or contacting her.  She and other members of Curren Tomko and Tarski LLP are experienced with advising and assisting employers with these and other labor and employment, employee benefit, compensation, and internal controls matters. If your organization needs assistance with assessing, managing or defending its COBRA or other employee benefit or human resources practices, please contact Ms. Stamer at cstamer@cttlegal.com, (214) 270-2402 or your favorite Curren Tomko Tarski, LLP attorney. 

For additional information about the experience and services of Ms. Stamer and other members of the Curren Tomko Tarksi, LLP team, see the http://www.cttlegal.com.

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Posted by Cynthia Marcotte Stamer

Tips For Employers to Prepare for Possible Swine Flu Outbreak As 1st U.S. Death Reported

April 29, 2009

With U.S. officials confirming the first swine flu attributed death in the U.S. today and warning Americans to take precautions to guard against a likely swine flu pandemic, U.S. employers are asking what steps they should take to defend their organization and its people against the risk of a widespread outbreak among members of their workforce and the attendant lost time, health and disability costs, OSHA and other liability exposures and other personal and financial consequences likely to result from an outbreak.

 

Whether or not the swine flu outbreak reaches the level of an official pandemic, official reports reflect a legitimate need for concern.  According to officials from the Centers for Disease Control and Prevention, victims of the virus already have been reported in 10 states, and the number of people known to be infected with the 2009 H1N1 influenza strain grew to 91 in the U.S. as of Wednesday. That number includes the first U.S. swine flu fatality: a 22-month-old child from Mexico who died of the illness Monday at a Houston, Texas hospital while visiting the United States. While swine flu victims have been reported in more than 11 countries, the majority of the incidents of the disease and deaths as of Wednesday morning had occurred in Mexico.

 

While the CDC says getting employees and their families to get a flu shot remains the best defense against a flu outbreak, it also says getting employees and family members to consistently practice good health habits like covering a cough and washing hands also is another important key to prevent the spread of germs and prevent the spread of respiratory illnesses like the flu.  Employers should encourage employees and their families to take the following steps: 

 

  • Avoid close contact with people who are sick. When you are sick, keep your distance from others to protect them from getting sick too.
  • Stay home when you are sick to help prevent others from catching your illness.  Cover your mouth and nose.
  • Cover your mouth and nose with a tissue when coughing or sneezing. It may prevent those around you from getting sick.
  • Clean your hands to protect yourself from germs.
  • Avoid touching your eyes, nose or mouth.
  • Germs are often spread when a person touches something that is contaminated with germs and then touches his or her eyes, nose, or mouth.
  • Practice other good health habits.  Get plenty of sleep, be physically active, manage your stress, drink plenty of fluids, and eat nutritious food.

 

Employers also should be sensitive to workplace policies or practices that may pressure employees with a contagious disease to report to work despite an illness and consider whether the employer should adjust these policies temporarily or permanently in light of the impending health risk.  For instance, financial pressures and the design and enforcement of policies regarding working from home and/or qualifying for paid or unpaid time off significantly impact the decisions employees make about whether to come to work when first experiencing symptoms of illness.  Employers of workers who travel extensively – may wish to delay or restrict travel for some period. 

 

Many employers may want to evaluate and appropriately revise existing policies with an eye to better defending their workforce against a major outbreak.  If considering allowing or requiring employees to work from home, employers need to implement appropriate safeguards to monitor and manage employee performance, and to protect the employer’s ability to comply with applicable wage and hour, worker’s compensation, safety, privacy and other legal and operational requirements.  They also should review and update family and medical leave act and other sick leave policies, group health plan medical coverage continuation rules and notices and other associated policies and plans for compliance with existing regulatory requirements, which have been subject to a range of statutory and regulatory amendments in recent years. 

 

To help promote health habits within their workforce, many businesses may want to download and circulate to employees and families the free resources published by the CDC at http://www.cdc.gov/flu/protect/habits.htm.  Businesses and other concerned parties also can track governmental reports about the swine flu and other pandemic concerns at http://www.pandemicflu.gov/index.html. 

 

Businesses also should begin preparing backup staffing and production strategies to prepare for disruptions likely to result if a significant outbreak occurs.  Employers also should be sensitive to workplace policies or practices that may pressure employees with a contagious disease to report to work despite an illness and consider whether the employer should adjust these policies temporarily or permanently in light of the impending health risk.  For instance, financial pressures and the design and enforcement of policies regarding working from home and/or qualifying for paid or unpaid time off significantly impact the decisions employees make about whether to come to work when first experiencing symptoms of illness.  Many employers may want to evaluate and appropriately revise existing policies with an eye to better defending their workforce against a major outbreak. 

 

If considering allowing or requiring employees to work from home, employers need to implement appropriate safeguards to monitor and manage employee performance, and to protect the employer’s ability to comply with applicable wage and hour, worker’s compensation, safety, privacy and other legal and operational requirements.  They also should review and update family and medical leave act and other sick leave policies, group health plan medical coverage continuation rules and notices and other associated policies and plans for compliance with existing regulatory requirements, which have been subject to a range of statutory and regulatory amendments in recent years. 

 

Employers should begin preparing backup staffing and production strategies to prepare for disruptions likely to result if a significant outbreak occurs.  Whether or not the disease afflicts any of its workers, businesses can anticipate the swine flu outbreak will impact their operations -either as a result of occurrences affecting their own or other businesses or from workflow disruptions resulting from safeguards that the business or other businesses implement to minimize swine flu risks for its workforce or its customers.

 

Businesses, health care providers, schools, government agencies and others concerned about preparing to cope with pandemic or other infectious disease challenges also may want to review the publication “Planning for the Pandemic” authored by Curran Tomko Tarski LLP partner Cynthia Marcotte Stamer available at http://www.cynthiastamer.com/documents/speeches/20070530%20Pan%20Flu%20Workplace%20Privacy%20Issues%20Final%20Merged.pdf.  Schools, health care organizations, restaurants and other businesses whose operations involve significant interaction with the public also may need to take special precautions.  These and other businesses may want to consult the special resources posted at  http://www.pandemicflu.gov/health/index.html. 

 

Cynthia Marcotte Stamer and other members of Curran Tomko and Tarski LLP are experienced with advising and assisting employers with these and other labor and employment, employee benefit, compensation, and internal controls matters.  Ms. Stamer in particular has worked extensively with health care providers, government officials, and businesses to plan for and deal with pandemic and other disease management and disaster preparedness concerns.  If your organization needs assistance with assessing, managing or defending its wage and hour or other labor and employment, compensation or benefit practices, please contact Ms. Stamer at cstamer@cttlegal.com, (214) 270-2402, or your favorite Curran Tomko Tarski, LLP attorney.  For additional information about the experience and services of Ms. Stamer and other members of the Curran Tomko Tarksi, LLP team, see the www.cttlegal.com.

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Posted by Cynthia Marcotte Stamer

New IRS’ 2009 “Dirty Dozen” Tax Scams List Invites Whistleblower Claims Against Employers, Others Engaged In Listed Transactions

April 14, 2009

The release yesterday (April 13, 2009) by the Internal Revenue Service of its 2009 “Dirty Dozen” Tax Scams List reminds businesses of the need to act to minimize exposures to tax related whistleblower or other retaliation claims by employees and other service providers that allege the potential involvement of the business in tax scams or other improper tax transactions.

 

Businesses face whistleblower, tax fraud prosecution, additional tax and penalty liability and other sanctions for involvement in tax shelters or other tax schemes.  Employees and other service provider reports to the Internal Revenue Service (IRS) are the leading means through which the IRS identifies and proves fraudulent tax activities.

 

Yesterday’s IRS announcement of its 2009 “dirty dozen” list of tax scams heightens whistleblower risks for businesses by encouraging employees and others who may have knowledge of a business or other taxpayer’s involvement in these or other prohibited tax practices to report their suspicions to the IRS and sharing instructions on how to report suspected tax fraud to the IRS as a whistleblower.  As part of these instructions, the announcement notes that “[w]histleblowers also may provide allegations of fraud to the IRS and may be eligible for a reward.”

 

The 2009 “dirty dozen” list of tax scams warns businesses about getting involved in 12 tax transactions that the IRS views as likely to create tax fraud and whistleblower risks. The tax schemes that made the 2009 Dirty Dozen List include:

  • Hiding Income Offshore
  • Filing False or Misleading Forms
  • Abuse of Charitable Organizations and Deductions
  • Return Preparer Fraud
  • Making Frivolous Arguments 
  • Making False Claims for Refund and Requests for Abatement
  • Abusive Retirement Plans
  • Disguised Corporate Ownership
  • Zero Wages
  • Misuse of Trusts
  • Fuel Tax Credit Scams

Taxpayers participating in the 2009 Dirty Dozen Tax Scams and other tax transactions listed as tax scams by the IRS risk exposure to additional taxes and penalties, prosecution for tax fraud, and potential whistleblower claims.  The Dirty Dozen list singles out for special attention some of the many tax transactions that the IRS views as tax shelters or tax fraud.  Depending on the nature of a business and its tax and compensation activities, businesses also may need to be concerned about scrutiny by the IRS for involvement in various other types of transactions that the IRS has identified as suspect. The IRS is urging U.S. businesses and other taxpayers to avoid participation in these common schemes.

 

Businesses engaged or accused of engaging in these or other transactions listed as tax scams or tax shelters by the IRS should exercise caution to confirm the appropriateness of the proposed transaction, to document their investigation of allegations of improper tax activities.  For profit and non-profit businesses should include appropriate tax compliance oversight in their internal controls and federal sentencing guideline compliance programs.  Businesses should review their activities in light of lists of IRS abusive transactions, should evaluate whether any of their transactions may be subject to scrutiny by the IRS, and take other appropriate steps to mitigate their exposure to prosecution for tax fraud, to tax related whistleblower liability and other risks.   Businesses also should exercise care when dealing with employees or service providers who make allegations that the business may be involved in improper tax activities.   Businesses also need to be prepared to demonstrate that they have not retaliated against individuals who report suspected tax fraud.  The best defense to retaliation claims is a consistent, well documented legitimate performance and discipline record.  Businesses should strengthen and consistently apply their employee performance and discipline processes to improve performance and deter whistleblower or other retaliation judgments.  As part of this process, businesses also should adopt and enforce policies requiring employees and other service providers to report suspected tax or other compliance concerns, administer documented processes for receiving and investigating allegations of potential fraud or other noncompliance, and should document their conclusions and any corrective actions in response to these investigations.

 

Cynthia Marcotte Stamer, and other members of Curren Tomko and Tarski LLP are experienced with assisting establish and administer employment, corporate compliance, internal and external fraud and other controls; to investigate potential fraud or other misconduct; to defend employment, whistleblower, Federal or state criminal or civil investigations, audits and prosecutions and to address other employment, employee benefits and corporate compliance matters.  If your organization needs assistance with assessing or managing its risk management and compliance responsibilities or liabilities under health care, employment, environmental, antitrust, securities or other federal or state laws, wishes to inquire about compliance audit or training or other services; or would like to review or engage and experience of Ms. Stamer, or other Curren Tomko Tarski LLP attorneys, please contact Ms. Stamer at cstamer@cttlegal.com, (214) 270-2402;  or see CTTLegal.com or CynthiaStamer.com.

More Information

We hope that this information is useful to you. You can register to receive future updates and information about upcoming programs, access other publications by Ms. Stamer and access other helpful resources at CynthiaStamer.com For additional information about Ms. Stamer and her experience, see http://cynthiastamer.com/human_resources.asp or contact Ms. Stamer directly. If you or someone else you know would like to receive updates about developments on these and other human resources and employee benefits concerns, please be sure that we have your current contact information – including your preferred e-mail- by creating or updating your profile at CynthiaStamer.com.  If you would prefer not to receive these updates, please send a reply e-mail with “Remove” in the subject line to support@SolutionsLawyer.net. You also can register to participate in the distribution of these updates by registering to participate in the Solutions Law Press HR & Benefits Update Blog at https://slphrbenefitsupdate.wordpress.com.

 

 

 

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Posted by Cynthia Marcotte Stamer

Subrogation Soup: The Law & Practicalities

April 7, 2009

Register Now

April 21, 2009 ABA JCEB Teleconference

1:00-2:30 pm ET / 12:00-1:30 pm CT / 11:00 am-12:30 pm MT / 10:00 am-11:30 am PT

 

Moderator:
Cynthia Marcotte Stamer, Curren Tomko Tarski LLP, Dallas, TX

Speakers:
James McKown, Recovery Data Connect, L.L.C., Leawood, KS
Scott Douglas Marquardt, Total Plan Services, Inc, Dallas, TX

 

Properly designed and administered subrogation provisions in ERISA-covered group health plans and group insurance contracts can provide invaluable tools for managing costs. Unfortunately, various legal and practical problems often prevent ERISA-covered group health plans and insurers from realizing many of these benefits. With health care costs continuing to rise, many health plan administrators, insurers and fiduciaries are placing renewed emphasis on the design and enforcement of their plan’s subrogation provisions. Listen and learn as a distinguished and experienced panel discusses the legal and practical ins and outs of the design, administration, and defense of effective group health plan policies and practices in ERISA-governed group health plans including:

 

ü       Legal Basis of Subrogation Under ERISA

ü       Why, When & When Not To Subrogate

ü       The Law

ü       The Process From Drafting, to Adjudication, to Recovery

ü       Who Gets Hired To Do What, Why & When

ü       Sticking Points & Plan Problems

ü       Practical Dos & Don’t

For more information or to register, go to http://meetings.abanet.org/meeting/jceb/JCEB042109.

 

If you have questions or concerns about the matters discussed in this publication or other human resources, employee benefits or compensation matters, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or publication, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 270-2402 or via e-mail to Cstamer@Solutionslawyer.net.

 

Comments Off on Subrogation Soup: The Law & Practicalities | Employers, ERISA, Health Plans, Human Resources, Insurance | Tagged: , , , , , , , | Permalink
Posted by Cynthia Marcotte Stamer

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