Health Plans, Providers & PBM Face Pressure To Prepare For Health Transparency As Trump Transparency Reforms March Foward

March 2, 2020

Today (March 2, 2020) is the deadline for employers and other health benefit program sponsors, insurers, plan administrators and fiduciaries, health care providers, PBMs and other interested persons to comment on proposed federal rule change that would require insured health plans to count drug rebates and price concessions retained by pharmacy benefit managers (PBMs) as administrative expenses for purposes of determining if the issuing insurer is required to rebate premiums under the medical loss ratio (MLR) rules of the Patient Protection & Affordable Care Act (“ACA”).  With the comment period on the package of health care transparency regulations published by the Trump Administration to implement the transparency reform it hopes will fuel better quality and cost effectiveness in the U.S. health care system, health plan sponsors, fiduciaries, administrators, insurers, heath care providers, PBMs, and other participants in the system need to start preparing to deal with their own responsibilities under the new rules, and to help plan members, patients and their caregivers, and other consumers to understand and use the new information the rules will make available.

2/06/20 Proposed Rule Pressures Insurers To Require PBMs To Disclose & Pass Through Manufacturer Rebates

Issued as part of the proposed “Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2021; Notice Requirement for Non-Federal Governmental Plans Proposed Rule” (“2/6/20 Proposed Rule”) published by the Department of Health & Human Services (“HHS”)  on February 6. 2020, the as part of a series of Trump Administration health care reform initiatives seeking to use competition and transparency to improve health care quality, choice and affordability, in furtherance of the Trump Administration “health plan transparency” initiative HHS predicts this change included in the  could generate $18.2 million more per year in the MLR rebate payments to consumers covered under insure health plans subject to the MLR and other insurance market reform provisions of the ACA. See also Remarks by President Trump on Honesty and Transparency in Healthcare Prices (November 15, 2019).  For a more detailed summary of the 2/06/20 Proposed Rule, see here.Most health plans contract with PBMs to decide the prescription drug formularies, copays, and other coverage design for their health plans, to administer their pharmacy benefits and to negotiate discounts and rebates from drug manufacturers in exchange for placing their drugs on a health plan’s formulary. PBMs are supposed to work on behalf of health plans to secure drug rebates, refunds, discounts, coupons, and direct or indirect remuneration, among other discounts. Health plans compensate PBMs in a variety of ways, including:

  • Paying administrative fees;
  • Allowing a PBM to retain the difference between the amount a PBM charges the health plan for a drug and the amount a PBM pays the pharmacy (called “spread pricing”); or
  • Allowing a PBM to retain all or a portion of any negotiated discounts from manufacturers, including rebates.

Currently, insured plans covered by the MLR rule as well as the PBM arrangements of many self-insured, employer or union sponsored health plans, do not require PBMs to disclose, account for, or pass through to the health plan they are engaged by the prescription drug rebates and certain other amounts that PBMs receive and retain from prescription drug manufacturers that the PBM selects for inclusion on the health plan formulary.

The current federal ACA MLR rule requires insured health plans subject to the MLR rule to deduct from their prescription drug claims both rebates they receive from manufacturers and any payments the PBM retains from the spread, but does not address situations in which the PBM retains rebates or other price concessions negotiated on behalf of the plans.  Consequently, the MLR reporting or calculation of insurers typically does not reflect any rebates PBMs retain that are not passed through to the insurer even though the PBM is supposed to be working on behalf of the health plan.

In recent years, these arrangements have come under widespread criticism as creating conflicts of interests that compromise the loyalty of the PBM to act in the best interest of its health plan clients and their plan members because when PBMs don’t report and pass through all pricing concessions negotiated by PBMs, health plans and health plan members don’t receive the benefit of those price discounts and the decisions that the PBM makes in choosing the highest quality and most cost effective medications for the formulary may lead the PBM to choose and price drugs on the plan formulary to maximize the PBM’s profits rather than the best interests of the plan and its members.

The 2/06/20 Proposed Rule would classify the portion of premium revenue that an insured health plan subject to the MLR rule expends on pharmacy costs as the actual reimbursement to pharmacies – minus any rebates or price concessions from manufacturers – no matter if the plan or its contracted PBM receives the price concession.  Requiring health insurers covered by the MLR rule to include rebates retained by their PBMs an administrative expense would make it difficult for most health insurers to keep all administrative expenses within 15 or 20 percent the MLR rules.  Since health insurers whose administrative expenses exceed the MLS ratio must rebate premiums under the ACA, HHS anticipates that finalizing the 2/06/20 Proposed Rule as proposed would prompt insured health plans covered by the MLR rule that use PBMs to administer pharmacy benefits to change the compensation provisions of their PBM contracts to eliminate or restructure those payments.

Since self-insured health plans generally are not subject to the ACA MLR rule, however, those plans generally need to pursue contracting or other strategies to address this concern.  Increasingly, many self-insured health plan sponsors, fiduciaries and administrators already are changing their PBM contracting and selection strategies to require disclosure and pass through of rebate and other compensation received by PBMs from manufacturers such as including administrative-fee-only compensation and a guarantee of 100 percent pass-through of rebates and manufacturer-derived revenue from the PBM to the health plan in their PBM contracts.

With the official comment deadline set to expire on March 2, 2020, employer and other insured and self-insured health plan sponsors of health plans using PBMs, fiduciaries and advisors should turn their attention to evaluating the likely implications of the 02/06/20 Proposed Rule on their health plan arrangements as well as  more generally evaluating their pharmacy benefit designs, PBM contracts and compensation arrangements, and associated arrangements and practices for potential conflicts of interest, hidden cost savings and other opportunities for improvement. As part of this efforts, employer sponsors, plan fiduciaries, administrators, and vendors of self-insured plans should keep in mind that the fiduciary responsibility rules of the Employee Retirement Income Security Act generally require plan fiduciaries to prudently evaluate compensation and other arrangements with plan vendors as well as to take action to identify and protect the plan against breaches of loyalty by plan vendors or fiduciaries from conflicts of interests or prohibited transactions.  Plan administrators also should conduct due diligence to confirm that PBM and other vendors properly including all compensation for purposes of Form 5500 and other reporting.  Along with assisting their health plan clients with these activities, brokers, consultants, TPAs, and other plan vendors also should evaluate the potential implications of the reforms in the 02/06/20 Proposed Rule as well as any relevant state law reforms on the advice and services they provide to their clients, as well as their potential responsibilities and exposures in light of the evolving state health and PBM transparency rules.

Other Health Plan Transparency Reforms

The 2/06/20 Proposed Rule is one in a series of federal health rule changes the Trump Administration is pursuing as part of its initiative seeking to use health care transparency to improve the price, quality and choice in the U.S. health care system.  In addition to the changes proposed in the 2/06/20 Proposed Rule,  in response to President Trump’s  July 24, 2020 Executive Order on Improving Price and Quality Transparency in American Healthcare to Put Patients First, HHS on November 14, 2019 also undertook two other regulatory actions intended to increase price transparency to empower patients and increase competition among all hospitals, group health plans and health insurance issuers in the individual and group markets:

Both the final and proposed rules require that pricing information be made publicly available.

  • Proposed Coverage Transparency Rule

The Proposed Coverage Transparency Rule would require most employer-based group health plans and health insurance issuers offering group and individual coverage to disclose price and cost-sharing information to participants, beneficiaries, and enrollees up front. With this information, patients will have accurate estimates of any out-of-pocket costs they must pay to meet their plan’s deductible, co-pay, or co-insurance requirements.  This will make previously unavailable price information accessible to patients and other stakeholders in a standardized way, allowing for easy comparisons.

If finalized, the Proposed Transparency in Coverage Rule will require non-grandfathered health plans and health insurance issuers to make certain health care price information more accessible to consumers and other stakeholders by requiring each non-grandfathered group health plan[2] or health insurance issuer offering non-grandfathered health insurance coverage in the individual and group markets to make available:

  • To participants, beneficiaries and enrollees (or their authorized representative) personalized out-of-pocket cost information for all covered health care items and services through an internet-based self-service tool and in paper form upon request. For the first time, most consumers would be able to get estimates of their cost-sharing liability for health care for different providers, allowing them to both understand how costs for covered health care items and services are determined by their plan, and shop and compare costs for health care before receiving care; and
  • To the public, including stakeholders such as consumers, researchers, employers, and third-party developers the in-network negotiated rates with their network providers and historical payments of  allowed amounts to out-of-network providers through standardized, regularly updated machine-readable files.

The Trump Administration believes these changes will provide opportunities for innovation to drive price comparison and consumerism in the health care market. In addition, the Transparency In Coverage Rule also proposes to allow issuers that empower and incentivize consumers through the introduction of plans that include provisions that encourage consumers to shop for services from lower-cost, higher-value providers, and that share the resulting savings with consumers, to take credit for such “shared savings” payments in their medical loss ratio (MLR) calculations. HHS says it made this proposal to ensure, should the proposal be finalized as proposed, that issuers would not be required to pay MLR rebates based on a plan design that would provide a benefit to consumers that is not currently captured in any existing MLR revenue or expense category.  HHS believes this proposal would preserve the statutorily-required value that consumers receive for coverage under the MLR program, while encouraging issuers to offer new or different value-based plan designs that support competition and consumer engagement in health care.  See also Transparency in Coverage Proposed Rule (CMS-9915-P) Fact Sheet.   The official comment period on the Proposed Transparency in Coverage Rule has not expired.  In January, HHS extended the comment period on the Transparency in Coverage Rule from January 14, 2020 to January 29, 2020.

  • Final Hospital Transparency Rule

Concurrent with its release of the Proposed Coverage Transparency Rule, HHS also finalized the Hospital Transparency Rule that will require hospitals to provide patients with clear, accessible information about their “standard charges” for the items and services they provide in two ways beginning in 2021:

  • Comprehensive Machine-Readable File: Hospitals will be required to make public all hospital standard charges (including the gross charges, payer-specific negotiated charges, the amount the hospital is willing to accept in cash from a patient, and the minimum and maximum negotiated charges) for all items and services on the Internet in a single data file that can be read by other computer systems. The file must include additional information such as common billing or accounting codes used by the hospital (such as Healthcare Common Procedure Coding System (HCPCS) codes) and a description of the item or service to provide common elements for consumers to compare standard charges from hospital to hospital.
  • Display of Shoppable Services in a Consumer-Friendly Manner: Hospitals will be required to make public payer-specific negotiated charges, the amount the hospital is willing to accept in cash from a patient for an item or service, and the minimum and maximum negotiated charges for 300 common shoppable services in a manner that is consumer-friendly and update the information at least annually.
  • Shoppable services are services that can be scheduled by a healthcare consumer in advance such as x-rays, outpatient visits, imaging and laboratory tests or bundled services like a cesarean delivery, including pre- and post-delivery care.
  • The requirements for the consumer-friendly file are that the information must be made public in a prominent location online that is easily accessible, without barriers, and it must also be searchable. Item and service descriptions must be in ‘plain language’ and the shoppable service charges must be displayed and grouped with charges for any ancillary services the hospital customarily provides with the primary shoppable service.

In order to ensure that hospitals comply with the requirements, the Hospital Transparency Rule also provides CMS with new enforcement tools including monitoring, auditing, corrective action plans, and the ability to impose civil monetary penalties of $300 per day. In response to public comments, CMS is finalizing that the effective date of the final rule will be January 1, 2021 to ensure that hospitals have the time to be compliant with these policies.  See also

Calendar Year (CY) 2020 Outpatient Prospective Payment System (OPPS) & Ambulatory Surgical Center (ASC) Price Transparency Requirements for Hospitals to Make Standard Charges Public final rule (CMS-1717-F2) Fact Sheet.

Start Preparing For New Transparency Requirements, Effects & Opportunities

With the comment periods on the Proposed Transparency in Coverage Rule already past and the deadline for comment on the 2/6/20 Proposed Rule set to expire today, employer and other health benefit plan sponsors, insurers, fiduciaries, administrators, heath care providers, insurers, plan members and other stakeholders should turn their attention to evaluating the potential opportunities, burdens, and impacts of these transparency reforms.

More Information

We hope this update is helpful. For more information about the  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.

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 GroupHR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy.

About the Author

The author of this update, Cynthia Marcotte Stamer, will speak about these and other health care cost and transparency reforms as a panelist on the program on Impact of Governmental Policy on Pricing and Access to Prescription Medical Products in the US and International Marketplace scheduled to take place at the American Bar Association International Section Annual Meeting in New York City on April 23, 2020.

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 including more than 30 years’ leading edge work on PBM and other insured and self-insured contracting and related matters.  .

Author of numerous highly regarded works on PBM and other health plan contracting and design,  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 health plans, their sponsors, fiduciaries, administrators, and insurers; managed care and insurance organizations; hospitals, health care systems and other health care providers, 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 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.  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 publications on “Transparent PBM Contracting,” “ACOs, Direct Contracting: Legal & Practical Challenges For Employers, Providers & TPAs,” “The Medicare Advantage Contracting Manual,” “Third Party Administrator (TPA) Contracting Principles and Strategies and a multitude of other highly regarded publications and presentations,  Stamer is widely recognized for her thought leadership on PBM and other managed care and health plan contracting and design, and a multitude of other health care, health plan and other health industry matters.  In addition, Ms. Stamer contributes her time and leadership to numerous policy, professional, civil and other organizations including service as the, 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.

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2018 US National Health Expenditures Grew Again

December 10, 2019

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 decreased from 17.9 percent 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 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 LinkedIn Solutions Law Groups 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 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) 452-8297 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 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.

©2019 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press, Inc.™ For information about republication, please contact the author directly. All other rights reserved.


Court Ruling Obamacare Unconstitutional Leaves Obamacare Future Uncertain As Annual Enrollment Period Ends

December 15, 2018

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.

©2018 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press, Inc.™ For information about republication, please contact the author directly. All other rights reserved.


Read Trump Health Care Executive Order

October 12, 2017

President Trump today (October 12, 2017) issued the following that he promised to be the first in a series of executive orders and other administrative actions that his administration will roll out to provide Obamacare relief  for consumers, employers and others by promoting healthcare choice and competition given the continued difficulty by the Republican-led Congress to pass legislation repealing or replacing the health care law.

What actually will result remains to be seen.  Like the January 20, 2017 Executive Order Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal that President Trump signed as his first executive order, the new Executive Order doesn’t actually change anything; it merely directs the agencies to review and propose for implementation changes to regulations and other guidance allowed by law.

On the heels of his announcement of the Executive Order, President Trump moved forward on his promise to take other action on Obamacare by announcing that the Administration will not continue funding for individual subsidies that currently are continued under an Obama Administration action in the absence of Congressional action funding those subsidies.

Concerned parties should monitor and inform themselves about proposed changes in the Executive Order and other actions as they are proposed and develop, and provide timely comments and other input to help influence the shape and content of any changes proposed or adopted in response to the Executive Order.  Solutions Law Press, Inc. will be monitoring developments.   Stay tuned for updates.

Language of Executive Order

By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows:

Section 1. Policy.

(a) It shall be the policy of the executive branch, to the extent consistent with law, to facilitate the purchase of insurance across State lines and the development and operation of a healthcare system that provides high-quality care at affordable prices for the American people. The Patient Protection and Affordable Care Act (PPACA), however, has severely limited the choice of healthcare options available to many Americans and has produced large premium increases in many State individual markets for health insurance. The average exchange premium in the 39 States that are using http://www.healthcare.gov in 2017 is more than double the average overall individual market premium recorded in 2013. The PPACA has also largely failed to provide meaningful choice or competition between insurers, resulting in one-third of America’s counties having only one insurer offering coverage on their applicable government-run exchange in 2017.

(b) Among the myriad areas where current regulations limit choice and competition, my Administration will prioritize three areas for improvement in the near term: association health plans (AHPs), short-term, limited-duration insurance (STLDI), and health reimbursement arrangements (HRAs).

(i) Large employers often are able to obtain better terms on health insurance for their employees than small employers because of their larger pools of insurable individuals across which they can spread risk and administrative costs. Expanding access to AHPs can help small businesses overcome this competitive disadvantage by allowing them to group together to self-insure or purchase large group health insurance. Expanding access to AHPs will also allow more small businesses to avoid many of the PPACA’s costly requirements. Expanding access to AHPs would provide more affordable health insurance options to many Americans, including hourly wage earners, farmers, and the employees of small businesses and entrepreneurs that fuel economic growth.

(ii) STLDI is exempt from the onerous and expensive insurance mandates and regulations included in title I of the PPACA. This can make it an appealing and affordable alternative to government-run exchanges for many people without coverage available to them through their workplaces. The previous administration took steps to restrict access to this market by reducing the allowable coverage period from less than 12 months to less than 3 months and by preventing any extensions selected by the policyholder beyond 3 months of total coverage.

(iii) HRAs are tax-advantaged, account-based arrangements that employers can establish for employees to give employees more flexibility and choices regarding their healthcare. Expanding the flexibility and use of HRAs would provide many Americans, including employees who work at small businesses, with more options for financing their healthcare.

(c) My Administration will also continue to focus on promoting competition in healthcare markets and limiting excessive consolidation throughout the healthcare system. To the extent consistent with law, government rules and guidelines affecting the United States healthcare system should:

(i) expand the availability of and access to alternatives to expensive, mandate-laden PPACA insurance, including AHPs, STLDI, and HRAs;

(ii) re-inject competition into healthcare markets by lowering barriers to entry, limiting excessive consolidation, and preventing abuses of market power; and

(iii) improve access to and the quality of information that Americans need to make informed healthcare decisions, including data about healthcare prices and outcomes, while minimizing reporting burdens on affected plans, providers, or payers.

Sec. 2. Expanded Access to Association Health Plans.

Within 60 days of the date of this order, the Secretary of Labor shall consider proposing regulations or revising guidance, consistent with law, to expand access to health coverage by allowing more employers to form AHPs. To the extent permitted by law and supported by sound policy, the Secretary should consider expanding the conditions that satisfy the commonality‑of-interest requirements under current Department of Labor advisory opinions interpreting the definition of an “employer” under section 3(5) of the Employee Retirement Income Security Act of 1974. The Secretary of Labor should also consider ways to promote AHP formation on the basis of common geography or industry.

Sec. 3. Expanded Availability of Short-Term, Limited‑Duration Insurance.

Within 60 days of the date of this order, the Secretaries of the Treasury, Labor, and Health and Human Services shall consider proposing regulations or revising guidance, consistent with law, to expand the availability of STLDI. To the extent permitted by law and supported by sound policy, the Secretaries should consider allowing such insurance to cover longer periods and be renewed by the consumer.

Sec. 4. Expanded Availability and Permitted Use of Health Reimbursement Arrangements.

Within 120 days of the date of this order, the Secretaries of the Treasury, Labor, and Health and Human Services shall consider proposing regulations or revising guidance, to the extent permitted by law and supported by sound policy, to increase the usability of HRAs, to expand employers’ ability to offer HRAs to their employees, and to allow HRAs to be used in conjunction with nongroup coverage.

Sec. 5. Public Comment.

The Secretaries shall consider and evaluate public comments on any regulations proposed under sections 2 through 4 of this order.

Within 180 days of the date of this order, and every 2 years thereafter, the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor and the Federal Trade Commission, shall provide a report to the President that:

(a) details the extent to which existing State and Federal laws, regulations, guidance, requirements, and policies fail to conform to the policies set forth in section 1 of this order; and

(b) identifies actions that States or the Federal Government could take in furtherance of the policies set forth in section 1 of this order.

Sec. 7. General Provisions.

(a) Nothing in this order shall be construed to impair or otherwise affect:

(i) the authority granted by law to an executive department or agency, or the head thereof; or

(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.

(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

DONALD J. TRUMP

THE WHITE HOUSE,

October 12, 2017

Implications & Actions

The impact of this and other Executive Orders and other Presidential actions depend upon what actions, if any, the agencies determine they are allowed by law to take and how those changes are implemented.  Concerned persons and organizations should begin preparing input to the agencies and monitoring and commenting on proposals and other guidance to help shape the outcome.

Solutions Law Press, Inc. is preparing initial analysis of this Executive Order and will be closely monitoring and updating this analysis.  Follow up to learn more and stay abreast of new 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 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. Author of numerous works on privacy and data security, Ms. Stamer‘s experience includes involvement in cyber security and other data privacy and security matters for more than 20 years.

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.

©2017 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions  Law Press, Inc.™   For information about republication, please contact the author directly.  All other rights reserved.


IRS Updates Amounts Used To Calculate 2017 Obamacare Individual Individual Shares Responsibility Tax Penalties

August 21, 2017

Individual Americans that don’t maintain their and their dependents’ enrollment in at least minimum essential coverage in a health program meeting the requirements of the Patient Protection & Affordable Care Act commonly referred to as “Obama Care” still generally should expect to pay individual shared responsibility tax penalties imposed by Obamacare.

Despite campaign promises to quickly repeal or reform Obamacare, the Republican controlled Congress has been unable to pass legislation repealing the individual tax penalty or other Obamacare coverage mandate related rules. Moreover, contrary to the impression widely held by many Americans that President Trump’s January 20 Executive Order protects uncovered individuals from the tax imposed under Internal Revenue Code Section 5001A, the Internal Revenue Service still plans to enforce and collect the tax. See here. Consequently, Internal Revenue Code Section 5001A still generally requires uncovered taxpayers to pay the individual shared responsibility payment.

This means that taxpayers not enrolled in minimum essential coverage or otherwise exempt from the individual responsibility payment need to be prepared to pay the tax.

In anticipation of enforcement of the individual shared responsibility tax, the Internal Revenue Service just set the monthly national average premium for qualified health plans that have a bronze level of coverage offered through Exchanges at $272 per individual and the maximum monthly national average premium for qualified health plans with a bronze level of coverage offered through Exchanges at $1,360 for a shared responsibility family with five or more members. The Internal Revenue Service intends that these amounts will be used to calculate individual shared responsibility tax penalties for 2017. The updated amounts are published in Rev. Proc. 2017-48

In general, the individual responsibility tax equals the lesser of (1) the sum of the monthly penalty amounts, or (2) the sum of the monthly national average bronze plan premiums for the shared responsibility family. See § 1.5000A-4(a). The monthly national average bronze plan premium means, for a month for which a shared responsibility payment is imposed, 1/12 of the annual national average premium for qualified health plans that (1) have a bronze level of coverage, (2) would provide coverage for the taxpayer’s shared responsibility family members, and (3) are offered through Exchanges for plan years beginning in a calendar year with or within which the taxable year ends. §§ 5000A(c)(1)(B) and 1.5000A-4(c). For this purpose, “shared responsibility family” means, for a month in a taxable year, all nonexempt individuals for whom the taxpayer and the taxpayer’s spouse, if the taxpayer is married and files a joint return with the spouse, are liable for the shared responsibility payment under § 5000A for that taxable year. See § 1.5000A-1(d)(17).

Taxpayers who are not enrolled in the necessary health coverage to meet the Obamacare health coverage mandate should evaluate their shared responsibility tax penalty exposure and weigh whether it makes more sense to enroll in qualifying health coverage or prepare to pay the tax.

About The Author

Recognized as “Legal Leader™ Texas Top Rated Lawyer” in both Health Care Law and Labor and Employment Law, a “Texas Top Lawyer,” and an  “AV-Preeminent” and “Top Rated Lawyer” by Martindale-Hubble, singled out as among the “Best Lawyers In Dallas” in employee benefits by D Magazine; Cynthia Marcotte Stamer is a practicing attorney and management consultant, author, public policy advocate and lecturer widely recognized for her nearly 30 years’ of work and pragmatic thought leadership, publications and training on health coverage and health care, health plan and employee benefits, workforce and related regulatory and other compliance, performance management, risk management, product and process development, public policy, operations and other concerns.

Throughout her legal and consulting career, Ms. Stamer has  drawn recognition for combining extensive knowledge and experience with her talents as an insightful innovator and problem solver when advising, representing and defending employer and other plan sponsors, insurers, fiduciaries, insurers, electronic and other technology, plan administrators and other service providers, governments and others about health coverage, benefit program design, funding, documentation, administration, data security and use, contracting, plan, public and regulatory reforms and enforcement, and other risk management and operations matters  as well as for her work and thought leadership on a broad range of other health,  employee benefits, human resources and other workforce, insurance, tax, compliance and other matters.  Her experience encompasses leading and supporting the development and defense of innovative new 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, state legislatures, attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators,  She also provides strategic and other supports clients in defending litigation as lead strategy counsel, special counsel and as an expert witness.

A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares shared her thought leadership, experience and advocacy on these and other concerns by her service in the leadership of a broad range of other professional and civic organization including her involvement as 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, 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; 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, Past Group Chair, current Defined Contribution Plan Committee Co-Chair, former Welfare Committee Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative and current 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 member of the Board of Directors of the Southwest Benefits Association and others.

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. For additional information about Ms. Stamer, see CynthiaStamer.com or contact Ms. Stamer via email to here or via telephone to (469) 767-8872.

About Solutions Law Press

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 www.SolutionsLawPress.com.

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

NOTICE:  Any party accessing or using any content obtained from or through Solutions Law Press, Inc.™ acknowledges and agrees that any and all programs, publications, statements and materials presented or published by Solutions Law Press, Inc.™ and any statements or other contents made or contained therein are for general informational and educational purposes only. They are generic in nature and not tailored or intended to be relied upon by any person, business, entity or other party for purposes for determining the legal, financial or other appropriateness, defensibility, suitability, outcome or consequences of any strategy, action, course of action, or any other facts, circumstances, event or conduct.  Users of these resources are responsible at all times for independently evluating the suitability of any content, materials, tools or other materials or information accessed from or through Solutions Law Press, Inc. directly or indirectly.

Solutions Law Press, Inc.™ and its authors and contributors do not represent or warrant in any form or manner, and expressly disclaim and deny the appropriateness of the use or reliance of any person or entity on any content, tools or resources accessed or obtained from or through Solutions Law Press, Inc.™ for any general or particular use or purpose by any party under any circumstances.

Likewise, they do not establish an attorney-client relationship or other fiduciary, contractual or other relationship between Solutions Law Press, Inc. and/or any of its authors or contributors and any other party.  They are not, and do not serve as a substitute for legal, accounting, tax or other advice.  They don’t create or otherwise give rise to any duty, obligation, responsibility on behalf of Solutions Law Press, Inc™ or any provider or offeree of content, tools or services to any party.

Parties accessing or using any of Solutions Law Press, Inc.™  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 publisher and the author expressly disclaim all liability for this content and any responsibility to provide any update or otherwise notify anyone 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.

©2017 Cynthia Marcotte Stamer.  Non-Exclusive License To Republish Granted To Solutions Law Press.


Learn About Rising Group Health Plan Mental Health Mandate Risks From 6/27 “2017 Federal Group Health Plan Mental Health Rules Update”

June 22, 2017

Register Now To Participate In 

“2017 Federal Group Health Plan Mental Health Rules Update

Solutions Law Press, Inc™ Health Plan Update WebEx Briefing  

Tuesday, June 27, 2017

10:30 A.M.-11:30 P.M. Eastern | 11:30 A.M.-12:30 P.M. Central

EXPANDING REGULATORY REQUIREMENTS & ENFORCEMENT SPELL TROUBLE FOR HEALTH PLANS AND THEIR SPONSORING EMPLOYERS.

Solutions Law Press, Inc.™ invites employer and other group health plan sponsors, fiduciaries, insurers, administrative service providers, plan brokers and consultants are invited learn critical information about their expanding risks and responsibilities arising from existing and proposed changes to rules and enforcement of federal group health plan mental health and substance abuse (MH/SUB) coverage and privacy rules under the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), as supplemented by the Patient Protection and Affordable Care Act (ACA) and the 21st Century Cures Act (Cures Act) and the Privacy Rules of the Health Insurance Portability & Accountability Act (HIPAA) conducted by attorney Cynthia Marcotte Stamer, a Fellow in the American College of Employee Benefits recognized as among the “Best Lawyers” in employee benefits for her health and other benefit knowledge, experience, policy advocacy and thought leadership.  Register here now!

Tightening Health Plan Mental Health & Substance Abuse Rules & Enforcement Make Group Health Plan Compliance Critical

New and proposed guidance jointly published June 16, 2017 by the Departments of Labor (DOL), Health & Human Services (HHS) and Treasury is the latest in a series of regulatory and enforcement developments over the past year alerting  group health plans and their employer and other group health plan sponsors, fiduciaries, insurers, administrative services providers, plan brokers and consultants involved in health plan design, funding, or administration to get serious about their group health plans’ compliance with the MHPAEA federal group health plan mental health and substance abuse coverage and benefit requirements, as supplemented by the ACA and the Cures Act without running afoul of the Privacy Rules of HIPAA.

Building upon federal group health plan mental health parity mandates originally implemented under the Mental Health Parity Act, the MHPAEA generally requires that any financial requirements or treatment limitations group health plans impose on mental health and substance use disorder (MH/SUD) benefits not be restrictive than the predominant financial requirements and treatment limitations that apply to substantially all medical and surgical benefits. MHPAEA also imposes several disclosure requirements on group health plans and health insurance issuers.  Not satisfied with the MHPAEA coverage and disclosure protections, however, Congress subsequently broadened federal MH/SUD benefit rights under group health plans through the enactment of the ACA and the Cures Act.  Congress also has imposed special requirements and protections for mental health treatment records adds additional responsibilities for group health plans and their service providers when dealing with information and records in connection with the administration of MH/SUD benefits.

After a long period of lax oversight and enforcement of these federal group health plan mental health rules, the Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (collectively, the Departments) since October, 2016 have begun both tightening the rules and acting to increase oversight and enforcement.  The Departments have issued a series of joint guidance clarifying and broadening their interpretations of these MH/SUD benefit and disclosure mandates while simultaneously taking steps to increase awareness and enforcement of these rights.  As part of these ongoing efforts, Departments’ on June 16, 2017 expanded this guidance with their publication of new Mental Health Parity Implementation FAQs Part 38 discussing their joint interpretation of the broadening effect of the enactment of the ACA and the Cure Act on these plan requirements.  Concurrently, the Departments signaled their intention to add additional responsibilities for group health plans and insurers by publishing along with FAQ Part 38 a Draft MHPAEA Disclosure Template and request for comments.  This latest guidance package reaffirms that the Departments are continuing efforts to increase oversight of and enforcement of MH/SUD compliance against group health plans, their sponsors, fiduciaries, insurers, and their administrative and other service providers.  In the face of these developments and the reported initiation of enforcement actions by the Departments, the group health plans, their employer and other sponsors, fiduciaries, insurers, and their administrative and other service providers should move quickly to understand and update their plans and practices to comply with these recent developments while bracing for the likely need to deal with further expanded disclosure and other additional responsibilities under the MHPAEA jointly proposed by the Departments on June 16, 2017.

Beyond fulfilling these expanding MHPAEA responsibilities, health plan fiduciaries, administrators, insurers and sponsors also must ensure their health plan and its business associates comply with  special rules concerning the protection, use and disclosure of mental health treatment records and information that may impact certain mental health treatment and other records received, used, retained or disclosed in the course of administering mental health, substance abuse or other provisions of their group health plans under the HIPAA Privacy Rules.  Keeping in mind that HHS audit and enforcement of compliance by health plans and other HIPAA covered entities with HIPAA’s medical privacy and data security rules, health plan sponsors, fiduciaries, insurers and administrative and other service providers also should take the opportunity to verify that their plans and practices comply with special HIPAA rules impacting authorizations and other dealings with certain mental health and substance abuse health information and records and other HIPAA medical privacy and security requirements.

Given these developments, group health plans, their sponsors, fiduciaries, insurers and administrator must take steps to verify and maintain compliance with these federal MH/SUD requirements.  Ensuring proper compliance with these federal rules is particularly important to avoid triggering the substantial liability that health plans, their employer and other sponsors, insurers, and administrators can incur if their health plan violates these mandates.  Obviously, plans and their sponsors, insurers and fiduciaries can expect to pay additional plan expenses necessary to pay wrongfully denied benefits and other expenditures these plan or its fiduciaries expend to investigate, defend and resolve claims or compliance audits, investigations, litigation or actions brought by the Departments, state insurance regulators with respect to state governments or insurers, or private litigation by participants or beneficiaries.  Many employer or other plan sponsors may be unaware that these violations also generally expose employers and other health plan sponsors to liability to self identify, self-report on Internal Revenue Service Form 8928 and self-pay and excise tax of up to $100 per participant per day per uncorrected violation by the due date for filing of their annual corporate tax return.

With oversight and enforcement already rising and the Departments proposing to expand further both disclosure duties and enforcement, group health plans, their employer and other sponsors, insurers, fiduciaries and administrators clearly need to take prompt action to verify their existing health plan provisions and administrative practices are up-to-date and administered to withstand challenge from the Departments, participants, beneficiaries, health care providers and others. Consequently, employer and other group health plan sponsors, fiduciaries, insurers, administrative services providers, plan brokers and consultants involved in health plan design, funding, or administration should act quickly to verify their plan terms and practices are updated to comply with existing rules and share their input in response to the Departments June 16, 2017 requests for comments.

ABOUT CYNTHIA MARCOTTE STAMER

Recognized as “Legal Leader™ Texas Top Rated Lawyer” in both Health Care Law and Labor and Employment Law, a “Texas Top Lawyer,” and an  “AV-Preeminent” and “Top Rated Lawyer” by Martindale-Hubble, singled out as among the “Best Lawyers In Dallas” in employee benefits by D Magazine; Cynthia Marcotte Stamer is a practicing attorney and management consultant, author, public policy advocate and lecturer widely recognized for her nearly 30 years’ of work and pragmatic thought leadership, publications and training on health coverage and health care, health plan and employee benefits, workforce and related regulatory and other compliance, performance management, risk management, product and process development, public policy, operations and other concerns.

Throughout her legal and consulting career, Ms. Stamer has  drawn recognition for combining extensive knowledge and experience with her talents as an insightful innovator and problem solver when advising, representing and defending employer and other plan sponsors, insurers, fiduciaries, insurers, electronic and other technology, plan administrators and other service providers, governments and others about health coverage, benefit program design, funding, documentation, administration, data security and use, contracting, plan, public and regulatory reforms and enforcement, and other risk management and operations matters  as well as for her work and thought leadership on a broad range of other health,  employee benefits, human resources and other workforce, insurance, tax, compliance and other matters.  Her experience encompasses leading and supporting the development and defense of innovative new 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, state legislatures, attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators,  She also provides strategic and other supports clients in defending litigation as lead strategy counsel, special counsel and as an expert witness.

A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares shared her thought leadership, experience and advocacy on these and other concerns by her service in the leadership of a broad range of other professional and civic organization including her involvement as 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, 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; 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, Past Group Chair, current Defined Contribution Plan Committee Co-Chair, former Welfare Committee Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative and current 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 member of the Board of Directors of the Southwest Benefits Association and others.

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. For additional information about Ms. Stamer, see CynthiaStamer.com or contact Ms. Stamer via email to here or via telephone to (469) 767-8872.

About Solutions Law Press

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 www.SolutionsLawPress.com.

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

NOTICE:  Any party accessing or using any content obtained from or through Solutions Law Press, Inc.™ acknowledges and agrees that any and all programs, publications, statements and materials presented or published by Solutions Law Press, Inc.™ and any statements or other contents made or contained therein are for general informational and educational purposes only. They are generic in nature and not tailored or intended to be relied upon by any person, business, entity or other party for purposes for determining the legal, financial or other appropriateness, defensibility, suitability, outcome or consequences of any strategy, action, course of action, or any other facts, circumstances, event or conduct.  Users of these resources are responsible at all times for independently evluating the suitability of any content, materials, tools or other materials or information accessed from or through Solutions Law Press, Inc. directly or indirectly.

Solutions Law Press, Inc.™ and its authors and contributors do not represent or warrant in any form or manner, and expressly disclaim and deny the appropriateness of the use or reliance of any person or entity on any content, tools or resources accessed or obtained from or through Solutions Law Press, Inc.™ for any general or particular use or purpose by any party under any circumstances.

Likewise, they do not establish an attorney-client relationship or other fiduciary, contractual or other relationship between Solutions Law Press, Inc. and/or any of its authors or contributors and any other party.  They are not, and do not serve as a substitute for legal, accounting, tax or other advice.  They don’t create or otherwise give rise to any duty, obligation, responsibility on behalf of Solutions Law Press, Inc™ or any provider or offeree of content, tools or services to any party.

Parties accessing or using any of Solutions Law Press, Inc.™  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 publisher and the author expressly disclaim all liability for this content and any responsibility to provide any update or otherwise notify anyone 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.

©2017 Solutions Law Press. All rights reserved.


 

 

 

 

 

 

 


ACA-ERISA Lawsuit Risks Likely To Continue Until Congress Acts Despite Trump Executive Order For Agencies To Issue Relief

January 23, 2017

Employer and other health plan sponsors, fiduciaries and insurers generally should be prepared to prove that they are maintaining and administering their health plans to comply with many Patient Protection and Affordable Care Act (ACA) mandates pending Congressional repeal or reform of the ACA, despite President Trump’s January 20, 2017 Executive Order on “Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal” (Executive Order) because the Federal agencies responsible for the implementation and interpretation of the ACA generally don’t have authority to bar health plan participants and beneficiaries from bringing benefit denial or breach of fiduciary duty lawsuits against health plans or fiduciaries for violating ACA mandates incorporated into the Employee Retirement Income Security Act (ERISA).

In addition to affirming President Trump’s commitment to seek the prompt repeal of the ACA, the Executive Order seeks to mitigate the burden of the ACA pending Congressional repeal by ordering  the Departments Health and Human Services (HHS), Labor (DOL), Treasury (Treasury)  and other agencies with ACA authority (Agencies) to exercise all available authority and discretion to the “maximum extent permitted by law:”

  • To waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the ACA that would impose a “cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.”
  • To provide greater flexibility to States and cooperate with them in implementing healthcare programs and to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State;
  • For departments and agencies with responsibilities relating to healthcare or health insurance to encourage the development of a free and open market in interstate commerce for the offering of healthcare services and health insurance, with the goal of achieving and preserving maximum options for patients and consumers.

While applicable Agencies are expected to act as quickly as possible to comply with President Trump’s orders, various statutory and procedural requirements almost certainly will limit both the relief granted and the speed with which the Agencies can grant the relief.  One obvious place where statutory limitations on Agencies authority almost certainly will impact the availability of relief arises from the ACA’s incorporation of many of its patient protection act group mandates into ERISA. While the Agencies may possess the authority to lessen the burden of compliance with the regulatory mandates of the ACA by revising regulations, issuing enforcement relief or other certain other actions, these powers do not extend to blocking the authority of participants and beneficiaries to bring suit to enforce the provision of the ACA that the ACA added to ERISA through private benefit denial or breach of fiduciary duty lawsuits brought under ERISA.

In the case of insured health plans, sponsors, insurers and administrators also will need to consider whether their ability to take advantage of the federal relieve available is blocked or restricted by state insurance statutes, regulations or other administrative requirements.  The likelihood of state statutory or regulatory restrictions on insured arrangements is particularly likely because of the heavy regulation of these products by states including the widespread incorporation of ACA mandates into state insurance laws and regulations in response to the Market Reform provisions of the ACA.

Even if these federal requirements are met to qualify for, adopt and implement any federally issued regulatory relief, employer and other plan sponsors, insurers, fiduciaries and administrators also should plan for and be prepared to run the necessary traps to properly amend their plan document, summary plan description and other plan notifications, administrative services agreements, stop loss or other insurance contracts and other vendor agreements to implement their desired changes.  Beyond knowing what has to be done to adopt and communicate the desired changes, employer and other sponsors and fiduciaries, their consultants, brokers and advisors need to consider the requirements and consequences that the planned changes might have under applicable plan documents and vendor agreements to avoid unanticipated costs or liabilities as well as what actions are needed to ensure that ERISA’s prudence and other fiduciary requirements are met.

Until these and other required actions are completed by the Agencies and the applicable plan sponsors, fiduciaries and other parties, employers and other plan sponsors, their management, their health plans, health plan fiduciaries, administrators and insurers remain legally obligated to continue to comply with the ACA as presently implemented under the existing regulations and judicial and administrative rulings.

Responsible parties should begin preparing to take advantage of the anticipated legislative and regulatory relief both by both carefully monitoring statutory and regulatory health plan developments and positioning themselves to act quickly when relief comes by evaluating their existing heath plan documents, contracts, communications and systems to verify existing compliance and determine requirements for implementing any planned changes, opening up discussion vendors about these possibilities and taking other steps to position themselves to act knowledgeably and efficiently to take advantage of new opportunities if and when they emerge and are warranted.

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 and management consultant, author, public policy advocate and lecturer widely known for work, teachings and publications.

Ms. Stamer works with health industry and other 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. 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.

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 in the leadership of a broad range of other professional and civic organization including 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 advisor 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; a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group; immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative and current 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 highly popular lecturer, symposia chair and author, who publishes and speaks extensively on health and managed care industry, human resources, employment, employee benefits, compensation, and other regulatory and operational risk management. Examples of her many highly regarded publications on these matters include the “Texas Payday Law” Chapter of Texas Employment Law, as well as thousands of other publications, programs and workshops these and other 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. For additional information about Ms. Stamer, see CynthiaStamer.com   or contact Ms. Stamer via email here  or via telephone to (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:

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

©2017 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press, Inc.™  All other rights reserved.


Employers, Insurers & TPAS: Budget Time, $ For 2017 Summary of Benefits and Coverage Updates

April 11, 2016

Group health plans and group and individual health insurers (Health Plans) must add updating their 2017 Summary of Benefits and Coverage (SBC) forms to their 2017 to do list in response to the publication by the Departments of Health and Human Services (HHS), Labor (DOL) and Treasury (collectively “Agencies) of enhanced content requirements for the 2017 Summary of Benefits and Coverage (SBC) template and Uniform Glossary that the Patient Protection & Affordable Care Act (ACA) requires Health Plans to provide to Health Plan members. Health Plans must begin using SBCs updated to comply with the 2017 SBC template released by the Agencies on April 6, 2016 beginning on the first day of the first open enrollment period that begins on or after April 1, 2017.

The ACA requires Health Plans to provide covered persons a brief (4 page) summary of what the plan covers and the plan’s cost sharing along with a comprehensive uniform glossary of commonly used health coverage and medical terms with the detailed content and format dictated by the Agencies SBC regulations. Intended to help covered persons understand and compare coverage options by providing standardized information in a standardized format about each plan, the SBC and Glossary must include all required content in the type and format dictated by the SBC regulations. In addition to ensuring that their SBC and Glossary meet these requirements, Health Plans also may need to prepare and offer translations of the SBC and Glossary to comply with the ACA’s “culturally and linguistically appropriate” requirements.

The current and 2017 SBC Template along with instructions for its preparation and completion, model translation documents for certain forms, and other information about the SBC requirements are available here.

Currently, the dictated SBC format includes coverage examples that demonstrate the cost sharing amounts an individual might be responsible for in three common medical situations. In addition to the current coverage examples that address diabetes care and childbirth, the updated template for 2017 also will require a new coverage example that addresses coverage for a foot fracture so that a consumer understands what a plan covers in an emergency scenario.

Beyond dictating the emergency example, the 2017 templates also expand the information about cost sharing that SBCs much contain to include enhanced language to explain deductibles and a requirement that plans address individual and overall out-of-pocket limits in the SBC.

While the Agencies regulations dictate the required content, health insurers and employers or others serving as health plan administrators or sponsors need to use care to ensure that SBCs are prepared appropriately and provided when and how required. Failure to timely deliver the SBC not only can trigger penalties under ERISA against the plan administrator and/or against the insurer under the ACA market reform rules, noncompliance with the SBC requirements also is among the listed ACA compliance defects that can expose the sponsoring employer to excise tax penalties under the Internal Revenue Code.

In order to fulfill this and other important ACA and other federal health plan notice and reporting mandates, employer and other plan sponsors, administrators and fiduciaries generally must finalize their health plan design well in advance of the date the new health plan design is intended to take effect.  The Agencies SBC regulations generally require that the SBC be provided before the first day of the enrollment period and that updated SBCs be provided whenever any material change in benefits or coverage is enacted after the delivery of the original SPB.  The requirement to prepare and deliver the SBC is in addition to the current federal mandate that plan administrators provide written notice of material changes to a health plan at least 60 days before the effective date of the material change and a host of other health plan notice requirements imposed by federal law.  Employers, insurers, third party administrators and health plan fiduciaries need to understand and make appropriate arrangements to ensure that these SBC and other notice and reporting requirements are timely and appropriately completed.

About The Author

A practicing attorney and Managing Shareholder of Cynthia Marcotte Stamer, P.C.,  Ms. Stamer’s more than 28 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.

A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Cynthia Marcotte Stamer is a noted Texas-based management lawyer and consultant, author, lecturer and policy advocate, recognized as among the “Top Rated Labor & Employment Lawyers in Texas” by LexisNexis® Martindale-Hubbell® and as among the “Best Lawyers In Dallas” for her work in the field of “Tax: Erisa & Employee Benefits” and “Health Care” by D Magazine.

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 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 workforce and other legal and operational crises large and small that arise in the course of operations.

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, Ms. Stamer helps management manage. Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce management operations and compliance. 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.  Common engagements include internal and external workforce hiring, management, training, performance management, compliance and administration, discipline and termination, and other aspects of workforce management including employment and outsourced services contracting and enforcement, sentencing guidelines and other compliance plan, policy and program development, administration, and defense, performance management, wage and hour and other compensation and benefits, reengineering and other change management, internal controls, compliance and risk management, communications and training, worker classification, tax and payroll, investigations, crisis preparedness and response, government relations, safety, government contracting and audits, litigation and other enforcement, and other concerns.

A Fellow in the American College of Employee Benefit Counsel, Ms. Stamer uses her deep and highly specialized knowledge and experience to help 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 compensation, health and other welfare benefit and insurance, severance, pension and deferred compensation, private exchanges, cafeteria plan and other employee benefit, fringe benefit, salary and hourly compensation, bonus and other incentive compensation and related programs, products and arrangements. She is particularly recognized for her leading edge work, thought leadership and knowledgeable advice and representation on the design, documentation, administration, regulation and defense of a diverse range of self-insured and insured health and welfare benefit plans including private exchange and other health benefit choices, health care reimbursement and other “defined contribution” limited benefit, 24-hour and other occupational and non-occupational injury and accident, ex-patriate and medical tourism, onsite medical, wellness and other medical plans and insurance benefit programs as well as a diverse range of other qualified and nonqualified retirement and deferred compensation, severance and other employee benefits and compensation, insurance and savings plans, programs, products, services and activities. As a key element of this work, Ms. Stamer works closely with employer and other plan sponsors, insurance and financial services companies, plan fiduciaries, administrators, and vendors and others to design, administer and defend effective legally defensible employee benefits and compensation practices, programs, products and technology. She also continuously helps employers, insurers, administrative and other service providers, their officers, directors and others to manage fiduciary and other risks of sponsorship or involvement with these and other benefit and compensation arrangements and to defend and mitigate liability and other risks from benefit and liability claims including fiduciary, benefit and other claims, audits, and litigation brought by the Labor Department, IRS, HHS, participants and beneficiaries, service providers, and others.  She also assists debtors, creditors, bankruptcy trustees and others assess, manage and resolve labor and employment, employee benefits and insurance, payroll and other compensation related concerns arising from reductions in force or other terminations, mergers, acquisitions, bankruptcies and other business transactions including extensive experience with multiple, high-profile large scale bankruptcies resulting in ERISA, tax, corporate and securities and other litigation or enforcement actions.  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 Affordable Care Act and other health care, pension, social security, workforce, insurance and other policies critical to the workforce, benefits, and compensation practices and other key aspects of a broad range of businesses and their operations. 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, Ms. Stamer annually leads the Joint Committee on Employee Benefits (JCEB) HHS Office of Civil Rights agency meeting and other JCEB agency meetings.  She also works as a policy advisor and advocate to many 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.

Beyond these involvements, Ms. Stamer also is active in the leadership of a broad range of other professional and civic organizations. For instance, Ms. Stamer presently serves on an American Bar Association (ABA) Joint Committee on Employee Benefits Council representative; Vice President of the North Texas Healthcare Compliance Professionals Association; Immediate Past Chair of the ABA RPTE Employee Benefits & Other Compensation Committee, its current Welfare Benefit Plans Committee Co-Chair, on its Substantive Groups & Committee and its incoming Defined Contribution Plan Committee Chair and Practice Management Vice Chair; Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and a current member of its Healthcare Coordinating Council; current Vice Chair of the ABA TIPS Employee Benefit Committee; the former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division; on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications. She also previously served as a founding Board Member and President of the Alliance for Healthcare Excellence, as a Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; the Board President of the early childhood development intervention agency, The Richardson Development Center for Children; Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a member of the Board of Directors of the Southwest Benefits Association. For additional information about Ms. Stamer, see here or contact Ms. Stamer directly by email here or by telephone 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 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 at here.

©2016 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press. All other rights reserved.


Learn Latest HIPAA Health Plan Rules In 3/30 SLP Webex

March 9, 2016

Solutions Law Press, Inc. ™ Invites You To A Special WebEx Briefing  

HIPAA Update: The Latest On Security, Patient Access & Other HIPAA Developments

Wednesday, March 30, 2016

1:00 P.M.-2:00 P.M. Eastern | 12:00 P.M.-1:00 P.M. Central 11:00 A.M-12:00 P.M. Mountain | 10:00 A.M-11:00 A.M. Pacific

Health care providers, health plans, health care clearinghouses and their business associates (Covered Entities) face new imperatives to review and tighten their practices to ensure their practices comply with recently released guidance from the U.S. Department of Health & Human Services Office of Civil Rights (OCR)) emphasizing and clarifying the responsibilities of health care providers, health plans and the healthcare clearinghouses under the Health Insurance Portability & Accountability Act of 1996 (HIPAA) to provide access to individuals that are the subject of protected health information or “PHI” to access or copies of their PHI in accordance with HIPAA’s rules and other recent HIPAA guidance and enforcement. With OCR’s recent release of added guidance and OCR enforcement statistics continuing to show HIPAA access rule violations among the most common HIPAA violations and OCR stepping up HIPAA enforcement, health care providers, health plans, healthcare clearinghouses can expect heightened scrutiny and enforcement of these requirements. Additionally, Covered Entities also should evaluate the adequacy of their other practices in light of other recent OCR guidance and enforcement actions.

Solutions Law Press, Inc.™ invites to catch up on the latest guidance on HIPAA’s requirements to provide access to patients to PHI by registering here to participate in the Solutions Law Press, Inc.™ “HIPAA Update: The Latest On Security, Patient Access & Other HIPAA Developments” WebEx briefing from Cynthia Marcotte Stamer on Friday, March 18, 2016.   During the Briefing, Ms. Stamer will provide participants with:

√ An update on OCR enforcement actiions and guidance over past 12 months

√ A detailed discussion of OCR’s new guidance about when Covered Entities must provide PHI access or copies to patients

√ Discuss rules and best practices for verifying the identity and credentials of an individual requesting PHI as a patient or personal representative of a patient

√ Share tips for contracting and dealing with business associates to facilitate administration of patient PHI access and security compliance activities

√ Share other practical considerations & best practices for compliance and risk management

√ Respond to participant questions on a time permitting basis

√ More

ABOUT THE SPEAKER

Recognized as “Legal Leader™ Texas Top Rated Lawyer” in both Health Care Law and Labor and Employment Law, a “Texas Top Lawyer,” and an “AV-Preeminent” and “Top Rated Lawyer” by Martindale-Hubble, singled out as among the “Best Lawyers In Dallas” in employee benefits 2015 by D Magazine;, Cynthia Marcotte Stamer is a practicing attorney and management consultant, author, public policy advocate and lecturer widely recognized for her more than 28 years extensive work and pragmatic thought leadership, experience, publications and training on HIPAA and other privacy, medical records and data and other health care, health plan and employee benefits, workforce and related regulatory and other compliance, performance management, risk management, product and process development, public policy and other key operational concerns.

As a core component of her work as the Managing Shareholder of Cynthia Marcotte Stamer, PC, the Co-Managing Member of Stamer Chadwick Soefje PLLC, Ms. Stamer has worked extensively throughout her nearly 30 year career with health care providers, health plans, health care clearinghouses, their business associates, employers, banks and other financial institutions, their technology and other vendors and service providers, and others on legal and operational risk management and compliance including extensive involvement with 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 concerns; prevention, investigation, response, mitigation and resolution of known or suspected data or privacy breaches or other incidents; defending investigations or other actions by plaintiffs, OCR, FTC, state attorneys’ general and other federal or state agencies; reporting and redressing known or suspected breaches or other violations; business associate and other contracting; insurance or other liability management and allocation; process and product development, contracting, deployment and defense; evaluation, commenting or seeking modification of regulatory guidance, and other regulatory and public policy advocacy; training and discipline; enforcement, and a host of other related concerns for public and private health care providers, health insurers, health plans, technology and other vendors, employers, and others. Ms. Stamer also has worked extensively domestically and internationally on public policy and regulatory advocacy on HIPAA and other privacy and data security risks and requirements as well as a broad range of other health, employee benefits, human resources, insurance, tax, compliance and other matters and representing clients in dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, Federal Trade Commission, HUD and Justice, as well as a state legislatures attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators as well supports clients in defending litigation as lead strategy counsel, special counsel and as an expert witness.

Beyond her extensive involvement advising and defending clients on these matters, Ms. Stamer also has served as the scrivener for the ABA JCEB’s meeting with OCR on HIPAA for many years. She returns as Chair of the Southern California ISSA Health Care Privacy & Security Summit for the third year in 2016, as well as speaks and serves on the steering committee of a multitude of other programs.

A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares shared her thought leadership, experience and advocacy on HIPAA and other concerns by her service in the leadership of a broad range of other professional and civic organization including 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, 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; former Board Compliance Chair and Board member of the National Kidney Foundation of North Texas, 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, immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative and current 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, a former member of the Board of Directors of the Southwest Benefits Association and others.

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. Examples of her many highly regarded publications on these matters include “Protecting & Using Patient Data In Disease Management: Opportunities, Liabilities And Prescriptions,” “Privacy Invasions of Medical Care-An Emerging Perspective,” “Cybercrime and Identity Theft: Health Information Security: Beyond HIPAA,” as well as thousands of other publications, programs and workshops these and other 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, 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. For additional information about Ms. Stamer, see CynthiaStamer.com or the Stamer│Chadwick │Soefje PLLC or contact Ms. Stamer via email to here or via telephone to (469) 767-8872.

 REGISTRATION & PROGRAM DETAILS

Registration Fee per course is $75.00 per person. Registration Fee Discounts available for groups of three or more participants from the same organization. Limited opportunities for participation. Registration accommodated on a first come basis. Completed registration and payment required via website registration 48 hours in advance of the program. No checks or cash accepted. Persons not registered with completed payment at least 48 hours in advance will only participate subject to availability and completed registration and payment. Payment only accepted via website PayPal. Register Here!

The Webex will be conducted over the internet. Participants will receive access code and instructions for sign on to participate in the Webex and/or dial in to participate in the program via telephone after processing of completed registration. Participants must have access to a computer with internet access and to telephone access to dial in via telephone to participate in the program. Solutions Law Press, Inc. is not responsible for any interruption or interference in participation resulting from limitations in the internet connectivity, computer, telephone or other equipment used by the participant to access and participate in the program.

ABOUT SOLUTIONS LAW PRESS, INC.™

Solutions Law Press, Inc.™ provides business and management information, tools and solutions, training and education, services and support to help organizations and their leaders better anticipate legal and operational issues impacting their organization’s performance, regulatory compliance and risk management, data and information protection and risk management and other key management objectives. Solutions Law Press, Inc.™ also conducts and assist businesses and associations to design, present and conduct customized programs and training targeted to their specific audiences and needs. For additional information about upcoming programs, to inquire about becoming a presenting sponsor for an upcoming event, e-mail your request to info@Solutionslawpress.com.   These programs, publications and other resources are provided only for general informational and educational purposes, the applicability of which to any particular circumstances may be impacted by legal changes, the specific facts and circumstances or other factors. Consequently, neither the distribution or presentation of these programs and materials to any party nor any statement or information provided in or in connection with this communication, the program or associated materials are not intended to or shall not be construed as establishing an attorney-client relationship, to constitute legal advice or a substitute for legal advice, or otherwise provide any assurance or expectation from Solutions Law Press, Inc., the presenter or any related parties that any participant or any other party can rely upon the information or any statements presented herein. If you or someone else you know would like to receive future Alerts or other information about developments, publications or programs or other updates, send your request to info@solutionslawpress.com. If you would prefer not to receive communications from Solutions Law Press, Inc. send an e-mail with “Solutions Law Press Unsubscribe” in the Subject to support@solutionslawyer.net. CIRCULAR 230 NOTICE: The following disclaimer is included to comply with and in response to U.S. Treasury Department Circular 230 Regulations. ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN. If you are an individual with a disability who requires accommodation to participate, please let us know at the time of your registration so that we may consider your request.   ©2016 Solutions Law Press, Inc.

 

 

 


Marketplace Data Deficiencies Signal Employer ACA Headaches

March 9, 2016

By: Cynthia Marcotte Stamer

Employers, health plans and individual taxpayers should be concerned about reports of deficiencies in the eligibility and enrollment tracking procedures of some health insurance exchanges or “marketplaces” created under the Patient Protection and Affordable Care Act (ACA) that are likely to identify individuals enrolling in health insurance coverage offered through the Healthcare.gov and certain state health insurance exchanges or “marketplaces” as eligible for subsidies who in fact are ineligible for subsidies.

As the Internal Revenue Service (IRS) and Department of Health & Human Services (HHS) rely upon Marketplaces’ eligibility and enrollment records to enroll Americans in health insurance coverage through the ACA created marketplaces, to help determine in individual Americans and employers are complying with the ACA shared responsibility rules, and to determine which individuals enrolling in coverage through marketplaces qualify for ACA subsidies, deficiencies in these practices and resulting errors in eligibility and enrollment records are likely to mean headaches for employer, health plans and individual Americans.

Marketplace Eligibility & Enrollment Data Critical To Administer ACA Reforms

Accurate eligibility and enrollment determination by marketplaces is critical to the administration of the ACA’s complicated web of reforms, including the determination the determination of whether the employee of a large employer who enrolls in coverage qualifies for a subsidy so as to trigger an obligation for the employer to pay an employer shared responsibility payment under IRC Section 4980H if the employee is not enrolled in group health coverage offered by the employer meeting ACA’s requirements.

As part of ACA’s massive restructuring of the health care payment system enacted by President Obama and the then Democrat-led Congress, most Americans now must pay an “individual shared responsibility payment” unless enrolled in “minimum essential coverage” one of the ACA-approved health coverage options. Along with this individual mandate, the ACA:

  • Dictates that all group and individual health insurance policies other than a narrow list of “excluded” plans include the rich and generally expensive package of ACA-mandated “essential health benefits,” pay a host of ACA-imposed taxes and assessments, and comply with a host of tight ACA market reforms;
  • Penalizes employers with 50 or more full-time employees (large employers) that fail to offer all full-time employees group health coverage for the employee and each of his dependent children (hereafter “dependent coverage”) through an employer-sponsored arrangement that provides minimum essential benefits at a cost not greater than 9.5 percent of the federal poverty level by providing that any large employer with at least 1 employee enrolled in subsidized health coverage offered through an ACA-established health insurance marketplace, to pay a monthly “employer shared responsibility payment” under Internal Revenue Code Section 4980H of:
    • For any large employer not offering any group health plan employee and dependent coverage providing minimum essential coverage to each full-time employee, $150 per full-time employee per month; or
    • For any other large employer, $250 per month for each full-time employee earning less than 400 percent of the federal poverty level enrolled in subsidized health insurance coverage through an ACA-established health insurance marketplace unless the employer shows the employer offered the employee the opportunity to enroll in employee and dependent coverage under a group health plan that provided the ACA-required minimum essential coverage at a cost not exceeding 9.5 percent of the employee’s adjusted gross income; and
  • Seeks to incentivize small employers (generally with fewer than 25 full-time and full-time equivalent employees) tax credits for offering minimum essential coverage under an employer-sponsored plan that meets the ACA requirements; and
  • Created a system of one federal and various state health care exchanges or “marketplaces” through which individual Americans and small employers can purchase an expensive package of “essential health benefits” from private health insurers offering “qualified health plans” (QHPs) through the their state “marketplace,” if any, or for Americans living in a state with that elected not to establish a state marketplace, the federal Healthcare.gov marketplace;
  • Uses federal tax dollars to subsidize a portion of the premiums paid by certain Americans earning less than 400% of the federal poverty level that enroll in coverage under a QHP through the marketplace applicable in their states unless the individual had the option to enroll in an employer-sponsored group health plan meeting the ACA’s “minimum essential coverage,” “minimum value” and “affordability” standards; and
  • Requires all employers, health plans and insurers and each Marketplace accurately and reliably to collect, maintain and report certain key data needed to coordinate and administer ACA’s individual coverage mandates, employer mandates and subsidy rules.

For proper administration and coordination with other plans and employers and the administration by the Internal Revenue Service of ACA tax subsidies payable to qualifying individuals obtaining coverage in a QHP through an exchange, HHS regulations require each marketplace to implement and administer reliably an application and enrollment process for enrollment in QHPs through the exchange.

To enroll in a QHP, an applicant must complete an application and meet eligibility requirements defined by the ACA. An applicant can enroll in a QHP through the Federal or a State marketplace, depending on the applicant’s State of residence. Applicants can enroll through a Web site, by phone, by mail, in person, or directly with a broker or an agent of a health insurance company. For online and phone applications, the marketplace verifies the applicant’s identity through an identity-proofing process. For paper applications, the marketplace requires the applicant’s signature before the marketplace processes the application. When completing any type of application, the applicant attests that answers to all questions are true and that the applicant is subject to the penalty of perjury.

After reviewing the applicant’s information, HHS expects the marketplace to determine whether the applicant is eligible for a QHP and, when applicable, eligible for insurance affordability programs. To verify the information submitted by the applicant, the marketplace is expected to use multiple electronic data sources, including those available through the Federal Data Services Hub (Data Hub). Data sources available through the Data Hub are the U.S. Department of Health and Human Services, Social Security Administration (SSA), U.S. Department of Homeland Security, and Internal Revenue Service, among others. The marketplace can verify an applicant’s eligibility for ESI through Federal employment by obtaining information from the U.S. Office of Personnel Management through the Data Hub.

Generally, when a marketplace cannot verify information that the applicant submitted or the information is inconsistent with information available through the Data Hub or other sources, HHS regulations require the marketplace to attempt to resolve the inconsistency in accordance with HHS regulations before treating the individual as ineligible. Because of the presumption of eligibility built into the system, individual’s who care not verified as ineligible are treated as eligible. As a result, inadequate verification practices by marketplaces are likely to result in the inappropriate characterization of individuals as eligible for enrollment with subsidies.

Audits Show Marketplace Eligibility & Enrollment Practices Deficient

Unfortunately, recent OIG reports raising concerns about the adequacy of the eligibility and enrollment verification procedures of various marketplaces are raising concerns about the reliability and adequacy of the eligibility and enrollment verification procedures and resulting data of various marketplaces. For instance, in its recently released report, Not All of the District of Columbia Marketplace’s Internal Controls Were Effective in Ensuring That Individuals Were Enrolled in Qualified Health Plans According to Federal Requirements, HHS OIG Report A-03-14-03301 (the ”D.C. Report”), OIG reports that OIG’s audit of 45 sample applicants from the enrollment period for insurance coverage in the District of Colombia’s exchange for calendar year 2014 revealed that District of Colombia’s health insurance marketplace had ineffective internal processes and controls for:

  • Verifying an applicant’s eligibility for minimum essential coverage (both employer-sponsored insurance and non-employer-sponsored insurance;
  • Maintaining application and eligibility verification data;
  • Maintain identity-proofing documentation for applicants who apply for QHPs;
  • Verifying annual household income in accordance with Federal requirements;
  • Maintaining documentation demonstrating that it verified whether an applicant was eligible for minimum essential coverage under an employment based health plan; and
  • Ensuring that its enrollment system maintains application, eligibility, and documentation, including all electronic eligibility verifications from the Data Hub.

Deficiencies Create Likely Headaches For Employers, Plans & Individual Taxpayers

Given the importance of accurate subsidy eligibility and other marketplace enrollment information, marketplace audit results recently reported by the OIG finding certain federal and state health insurance marketplaces are not using effective internal controls to verify and administer eligibility and enrollment processes raises concerns not only concerns for taxpayers generally, but also could signal added headaches for employers and health plans.

Large employers and individual Americans receiving subsidies are likely to experience the greatest impact because of the reliance upon the IRS on marketplace data to determine employer and individual shared responsibility payment liability.  However, all employers and health plans also could experience some fallout.

Large employers should be prepared to receive and defend against IRS assertions that the employer is liable for paying employer shared responsibility payment under IRC Section 4980H when an employee of the employer is one of those individuals that a marketplace improperly classifies as eligible to receive subsidies because of deficient marketplace eligibility or enrollment data collection and verification practices. In addition, all employers should be prepared to receive and respond to inquiries from marketplaces, the IRS or HHS seeking to investigate, verify and reconcile data relevant to the administration of the ACA market, subsidy, shared responsibility and other reforms of the ACA.

Meanwhile, employers, health plans and individual Americans alike should brace to receive inquiries from the IRS, HHS, marketplaces, health plans and others seeking to verify and reconcile marketplace data with data reported by health plans, employers and individual Americans.  While timely and appropriate response to legitimate requests from the IRS, HHS, a marketplace or other appropriate party is important,  all parties should be careful to verify the legitimacy of the request and the identity and credentials of the party making the request in light of the IRS and other agencies’ reports of the identity theft and other scams by opportunist criminals using the pretext of acting for the IRS or other legitimate purposes illegally to trick businesses or individuals into sharing sensitive tax, financial or other  information.   While all parties need to use care in responding to these requests, employers, health plans and their service providers also need to ensure that these procedures are appropriately conducted and documented to minimize their exposure to liability for violations of the confidentiality, privacy or data security requirements that may apply to the employer, health plan or other party under the IRC, the Health Insurance Portability & Accountability Act (HIPAA) or various other federal or state laws.

To help prepare for these potential inquiries, employers, health plans and other parties should ensure that their recordkeeping, enrollment and reporting practices under ACA are clean and ready to respond to these and other government or employee inquiries.

Employers and others concerned about the impact of these deficiencies on the liabilities of large employers, taxpayers or both may wish express concern to their elected representatives in Congress.

About The Author

Recognized as a “Top” attorney in employee benefits, labor and employment and health care law extensively involved in health and other employee benefit and human resources policy and program design and administration representation and advocacy throughout her career, Cynthia Marcotte Stamer is a practicing attorney and Managing Shareholder of Cynthia Marcotte Stamer, P.C., a member of Stamer│Chadwick│Soefje PLLC, author, pubic speaker, management policy advocate and industry thought leader with more than 28 years’ experience practicing at the forefront of employee benefits and human resources law.

A Fellow in the American College of Employee Benefit Counsel, past Chair and current Welfare Benefit Committee Co-Chair of the American Bar Association (ABA) RPTE Section Employee Benefits Group, Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, former Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, an ABA Joint Committee on Employee Benefits Council Representative and Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, Ms. Stamer is recognized nationally and internationally for her practical and creative insights and leadership on health and other employee benefit, human resources and insurance matters and policy.

Ms. Stamer helps management manage. 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 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 workforce and other legal and operational crises large and small that arise in the course of operations.

Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce management operations and compliance. 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. Common engagements include internal and external workforce hiring, management, training, performance management, compliance and administration, discipline and termination, and other aspects of workforce management including employment and outsourced services contracting and enforcement, sentencing guidelines and other compliance plan, policy and program development, administration, and defense, performance management, wage and hour and other compensation and benefits, reengineering and other change management, internal controls, compliance and risk management, communications and training, worker classification, tax and payroll, investigations, crisis preparedness and response, government relations, safety, government contracting and audits, litigation and other enforcement, and other concerns.

Ms. Stamer uses her deep and highly specialized health, insurance, labor and employment and other knowledge and experience to help 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 compensation, health and other welfare benefit and insurance, severance, pension and deferred compensation, private exchanges, cafeteria plan and other employee benefit, fringe benefit, salary and hourly compensation, bonus and other incentive compensation and related programs, products and arrangements. She is particularly recognized for her leading edge work, thought leadership and knowledgeable advice and representation on the design, documentation, administration, regulation and defense of a diverse range of self-insured and insured health and welfare benefit plans including private exchange and other health benefit choices, health care reimbursement and other “defined contribution” limited benefit, 24-hour and other occupational and non-occupational injury and accident, ex-patriate and medical tourism, onsite medical, wellness and other medical plans and insurance benefit programs as well as a diverse range of other qualified and nonqualified retirement and deferred compensation, severance and other employee benefits and compensation, insurance and savings plans, programs, products, services and activities. As a key element of this work, Ms. Stamer works closely with employer and other plan sponsors, insurance and financial services companies, plan fiduciaries, administrators, and vendors and others to design, administer and defend effective legally defensible employee benefits and compensation practices, programs, products and technology. She also continuously helps employers, insurers, administrative and other service providers, their officers, directors and others to manage fiduciary and other risks of sponsorship or involvement with these and other benefit and compensation arrangements and to defend and mitigate liability and other risks from benefit and liability claims including fiduciary, benefit and other claims, audits, and litigation brought by the Labor Department, IRS, HHS, participants and beneficiaries, service providers, and others. She also assists debtors, creditors, bankruptcy trustees and others assess, manage and resolve labor and employment, employee benefits and insurance, payroll and other compensation related concerns arising from reductions in force or other terminations, mergers, acquisitions, bankruptcies and other business transactions including extensive experience with multiple, high-profile large scale bankruptcies resulting in ERISA, tax, corporate and securities and other litigation or enforcement actions.

Ms. Stamer also is deeply involved in helping to influence the Affordable Care Act and other health care, pension, social security, workforce, insurance and other policies critical to the workforce, benefits, and compensation practices and other key aspects of a broad range of businesses and their operations. 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, Ms. Stamer annually leads the Joint Committee on Employee Benefits (JCEB) HHS Office of Civil Rights agency meeting and other JCEB agency meetings. She also works as a policy advisor and advocate to many 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 is active in the leadership of a broad range of other professional and civic organizations. For instance, Ms. Stamer presently serves on an American Bar Association (ABA) Joint Committee on Employee Benefits Council representative; Vice President of the North Texas Healthcare Compliance Professionals Association; Immediate Past Chair of the ABA RPTE Employee Benefits & Other Compensation Committee, its current Welfare Benefit Plans Committee Co-Chair, on its Substantive Groups & Committee and its incoming Defined Contribution Plan Committee Chair and Practice Management Vice Chair; Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and a current member of its Healthcare Coordinating Council; current Vice Chair of the ABA TIPS Employee Benefit Committee; the former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division; on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications. She also previously served as a founding Board Member and President of the Alliance for Healthcare Excellence, as a Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; the Board President of the early childhood development intervention agency, The Richardson Development Center for Children; Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a member of the Board of Directors of the Southwest Benefits Association. For additional information about Ms. Stamer, see CynthiaStamer.com or the Stamer│Chadwick │Soefje PLLC or contact Ms. Stamer via email here or via telephone to (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 http://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.

©2016 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press, Inc.™ All other rights reserved.


Health Care Providers’ ERISA Health Plan Benefit Opportunities & Employee Benefits Compliance Obligations Topic of 9/15 Study Group

September 9, 2015

Solutions Law Press, Inc. is happy to share information about this upcoming free health industry study group meeting on 9/15/2015 in Irving, Texas.

NORTH TEXAS HEALTHCARE COMPLIANCE PROFESSIONALS ASSOCIATION

Invites Members and Guests to Our Next Group Luncheon

Employee Benefit Security Administration Insights On Healthcare Organization’s Health & Other Employee Benefit Plan Rights & Responsibilities Under Employee Retirement Income Security Act

Featuring

Kristi Gotcher

U.S. Department of Labor Employee Benefit Security Administration Investigator

Tuesday, September 15, 2015

11:30 a.m. to 1:30 p.m.

DFW Hospital Council Offices

250 Decker Drive

Irving, Texas

RSVP here  by Noon on September 14, 2015

Space Limited!  Register Early To Reserve Your Spot To Participate!

Please share this invitation with others who might be interested in this topic or other NTHCPA events!

The North Texas Healthcare Compliance Professionals Association (NTHCPA) invites members and other interested health care compliance professionals to join us on Tuesday, September 15, 2015 from 11:30 a.m. to 1:30 p.m. for our Study Group Luncheon featuring a program on “Employee Benefit Security Administration Insights On Healthcare Organization’s Health & Other Employee Benefit Plan Rights & Responsibilities Under Employee Retirement Income Security Act” from U.S. Department of Labor Employee Benefit Security Administration (EBSA) Investigator Kristi Gotcher.

The health and other employee benefit plan rules of the Employee Retirement Income Security Act (ERISA) generally offer important protections and create significant compliance challenges for health care organizations and providers.  On one hand, health care providers generally rely heavily on their or their patient’s ability to obtain health benefits promised under employer or union-sponsored health plans covering their patients to help reimbursement provider charges.  Meanwhile, health care providers and their leaders also can incur significant liability for failing to comply with ERISA’s rules when establishing and maintaining health or other employee benefit programs for their own employees.  Drawing on her involvement as investigator with the Department of Labor agency primarily responsible for both interpreting and enforcing ERISA’s rules, EBSA Ms. Gotcher will share key updates and insights on both how ERISA and the EBSA can help patients and providers enforce benefit rights under ERISA-covered health plans and key health and highlight employee benefit compliance responsibilities that health care organizations and their leaders need to ensure that their own health and other employee benefit programs meet to avoid violating ERISA.

About the Speaker

Kristi A. Gotcher is an Investigator with the United States Department of Labor, Employee Benefits Security Administration (EBSA) in the Dallas Regional Office.   Kristi began working for EBSA in the Dallas Regional Office in November 2007 as a Benefits Advisor.  She earned her Bachelor of Arts in Social Political Relations from St. Edwards University and a J.D. from Texas Wesleyan University School of Law (now Texas A&M University School of Law).  Ms. Gotcher is licensed to practice law in the State of Texas.

Registration & Meeting Details

The meeting scheduled from 11:30 a.m. to 1:30 p.m. on Tuesday, September 15, 2015 at the DFW Hospital Council Offices located at 250 Decker Drive, Irving Texas.  Participants who timely R.S.V.P. will enjoy a complimentary luncheon. Networking and lunch service will begin at 11:30. Our program will begin at Noon.

NTHCPA encourages members and other interested health care compliance professionals to register early to reserve their spot to participate and to share this invitation with others in the industry who might benefit from participation.

There is no charge to participate in the meeting.  However space is limited and available only on a first come, first serve basis.  To ensure your spot and help us to arrange for adequate space and refreshments for this meeting, R.S.V.P. here as soon as possible and no later than Noon on September 14, 2015.  Walk in guests will be accommodated on a space-available basis only.

Thanks To Meeting Underwriter Stamer ׀ Chadwick ׀ Soefje, PLLC

NTHCPA and its members extend our thanks to Cynthia Marcotte Stamer, P.C. and the other members of Stamer ׀ Chadwick ׀ Soefje PLLC for underwriting this month’s study group luncheon and other support of NTHCPA.

A boutique firm of exceptionally experienced and skilled “big-firm” lawyers committed to changing the way law firms serve their clients, Stamer │Chadwick │Soefje, PLLC delivers sophisticated legal advice and innovative solutions to the most challenging and complex problems. Simply put, Stamer │Chadwick │Soefje, PLLC attorneys are “Solutions Lawyers™.”

Stamer │Chadwick │Soefje, PLLC attorneys deliver sophisticated legal advice and innovative solutions to the most challenging and complex problems. Stamer │Chadwick │Soefje, PLLC attorneys possess the breadth of experience to respond to the unique legal and operational challenges health industry and other clients face and help guide them toward pragmatic resolutions that make sense for them. “Solutions Lawyers™ possess the breadth of experience to respond to the unique challenges our corporate and individual clients face and help guide them toward pragmatic resolutions that make sense for them.

Founded by nationally-known, healthcare and labor & employment attorney Cynthia Marcotte Stamer; labor & employment attorney Robert G. Chadwick; and professional liability and civil litigation attorney Timothy B. Soefje, Stamer │Chadwick │Soefje, PLLC focuses on advising and representing businesses and professionals nationally in the areas of healthcare, cyber liability, ERISA, employee benefits, labor & employment, corporate and commercial litigation, professional liability, construction litigation, and insurance defense.  All three attorneys are rated AV® Preeminent™ by Martindale-Hubbell® Peer Review Ratings™ Ms. Stamer and Mr. Chadwick are both Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, are Fellows in the American Bar Foundation, and recognized as “Top Lawyers” in Labor and Employment Law.  Ms. Stamer also has received recognition as a “Top” attorney in health care and employee benefits law and is a Fellow in the American College of Employee Benefit Council.

Ms. Stamer more than 28 years’ experience advising and representing health industry and employee benefit clients on a wide range of legal, public policy, management and operational concerns as well as extensive leadership and management experience serving in on the board of health industry nonprofit organizations. Nationally recognized for her legal work, advocacy, publications, writings and presentations on health industry concerns, Ms. Stamer provides legal and management advice, training and coaching, defense, public policy and regulatory advocacy to health industry and other clients on health and other regulatory and operational compliance, federal and state public policy and enforcement, managed care and other contracting, reimbursement, fraud, quality, employment, staffing and other workforce, benefits, licensing, credentialing and peer review, safety, disaster preparedness and response, HIPAA and other privacy and data security, corporate governance, investigations and internal controls, and a host of other health industry compliance and risk management and other legal and operational concerns. In addition to her legal experience, Ms. Stamer also contributes her experience and talents to serving in a number of health industry and other civil and professional groups.  Among other things, Ms. Stamer serves as Vice President of the NTHCPA, the RPTE representative to the American Bar Association (ABA) Joint Committee on Employee Benefits Council and scrivener for its annual agency meeting with the Office of Civil Rights, the ABA International Section Life Sciences and Health Law Committee Vice President of Policy, RPTE Liaison to the ABA Health Care Coordinating Counsel, TIPS Employee Benefit Committee Vice Chair, Founder and Executive Director of the Project COPE:  The Coalition on Patient Empowerment, and National Physicians Council for Healthcare Policy.  She also previously served as President and Founding Board Member of the Alliance for Health Care Excellence and its Health Care Heroes and Patient Empowerment Programs, as RPTE Employee Benefits & Other Compensation Group Chair and Welfare Benefit Committee Vice Chair, Exempt Organizations Coordinator of the Gulf States Area TEGE Council, Board President and Audit Committee Chair of the Richardson Development Center for Children ECI Agency, National Kidney Foundation of North Texas Board Audit Committee Chair, the United Way of North Texas Long Range Planning Committee.  She also has and continues to serve in the leadership of many other civic and professional boards, seminar faculties, editorial advisory boards and publishes and speaks extensively on health industry and employee benefit related concerns.

Mr. Chadwick has extensive experience advising and defending health industry and other clients on OSHA and other occupational health and safety, employee benefits, compensation and other labor and employment  concerns as well as defending boards and other management leaders against management liability claims.

Mr. Soefje has extensive experience advising and representing health industry clients and professionals on medical malpractice, officers and directors liability and other professional liability, errors and omissions, construction defect and other litigation and disputes.

For additional information, contact Ms. Stamer cstamer@solutionslawyer.net

About the NTHCPA

NTHCPA exists to champion ethical practice and compliance standards and to provide the necessary resources for ethics and compliance Professionals and others in North Texas who share these principles.  The vision of NTHCPA is to be a pre-eminent compliance and ethics group promoting lasting success and integrity of organizations within North Texas.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns.

Other Helpful Resources & Other Information

We hope that this information is useful to you.   If you found these updates of interest, you also be interested in one or more of the following other recent articles published on the Coalition for Responsible Health Care Reform electronic publication available here, our electronic Solutions Law Press Health Care Update publication available here, or our HR & Benefits Update electronic publication available hereYou also can get access to information about how you can arrange for training on “Building Your Family’s Health Care Toolkit,”  using the “PlayForLife” resources to organize low-cost wellness programs in your workplace, school, church or other communities, and other process improvement, compliance and other training and other resources for health care providers, employers, health plans, community leaders and others here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail by creating or updating your profile here. You can reach other recent updates and other informative publications and resources.

Examples of some of these recent health care related publications include:

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.

©2015 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press, Inc.™. All other rights reserved.


Health Insurer/Vendor’s Claims & Appeals Deficiencies Could Trigger Significant Employer Excise Tax Liability

July 27, 2015

Employers sponsoring group health plan coverage now or in 2014, check the adequacy of your insurer or third party administrator’s claims and appeals processes and notices.  Employers that sponsor group health plans that violated certain health care reform mandates for claims and appeals imposed by the Patient Protection and Affordable Care Act (ACA) will face a duty to pay an excise tax of $100 per violation per day under the expanded Form 8928 filing requirements made applicable to employers providing health plan coverage after 2013 under the Internal Revenue Code (Code), as well undermine the enforceability of claims and appeals decisions under Section 502(b) and trigger penalties of $125 per day ($1000 per day in the case of Department of Labor enforcement actions) against the plan administrator under Section 502(c) of the Employee Retirement Income Security Act of 1974 (ERISA).

Insurers and third party administrators providing claims and appeals services also should be concerned.  Not only could these vendors face liability under ERISA, employer hit with fees almost certainly will look to the vendors responsible for performing these services for indemnification or other relief.  Fixing past problems and preventing new violations is key to mitigating risks for all parties.

Because of the potential legal risks under the Code and ERISA, employers evaluating compliance to determine whether to file a Form 8928 generally should consult with legal counsel about whether and how best to structure and conduct the health plan compliance review to preserve distinctions between their business operations and fiduciary activities performed on behalf of the plan, as well as any opportunities to use attorney-client privilege, work product or other evidentiary rules to mitigate their risks and exposures.

Even before ACA, ERISA already required that group health plans and their plan administrators and fiduciary comply with a long list of highly technical rules when processing and administering claims and appeals and notifying plan members about these activities. The ACA claims and appeals rules covered by the Form 8928 filing and excise tax rules are additional notice and procedural safeguards imposed upon group health plans in addition to these long-standing ERISA claims and appeals procedures.  As implemented by current Department of Labor Regulations, these ACA claims and appeals procedures require that group health plans (other than grandfathered plans) both comply with:

  • All of the pre-existing ERISA claims and appeals rules; and
  • Notify members or their beneficiaries of their rights to and provide for independent review of coverage rescission decisions and medical judgment-based claims denials in accordance with detailed rules set forth in the Labor Department Regulations; and
  • Comply with tighter procedural and notice standards for processing claim and appeals imposed by ACA in accordance with the detailed rules set forth in the Labor Department Regulations.

While most employers that sponsor group health plans historically have assumed that the insurers or other health plan vendors hired to administer their programs have designed and administer claims and appeals in compliance with these mandates, the processes and notices of many health plan insurers and self-insured plan claims and appeals vendors typically fall far short of meeting the requirements of even the pre-existing ERISA claims and appeals requirements as implemented by Labor Department Regulations since 2001, much less the additional independent review and other ACA claims and appeals requirements.

Post-2013 deficiencies in the practices of many insurers and other health plan vendors’ claims and appeals processes and notifications now leave many employers exposed to significant excise tax penalties.  While under ERISA, group health plans and their responsible plan administrator or other applicable named fiduciary, not the sponsoring employer, generally bear the responsibility and liability for administering the group health plan in accordance with ACA’s claims and appeals and the other group health plan requirements covered by Form 8928, the Code’s extension of the Form 8928 filing requirement and imposition of significant excise taxes against employers that sponsor group health plans that violate these requirements is designed to give businesses sponsoring group health plans meaningful incentives to take steps to ensure that their group health plan is properly designed and administered by its insurers and fiduciaries to comply with the listed requirements.

Under Code Section 6039D, businesses sponsoring group health plans are required to self-assess and pay excise taxes of up to $100 per day for each uncorrected violation of a specified list of federal health plan mandates by filing a Form 8928 when the business files its corporate or partnership tax return for the applicable taxable year.  Before 2014, the Form 8928 filing requirement applied to a fairly narrow set of requirements.  Beginning with 2014, however, ACA added the ACA claims and appeals rules as well as a long list of other ACA requirements to the health plan violations subject to Form 8928 disclosures and excise taxes. If a business sponsored a health plan that violated the ACA claims and appeals rules or any other health plan rule subject to the Form 8928 filing requirement in 2014 or thereafter, the business should take prompt, well-documented actions to self-correct the violation or timely must file the required Form 8929 and pay the applicable $100 per violation per day excise tax since proof of good faith efforts to maintain compliance, proof of self-correction, or both may mitigate these excise tax and other Form 8928 liability as well as associated ERISA exposures.  Likewise, during the current and future years after 2013, businesses offering group health plan coverage to their employees  also will want to monitor their health plan’s compliance with the federal group health plan rules  covered by Form 8929 reporting to avoid or mitigate these risks going forward.

Since federal group health plan violations that trigger the Form 8928 requirement of a sponsoring employer also generally create potential exposures for the ERISA exposures for the group health plan, parties acting as the “plan administrator” or other “fiduciary” role with respect to the plan or both under ERISA, the group health plan and its plan administrator or other responsible fiduciary (sometimes, but not always the employer or a member of its management), the group health plan, and those parties acting as the plan administrator or fiduciary responsible for administering the plan in compliance with those requirements also will want to be prepared to demonstrate that prudent steps are taken to administer the group health plan in accordance with the applicable mandates, including prudently to investigate and redress any suspected concerns identified in connection with the employer’s Form 8928 filing analysis.  Under ERISA, for instance, the group health plan’s failure to strictly comply with any one of the highly technical claims or appeals procedural or notification requirements of ACA can give the affected plan member or its assignee the ability to sue the group health plan without the need to fulfill otherwise applicable appeals or other procedures that otherwise might apply under the group health plan’s claims and appeals procedures as well as have other adverse consequences for the group health plan or its fiduciaries, may heightened the burdens of proof the plan or its fiduciaries must meet to sustain denial determinations, or both.  In addition, where the ACA violation included a failure to comply with ACA’s claims or appeals notification requirements, the violation also could provide the basis for the plan member to ask a court to order the plan administrator to pay the plan member up to  $125 per day per violation plus attorneys’ fees and enforcement costs, the basis for the Department of Labor to penalize the plan administrator up to $1025 per day per violation per plan member, or both.   While technically these ERISA exposures generally run specifically to the plan or the party serving as its plan administrator or responsible fiduciary, the employer frequently ultimately pays for these liabilities either because:

  • The plan documentation names the sponsoring business as the plan administrator or named fiduciary responsible for these actions;
  • The vendor agreement between the sponsoring business and the insurer or other service provider that the business hired to perform these duties requires the sponsoring business to indemnify the vendor for these liabilities; or
  • Both.

While the sponsoring business and parties serving as the plan administrator or other fiduciaries of the plan all have potential legal risk if the plan is not administered in accordance with the ACA claims and appeals procedures or other requirements covered by the Form 8928 filing requirements, all parties need to be mindful of the distinctions between the Form 8928 and other exposures that a sponsoring employer bears under the Code as compared to the ERISA fiduciary responsibility and other duties imposed upon the plan and its fiduciaries under ERISA.  Maintenance of proper separation between these roles and appropriate structuring of communications between the sponsoring business with the plan and its fiduciaries and vendors is important to minimize the risk that the sponsoring business unintentionally will create or broaden the fiduciary liability exposures of the business by unnecessarily or inappropriately exercising discretion or control over the administration of plan duties that the plan terms allocate to other parties.  Also, plan sponsors engaging in compliance reviews and associated discussions generally have a greater ability to use attorney-client privilege and work product than plan fiduciaries.  Accordingly, businesses sponsoring their group health plans and their management generally will want to consult with qualified, experienced legal counsel for advice about whether and how to structure their Form 8928 assessments and associated risk analysis and correction discussions to promote and preserve the ability of the business, as the sponsoring employer, and its management to minimize ERISA fiduciary exposures and claim and use attorney-client privilege and work product evidentiary privileges to contain the scope of ERISA associated risks.

Going forward, businesses also will want to obtain advice of counsel about opportunities to mitigate Form 8928, ERISA and other exposures through more careful credentialing and contracting with health plan insurers and vendors, review and drafting of plan documents, summary plan descriptions and other plan materials, and other risk management and compliance processes and procedures. See Careful Selection & Contracting With Vendors Critical Part of Health Plan Renewals

While most employers will not be able to negotiate the ideal contractual provisions and all operational violations, careful plan drafting to comply with applicable rules, vendor credentialing and contracting, and monitoring of compliance by an employer can reduce the risk and frequencies of violation and promote timely self-correction.  In addition, the documented administration of these and other efforts by the employer can provide invaluable evidence to position the sponsoring employer to minimize or secure a waiver of excise taxes that otherwise might arise under the Code, pursue indemnification for liabilities the employer incurs due to the misfeasance of the insurer or vendor or both.

For Help or More Information

For Legal or Consulting Advice, Legal Representation, Training Or More Information

If you need help responding to these new or other workforce, benefits and compensation, performance and risk management, compliance, enforcement or management concerns, help updating or defending your workforce or employee benefit policies or practices, or other related assistance, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

A practicing attorney and Managing Shareholder of Cynthia Marcotte Stamer, P.C., a member of Stamer│Chadwick │Soefje PLLC, Ms. Stamer’s more than 27 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, past Chair and current Welfare Benefit Committee Co-Chair of the American Bar Association (ABA) RPTE Section Employee Benefits Group, Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, former Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, an ABA Joint Committee on Employee Benefits Council Representative and Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, Ms. Stamer is recognized nationally and internationally for her practical and creative insights and leadership on HIPAA and other health and other employee benefit, human resources, and related insurance, health care, privacy and data security and tax matters and policy.

Ms. Stamer’s legal and management consulting work throughout her 27 plus year 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 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 workforce and other legal and operational crises large and small that arise in the course of operations.

Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce management operations and compliance. 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 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 compensation, health and other welfare benefit and insurance, severance, pension and deferred compensation, private exchanges, cafeteria plan and other employee benefit, fringe benefit, salary and hourly compensation, bonus and other incentive compensation and related programs, products and arrangements.

She is particularly recognized for her leading edge work, thought leadership and knowledgeable advice and representation on the design, documentation, administration, regulation and defense of a diverse range of self-insured and insured health and welfare benefit plans including private exchange and other health benefit choices, health care reimbursement and other “defined contribution” limited benefit, 24-hour and other occupational and non-occupational injury and accident, ex-patriate and medical tourism, onsite medical, wellness and other medical plans and insurance benefit programs as well as a diverse range of other qualified and nonqualified retirement and deferred compensation, severance and other employee benefits and compensation, insurance and savings plans, programs, products, services and activities. In these and other engagements, Ms. Stamer works closely with employer and other plan sponsors, insurance and financial services companies, plan fiduciaries, administrators, and vendors and others to design, administer and defend effective legally defensible employee benefits and compensation practices, programs, products and technology. She also continuously helps employers, insurers, administrative and other service providers, their officers, directors and others to manage fiduciary and other risks of sponsorship or involvement with these and other benefit and compensation arrangements and to defend and mitigate liability and other risks from benefit and liability claims including fiduciary, benefit and other claims, audits, and litigation brought by the Labor Department, IRS, HHS, participants and beneficiaries, service providers, and others. She also assists debtors, creditors, bankruptcy trustees and others assess, manage and resolve labor and employment, employee benefits and insurance, payroll and other compensation related concerns arising from reductions in force or other terminations, mergers, acquisitions, bankruptcies and other business transactions including extensive experience with multiple, high-profile large scale bankruptcies resulting in ERISA, tax, corporate and securities and other litigation or enforcement actions.

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 Affordable Care Act and other health care, pension, social security, workforce, insurance and other policies critical to the workforce, benefits, and compensation practices and other key aspects of a broad range of businesses and their operations. 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 plans, their sponsors, administrators, insurers and many 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 is active in the leadership of a broad range of other professional and civic organizations. For instance, Ms. Stamer presently serves on an American Bar Association (ABA) Joint Committee on Employee Benefits Council representative; Vice President of the North Texas Healthcare Compliance Professionals Association; Immediate Past Chair of the ABA RPTE Employee Benefits & Other Compensation Committee, its current Welfare Benefit Plans Committee Co-Chair, on its Substantive Groups & Committee and its incoming Defined Contribution Plan Committee Chair and Practice Management Vice Chair; Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and a current member of its Healthcare Coordinating Council; current Vice Chair of the ABA TIPS Employee Benefit Committee; the former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division; on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications. She also previously served as a founding Board Member and President of the Alliance for Healthcare Excellence, as a Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; the Board President of the early childhood development intervention agency, The Richardson Development Center for Children; Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a member of the Board of Directors of the Southwest Benefits Association. For additional information about Ms. Stamer, see www.cynthiastamer.com, or http://www.stamerchadwicksoefje.com the member of contact Ms. Stamer via email here or via telephone to (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 may be interested reviewing other Solutions Law Press, Inc.™ resources at www.solutionslawpress.com such as:

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Prompt Business Action Needed To Mitigate Post-King Employer Health Benefit Costs & Liabilities

June 30, 2015

With the Obama Administration construing the United States Supreme Court’s King v. Burwell decision as a green light for its full implementation and enforcement of the Patient Protection & Affordable Care Act (ACA), U.S. businesses should brace for both increases in health benefit costs and liabilities over the next year as well as take prompt action to identify and mitigate potential excise tax and other exposures from any unaddressed compliance deficiencies in their 2014 or 2015 health plans as soon as possible and no later than the due date for filing their 2014 business tax return.

As health benefit costs continue their upward trend, many businesses and their leaders plan to look for new options to manage costs and liabilities following the King decision.  In most cases, businesses assume they can delay these actions until the beginning of their upcoming health plan year, not realizing their company’s potential liability exposures from existing and past defects.  Businesses and their leaders who have held off updating their health plan compliance and expect to delay completion of these activities until the beginning of their upcoming health plan year are likely to be in for a rude awakening, however, particularly since a much underappreciated Sarbanes-Oxley style provision of the Internal Revenue Code will require employer or other group health plan sponsors to self-report, self-assess and pay stiff excise tax penalties when filing their company’s 2014 business tax return unless their group health plan complied with a long list of ACA and other federal health plan rules in 2014.

Employer Health Benefit & Other Compensation Up, Costs Exposures Projected To Continue To Rise

While many businesses delayed making tough choices  about their health plan design and compliance over the past several years in hopes of some judicial or Congressional relief from the mandates and costs of ACA, businesses generally have continued to struggle with ever-rising compensation and benefit costs, with health benefit costs the biggest challenge.  Recent U.S. Bureau of Labor Statistics (BLS) data confirms what business leaders already know.  Compensation and benefit costs rose over the past year, with health benefit costs remaining a big factor in these increased costs.  According to BLS, employer compensation costs rose slightly and health benefit costs remained the largest individual benefit cost for employers during the 12-month period ending March 31, 2015, according to the U.S. Bureau of Labor Statistics (BLS). See BLS Employment Cost Index News Release (April 30, 2015).

The BLS Employer Costs For Employee Compensation Report, March 2015 released June 10, 2015 Report) shows private employers spent an average of $31.65 per hour worked for compensation in March 2015 with health benefits accounting averaging 7.7 percent of this average employer total compensation cost per employee.  This compares to BLS showing that in March 2014, In March 2014, total employer compensation costs for private industry workers averaged $29.99 per hour worked, with wages and salaries averaging $20.96 per hour (69.9 percent) and benefits averaging $9.03 per hour (30.1 percent). See BLS Employer Costs For Employee Compensation, March 2014 (June 12, 2014)(2014 Report).

BLS data on health benefit and other compensation and benefit costs and trends provides many interesting insights for business as well as government leaders and the role health benefit cost increases play in these increased expenditures.  For instance, BLS statistics show for private employers on average during the 12-month period ending March 31, 2015:

  • Compensation costs for private industry workers increased 2.8 percent over the year, higher than the March 2014 increase of 1.7 percent;
  • Wages and salaries increased 2.8 percent, also higher than the March 2014 increase of 1.7 percent;
  • Benefits costs rose 2.6 percent, which was higher than March 2014, when the increase was 1.8 percent; and
  • Health benefits on average increased 2.5 percent over during the 12-month period that ended on March 31, 2015, rising from the March 2014 increase in compensation costs of 1.8 percent.

Businesses Must Prepare For Impending ACA Enforcement While Dealing With Upsurge In Health Benefit Costs

While the continued rise in the average hourly cost of health benefits for employers is significant in its own right, the reported health benefit cost and employer health cost data in the Report does not include additional reporting and other compliance and risk management costs, which in light of the explosion in employer group health plan mandates since the passage of the Patient Protection and Affordable Care Act (ACA). Research indicates that the employer plan design changes slowed the upward trend in employer health benefit expenditures that otherwise would have occurred in 2015.  This upward trend is projected to continue if not accelerate in 2016, however.

The 2015 Report shows these upward increases in employer costs for health benefits and other compensation continued in the first quarter of 2015.  Concerning health benefits, for instance, the 2015 Report shows health benefit costs paid by employers averaged $2.43 per hour worked (7.7 percent of total compensation)in private industry in March 2015, compared to the average health benefit costs BLS reported.  In comparison, the 2014 Report indicated in March, 2014, the average cost for health insurance benefits in private industry was $2.36 per hour worked in March 2014 (7.9 percent of total compensation).

Overall health benefit costs and associated compliance expenses of employers that elect to continue to offer health benefits for employees are projected to rise throughout 2015 and 2016 as ACA driven mandates and market changes drive up employer’s direct health benefit costs.  See, e.g. Employers’ Health Costs Projected to Rise 6.5% for 2016.

The trend data and judicial and political developments indicate that business leaders can look for these trends not only to continue, but accelerate. With an impending responsibility to self-report violations of ACA and various of federal health plan mandates imminent, business leaders should brace to deal with any deficiencies in compliance in their 2014 and 2015 health plans much sooner than they might have expected following the Supreme Court’s King v. Burwell decision last week.  President Obama made clear last week he views the King ruling as giving the Internal Revenue Service, Department of Labor and Department of Health & Human Services the all clear for full implementation and enforcement of ACA and other federal health plan rules.  While these overall enforcement exposures will play out over the next several years, many employers are poised to experience the first bite of these new enforcement exposures over the next few months, when the Internal Revenue Code will require that employers that offered health coverage for employees in 2014 self-assess, report and pay stiff new excise tax penalties of $100 per day per violation when filing their 2014 tax return unless their program complied with all of a long list of ACA or other federal law mandates in addition to otherwise applicable exposures under the Employee Retirement Income Security Act (ERISA) and other laws. See, Businesses Must Confirm & Clean Up Health Plan ACA & Other Compliance Following Supreme Court’s King v. Burwell Decision.  Since prompt self-audit and correction can help mitigate these liabilities, business leaders should act quickly to engage experienced legal counsel for their companies for help in evaluating, within the scope of attorney client privilege, the adequacy of their 2014 and 2015 health plan compliance, options for addressing potential exposures from any compliance deficiencies, and for advice and assistance to decide whether to offer health benefits going forward and if so, aid in designing and implementing their future health benefit program to enhance its defensibility.  While businesses inevitably will need to involve or coordinate with their accounting, broker, and other vendors involved with the plans, businesses generally will want to get legal advice in a manner that preserves their potential to claim attorney-client privilege to protect against discovery in the event of future enforcement or litigation actions sensitive discussions and analysis about compliance audits, plan design choices, and other risk management and liability planning as well as to get help evaluating potential future plan design changes or proposed solutions to known or suspected liability exposures, particularly in light of complexity of the exposures and risks.

For Legal or Consulting Advice, Legal Representation, Training Or More Information

If you need help responding to these new or other workforce, benefits and compensation, performance and risk management, compliance, enforcement or management concerns, help updating or defending your workforce or employee benefit policies or practices, or other related assistance, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

Recognized as a “Top” attorney in employee benefits, labor and employment and health care law extensively involved in health and other employee benefit and human resources policy and program design and administration representation and advocacy throughout her career, Cynthia Marcotte Stamer is a practicing attorney and Managing Shareholder of Cynthia Marcotte Stamer, P.C., a member of Stamer│Chadwick │Soefje PLLC, author, pubic speaker, management policy advocate and industry thought leader with more than 27 years’ experience practicing at the forefront of employee benefits and human resources law.

A Fellow in the American College of Employee Benefit Counsel, past Chair and current Welfare Benefit Committee Co-Chair of the American Bar Association (ABA) RPTE Section Employee Benefits Group, Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, former Chair of the ABA Health Law Section Managed Care & Insurance Interest Group,  an ABA Joint Committee on Employee Benefits Council Representative and Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, Ms.Stamer is recognized nationally and internationally for her practical and creative insights and leadership on health and other employee benefit, human resources and insurance matters and policy.

Ms. Stamer helps management manage. Ms. Stamer’s legal and management consulting work throughout her 27 plus year 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 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 workforce and other legal and operational crises large and small that arise in the course of operations.

Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce management operations and compliance.  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.  Common engagements include internal and external workforce hiring, management, training, performance management, compliance and administration, discipline and termination, and other aspects of workforce management including employment and outsourced services contracting and enforcement, sentencing guidelines and other compliance plan, policy and program development, administration, and defense, performance management, wage and hour and other compensation and benefits, reengineering and other change management, internal controls, compliance and risk management, communications and training, worker classification, tax and payroll, investigations, crisis preparedness and response, government relations, safety, government contracting and audits, litigation and other enforcement, and other concerns.

Ms. Stamer uses her deep and highly specialized health, insurance, labor and employment and other knowledge and experience to help 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 compensation, health and other welfare benefit and insurance, severance, pension and deferred compensation, private exchanges, cafeteria plan and other employee benefit, fringe benefit, salary and hourly compensation, bonus and other incentive compensation and related programs, products and arrangements. She is particularly recognized for her leading edge work, thought leadership and knowledgeable advice and representation on the design, documentation, administration, regulation and defense of a diverse range of self-insured and insured health and welfare benefit plans including private exchange and other health benefit choices, health care reimbursement and other “defined contribution” limited benefit, 24-hour and other occupational and non-occupational injury and accident, ex-patriate and medical tourism, onsite medical, wellness and other medical plans and insurance benefit programs as well as a diverse range of other qualified and nonqualified retirement and deferred compensation, severance and other employee benefits and compensation, insurance and savings plans, programs, products, services and activities.  As a key element of this work, Ms. Stamer works closely with employer and other plan sponsors, insurance and financial services companies, plan fiduciaries, administrators, and vendors and others to design, administer and defend effective legally defensible employee benefits and compensation practices, programs, products and technology. She also continuously helps employers, insurers, administrative and other service providers, their officers, directors and others to manage fiduciary and other risks of sponsorship or involvement with these and other benefit and compensation arrangements and to defend and mitigate liability and other risks from benefit and liability claims including fiduciary, benefit and other claims, audits, and litigation brought by the Labor Department, IRS, HHS, participants and beneficiaries, service providers, and others.  She also assists debtors, creditors, bankruptcy trustees and others assess, manage and resolve labor and employment, employee benefits and insurance, payroll and other compensation related concerns arising from reductions in force or other terminations, mergers, acquisitions, bankruptcies and other business transactions including extensive experience with multiple, high-profile large scale bankruptcies resulting in ERISA, tax, corporate and securities and other litigation or enforcement actions.

Ms. Stamer also is deeply involved in helping to influence the Affordable Care Act and other health care, pension, social security, workforce, insurance and other policies critical to the workforce, benefits, and compensation practices and other key aspects of a broad range of businesses and their operations.  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, Ms. Stamer annually leads the Joint Committee on Employee Benefits (JCEB) HHS Office of Civil Rights agency meeting and other JCEB agency meetings.  She also works as a policy advisor and advocate to many 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 is active in the leadership of a broad range of other professional and civic organizations. For instance, Ms. Stamer presently serves on an American Bar Association (ABA) Joint Committee on Employee Benefits Council representative; Vice President of the North Texas Healthcare Compliance Professionals Association; Immediate Past Chair of the ABA RPTE Employee Benefits & Other Compensation Committee, its current Welfare Benefit Plans Committee Co-Chair, on its Substantive Groups & Committee and its incoming Defined Contribution Plan Committee Chair and Practice Management Vice Chair; Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and a current member of its Healthcare Coordinating Council; current Vice Chair of the ABA TIPS Employee Benefit Committee; the former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division; on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.  She also previously served as a founding Board Member and President of the Alliance for Healthcare Excellence, as a Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; the Board President of the early childhood development intervention agency, The Richardson Development Center for Children; Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a member of the Board of Directors of the Southwest Benefits Association. For additional information about Ms. Stamer, see www.cynthiastamer.com, or www.stamerchadwicksoefje.com   the member of contact Ms. Stamer via email here or via telephone to (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 www.solutionslawpress.com including:

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

©2015 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press. All other rights reserved.


Businesses Must Confirm & Clean Up Health Plan ACA & Other Compliance Following Supreme Court’s King v. Burwell Decision

June 25, 2015

With the Supreme Court’s much anticipated June 25, 2015 King v. Burwell decision dashing the hope that the Supreme Court  would provide relief for businesses and their group health plans from the Patient Protection and Affordable Care Act (ACA) mandates by striking down ACA, U.S. businesses that offered health coverage in 2014 and those continuing to sponsor health coverage currently swiftly to act to review and verify the adequacy of their 2014 and current group health plan’s compliance with ACA and other federal group health plan mandates as well as begin their finalizing their group health plan design decisions for the upcoming year.

King Decision Nixes Hope For Meaningful Judicial Relief For Businesses, Plans For Existing ACA Violations

Prompt action to assess and verify compliance is particularly critical in light of much overlooked the “Sox For Health Plans” style rules of Internal Revenue Code (Code) Section 6039D, which generally require group health plans that violated various federal group health plan mandates to self-identify and self-report these violations, as well as self-assess and pay the excise taxes of up to $100 per day per violation triggered by uncorrected violations.  While applicable prior to 2014 for uncorrected violations of a relatively short list of pre-ACA federal group health mandates, ACA broadened the applicability of Code Section 6039D to include ACA’s group health plan mandates beginning in 2014. see SOX FOR HEALTH PLANS? IRS Excise Tax Requirements For Failing to Report Plan Violations Who Must File the IRS Form 8928, Requirement for Self-Reporting? This means that in addition to any other liability that the company, its group health plan and its fiduciaries might bear for violating these rules under the Employee Retirement Income Security Act, the Code, the Social Security Act or otherwise, the sponsoring business also will incur liability for the Code Section 6039D excise tax for uncorrected violations, as well as late or non-filing penalties and interest that can result from late or non-filing.

Many employers have significant exposure to these Code Section 6039D excise tax liabilities since many plan sponsors or their vendors have delayed reviewing or updating their group health plans for compliance with some or all of ACA’s mandates.  In many cases, businesses delayed in hopes that the Supreme Court would strike down the law, Congress would amend or repeal it, or both.  In other cases, limited or continuing changes to the regulatory guidance about some of ACA’s mandates prompted businesses to hold off investing in compliance to minimize compliance costs.  Regardless of the past reasons for such delays, however, businesses sponsoring group health plans after 2013 need to recognize and act to address their uncorrected post-2013 ACA violations exposures.

While many businesses as well as individual Americans have held off taking long overdue steps to comply with ACA’s mandates pending the Supreme Court’s King v. Burwell decision, the three agencies charged with enforcement of its provision – the IRS, Department of Labor and Department of Health and Human Service has been gearing up to enforce those provisions of ACA already in effect and to finalize implementation of others in the expectation of today’s ruling in favor of the Obama Administration.  As a practical matter, businesses sponsoring group health plans and other ACA opponents need to recognize that the Supreme Court’s King decision realistically gives these agencies the go ahead to move forward with these plans for aggressive implementation and enforcement.

While technically only addressing a challenge to the Obama Administration’s interpretation of the individual tax credit (“Individual Subsidy”) ACA created under Code Section 36B, the Supreme Court’s decision realistically eliminates any realistic hope for that the Supreme Court will provide businesses or their group health plans with any meaningful past or current ACA violations by striking down the law itself. Of all of the currently pending challenges to ACA working their way to through the courts, the King case presented the best chance of a Supreme Court ruling that would wholesale invalidate ACA’s insurance reforms, if not the law itself, because of the importance of the Individual Subsidy to the intended workings of those reforms. By upholding the Obama Administration’s interpretation of Code Section 36B as allowing otherwise qualifying individuals living in states without a state run ACA health insurance exchange to claim the Individual Subsidy for buying health care coverage through the federal Healthcare.gov health insurance exchange, the Supreme Court effectively killed the best possibility that the Supreme Court would invalidate the insurance reforms or ACA itself. While various challenges to the law or certain of the Obama Administration’s interpretations of its provisions, none of these existing challenges present any significant possibility that the Supreme Court will strike down ACA.

While the Republicans in Congress have promised to take Congressional action to repeal or reform ACA since retaking control of the Senate in last Fall’s elections, meaningful legislative reform also looks unlikely.  Its narrow majority in the Senate means that Republicans alone do not have sufficient votes to override President Obama’s promised veto of these efforts. Consequently, prospects for meaningful legislative relief or repeal of ACA’s mandates remain extremely dim even with Republicans holding the majority in both the House and Senate.

Deadline To Self-Report, Pay Excise Tax Penalties For 2014 Health Plan Violations Rapidly Approaching

In light of these developments, businesses must prepare both to meet their current and future ACA and other federal health plan compliance obligations and defend potential deficiencies in their previous compliance over the past several years.  The importance of these actions take on particular urgency given the impending deadlines under the largely overlooked “Sox for Health Plans” rules of Code Section 6039D for businesses that sponsored group health plans after 2013.

Under Code Section 6039D, businesses sponsoring group health plans in 2014 must self-assess the adequacy of their group health plan’s compliance with a long list of ACA and other federal mandates in 2014 and to the extent that there exist uncorrected violations, to self-report these violations and self-assess on IRS Form 8928 and pay the required excise tax penalty of $100 for each day in the noncompliance period with respect to each individual to whom such failure relates.  For ACA violations, the reporting and payment deadline generally is the original due date for the business’ tax return. Absent further regulatory or legislative relief, businesses providing group health plan coverage in 2014 or thereafter also should expect to face similar obligations and exposures.  As a result, businesses that sponsored group health plans in 2014 or thereafter should take affirmative steps to act quickly to verify the adequacy of their group health plan’s compliance with all ACA and other group health plan mandates covered by the Code Section 6039D reporting requirements.  Prompt action to identify and sel-correct covered violations may mitigate the penalties a company faces under Code Section 6039D as well as other potential liabilities associated with those violations under the Employee Retirement Income Security Act (ERISA), the Social Security Act, or other federal laws. On the other hand, failing to act promptly to identify and deal with these requirements and the potential reporting and excise tax penalty self-assessment and payment requirements imposed by Code Section 6039D can significantly increase the liability the business faces for these violations substantially both by triggering additional interest and late payment and filing penalties, as well as forfeiting the potential opportunities that Code Section 6039D otherwise might offer to qualify to reduce or avoid penalties through good faith efforts to comply or self-correct.

While current guidance allows businesses the opportunity to extend the deadline for filing of their Form 8928, the payment deadline for the excise taxes cannot be extended. Code Section 6039D provides opportunities for businesses to reduce their excise tax exposure by self-correction or showing good faith efforts to comply with the ACA and other group health plan mandates covered by Code Section 6039D.  Businesses need to recognize, however, that delay in identification and correction of any compliance concerns less likely to qualify for this relief.  Accordingly prompt action to audit compliance and address any compliance concerns is advisable to mitigate these risks as well as other exposures.

Other Enforcement & Liability Risks

Beyond the impending Form 8928 excise tax responsibilities, employer and other health plan sponsors, fiduciaries, insurers and administrators also need to update their health plan compliance and risk management in anticipation of other challenges. Many health plan sponsors, fiduciaries, administrators, insurers and other vendors and advisors have allowed ongoing challenges and debates about ACA in the Courts, Congress and the media to lull them into delaying investing the money and other resources required to review and update of their programs for compliance with ACA and a host of other federal rules and court decisions impacting their programs and its associated risks. With their impending Form 8928 disclosures providing invaluable admissions of potential exposures and the Obama Administration and plaintiff’s bar likely to take King as a green light to enforce ACA and other group health plan mandates, plan sponsors, fiduciaries, insurers and administrators can expect greater scrutiny and challenges of their health plan design and administration by private plaintiffs, the Department of Labor, Department of Health & Human Services, IRS, and in the case of insured arrangements, state insurance regulators. Officers, directors and management leaders of employer or other sponsors of plans facing expenses from delayed or flawed compliance efforts, as well as their health plan insurers, administrative service providers, brokers, consultants, stop los insurers, auditors and other vendors and advisors also should brace for demands and other painful pushback from employers or health plan fiduciaries looking to shift liability to advisors or vendors for costs and damages resulting from claims or other enforcement liabilities resulting from delayed enforcement in alleged reliance upon the advisor or vendor.  Strategic actions taken now could help mitigate potential exposures and other fallout of these and other health plan compliance delays.

Liabilities Make Advisable Engaging Legal Counsel For Privilege & Other Risk Management Assistance. 

Businesses preparing to conduct audits also are urged to consider seeking the advice from qualified legal counsel experienced in these and other group health plan matters before initiating their audit as well as regarding the evaluation of any concerns that might be uncovered. While businesses inevitably will need to involve or coordinate with their accounting, broker, and other vendors involved with the plans, businesses generally will want to preserve the ability to claim attorney-client privilege to protect all or parts of their audit investigation and analysis and certain other matters against discovery as well as assistance with proper evaluation of options in light of findings and assistance from counsel to document the investigation and carefully craft any corrective actions for defensibility.

For Legal or Consulting Advice, Legal Representation, Training Or More Information

If you need help responding to these new or other workforce, benefits and compensation, performance and risk management, compliance, enforcement or management concerns, help updating or defending your workforce or employee benefit policies or practices, or other related assistance, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

Recognized as a “Top” attorney in employee benefits, labor and employment and health care law extensively involved in health and other employee benefit and human resources policy and program design and administration representation and advocacy throughout her career, Cynthia Marcotte Stamer is a practicing attorney and Managing Shareholder of Cynthia Marcotte Stamer, P.C., a member of Stamer│Chadwick │Soefje PLLC, author, pubic speaker, management policy advocate and industry thought leader with more than 27 years’ experience practicing at the forefront of employee benefits and human resources law.

A Fellow in the American College of Employee Benefit Counsel and Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, Ms.Stamer is recognized nationally and internationally for her practical and creative insights and leadership on health and other employee benefit, human resources and insurance matters and policy.  Ms. Stamer uses her deep and highly specialized knowledge and experience to help 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 compensation, health and other welfare benefit and insurance, severance, pension and deferred compensation, private exchanges, cafeteria plan and other employee benefit, fringe benefit, salary and hourly compensation, bonus and other incentive compensation and related programs, products and arrangements. She is particularly recognized for her leading edge work, thought leadership and knowledgeable advice and representation on the design, documentation, administration, regulation and defense of a diverse range of self-insured and insured health and welfare benefit plans including private exchange and other health benefit choices, health care reimbursement and other “defined contribution” limited benefit, 24-hour and other occupational and non-occupational injury and accident, ex-patriate and medical tourism, onsite medical, wellness and other medical plans and insurance benefit programs as well as a diverse range of other qualified and nonqualified retirement and deferred compensation, severance and other employee benefits and compensation, insurance and savings plans, programs, products, services and activities.  As a key element of this work, Ms. Stamer works closely with employer and other plan sponsors, insurance and financial services companies, plan fiduciaries, administrators, and vendors and others to design, administer and defend effective legally defensible employee benefits and compensation practices, programs, products and technology. She also continuously helps employers, insurers, administrative and other service providers, their officers, directors and others to manage fiduciary and other risks of sponsorship or involvement with these and other benefit and compensation arrangements and to defend and mitigate liability and other risks from benefit and liability claims including fiduciary, benefit and other claims, audits, and litigation brought by the Labor Department, IRS, HHS, participants and beneficiaries, service providers, and others.  She also assists debtors, creditors, bankruptcy trustees and others assess, manage and resolve labor and employment, employee benefits and insurance, payroll and other compensation related concerns arising from reductions in force or other terminations, mergers, acquisitions, bankruptcies and other business transactions including extensive experience with multiple, high-profile large scale bankruptcies resulting in ERISA, tax, corporate and securities and other litigation or enforcement actions.

Ms. Stamer also is deeply involved in helping to influence the Affordable Care Act and other health care, pension, social security, workforce, insurance and other policies critical to the workforce, benefits, and compensation practices and other key aspects of a broad range of businesses and their operations.  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, Ms. Stamer annually leads the Joint Committee on Employee Benefits (JCEB) HHS Office of Civil Rights agency meeting and other JCEB agency meetings.  She also works as a policy advisor and advocate to many business, professional and civic organizations.

Ms. Stamer helps management manage.Ms. Stamer’s legal and management consulting work throughout her 27 plus year 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 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 workforce and other legal and operational crises large and small that arise in the course of operations.

Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce management operations and compliance.  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.  Common engagements include internal and external workforce hiring, management, training, performance management, compliance and administration, discipline and termination, and other aspects of workforce management including employment and outsourced services contracting and enforcement, sentencing guidelines and other compliance plan, policy and program development, administration, and defense, performance management, wage and hour and other compensation and benefits, reengineering and other change management, internal controls, compliance and risk management, communications and training, worker classification, tax and payroll, investigations, crisis preparedness and response, government relations, safety, government contracting and audits, litigation and other enforcement, and other concerns.

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 is active in the leadership of a broad range of other professional and civic organizations. For instance, Ms. Stamer presently serves on an American Bar Association (ABA) Joint Committee on Employee Benefits Council representative; Vice President of the North Texas Healthcare Compliance Professionals Association; Immediate Past Chair of the ABA RPTE Employee Benefits & Other Compensation Committee, its current Welfare Benefit Plans Committee Co-Chair, on its Substantive Groups & Committee and its incoming Defined Contribution Plan Committee Chair and Practice Management Vice Chair; Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and a current member of its Healthcare Coordinating Council; current Vice Chair of the ABA TIPS Employee Benefit Committee; the former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division; on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.  She also previously served as a founding Board Member and President of the Alliance for Healthcare Excellence, as a Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; the Board President of the early childhood development intervention agency, The Richardson Development Center for Children; Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a member of the Board of Directors of the Southwest Benefits Association. For additional information about Ms. Stamer, see www.cynthiastamer.com or contact Ms. Stamer via email here or via telephone to (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 www.solutionslawpress.com.

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

©2015 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press. All other rights reserved.


Tell Congress to protect wellness programs against EEOC attacks

January 28, 2015

The EEOC has declared war on many employer sponsored wellness programs. The Senate Health, Education, Labor, and Pensions Committee will hold a hearing about how to improve employer wellness programs on Thursday, January 29. Employers and others should urge the Committee and other Congressional leaders to overrule the EEOC’s attacks on wellness programs as illegal disability discrimination under the Americans with Disabilities Act.


OIG Report Pressures EBSA To Finalize ERISA Fiduciary Investment Advice Rule & Repeal or Restrict Small Scope Audit Rule

December 3, 2014

Employee benefit plan sponsors, administrators, fiduciaries and the banks, insurers and other service providers involved in the investment or management of plan assets that currently rely upon existing Employee Benefit Security Administration (EBSA) limited scope audit regulations to avoid the expense and other burdens of conducting full scale audits of certain employee benefit plan assets held by banks, insurers and certain other regulated entities should watch for EBSA proposals to repeal or tighten these regulations in response to recommendations in a new report published by the U.S. Department of Labor Office of Inspector General (OIG) .   If adopted by the EBSA, plans sponsors, administrators and fiduciaries could expect to incur significant increases in the annual audit expenses of their employee benefit plans, banks, insurers and other organizations currently covered by the small scope audit exception could expect greater scrutiny and expenses when dealing with employee benefit plan accounts, and all of these parties could expect greater fiduciary risk and other compliance obligations.

Repealing or tightening the EBSA limited scope audit regulations and finalizing proposed conflict of interest rules  are two key recommendations that OIG urges EBSA to adopt to strengthen its ability to fulfill its mission to protect the security of retirement, health, and other private‐sector employer‐sponsored benefit plans for America’s workers, retirees, and their families in the Top Management Challenges Facing the Department of Labor report (Report) just released by the OIG.

While ERISA generally requires plan asset audits on most employee benefit plan assets, the small scope audit rule of the Employee Retirement Income Security Act (ERISA) currently authorizes so‐called “limited scope audits” for plan assets held in certain banks, insurance companies and certain other qualifying entities under the presumption that these organizations and their actions with respect to the assets are being audited by other entities for other purposes.  As a result, the independent public accountants that conduct their audits express “no opinion” on the financial statements of the assets they hold on behalf of plans.

According to the OIG Report, this small scope audit rule inappropriately challenges EBSA’s oversight efforts by allowing as much as $3.3 billion in pension assets held in otherwise regulated entities, such as banks to “escape audit scrutiny.” The Report states, “These limited scope audits weaken assurances to stakeholders and may put retirement plan assets at risk because they provide little or no confirmation regarding the existence or value of plan assets.

In addition to attacking the small scope audit rule, OIG also urges EBSA to finalize its long awaited rules defining prohibited conflicts of interest for parties and individuals providing investment advice to employee benefit plans that EBSA has been working on since 2010.  The so‐called “conflict of interest ‐‐ fiduciary investment advice rule” would broaden the definition of investment advice fiduciary for ERISA plans and individual retirement accounts to try to reduce the opportunities for financial conflicts of interest to compromise the impartiality of investment advice in the retirement savings marketplace.

Accordingly, the OIG Report concludes that EBSA should “concentrate on issuing final regulations on the so‐called “conflict of interest rule” and continue its work to obtain legislative changes repealing the limited‐scope audit exemption. In the interim, EBSA should continue to expand upon its existing authority to clarify and strengthen limited scope audit regulations and evaluate the ERISA Council’s recommendations on the issue.”

The OIG recommendations in the Report are likely to refuel pressure on EBSA to finalize the fiduciary investment advice rule and tighten or eliminate the small scope audit rule.  Since either or both of these actions would likely increase the expense and other responsibilities and risks associated with the investment and maintenance of employee benefit plan assets, plan sponsors, fiduciaries, administrators, banks, insurers, investment advisors and others involved in the investment or administration of employee benefit plans and their assets should both carefully monitor the response of the EBSA to the OIG recommendations and react promptly to provide feedback to help shape any changes to manage these costs and expenses.

About Author Cynthia Marcotte Stamer

If you need help evaluating or monitoring the implications of these developments or reviewing or updating your health benefit program for compliance or with any other employment, employee benefit, compensation or internal controls matter, please contact the author of this article, attorney Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefits Council, immediate past-Chair and current Welfare Benefit Committee Co-Chair of the American Bar Association (ABA) RPPT Employee Benefits & Other Compensation Arrangements, an ABA Joint Committee on Employee Benefits Council Representative, the ABA TIPS Employee Benefit Plan Committee Vice Chair, former ABA Health Law Section Managed Care & Insurance Interest Group Chair, past Southwest Benefits Association Board Member, Employee Benefit News Editorial Advisory Board Member, and a widely published speaker and author,  Ms. Stamer has more than 24 years experience advising businesses, plans, fiduciaries, insurers. plan administrators and other services providers,  and governments on health care, retirement, employment, insurance, and tax program design, administration, defense and policy.   Nationally and internationally known for her creative and highly pragmatic knowledge and work on health benefit and insurance programs, Ms. Stamer’s  experience includes extensive involvement in advising and representing these and other clients on ACA and other health care legislation, regulation, enforcement and administration.

Widely published on health benefit and other related matters, Ms. Stamer’s insights and articles have been published by the HealthLeaders, Modern Health Care, Managed Care Executive, the Bureau of National Affairs, Aspen Publishers, Business Insurance, Employee Benefit News, the Wall Street Journal, the American Bar Association, Aspen Publishers, World At Work, Spencer Publications, SHRM, the International Foundation, Solutions Law Press and many others.

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

For Added Information and Other Resources

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

For Help Or More Information

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

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 24 years of work helping employers and other management; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; and others design, administer and defend innovative workforce, compensation, employee benefit  and management policies and practices. Her experience includes extensive work helping employers implement, audit, manage and defend union-management relations, wage and hour, discrimination and other labor and employment laws, privacy and data security, internal investigation and discipline and other workforce and internal controls policies, procedures and actions.  The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer works, publishes and speaks extensively on management, re-engineering, investigations, human resources and workforce, employee benefits, compensation, internal controls and risk management, federal sentencing guideline and other enforcement resolution actions, and related matters.  She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters.Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For additional information about Ms. Stamer and her experience or to get access to other publications by Ms. Stamer see hereor contact Ms. Stamer directly.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, 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 resources at www.solutionslawpress.com.

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

©2014 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.


TEGE Counsel To Assume Responsibility For Employee Plans, Exempt Orgs & IRA Technical Guidance in 2015

December 3, 2014

The Department of Treasury announced today the transfer of technical responsibility for certain tax related technical issues involving exempt organizations, qualified retirement plans, and individual retirement annuities and accounts (IRAs) to the Office of Chief Counsel.  The reassignment of duties scheduled for formal publication in Announcement 2014-34 in Internal Revenue Bulletin 2014-51 on Dec. 15, 2014.will happen as part of a realignment of the Tax Exempt and Government Entities Division (TE/GE).  As a result of the realignment occurring at the beginning of 2015, the technical responsibility for preparing revenue rulings, revenue procedures, and certain other forms of published guidance, and issuing technical advice and certain letter rulings, will shift from TE/GE to the Office of Associate Chief Counsel (Tax Exempt and Government Entities) (TEGE Counsel).  The annual revenue procedures addressing these matters will be updated in January of 2015 to reflect this realignment.

 

 

About Author Cynthia Marcotte Stamer

If you need help evaluating or monitoring the implications of these developments or reviewing or updating your health benefit program for compliance or with any other employment, employee benefit, compensation or internal controls matter, please contact the author of this article, attorney Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefits Council, immediate past-Chair and current Welfare Benefit Committee Co-Chair of the American Bar Association (ABA) RPPT Employee Benefits & Other Compensation Arrangements, an ABA Joint Committee on Employee Benefits Council Representative, the ABA TIPS Employee Benefit Plan Committee Vice Chair, former ABA Health Law Section Managed Care & Insurance Interest Group Chair, past Southwest Benefits Association Board Member, Employee Benefit News Editorial Advisory Board Member, and a widely published speaker and author,  Ms. Stamer has more than 24 years experience advising businesses, plans, fiduciaries, insurers. plan administrators and other services providers,  and governments on health care, retirement, employment, insurance, and tax program design, administration, defense and policy.   Nationally and internationally known for her creative and highly pragmatic knowledge and work on health benefit and insurance programs, Ms. Stamer’s  experience includes extensive involvement in advising and representing these and other clients on ACA and other health care legislation, regulation, enforcement and administration.

Widely published on health benefit and other related matters, Ms. Stamer’s insights and articles have been published by the HealthLeaders, Modern Health Care, Managed Care Executive, the Bureau of National Affairs, Aspen Publishers, Business Insurance, Employee Benefit News, the Wall Street Journal, the American Bar Association, Aspen Publishers, World At Work, Spencer Publications, SHRM, the International Foundation, Solutions Law Press and many others.

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

For Added Information and Other Resources

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

For Help Or More Information

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

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 24 years of work helping employers and other management; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; and others design, administer and defend innovative workforce, compensation, employee benefit  and management policies and practices. Her experience includes extensive work helping employers implement, audit, manage and defend union-management relations, wage and hour, discrimination and other labor and employment laws, privacy and data security, internal investigation and discipline and other workforce and internal controls policies, procedures and actions.  The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer works, publishes and speaks extensively on management, re-engineering, investigations, human resources and workforce, employee benefits, compensation, internal controls and risk management, federal sentencing guideline and other enforcement resolution actions, and related matters.  She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters.Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For additional information about Ms. Stamer and her experience or to get access to other publications by Ms. Stamer see hereor contact Ms. Stamer directly.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, 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 resources at www.solutionslawpress.com.

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

©2014 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.


Private Exchanges: Employer Health Program Panacea or Problem? Consider Carefully!

November 20, 2014

Employers trying to continue offering affordable health and welfare benefits amid the expanding costs and regulations enacted under the Patient Protection & Affordable Care Act (ACA) often are encouraged by some consultants and brokers to consider offering  coverage options pursuant to a “private exchange” offering employees the options to get reimbursement for individual health coverage from a health reimbursement account (HRA) (collectively the “agencies”) or other choice optand cions.

While these options sound attractive, not all of these options work for all employers. The consumer driven health care and other private exchange lingo used to describe these arrangements often means different things to different people.  Some “private exchanges” are little more than high-tech online cafeteria enrollment arrangements. See, e.g. A ‘Cynical’ Look at Private Exchanges Employers need to carefully scrutinize these proposals both for their compliance and other legal risks, affordability and cost, and other suitability.

When considering a private exchange or other arrangement, it is important to understand clearly the proposal, its design, operation, participating vendors, the charges, what is excluded or costs extra, and who is responsible for delivering what.  Assuming an employer views the cost and operations merit considering the option, it also needs to carefully evaluate the legal compliance and risks of the arrangements.

The agencies have issued a long stream of guidance cautioning employers about the use of arrangements where the employer provides pre- or after-tax dollars to pay for or reimburse premiums for individual policies, and employers from paying or reimbursing employees for the cost of enrolling in coverage under a public health insurance exchange or both.  See, e.g., DOL Technical Release 2013-03; IRS Notice 2013-54; Insurance Standards Bulletin, Application of Affordable Care Act Provisions to Certain Healthcare Arrangement; IRS May 13, 2014 FAQs available here.  Most recently, for instance, the new FAQS About Affordable Care Act Implementation (XXII) (FAQ XXII) published by the agencies on November 6, 2014 reiterates previous agency guidance indicating that tax basis for purchasing individual coverage in lieu of group health plan coverage.  FAQ XXII, among other things, states

  • HRAS, health flexible spending arrangements (health FSAs) and certain other employer and union health care arrangements where the employer promises to reimburse health care costs: are considered group health plans subject to the Public Health Service Act (PHS Act) § 2711 annual limits, PHS Act § 2713 preventive care with no cost-sharing and other group market reform provisions of PHS Act §§ 2711-2719 and incorporated by reference into the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code (Code) but
  • HRA or other premium reimbursement arrangements do not violate these market reform provisions when integrated with a group health plan that complies with such provisions. However, an employer health care arrangement cannot be integrated with individual market policies to satisfy the market reforms. Consequently, such an arrangement may be subject to penalties, including excise taxes under section 4980D of the Internal Revenue Code (Code).

FAQ XXII reaffirms and reinforces this prior guidance, stating “Such employer health care arrangements cannot be integrated with individual market policies to satisfy the market reforms and, therefore, will violate PHS Act sections 2711 and 2713, among other provisions, which can trigger penalties such as excise taxes under section 4980D of the Code. Under the Departments’ prior published guidance, the cash arrangement fails to comply with the market reforms because the cash payment cannot be integrated with an individual market policy.”

Another potential arises under the various tax and non-discrimination rules of the Code and other federal laws.  For instance, Code sections 105, 125 and other Code provisions prohibitions against discrimination in favor of highly compensated or key employees could arise based on the availability of options or enrollment participation.  Historically many have assumed that these concerns could be managed by treating the premiums or value of discriminatory coverage as provided after-tax for highly compensated or key employees.  However IRS and Treasury leaders over the past year have made statements in various public meetings suggesting that the IRS does not view this as a solution.  Of course, FAQ XXII also highlights the potential risks of underwriting or other practices of offering individual or other coverage in a manner that discriminates against disabled, elderly or other employees protected against federal employment discrimination, Medicare, Medicaid, veterans or other federal employment or related laws.

In addition to confirming that the arrangement itself doesn’t violate specific Code or other requirements, employers and others responsible for structuring these arrangements also should exercise care to critically evaluate and document their analysis that the options offered are suitable.  Like other employee benefit arrangements, ERISA generally requires that individual or group products offered by employers, unions or both be prudently selected and managed. Employers sponsoring or considering sponsoring these arrangements should expect that the DOL will expect that each product or benefit option offered be prudently selected in accordance with ERISA’s rules.  Compensation arrangements for the brokers and consultants offering these arrangements also should be reviewed for prudence, as well as to ensure that the arrangements don’t violate ERISA’s prohibited transaction rules.  Eligibility and other enrollment and related administrative systems and information sharing also should be critically evaluated under ERISA, as well as to manage exposures under the privacy and security rules of the Health Insurance & Portability Act (HIPAA) and other laws.

As a part of this analysis, employers and others contemplating involvement in these arrangements also will want to critically review the vendor contracts and operating systems of the vendors that will participate in the program both for legal compliance, prudence for inclusion, prohibited transactions, and other legal compliance, as well as to ensure that the contract by its terms holds the vendor responsible for delivering on service and other expectations created in the sales pitch.  In reviewing the contract, special attention should be given to fiduciary allocations, indemnification and standards of performance, business associate or other privacy and data security assurances required to comply with HIPAA and other confidentiality and data security requirements and the like.  As HHS discovered with the rollout of the Healthcare.gov exchange, unctionality also plays a big role in the value proposition justified, the contractual commitments from the vendor also should cover expected operational performance and reliability as well as legal compliance and risk management.

About Author Cynthia Marcotte Stamer

If you need help evaluating or monitoring the implications of these developments or reviewing or updating your health benefit program for compliance or with any other employment, employee benefit, compensation or internal controls matter, please contact the author of this article, attorney Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefits Council, immediate past-Chair and current Welfare Benefit Committee Co-Chair of the American Bar Association (ABA) RPPT Employee Benefits & Other Compensation Arrangements, an ABA Joint Committee on Employee Benefits Council Representative, the ABA TIPS Employee Benefit Plan Committee Vice Chair, former ABA Health Law Section Managed Care & Insurance Interest Group Chair, past Southwest Benefits Association Board Member, Employee Benefit News Editorial Advisory Board Member, and a widely published speaker and author,  Ms. Stamer has more than 24 years experience advising businesses, plans, fiduciaries, insurers. plan administrators and other services providers,  and governments on health care, retirement, employment, insurance, and tax program design, administration, defense and policy.   Nationally and internationally known for her creative and highly pragmatic knowledge and work on health benefit and insurance programs, Ms. Stamer’s  experience includes extensive involvement in advising and representing these and other clients on ACA and other health care legislation, regulation, enforcement and administration.

Widely published on health benefit and other related matters, Ms. Stamer’s insights and articles have been published by the HealthLeaders, Modern Health Care, Managed Care Executive, the Bureau of National Affairs, Aspen Publishers, Business Insurance, Employee Benefit News, the Wall Street Journal, the American Bar Association, Aspen Publishers, World At Work, Spencer Publications, SHRM, the International Foundation, Solutions Law Press and many others.

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

For Added Information and Other Resources

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

For Help Or More Information

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

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 24 years of work helping employers and other management; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; and others design, administer and defend innovative workforce, compensation, employee benefit  and management policies and practices. Her experience includes extensive work helping employers implement, audit, manage and defend union-management relations, wage and hour, discrimination and other labor and employment laws, privacy and data security, internal investigation and discipline and other workforce and internal controls policies, procedures and actions.  The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer works, publishes and speaks extensively on management, re-engineering, investigations, human resources and workforce, employee benefits, compensation, internal controls and risk management, federal sentencing guideline and other enforcement resolution actions, and related matters.  She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters.Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For additional information about Ms. Stamer and her experience or to get access to other publications by Ms. Stamer see hereor contact Ms. Stamer directly.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, 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 resources at www.solutionslawpress.com.

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

©2014 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.


Stamer Kicks Off Dallas HR 2015 Monthly Lunch Series With 2015 Federal Legislative, Regulatory & Enforcement Update

November 10, 2014

Human resources and other management leaders are watching Washington to see if the change in Congressional control resulting from the November 4, 2014 mid-term election ushers in a more management friendly federal legal environment. Since President Obama took office, the Democrats aggressive pursuit of health care, minimum wage and other federal pro-labor legislation, regulations and enforcement has increased management responsibilities, costs and liabilities.

Nationally recognized management attorney, public policy advisor and advocate, author and lecturer Cynthia Marcotte Stamer will help human resources and other management leaders prepare for 2015 when she speaks on “2015 Federal Legislative, Regulatory & Enforcement Update: What HR & Benefit Leaders Should Expect & Do Now” at the 2015 Dallas HR monthly luncheon series kickoff meeting on January 13, 2014.

About The Program

While November 4, 2014 Republican election victories gave Republicans a narrow majority in both the House and Senate when the new Congress takes office January 3, 2015, the new Republican Majority may face significant challenges delivering on their promises to move quickly to enact more business-friendly health care, guest worker, tax and other key reforms Republicans say will boost the employment and the economy.

While President Obama and Democrat Congressional leaders say they plan to work with the new majority, President Obama already is threatening to use vetoes, regulations and executive orders to block Republicans from obstructing or rolling back his pro-labor policy and enforcement agenda.   When the new Congress takes office, the narrowness of the Republican Majority in the Senate means Republicans can’t block a Democratic filibuster or override a Presidential veto without recruiting some Democratic support.

As the Democrats and Republicans head into battle again, Board Certified Labor & Employment attorney and public policy advocate Cynthia Marcotte Stamer will help human resources and other management leaders get oriented for the year ahead by sharing her insights and predictions on the legislative, regulatory and enforcement agendas that HR, benefit and other business leaders need to plan for and watch in 2015.  Among other things, Ms. Stamer will:

  • Discuss how management can benefit from monitoring and working to influence potential legislative, regulatory and enforcement developments when planning and administering HR and related workforce policies;
  • Discuss the key workforce and other legislative, regulatory and enforcement priorities and proposals Democrats and Republicans plan to pursue during 2015;
  • Share her insights and predictions about how the narrow Republican majority, Mr. Obama’s lame duck presidency and other factors could impact each Party’s ability to pursue its agenda
  • Share tips management leaders can use to help monitor developments and to help shape legislation, regulation and enforcement through Dallas HR, SHRM and other organizations as well as individually;
  • Learn tips for anticipating and maintaining flexibility to respond to legislative, regulatory and enforcement developments; and
  • More

To register or get more details about the program, DallasHR, or both, see http://www.dallashr.org.

About Ms. Stamer

Board certified labor and employment attorney, public policy leader, author, speaker Cynthia Marcotte Stamer is nationally and internationally recognized and valued for her more than 25 years of work advising and representing employers, insurers, employee benefit plans, their fiduciaries and advisors, business and community leaders and governments about workforce, employee benefits, social security and pension, health and insurance, immigration and other performance and risk management, public policy and related regulatory and public policy, management and other operational concerns.

Throughout her career, Ms. Stamer continuously both has helped businesses and their management to monitor and respond to federal and state legislative, regulatory and enforcement concerns and to anticipate and shape federal, state and other laws, regulations, and enforcement in the United States and internationally.

Well known for her leadership on workforce, health and pension policy through her extensive work with clients as well as through her high profile involvements as the Founder and Executive Director of the Coalition for Responsible Healthcare Policy and its PROJECT COPE: the Coalition on Patient Empowerment, a founding Board member of the Alliance for Health Care Excellence, a Fellow in the American College of Employee Benefit Counsel, the American Bar Association (ABA), and the State Bar of Texas leadership and other involvements with the ABA including her annual service leading the annual agency meeting of Joint Committee on Employee Benefits (JCEB) representatives with the HHS Office of Civil Rights and participation in other JCEB agency meetings, past involvements with legislative affairs for the Texas Association of Business and Dallas HR and others, and many speeches, publications, and other educational outreach efforts, Ms. Stamer has worked closely with Congress and federal and state regulators on the Patient Protection & Affordable Care Act and other health care, pension, immigration, tax and other workforce-related legislative and regulatory reforms for more than 30 years. One of the primary drafters of the Bolivian Social Security reform law and a highly involved leader on U.S. workforce, benefits, immigration and health care policy reform, Ms. Stamer’s experience also includes working with U.S. and foreign government, trade association, private business and other organizations to help reform other countries’ and U.S. workforce, social security and severance, health care, immigration, privacy and data security, tax, ethics and other laws and regulations. Ms. Stamer also contributes her policy, regulatory and other leadership to many professional and civic organizations including as Vice President of the North Texas Healthcare Compliance Professionals Association; Immediate Past Chair of the American Bar Association RPTE Employee Benefits & Other Compensation Committee and its current Welfare Benefit Plans Committee Co-Chair, a Substantive Groups & Committee Member; a member of the leadership council of the ABA Joint Committee on Employee Benefits; Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and a current member of its Healthcare Coordinating Council; the current Vice Chair of the ABA TIPS Employee Benefit Committee, and the past Coordinator of the Gulf Coast TEGE Council TE Division.

The publisher and editor of Solutions Law Press, Inc. who serves on the Editorial Advisory Boards of Employee Benefit News, HR.com, InsuranceThoughtLeadership.com and many other publications, Ms. Stamer also is a prolific and highly respected author and speaker,  National Public Radio, CBS, NBC, and other national and regional news organization, Atlantic Information Services, The Bureau of National Affairs, HealthLeaders, Telemundo, Modern Healthcare, Business Insurance, Employee Benefit News, the Employee Benefits News, World At Work, Benefits Magazine, InsuranceThoughtLeadership.com, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, CEO Magazine, CFO Magazine, CIO Magazine, the Houston Business Journal, and many other prominent news and publications.  She also serves as a planning faculty member and regularly conducts training and speaks on these and other management, compliance and public policy concerns for these and a diverse range of other organizations. For additional information about Ms. Stamer, see www.cynthiastamer.com.

For Added Information and Other Resources

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

For Help Or More Information

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

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 24 years of work helping employers and other management; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; and others design, administer and defend innovative workforce, compensation, employee benefit  and management policies and practices. Her experience includes extensive work helping employers implement, audit, manage and defend union-management relations, wage and hour, discrimination and other labor and employment laws, privacy and data security, internal investigation and discipline and other workforce and internal controls policies, procedures and actions.  The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer works, publishes and speaks extensively on management, reengineering, investigations, human resources and workforce, employee benefits, compensation, internal controls and risk management, federal sentencing guideline and other enforcement resolution actions, and related matters.  She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters.Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see hereor contact Ms. Stamer directly.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, 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 resources at www.solutionslawpress.com.

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

©2014 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.


New EEOC Lawsuit Challenges Orion Energy Systems Employee Benefit Program Under ADA

September 19, 2014

Employers using or considering using health risk assessments or other wellness programs should carefully monitor a new Equal Employment Opportunity Commission (EEOC) lawsuit, EEOC v. Orion Energy Systems, Civil Action 1:14-cv-01019 (E.D.Wis.), which is the first time the EEOC has sued an employer under the Americans With Disabilities Act (ADA) based on the employer’s wellness program.

Although the alleged facts in Orion reflect its practices might be much more aggressive than in common use by most employers, the principles argued by the EEOC in  Orion raise potential concerns for the growing number of employers relying on health risk assessment and other wellness programs to help manage health benefit costs, employee disabilities, and other concerns.

According the Kaiser Family Foundation, health risk assessments and other wellness program use is increasingly common.  The majority of employers reportedly now offer some sort of wellness program — 94 percent of employers with over 200 workers, and 63 percent of smaller ones.

Employers that use these arrangements generally believe their health risk assessment or other wellness benefit passes legal muster as long as it complies with standards established in final regulations amending the nondiscrimination requirements of the Health Insurance Portability Act (HIPAA). The sponsors of these arrangements often are unaware of or discount the likelihood that the EEOC might view these and other wellness benefit arrangements as violating the ADA prohibitions against medical inquiries that are not both job related and necessary to the job or other ADA disability discrimination prohibitions.

In Orion, the EEOC contends that Orion instituted a wellness program that required medical examinations and made disability-related inquiries.  When employee Wendy Schobert declined to participate in the program, Orion shifted responsibility for payment of the entire premium for her employee health benefits from Orion to Schobert. Shortly thereafter, Orion fired Schobert.

The EEOC charges Orion violated federal law by requiring an employee to submit to medical exams and inquiries that were not job-related and consistent with business necessity as part of a so-called “wellness program,” which the EEOC charges was not voluntary, and then by firing the employee when she objected to the program.

The EEOC maintains that Orion’s wellness program violated the ADA as applied to Schobert.  Additionally, EEOC also charges Orion wrongfully retaliated against Schobert because of her good-faith objections to the wellness program. The EEOC further asserts that Orion interfered with Schobert’s exercise of her federally protected right to not be subjected to unlawful medical exams and disability-related inquiries.

“Employers certainly may have voluntary wellness programs — there’s no dispute about that — and many see such programs as a positive development,” said John Hendrickson, regional attorney for the EEOC Chicago district. “But they have to actually be voluntary. They can’t compel participation by imposing enormous penalties such as shifting 100 percent of the premium cost for health benefits onto the back of the employee or by just firing the employee who chooses not to participate. Having to choose between responding to medical exams and inquiries — which are not job-related — in a wellness program, on the one hand, or being fired, on the other hand, is no choice at all.”

The Orion litigation reminds businesses of the advisability or properly designing and managing wellness programs to comply with applicable legal requirements.

Financial or other incentive and reward programs of course must be designed to comply with HIPAA’s nondiscrimination rules, the ADA and privacy rules.   Privacy requirements also can be a challenge under these laws unless information collected from screening and other wellness and disease management activities is carefully collected, routed and handled to comply with HIPAA, GINA and other privacy rules.  See, e.g,   EBSA Issues Guidance on Health PLan Wellness & Disease Management Programs Subject to HIPAA Nondiscrimination RulesADAAA Amendment Broader “Disability Definition Not Retroactive, Employer Action Needed To Manage Post 1/1/2009 RisksBusinesses Face Rising Disability Discrimination Enforcement Risks; EEOC Finalizes Updates To Disability Regulations In Response to ADA Amendments Act.

Employers and health plans also should review the existing preventive care coverage provided in their health plans to ensure compliance with expanded federal mandates enacted as part of the sweeping new federal health care reform law. See e.g., Affordable Care To Require Health Plans Cover Contraception & Other Women’s Health Procedures.

If you need assistance addressing the legal requirements of your wellness program or other workforce, employee benefit, compensation or risk management concern, contact the author of this update.  We also encourage you and others to help develop real meaningful improvements by joining Project COPE: Coalition for Patient Empowerment here by sharing ideas, tools and other solutions and other resources. TheCoalition For Responsible Health Care Policy provides a resource that concerned Americans can use to share, monitor and discuss the Health Care Reform law and other health care, insurance and related laws, regulations, policies and practices and options for promoting access to quality, affordable healthcare through the design, administration and enforcement of these regulations.You also can access information about how you can arrange for training on “Building Your Family’s Health Care Toolkit,”  using the “PlayForLife” resources to organize low cost wellness programs in your workplace, school, church or other communities, and other process improvement, compliance and other training and other resources for health care providers, employers, health plans, community leaders and others here.

About Author Cynthia Marcotte Stamer

If you need help reviewing or updating your health benefit program for compliance with ACA or other laws or with any other employment, employee benefit, compensation or internal controls matter, please contact the author of this article, attorney Cynthia Marcotte Stamer.

A 2011 inductee to the American College of Employee Benefits Council, immediate past-Chair and current Welfare Benefit Committee Co-Chair of the American Bar Association (ABA) RPPT Employee Benefits & Other Compensation Arrangements, an ABA Joint Committee on Employee Benefits Council Representative, the ABA TIPS Employee Benefit Plan Committee Vice Chair, former ABA Health Law Section Managed Care & Insurance Interest Group Chair, past Southwest Benefits Association Board Member, Employee Benefit News Editorial Advisory Board Member, and a widely published speaker and author,  Ms. Stamer has more than 24 years experience advising businesses, plans, fiduciaries, insurers. plan administrators and other services providers,  and governments on health care, retirement, employment, insurance, and tax program design, administration, defense and policy.   Nationally and internationally known for her creative and highly pragmatic knowledge and work on health benefit and insurance programs, Ms. Stamer’s  experience includes extensive involvement in advising and representing these and other clients on ACA and other health care legislation, regulation, enforcement and administration.

Widely published on health benefit and other related matters, Ms. Stamer’s insights and articles have been published by the HealthLeaders, Modern Health Care, Managed Care Executive, the Bureau of National Affairs, Aspen Publishers, Business Insurance, Employee Benefit News, the Wall Street Journal, the American Bar Association, Aspen Publishers, World At Work, Spencer Publications, SHRM, the International Foundation, Solutions Law Press and many others.

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

About Project COPE: The Coalition On Patient Empowerment & Its  Coalition on Responsible Health Policy

Sharing and promoting the use of practical practices, tools, information and ideas that patients and their families, health care providers, employers, health plans, communities and policymakers can share and offer to help patients, their families and others in their care communities to understand and work together to better help the patients, their family and their professional and private care community plan for and manage these  needs is the purpose of Project COPE.

The best opportunity to improve access to quality, affordable health care for all Americans is for every American, and every employer, insurer, and community organization to seize the opportunity to be good Samaritans.  The government, health care providers, insurers and community organizations can help by providing education and resources to make understanding and dealing with the realities of illness, disability or aging easier for a patient and their family, the affected employers and others. At the end of the day, however, caring for people requires the human touch.  Americans can best improve health care by not waiting for someone else to step up:  Speak up, step up and help bridge the gap when you or your organization can do so by extending yourself a little bit.  Speak up to help communicate and facilitate when you can.  Building health care neighborhoods filled with good neighbors throughout the community is the key.

The outcome of this latest health care reform push is only a small part of a continuing process.  Whether or not the Affordable Care Act makes financing care better or worse, the same challenges exist.  The real meaning of the enacted reforms will be determined largely by the shaping and implementation of regulations and enforcement actions which generally are conducted outside the public eye.  Americans individually and collectively clearly should monitor and continue to provide input through this critical time to help shape constructive rather than obstructive policy. Regardless of how the policy ultimately evolves, however, Americans, American businesses, and American communities still will need to roll up their sleeves and work to deal with the realities of dealing with ill, aging and disabled people and their families.  While the reimbursement and coverage map will change and new government mandates will confine providers, payers and patients, the practical needs and challenges of patients and families will be the same and confusion about the new configuration will create new challenges as patients, providers and payers work through the changes.

For Added Information and Other Resources

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

For Help Or More Information

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

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 24 years of work helping employers and other management; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; and others design, administer and defend innovative workforce, compensation, employee benefit  and management policies and practices. Her experience includes extensive work helping employers implement, audit, manage and defend union-management relations, wage and hour, discrimination and other labor and employment laws, privacy and data security, internal investigation and discipline and other workforce and internal controls policies, procedures and actions.  The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer works, publishes and speaks extensively on management, reengineering, investigations, human resources and workforce, employee benefits, compensation, internal controls and risk management, federal sentencing guideline and other enforcement resolution actions, and related matters.  She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters.Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see hereor contact Ms. Stamer directly.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, 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 resources at www.solutionslawpress.com.

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

©2011 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.


HHS Share Model HIPAA Notices 1 Week Before Deadline For Updating Business Associate Agreements

September 16, 2013

A week before the September 23, 2013 deadline for all health care providers, health plans, health care clearinghouses (Covered Entities) and their business associates to have updated their business associate agreements to comply with the Final Omnibus HIPAA Rule, the Department of Health & Human Services Office of the National Coordinator for Health Information Technology (ONC) and the Office for Civil Rights (OCR) today (September 16, 2013) released Model Notices of Privacy Practices (Notices) for health care providers and health plans to use to communicate with their patients and plan members. With penalties and enforcement continuing to rise, Covered Entities and their business associates should take appropriate steps to review and update their privacy and breach notification policies and procedures, privacy officer appointments, notices of privacy practices, business associate agreements and other HIPAA compliance and risk management documentation, practices, procedures and coverage, breach notification and other HIPAA compliance and risk management practice.

Model HIPAA Notices

Developed collaboratively by ONC and OCR the Notices available here designed in the following three different styles are designed for users to customize to fit their specific needs and practices:

  • A notice in the form of a booklet;
  • A layered notice with a summary of the information on the first page and full content on the following pages; and
  • A notice with the design elements of the booklet, but that is formatted for full-page presentation.

Use of these model Notices is optional.  While the agencies designed the Notices to let Covered Entities to use these models by entering some of their own information into the model, such as contact information, and then printing for distribution and posting on their websites, Covered Entities should consult with legal counsel to determine the suitability of the Notices generally for their entity’s use and any customization, if any, that may be recommended or required to a Notice if the Covered Entity decides rely upon a model Notice to prepare its Notice of Privacy Practices.  To facilitate any tailoring, the agencies provided a text-only version for Covered Entities wishing only wish to use the content with or without tailoring.

September 23 Business Associate Agreement Update Deadline

September 23, 2013 also is the final deadline established in the Final Omnibus HIPAA Rule for Covered Entities and their business associations to update the business associate agreements required by HIPAA to reflect application of the breach notification, business associate, and many of HIPAA’s requirements to directly cover business associates and other aspects of the Health Information Technology for Economic and Clinical Health (HITECH) Act enacted as part of the American Recovery and Reinvestment Act of 2009.  While HHS published a Sample Business Associate Agreement last June to aid Covered Entities and their business associates with understanding the business associate agreement requirements as impacted by the Omnibus Final HIPAA Rule, it also made clear that Covered Entities and their business associates should tailor their business associate agreements to fit their specific circumstances and relationships.  OCR National Office and regional officials speaking about their findings about past business associate agreement compliance have indicated that their audit and enforcement activities show widespread compliance issues among Covered Entities and business associates with the original business associate agreements.  OCR clearly expects Covered Entities and their business associates to address and resolve these compliance issues going forward.

Covered Entities and their business associates are increasingly at peril if caught violating HIPAA’s Privacy, Security or Breach Notification rules.  With the HITECH Act Breach Notification rules now requiring Covered Entities to self-disclose breaches, OCR becomes aware of breaches much more easily.  Coupled with the HITECH Act’s increase in sanctions for HIPAA violations, Covered Entities and, beginning September 23, 2013, their business associates face rising risks for violating HIPAA.  See, e.g. HHS Settles with Health Plan in Photocopier Breach Case; WellPoint Settles HIPAA Security Case for $1,700,000; Shasta Regional Medical Center Settles HIPAA Security Case for $275,000; Idaho State University Settles HIPAA Security Case for $400,000; and HHS announces first HIPAA breach settlement involving less than 500 patients.

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

For Help or More Information

If you need assistance responding to HIPAA or other health industry regulatory, enforcement or other developments, reviewing or tightening your policies and procedures, conducting training or audits, responding to or defending an investigation or other enforcement actions; with 2014 health plan decision-making, or with reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte Stamer for help.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer is widely recognized for her extensive work, publications, and thought leadership on HIPAA and other privacy and data security issues.  Scribe for the ABA JCEB annual Technical Sessions meeting with OCR for the past three years, Ms. Stamer’s experience includes extensive work advising, representing and training health plan, health insurance, health IT, health care and other clients on HIPAA and other privacy, data protection and breach and other related matters and represents and advises these and other clients in responding to OCR Privacy and Civil Rights and other HHS agencies, Labor Department, IRS regulations, investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns.  She also is recognized for her extensive publications and programs including numerous highly regarding publications and programs on HIPAA and other privacy and data security concerns as well as a wide range of other workshops, programs and publications.

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

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, HR.com, Insurance Thought Leadership, Solutions Law Press, Inc. and other publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Resources

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

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

©2013 Cynthia Marcotte Stamer, P.C. 

Nonexclusive license to republish granted to Solutions Law Press, Inc.  All other rights reserved.


[*] On January 24, 2013, the Department of Labor (the Department) issued guidance stating the Department’s conclusion that the notice requirement under FLSA section 18B will not take effect on March 1, 2013 for several reasons until further guidance setting the extended deadline was published.


IRS Publishes Final Health Reform Individual Shared Responsibility Rules

September 1, 2013

Starting in 2014, the Individual Shared Responsibility mandate of the Patient Protection & Affordable Care Act (ACA) dictates that each individual American either have minimum essential coverage for each month, qualify for an exemption, or make a payment when filing his or her federal income tax return.  In anticipation of the implementation of this Individual Shared Responsibility mandate, the Department of the Treasury and the Internal Revenue Service (IRS) published final regulations implementing the Individual Shared Responsibility mandate in the Internal Revenue Code. The guidance contained in these final regulations provide each American with critical information about their families’ potential exposure to liability for the individual shared responsibility tax in 2014 as well as key insights for employers.  Solutions Law Press, Inc.  authors are finalizing various articles on certain key aspects of these new regulations for publication over the next few days. Stay tuned for more details!

For each month beginning after December 31, 2013, Internal Revenue Code Section 5000A’s Individual Shared Responsibility mandate requires that individual Americans either qualify as exempt, maintain minimum essential coverage for themselves and any nonexempt family members, or pay an individual shared responsibility payment when paying their Federal income tax return.  A taxpayer will be obligated to pay the individual shared responsibility tax under Internal Revenue Code Section 5000A for any non-exempt individual the taxpayer claims on his or her individual tax return as a dependent who is not exempt or enrolled in minimum essential coverage.

Under § 5000A(f)(2), minimum essential coverage includes coverage under an eligible employer-sponsored plan.

The final regulations set the rules that the IRS will use to decide when an individual American will become liable for paying the tax imposed by ACA for failing to maintain the minimum required health insurance coverage mandated by ACA beginning January 1, 2013 and other related rules.  While specifically addressing the obligations of individual Americans to pay the Individual Shared Responsibility payment, the final rules coupled with the availability of the new option for individual Americans to buy coverage through an ACA-qualified federal health care exchange and, depending on the adjusted household income of the individual, potentially also to receive tax credits for enrolling in coverage through an exchange is likely to impact the enrollment choices that employed individuals make about enrolling in coverage offered by their employer versus in coverage through a federally qualified health insurance exchange.  Accordingly, both individual Americans and the businesses that employ them should act quickly to understand the key aspects of the final regulations and their implications.

When considering the effect of these final regulations, employers and individual Americans should keep in mind that Notice 2013-42, issued on June 26, 2013, provides limited transition relief from the Individual Shared Responsibility mandate for employees and their families who are eligible to enroll in certain employer-sponsored health plans with a plan year other than a calendar year if the plan year begins in 2013 and ends in 2014. For additional information on the Individual Shared Responsibility provision, the final regulations and Notice 2013-42, see the IRS questions and answers.

Coming slightly less than a month before the October 1, 2013 scheduled opening of the first enrollment period for individual Americans to enroll in health care coverage through a federally qualified health insurance exchange created pursuant to ACA and the deadline for employers to deliver the notice of the availability of this option dictated by Fair Labor Standards Act 18B,  the final regulations and Obama Administration’s announced plans to enforce its provisions has drawn criticism from a number of groups.  While the Obama Administration has indicated that it still plans to enforce the Individual Shared Responsibility mandate against individual Americans, it announced in July, 2013 that it would delay enforcement of the Employer Shared Responsibility Mandate rules of Internal Revenue Code Section 4980H until 2015.  Many consumer rights groups and others are arguing that the Administration should also delay its enforcement of the Individual Shared Responsibility Mandate in light of its delay of enforcement of Internal Revenue Code Section 4980H against businesses.   Pending a reversal of its position or Congressional relief, the final regulation signal to individual Americans and their employers to prepare to deal with the new Individual Shared Responsibility Mandate beginning in January, 2014.

While the delay in enforcement of the Section 4980H employer shared responsibility payment until 2015 means that employers will not incur liability for failing to provide coverage meeting the minimum essential coverage, minimum value and affordability standards of Internal Revenue Code Section 4980H, the impending implementation of the Individual Shared Responsibility mandate of Internal Revenue Code Section 5000A and the impending availability of tax credits for certain individuals with Household Adjusted Gross Incomes of less than 400 percent of the poverty level almost certainly will influence enrollment decisions that employees make concerning coverage offered by their employer, if any.  Employers  can expect that employee choices about enrolling in employer-sponsored group health coverage will be influenced by the impending obligation to enroll in coverage or pay the individual shared responsibility tax in 2014 governed by the final regulations.  Employers can expect that employee concern about these exposures will prompt many employees to carefully scrutinize and in some cases question the information and implications of information provided by the employer or its plan such as the Section 18B notice that employers must provide by October 1, 2013, the summary of benefits and coverage (SBC) that the Affordable Care Act obligations the employer or plan to provide as the employees work to sort out their choices.  As these and other plan communications are likely to face significant scrutiny, employers and their employee benefit plan fiduciaries and administrators should use extra care to ensure that these and other plan documents and communications are carefully and precisely tailored to accurately convey all material plan terms.

For Help or More Information

If you need help understanding or dealing with these impending notification requirements, with other 2014 health plan decision-making or preparation, or with reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

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

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, HR.com, Insurance Thought Leadership, Solutions Law Press, Inc. and other publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Resources

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

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

©2013 Cynthia Marcotte Stamer, P.C. 

Nonexclusive license to republish granted to Solutions Law Press, Inc.  All other rights reserved.


[*] On January 24, 2013, the Department of Labor (the Department) issued guidance stating the Department’s conclusion that the notice requirement under FLSA section 18B will not take effect on March 1, 2013 for several reasons until further guidance setting the extended deadline was published.


Impending 10/1 Exchange Notice & Other New Notice Deadlines Cut Time Short For Employers To Finalize 2014 Health Plan Terms & Contracts

August 21, 2013

Employer and union group health plan sponsors and insurers of group and individual health plans (Health Plans) agonizing over 2014 plan design decisions are running out of time. Impending deadlines to update and deliver the initial Exchange Notice by October 1, 2013, the Summary of Benefits and Communications (SBC) disclosure before their next enrollment period begins, and 60-day prior notice of material reductions in benefits or services under the plan mandated by the Patient Protection and Affordable Care Act (ACA) require employers or other sponsors to finalize design decisions and amendments well in advance of January 1, 2014.  These new notification obligations create added urgency and pressure for Health Plans and their employer and other sponsors to finalize and implement their decisions on their Health Plans 2014 plan designs and coverages and make the necessary determinations to prepare and timely deliver the required notifications in accordance with these new notification mandates well before the start of the 2014 plan year or its enrollment period. Employers who in the past have put off these decisions until the last month of the plan year no longer can legally do so.

ACA Exchange Notices Due By October 1

One of the biggest time constraints for finalizing 2014 plan designs, contracts and terms is the impending October 1, 2014 deadline for employers to provide the notice required by Fair Labor Standards Act Section 18B.

Regardless of if the employer sponsors a health plan or when the next plan enrollment period begins, all employers covered by the FLSA generally are required deliver a notice to employees about the new option beginning January 1, 2014 to get health care coverage through a health care exchange (now rebranded by the Obama Administration as a “Marketplace”)(Marketplace) created by ACA that meets the requirements of new FLSA Section 18B enacted Section 1512 of ACA.

Absent a delay or other reprieve from the Obama Administration or Congress,  Open enrollment for health insurance coverage through the Marketplace begins October 1, 2013.  Individuals and employees of small businesses beginning October 1, 2013 can apply for and, beginning January 1, 2014 to buy health care coverage offered through the Marketplace established under ACA for their state (including the Federal Marketplace for states that did not elect to establish their own Marketplace). Some individuals who earn less than 400% of the federal poverty level and meet certain other conditions also are slated to qualify to receive federal subsidies that will pay all or part of the cost of buying coverage through a Marketplace.

To promote awareness among employees of the Marketplace as an option for getting health coverage, creates a new FLSA Section 18B requiring a notice (Exchange Notice) to employees of coverage options available through the Marketplace.  Originally required by March 1, 2013,[*] the Department of Labor (DOL) extended the deadline for providing the Exchange Notice to October 1, 2013.  Employers must provide a notice of coverage options to each employee, regardless of plan enrollment status (if applicable) or of part-time or full-time status. Employers are not required to provide a separate notice to dependents or other individuals who are or may become eligible for coverage under the plan but who are not employees.

All FLSA-Covered Employers Must Provide Exchange Notices Beginning October 1, 2013

Under FLSA Section 18B of the FLSA, each applicable employer must provide each employee at the time of hiring (or with respect to current employees, by October 1, 2013), a written notice that fulfills the applicable Exchange Notice requirements as set forth in the DOL Regulations.

The FLSA section 18B requirement to provide a notice to employees of coverage options applies to all   employers subject to the FLSA. In general, the FLSA applies to employers that employ one or more employees who are engaged in, or produce goods for, interstate commerce. For most firms, a test of not less than $500,000 in annual dollar volume of business applies. The FLSA also specifically covers the following entities: hospitals; institutions primarily engaged in the care of the sick, the aged, mentally ill, or disabled who reside on the premises; schools for children who are mentally or physically disabled or gifted; preschools, elementary and secondary schools, and institutions of higher education; and federal, state and local government agencies.  Employers questioning whether their business is subject to the FLSA should seek the assistance of legal counsel experienced with the FLSA.

Timing and Delivery of Notice

Employers are required to provide the Exchange Notice to each new employee at the time of hiring beginning October 1, 2013. For 2014, the Department will consider a notice to be provided at the time of hiring if the notice is provided within 14 days of an employee’s start date.

For employees who are current employees before October 1, 2013, employers must provide the Exchange Notice no later than October 1, 2013.

The Exchange Notice must be provided in writing in a manner calculated to be understood by the average employee. Employers may deliver the Exchange Notice by first-class mail or, if the electronic notification requirements of the Department of Labor’s electronic disclosure safe harbor at 29 CFR 2520.104b-1(c) are met, electronically.

Required Content of Exchange Notice

The Exchange Notice content mandated by FLSA Section 18B is fairly limited.  Section 18B requires that the Exchange Notice only dictates three required elements:

  • Inform employees of coverage options, including information about the existence of the new Marketplace as well as contact information and description of the services provided by a Marketplace;
  • Inform the employee that the employee may be eligible for a premium tax credit under Section 36B of the Code if the employee purchases a qualified health plan through the Marketplace; and
  • Include a statement informing the employee that if the employee purchases a qualified health plan through the Marketplace, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes.  At minimum, this generally requires that the Exchange Notice distributed by an employer must inform the employee.

Interim DOL guidance implementing these requirements construes the content requirements as requiring that the Exchange Notice tell the employee:

  • Of the existence of the Marketplace (referred to in the statute as the Exchange) including a description of the services provided by the Marketplace, and the way the employee may contact the Marketplace to request assistance;
  • That the employee may be eligible for a premium tax credit or subsidy under Section 36B of the Internal Revenue Code (the Code) if the employee purchases a qualified health plan through the Marketplace and the employer does not offer coverage to the employee under a group health plan that is considered to provide “Minimum Value” for purposes of ACA; and
  • That if the employee purchases a qualified health plan through the Marketplace, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes.

Allow Adequate Time To Do Analysis, Complete Other Steps To Prepare Exchange Notices

Employers should resist the urge to allow the shortness of the list of information required that FLSA Section 18B requires in the Exchange Notice lure them into underestimating the time and effort required to prepare the Exchange Notification.  For many employers, determining if the Health Plan provides Minimum Value can be time-consuming and complex.

For this, the SBC notice discussed later in this update and other purposes, Code Section 36B(c)(2)(C)(ii) provides that an employer-sponsored Health Plan provides Minimum Value if the ratio of the share of total costs paid by the Health Plan relative to the total costs of covered services is no less than 60% of the anticipated covered medical spending for covered benefits paid by a group health plan for a standard population, computed in accordance with the plan’s cost-sharing, and divided by the total anticipated allowed charges for covered benefits provided to a standard population is no less than 60%.  See Patient Protection and ACA: Standards Related to Essential Health Benefits, Actuarial Value, and Accreditation Regulation.

Existing regulations require the employers to get an actuarial certification to determine if its Health Plan provides Minimum Value unless the employer can show that the Health Plan fits the criteria to use and satisfies this test using either the Minimum Value Calculator or an applicable safe harbor design approved by HHS, Treasury and DOL.  These determinations often are time consuming and complex requiring careful review and analysis of the group health plan coverage and benefits.  Many self-insured or other group health plans have plan designs that prevent the employer from relying on the Minimum Value Calculator or design safe harbors.  If the employer cannot rely upon the Minimum Value Calculator or one of the design safe harbors, an actuarial certification will be needed.  Employers need to allow sufficient time to make these determinations in time to complete and deliver the Exchange Notices.

Employers should particularly expect to need to obtain an actuarial certification to determine if the Health Plan provides Minimum Value determination if the Health Plan is taking advantage of temporary relief from the cost sharing limitations of ACA for 2014 announced by the Obama Administration in February and reconfirmed in July, that for 2014 allows Health Plans to apply a separate ACA-compliant out-of-pocket maximum to prescription drug benefits from the ACA-compliant out-of-pocket maximum applied to all other benefits subject to ACA’s cost sharing restrictions.   Since the Minimum Value Calculator cannot take into account this option, however, employers planning to apply a separate out-of-pocket maximum for prescription drug coverage versus other plan benefits should be prepared to get an actuarial certification of whether the plan provides Minimum Value.

DOL Model Exchange Notices Not Panacea

Employers may want to use some or all of the language that the DOL included in Model Notices that DOL published in conjunction with its publication of interim guidance on FLSA Section 18B in Technical Release No. 2013-02 on May 8, 2013 here. Because employers must tailor the content of the Exchange Notice for their group health plan based on specific information about their group health plan, employers are cautioned not to underestimate the time or effort that will be required to properly prepare the Exchange Notice for their group health plan, whether or not the employer makes use of the Model Notices in whole or part.

DOL published three model exchange notices (Model Notices) to assist employers in preparing the Exchange Notice for their Health Plan for 2014. One Model Notice is intended for employers who do not offer a Health Plan.  The second Model Notice is designed for employers who offer a health plan to some or all employees. The third Model Notice is designed for employers to use to notify individuals who are enrolled or eligible to enroll in continuation coverage  under the Health Plan under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA).   Technical Release No. 2013-02 says employers may use the applicable of these models or a modified version, provided the Exchange Notice meets the content requirements described above.

Despite the availability of these Model Notices, preparing and providing the required Exchange Notices required by Section 18B typically requires significant evaluation and presents a variety of challenges for most employers.  While intended to facilitate the ability of employers to prepare and provide the required Exchange Notices, preparing the Model Notices generally is challenging for many employers.

First, even using the Model Notices, the employer must decide if the Health Plan provides Minimum Value.

Another challenge with wholesale use of the Model Notices involves deciding how much of the optional language contained in the Model Notices to include in the Exchange Notice and what optional information, if any, to provide as part of that Notice.

For one thing, the Model Notices propose that the Exchange Notice include statements that many critics view as inappropriately promoting enrollment in coverage through the Marketplace rather than employer sponsored group health plans.  Critics complain, for instance that the Model Notice’s statement that the Marketplaces offer “one-stop shopping” that allows the employee to get coverage that the Model Notice states is more “affordable” are inaccurate or misleading. Many critics view the assertion that coverage obtained through the exchange is more “affordable” to be inaccurate as it does not take into account a comparison of the actual benefits and costs of the respective plan options and whether the employee can afford the typically richer (and therefore often more expensive) benefit packages ACA’s essential health benefits mandates require be included in coverage offered for sale through the Marketplaces and presumes that these higher costs will be defrayed by tax credits or subsidies that are only available if the employee earns less than 400% of the federal poverty level and is not offered the option to enroll in an employer sponsored group health plan coverage that provides “minimum essential coverage” (MEC) and Minimum Value and is “affordable” within the meaning of ACA.

Employers considering using the Model Notices also need to decide if their Exchange Notices will include the optional factual disclosures about their group health plan suggested in the Model Notices, but not required to fulfill the requirements of FLSA Section 18B.

The Model Notices propose that an employer also voluntarily provide a significant amount of other information about its group health plan that FLSA Section permits, but does not require that the Exchange Notice include.  The DOL says it designed the Model Notices to help employers to identify and disclose information that the DOL expects employees interested in the tax credit to subsidize the employee’s cost of enrolling in coverage through the Marketplace will need to get from employers to show eligibility.  DOL assumes that many employers might want to voluntarily provide this information in the Exchange Notice to avoid receiving a multitude of anticipated inquiries from employees interested seeking tax credits to subsidize their enrollment in coverage through the Marketplace.  Since collection the data necessary to make these optional disclosures can add significant complexity and time to the preparation of the Exchange Notice, employers should carefully weigh the pros and cons of making the optional disclosures.  The anticipated demand for this information has declined since the Obama Administration announced it plans to use an “honor system” approach to determine if individuals can claim eligibility for tax credit subsidies for buying coverage through the Marketplaces in 2014.  Meanwhile, the interim nature of the existing guidance on the Exchange Notice and other key aspects of ACA make it reasonable to expect further changes in the expected content of the Exchange Notice, ACA requirements that it is intended to communicate or both which could impact the need for or accuracy of these disclosures.  For this reason, employers should carefully consider whether and what optional disclosures to include in their Exchange Notices.

Don’t Forget To Notify COBRA Qualified Beneficiaries

Technical Release No. 2013-02 indicates that in addition to sending an Exchange Notice to employees, employers or their group health plan administrators also must notify COBRA eligible or enrolled individuals.

In general, under COBRA, an individual who was covered by a group health plan on the day before a qualifying event occurred may be able to elect COBRA continuation coverage upon a qualifying event (such as termination of employment or reduction in hours that causes loss of coverage under the plan). Individuals with such a right are called qualified beneficiaries. A group health plan must provide qualified beneficiaries with an election notice, which describes their rights to continuation coverage and how to make an election. The election notice must be provided to the qualified beneficiaries within 14 days after the plan administrator receives the notice of a qualifying event.

Technical Release No. 2013-02 says that the DOL considers the required disclosures for the Exchange Notice information to be disclosed to qualified beneficiaries and that the DOL is revising previously published model COBRA notices to incorporate this information.

DOL says in Technical Release No. 2013-02 that the group health plans can use the revised model COBRA election notice to satisfy the requirement to provide the election notice under COBRA including the disclosure of information required by FLSA Section 18B. The DOL cautions that as with the earlier model COBRA notices, in order to use this model election notice properly, the plan administrator must complete it by filling in the blanks with the appropriate plan information. Technical Release 2013-02 states that use of the model election notice, appropriately completed, will be considered by the Department of Labor to be good faith compliance with the election notice content requirements of COBRA.

ACA SBC Mandate Overview

In addition to the Exchange Notice requirement, the need to prepare and timely delivery the “Summary of Benefits and Coverage or “SBC”) required by ACA also pressures employers to finalize their health plan terms and contracts for 2014 as soon as possible.

ACA amended the Public Health Services Act (PHS) Section 2715, Employee Retirement Income Security Act (ERISA) Section 715 and the Internal Revenue Code (Code) Section 9815 to require that Health Plans and health insurance issuers provide a SBC and a “Uniform Glossary” that “accurately describes the benefits and coverage under the applicable plan or coverage” in a way that meets the format, content and other detailed SBC standards set for ACA as implemented by the Departments regulatory guidance. Like the Exchange Notice, proper preparation of the SBC requires determination of whether the Health Plan provides Minimum Value, as well as other detailed analysis of the plan terms and coverages to complete the other disclosures required in the SBC.

The Summary of Benefits and Coverage and Uniform Glossary Final Regulation  (Final Regulation) implementing this requirement published February 14, 2012 generally requires Health Plans at specified times including before the first offer of coverage under the Plan as well as following certain material changes to the Plan. For Health Plans providing group health plan coverage, FAQs About ACA Implementation (Part VII)[*] set the deadline for Health Plan to deliver a SBC as follows, while at the same time indicating that the Departments would not impose penalties on plans and issuers “working diligently and in good faith” to provide the required SBC content in an appearance consistent with the Final Regulations:

  • To covered persons enrolling or re-enrolling in an open enrollment period (including late enrollees and re-enrollees) as the first day of the first open enrollment period that begins on or after September 23, 2012; and
  • For individuals enrolling in coverage other than through an open enrollment period (including individuals who are newly eligible for coverage and special enrollees) as the first day of the first plan year that begins on or after September 23, 2012. See FAQs About ACA Implementation (Part VIII).

While the SBC doesn’t prohibit an employer from amending its Health Plan terms after the enrollment period begins, employers that change Health Plan terms or designs after distributing a SBC must incur the expense and effort to prepare and redistribute an updated SBC.  Accordingly, most Health Plans and their sponsors or insurers will want to finalize Health Plan terms before the enrollment period begins to avoid the need to and expense of sending updated SBCs as a result of a later change in Health Plan terms.

The Final Regulation and other existing guidance generally dictates that Health Plans follow a required template for providing the SBC and accompanying glossary. When publishing the Final Regulation, the Departments also published the required SBC template form (2013 SBC Template) and instructions for Health Plans to use to prepare and provide the required SBC for coverage beginning before January 1, 2014 and promised updated guidance and templates for use in providing SBCs for post-2013 coverage. While the Agencies clarified certain other details about the SBC rules, they did not materially change the required content or form of the 2013 SBC Template until their April 23, 2013 release of FAQs About ACA Implementation (Part XIV). See e.g. FAQs About ACA Implementation Part IX and Part X.

FAQ Part XIV Requires MEC and Minimum Value Disclosures In SBC

FAQs About ACA Implementation (Part XIV) published April 23, 2013 announces the updated required 2014 SBC Template that the Agencies are requiring to SBCs for periods of health coverage from January 1, 2014 to December 31, 2014.  Along with the 2014 SBC Template, the Agencies also published 2014 Sample Completed SBC, which provides an example of a SBC completed for a hypothetical health plan prepared by the Agencies.

The 2014 SBC Template updates the 2013 SBC Template and Sample Completed Template to add information the Agencies believe individuals eligible for Health Plan coverage should know in light of the impending implementation of the individual shared responsibility requirements of Internal Revenue Code (Code) Section 5000A and the employer shared responsibility rules of Code Section 4980H commonly called ACA’s “pay-or-play” rules.   These were the “penalty” provisions that the Supreme Court ruled are taxes in 2013.

The April 23, 2013 FAQ expressly requires that SBCs for periods of coverage after December 31, 2013 disclose if the Health Plans provide MEC and Minimum Value to enable participants and beneficiaries to understand if enrollment in the Health Plan will suffice to allow the employee to avoid paying the individual penalty under Code Section 5000(a)’s individual “shared responsibility” rules, to compare the coverage and costs to enroll in the employer’s Health Plan versus to enroll in health care coverage through a Marketplace and to predict how their eligibility for enrollment in the employer’s Health Plan will impact their eligibility to qualify to claim tax credits under Code Section 32G to help subsidize the cost to purchase coverage through a Marketplace.

Code Section 5000A generally imposes a penalty tax on individuals that fail to maintain enrollment in MEC within the meaning of Code Section 5000A(f) and not otherwise exempt under Code Section 5000A(d).  As of the publication of this update, the Obama Administration has not announced any delay in the enforcement of this penalty against individuals, but legislation is pending in Congress that would delay its applicability, along with approving the delay of enforcement of the Code Section 4980H penalties previously announced by the Obama Administration.

Although the Obama Administration announced in early July, 2013 that it will not enforce collection of the Code Section 4980H provisions against employers until 2015, Code Section 4980H generally requires employers of 50 or more full-time employees to pay a penalty if the employer fails to offer a group health plan providing MEC and Minimum Value   Minimum Value is determined for this purpose in the same manner that it is determined for purposes of making the required disclosure in the Exchange Notice.

60-Day Advance Notice of Material Changes Requirement

In addition to providing the required Exchange Notice and SBCs, employers, group health plans and their plan administrators also must ensure that participants and beneficiaries are given at least 60 days prior notice before the effective date of any “material reduction in covered services or benefits.” See 29

CFR Section 2520.104b-3(d)(3); also see 29 CFR Section 2520.104b-3(d)(2) regarding a 90-day alternative rule.

Section 102 of ERISA has been amended to require 60-day advance notice of material plan changes for plan years beginning on or after September 23, 2012 before the change can be effective.  The 60-day advance notification requirement is a modification to the summary plan description/summary of material modification requirements generally applicable to employee benefit plans under ERISA.

The rule’s definition of “material modification” is the same as the definition in the summary of material modifications rule generally applicable to employee benefit plans under ERISA Section 102.

DOL guidance indicates that group health plans can meet the 60-day advance notice requirement by providing an updated Summary of Benefits and Coverage if the change is reflected on the summary or by sending a separate written notice describing the material modification.

Group health plan issuers or sponsors that willfully (intentionally) fail to provide the notice of material modification can face a fine of up to $1,000 for each failure. Each covered individual equates to a separate offense for purposes of these penalties.

Employer and other group health sponsors, issuers, fiduciaries and administrators also should keep in mind that courts historically refuse to enforce reductions in benefits or services provided under the plan until participants and beneficiaries are notified of the change.  For purposes of the ERISA notification rules, group health plans, their sponsors, insurers, administrators and fiduciaries are cautioned to take into account whether health care providers or other parties who have assignments of benefits should be provided with notification under these or other ERISA rules in addition to the employees and dependents who are enrolled in coverage under the group health plan.

Notice Deadlines Mean Time Short To Adopt & Communicate 2014 Plan Terms

Employer and other health plan sponsors, insurers, administrators and others involved in 2014 group health plan decisions and preparations must take into account these notification deadlines and allow adequate lead time to properly finalize, adopt and communicate their 2014 health plan terms.

Since group health plan design decisions must be finalized to properly prepare the Minimum Value disclosures required in the Exchange Notice and the SBC and any material reductions required by the 60-day advance notice requirement, time running short to finalize 2014 plan designs.

Employer and other plan sponsors, fiduciaries, administrators, and insurers are cautioned that their preparations should ensure both the necessary disclosures are made and that all disclosures are carefully prepared so that the notifications and the plan terms are consistent.

These preparations should include the critical review and coordination of the language of health plan documents and summary plan descriptions in light of these other notifications to identify and address potential differences between the government-mandated terms and language in the Glossary and SBC, the Exchange Notice and 60-day notice and the plan terms and summary plan description.

Arrangements also must include proper structuring and formatting of all of these documents and timely distribution in accordance with applicable regulations to participants and beneficiaries entitled to receive these documents in a manner that positions the employer, the group health plan and its fiduciaries and insurers to show compliance. In regard to distributions, parties planning to distribute notifications electronically need to ensure that any electronic or other methods of distribution meet applicable requirements and that the Health Plans timely send copies to all entitled parties – employees and dependents – in accordance with the applicable rules.

When planning these activities, group health plans, their sponsors, insurers and administrators also generally will want to minimize distribution costs by coordinating distribution of these ACA mandated notices with other notifications required for group health plans about privacy, coverage for newborns and mothers, mental health coverage, post-mastectomy reconstructive surgery and the like.

For Help or More Information

If you need help understanding or dealing with these impending notification requirements, with other 2014 health plan decision-making or preparation, or with reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

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

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, HR.com, Insurance Thought Leadership, Solutions Law Press, Inc. and other publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Resources

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

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

©2013 Cynthia Marcotte Stamer, P.C. 

Nonexclusive license to republish granted to Solutions Law Press, Inc.  All other rights reserved.


[*] On January 24, 2013, the Department of Labor (the Department) issued guidance stating the Department’s conclusion that the notice requirement under FLSA section 18B will not take effect on March 1, 2013 for several reasons until further guidance setting the extended deadline was published.


Health Plan Pays $1.2M+ HIPAA Settlement For Not Protecting PHI On Copiers

August 15, 2013

Affinity Health Plan, Inc. (Affinity) will pay $1,215,780 and take other corrective actions to settle alleged violations of the Health Insurance Portability and Accountability Act (HIPAA) Privacy and Security Rules under the Affinity Resolution Agreement and CAP (Affinity Settlement) with the U.S. Department of Health and Human Services (HHS) Office of Civil Rights (OCR).  The settlement comes as the September 24, 2013 deadline for health plans, health care providers, health care clearinghouses (Covered Entities) and their business associates to update the written business associate agreements that HIPAA requires exist before business associates can be allowed to create, use, access or disclose personally identifiable health care information protected by HIPAA (PHI) to carry out HIPAA-covered functions on behalf of a Covered Entity to comply with changes to HIPAA’s implementing regulations adopted by OCR earlier this year.  Health plans and other Covered Entities should take timely action to confirm that their existing procedures appropriate safeguards to protect PHI when using or disposing of copiers or other equipment or media as well as to implement business associate or other policy, procedures or training updates required to comply with the updated HIPAA rules.

HIPAA Updates Require Breach Notification, Tightened Other HIPAA Requirements

HIPAA generally requires that Covered Entities (and after September 24, 2013, their business associates) safeguard and restrict the use, access or disclosure of PHI as required by HIPAA.  The HITECH Act amended these requirements to tighten certain of these requirements and restrictions, to expand the sanctions for violation of these requirements, to require Covered Entities and their business associates to provide notification of breaches of unsecured PHI to individuals whose information was breached, OCR and in some cases, the media, and made certain other changes to the original requirements of HIPAA.  Earlier this year, OCR amended and restated its original Privacy and Security Rules here (2013 Final Rule) to comply with changes in the regulations resulting from these HITECH Act amendments beginning last March, but set the deadline for updating business associate agreements to meet these updated requirements at September 23, 2013.

The 2013 Final Rule and other OCR guidance makes clear that OCR expects Covered Entities and their business associates appropriately to safeguard PHI stored in computers, hard drives, and other digital media until it is properly disposed in accordance with the updated standards required by HIPAA as implemented under the 2013 Final Rule. HITECH Breach Notification Rule requires HIPAA-covered entities to tell HHS of a breach of unsecured protected health information, including breaches resulting from failure to properly secure PHI stored in digital format until it has been destroyed in accordance with the standards established by the 2013 Final Rule.   OCR previously has sanctioned other Covered Entities for failed to properly destroy or safeguard PHI stored in digital format on computer or other equipment before abandoning or disposing of that equipment.  The Affinity Settlement reaffirms OCR’s concern that Covered Entities meet these disposal requirements when replacing or abandoning equipment containing electronic PHI.

Affinity Settlement Highlights

According to the August 14, 2013 OCR announcement of the settlement, the settlement resulted from an investigation initiated after Affinity filed a breach report with OCR on April 15, 2010, as required by the Health Information Technology for Economic and Clinical Health Act (HITECH Act.)

In its breach report, Affinity indicated that a representative of CBS Evening News told Affinity that, as part of an investigatory report, CBS had purchased a photocopier previously leased by Affinity.  CBS informed Affinity that the copier that Affinity had used contained confidential medical information on the hard drive.

Affinity estimated in its breach report that up to 344,579 individuals may have been affected by this breach. OCR’s investigation indicated that Affinity impermissibly disclosed the protected health information of these affected individuals when it returned multiple photocopiers to leasing agents without erasing the data contained on the copier hard drives.  In addition, OCR reports its investigation revealed that Affinity failed to incorporate the electronic protected health information (ePHI) stored on photocopier hard drives in its analysis of risks and vulnerabilities as required by the Security Rule, and failed to implement policies and procedures when returning the photocopiers to its leasing agents.

In addition to the $1,215,780 payment, the Affinity Settlement includes a corrective action plan requiring Affinity to use its best efforts to retrieve all hard drives that were contained on photocopiers previously leased by the plan that remain in the possession of the leasing agent, and to take certain measures to safeguard all ePHI.

Learn From Affinity Lesson On Proper Disposal Procedures

Like prior OCR settlements stemming from inadequate security for PHI when transitioning equipment, media or facilities, the Affinity Settlement sends another reminder to Covered Entities and their business associates again of the importance of using appropriate procedures to protect or dispose of PHI when replacing or redeploying equipment or media that may contain PHI.

“This settlement illustrates an important reminder about equipment designed to retain electronic information: Make sure that all personal information is wiped from hardware before it’s recycled, thrown away or sent back to a leasing agent,” said OCR Director Leon Rodriguez.  “HIPAA covered entities are required to undertake a careful risk analysis to understand the threats and vulnerabilities to individuals’ data, and have appropriate safeguards in place to protect this information.”

OCR has published guidance concerning HIPAA’s requirements for the proper safeguarding and disposal of media and equipment in the 2013 Final Rule and other guidance.  Concerning the proper disposition of copiers that may have PHI stored on their hard drives or in other digital formal, OCR in the Affinity Settlement recommended that Covered Entities and their associates also review the Federal Trade Commission’s Guidance On Safeguarding Sensitive Data Stored In The Hard Drives Of Digital Copiers and the National Institute of Standards and Technology has issued Guidance On Assessing The Security Of Multipurpose Office Machines.  Covered Entities and their business associates should use this and other guidance to ensure that they can demonstrate that appropriate practices and procedures have been used to when disposing of or repurposing copies or other equipment that may contain electronic PHI.

HIPAA Regulation Updates Require Other Updates Beyond Disposal Procedures

In addition to addressing the concerns that lead to the Affinity Settlement, Covered Entities and their business associates also should verify that their practices, policies, privacy notices, business associate agreements, and training also are updated to comply with updates to the updated 2013 Final Rule adopted by OCR earlier this year here.

Since passage of the HITECH Act, OCR officials have warned Covered Entities to expect an omnibus restatement of its original regulations.  While OCR had issued certain regulations implementing some of the HITECH Act changes, it waited to publish certain regulations necessary to implement other HITECH Act changes until it could complete a more comprehensive restatement of its previously published HIPAA regulations to reflect both the HITECH Act amendments and other refinements to  its HIPAA Rules. The 2013 Regulations published today fulfill  that promise by restating OCR’s HIPAA Regulations to reflect the HITECH Act Amendments and other changes and clarifications to OCR’s interpretation and enforcement of HIPAA.

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

For Help or More Information

If you need help monitoring or providing input on this legislation or to understand and respond to these or other legislation, laws and regulations, or with reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters including extensive experience on HIPAA and other privacy and data security issues.  Author of numerous prominent publications on HIPAA and other data security and privacy concerns impacting health plans, health care providers, employers, financial services providers and others, Ms. Stamer also serves as the scribe for the ABA JCEB annual Technical Sessions meeting with OCR and has represented numerous health plans, employers, health care providers and others in investigating, redressing, reporting data breach, identity theft and other compliance concerns.

She advises clients on, publishes, and speaks on HIPAA and other health plan, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials about regulatory, investigatory or enforcement concerns.

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

Other Resources

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

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

©2013 Cynthia Marcotte Stamer, P.C.  Nonexclusive license to republish granted to Solutions Law Press, Inc.  All other rights reserved


Justice Department Sues Texas Bus Company For Illegal Discrimination Against Citizens When Hiring H-2B Program Workers

August 6, 2013

A federal lawsuit against Houston-based bus company Autobuses Ejecutivos LLC, d/b/a Omnibus Express, reminds U.S employers hiring foreign workers under the H-2B or other special worker visa programs to use care to ensure that they can prove that their need for foreign workers is not the result of recruitment and hiring practices that illegally discriminate against work-eligible members of the U.S. workforce already in the United States.

The Justice Department announced on August 6, 2013 that it and the Executive Office of Immigration Review’s Office of the Chief Administrative Hearing Officer (OCAHO) are suing Omnibus Express for allegedly violating the Immigration and Nationality Act’s (INA) anti-discrimination provisions by preferring to hire for bus driver positions temporary nonimmigrant visa holders on H-2B visas over work-eligible U.S. citizens, certain lawful permanent residents and other protected individuals.

H-2B Program Hiring Prohibited If Need Based On Illegal Discrimination

The H-2B program allows U.S. employers to bring foreign nationals to the United States to fill temporary nonagricultural jobs only when there are not enough U.S. workers who are able, willing or qualified to do the temporary work.  While H-2B program hiring can be invaluable when a legitimate need exists, businesses contemplating or using the program need to be prepared to show their need to hire workers on H-2B visas is not the result of discriminatory hiring practices prohibited by the INA or other federal employment discrimination laws.

The INA generally protects work-eligible individuals in the United States, such as U.S. citizens, certain lawful permanent residents, refugees and asylees, from unlawful discrimination in hiring based on their citizenship status prohibiting employers from discriminating in hiring against these protected work-eligible workers based on their citizenship status.

Accordingly, while the H-2B program provides a valid opportunity to hire foreign workers consistent with the H-2B visa program requirements when in fact there are insufficient work-eligible, qualified applicants already in the U.S. to fill the position, employers hiring workers under the H-2B or other visa programs need to ensure that they are not inappropriately discriminating against U.S. citizens, permanent residents or other work-eligible individuals already in the U.S. in their recruitment and hiring practices when taking advantage of the H-2B program to hire workers.

In addition to the anti-discrimination provisions of the INA, hiring practices that discriminate in favor of hiring workers over other qualified applicants based on the respective citizenship, national origin, race or other protected status of the respective applicants or workers also can expose a business to liability under various other laws. In addition to suits brought by the Justice Department, prohibited discrimination by an employer under these other employment discrimination laws may expose a business to liability to actions brought by private litigants, the Equal Employment Opportunity Commission (EEOC), Office of Federal Contract Compliance (OFCCP) or other agencies, or both.

Omnibus Express Suit Highlights Risks Of H-2B Visa Hiring Need Based On Illegal Discrimination

The Justice Department complaint charges that Omnibus Express failed to fulfill this obligation.  It claims that Omnibus Express violated the INA by actively discouraging or failing to consider the applications of many qualified U.S. citizens and other protected individuals between September 2012 to February 2013 while at the same time petitioning the U.S. Department of Labor (DOL) and U.S. Citizenship and Immigration Services (USCIS) for permission to hire up to 50 foreign workers on H-2B visas.    The Justice Department alleges that Omnibus Express violated the INA by hiring 42 H-2B workers during this period based on its representation to the DOL and USCIS that there were not enough qualified workers in the United States to fill the 50 bus driver positions when in fact, its practices illegally discriminated against work-eligible U.S. citizens, lawful permanent residents and other INA-protected individuals who could have filled the positions.

The Justice Department asks the court to redress these alleged violations of the INA by ordering Omnibus Express to pay back pay for injured parties and civil penalties prohibiting future discrimination by Omnibus Express, and ordering other injunctive relief.

INA Discrimination Prosecution Part Of Obama Administration’s Emphasis on Enforcing Discrimination Laws

Businesses also should keep in mind that the Justice Department’s prosecution of Omnibus Express for alleged illegal citizenship discrimination also is part of the Obama Administration’s larger agenda prioritizing the expansion of non-discrimination safeguards for protected classes and the enforcement of these non-discrimination laws.

Since Mr. Obama took office, the Administration has sought regulatory and statutory changes that expand the federal employment and other anti-discrimination for a broad range of groups. The Administration also continues to proactively seek to expand the individuals protected by these and other Federal anti-discrimination laws even as the Departments of Justice, Labor, Health & Human Services, Education, Housing & Urban Development and other federal agencies have expanded their investigation, prosecution and public outreach of these laws.

In light of these developments, businesses should recognize that this proactive anti-discrimination agenda makes it wise for private businesses and state and local government agencies to take greater care to prevent and position their organizations to defend against potential discrimination and retaliation claims under the INA and a broad range of other employment and other anti-discrimination laws.

While this activist agenda in the anti-discrimination law area merits tighter compliance and risk management for all organizations, government contractors or subcontractors particularly face heightened risk as a result of recent expansions to the reach and requirements of nondiscrimination requirements.

Act To Mitigate Citizenship, National Origin & Other Employment Discrimination Exposures

Accordingly, while the Omnibus Express particularly highlights the importance for businesses subject to U.S. law to use care before hiring foreign workers on H-2B or other special visas to ensure that they can demonstration the need for foreign workers does not stem from recruitment and hiring practices that illegally discriminate against applicants already in and eligible to work in the U.S. who would be qualified to fill those positions.

Furthermore, businesses should use care not to underestimate their exposure to liability from charges of illegal discrimination in violation of the INA or other federal employment discrimination laws.  Prohibited discrimination against workers based on citizenship, national origin or other prohibited grounds exposes employers to private lawsuits by workers seeking damages, attorneys’ fees and costs, and other remedies.  In addition to these private exposures, the suit against Omnibus Express shows that the readiness of the Justice Department to enforce the INA so that work-authorized individuals have equal access to employment in the United States free from prohibited discrimination based on citizenship.

Jocelyn Samuels, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division affirmed this commitment in the announcement of the Justice Department suit against Omnibus Express, stating “We are committed to enforcing the INA so that work-authorized individuals have equal access to employment in the United States.”

Accordingly, all businesses should make the tightened risk management of their INA anti-discrimination risks part of a broader emphasis on the prevention and management of their organization’s discrimination exposures generally.

As part of these risk management efforts, organizations should:

  • Review and update their understanding of current anti-discrimination rules under the INA and other laws;
  • Evaluate the adequacy of and tighten existing practices and documentation to mitigate exposures with discrimination and other laws;
  • Update and tighten management controls, investigation and other procedures to promote compliance with anti-discrimination policies and identify and mitigate exposures arising in the course of operations;
  • Conduct well-documented periodic training on these and other anti-discrimination compliance and risk management practices; and take other actions to monitor and enforce compliance by staff, contractors and others with whom they do business.

For Help With Compliance & Risk Management and Defense

If you need help in auditing or assessing, updating or defending your organization’s compliance, risk manage or other  internal controls practices or actions, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469)767-8872.

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 25 years of work helping private and governmental organizations and their management; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; schools and other governmental agencies and others design, administer and defend innovative compliance, risk management, workforce, compensation, employee benefit, privacy, procurement and other management policies and practices. Her experience includes extensive work helping employers implement, audit, manage and defend against employment and other anti-discrimination and anti-retaliation, union-management relations, wage and hour, and other labor and employment laws, other regulatory requirements, procurement, conflict of interest, discrimination management, privacy and data security, internal investigation and discipline and other workforce and internal controls policies, procedures and actions.  The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee, a member of the HR.com editorial advisory board, a past National Consultants Board Member and Region IV Chair for SHRM, past Legislative Chair for the Dallas Human Resources Management Association, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer works, publishes and speaks extensively on workforce and risk management, reengineering, investigations, human resources and workforce, employee benefits, compensation, internal controls and risk management, federal sentencing guideline and other enforcement resolution actions, and related matters.  She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications.

You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.  For information about engaging Ms. Stamer for representation, training or other assistance, contact Ms. Stamer directly at (469) 767-8872.

Other Resources

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

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

©2013 Cynthia Marcotte Stamer, P.C.  Nonexclusive license to republish granted to Solutions Law Press, Inc.  All other rights reserved


Legislation Proposes To Change Obama Care Full-Time Employee Definition

August 5, 2013

Businesses and workers concerned that the definition of “full-time” employment as 30 hours per week in the “pay-or-play” penalties of the Patient Protection and Affordable Care Act (commonly referred to by the public  as “Obamacare”) is hurting American workers may want to share their input on recently introduced legislation that would raise the number of hours an employee must work to qualify as “full-time”  for purposes of the pay-or-pay penalty from 30 to 40 hours per week with members of the key Congressional Committees that will decide whether this legislation advances when Congress returns from its Summer vacation.

Growing concern about the costs and other implications of Obamacare are fueling renewed debate in Congress about the pay-or-play and other provisions of Obamacare.  Only 57 days before enrollment in coverage slated to be available as an alternative to employer coverage beginning January 1, 2014 through new federally mandated health insurance exchanges is prompting renewed debate in Congress about the full-time employee, pay-or play and other provisions of Obamacare.  As Congress takes its summer break, both sides are talking and listening to voters about health care reform. Concerned parties should share their input on Congress during this break to help shape the decisions Congress makes when it returns to work in September.

“Full-Time Employee” Definition Key Element Of  Employer’s “Pay-Or Play” Liability

Originally scheduled to take effect on January 1, 2014 until the Administration on July 2, 2013 announced it would not enforce its provisions until 2015, the employer “shared responsibility” or “pay-or-play” rules of Internal Revenue Code (Code) Section 4980H enacted as part of Obamacare have been widely criticized as killing jobs and reducing employment.

When effective, Code Section 4980H will require that businesses employing 50 or more “full-time” employees (Large Employers”) pay a tax penalty calculated in accordance with Code Section 4980H unless the Large Employer offers each “full-time employee” the opportunity to enroll himself and each of his dependent children in coverage under a qualifying health plan that meets the minimum essential coverage, minimum value and affordability standards of Obamacare.

Under the current provisions of Code Section 4980H, the amount of the penalty that a Large Employer must pay is:

  • $168 per employee per month for any month that the employer doesn’t offer minimum essential coverage to each full-time employee and has at least one full-time employee who receives a subsidy or tax credit for enrolling in coverage under one of the health insurance exchanges created by Obamacare (Subsidized Employee);
  • $250 per employee month multiplied by the number of full-time employees of the business that are Subsidized Employees if the employer offers coverage under the health plan that provides minimum essential coverage but the health plan fails to meet the minimum value or affordability standards of Code Section 4980H; or
  • $0 if the employer either offers health plan coverage that meets the minimum essential coverage, minimum value and affordability requirements of Code Section 4980H or doesn’t have any full-time employees who are Subsidized Employees.

30-Hour Full-Time Definition Reducing Full-Time Employment Opportunities

As the original January 1, 2014 implementation date of Code Section 4980H has approached, original largely Republican concern about its unintended adverse impact on employment increasingly has grown amid widespread reports that businesses are avoiding hiring and reducing employee hours to minimize exposures to Code Section 4980H-driven costs. See, e.g. Obamacare’s Employer Penalty And Its Impact On Temporary Workers;  States Cutting Employee Hours To Avoid Obama Care Costs; Americans Who Voted For Obama Now Seeing Weekly Job Hours Slashed Below 30 As Obamacare Kicks In.  Particularly embarrassing among these reports include the recent report that even a call center hired by the Administration to help promote enrollment coverage offered through the Obamacare-created  exchanges is limiting the hours its employees can work to under 30 hours per week.  ObamaCare Call Center To Keep Employees Under 30 Hours/Week.

As businesses already struggling to deal with a tough economy moved to minimize the number of their full-time employees, even labor unions that originally supported Obamacare joined the cry for reform of its provisions to mitigate employment losses resulting from employer efforts to minimize Code Section 4980H exposures.  See Companies Cut Hours Of Full-Time Employees To Avoid Providing Health Care Under New Rules.

S. 1188/H.R. 2575 Would Make Full-Time Mean 40 Hours Per Week

Prompted by growing concern about the apparent adverse impact of Obamacare on job opportunities for hourly workers, legislation now is pending in both the House and Senate to amend the Obamacare’s definition of “full-time.” In June, Senators Susan Collins (R-ME) and Joe Donnelly (D-IN) Collins introduced a bill to amend  Code Section 4980H to change the definition of full-time employee for purpose of the shared responsibility provisions of Obamacare,  S. 1188: Forty Hours Is Full Time Act to change the definition of “full-time” from 30 to 40 hours per week and the number of hours counted toward a “full-time equivalent” employee to 174 hours per month.  Representative Todd Young (R-IN) then introduced a similar provision in the House on June 28, 2013, H.R. 2575, Save American Workers Act of 2013

H.R. 2575 has garnered the support of 144 Cosponsors.  H.R. 2575.  Following its introduction, the House assigned H.R. 2575 to the House Ways and Means Committee, whose members now must decide when and if the bill will advance in the House.  Key members of the House Ways and Means Committee who will make this decision on include the following Committee Members:  Dave Camp; Sander Levin; Charles Boustany Jr.; Kevin Brady (Chair, Subcommittee on Health); Sam Johnson; Devin Nunes; David Reichert (Chair, Subcommittee on Human Resources);  Patrick “Pat” Tiberi; Xavier Becerra; Diane Black Earl Blumenauer; Vern Buchanan; Joseph Crowley; Danny Davis; Lloyd Doggett;  Jim Gerlach; Tim Griffin; Lynn Jenkins; Mike Kelly; Ron Kind; John Larson; John Lewis; Kenny Marchant; Jim McDermott; Richard Neal; Bill Pascrell Jr.;  Erik Paulsen; Tom Price; Charles Rangel; Tom Reed II, James Renacci; Peter Roskam; Paul Ryan; Aaron Schock; Allyson Schwartz; Adrian Smith; Linda Sánchez; Mike Thompson; and the Bill’s sponsor, Todd Young.

Although introduced before H.R. 2575, S. 1188 to date has drawn less interest among members of the Senate.  The Senate referred S. 1188 to the Senate Finance Committee, where to date, that Committee has not taken any further action. It presently has 8 cosponsors, 7 of which are Republicans.  See S. 1181 Cosponsors.  With Democrats the Majority Party in the Senate, many expect the bill to require significant public pressure and support for the Committee to report the bill out from the Committee, which presently is Chaired by Democrat Max Baucus.  Other Senate Finance Committee members include Orrin Hatch; Michael Bennet; Sherrod Brown; Robert “Bob” Casey Jr.; John “Jay” Rockefeller IV; Debbie Stabenow; Ron Wyden; Richard Burr; Maria Cantwell; Benjamin Cardin; John Cornyn; Michael Crapo;  Michael Enzi; Charles “Chuck” Grassley;  John “Johnny” Isakson; Robert “Bob” Menéndez; Bill Nelson; Robert “Rob” Portman; Pat Roberts; Charles Schumer; John Thune; and Patrick “Pat” Toomey.

This past weekend, S. 1188’s sponsor, Maine Senator Susan Collins sought to beef up support for the bill.  In urging support for her bill, Senator Collins said the health care law’s 30-hour per week definition kills jobs. “Obamacare is actually discouraging small businesses from creating jobs and hiring new employees,” she said. “The law also has perverse incentives for employers to reduce the number of hours that their employees can work.”

How To Contact Key Committees To Show Support or Share Other Feedback

Individuals wishing to share their support or other input about S. 1181 with the Senate Finance Committee can call (202) 224-4515 or  send their written input to the Senate Committee on Finance members via fax to (202) 228-0554.

Support or other input on H.R. 2575 should be sent via fax to House Ways & Means Committee members via fax to (202) 225-2610 or by calling the Committee office at (202) 225-3625.

Committee members and other members of Congress also generally can be contacted via e-mail through the link provided on each member’s webpage.  Because security precautions generally delay delivery of mail to members of Congress for 7-10 days, concerned individuals generally are encouraged to contact the Committee or other members of Congress via fax or e-mail.

Stay In Touch & Join The Discussion On Health Care Reform

Want to stay in touch with the latest developments on health care reform and get involved with helping to share  meaningful improvements in U.S. health care and workforce policy and our health care and health care insurance system?   The Coalition For Responsible Health Care Policy provides a resource that concerned Americans can use to share, monitor and discuss the Health Care Reform law and other health care, insurance and related laws, regulations, policies and practices and options for promoting access to quality, affordable healthcare through the design, administration and enforcement of these regulations.  We also encourage you to participate in our Project COPE: Coalition for Patient Empowerment initiative here to share ideas, discuss issues, and access and share tools and other resources.

For Help or More Information

If you need help monitoring or providing input on this legislation or to understand and respond to these or other legislation, laws and regulations, or with reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters including extensive experience on HIPAA and other privacy and data security issues.

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

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

Other Resources

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

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

 

©2013 Cynthia Marcotte Stamer, P.C.  Nonexclusive license to republish granted to Solutions Law Press, Inc.  All other rights reserved


Employers & Insurers Reminded Of July 31 Deadline To Pay New ACA-Required PCORI Fees

July 26, 2013

Employers sponsoring self-insured group health plans and insurers are reminded that the deadline to report and pay the fee new fees required by the Patient Protection and Affordable Care Act (ACA) to help fund the Patient-Centered Outcomes Research Institute (PCORI) is July 31, 2013.

The PCORI fee, required to be reported annually on the second quarter Form 720 and paid by its due date, July 31, is based on the average number of lives covered under the policy or plan.  The annually required PCORI fee applies to policy or plan years ending on or after October 1, 2012, and before October. 1, 2019.

The PCORI fee is just one of a number of new fees and costs that ACA imposes upon employers and individuals as part of the health care reforms enacted under ACA.

Employers of more than 50 full-time employees recently received a temporary retrieve from another of these looming potential fees, the employer “shared responsibility” payment that ACA added to the Internal Revenue Code (Code) under new Code Section 4980H.

Earlier this month, the Internal Revenue Service (IRS) announced that it will delay until 2015 enforcement of the employer shared responsibility or “pay-or-play” rules of Code Section 4980H.  See July 2 Blog and Notice 2013-45.   Slated prior to the delayed enforcement announcement to take effect January 1, 2014, the employer shared responsibility rules generally will require employers which individually or collectively with other commonly controlled or affiliated employers employee 50 or more full-time employees that do not offer group health coverage that meets the minimum essential coverage, minimum value and affordability standards of the Affordable Care Act to pay an “assessment” that the Supreme Court ruled last year to be a tax, as well as to comply with certain reporting requirements.

While Notice 2013-45 gives large more time to prepare to comply with Code Section 4980H, it provides no relief from the obligation to pay the PCORI fee or from other group health plan mandates imposed by ACA or other applicable federal laws.  Consequently, as businesses continue to prepare for the delayed implementation of Code Section 4980H in 2015, they also need to ensure that they timely pay any required PCORI fees and meet other applicable federal group health plan mandates as they continue to diligently prepare to deal with Code Section 4980H.

While businesses work to meet current and impending federal health plan responsibilities, most business leaders also will want to continue to closely monitor and provide regular input to members of Congress and regulators on proposed regulatory and enforcement guidance and potential Congressional amendments to the Affordable Care Act or other health care or tax policy reforms.

For Help or More Information

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

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters including extensive experience on HIPAA and other privacy and data security issues.

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

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

Other Resources

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

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

©2013 Cynthia Marcotte Stamer, P.C.  Nonexclusive license to republish granted to Solutions Law Press, Inc.  All other rights reserved


“Pay Or Play” Reprieve Still Leaves Employers Facing Challenging 2014 Health Care Reform Deadlines

July 11, 2013

The Internal Revenue Service (IRS) yesterday (July 10, 2013) shared its first “formal” guidance officially implementing the Obama Administration’s decision to delay until 2015 enforcement of certain of the employer shared responsibility or “pay-or-play” rules of new Internal Revenue Code (Code) Section 4980H first informally announced by Department of Treasury Assistant Secretary for Tax Policy Mark Mazar in this July 2 Blog.

Notice 2013-45 outlines the specific “transition relief” rules under which the IRS says it will forego during 2014 enforcement of the employer shared responsibility penalty tax rules and associated and information reporting requirements that are slated to take effect for single employers or groups of commonly controlled or affiliated employers that employ 50 or more full-time employees (Large Employers) beginning January 1, 2014 as part of the sweeping health care reforms enacted under the Patient Protection and Affordable Care Act (Affordable Care Act).  Even with the extension of time allowed by Notice 2013-45 to prepare to comply with Code Section 4980H, however, employers and insurers have much to do to prepare.

The first priority for employers wishing to take advantage of added time to comply with Affordable Care Act’s pay or play penalty to maximize their planning opportunities and to minimize their potential Code Section 4980H consequences should be to clean up worker classifications, to track all hours worked for all employees and collect all other relevant employee data.

Notice 2013-45 Confirms IRS Won’t Enforce Code Section 4980H In 2014

The transitional relief in Notice 2013-45 comes as businesses have struggled to understand and come to grips with the requirements of new Internal Revenue Code Section 4980H that beginning January 1, 2014, a Large Employer  calculate and pay the applicable “assessable payment” tax  under Section 4980H for each month that it fails to offer each full-time employee group health plan coverage meeting Code Section 4980H’s “minimum essential coverage,” “minimum  value” and “affordability standards” if any full-time employee receives a subsidy for enrolling in coverage through a health insurance exchange.

Specifically, Notice 2013-45 waives IRS enforcement only for 2014 and only of:

  • The information reporting requirements applicable to insurers, self-insuring employers, and certain other providers of minimum essential coverage (MEC) under Code Section 6055 (6055 Reporting);
  • The information reporting requirements applicable to applicable large employers under Code Section 6056 (6056 Reporting);  and
  • The obligation to pay tax penalties under the employer shared responsibility provisions under Code Section 4980H (4980H Tax).

This relief is limited in both scope and duration.  Notably, Notice 2013-58 states:

  • Its provisions have no effect on the effective date or application of the multitude of other new mandates that have or will kick in coming months in connection with the impending 2014 Affordable Care Act reforms; and
  • The IRS plans that the tax penalty provisions of Code Section 4980H and the information reporting requirements of Code Sections 6055 and 6056 “will be fully effective for 2015.”

While the IRS is promising in Notice 2013-45 that the IRS will not require any payments by any employer under Code Section 4980H for 2014, it also urges Large Employers other affected entities to prepare for 2015 by voluntarily complying with the information reporting provisions (once the information reporting rules have been issued) in 2014 including conducting “real-world testing of reporting systems and plan designs” and continuing employer-provided coverage.

Relief Leaves Large Employers & Other Employers With Much Work To Do

While Notice 2013-45 gives Large Employers more time to prepare to comply as well as to communicate with the IRS about the need and options for simplification, employers should continue to aggressively prepare for compliance. The IRS says it intends to fully enforce the rules against Large Employers beginning in 2015 and to implement other Affordable Care Act provisions.  Consequently, employers that know or question if they may be Large Employers, their insurers, service providers and advisors should continue to diligently prepare to deal with Code Section 4980H, as well as other federal health plan rules.  Accordingly, Large Employers, their insurers and advisors could continue to diligently prepare to prepare to manage their impending Code Section 4980H responsibilities and liabilities.

1.  Start With Worker Classification, Time & Income Data Collection & Recordkeeping

Employers wishing to use this reprieve to their best advantage should start by ensuring that they clean up and tighten their worker classification and time tracking practices.  This should start with auditing the classification of all workers providing services as employees, contractors or otherwise  to be sure that they are properly classified.  Code Section 4980H takes into account all workers who are under they facts and circumstances test applied by the Code “common law employees” for purposes of deciding what employers are covered by Code Section 4980H and calculating the penalties, if any owning.  Many businesses mistakenly fail to recognize a wide range of workers considered by the business to work as contractors, leased employees or in other capacities are likely to be considered by the IRS to be common law employees for purposes of these rules.  Ensuring that the business has properly accounted for all workers that the IRS is likely to view as common law employees is essential to any reliable planning or cost projection.

Beyond having an appropriate understanding of what individuals are considered common law employees, businesses also should seek to track accurately all hours worked, regardless of whether the employees are non-exempt workers that the Fair Labor Standards Act (FLSA) requires the employer pay hourly, or exempt employees under the FLSA that the employer pays on a salaried, commission or other non-hourly basis.  Under existing Code Section 4980H rules, employers that don’t have accurate time records for employees must rely upon safe-harbor rules for identifying workers that are considered full-time.  These safe harbor rules credit hours in such a way that tends to overstate the number of full-time employees and full-time equivalent employees.

In workforces where many employees many receive significant additional family income from the earnings of a spouse, another job or other sources, employers also may want to add processes to verify actual household adjusted gross income  (HAGI) for purposes of identifying which of its full-time employees, whose HAGI actually is below the 400 percent of the poverty level required to qualify to receive subsidies when enrolling in coverage through a Health Insurance Exchange.

2. Other To Dos

Other helpful preparations also generally will include:

  • Seeking and monitoring developing guidance about the meaning of minimum essential coverage and other associated rules;
  • Providing meaningful input to the IRS, the Department of Health & Human Services, Congress and others on the need for and options to simplify time and other data and reporting requirements,  employer interactions and data requests for verification of exchange subsidy eligibility and other purposes;
  • Evaluating and adjusting workforce and benefit practices, time and other record keeping systems, and plan designs;
  • Evaluating workflow and staffing practices to determine the potential advantages of using certain measurement, stability or administrative periods, safe harbors and other options for purposes of applying Code Section 4980H, making changes in workforce or staffing practices, redesigning benefits or other adjustments; and
  • Working with management, vendors and others to identify and change plan designs; and
  • Completing other preparations to cope with the rules.

While continuing these preparations to comply with Code Section 4980H in 2015, Large Employers as well as other businesses also need to get busy finalizing preparations for the upcoming 2014 plan year, particularly in the face of fast approaching notice deadlines. Employers are under the gun to finalize and implement plan design, vendor and other decisions and complete other preparations to prepare and deliver these and other materials on time, updated in time to meet new or revised federal health plan requirements under the Affordable Care Act and other laws.  The impending Affordable Care Act-imposed deadlines to deliver newly mandated exchange notices by October 1 and updated “Summaries of Benefits and Coverage” or “SBCs” by the beginning of their next enrollment period significantly shortens the time for employers to finalize their plan designs.  Under existing SBC rules, employers that amend their plans after the beginning of an annual enrollment period must update and resend SBCs to plan members.  Furthermore, Federal rules also now generally require health plan administrators provide 60 days advance notice to plan members of plan amendments that materially reduce coverage or benefits.  Therefore all employers regardless of size will want to ensure that their plans and associated contracts are finalized quickly to adequately meet these requirements without incurring the added expense of updating and redistributing their SBCs.

As part of these efforts, all businesses generally should act quickly and diligently to:

  • Carefully credential and contract with insurers, administrators, consultants and other plan service providers and advisors to document expectations and commitments about compliance, quality assurance, fiduciary and other responsibility and status, indemnification and other accountability and other matters including updated business associate commitments where required to comply with recently changes in the privacy rules of the Health Insurance Portability & Accountability Act generally required no later than September 24, 2013 for all existing plan business associates);
  • Audit within the scope of attorney-client privilege all existing employee and alternative workforce arrangements and patterns to confirm that all common law employees properly are identified and classified and that appropriate arrangements are in place to track and document time and other relevant information to position the business reliably its responsibilities and defend its action for Code Section 4980H and other federal health plan, Fair Labor Standards Act and other compliance purposes;
  • Consult with legal counsel within the scope of attorney-client privilege about any legally required or otherwise desired adjustments to worker classification or other workforce practices to minimize Affordable Care Act or other liabilities;
  • Finalize decisions about what health benefits, if any that their business will offer to what employees in the upcoming plan years and carefully contract with vendors, update plan documents, the SBCs, summary plan descriptions and other materials for the upcoming plan year before the first day of the next enrollment period;
  • Carefully amend and update plan documents, summary plan descriptions, SBCs, privacy practices notices and other required notices, communications and forms to the extent possible, before the upcoming enrollment period to minimize inconsistencies, and to be able to package required notices, summary plan descriptions and other communication and enrollment materials to take advantage of the opportunity to minimize distribution expenses;
  • Complete the necessary decisions and arrangements to prepare and send the exchange notice that the Affordable Care Act requires be delivered for the first time by October 1, 2013; and
  • Finalize other preparations for the upcoming plan year.

Monitor & Provide Input On Proposed Tax & Health Care Reform

While businesses work to meet current and impending federal health plan responsibilities, most business leaders also will want to continue to closely monitor and provide regular input to members of Congress and regulators on proposed amendments to the Affordable Care Act or other health care or tax policy reforms.

Despite a projected $ 5 billion reduction in federal budget revenue from non-enforcement of Code Section 4980H in 2014, the Administration is moving ahead aggressively to implement other Affordable Care Act reforms as scheduled.   Notice 2013-45 states that the Administration plans to continue to provide subsidies pursuant to the Affordable Care Act for individuals earning less than 400% of the Federal poverty level who enroll in health coverage through a Health Insurance Exchange, which the Administration has rebranded and now refers to as “Marketplaces.”  Furthermore, the Administration separately announced on July 5, 2013 that individuals will be allowed to apply for and claim these subsidies based on an “honor system” in 2014; the Administration will not require verification of eligibility.

Even before the IRS announced the relief now formalized by Notice 2013-45, the rising federal budget costs of the Affordable Care Act was fueling concern.  In March, the General Accounting Office (GAO) reported that after having already spent more than $394 million on exchange efforts, the Obama administration needs Congress to approve an extra $1.5 billion added to the budget to cover the  additional $2 billion that the GAO projects the Administration will need over the next fiscal year to create and run the federal exchanges. See GAO Report and  GAO Report.  Foregoing enforcement of Code Section 4980H, verification of subsidy eligibility and other unexpected costs resulting from glitches in the preparation and rollout of the Affordable Care Act reforms for 2014 are adding to the growing costs and projected budgetary impact of the Affordable Care Acts on the federal budget.  With existing budget shortfalls already fueling pressure for increased tax revenues, businesses and individuals concerned about tax liability will want to carefully monitor and provide input to Congressional leaders on health care and tax reform.

For Help or More Information

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

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters including extensive experience on HIPAA and other privacy and data security issues.

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

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

Other Resources

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

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

©2013 Cynthia Marcotte Stamer, P.C.  Nonexclusive license to republish granted to Solutions Law Press, Inc.  All other rights reserved


HHS Continues Preparations For New Health Insurance Marketplace By Awarding Grants To Promote Kids Enrollment

July 2, 2013

As part of its continuing efforts to promote enrollment in the Health Insurance Marketplace slated to take effect January 1, 2014, the Department of Health and Human Services (HHS) today (July 2, 2013) announced the award of nearly $32 million in grants for efforts to identify and enroll children eligible for Medicaid and the Children’s Health Insurance Program (CHIP). The Connecting Kids to Coverage Outreach and Enrollment Grants were awarded to 41 state agencies, community health centers, school-based organizations and non-profit groups in 22 states; two grantees are multistate organizations.  The announcement comes as employers and others continue to express concern about the sufficiency of preparations and HHS’ recent rollout of online tools to aid consumers enroll in the new Health Care Marketplace scheduled to launch January 1, 2014 as part of the continuing implementation of reforms enacted as part of the Patient Protection & Affordable Care Act (Affordable Care Act).

Announced Grants Target Increased CHIP & Medicaid Enrollment In Preparation For Health Care Marketplace

In amounts ranging from $190,000 to $1 million out of the $140 million included in the Affordable Care Act and the Children’s Health Insurance Program Reauthorization Act (CHIPRA) of 2009 for enrollment and renewal outreach,  HHS Reports the grants awarded to the grantees listed here focus on 5 areas:

  • Engaging schools in outreach, enrollment and retention activities (9 awards);
  • Reducing health coverage disparities by reaching out to subgroups of children that are less likely to have health coverage (8 awards);
  • Streamlining enrollment for individuals participating in other public benefit programs such as nutritional or other assistance programs (3 awards);
  • Improving application assistance resources to provide high quality, reliable Medicaid and CHIP enrollment and renewal services in local communities (13 awards); and
  • Training communities to help families understand the new application and enrollment system and to deliver effective assistance to families with children eligible for Medicaid or CHIP (8 awards).

According to HHS, the grants will build on the Secretary’s Connecting Kids to Coverage Challenge to find and enroll all eligible children and support outreach strategies that have been shown to be successful.

According to HHS, Connecting Kids to Coverage Outreach and Enrollment Grant Awards (Cycle III) Efforts to streamline Medicaid and CHIP enrollment and renewal practices, combined with robust outreach activities, have helped reduce the number of uninsured children.  Since 2008,  HHS claims 1.7 million children have gained coverage and the rate of uninsured children has dropped to 6.6 percent in 2012

“Today’s grants will ensure that more children across the nation have access to the quality health care they need,” said Secretary Sebelius. “We are drawing from successful children’s health coverage outreach and enrollment efforts to help promote enrollment this fall in Medicaid and the new Health Insurance Marketplace.”

Continuing Preparations For New Health Care Marketplace

 The grant awards are part of a much broader effort by HHS to prepare Americans to enroll in the newly reformed Health Insurance Marketplace that the Obama Administration is working to implement as part of the sweeping reforms enacted by the Affordable Care Act.

Enrollment is the Health Insurance Exchanges also to be included in the new federal health care marketplace is scheduled to begin October 1, 2013.  In anticipation of this deadline, HHS recently also announced its rollout of new consumer health care education and decision-making tools on its newly designed www.healthcare.gov  website.

In announcing its launch of its Health Insurance Marketplace educational tools here on June 24, 2013, the Department of Health & Human Services (HHS) repeated recent claims that HHS and the states are on target to begin enrollment on October 1, 2013 in the federal and state health care exchanges now retitled “Health Insurance Marketplace” by the Administration, to meet other key milestones and to the beginning coverage under the newly created Health Insurance Marketplaces beginning January 1, 2014.

As part of these preparations, HHS kicked off an aggressive Health Insurance Marketplace education effort by announcing the deploying of with newly designed “consumer-focused” HealthCare.gov website and the 24-hours-a-day consumer call center that HHS claims provide all the necessary tools to prepare Americans for open enrollment and ultimately sign up for private health insurance.

While HHS says its tools and other preparations will get the Health Care Marketplaces and Americans ready for the conversion of the U.S. health care system slated to begin January 1, 2014, others are less confident.  For instance, GAO officials recently found that major work that federal and state officials  must complete to timely begin enrollment by October 1 remains unfinished, making it unclear if they will meet the impending October 1, 2013 enrollment kickoff deadline.  See GAO Report and  GAO Report.

Meanwhile, employers of 50 or more full-time employees and others also have complained that delayed and incomplete guidance has prevented them from understanding their obligations and moving to complete preparations to comply with the new employer mandates by delaying private market reforms and employer preparations.  These problems have been further complicated by recent media coverage and public debate about the access to sensitive personal health care, financial information and the role of the Internal Revenue Service and other government agencies under the Affordable Care Act following recent charges that certain Internal Revenue Service officials improperly targeted certain charitable organization and their organizers as part of application approval and audits.

Despite these concerns, HHS is marching ahead on its efforts to implement the law by launching these and other enrollment and educational outreach.

For Help or More Information

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

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters including extensive experience on HIPAA and other privacy and data security issues.

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

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

Other Resources

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

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

©2013 Cynthia Marcotte Stamer, P.C.  Nonexclusive license to republish granted to Solutions Law Press, Inc.  All other rights reserved


HHS Touts Enrollment Tools, Says Exchange Enrollment Ready Despite GAO Concerns

June 26, 2013

Despite growing concerns expressed by the General Accounting Office (GAO) and others about arrangements and the need for added funding to prepare for the massive conversion in the U.S. health care system slated to take effect January 1, 2014 under the Patient Protection & Affordable Care Act (“ACA), Obama Administration officials are continuing to claim readiness to begin enrollment of Americans In federal health care marketplace on schedule on October 1, 2013 and to meet other crucial deadlines necessary to effectively implement the next wave of ACA’s health care reforms in the Department of Health & Human Service’s rollout of new consumer health care education and decision-making tools on its newly designed healthcare.gov website.

In announcing its launch of its Health Insurance Marketplace educational tools here on June 24, 2013, the Department of Health & Human Services (HHS) repeated recent claims that HHS and the states are on target to begin enrollment on October 1, 2013 in the federal and state health care exchanges now retitled “Health Insurance Marketplace” by the Administration, to meet other key milestones and to the beginning coverage under the newly created Health Insurance Marketplaces beginning January 1, 2014.

As part of these preparations, HHS kicked off an aggressive Health Insurance Marketplace education effort by announcing the deploying of with newly designed “consumer-focused” HealthCare.gov website and the 24-hours-a-day consumer call center that HHS claims provide all the necessary tools to prepare Americans for open enrollment and ultimately sign up for private health insurance.

According to HHS, “The new tools will help Americans understand their choices and select the coverage that best suits their needs when open enrollment in the new Health Insurance Marketplace begins October 1.”

According to Centers for Medicare & Medicaid Services Administrator Marilyn Tavenner, “In October, HealthCare.gov will be the online destination for consumers to compare and enroll in affordable, qualified health plans.”

Between now and the start of open enrollment, HHS says the Marketplace call center will provide educational information and, beginning Oct. 1, 2013, will help consumers with application completion and plan choice.  In addition to English and Spanish, the call center provides assistance in more than 150 languages through an interpretation and translation service.  Customer service representatives are available for assistance via a toll-free number at 1-800-318-2596 and hearing impaired callers using TTY/TDD technology can dial 1-855-889-4325 for assistance.

While HHS says its tools and other preparations will get the Health Care Marketplaces and Americans ready for the conversion of the U.S. health care system slated to begin January 1, 2014, others are less confident.  For instance, GAO officials recently found that major work that federal and state officials  must complete to timely begin enrollment by October 1 remains unfinished, making it unclear if they will meet the impending October 1, 2013 enrollment kickoff deadline.  See GAO Report and  GAO Report such as::

  • 17 states committed to run their own exchanges have missed March 2013 deadlines on 44% of key activities;
  • Officials creating the small business exchanges still must review plans and train and certify the “navigators” that are supposed to help companies and individuals enroll in plans and complete other key arrangements;
  • A federal  the “data hub” designed to help individuals determine their eligibility and enroll in plans offered through the exchanges has only  undergone initial testing; and
  • The current planned process for coordination of data between employer and insurer plans and the health care exchanges to evaluate eligibility of the millions of Americans expected to apply for subsidies for enrolling in coverage through the exchange presently is for HHS to contact employers by telephone employers to ask if that employer asked that employee enrollee minimum essential coverage providing minimum essential value at an affordable cost that would disqualify the applicant for the subsidy.

Meanwhile, the GAO Reports also provide a glimpse at what the federal government has spent so far on preparing the federal exchanges and the data hub. They indicate that hat the Obama Administration had approximately $394 million on exchange efforts as of March 2013 including:

  • $84 million to CGI Federal, which is building the federal exchange computer infrastructure;
  • $55 million to Quality Software Services, which is building the data hub; and
  • $38 million to Booz Allen Hamilton to provide technical assistance for enrollment and eligibility.

Contractor Booz Allen Hamilton recently has drawn attention as the National Security Association contractor through which the notorious fugitive Edward Snowden allegedly accessed information he disclosed to the public about NSA surveillance of “big data” on Americans and others through the internet.

The GAO also estimated the Obama administration needs Congress to approve an extra $1.5 billion from the budget to provide the Administration with the additional $2 billion that the GAO projects the Administration will need over the next fiscal year to create and operate the federal exchanges.  Existing budget concerns make it unlikely that Congress will approve these extra funds.

 

For Help or More Information

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

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters including extensive experience on HIPAA and other privacy and data security issues.

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

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

Other Resources

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

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

©2013 Cynthia Marcotte Stamer, P.C.  Nonexclusive license to republish granted to Solutions Law Press, Inc.  All other rights reserved


Id & Manage Hidden Employee Benefit Exposures In Business Insolvency Or Other Transactions

June 5, 2013

The June 4, 2013 announcement of the Employee Benefit Security Administration (EBSA) provides a timely reminder to businesses sponsoring employee benefit plans, their owners and management, plan fiduciaries, banks, administrative service providers and other plan vendors, employee benefit plan and bankruptcy trustees, corporate receivers, creditors, and others looking to expedite the windup of abandoned  401(k), profit-sharing and other individual account pension plans of the challenges that can result when employee benefit plan responsibilities are mishandled when companies fail or experience other significant events, as well as the availability of tools to help mitigate or prevent these challenges through responsible proactive action.

Hidden Employee Benefit Exposures For Unwary Abound For Parties In Business Insolvency Or Other Transactions

A complex maze of ERISA, tax and other rules make, administration and termination of employee benefit plans a complicated matter. When the company sponsoring a plan experiences a significant workforce or other restructuring, becomes distressed, goes bankrupt or liquidates, merges, sells assets or engages in other significant business transaction impacting the plans or its workforce, the rules, as well as the circumstances, can create a liability and operational quagmire for everyone from the sponsoring business, its management, buyers, vendors, plan fiduciaries, plan participants and beneficiaries, related entities, asset purchasers and others.  While tough economic times may tempt business leaders to cut corners, more than 3o years of litigation and enforcement precedent make clear that cutting corners on the assessment and handling of employee benefit and other workforce responsibilities amid business distress or in other business transactions or events presents risks for all parties involved.  See e.g., Tough Times Are No Excuse For ERISA Shortcuts;  Mishandling Employee Benefit Obligations Creates Big Liabilities For Distressed Businesses & Their Business LeadersWhile many business leaders and plan fiduciaries lack a strong understanding of these rules and their implications in times of business or benefit plan distress or other significant business transactions, even those experienced with these concerns need to use caution to understand and respond to the series of ongoing changes in these rules, regulations and precedent that impact on the handling of plan related responsibilities in these and other special situations. 

The Internal Revenue Code (Code) requires contains a maze of requirements that companies sponsoring pension, profit-sharing, health and other employee benefit plans, their plans, and plan administrators must follow when maintaining, administering, or terminating these plans including in many instances, special rules on the termination of the plans, distribution of assets, and the liabilities that attach to affiliated companies, successors, and assets resulting from transactions involving employee benefit plans or their sponsors.

In addition to the Code’s rules, companies and other individuals that in name or in function have or exercise discretionary responsibility or authority over the maintenance, administration or funding of employee benefit plans regulated by ERISA also generally must meet ERISA’s high standards  for carrying out these duties based on their functional ability to exercise discretion over these matters, whether or not they have been named as fiduciaries formally. Under many circumstances these rules, or the handling of transactions can broaden the scope of responsibility or create exposures for a surprising range of parties dealing with the plan sponsor, related corporations or their stock, assets, benefit plans or workforce in corporate bankruptcies, mergers, asset or stock acquisitions, liquidations or other transactions.

Beyond these basic tax and fiduciary obligations, ERISA and the Internal Revenue Code (Code) create additional responsibilities and liabilities for when dealing with defined benefit or other pension plans subject to ERISA’s minimum funding and plan termination rules that when violated trigger a plethora of funding and notification obligations, penalties, liens on assets, and other obligations that can create significant traps for unwary plan fiduciaries and administrators, the sponsoring corporation, its management, affiliates and successors, as well as creditors or purchasers of stock or assets and others dealing with them.

Despite these well-documented responsibilities and a well-established pattern of enforcement by the Department of Labor, Pension Benefit Guarantee Corporation, Internal Revenue Service and private plaintiffs, many businesses and business leaders fail to appropriately understand these and other basic responsibilities and liabilities associated with the establishment, administration, termination and windup of employee benefit plans and other details about how their or others mishandling of employee benefit plan related responsibilities can undermine business goals and create unanticipated liability exposures.

Frequently, companies sponsoring their employee benefit plans and their executives mistakenly assume that they can rely upon vendors and advisors to ensure that their programs are appropriately established. The establishment and maintenance of these arrangements with limited review or oversight by the sponsoring company or its management team can be risky.

In other instances, businesses and their leaders do not realize that ERISA’s functional definition to determine fiduciary status means that individuals participating in discretionary decisions about the employee benefit plan, as well as the plan sponsor, may bear liability under many commonly occurring situations if appropriate care is not exercised to protect participants or beneficiaries in these plans.

In yet other instances, purchasers, related entities, bankruptcy trustees and creditors or others don’t appreciate the way their own or others mishandling of employee benefit plan obligations or exposures can impact their transactions and associated risks.

Proactive Action Can Mitigate Exposures & Costs

For this reason, companies providing employee benefits and their management, service providers, and related entities and the businesses dealing with them need a clear understanding of the rules and responsibilities Federal law imposes on the funding, administration and termination of these programs, how these rules can impact their responsibilities and goals, and the steps necessary to avoid or mitigate exposures likely to result if they or others mishandle employee benefit plan related responsibilities or assets and how to avoid or mitigate these concerns.

The challenges of winding up an abandoned plan discussed in the EBSA news release yesterday highlights just one of these complications, the problem of dealing with abandoned plans.

When companies and their management abandon plans, they leave their plans, participants and beneficiaries, service providers and others in limbo, without the authority or funds to wind up the plans.  When employers abandon their individual account pension plans, custodians such as banks, insurers and mutual fund companies are left holding the assets of these abandoned plans but without the authority to terminate such plans and make benefit distributions even in response to participant demands. Service providers often find themselves in the legally awkward situation of having continuing plan responsibilities without necessary direction or compensation for performance.  Meanwhile, participants and beneficiaries can’t manage, access or often even get information about their funds until the situation resolves.  Dealing with these issues usually requires cumbersome, time-consuming and costly processes often requiring complex, lengthy, highly formalistic and expensive judicial and administrative procedures to resolve while fiduciary, tax and other liabilities mount.  Meanwhile, participants and beneficiaries often lose access to their accounts or benefits or even see plan value decline as plan assets that could go to benefits are diverted to cover administrative costs of winding up the plan.

The EBSAs abandoned plan program is just one of many examples of tools that parties struggling with these issues can use to mitigate these challenges and exposures.  EBSA uses its abandoned plan program to facilitate a voluntary efficient process for winding up the affairs of abandoned individual account plans so that benefit distributions are made to participants and beneficiaries when this occurs.

The EBSA Abandoned Plan News Release  and the EBSA’s related response Response to ADP/JP Morgan published June 4, 2013 show an example of how EBSA used its abandoned plan program to give critical relief to JP Morgan Chase Bank NA and ADP Inc. to use to wind up certain abandoned plans without exhausting the 90-day waiting period that ordinarily applies before the termination of a retirement plan based on the best interest of participants pursuant to 29 CFR §2578.1.  By exercising its discretion to waive the 90-day notice period, the EBSA allowed JP Morgan Chase Bank NA and ADP Inc. to terminate immediately and wind up approximately 180 defined contribution pension plans abandoned due to corporate crises or neglect.

Requesting relief from the EBSA like that granted to JP Morgan Chase Bank NA and ADP Inc. in the announcement made yesterday is just one of various types of relief that legal counsel experienced with dealing with workforce and employee benefit plan challenges that can arise when companies or their plans become inadequately funded, bankrupt, or experience other significant transactions or events, can use to help debtors, and other plan sponsors, their management, affiliates, successors, buyers, plan fiduciaries, vendors, bankruptcy creditors and trustees.

Experienced counsel can help companies understand and negotiate the complex rules of the EBSA, the Pension Benefit Guarantee Corporation and the Internal Revenue Service governing dealings with these plans and where appropriate and available by taking advantage of relief or other options to mitigate these challenges.  Involving experienced counsel to explore and use these options early can help all parties get participants and beneficiaries their benefits while minimizing legal risks, time and expenses associated with the wind up of these troubled or abandoned plans.  Even where special dispensation is not available, the early involvement of experienced legal counsel as early as possible after the possibility that a business or its plans or assets will be impacted by underfunding, insolvency, a bankruptcy or liquidation, workforce reduction, sale, merger or other significant event can help plan and administer the steps necessary to handle cost effectively employee benefit related responsibilities and impacts.

For Help or More Information

If you need help with assessing or handing employee benefit or workforce challenges arising from business or employee benefit plan insolvency, stock or asset sales, mergers, bankruptcy or liquidation, reductions or other workforce changes or other significant business transactions or events, or other employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters including extensive experience handling workforce and employee benefit challenges arising from plan underfunding, company restructurings, workforce change,  insolvencies, bankruptcies, mergers, stock or asset acquisitions, or other significant business or plan transactions.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, and insurers, bankruptcy trustees and receivers, asset purchasers, creditors and others dealing with plans and their sponsors, and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials about regulatory, investigatory or enforcement concerns.  Her experience includes involvement in the planning, execution and resolution of workforce and employee benefit related details of a multitude of high and low profile restructurings, bankruptcies and other significant transactions throughout her more than 25 year career.

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

Other Resources

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

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

©2013 Cynthia Marcotte Stamer, P.C.  Nonexclusive license to republish granted to Solutions Law Press, Inc.  All other rights reserved


Final Regulations Update HIPAA Health Plan Wellness Program Rules

May 30, 2013

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Employer, union and sponsors of employment-based group health plans that include health risk assessment (HRA) or other wellness plan features that reward participants for engaging in certain assessments or other activities designed to promote wellness or disease management, and fiduciaries insurers, and administrators  of these health plans should review and update their programs in light of final wellness program rules jointly published by the Department of Health and Human Services (HHS), Department of Labor Employee Benefit Security Administration (EBSA) and the Department of Treasury (collectively the “Agencies”) today (May 29, 2013) here (Wellness Regulations).

While these final Wellness Regulations implementation of changes to the “bona fide wellness program exception” to nondiscrimination rules contained in the Portability Rules of the Health Insurance Portability & Accountability Act (HIPAA) as amended by the Patient Protection and Affordable Care Act (ACA) allow group health plans to provide bigger rewards to members for cooperating in wellness activities required under a “bona wellness program” within the meaning of the Wellness Regulations, the Wellness Regulations and other federal rules still need care to design and administer these health plan features meet all applicable Wellness Regulations for qualification as a “bona fide wellness program while also safeguarding the use of “personal health information” and “genetic health information in accordance with the privacy rules of HIPAA as amended by the Genetic Information Nondiscrimination Act (GINA) managing potential employment disability discrimination exposures under the Equal Employment Opportunity Commission’s (EEOC’s) current interpretation of the employment discrimination rules of Americans With Disabilities Act (ADA) and GINA.

Wellness Rules Implement ACA Changes To HIPAA “Bona Fide Wellness Program Rules

The nondiscrimination prohibitions of the Health Insurance Portability & Accountability Act (HIPAA), as amended by the Genetic Information Nondiscrimination Act (GINA) and the Patient Protection and Affordable Care Act (ACA) generally prohibit health plans from discriminating against an individual based on eligibility or premium based on a health factor.  Wellness or disease management programs that vary premiums or contributions, cost-sharing or other benefit mechanisms, or provide other rewards or inducements can run afoul of this HIPAA nondiscrimination prohibition if not properly designed and administered to fall within the “bona fide wellness program” exception.

The Wellness Regulations as finalized continue to interpret HIPAA’s general prohibition against group health plan provisions that discriminate based on a health factor to prohibit group health plans to vary benefits (including cost-sharing mechanisms) or the premium or contribution for similarly situated individuals when wellness program that satisfies the requirements of the Wellness Regulations for a “bona fide wellness program

The Affordable Care Act generally increased the maximum permissible reward under a health-contingent wellness program from 20 percent to 30 percent of the cost of health coverage for qualifying bona fide wellness programs and to as much as 50 percent of the cost of health coverage for bona fide wellness programs designed to prevent or reduce tobacco use.  In keeping with these ACA amendments to HIPAA, the Wellness Regulations allow group health plans and insurers to offer these greater rewards as long as the wellness program otherwise meets the conditions that the Wellness Regulations set for qualification as a bona fide wellness program.

In order to offer these incentives, however, the Wellness Regulations make clear that group health plans, their insurers and fiduciaries still need to tread carefully to properly design and administer these arrangements to ensure that their wellness program meet the applicable conditions of the Wellness Regulations for qualification as a bona fide wellness program.

In keeping with the approach announced in proposed regulations the Agencies previously published here last Fall, the Wellness Regulations have different requirements for “participatory wellness programs” versus “health contingent wellness programs.”

  • “Participatory wellness programs” generally are programs that reward plan members for participating in wellness activities based on participation in specified activities without regard to an individual’s health status. These include programs that reimburse for the cost of membership in a fitness center; that provide a reward to employees for attending a monthly, no-cost health education seminar; or that reward employees who complete a health risk assessment, without requiring them to take further action
  • “Health-contingent wellness programs” generally are programs where individuals must meet a specific standard related to their health to qualify for the specified reward or avoid a specified penalty. Examples of health-contingent wellness programs include programs that provide a reward to those who do not use, or decrease their use of, tobacco, or programs that reward those who achieve a specified health-related goal, such as a specified cholesterol level, weight, or body mass index, as well as those who fail to meet such goals but take certain other healthy actions.

Group health plan sponsors, fiduciaries, insurers and administrators should use care to properly understand which type of program or programs their group health plans contain and ensure that their programs are properly designed and administered to meet these conditions.  While fulfillment of these requirements can allow the arrangement to avoid violation of HIPAA’s nondiscrimination rules, however, it is important also to ensure that other applicable federal requirements for the use of these arrangements also are fulfilled along with these HIPAA nondiscrimination requirements.

Meeting Other Federal Rules For Wellness Programs Also Important

In addition to fulfilling the Wellness Regulations, health plans, their sponsors, fiduciaries, insurers and administrators also need to ensure that any wellness program included in a group health plan also meets other federal rules about the protection of sensitive personal health information and genetic health information and do not violate the employment discrimination rules of the ADA and GINA

  • Update Privacy Compliance

.Since wellness programs generally inherently involve some collection, use, access or disclosure of “protected health information” within the meaning of the Privacy Rules of HIPAA, it is particularly important to review and tighten plan provisions and other documentation, processes, procedures, and training to reduce the risk of violating HIPAA. A review of the adequacy of these arrangements is made particularly important in light of recent changes to in the implementing regulations of these HIPAA Privacy Rules adopted earlier this year to implement changes enacted by the HITECH Act.  Among other things, these changes may require updates to the health plan’s definition of personal health care information to clarify that it includes family health information and other “genetic information” that wellness programs often collect. Other updates to plan provisions, privacy policies, vendor agreements or other practices also may be needed to comply with modifications to the HIPAA Privacy Rules on business associates, marketing, breach notification, training or other rules.

  • Manage Disability Discrimination Risks

In addition to ensuring compliance with current requirements about privacy, group health plans, their sponsors, fiduciaries, insurers and vendors also should take steps to minimize potential employment discrimination challenges under the ADA and GINA.

Despite ACA’ amendments to HIPAA’s bona fide wellness program rules and the 11th Circuit’s rejection of an EEOC challenge in Broward County v. Seff, EEOC officials continue to take the position that testing and inquiries about medical conditions made in connection with wellness programs presumptively violate the Americans With Disabilities Act physical testing and other disability discrimination rules as raising concerns about wellness and disease management programs..   See, e.g.EBSA Issues Guidance on Health Plan Wellness & Disease Management Programs Subject to HIPAA Nondiscrimination RulesADAAA Amendment Broader “Disability Definition Not Retroactive, Employer Action Needed To Manage Post 1/1/2009 Risks