Essential Health Benefit Definition Built On Expensive Mandated Benefit Plan Likely To Be Expensive For Employers, States & Individuals

July 20, 2012

Learn More & Get A 2012 Health Plan Compliance Checkup at 7/24 Health Plan Update WebEx Workshop!

Concerned about how the mandates and costs of  the Patient Protection & Affordable Care Act will impact your corporate and family finances following the Supreme Court’s June 28, 2012 National Federation of Independent Business v. Sebelius ruling upholding the constitutionality of the individual mandate of the Patient Protection & Affordable Care Act (ACA)? Businesses, individuals, states and federal and state Congressional and regulatory leaders others looking for opportunities to manage these costs should carefully scrutinize how the Department of Health & Human Services (HHS) plans to define “essential health benefits” (EHBs).

Essential Health Benefit Determinations Impact Program Designs and Costs

The definition of EHBs is pivotal to determining the benefits required to be offered by payers and purchased by individuals under the Affordable Care Act now as well as when full Affordable Care Act implementation happens in 2014. Of course, the already effective Affordable Care Act’s restrictions on lifetime and annual dollar limitations on EHBs provided under covered health plans and insurance policies already have impacted the plan designs and costs of existing coverages.

Beginning in 2014, the Affordable Care Act will require that all non-grandfathered health plans in the insured individual and small group market and certain covered state and federal programs will cover at least the EHB as defined by HHS. Although the Affordable Care Act does not directly obligate self-insured group health plans, large group market health plans, and grandfathered health plans to design their plan to provide the coverage included in the required EHB package after 3014, the EHB package design also will affect the costs of these plans by prohibiting these plans from imposing annual and lifetime dollar limits on EHBs even though the final process for determining what is an EHB for these employer-sponsored health plan purposes has yet to be finalized.

Furthermore, since the Affordable Care Act currently restricts both insured and self-insured health plans of all sizes from imposing lifetime and annual dollar limits on benefits and services listed in the Affordable Care Act as required EHBs, the statutory list of EHBs already is having significant cost implications for employers and health plans and their health plan designs. These implications will only grow as full implementation of the Affordable Care Act reform occurs in 2014. Thus, the definition of EHB and how it is a key determinant of the ultimate cost of the Affordable Care Act mandates for individuals, employers, insurers, states, the federal government and ultimately taxpayers.

HHS Guidance Promotes Benefit-Rich EHB Program Mandate For States & Individual & Small Group Insured Programs & Policies

The current approach of the HHS to determining the services and benefits for non-grandfathered individual and small group market insured plans and covered state and federal benefit programs will be skewed toward the benefit rich plan design of federal and state employee health plans and benefit mandate-laden small group insurance plans even though the majority of employer sponsored health plans are self-insured plans that contain more limited benefit packages.

The Affordable Care Act directs that the EHB reflect the scope of benefits covered by a “typical employer plan” and cover at least the following general categories of items and services: categories of items and services: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care (Listed EHB).

An overly-rich EHBs definition will require that individual and insured small group employer health plans, insurers, state Medicaid and Exchanges and the federal exchanges provide, and individuals in these programs purchase, a much richer set of benefits than is currently provided to the majority of employees under the self-insured, employer-sponsored health plans under which they are covered when most are struggling to deal with already over-extended budgets.

Although 60% or more of all employer-sponsored health plans nationwide and 82% of plans sponsored by companies employing more than 200 workers are “self-insured” health plans exempt from the obligation to provide the state mandated benefits that apply to insured plans under state insurance regulations, HHS is largely ignoring the practices of these self-insured health plans for purposes of defining the EHBs package that plans and other payers must offer as EHBs.

Unlike insured health plans, self-insured health plans generally are exempted from the obligation to comply with mandated benefits requirements of state insurance laws pursuant to the preemption provisions of the Employee Retirement Income Security Act (ERISA).   Avoidance of the cost of providing state mandated benefits typically is one of the primary reasons that an employer chooses to offer health plan coverage on a self-insured rather than insured basis. Consequently, the care and services covered by self-insured health plans typically are less generous in many respects than those provided by state and federal employee health plans or individual or group health insurance policies regulated by state insurance law.

Even knowing that the majority of employer-sponsored coverage is provided on a self-insured basis and that federal, state, employer and individual budgets are already strained, HHS nevertheless set up the process so that practices of the government employee health programs and state-regulated insurance policies subject to a wide range of state benefit mandates will determine the EHBs package.

Both state-regulated insured health plans and federal and state employee plans generally are loaded with a long list of mandated benefits that self-insured health plans don’t provide or provide only on a more limited basis. Because self-insured plans are exempt from the duty to comply with state insurance mandated benefit regulations, the benefit package provided under a self-insured plan typically is not as extravagant as the benefit package offered by insurance plans required to comply with state benefit mandates or by the federal or state employee health insurance programs paid for with taxpayer dollars, the process ensures a richer EHB package.

More required benefits means more required costs and the required EHB package determines the benefits required.  Thus, HHS’s decision to model the Affordable Care Act’s definition of EHBs upon federal and state employee health plans and insured state policies when the sponsors of those programs already are struggling to pay for the costs of the plush benefit packages dictated by law merely promises to overburden the fiscal resources of these sponsors and the individuals required to participate and contribute to these programs.

Nevertheless, driven by an administration firmly entrenched in the utopian delusions that money is no object when it comes to promising health care benefits, HHS is diligently proceeding on a path to ensure that the benefit-rich, more expensive government employee health plan/state regulated insured plan model determines the required EHBs.

Under the intended process announced by HHS Center for Consumer Information and Insurance Oversight (CCIIO) on December 16, 2011, HHS announced that it would allow each state to decide the EHBs package on a state-by-state by choosing a “benchmark health plan” that meets HHS standards. While HHS touted the decision as allowing states significant choice, as outlined in more detail in the paragraphs that follow, in reality the parameters within which HHS will require states to exercise this choice provides little flexibility for states to control costs by adopting a limited EHB package. Furthermore, final regulations published in the July 20, 2012 Federal Register that define the data that HHS will rely upon to define and update the EHB definition going forward also layout a process that will almost certainly result in a much richer package of EHBs than what most employees covered by self-insured employer or union-sponsored health plans enjoy today.

In December 2011, HHS announced its intention to allowing states the “flexibility” to define EHB on a state by state basis provided that the state’s EHB definition meets minimum standards required by HHS. Under this approach, the benefits and services included in the benchmark health insurance plan selected by the state would be the EHBs package. States in deciding the required EHB package could modify coverage within a benefit category so long as they do not reduce the value of coverage.

To set the EHBs package for its state, HHS intend that a state will decide the benefits and services required in the EHBs package by choosing one of the following programs, (supplemented as necessary to ensure that the benchmark health plan covers each of the 10 categories of benefits listed in the Affordable Care Act) as the benchmark health insurance plan for that state:

  • One of the three largest small group plans in the state by enrollment;
  • One of the three largest state employee health plans by enrollment;
  • One of the three largest federal employee health plan options by enrollment; or
  • The largest HMO plan offered in the state’s commercial market by enrollment.

None of these options would allow for a state to elect for the EHBs package that more closely tailors the more cost-effective, less mandated benefit heavy designs more typically used in the self-insured employer-sponsored programs sponsored by more than 60% of U.S. employers offering employee health insurance coverage. Therefore, individuals covered by individual health insurance and small employers providing coverage through small group market insurance policies can expect to be required to offer a rich benefit package regardless of the state in which they are based.

Concerning which EHB package will apply when a small employer has employees or operates in multiple states, existing guidance specifies that the EHB benchmark for the State in which the insurance policy is issued would determine the EHB for all participants, regardless of the employee’s State of residence.

Individual and small group insurance plans and policies and government benefit programs required to provide essential benefits also should not anticipate that required scope of the required EHB package will narrow over time if HHS proceeds as planned.

The final rule on “Patient Protection and Affordable Care Act; Data Collection To Support Standards Related to Essential Health Benefits; Recognition of Entities for the Accreditation of Qualified Health Plans” (EHB Data Rule) published on July 24, 2012 also does not take into account the practices of self-insured health plans for purposes of defining and updating EHB package.

The EHB Data Rule outlines the data that health insurers offering coverage under qualified health plans pursuant to Health Care Exchanges will be required to collect and report to HHS for HHS to use to determine the definition and update the EHBs package. This final rule also establishes a process for the recognition of accrediting entities for purposes of certification of qualified health plans.

The EHB Data Rule ignores and excludes reference to any data based on self-insured health plan coverage. Instead, in its current form the EHB Data Rule relies only collects data reported by insured plans. Reliance only upon data collected under the EHB Data Rule will further skew the plan design for all plans – insured or self-insured – to be designed in accordance with the more benefit rich mandates of governmental employee plans funded by taxpayer dollars and fully-insured group health plans forced to include a broad range of state benefit mandates in their programs. Consequently, it appears that HHS intends that self-insured employee health plans will be required to provide the same extremely benefit rich EHBs package as required in a fully-insured health plan even though ERISA section 514 bars the states from enforcing state mandates against self-insured plans.

By disregarding the practices of self-insured plans in the current process of setting expectations for the EHB package the planned HHS process for determining the EHB package provides for a much richer and more expensive benefit package than what is provided in the typical self-insured health plan offered by 60% of U.S. employers nationwide.

Implications & Action Items For Employer Plan Sponsors, Insurers, Employers, Individuals & States Concerned About Costs

Because the determination of the EHB package plays such a significant role in determining the premiums and other amounts that employers, individuals, states and taxpayers will have to expend to fund promised benefits, all parties concerned with the need to appropriately manage these and other related costs should push for HHS and the other Departments, as well as members of Congress to insist that the benefits and services treated as EHBs be carefully tailored.

As the history of state mandated benefits already demonstrates, the cost of funding the benefits promised in the program for all parties will increase the more services included in the definition of EHB. With state, employer, individual and the federal government budgets already strained in a tight economy, a utopian definition of EHBs that results in overburdening costs is a luxury that no one can avoid.

Taken together, the final regulations and HHS’s intended approach to allowing states to define essential health benefits on a state-by-state basis promises under the process established by HHS will result in the imposition of a much richer and more expensive required EHB package on individuals that is richer and more expensive than would result if the self-insured group health plan practices and data were included. As a result, states, small group market insurers and their employer customers and the individuals participating in these plans can expect to be required to pay for a more costly package of benefits than might apply if HHS had elected to use a more holistic approach to defining the EHB package that took into account the practices of self-insured employer and union-sponsored health plans.

This outcome certainly is not dictated by the language of the statute. A more balanced definition of EHBs tailored to meet the economic and budget realities of the times certainly is attainable within the current statutory framework without the need for legislative action. Indeed, given that the majority of group health plans are self-insured, many question the appropriateness of HHS’s reliance upon the practices and data of state regulated, mandated benefit laden insured health plans to define the EHB of a “typical employer plan.”  Concerned employers, insurers, and individuals should urge HHS to reconsider its approach and adopt an alternative definition of EHB focused on defining essential in light of the cash-strained times. 

To the extent that the existing regulators are unwilling to temper the zealousness of idealism to meet today’s budget and economic realities, employers, insurers and the individuals who will be required to bear the burden of the resulting costs should pressure Congress to act to clarify the EHB definition so as not to overburden the system.

Self-insured group health plans, large group market health plans, and grandfathered health plans also need to recognize the need to participate in the dialogue. These programs and their employer and union sponsors are still in limbo, awaiting guidance from HHS about what standards HHS will impose for purposes of determining what constitutes an EHB and how this decision will impact their costs and plan design and other implications even as the Affordable Care Act requires them to decide without guidance what EHBs are for purposes of complying with its lifetime and annual dollar limit prohibitions. 

According to a “Frequently Asked Questions on Essential Health Benefits Bulletin” published by HHS earlier this year, the Departments of Labor, Treasury, and HHS still are deciding how they will determine if a self-insured group health plan, a large group market health plan, or a grandfathered group health plan used a permissible definition of EHB for purposes of meeting their responsibilities under the Affordable Care Act. HHS as indicated they are considering deeming the plan’s definition of EHB appropriate if the plan uses “a definition authorized by the Secretary of HHS (including any available benchmark option, supplemented as needed to ensure coverage of all ten statutory categories).

Regardless, until that additional guidance is forthcoming, the need to administer their group health plans in accordance with the already-effective Affordable Care Act restrictions on lifetime and annual dollar limits on EHBs means all affected group health plans that contain any annual limits on benefits, their sponsors and fiduciaries should take steps to ensure that these provisions are supported and administered using an appropriate definition of EHB supported by the necessary analysis and documentation to position the health plan to demonstrate this effort at good faith compliance until HHS issues further clarifying guidance.

Get Health Plan Compliance Check up at 7/24 Health Plan Update

Health plans, their employer and other plan sponsors, fiduciaries, administrators, brokers and consultants and other service providers are invited to get a 2012/2013 Health Plan Compliance Checkup by participating in the Health Plan Update Workshop Solutions Law Press, Inc. is hosting on July 24, 2012 as part of its 2012 Health Plan-U Coping with Health Care Reform Workshop Series beginning with the kickoff program, “2012 Health Plan Update” on July 24, 2012. 

The Workshop offers the opportunity for employer and union health plans, their sponsors, fiduciaries, insurers, administrators and service providers to catch up on the latest requirements and guidelines impacting employer and union sponsored group health plans under ACA and other federal health plan regulations.

The 2012 Health Plan Update Workshop is scheduled for July 24, 2012 from 12:30 P.M.-2:30 P.M. Eastern, 11:30 A.M.-1:30 P.M. Central, 10:30 A.M-12:30 P.M. Mountain and 9:30 A.M-11:30 A.M. Pacific Time.

Participants may choose to attend the live briefing in Addison, Texas or take part via WebEx for a registration fee of $125.00. Texas Department of Insurance Continuing Education Credit and other professional certification credit may be requested by qualifying participant for an added charge.

The Coping With Healthcare Reform: 2012 Health Plan Update Workshop will cover the latest guidance on Affordable Care Act and other federal health plan regulatory changes impacting employment-based group health plans and other key information employer and other group health plan sponsors, group health plans, insurers, plan administrators, fiduciaries, brokers and advisors and others working with these plans need to understand and cope with 2012-2013 ACA and other health plan requirements including:

  • ACA Summary of Benefits And Communications Mandates & Their Implications On Plan Documents, SPDs & Administration
  • ACA Culturally and Linguistically Appropriate Mandates
  • ACA External & Internal Review, ERISA Claims & Appeals, & Other Federal Claim Handling Requirements: What rules apply to which plans? What to do to minimize the impact of changing requirements?
  • ACA “Essential Health Benefit” Rules & Their Implications For Health Plans & Their Sponsors Now & After 2014
  • ACA, ADA & Other Federal Health Plan Nondiscrimination Rules
  • ACA W-2 & Other Federal Reporting, Notice & Disclosure Requirements
  • ACA grandfathered plan status: Do you have it? How do you lose it? What it does for your program?
  • ACA, COBRA, HIPAA, GINA, FMLA, Military Leave, Michelle’s Law & Other Federal Eligibility Mandates
  • Preventive care coverage & wellness program rules under Affordable Care Act, GINA, ADA & other federal regulations
  • Mental health & substance abuse, provider choice & other benefit mandates under ACA, Mental Health Parity & other federal rules
  • Federal Health Plan Notice & Communication Rules
  • ERISA Fiduciary Responsibility, Reporting & Disclosure & Other Rules
  • New HIPAA Privacy Rules & Audits & How Plans & Plan Sponsors Should Respond
  • Consumer Driven Health Plan Communication Strategies
  • Tips To Help Review & Update Plans, Communications, Vendor Agreements & Processes
  • Expected & Proposed ACA & Other Federal Health Plan Rules
  • Practical Strategies For Monitoring & Responding To New Requirements & Changing Rules
  • Participant Questions
  • More

The Supreme Court’s June 28, 2012 National Federation of Independent Business v. Sebelius ruling upholding the health care reform law means health plans, their employer and other sponsors, fiduciaries and administrators, and insurers must quickly update their health plan documents, summary plan descriptions and other communications, administrative procedures, contracts, reporting and other arrangements to meet Affordable Care Act and other federal rules that have, or by plan year end will, take effect pending the full rollout of the law in 2014.  The 2012 Health Plan Update Workshop on July 24, 2012, kicks off a series Solutions Law Press, Inc. is offering to help health plans and their leaders quickly and cost-effectively get up to speed with and respond to these requirements.   Other upcoming programs offered as part of the Health Plan-U 2012 Coping With Health Care Reform Series include:

Claims & Appeals Bootcamp*
July 31, 2012
12:30 P.M.-2:00 P.M. Eastern | 11:30 A.M.-1:00 P.M. Central | 10:30 A.M-12:00 P.M. Mountain | 9:30 A.M-11:00 A.M. Pacific

HIPAA Bootcamp*
August 14, 2012
12:30 P.M.-2:30 P.M. Eastern | 11:30 A.M.-1:30 P.M. Central | 10:30 A.M-12:30 P.M. Mountain | 9:30 A.M-11:30 A.M. Pacific

Health Plan Communications Bootcamp: SBCs, SPDs & Beyond*
August 28, 2012
12:30 P.M.-2:00 P.M. Eastern | 11:30 A.M.-1:00 P.M. Central | 10:30 A.M-12:00 P.M. Mountain | 9:30 A.M-11:00 A.M. Pacific

The Workshops are designed to help health plans, their employer and other sponsors, fiduciaries, administrators, brokers and consultants and others with responsibilities for these plans quickly learn key steps that they may need to take to update and administer their health plans to meet existing and emerging ACA, Employee Retirement Income Security Act (ERISA), Internal Revenue Code (Code) and other federal mandates.

Attorney Cynthia Marcotte Stamer Leads Workshops

The 2012 Health Plan Update and other Coping With Healthcare Reform Workshops in the Solutions Law Press, Inc. Health Plan-U Coping With Health Care Reform Series will be lead by attorney Cynthia Marcotte Stamer. 

A Fellow in the American College of Employee Benefits Counsel, recognized in International Who’s Who, and Board Certified in Labor & Employment Law, Ms. Stamer has 25 years experience advising and representing private and public employers, employer and union plan sponsors, employee benefit plans, associations, their fiduciaries, administrators, and vendors, group health, Medicare and Medicaid Advantage, and other insurers, governmental leaders and others on health and other employee benefit. employment, insurance and related matters.

Also a well-known and prolific author and popular speaker Board Certified in Labor & Employment Law, Ms. Stamer presently serves as Co-Chair of the ABA RPTE Section Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Committee, an ABA Joint Committee on Employee Benefits Representative, an Editorial Advisory Board Member of the Institute of Human Resources (IHR/HR.com) and Employee Benefit News, and various other publications.

A primary drafter of the Bolivian Social Security privatization law with extensive domestic and international regulatory and public policy experience, Ms. Stamer also has worked extensively domestically and internationally on public policy and regulatory advocacy on health and other 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.

A prolific author and popular speaker, Ms. Stamer regularly authors materials and conducts workshops and professional, management and other training on employee benefits, human resources and related topics for the ABA, Aspen Publishers, the Bureau of National Affairs (BNA), SHRM, World At Work, Government Institutes, Inc., the Society of Professional Benefits Administrators and many other organizations. She also regularly serves on the faculty and planning committees of a multitude of symposium and other educational programs.

For more details about Ms. Stamer’s services, experience, presentations, publications, and other credentials or to inquire about arranging counseling, training or presentations or other services by Ms. Stamer, see http://www.CynthiaStamer.com.

Registration, Continuing Education & Other Details

Register Now! The Registration Fee per course is $125.00 per person (plus an additional $10 service fee for each individual seeking Texas Department of Insurance Continuing Education Credit). Registration Fee Discounts are available for groups of three or more. Payment required via website registration required 48 hours in advance of the program to complete registration. Payment only accepted via website PayPal. No checks or cash accepted. Persons not registered at least 48 hours in advance will only participate subject to system and space availability.
Texas Department of Insurance and Other Continuing Education Credit.

All Health Plan-U Coping With Health Care Reform programs are approved to be offered for general certification credit by the Texas Department of Insurance, World At Work and HRCI education credit for the time period offered subject to fulfillment all applicable Texas Department of Insurance requirements, completion of required procedures and payment of the additional service processing fee of $10.00. The HIPAA Bootcamp program is Texas Department of Insurance-approved for 1.5 hours of General Credit and .5 Hours of Ethics Credit. The Texas Department of Insurance possesses the final authority to determine whether an individual qualifies to receive requested continuing education credit. Neither Solutions Law Press, Inc., the speaker nor any of their related parties guarantees the approval of credit for any individual or has any liability for any denial of credit. Special fees or other conditions may apply.

Cancellation & Refund Policies

In order to receive refund credit, written cancellation (either fax or e-mail) must be received at least 48 hours in advance of the meeting and are subject to a $10.00 refund processing fee. Refunds will be made within 60 days of receipt of written cancellation notice.

About Solutions Law Press, Inc.™

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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

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

 

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Posted by Cynthia Marcotte Stamer

Leprino Foods To Pay $550K To Settle OFCCP Charge Pre-Hire Screening Test Illegally Discriminated

July 19, 2012

The consent decree between the U.S. Department of Labor’s Office of Federal Contract Compliance Program and Leprino Foods Inc. resolving charges of systemic hiring discrimination at the company’s Lemoore West facility signed today by an Labor Department administrative law highlights the growing aggressiveness of the Labor Department in challenging employment screening practices. The Leprino Foods case highlights the advisability of businesses judiciously determining and documenting in advance the valid business justification for employment screening procedures such as pre-employment tests and background screening.

Leprino Foods is one of the largest producers of mozzarella cheese in the world and is based in Denver, Colo. Since 2005, the company has received contracts totaling nearly $50 million from U.S. Department of Agriculture’s Farm Services Agency to provide mozzarella and other dairy products to the federal government. The Leprino Foods consent decree settles OFCCP’s allegations that Leprino Foods’ use of a pre-employment test called WorkKeys to select hires for on-call laborer positions illegally discriminated against discrimination against African-American job applicants and applicants of Asian and Hispanic descent.

OFCCP charged Leprino Foods violated Executive Order 11246, which prohibits federal contractors and subcontractors from discriminating on the bases of race, color, religion, sex and national origin in their employment practices. The agency made its findings after a scheduled compliance review in which OFCCP investigators conducted interviews, analyzed company data and reviewed documents provided by the company. Through this review, OFCCP discovered that the administration of the WorkKeys exam had an adverse impact on minority job applicants for these specific positions. The agency also found that the exam was not job-related, as it tested applicants’ skills in mathematics, locating information and observation – skills that the OFCCP felt were not critical to the entry-level tasks performed by on-call laborers, such as inspecting products, monitoring equipment and maintaining sanitation at the facility.

Under the terms of the consent decree, Leprino will pay $550,000 in back wages, interest and benefits to 253 minority workers who were rejected for on-call laborer positions between January 2005 and October 2006 because they failed the WorkKeys exam. Additionally, the company has agreed to discontinue use of the test for this purpose, hire at least 13 of the original class members, undertake extensive self-monitoring measures and immediately correct any discriminatory practices. 

One of a growing number of challenges by the Obama Administration to pre-hire screening and credentialing procedures by employers as illegally discriminatory, the settlement reminds business leaders of the growing aggressiveness by the Obama Administration in challenging a broad range of pre-hire screening procedures such as pre-employment skills and other testing, background checks or the like.  In addition to challeging tests like that use by Leprino Foods, the OFCCP and EEOC under the Obama Administration also are challenging criminal background and other screening procedures.

In the face of these enforcement activities, businesses desiring to use these or other screening procedures should take steps to position themselves to defend against likely challenges and scrutiny. 

As part of these efforts, businesses should exercise care to conduct and retain carefully conducted and well documented analysis of the legitimate business justification for their use of tests, background checks or other credentialing procedures.  This analysis and documentation should be conducted prior to the implementation and use of these procedures to minimize the likely that the “after acquired evidence rule” or other similar arguments might be used to undermine the admissibility and effectiveness of these business justification arguments.  Businesses also should implement procedures to monitor for potential evidence of adverse impact or other improper bias against candidates in protected employment classes by the tests themselves or in their administration and implement well-documented processes to control for such bias.

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Posted by Cynthia Marcotte Stamer

Update Health Plans For Expanded MHPAEA & Health Care Reform Mental Health Mandates

July 15, 2012

With attention heavily focused on the health care reform mandates of the Patient Protection & Affordable Care Act (ACA), many employer and union sponsored group health plans are underestimating plan costs and risking significant liability from outdated mental health and substance abuse coverage rules to comply with the mental health parity mandates of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). 

Although covered group health plans and issuers generally have been required to comply with the statutory provisions of the MHPAEA for all plan years beginning after October 2, 2009 and with the interim final regulations jointly issued by the Departments of Labor, Treasury and Health and Human Services for all plan years beginning after June 30, 2010, many employer or other plan sponsors have yet to properly update their health plan documents, claims and appeals processes, summary plan descriptions and other communications to comply with these MHPAEA mental health benefit mandates or a myriad of other changes to federal health plan rules that already are effective.  Violations of these mandates can result Labor Department or private plaintiff lawsuits, requiring the health plan to pay benefits not budgeted for and in some cases, not covered by stop loss or other insurance, as well as Internal Revenue Service and other penalties, as well as attorneys’ fees and other costs of defense.

Solutions Law Press, Inc. invites you to catch up on what private employer and union health plans, their sponsors, fiduciaries and administrators need to do to update and administer their group health plans to comply with MHPAEA and other federal health plan mandates in addition to updating their health plans in response to the ACA requirements already effective or scheduled to take effect in upcoming months by participating in person or via WebEx in the “2012 Health Plan Update Workshop” on July 24, 2012.

Many Health Plans Need Update For MHPAEA & Other Federal Mental Health Mandates

The MHPAEA supplemented the previously enacted mental health parity requirements enacted under the Mental Health Parity Act of 1996 (MHPA).

For plans and policies subject to its provisions, the MHPAEA as implemented by the Departments’ interim final rules generally prohibit group health plans or group health insurance issuers from imposing financial or quantitative requirements (such as a copayment or coinsurance) or a quantitative treatment limitation (such as a limit on the number of outpatient visits or inpatient days covered) on mental health or substance use disorder benefits in any of 6 classifications that is more restrictive than those that apply to medical/surgical benefits in the same classification. Thus, if a plan generally applies a $25 copayment to at least 2/3 of outpatient, in-network, medical/surgical benefits, a higher copayment could not be imposed on outpatient, in-network mental health or substance use disorder benefits.

In addition to financial requirements and quantitative treatment limitations, plans and issuers often impose nonquantitative treatment limitations, such as:

  • Medical management standards limiting or excluding benefits based on medical necessity or medical appropriateness, or based on whether a treatment is experimental or investigative;
  • Formulary design for prescription drugs;
  • Standards for provider admission to participate in a network, including reimbursement rates;
  • Plan methods used to determine usual, customary, and reasonable fee charges;
  • Refusal to pay for higher-cost therapies until it can be shown that a lower-cost therapy is not effective (also known as fail-first policies or step therapy protocols); and
  • Exclusions based on failure to complete a course of treatment.

Since it released interim regulations, the Departments have published a series of FAQ guidance that answers various questions about interim final rules and taken other steps to promote awareness and understanding of the MHPAEA, as well as taken other steps to prepare for its enforcement.

Despite the availability of this guidance, many employer and other health plan sponsors, fiduciaries and administrators have not updated their health plans to comply with the MHPAEA guidance.  

Attention focused on the political fights and regulatory demands of ACA and an often unwarranted assumption of the compliance adequacy of plan designs and documentation provided by insurers, administrators and other professional service providers have lead many employer and other health plan sponsors, their health plan fiduciaries and administrators to fail to make legally required or otherwise needed changes.  These oversights are exposing many plans and their sponsors to unanticipated costs and potentially significant liability by failing to appropriately update their plans documentation, communications and procedures to comply with evolving mandates such as the mental health parity requirements of the MHPAEA as implemented by evolving guidance. 

Following the release of updates to the MHPAEA portion of the Employer Self Compliance Tool here by the Department of Labor Employee Benefit Security Administration (EBSA) last week and with mental health benefits among those that ACA specifically identifies as an “essential benefit,” employer and union health plans, their sponsors, fiduciaries and administrators should expect greater scrutiny of their plans compliance with federal mental health parity mandates by updating their health plans’ mental health and substance abuse provisions in response to the MHPAEA and other federal mandates.

7/24 Workshop Provides Update on MHPAEA & Other Health Plan Mandates

Solutions Law Press, Inc. invites you to catch up on the latest MHPAEA and other federal requirements impacting employer and union sponsored group health plans under ACA and other federal health plan regulations by participating in “Coping With Health Care Reform: 2012 Health Plan Update Workshop on Tuesday, July 24, 2012. Participants may choose to attend the live briefing in Addison, Texas or participate via WebEx for a registration fee of $125.00. To register or for more information, see here.

For Help or More Information

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

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

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

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern 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 concerning 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.

©2012 Cynthia Marcotte Stamer, P.C.

 

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Posted by Cynthia Marcotte Stamer

Record $2.3 Million+ H-2A Backpay Order Plus Civil Money Penalty Reminds Businesses Employing Foreign Workers To Manage Compliance

July 10, 2012

Underpaying and failing to meet other H-2A visa program requirements for its employment of temporary foreign agricultural workers was an extremely costly mistake for Yerington, Nevada-based onion grower Peri & Sons.   

Peri & Sons must pay a record total of $2,338,700 in back wages to 1,365 workers, plus a $500,000 civil money penalty to the Department of Labor for failing to properly pay foreign agricultural workers working under the H-2A visa program under a consent order entered by U.S. Department of Labor Administrative Law Judge Steven Berlin in San Francisco.  The consent order announced by the Labor Department Wage and Hour Division today (July 10, 2012) reminds U.S. businesses of the need to meet compliance responsibilities when employing foreign workers and illustrates the significant risks that employers of foreign workers risk by failing to meet minimum wage and hour, overtime, vis, I-9 and other requirements for employing foreign workers.

The record back pay order stems from charges brought by the Labor Department’s Wage and Hour Division after it determined that Peri & Sons violated the FLSA and the H-2A visa program requirements by underpaying H-2A employees involved in irrigation, harvesting, packing and shipping of onions sold in grocery stores nationwide. All of the affected workers came to the U.S. from Mexico under the H-2A temporary agricultural worker visa program. In most cases, their earnings fell below the hourly wage required by the program, as well as below the federal minimum wage of $7.25 per hour for a brief period of time. Investigators also found that workers were not paid for time spent in mandatory pesticide training or reimbursed for subsistence expenses while traveling to and from the U.S. Additionally, Peri & Sons did not pay the worker’s return transportation costs at the end of the contract period.

The H-2A temporary agricultural worker program permits agricultural employers who expect a shortage of domestic workers to bring nonimmigrant foreign workers to the United States to do temporary or seasonal agricultural work. The employer must file an application stating that a sufficient number of domestic workers are not available and the employment of these workers will not adversely affect the wages and working conditions of similarly employed workers in the U.S. Employers using the H-2A program also must meet a number of specific conditions relating to recruitment, wages, housing, meals and transportation. See more on H-2A visa employment rules here.

Reflective of the Obama Administration’s heavy emphasis of the enforcement of wage and hour and other laws protective of workers, the Peri & Sons order shows the potential risks that employers run when violating these rules.  To minimize these exposures, employers of H-2A or other workers employed under special visa programs should carefully manage these programs to ensure their ability to prove compliance with all requirements of the visa program, the FLSA, and other relevant laws.  These programs should include careful and ongoing due diligence to maintain a current understanding of all applicable requirements for the legal employment of these workers and the establishment of systemized processes and documentation both to support compliance and to preserve evidence necessary to prove this compliance against possible investigations or charges.  When conducting and planning these activities, businesses should keep in mind that employers of foreign workers generally are accountable for meeting all human resources and related laws generally applicale to employees as well as additional visa and other eligibility to work credentialing, documentation, pay and other requirements. 

About Ms. Stamer

Recognized in International Who’s Who, and Board Certified in Labor & Employment Law, attorney and management consultant Cynthia Marcotte Stamer has 25 years experience advising and representing private and public employers, staffing and manpower companies, employer and union plan sponsors, employee benefit plans, associations, their fiduciaries, administrators, and vendors, governmental leaders and others on wag hour and other workforce, employee benefits, compensation, internal controls and compliance, and related performance and risk management concerns. Her experience includes extensive work advising domestic and international businesses about employment, recruitment, compensation and management of workers and other human resources, employee benefit and other reengineering, performance management, risk management, compliance, public policy and other concerns and opportunities.

A primary drafter of the Bolivian Social Security privatization law with extensive domestic and international workforce, regulatory and public policy experience, Ms. Stamer has extensive experience advising U.S. and foreign businesses about the employment of foreign workers in the U.S., as well as other cross-border employment and other workforce management and compliance concerns.  In addition, Ms. Stamer also has worked extensively domestically and internationally on public policy and regulatory advocacy on human resources and other workforce, health and other employee benefits, insurance, tax, compliance and other matters.  She has represented clients in dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, Federal Trade Commission, HUD and Justice; state legislatures attorneys general, insurance, labor, worker’s compensation, and other state and local agencies and regulators; and various foreign governments and their officials.

Ms. Stamer also shares her experience through leadership involvement in a number of human resources and related management and professional organizations  An Editorial Advisory Board Member and author for the Institute of Human Resources (IHR/HR.com), Insurance Thought Leaders, Employee Benefit News, and various other highly regarded publications, Ms. Stamer also presently serves as Co-Chair of the ABA RPTE Section Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Committee, an ABA Joint Committee on Employee Benefits Representative and in various other professional and civic leadership. She previously has served on the Dallas World Affairs Council Board, and has been active in cross border policy, trade and other activities of the US-Mexico Chamber of Commerce and a variety of other organizations.    

A prolific author and popular speaker, Ms. Stamer regularly authors materials and conducts workshops and professional, management and other training on employee benefits, human resources, health care, privacy and data security, technology and other compliance and management topics.  Ms.  Stamer has written and spoken extensively on cross-border migration, workforce, health care, pension, insurance, ethics and internal controls, public policy and other challenges businesses and governments face in connection with cross border or multinational employment or operations.  An Editorial Advisory Board member and author for HR.com, Insurance Thought Leaders and many other publications, Ms. Stamer also regularly serves on the faculty and planning committees of a multitude of symposium and other educational programs. 

Her publications and insights on these and other related topics appear in the Health Care Compliance Association, American Bar Association, Atlantic Information Service, Bureau of National Affairs, World At Work, SHRM, The Wall Street Journal, Government Institutes, Inc.,Business Insurance, the Dallas Morning News, HR.Com, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications.   For more details about Ms. Stamer’s services, experience, presentations, publications, and other credentials or to inquire about arranging counseling, training or presentations or other services by Ms. Stamer, see www.CynthiaStamer.com or contact Ms. Stamer at (469) 767-8872 or via e-mail here.

Other Resources

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

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at ww.solutionslawpress.com. 

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

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

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Posted by Cynthia Marcotte Stamer

Stamer Speaks 11/15 About Things Plan Committees Must Do Differently In 2012 At SWBA Meeting

July 10, 2012

Stamer Speaks About Things Plan Committees Must Do Differently In 2012 At SWBA Meeting In November

Cynthia Marcotte Stamer will be among the featured panelists speaking about “The Flood of Things a Plan Committee Must Do Differently in 2012” at the Southwest Benefits Association (SWBA) 23rd Annual Employee Benefits Conference for Practitioners and Plan Sponsors scheduled for November 15-16, 2012 at the Doubletree Galleria Hotel in Dallas, Texas

During “The Flood of Things a Plan Committee Must Do Differently in 2012” program,  scheduled to begin at 4:00 PM on November 15, Ms. Stamer and other panelists will discuss the grow emerging challenges and responsibilities that employee benefit plan committees and other fiduciaries must deal with in 2012 such as new provider disclosures and participant disclosures about internal retirement plan fees, to new processes for handling claims and appeals arising under health plans now (and other types of plans soon), to identifying and documenting who really are the other fiduciaries of its plan, to avoiding stock drop exposure (especially after Pfiel), excessive fees exposure, securities lending exposure and others. 

The program is part of two days of educational programs that the SWBA will provide during the Conference.  To register or for additional details, see here.

About Ms. Stamer

A Fellow in the American College of Employee Benefits Counsel, recognized in International Who’s Who, and Board Certified in Labor & Employment Law, attorney and health benefit consultant Cynthia Marcotte Stamer has 25 years experience advising and representing private and public employers, employer and union plan sponsors, employee benefit plans, associations, their fiduciaries, administrators, and vendors, group health, Medicare and Medicaid Advantage, and other insurers, governmental leaders and others on health and other employee benefit. employment, insurance and related matters. Her experience includes extensive work on advising employee benefit plans, their fiduciaries and advisors, employers, creditors, debtors, trustees, financial services organizations about employee benefit and other rerengineering, performance management, risk management, compliance, public policy and other concerns and opportunities.

A well-known and prolific author and popular speaker Board Certified in Labor & Employment Law, Ms. Stamer presently serves as Co-Chair of the ABA RPTE Section Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Committee, an ABA Joint Committee on Employee Benefits Representative, an Editorial Advisory Board Member of the Institute of Human Resources (IHR/HR.com) and Employee Benefit News, and various other publications.  A primary drafter of the Bolivian Social Security privatization law with extensive domestic and international regulatory and public policy experience, Ms. Stamer also has worked extensively domestically and internationally on public policy and regulatory advocacy on health and other 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. A prolific author and popular speaker, Ms. Stamer regularly authors materials and conducts workshops and professional, management and other training on employee benefits, human resources, health care, privacy and data security, technology and other compliance and management topics.  Her publications and insights appear in the Health Care Compliance Association, American Bar Association, Atlantic Information Service, Bureau of National Affairs, World At Work, SHRM, The Wall Street Journal, Government Institutes, Inc.,Business Insurance, the Dallas Morning News, HR.Com, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications.   An Editorial Advisory Board member and author for HR.com, Insurance Thought Leaders and many other publications, Ms. Stamer also regularly serves on the faculty and planning committees of a multitude of symposium and other educational programs.  For more details about Ms. Stamer’s services, experience, presentations, publications, and other credentials or to inquire about arranging counseling, training or presentations or other services by Ms. Stamer, see www.CynthiaStamer.com or contact Ms. Stamer at (469) 767-8872 or via e-mail here

Other Resources

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

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at ww.solutionslawpress.com. 

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

©2011 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.

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Posted by Cynthia Marcotte Stamer

Supreme Court Decision Puts Health Plans Under Fire To Complete ACA-Required Summary of Benefits & Communications & Other Health Plan Updates

July 10, 2012

SBCs Required By 1st Day Of 1st Enrollment Period Beginning After September 22, 2012

Health Plan-U Coping With Health Care Reform Workshop Series Provide Timely Updates Beginning July 24

The June 28, 2012 Supreme Court National Federation of Independent Business v. Sebelius ruling rejecting constitutional challenges to the Patient Protection and Affordable Care Act (Affordable Care Act). means most health plans, their employer and other sponsors, fiduciaries and administrators, and insurers must rush to update their health plan documents, summary plan descriptions and other communications, administrative procedures and contracts, reporting and other arrangements to meet the “Summary of Benefits & Coverage” (SBC) and other requirements of Affordable Care Act and other federal rules that have, or by year-end will, apply to their group health plans.

Final SBC Regulations[*] implementing the Affordable Care Act’s summary of benefits and coverage requirements jointly published February 14, 2012 by the Departments of Labor, Health and Human Services (HHS), and the Treasury (the Departments) will require most health plans and health insurers begin providing the SBC and Uniform Glossary meeting Department standards to covered persons and coverage applicants beginning on the opening day of the first enrollment period beginning after September 22, 2012.

Parties responsible for completing these arrangements should expect to need significant lead time properly to tailor a SBC and Glossary to their health plan, and complete other necessary arrangements to timely comply with the Final SBC Regulations. Most health plans will need significant time to complete the analysis needed to prepare a SBC appropriately tailored to their health plan.  In addition, most group health plans and insurers, their sponsors, administrators and fiduciaries also generally want to identify and make changes to their health plan design, documents, summary plan descriptions and other materials and practices in response to the new requirements.

Completing the preparations to meet the deadline for providing SBCs won’t be easy for most health plans and insurers planning to conduct annual or other enrollment periods this Fall.  Most employer and other health plan sponsors, fiduciaries, insurers and administrators can expect to experience significant challenges completing the arrangements necessary to comply with the highly technical and extremely rigid requirements of the SBC rules. Most health plan sponsors, fiduciaries and administrators also will want to consider tightening plan document, summary plan description, claims and appeals notices and other plan documentation and associated administrative procedures to coördinate with the SBC language and other Affordable Care Act requirements.

Regulations implementing the SBC requirements published in February, 2012 and later regulatory guidance dictate detailed requirements about the required content of the SBC, as well as dictate that health plans and insurers covered by the SBC rules provide a Uniform Glossary of terms, many of which are likely to differ from definitions of the same or similar terms in plan documents, summary plan descriptions or other plan related documents. To help further clarify these requirements, the Departments on March 19, 2012 published a new FAQ[†] that clarifies certain information about the SBC Regulation and its deadline and other requirements. When plans cover a culturally diverse workforce, health plans also will need to make the necessary arrangements to prepare their plans where necessary to comply with the Affordable Care Act’s requirement that health plans and insurers communicate in culturally and linguistic way.

Taking time to make changes needed to find and resolve potential conflicts and other ambiguities between required terms of the SBC and Glossary and existing health plan documentation, communications and procedures is particularly important in light of the United States Supreme Court’s May 16, 2011 ruling in Cigna Corp. v. Amara.  In Amara, the Supreme Court ruled that federal courts may use equitable remedies provided for under the Employee Retirement Income Security Act to give a remedy to individuals hurt because summary plan descriptions or other communication or disclosure documents provided by the health plan contain terms that conflict with the official health plan documents under certain conditions.  Health plans, their fiduciaries, sponsoring employers and unions, insurers, administrative service providers and their management also generally will want to carefully craft the SBC and other related plan materials and processes to manage these risks and support the enforceability of the intended plan design.

Workshops Helps Health Plans, Fiduciaries, Insurers & Administrators Prepare

Health plans, their fiduciaries, employer and other sponsors, insurers and administrator can catch up on steps to take to prepare their health plans to comply with the new SBC and other requirements by participating in the 2012 Health Plan-U Coping With Health Care Reform Workshops that Solutions Law Press, Inc. will host beginning on July 24, 2012.

The Workshop Series now includes the following four Workshops to be conducted between July 24, 2012 and August 28, 2012:

2012 Health Plan Update*

July 24, 2012

11:30 A.M.-1:30 P.M. Central

Claims & Appeals Bootcamp*

July 31, 2012

11:30 A.M.-1:00 P.M. Central

HIPAA Bootcamp*

August 14, 2012

11:30 A.M.-1:30 P.M. Central

Health Plan Communications

Bootcamp:

SBCs, SPDs & Beyond*

August 28, 2012

11:30 A.M.-1:00 P.M.

More programs are planned for later in the Fall.  To register for these programs or get more details, see here.

For Help or More Information

If you need help preparing to comply with the SBC requirements or other help 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 24 years of work, advocacy, education and publications on leading health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

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

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

©2012 Cynthia Marcotte Stamer, P.C.  Limited Non-Exclusive Right To Reprint Granted To Solutions Law Press, Inc.  All Other Rights Reserved.

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

[†] See FAQS About Affordable Care Act

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

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Posted by Cynthia Marcotte Stamer

$27M+ Settlement Highlights Fiduciary Risks Plan Sponsors & Fiduciaries Risk If Plan Vendors, Compensation Improperly Set

July 7, 2012

A $27 million settlement announced by the Department of Labor on July 7 shows the big liability that employer, union or association plan sponsors and their fiduciaries risk by failing to take appropriate steps when deciding who will serve as fiduciaries or other plan sponsors or setting the compensation paid by the plan for those services.

The National Rural Electric Cooperative Association (NRECA) will restore $27,272,727 to three association-sponsored employee benefit plans covered by the Employee Retirement Income Security Act (ERISA) to settle U.S. Department of Labor Employee Benefits Security Administration (EBSA) charges that the association violated ERISA by selecting itself as a service provider to the plans, determining its own compensation and making payments to itself that exceeded NRECA’s direct expenses in providing services to the employee benefit plans.  EBSA announced the settlement on July 5, 2012.

Following an EBSA investigation, EBSA accused NRECA of violating NRECA by selecting itself to act as the administrator of various association employee benefit plans and arranging for the NRECA to receive unreasonable compensation for these services which NRECA set without the use of independent parties to prudently verify the appropriateness of the selection or compensation arrangements.  EBSA said these arrangements violated the self-dealing and other fiduciary responsibility requirements of ERISA.

Headquartered in Arlington, NRECA is a nonprofit trade association for electric power cooperatives. The sponsored plans are open to members of the trade association as well as the association’s employees. As of 2010, the latest information available, the NRECA 401(k) Plan had 68,970 participants, the NRECA Retirement Security Plan had 64,286 participants and the NRECA Group Benefits Plan had 73,644 participants.

Under the terms of the agreement, NRECA will not provide administrative services to the NRECA Retirement Security Plan, the NRECA 401(k) Plan and the NRECA Group Benefits Plan without entering into a written contract or agreement with the plans that must be approved by an independent fiduciary. The independent fiduciary must determine whether the use of NRECA to provide administrative services to the plans is prudent and reasonable, determine the categories of direct expenses that NRECA may charge to the plans and the methods of calculating those expenses, and monitor NRECA’s compliance with certain terms of the agreement. The agreement also provides that during a 60-month period following the implementation date, NRECA shall discount the amount of permissible direct expenses for which it seeks reimbursement from all three plans in the amount of $22,727,272.  The balance of the settlement payment, $4,545,455, already has been paid directly to the NRECA 401(k) Plan.  In addition to the amounts returned to the plans, NRECA will pay $2,727,276 in civil penalties.

“This settlement sends a clear message to plan fiduciaries that they cannot profit from selecting themselves to provide services to plans,” said Phyllis Borzi, assistant secretary of labor for employee benefits security in announcing the settlement.

Employee benefit plan vendor selection and compensation arrangements made by association and other employee benefit plan sponsors, fiduciaries and service providers are coming under increasing scrutiny by the EBSA.  While ERISA technically grants plan sponsors and fiduciaries wide latitude to make these choices, the exercise of these powers comes with great responsibility.  See e.g., Plan Sponsors. Their Owners & Management & Others Risk Personal Liability If Others Defraud Plans or Mismanage Employee Benefit Plan Responsibilities; New Rules Give Employee Benefit Plan Fiduciaries & Investment Advisors New Investment Advice Options;DOL Proposes To Expand Investment Related Services Giving Rise to ERISA Fiduciary Status As Investment Fiduciary. 

Associations, employer and other plan sponsors, and other entities and individuals who in name or in function possess or exercise discretionary responsibility or authority over the selection of plan fiduciaries, administrative or investment service providers or other services to the plan or the establishment of their compensation generally must make those decisions in accordance with the fiduciary responsibility and prohibited transaction rules of ERISA.  Among other things, these rules generally require that fiduciaries exercising discretion over these and other plan matters:

ü    Must act prudently for the exclusive benefit of plan participants and beneficiaries;

ü    Must not involve the plan or its assets in any arrangement that is listed as a prohibited transaction under ERISA § 406; and

ü    Must not act for the benefit of themselves or any third party.

Fiduciaries that violate these rules risk personal liability to the plans for the greater of profits realized or losses sustained by the plan, plus attorneys’ fees and costs, as well as exposure to an EBSA-assessed ERISA civil penalty equal to 20% of the amount of the fiduciary breach. 

Since the earliest days of ERISA, the EBSA as well as private plaintiffs have aggressively enforced these and other fiduciary responsibility rules.  In recent years, EBSA has taken further steps to tighten and enforce these protections such as the new fee disclosure rules recently implemented by the EBSA and other fiduciary guidance. See, e.g., Western Mixers & Officers Ordered To Pay $1.2M+ For Improperly Using Benefit Plan Funds For Company Operations, Other ERISA Violations; Plan Administrator Faces Civil & Criminal Prosecution For Allegedly Making Prohibited $3.2 Million Real Estate Investment; Tough times are no excuse for ERISA shortcuts.

Despite these well-document fiduciary exposures and a well-established pattern of enforcement by the Labor Department and private plaintiffs, many companies and their business leaders fail to appreciate the responsibilities and liabilities associated with the establishment and administration of employee benefit plans.  Frequently, employer and other employee benefit plan sponsors fail adequately to follow or document their administration of appropriate procedures to be in a position to demonstrate their fulfillment of these requirements when selecting plan fiduciaries and service providers, determining the compensation paid for their services, overseeing the performance of these parties, or engaging in other dealings with respect to plan design or administration.  In other instances, businesses and their leaders do not realize that the functional definition that ERISA uses to determine fiduciary status means that individuals participating in discretionary decisions relating to 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. For this reason, businesses and associations providing employee benefits to employees or dependents, as well as members of management participating in, or having responsibility to oversee or influence decisions concerning the establishment, maintenance, funding, and administration of their organization’s employee benefit programs need a clear understanding of their responsibilities with respect to such programs, the steps that they should take to demonstrate their fulfillment of these responsibilities, and their other options for preventing or mitigating their otherwise applicable fiduciary risks.

In light of the significant liability risks, employer, association and other employee benefit plan sponsors and their management, plan fiduciaries, service providers and consultants should exercise care when selecting plan fiduciaries and service providers, establishing their compensation and making other related arrangements.  To minimize fiduciary exposures, parties participating in these activities should seek the advice of competent legal counsel concerning their potential fiduciary status and responsibilities relating to these activities and take appropriate steps to minimize potential exposures.

For Help or More Information

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

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

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

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

Other Resources

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

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at ww.solutionslawpress.com. 

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

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

Comments Off on $27M+ Settlement Highlights Fiduciary Risks Plan Sponsors & Fiduciaries Risk If Plan Vendors, Compensation Improperly Set | Employee Benefits, Employers, ERISA, Fiduciary Responsibility, Health Plans, Mental Health, Mental Health Parity, Retirement Plans, Tax | Tagged: , , , , , , | Permalink
Posted by Cynthia Marcotte Stamer

7/24 “Health Plan Update” Workshop Kicks Off 2012 Health Plan-U Coping With Health Care Reform Workshop Series

July 6, 2012

2012 Health Plan-U Coping With Health Care Reform Series  Provides Key Training & Information For Health Plans, Sponsoring Employers,

Fiduciaries, Administrators & Advisors On ACA & Other Responsibilities

Health plans, their employer and other plan sponsors, fiduciaries, administrators, brokers and consultants and other service providers are invited to geta 2012/2013 Health Plan Compliance Checkup by participating in the Health Plan Update Workshop Solutions Law Press, Inc. is hosting on July 24, 2012 as part of its 2012 Health Plan-U Coping with Health Care Reform Workshop Series beginning with the kickoff program, “2012 Health Plan Update” on July 24, 2012. 

The Supreme Court’s June 28, 2012 National Federation of Independent Business v. Sebelius ruling upholding the health care reform law means health plans, their employer and other sponsors, fiduciaries and administrators, and insurers must quickly update their health plan documents, summary plan descriptions and other communications, administrative procedures, contracts, reporting and other arrangements to meet Affordable Care Act and other federal rules that have, or by plan year end will, take effect pending the full rollout of the law in 2014.   Beginning with the Health Plan Update Workshop on July 24, 2012, Solutions Law Press, Inc. is working to help health plans and their leaders quickly and cost-effectively get up to speed with and respond to these requirements by hosting the following series of workshops as part of its 2o12 Health Plan-U Coping With Health Care Reform Worksop Series:

Coping With Health Care Reform:  2012 Health Plan Update Workshop*

July 24, 2012

12:30 P.M.-2:30 P.M. Eastern | 11:30 A.M.-1:30 P.M. Central | 10:30 A.M-12:30 P.M. Mountain | 9:30 A.M-11:30 A.M. Pacific

 Claims & Appeals Bootcamp*

July 31, 2012

12:30 P.M.-2:00 P.M. Eastern | 11:30 A.M.-1:00 P.M. Central  | 10:30 A.M-12:00 P.M. Mountain | 9:30 A.M-11:00 A.M. Pacific

HIPAA Bootcamp*

August 14, 2012

12:30 P.M.-2:30 P.M. Eastern | 11:30 A.M.-1:30 P.M. Central  | 10:30 A.M-12:30 P.M. Mountain | 9:30 A.M-11:30 A.M. Pacific

 Health Plan Communications Bootcamp:  SBCs, SPDs & Beyond*

August 28, 2012

12:30 P.M.-2:00 P.M. Eastern | 11:30 A.M.-1:00 P.M. Central | 10:30 A.M-12:00 P.M. Mountain | 9:30 A.M-11:00 A.M. Pacific 

The Workshops are designed to help health plans, their employer and other sponsors, fiduciaries, administrators, brokers and consultants and others with responsibilities for these plans quickly learn key steps that they may need to take to update and admininster their health plans to meet existng and emerging ACA, Employee Retirement Income Security Act (ERISA), Internal Revenue Code (Code) and other federal mandates. 

7/24 Health Plan Update Workshop Kicks Off Series

Solutions Law Press, Inc. HR & Benefits Update will kick off its 2012 Health-U Coping With Health Care Reform Workshop Series by hosting the 2012 Health Plan Update Workshop on July 24, 2012 from 12:30 P.M.-2:30 P.M. Eastern, 11:30 A.M.-1:30 P.M. Central, 10:30 A.M-12:30 P.M. Mountain and  9:30 A.M-11:30 A.M. Pacific Time.

The June 28, 2012 Supreme Court National Federation of Independent Business v. Sebelius ruling rejecting constitutional challenges to the ACA health care reform law means most health plans, their employer and other sponsors, fiduciaries and administrators, and insurers must rush to update their health plan documents, summary plan descriptions and other communications, administrative procedures and contracts, reporting and other arrangements to meet the requirements of ACA that have, or by year end will, take effect pending the full rollout of the law in 2014.  

Solutions Law Press, Inc. invites you to catch up on the latest requirements and guidelines impacting employer and union sponsored group health plans under ACA and other federal health plan regulations by participating in “Coping With Health Care Reform:  2012 Health Plan Update Workshop on Tuesday, July 24, 2012.   Participants may choose to attend the live briefing in Addison, Texas or take part via WebEx for a registration fee of $125.00.  Texas Department of Insurance Continuing Education Credit and other professional certification credit may be requested by qualifying participant for an added charge.

The Coping With Healthcare Reform: 2012 Health Plan Update Workshop will cover the latest guidance on Affordable Care Act and other federal health plan regulatory changes impacting employment-based group health plans and other key information employer and other group health plan sponsors, group health plans, insurers, plan administrators, fiduciaries, brokers and advisors and others working with these plans need to understand and cope with 2012-2013 ACA and other health plan requirements including:

√ ACA Summary of Benefits And Communications Mandates & Their Implications On Plan Documents, SPDs & Administration

√ ACA Culturally and Linguistically Appropriate Mandates

√ ACA External & Internal Review, ERISA Claims & Appeals, & Other Federal Claim Handling Requirements:  What rules apply to which plans?  What to do to minimize the impact of changing requirements?

√ ACA “Essential Health Benefit” Rules & Their Implications For Health Plans & Their Sponsors Now & After 2014

√ ACA, ADA & Other Federal Health Plan Nondiscrimination Rules

√ ACA W-2 & Other Federal Reporting, Notice & Disclosure Requirements

√ ACA grandfathered plan status:  Do you have it?  How do you lose it?  What it does for your program?

√ ACA, COBRA, HIPAA, GINA, FMLA, Military Leave, Michelle’s Law & Other Federal Eligibility Mandates

√ Preventive care coverage & wellness program rules under Affordable Care Act, GINA, ADA & other federal regulations

√ Mental health & substance abuse, provider choice & other benefit mandates under ACA, Mental Health Parity & other federal rules

√ Federal Health Plan Notice & Communication Rules

√ ERISA Fiduciary Responsibility, Reporting & Disclosure & Other Rules

√ New HIPAA Privacy Rules  & Audits & How Plans & Plan Sponsors Should Respond

√ Consumer Driven Health Plan Communication Strategies

√ Tips To Help Review & Update Plans, Communications, Vendor Agreements & Processes 

√ Expected & Proposed ACA & Other Federal Health Plan Rules

√ Practical Strategies For Monitoring & Responding To New Requirements & Changing Rules

√ Participant Questions

√ More

Cynthia Marcotte Stamer Leads Workshops

The 2012 Health Plan Update and other Coping With Healthcare Reform Workshops will be lead by attorney Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefits Counsel, recognized in International Who’s Who, and Board Certified in Labor & Employment Law, Ms. Stamer has  25 years experience advising and representing private and public employers, employer and union plan sponsors, employee benefit plans, associations, their fiduciaries, administrators, and vendors, group health, Medicare and Medicaid Advantage, and other insurers, governmental leaders and others on health and other employee benefit. employment, insurance and related matters. A well-known and prolific author and popular speaker Board Certified in Labor & Employment Law, Ms. Stamer presently serves as Co-Chair of the ABA RPTE Section Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Committee, an ABA Joint Committee on Employee Benefits Representative, an Editorial Advisory Board Member of the Institute of Human Resources (IHR/HR.com) and Employee Benefit News, and various other publications.  A primary drafter of the Bolivian Social Security privatization law with extensive domestic and international regulatory and public policy experience, Ms. Stamer also has worked extensively domestically and internationally on public policy and regulatory advocacy on health and other 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. A prolific author and popular speaker, Ms. Stamer regularly authors materials and conducts workshops and professional, management and other training on employee benefits, human resources and related topics for the ABA, Aspen Publishers, the Bureau of National Affairs (BNA), SHRM, World At Work, Government Institutes, Inc., the Society of Professional Benefits Administrators and many other organizations. She also regularly serves on the faculty and planning committees of a multitude of symposium and other educational programs.  For more details about Ms. Stamer’s services, experience, presentations, publications, and other credentials or to inquire about arranging counseling, training or presentations or other services by Ms. Stamer, see www.CynthiaStamer.com.

 Registration, Continuing Education & Other Details

Register Now!  The Registration Fee per course is $125.00 per person (plus an additional $10 service fee for each individual seeking Texas Department of Insurance Continuing Education Credit).  Registration Fee Discounts are available for groups of three or more.  Payment required via website registration required 48 hours in advance of the program to complete registration.  Payment only accepted via website PayPal.  No checks or cash accepted.  Persons not registered at least 48 hours in advance will only participate subject to system and space availability.

 * Texas Department of Insurance and Other Continuing Education Credit 

All Health Plan- U Coping With Health Care Reform programs are approved to be offered for general certification credit by the Texas Department of Insurance  for the time period offered subject to fulfillment all applicable Texas Department of Insurance requirements, completion of required procedures and payment of the additional service processing fee of $10.00.  An application for continuing education credit for other programs is pending. The HIPAA Bootcamp program is approved for 1.5 hours of General Credit and .5 Hours of Ethics Credit.  The Texas Department of Insurance possesses the final authority to determine whether an individual qualifies to receive requested continuing education credit.  Neither Solutions Law Press, Inc., the speaker or any of their related parties guarantees the approval of credit for any individual or has any liability for any denial of credit.    HRCI and World At Work certification credit for the these programs has been requested but approval is currently  pending.  If you have special continuing education credit needs that you wish us to consider, please let us know.  We are happy to visit with you about our ability to accommodate your request.  Special fees or other conditions may apply. 

Camcellation & Refund Policies

 In order to receive refund credit, written cancellation (either fax or e-mail) must be received at least 48 hours in advance of the meeting and are subject to a $10.00 refund processing fee.  Refunds will be made within 60 days of receipt of written cancellation notice.

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 promote effective management of legal and operational 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. 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 intended to or shall be construed as establishing an attorney-client relationship,  to constitute legal advice or provide any assurance or expectation from Solutions Law Press, Inc., the presenter or any related parties. 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

©2012 Solutions Law Press, Inc. All Rights Reserved.

Comments Off on 7/24 “Health Plan Update” Workshop Kicks Off 2012 Health Plan-U Coping With Health Care Reform Workshop Series | 105(h), Affordable Care Act, Claims Administration, COBRA, Employee Benefits, Employers, ERISA, family leave, Fiduciary Responsibility, FMLA, Health Plans, Human Resources, Income Tax, medical leave, Medicare Part D, Mental Health, Mental Health Parity, MEWA, Patient Empowerment, Patient Protection and Affordable Care Act, Payroll Tax, Prescription Drugs, Public Policy, Tax, Wellness Programs | Permalink
Posted by Cynthia Marcotte Stamer

Coping With Health Care Reform: 2012 Health Plan Update Workshop July 24, 2012: Register Now!

July 2, 2012

Coping With Health Care Reform: 2012 Health Plan Update

A Solutions Law Press HR & Benefits Workshop

July 24, 2012

10:30 A.M.-Noon Eastern | 11:30 A.M.-1:00 P.M. Central | 9:30 A.M-11:00 A.M. Pacific

Register Now!

Get a 2012/2013 Health Plan Compliance Checkup! 

 Learn Latest About What Your Health Plan Must Do To Meet Patient Protection & Affordable Care Act  (ACA) Summary of Benefits & Communications (SBC), External Review,  Culturally & Linguistically Appropriate, Nondiscrimination,  Mandated Coverage & Benefit & Other Affordable Care Act, As Well As The Latest On ERISA & Other Federal Health Plan Rules!

The June 28, 2012 Supreme Court National Federation of Independent Business v. Sebelius ruling rejecting constitutional challenges to the ACA health care reform law means most health plans, their employer and other sponsors, fiduciaries and administrators, and insurers must rush to update their health plan documents, summary plan descriptions and other communications, administrative procedures and contracts, reporting and other arrangements to meet the requirements of ACA that have, or by year end will, take effect pending the full rollout of the law in 2014.  

Solutions Law Press, Inc. invites you to catch up on the latest requirements and guidelines impacting employer and union sponsored group health plans under ACA and other federal health plan regulations by participating in “Coping With Health Care Reform:  2012 Health Plan Update Workshop on Tuesday, July 24, 2012.   Participants may choose to attend the live briefing in Addison, Texas or take part via WebEx for a registration fee of $125.00.  Texas Department of Insurance Continuing Education Credit and other professional certification credit may be requested by qualifying participant for an added charge.

Learn Latest On 2012/2013 Federal Health Plan Requirements

 The Coping With Healthcare Reform: 2012 Health Plan Update Workshop will cover the latest guidance on Affordable Care Act and other federal health plan regulatory changes impacting employment-based group health plans and other key information employer and other group health plan sponsors, group health plans, insurers, plan administrators, fiduciaries, brokers and advisors and others working with these plans need to understand and cope with 2012-2013 ACA and other health plan requirements including:

  • ACA Summary of Benefits And Communications Mandates & Their Implications On Plan Documents, SPDs  & Administration
  • ACA Culturally and Linguistically Appropriate Mandates
  • ACA External & Internal Review, ERISA Claims & Appeals, & Other Federal Claim Handling Requirements:  What rules apply to which plans?  What to do to minimize the impact of changing requirements.
  • ACA “Essential Health Benefit” Rules & Their Implications For Health Plans & Their Sponsors Now & After 2014
  •  ACA, ADA & Other Federal Health Plan Nondiscrimination Rules
  • ACA W-2 & Other Federal Reporting, Notice & Disclosure Requirements
  • ACA grandfathered plan status:  Do you have it?  How do you lose it?  What it does for your program?
  • ACA, COBRA, HIPAA, GINA, FMLA, Military Leave, Michelle’s Law & Other Federal Eligibility Mandates
  • Preventive care coverage & wellness program rules under Affordable Care Act, GINA, ADA & other federal regulations
  • Mental health & substance abuse, provider choice & other benefit mandates under ACA, Mental Health Parity & other federal rules
  • Federal Health Plan Notice & Communication Rules
  • ERISA Fiduciary Responsibility, Reporting & Disclosure & Other Rules
  • New HIPAA Privacy Rules  & Audits & How Plans & Plan Sponsors Should Respond
  • Consumer Driven Health Plan Communication Strategies
  • Tips To Help Review & Update Plans, Communications, Vendor Agreements & Processes
  • Expected & Proposed ACA & Other Federal Health Plan Rules
  • Practical Strategies For Monitoring & Responding To New Requirements & Changing Rules
  • Participant Questions
  • More

About The Speaker

A Fellow in the American College of Employee Benefits Counsel, recognized in International Who’s Who, and Board Certified in Labor & Employment Law, attorney and health benefit consultant Cynthia Marcotte Stamer has  25 years experience advising and representing private and public employers, employer and union plan sponsors, employee benefit plans, associations, their fiduciaries, administrators, and vendors, group health, Medicare and Medicaid Advantage, and other insurers, governmental leaders and others on health and other employee benefit. employment, insurance and related matters. A well-known and prolific author and popular speaker Board Certified in Labor & Employment Law, Ms. Stamer presently serves as Co-Chair of the ABA RPTE Section Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Committee, an ABA Joint Committee on Employee Benefits Representative, an Editorial Advisory Board Member of the Institute of Human Resources (IHR/HR.com) and Employee Benefit News, and various other publications.  A primary drafter of the Bolivian Social Security privatization law with extensive domestic and international regulatory and public policy experience, Ms. Stamer also has worked extensively domestically and internationally on public policy and regulatory advocacy on health and other 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. A prolific author and popular speaker, Ms. Stamer regularly authors materials and conducts workshops and professional, management and other training on employee benefits, human resources and related topics for the ABA, Aspen Publishers, the Bureau of National Affairs (BNA), SHRM, World At Work, Government Institutes, Inc., the Society of Professional Benefits Administrators and many other organizations. She also regularly serves on the faculty and planning committees of a multitude of symposium and other educational programs.  For more details about Ms. Stamer’s services, experience, presentations, publications, and other credentials or to inquire about arranging counseling, training or presentations or other services by Ms. Stamer, see http://www.CynthiaStamer.com.

Registration, Education Credit & Other Details

REGISTRATION FEE:  Registration Fee $125.00 per person (plus an additional $10 service fee for parties seeking Texas Department of Insurance Continuing Education Credit).  Registration Fee Discounts available for groups of three or more.  Payment required via website registration required 48 hours in advance of the program to complete registration.  Payment only accepted via website PayPal.  No checks or cash accepted.  Persons not registered at least 48 hours in advance will only participate subject to system and space availability.   Register Now!

TEXAS DEPARTMENT OF INSURANCE CONTINUING EDUCATION CREDIT:  This program has been approved to be offered for general certification credit by the Texas Department of Insurance subject to fulfillment all applicable Texas Department of Insurance requirements, completion of required procedures and payment of the additional service processing fee of $10.00.  The Texas Department of Insurance possesses the final authority to decide whether an individual qualifies to receive requested continuing education credit.  Neither Solutions Law Press, Inc. , the speaker or any of their related parties shall have any liability therefore.

OTHER PROFESSIONAL CERTIFICATION OR CONTINUING EDUCATION CREDIT:   HRCI and World At Work certification credit requested and pending.  If you have special continuing education credit needs that you wish us to consider, please let us know.  We are happy to visit with you about our ability to accommodate your request.  Special fees or other conditions may apply. 

CANCELLATION   & REFUND POLICY:  In order to receive credit, cancellation (either fax or mail) must be received at least 48 hours in advance of the meeting and are subject to a $10.00 refund processing fee.  Refunds will be made within 60 days of receipt of written cancellation notice.. DISABILITIES ACCOMMODATION:  If you are an individual with a disability who requires accommodation to take part, please let us know when registering so that we may consider your request.

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 promote effective management of legal and operational performance, regulatory compliance and risk management, data and information protection and risk management and other key management objectives. Our resources include a broad range of   legal, regulatory, compliance, risk management, internal controls and other key information and support to aid management generally as well as industry and discipline specific resources on Management Compliance, Operations & Risk Management; Human Resources, Employee Benefits & Compensation, Health Plans & Insurance; Investigations, Audits & Assessments; Internal & External Controls & Policies; Officer, Directors & Owner Risk Management; Privacy & Other Information Security; Public Policy & Regulatory Oversight; Quality & Process Management; Vendor & Customer Relationship; Event Management; and Other Management & Operations Needs. 

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.

Save The Date & Register For These Upcoming  HR & Benefits Workshops

Solutions Law Press, Inc sponsors many valuable Human Resources and Employee Benefits Workshops. Register or get more information on the following upcoming Health Plan Workshops  Here:

July 24, 2012, Coping With Health Care Reform: 2012 Health Plan Update Workshop

 July 31, 2012, Claims & Appeals Bootcamp

August 14, 2012, HIPAA Bootcamp

 Sponsorships & Other Partnering Opportunities

Solutions Law Press, Inc. offers many sponsorship and other opportunities for consultants, brokers, associations and other organizations to offer our training and other resources to groups and others on preferred terms.  To explore these opportunities, please E-mail cindy@solutionslawpress.com.

Important Information

Solutions Law Press, Inc.™  programs, publications and other resources are provided only for general informational and educational purposes. 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 intended to or shall be construed as establishing an attorney-client relationship,  to constitute legal advice or provide any assurance or expectation from Solutions Law Press, Inc., the presenter or any related parties. 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. 

©2012 Solutions Law Press, Inc.  All rights reserved.

Comments Off on Coping With Health Care Reform: 2012 Health Plan Update Workshop July 24, 2012: Register Now! | Uncategorized | Tagged: , , , , , , , | Permalink
Posted by Cynthia Marcotte Stamer

OCR Hits Alaska Medicaid For $1.7M+ For HIPAA Security Breach

June 26, 2012

The Alaska State Medicaid Agency, the Alaska Department of Health and Social Services (DHSS) will pay the U.S. Department of Health and Human Services’ (HHS) $1,700,000 to settle possible violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Security Rule.  Alaska DHSS also has agreed to take corrective action to properly safeguard the electronic protected health information (ePHI) of their Medicaid beneficiaries. 

The first HIPAA Resolution Agreement that the HHS Office for Civil Rights (OCR) has reached a state agency, the Resolution Agreement  second announced Resolution Agreement stemming from a unsecured protected health information breach report filed in response to the breach notification rules of the Health Information Technology for Economic and Clinical Health (HITECH) Act.  Earlier this year, OCR announced its first Resolution Agreement involving a health plan resulted from a breach notification report it had filed under the HITECH Act.  See $1.5 Million HIPAA Settlement Reached To Resolve 1st OCR Enforcement Action Prompted By HITECH Act Breach Report.

OCR opened the investigation leading to the Resolution Agreement after Alaska DHSS filed a breach report that indicated that a portable electronic storage device (USB hard drive) possibly containing ePHI was stolen from the vehicle of a DHSS employee.  Over the course of the investigation, OCR found evidence that DHSS did not have adequate policies and procedures in place to safeguard ePHI.  Further, the evidence indicated that DHSS had not completed a risk analysis, implemented sufficient risk management measures, completed security training for its workforce members, implemented device and media controls, or addressed device and media encryption as required by the HIPAA Security Rule.  Inadequacies by covered entities in safeguarding protected health information and laptops and other devices containing ePHI is a common compliance concern according to OCR statistics.

In addition to the $1,700,000 settlement, the agreement includes a corrective action plan that requires Alaska DHSS to review, revise, and maintain policies and procedures to ensure compliance with the HIPAA Security Rule.  A monitor will report back to OCR regularly on the state’s ongoing compliance efforts. 

OCR’s announcement highlights the need for covered entities not only to take proper steps to establish and administer appropriate policies and safeguards to protect protected health information and EHI, but also to prepare, update as needed and be prepared to produce documentation showing their oganizations actions to evaluate, monitor and maintain appropriate safeguards of ePHI and the operating systems and devices that contain this information. 

“Covered entities must perform a full and comprehensive risk assessment and have in place meaningful access controls to safeguard hardware and portable devices,” said OCR Director Leon Rodriguez.  “This is OCR’s first HIPAA enforcement action against a state agency and we expect organizations to comply with their obligations under these rules regardless of whether they are private or public entities.”

The HHS Resolution Agreement can be viewed here.

Enforcement Actions Highlight Growing HIPAA Exposures For Covered Entities

The Alaska Medicaid Resolution Agreement is the latest in a growing list of Resolutions Agreements highlighting the mounting exposures that health care providers, health plans, health care clearinghousesand their business associates face if required to file a large breach notification or otherwise charged with failing to appropriately manage their HIPAA responsibilities. See Arizona Physician Group Pays $100K To Settle HIPAA Charges; $1.5 Million HIPAA Settlement Reached To Resolve 1st OCR Enforcement Action Prompted By HITECH Act Breach Report; HIPAA Heats Up: HITECH Act Changes Take Effect & OCR Begins Posting Names, Other Details Of Unsecured PHI Breach Reports On Website.   As OCR leaders have indicated that OCR investigates all large breach notification filings made under the HITECH Act Breach Notification Rules and with more than 450 large breach notifications reported on its website, additional Resolution Agreements are expected in coming months even as covered entities and their business associates are awaiting the impending  issuance of updated HIPAA regulations.

In light of these and other developments and risks, covered entities and their business associates should move to audit and strengthen their HIPAA compliance and documentaiton and adopt  other suitable safeguards to minimize HIPAA exposures. 

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

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

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

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

For Representation, Training & Other Resources

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

Board Certified in Labor & Employment Law, Past Chair of the ABA RPTE Employee Benefit & Other Compensation Arrangements Group, Co-Chair and Past Chair of the ABA RPTE Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Plans Committee, Vice President of the North Texas Health Care Compliance Professionals Association, Past Chair of the ABA Health Law Section Managed Care & Insurance Section and the former Board Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer has more than 24 years experience advising health plan and employee benefit, insurance, financial services, employer and health industry clients about these and other matters. Ms. Stamer has extensive experience advising and assisting health care providers, health plans, their business associates and other health industry clients to establish and administer medical privacy and other compliance and risk management policies, to health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. She regularly designs and presents HIPAA and other risk management, compliance and other training for health plans, employers, health care providers, professional associations and others.

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

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

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

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

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

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication click here. If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject to here.

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

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Posted by Cynthia Marcotte Stamer

Model Language May Aid Section 83(b) Elections Even As Executive & Other Special Compensation Carry Growing Liability Traps

June 26, 2012

Businesses wishing to accelerate their ability to deduct the value of nonqualified stock or other property transferred to an employee or contractor as compensation for services and employees and independent contractors anticipating the need to make a Section 83(b) election to minimize income tax on property to be received as compensation for service subject to a substantial risk of forfeiture which the recipient expects to grow in value may find sample language contained in Revenue Procedure 2012-29 (Revenue Procedure) helpful.  While this new tool may faciliate the cost of preparing an election, executives and others receiving property as compensation and the businesses providing that compensation should exercise care to properly understand and manage responsibilities and requirements impacting these and other compensation arrangements under Section 89 and a growing list of increasingly complicated and diverse laws, regulations and other requirements.  

The Revenue Procedure contains sample language that the Internal Revenue Service (IRS) says employees and independent contractors may (but are not required) to use to make the “83(b) election” that Section 83(b) of the Internal Revenue Code (Code) requires the property recipient to make to accelerate income recognition as well as provides examples of the income tax consequences of making such an election.

Section 83(b) Election As Tax Planning Tool

 Code Section 83 plays a key rule in determining when:

  • When the value of property received by an employee or other service provider as compensation for the performance of services becomes taxable to the recipient;
  • The timing of the valuation of the property; and
  • The timing of the employing businesses’ deduction of this property.

Treasury Regulation Section 1.83-3(f) specifies that property is transferred in connection with the performance of services if it is transferred to an employee or independent contractor (or beneficiary thereof) in recognition of the performance of services, or refraining from performance of services.   Where Section 83 applies, the transfer of property is subject to Section 83 whether such transfer is in respect of past, present, or future services.

Code Section 83(a) generally provides that if, in connection with the performance of services, property is transferred to any person other than the person for whom such services are performed, the excess of the fair market value of the property (determined without regard to any restriction other than a restriction which by its terms will never lapse) as of the first time that the transferee’s rights in the property are transferable or are not subject to a substantial risk of forfeiture, whichever occurs earlier, over the amount (if any) paid for the property is included in the service provider’s gross income for the taxable year which includes such time.

Where the property transferred as compensation is expected to increase in value from the time of the grant until transfer restrictions or risks of forfeiture lapse, the delay in income recognition dictated by Section 83(a) generally has the effect of increasing the income tax that the recipient will pay on the property.

Assuming that the value of the property when the property is granted is adequately ascertainable, however, Section 83(b) and Section 1.83-2(a) permit the service provider to elect to include in gross income the excess (if any) of the fair market value of the property at the time of transfer over the amount (if any) paid for the property, as compensation for services by making a timely Section 83(b) election.

Under Section 83(b)(2), an election made under Section 83(b) is only effective to accelerate the recognition of taxable income from the transfer of property for services if made in accordance with the regulations and filed with the IRS no later than 30 days after the date that the property is transferred to the service provider. 

Treasury Regulation Section 1.83-2(c) provides for a service provider to make a Section 83(b) election be made under Section 83(b) is made by filing a copy of a written statement that meets the requirements of the Regulation with the IRS office with which the person who performed the service files his return and submitting a copy of that statement with his income tax return for the taxable year in which such property was transferred.  Section 1.83-2(d) requires that the person who performed the services also submit a copy of the Section 83(b) election to the person for whom the services were performed.

While the Regulations dictate the required content of the Section 83(b) election, until now the IRS had not dictated or otherwise provided model language for use in making this election.

The Revenue Procedure provides model language to aid service providers who receive substantially nonvested property in connection with the performance of services and wish to file an election under Section 83(b).

While the model language should make the completion and filing of a desired Section 83(b) election easier for those wishing to accelerate income recognition from property received as compensation for services, employees and other service providers receiving property as compensation and their employers are cautioned to consult with qualified tax counsel or advisor about the applicability and implications of making a Section 83(b) election.  Section 83 conditions the availability of the option to make a Section 83(b) election on the property having a “readily ascertainable fair market value” when transferred and timely election.  In the case of stock options and certain other property, valuation issues may disqualify the transfer for coverage by a Section 83(b) election.  

Beyond the restrictions on the use of the Section 83(b) election, parties considering making the election are cautioned to fully understand the consequences of making the election.  Under certain circumstances, making an election to minimize future taxes can have unexpected consequences.  For instance, a taxpayer that makes the election should be prepared to pay taxes on the property in the year received even though transfer or forfeiture restrictions on the property may prevent the taxpayer from selling or using the property currently.  

Because the election is irrevocable hardships also can happen if the property decreases rather than increases in value after the date of transfer.  Once made, Section 83(b) elections generally are irrevocable without the approval of the IRS, which is difficult to secure.  Consequently, a service provider that makes a Section 83(b) election also runs the risk that he may pay greater taxes by making the election if the property subsequently declines in value.  Of course where the employer conditions the grant of property on the making of the Section 83(b) election, the recipient employee or contractor may not be able to avoid this risk.  At minimum, however, the service provider should be prepared for this possibility and have arrangements in place to meet the resulting tax obligations when they arise.

Ensure Old Compensation Experience Not Rendered Obsolete By New Rules

Because of the lengthy tenure of Section 83 of the Code, many businesses and their leaders often feel comfortable that past experience makes the need to consult tax and other experts about the design and implementation of property based or other compensation arrangements.   While this may be the case in some instances, changing rules make it advisable that parties participating in these arrangements check their understanding to avoid stepping into unanticipated traps.

The longstanding provisions of Section 83 are part of a growing list of tax, securities and other rules that executives, board members, and other service providers and the businesses that receive their services may be required to successfully negotiate when seeking to use stock or other property as compensation for services.  

Ongoing changes in the law and regulations concerning executive and other compensation transactions and evolving lender, shareholder and contractual relationships makes it advisable that  parties participating in these and other compensation arrangements seek the advice of competent legal and accounting service providers with experience with these concerns. 

Beyond Section 83, executive and other compensation arrangements increasingly also be impacted by new Code provisions like the complicated rules of Code Section 409A, shareholder approval, securities and other disclosure requirements, conflict of interest and other board and organizational governance, and a host of other requirements that may have ramifications well in excess of the tax consequences that were historically the primary concern in the design of these arrangements in past decades.   For certain publically traded businesses, proper valuation, reporting and disclosure and in some instances, even shareholder approval of certain compensation arrangements may be critical.  Likewise, IRS Form 990 and other emerging tax and other rules increasingly require that nonprofit health care, education and other non-profit organizsations be prepared to defend the design, valuation, and reporting of executive and certain other compensation arrangements .  Even in closely held start ups and certain other organizations, founders and others often unintentionally incur significant liability by offering employees who do not qualify as exempt under the Fair Labor Standards Act or as accredited investors under securities law private placement exemptions or making other expensive compensation design missteps..  Amid these and other growing responsibilities, getting executive and other compensation arrangements right plays a critical role to the success of a business and the management of its liability.  

For Help With Risk Management, Compliance & Other Management Concerns

If you need assistance in auditing or assessing, updating or defending your organization’s compensation, employee benefits and other workforce compliance, risk management 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. 

Immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee and current Co-Chair of its Welfare Benefits Committee, Vice Chair of the ABA TIPS Employee Benefits 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, and former Employee Benefits & Insurance Professor for the University of Dallas Graduate School of Management, 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.  Her experience includes extensive work advising businesses and executives on Code Section 83, 409A, 280G, and other tax, employment, securities and relates concerns  relating to nonqualified and qualified deferred compensation, incentive stock option, severance, and other compensation and benefits arrangements.  She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly.

About Solutions Law Press

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.

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Posted by Cynthia Marcotte Stamer

IRS To Offer Help For U.S. Citizens Overseas With Foreign Retirement Plans, Dual Citizenship Tax Issues

June 26, 2012

 

The Internal Revenue Service (IRS)  is reaching out to help U.S. ex patriates and U.S. citizens with dual citizenship residing oversees to catch up on tax filings, deal with foreign retirement plan issues and help with other tax concerns. 

On June 26, 2012, IRS Commissioner Doug Shulman announced a series of what it calls ” common-sense steps” that the IRS is taking to U.S. citizens abroad get current with their tax obligations and resolve pension issues. 

The IRS is aware that some U.S. taxpayers living abroad have failed to timely file U.S. federal income tax returns or Reports of Foreign Bank and Financial Accounts (FBARs).  Some of these taxpayers have recently become aware of their filing requirements and want to comply with the law.  The 2012 deadline to file these reports is fast approaching on June 30, 2012.  As part of these efforts, Shulman announced the IRS will provide a new option to help some U.S. citizens and others residing abroad who haven’t been filing tax returns and provide them a chance to catch up with their tax filing obligations if they owe little or no back taxes. The new procedure will go into effect on Sept. 1, 2012.

To help these taxpayers, the IRS offered the new procedures that will allow taxpayers who are low compliance risks to get current with their tax requirements without facing penalties or additional enforcement action. These people generally will have simple tax returns and owe $1,500 or less in tax for any of the covered years. 

The IRS also announced that the new procedures will allow resolution of certain issues related to certain foreign retirement plans (such as Canadian Registered Retirement Savings Plans).  In some circumstances, tax treaties allow for income deferral under U.S. tax law, but only if an election is made on a timely basis.  The streamlined procedures will be made available to resolve low compliance risk situations even though this election was not made on a timely basis.

Taxpayers using the new procedures announced today will be required to file delinquent tax returns along with appropriate related information returns for the past three years, and to file delinquent FBARs for the past six years. Submissions from taxpayers that present higher compliance risk will be subject to a more thorough review and potentially subject to an audit, which could cover more than three tax years.

The IRS also announced its offshore voluntary disclosure programs have exceeded the $5 billion mark, released new details regarding the voluntary disclosure program announced in January and closed a loophole used by some U.S. citizens.  See IR-2012-64 for more details.

U.S. employers who employ executives or other U.S. citizens to work oversees as employees or consultants may want to share information about  the new programs and the underlying compliance obligations that they are designed to address to promote awareness of the possible relief to those who might benefit from the announced relief.  In addition, employees and other individuals who do or have recently lived, worked, or maintained accounts or other assets outside the United States also should consult with qualified tax advisors promptly about whether they have any unresolved liabilities or responsibilities and if so, concerning the advisability of using any of the newly announced programs to redress these concerns.

For Help or More Information

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

Other Resources

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

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at www.solutionslawpress.com. 

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

©2011 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press. All other rights reserved.

 

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Posted by Cynthia Marcotte Stamer

New EEOC State Discrimination Charge Data Helpful Employer Risk Assessment Tool Discrimination Exposures Grow

June 26, 2012
 Tables Present Employment Discrimination Statistics in User-Friendly Format

New employment discrimination charge statistics made available online by the U.S. Equal Employment Opportunity Commission (EEOC) in May, 2012 provide a helpful risk assessment tool for private sector employers looking to understand and decide where to deploy resources to management their employment discrimination exposures. 

In May, the EEOC put private sector workplace discrimination charge statistics for each of the nation’s 50 states and U.S. Territories for fiscal years 2009-2011 online.  These data provide a look at EEOC charge receipts, broken down by the basis of discrimination, as well as the percent of total state and national charges. The state data tables are available online at http://www1.eeoc.gov/eeoc/statistics/enforcement/charges_by_state.cfm.

The EEOC plans to update the state data each fiscal year.

The availability of these statistics comes at an opportune time.  Disability and other discrimination challenges are rising.   Since taking office, President Obama has made enforcement of disability and other employment discrimination laws a top priority by both pursing enforcement directly and stepping up public outreach and education efforts to promote awareness and encourage private enforcement.  These efforts have been further strengthened by statutory and regulatory amendments to disability discrimination and other discrimination laws.   As a result of these developments and a tightening job market, discrimination claims are on the rise. 

To help mitigate the expanded employment liability risks , businesses generally should act to manage their exposures.  Management should exercise caution to carefully design and implement employment discrimination and related employment policies.  They should implement exit interview, hotline and other practices  to help detect and resolve potential discrimination exposures early.  They also should carefully document legitimate disciplinary and other non-discriminatory justifications for employment related activities and conduct regular training for management and employees. 

Businesses also should consider tightening their documentation regarding their procedures and processes governing the  collection and handling records and communications that may contain information that could be helpful or hurtful in the event of a discriminatioj charge.  Businesses need to ensure that all required records and statistics are collected.  In addition, businesses also should consider strengthing record creation and retention efforts to help preserve other evidence that could be invaluable to defending charges and change the way that decisions are made and documented to position their organizations to more effectively demonstrate the defensibility of their employment and other business activities against potential nondiscrimination charges.

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

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

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

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

About The Author

Management attorney and consultant Cynthia Marcotte Stamer helps businesses, governments and associations solve problems, develop and implement strategies to manage people, processes, and regulatory exposures to achieve their business and operational objectives and manage legal, operational and other risks. Board certified in labor and employment law by the Texas Board of Legal Specialization, with more than 20 years human resource and employee benefits experience, Ms. Stamer helps businesses manage their people-related risks and the performance of their internal and external workforce though appropriate human resources, employee benefit, worker’s compensation, insurance, outsourcing and risk management strategies domestically and internationally. Recognized in the International Who’s Who of Professionals and bearing the Martindale Hubble AV-Rating, Ms. Stamer also is a highly regarded author and speaker, who regularly conducts management and other training on a wide range of labor and employment, employee benefit, human resources, internal controls and other related risk management matters.  Her writings frequently are published by the American Bar Association (ABA), Aspen Publishers, Bureau of National Affairs, the American Health Lawyers Association, SHRM, World At Work, Government Institutes, Inc., Atlantic Information Services, Employee Benefit News, and many others. For a listing of some of these publications and programs, see here. Her insights on human resources risk management matters also have been quoted in The Wall Street Journal, various publications of The Bureau of National Affairs and Aspen Publishing, the Dallas Morning News, Spencer Publications, Health Leaders, Business Insurance, the Dallas and Houston Business Journals and a host of other publications. Chair of the ABA RPTE Employee Benefit and Other Compensation Committee, a council member of the ABA Joint Committee on Employee Benefits, and the Legislative Chair of the Dallas Human Resources Management Association Government Affairs Committee, she also serves in leadership positions in many human resources, corporate compliance, and other professional and civic organizations. For more details about Ms. Stamer’s experience and other credentials, contact Ms. Stamer, information about workshops and other training, selected publications and other human resources related information, see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mailto  cstamer@solutionslawyer.net

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.   

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

 

Comments Off on New EEOC State Discrimination Charge Data Helpful Employer Risk Assessment Tool Discrimination Exposures Grow | ADA, Corporate Compliance, EEOC, Employers, GINA, Human Resources, OFCCP, Retaliation | Tagged: , , , , , , , , | Permalink
Posted by Cynthia Marcotte Stamer

Obama’s Reaffirms Commitment Prosecute Disability Discrimination To Mark Omlstead Anniversary

June 22, 2012

Statements of President Obama  made today (June 22, 2012) in celebration of the 13th anniversary of the June 22, 1999 Supreme Court decision in Olmstead v. L.C. are a reminder that U.S. businesses face a continuing and growing need to be on guard to defend against potential disability discrimination liabilities. Coupled with the well-documented activism of the Equal Employment Opportunity Commission and other agencies in prosecuting disability discrimination and promoting a pro-disability enforcement agenda, businesses are encouraged to review and tighten their disability discrimination compliance procedures and documentation. 

In Olmstead, the Supreme Court ruled in that the unjustified institutional isolation of people with disabilities is a form of unlawful discrimination under the Americans with Disabilities Act (ADA). 

In marking the 13th anniversary of this decision, President Obama said, “As we mark the anniversary of this historic civil rights decision, we reaffirm our commitment to fighting discrimination, and to addressing the needs and concerns of those living with disabilities.”

In reaffirming this commitment, the Administration highlighted its past and continuing efforts to enforce disability discrimination laws, as well as other activities to support individuals with disability. 

As part of its significant commitment to disability discrimination enforcement, the Civil Rights Division at the Department has been involved in more than 40 Olmstead matters in 25 states.   Recently, in Virginia, the Department entered into a landmark settlement agreement with the Commonwealth, which will shift Virginia’s developmental disabilities system from one heavily reliant on large, state-run institutions to one focused on safe, individualized, and community-based services that promote integration, independence and full participation by people with disabilities in community life. The agreement expands and strengthens every aspect of the Commonwealth’s system of serving people with intellectual and developmental disabilities in integrated settings, and it does so through a number of services and supports.  The Department has a website dedicated to Olmstead enforcement, which includes links to settlements, briefs, findings letters, and other materials. The settlement agreements are a reminder that private businesses and state and local government agencies alike should exercise special care to prepare to defend their actions against potential disability or other Civil Rights discrimination challenges.  All organizations, whether public or private need to make sure both that their organizations, their policies, and people in form and in action understand and comply with current disability and other nondiscrimination laws.  When reviewing these responsibilities, many state and local governments and private businesses may need to update their understanding of current requirements.  The scope and applicability of disability and various other federal nondiscrimination and other laws have been expanded or modified in recent years by statutory, regulatory or enforcement changes. 

These Justice Department efforts also are reflected in the companion enforcement efforts to investigate and prosecute disability discrimination by the Labor Department Equal Employment Opportunity Commission in employment, the Department of Housing & Urban Development in housing and related areas, the Department of Education in education and related fields and a host of other agencies.

While the Administration’s disability law enforcement reaches broadly, disability discrimination enforcement is particularly notable in the area of employment law.  For instance, the Equal Employment Opportunity Commission recently sued Wendy’s franchisee, CTW L.L.C., (Texas Wendy’s) for allegedly violating the Americans With Disabilities Act by denying employment to a hearing-impaired applicant.  In its suit against Texas Wendy’s, the EEOC  seeks injunctive relief, including the formulation of policies to prevent and  correct disability discrimination as well as an award of lost wages and compensatory damages for Harrison  and punitive damages against CTW L.L.C.   An example of a growing number of disability discrimination enforcement actions taken against employers and others on behalf of hearing impaired or other persons with disabilities under the Obama Administration, the case against Texas Wendy’s highlights the growing enforcement exposures of U.S. businesses to disability discrimination claims under the Obama Administration. In the suit, the EEOC charged that the general manager of a Killeen,  Texas Wendy’s refused to hire Michael Harrison, Jr. for a cooker position,  despite his qualifications and experience, upon learning that Harrison is  hearing-impaired.

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

Expanding Disability Discrimination Exposures

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

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

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

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

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

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

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

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

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

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

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

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

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

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

About The Author

Management attorney and consultant Cynthia Marcotte Stamer helps businesses, governments and associations solve problems, develop and implement strategies to manage people, processes, and regulatory exposures to achieve their business and operational objectives and manage legal, operational and other risks. Board certified in labor and employment law by the Texas Board of Legal Specialization, with more than 20 years human resource and employee benefits experience, Ms. Stamer helps businesses manage their people-related risks and the performance of their internal and external workforce though appropriate human resources, employee benefit, worker’s compensation, insurance, outsourcing and risk management strategies domestically and internationally. Recognized in the International Who’s Who of Professionals and bearing the Martindale Hubble AV-Rating, Ms. Stamer also is a highly regarded author and speaker, who regularly conducts management and other training on a wide range of labor and employment, employee benefit, human resources, internal controls and other related risk management matters.  Her writings frequently are published by the American Bar Association (ABA), Aspen Publishers, Bureau of National Affairs, the American Health Lawyers Association, SHRM, World At Work, Government Institutes, Inc., Atlantic Information Services, Employee Benefit News, and many others. For a listing of some of these publications and programs, see here. Her insights on human resources risk management matters also have been quoted in The Wall Street Journal, various publications of The Bureau of National Affairs and Aspen Publishing, the Dallas Morning News, Spencer Publications, Health Leaders, Business Insurance, the Dallas and Houston Business Journals and a host of other publications. Chair of the ABA RPTE Employee Benefit and Other Compensation Committee, a council member of the ABA Joint Committee on Employee Benefits, and the Legislative Chair of the Dallas Human Resources Management Association Government Affairs Committee, she also serves in leadership positions in many human resources, corporate compliance, and other professional and civic organizations. For more details about Ms. Stamer’s experience and other credentials, contact Ms. Stamer, information about workshops and other training, selected publications and other human resources related information, see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mailto  cstamer@solutionslawyer.net

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.   

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

 

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Posted by Cynthia Marcotte Stamer

IRS Changing Individual Taxpayer ID Number Application Requirements

June 22, 2012

Interim Changes Intended To Promote Better Integrity of the ITIN Process

On June 21, 2012, the Internal Revenue Service announced interim changes to its procedures for issuing Individual Taxpayer Identification Numbers (ITINs) from now through the end of the year.  Designed specifically for tax-administration purposes, ITINs are only issued to people who are not eligible to obtain a Social Security Number.  ITINs play a critical role in the tax administration process and assist with the collection of taxes from foreign nationals, non-resident aliens and others who have filing or payment obligations under U.S. law. Businesses with foreign workers or service providers, others who may be impacted by rules should encourage early action to avoid difficulties in reporting later.

During this interim period, the IRS will only issue ITINs when applications include original documentation, such as passports and birth certificates, or certified copies of these documents from the issuing agency. During this interim period, ITINs will not be issued based on applications supported by notarized copies of documents. In addition, ITINs will not be issued based on applications submitted through certifying acceptance agents unless they attach original documentation or copies of original documents certified by the issuing agency. The changes, which are effective immediately, are designed to strengthen and protect the integrity of the ITIN process while minimizing the impact on taxpayers.

The procedures apply to most applicants submitting Form W-7, Application for IRS Individual Taxpayer Identification Number.  ITINs for most individuals generally are issued during the tax filing season with the submission of a Form 1040, U.S. Individual Income Tax Return. Because the April 17 filing deadline has passed, the IRS anticipates that a small number of taxpayers will need ITINs between now and the end of the year for these purposes.

According to today’s announcement, the IRS will issue final rules before the start of the 2013 filing season when most ITIN requests come in. The IRS will be gathering feedback and suggestions during the summer from stakeholders on what permanent procedures are appropriate as it reviews procedures for the ITIN program.  The IRS says it will look to make long-term improvements to the program while minimizing barriers to individuals reporting their income and filing their tax returns.

During this interim period, people who need ITINS to get their tax return processed can do so by submitting by mail their original documentation or certified copies of their documentation. Documentation will be accepted at IRS walk-in sites but will be forwarded to the ITIN centralized site for processing. The IRS also has an additional set of questions and answers for ITIN applicants available.

Some categories of applicants are not impacted by these interim changes, including spouses and dependents of U.S. military personnel who need ITINs. People who should follow the current procedures outlined in the Form W-7 instructions include:

  • Military spouses and dependents without an SSN who need an ITIN (Military spouses use box e on Form W-7 and dependents use box d). Exceptions to the new interim document standards will be made for military family members satisfying the documentation requirements by providing a copy of the spouse or parent’s U.S. military identification, or applying from an overseas APO/FPO address.
  • Nonresident aliens applying for ITINs for the purpose of claiming tax treaty benefits (use boxes a and h on Form W-7). Non-resident alien applicants generally need ITINs for reasons besides filing a U.S. tax return. This is necessary for nonresident aliens who may be subject to third-party withholding for various income, such as certain gaming winnings or pension income, or need an ITIN for information reporting purposes. While existing documentation standards will be maintained only for these applicants, scrutiny of the documents will be heightened.  ITIN applications of this category that are accompanied by a US tax return will be subject to the new interim document standards.

The IRS may require some taxpayers who have already filed applications to furnish additional documentation directly to the IRS. No additional action is required for people who have already filed ITIN requests unless they are contacted by the IRS.

More information about ITINs can be found at 2012 ITIN Review Frequently Asked Questions.

The changes may impact a wide range of employers and the individuals who provide service to them.  Employers dealing with service providers who may be impacted by these rules should act early to request and encourage delivery of taxpayer identification numbers from individuals that may be impacted by these requirements.

For Help or More Information

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

Other Resources

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

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at www.solutionslawpress.com. 

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

©2011 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press. All other rights reserved.

 

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Posted by Cynthia Marcotte Stamer

Insurer Group Health Inc. To Refund $500,00+ & Change Claims Practices To Settle NY AG Charges It Wrongfully Denied Coverage

June 18, 2012

Health insurer Group Health Inc. (“GHI”) must send reimbursement checks expected to approach $500,000 and change its claims handling practices to settle charges brought by the New York Attorney General Eric T. Schneiderman  that its mishandling of certain out-of-network claims wrongfully denied coverage to its members.  Schneiderman charted that GHI violated New York law by processing claims and caused patients to be billed wrongfully for covered physician services — sometimes in amounts reaching thousands of dollars — when they should have been shielded from any expense by applying standard out-patient coverage schedules even though the GHI health insurance policy was required to cover certain key medical providers who might be out-of-network — including anesthesiologists, pathologists, and radiologists — at a higher rate and with no member cost-share.

Under the terms of the agreement with GHI, the insurance company will send reimbursement checks to affected members. Because of the Attorney General’s investigation, GHI has already returned $162,000 to New York consumers and that number is expected to approach $500,000 in restitution for three years of claims. GHI will retain an auditor to ensure all eligible members are given refunds. In addition to providing reimbursement to eligible members, the agreement provides that GHI train its employees, pay a penalty, and assist consumers with resolving any debt collection activity.  See here.

GHI is part of Emblem Health, and provides insurance to consumers to 28 counties across New York State.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources including:

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Posted by Cynthia Marcotte Stamer

NLRB Moves To Promote Non-Union Employee Use of Collective Action Rights By Launching Webpage

June 18, 2012

The National Labor Relations Board is launching a new website page focused on promoting awareness and encourage the exercise of rights to employees to act together for their mutual aid and protection, even if they are not in a union, under the National Labor Relations Act (NLRA). 

As part of its aggressive commitment to promote and support union organizing and other collective action by employees under the Obama Administration, the NLRB in recent years has stepped up investigatory and enforcement activities on behalf of non-union employees.  The right to engage in certain types of concerted activity was written into the original 1935 National Labor Relations Act’s Section 7, which states that:  “Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all such activities.”

Non-union concerted activity accounts for more than 5% of the agency’s recent caseload.

The new webpage launched June 18, 2012 here seeks to promote awareness and use of these and other collective action rights under the NLRA by sharing stories of more than a dozen recent cases involving protected concerted activity.  Examples of these cases include stories of A construction crew fired after refusing to work in the rain near exposed electrical wires; a customer service representative who lost her job after discussing her wages with a coworker; an engineer at a vegetable packing plant fired after reporting safety concerns affecting other employees; a paramedic fired after posting work-related grievances on Facebook; and poultry workers fired after discussing their grievances with a newspaper reporter.  

“A right only has value when people know it exists,” said NLRB Chairman Mark Gaston Pearce. “We think the right to engage in protected concerted activity is one of the best kept secrets of the National Labor Relations Act, and more important than ever in these difficult economic times. Our hope is that other workers will see themselves in the cases we’ve selected and understand that they do have strength in numbers.”

In addition to the new webpage, the NLRA also has undertaken efforts to promote employee awareness of NLRA rights by imposing new employer poster requirements, has attacked the use of mandatory arbibtration provisions by employers as prohibited under the NLRA, and has pursued a wide range of regulatory and enforcement policy changes that seek to strengthen the power of organized labor.  In light of this growing activism, employers should continue to strengthen their labor-management policies and practices to mitigate the growing labor exposures that result from this activist agenda.  

For Help or More Information
If you need help with labor and employment or other human resource, performance management, internal controls or compliance and risk management matters, please contact the author of this article, Cynthia Marcotte Stamer.  Board Certified in Labor & employment Law by the Texas Board of Legal Specialization,management attorney, author and consultant  Ms. Stamer is nationally and internationally recognized for more than 24 years of work helping private and governmental organizations and their management; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; schools and other governmental agencies and others design, administer and defend innovative compliance, risk management, workforce, compensation, employee benefit, privacy, procurement and other management policies and practices. Her experience includes extensive work helping employers carry out, audit, manage and defend worker classification,union-management relations, wage and hour, discrimination and other labor and employment laws, procurement, conflict of interest, discrimination management, privacy and data security, internal investigation and discipline and other workforce and internal controls policies, procedures and actions. 
Widely published on worker classification and other workforce risk management and compliance concerns, the immediate past-Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee and current Co-Chair of its Welfare Plan Committee, Vice Chair of the ABA TIPS Section Employee Benefits Committee,  a Council Representative of the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer works, publishes and speaks extensively on management, worker classification, re-engineering, investigations, human resources and workforce, employee benefits, compensation, internal controls and risk management, federal sentencing guideline and other enforcement resolution actions, and related matters.  She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For more information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly.

Other Resources

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

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at www.solutionslawpress.com. 

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

©2011 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press. All other rights reserved.

 

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Posted by Cynthia Marcotte Stamer

Making Wellness Work On A Shoestring Budget

May 28, 2012
With tight budgets preventing many businesses from investing in wellness consulting resources, a tight budget doesn’t mean your company, church, or other group can’t have a thriving wellness program.  Wellness is a culture.   While the resources and advice of consultants and bells and whistles can be helpful sometimes, the inability to afford them doesn’t mean that your organization or group can’t have a healthy and effective wellness program. 
 
The key to promoting wellness in your workplace, organization or community is to promote a culture of healthy eating, movement and lifestyles.  Establish the culture by leading the way.  Make healthy food choices available at meetings.  Require or urge your leadership to model good eating behavior.  Have a healthy pot luck and challenge employees to bring and share their tastiest, healthy dish.   
 
Encourage leaders and others to incorporate movement into the day.  Walking meetings and other inexpensive activities can help promote health with very little cost.  Encourage employees to walk in walk-a-thons, participate in running groups, walk or skip to lunch, take the stairs,  participate in sports leagues or other similar activities. 
 
Don’t overlook the wealth of available free resources.  Project COPE”s Play For Life Program relies upon a host of free often government provided resources.   Many great wellness tools are available from NIH and other government sources at little or no cost including the newly released NIH and the Weight of the Nation resources just made available by NIH here.
 
Project COPE: Coalition On Patient Empowerment & Coalition For Responsible Health Care Quality

Project COPE: Coalition on Patient Empowerment & the Coalition for Responsible Health Care Quality  are coalitions of individuals and organizations that share the belief that every American and American organization has a stake, and something to contribute to our ability to find and implement the best options for ensuring that the U.S. health care system provides quality, affordable health care.

Health care impacts every individual and every organization in America.  Consequently, every American citizen and organization including but not limited to health care providers, employers, insurer, and community organizations should take part.    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 or speak up. 

Project COPE urges and invites each individual and organization speak up to help communicate and act to make health care work for themselves, their families and others when you can and share your input to help preserve and continue to develop real meaningful improvements to our health care system by joining Project COPE: Coalition for Patient Empowerment here by sharing ideas, tools and other solutions and other resources. 

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 here . 

Wellness is a culture.   While the resources and advice of consultants and bells and whistles can be helpful sometimes, the inability to afford them doesn’t mean that your organization or group can’t have a healthy and effective wellness program. 
 
The key to promoting wellness in your workplace, organization or community is to promote a culture of healthy eating, movement and lifestyles.  Establish the culture by leading the way.  Make healthy food choices available at meetings.  Require or encourage your leadership to model good eating behavior.  Have a healthy pot luck and challenge employees to bring and share their tastiest, healthy dish.   
 
Encourage leaders and employees and others to incorporate movement into the day.  Walking meetings and other inexpensive activities can help promote health with very little expense.  Encourage employees to walk in walk-a-thons, participate in running groups, participate in sports leagues or other similar activities.
 
Don’t overlook the wealth of available free resources.  Project COPE”s Play For Life Program relies upon a host of free often government provided resources.   Many great wellness tools are available from NIH and other government sources at little or no cost including the newly released NIH and the Weight of the Nation resources just made available by NIH here.
 
The key to wellness is getting started and keeping going.   Making healthy living part of your culture can pay big benefits in health and absentee savings, increased productivity and workforce retention.  What are you waiting for?  Get moving!
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 here . 

For Help or More Information

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

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

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

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

Other Resources

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

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at ww.solutionslawpress.com. 

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

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

Comments Off on Making Wellness Work On A Shoestring Budget | Claims Administration, Employee Benefits, Employers, ERISA, Health Plans, Mental Health, Mental Health Parity, Retirement Plans, Tax | Tagged: , , , , , , , , , , , , , | Permalink
Posted by Cynthia Marcotte Stamer

Tighten Defensibility of Criminal & Other Background Check Practices In Light of Labor Department Non-Discrimination Regulation & Enforcement Emphasis

May 25, 2012

Employers, job banks, recruiters and other parties that conduct and rely upon criminal background checks for purposes of screening applicants or making other employment decisions should check and update their practices in response to the announced plans of the U.S. Department of Labor to expand and enforce limitations on employment discrimination against individuals with criminal records as well as the criminal background check requirements of the Fair Credit Reporting Act and other applicable laws.

While criminal or other background checks often are mandated or otherwise business justified, employers and others conducting or using background check information need to understand and comply with legal requirements about the use and administration of criminal or other background checks.

Potential Employment Discrimination Exposures From Criminal Background Checks

Over the past several months, Labor Department officials have identified protection of individuals with criminal backgrounds against employment discrimination as a policy and enforcement priority.

In keeping with this goal, the Labor Department Employment and Training Administration (ETA), with the Civil Rights Center (CRC). on May 25, 2012 published updated training guidance for about exclusions based on criminal records, and how they are relevant to the existing nondiscrimination obligations for the public workforce system and certain other entities that receive federal financial assistance to operate Job Banks, to provide assistance to job seekers in locating and obtaining employment, and to assist employers by screening and referring qualified applicants in Training and Employment Guidance Letter No. 31-11 (TEGL) along with the following accompanying guidance documents:

Meet FCRA Criminal & Other Background Check Requirements

When conducting such a criminal or other background check using a third-party or the internet, care should be taken to comply with the applicable purpose, notice and consent requirements for conducting third-party conducted background checks under the Fair Credit Reporting Act (FCRA) and otherwise applicable law. 

Since criminal and other background investigations generally qualify as a credit check for purposes of the FCRA, employers, recruiters, job banks and other parties conducting background checks for employment related purposes risk significant liability for conducting these activities without providing the proper notifications and obtaining necessary consents.  Additional requirements often also may apply under applicable state laws, labor-management contracts, government contracting requirements or other similar requirements.  Consequently, before doing any credit or other background check, employers or others should ensure that they have the policies, disclosures, data security and written consents required to comply with the FCRA and other laws.

With these procedures in place, employers or others planning to use criminal or other background checks then should work to manage discrimination and other potential risks associated with potential challenges to their use of the information.

Among other things, businesses should carefully document the business justification for their use of the background check and restrict the data they request and receive to information relevant to that purpose.  The collection and receipt of this information should be structured and managed in such a way to mitigate employment discrimination, privacy and other legal risks and to promote defensibility.  For instance, proper procedures should be used to lower the risk of a pattern of prohibited discrimination on race, national origin, disability or other similar employment discrimination laws.  Likewise, collection or receipt of information such as bankruptcy history or other liability sensitive information should be avoided unless a legally defensible need and appropriate procedures governing use can be demonstrated in operation.  Care also should be taken to apply the criteria uniformly. Given ADA, GINA, FACTA and other privacy concerns, employers also should specifically check their data collection and protection procedures for adequacy.

To help with these and other concerns, consider defining and documenting in advance the relevant criteria for the position and why it is relevant.  Where possible, try to avoid getting information beyond that defined as relevant which could raise sensitivities.  Since the FCRA requires notice if adverse hiring decisions are made, employers also should carefully evaluate and document the basis of their decisions when deciding not to hire or promote individuals based on this information and appropriately safeguard this information against improper use or disclosure. 

For Help Or Additional Information

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

Board Certified in Labor and Employment Law, a Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on human resources, recruitment, employee benefits, compensation, credentialing, promotion and discipline and related workforce and risk management matters. 

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 employment and other services arrangements and assocaited employee benefit,  compensation, reductions in force and other severance and other human resources, employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s r management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials about regulatory, investigatory or enforcement concerns. 

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

Other Resources

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

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at ww.solutionslawpress.com. 

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

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

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Posted by Cynthia Marcotte Stamer

Review & Update Health Plan Mental Health Coverage As DOL Supplements Guidance On Health Plan Mental Health Parity Rules

May 23, 2012

Group health plans and health insurers subject to the mental health parity requirements of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) have extra guidance about the effect of these requirements on utilization management and copayment requirements.  As the Labor Department and other federal agencies celebrate Mental Health Awareness Month, plan sponsors, administrators and fiduciaries should review and update their plans to comply with the current requirements and tighten administration and other documentation to position decisions for defensibility against growing scrutiny.

In conjunction with its marking of Mental Health Awareness month in May, the Department of Labor’s Employee Benefits Security Administration (EBSA) recently updated its guidance and resources about the MHPAEA.  The updated resources include:

  • New Mental Health Parity webpage, available here; and
  • Understanding (and Common Misunderstandings Related to) Implementation of the Mental Health Parity and Addiction Equity Act of 2008, available here.

This new guidance supplements a growing list of guidance concerning the interpretation and enforcement of the MHPAEA by the U.S. Departments of Health and Human Services (HHS), Labor and the Treasury (the Departments).  On November 17, 2011, the Departments jointly published more FAQs that share insights on how the MHPAEA requirements impact certain common copayments and utilization review arrangements historically used by plans and insurers.  The new FAQ guidance here provides more clarification about the meaning of the interim final rules implementing MHPAEA the Departments jointly issued on February 2, 2010, and earlier FAQ guidance published on June 30, 2010 and December 22, 2010 as applied to these practices.

For group health insurers and group health plans subject to its provisions, MHPAEA generally requires that insurer or plan:

  • Cannot impose financial requirements and treatment limitations on mental health and substance use disorder benefits that are more restrictive than the predominant financial requirements and treatment limitations that apply to substantially all medical and surgical benefits; and
  • Cannot impose separate financial requirements or treatment limitations that are applicable only to mental health or substance use disorder benefits.

Insurers, plan sponsors, fiduciaries and administrators also should consider the potential implications of various other federal requirements on the design and administration of mental health and substance abuse coverage and benefits under their programs.   For example, the express reference to mental health and substance abuse benefits as included within the definition of “essential benefits” for purposes of the Affordable Care Act requires additional consideration of the effect of the Affordable Care Act’s annual and lifetime limit and other mandates relating to essential benefit coverage be evaluated and addressed.  In addition, specific attention should be devoted to the potential effects of the Affordable Care Act’s independent review and other rules concerning the processing and payment of health benefit claims by non-grandfathered health plans.

Along with considering the potential implications of these emerging requirements, health insurers, group health plans and those involved in their design and administration also should verify that their eligibility and other program terms or practices do not inappropriately violate the nondiscrimination rules of laws such as the Americans with Disabilities Act, the Health Insurance Portability & Accountability Act, the Genetic Information Nondiscrimination Act or other laws and that their plan and those involved in its administration are properly safeguarding the confidentiality of sensitive information about mental health , substance abuse or other health information about covered persons or their family.   Learn more here.

For Help or More Information

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

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

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

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

Other Resources

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

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at ww.solutionslawpress.com. 

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

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

Comments Off on Review & Update Health Plan Mental Health Coverage As DOL Supplements Guidance On Health Plan Mental Health Parity Rules | Claims Administration, Employee Benefits, Employers, ERISA, Health Plans, Mental Health, Mental Health Parity, Retirement Plans, Tax | Tagged: , , , , , , , , | Permalink
Posted by Cynthia Marcotte Stamer

Western Mixers & Officers Ordered To Pay $1.2M+ For Improperly Using Benefit Plan Funds For Company Operations, Other ERISA Violations

May 23, 2012

Businesses owners and managers should treat last week’s judgment against a California fruit and nut supplier Western Mixers Inc. and its officers as a wake-up call to meet employee benefit funding obligations, not to use plan monies for company operations and to take other required steps to make sure that retirement, health and other employee benefit plans moneys and other responsibilities are properly handled.

Under a judgment entered in Solis v. Frank L. Rudy et. al. and Western Mixers Inc. Money Purchase Pension Plan, Western Mixers Inc., its owners and officers will pay a total of $1,287,901 to the company’s pension plan, plus a 20 percent penalty to the Department of Labor.

Following an investigation by the Employee Benefits Security Administration (EBSA), the Department of Labor sued Western Mixers Inc. and two officers who served as trustees of the plan for failing to make approximately $952,511 in mandatory employer contributions for the benefit of participants and beneficiaries and improperly using plan monies in the company’s business operations. Investigators also found that the same two officers as well as the company’s chief financial officer made $565,000 in unauthorized withdrawals from the plan accounts, commingling those funds in the company’s general accounts and using them for the benefit of the business. 

Labor Department officials sued the company, and the officers for violation of the fiduciary responsibility rules of the Employee Retirement Income Security Act (ERISA).  ERISA generally requires that plan trustees and other plan fiduciaries carry out duties with respect to an employee benefit plan assets prudently for the exclusive benefit of participants. 

Pursuant to the consent judgment, the company and its officers admitted to violation of ERISA.  During the course of the investigation leading up to the lawsuit, the company previously repaid to the plan $485,000 of the total funds identified as missing by the Labor Department.  According to an announcement of the U.S. Department of Labor on May 14, 2012, Midwest Mixers Inc.’s officers agreed to repay $802,901 to participants’ accounts within 10 day of the judgment.

In addition to repaying the missing funds with interest, defendants also must pay a penalty equal to 20 percent of the recovered amount.  The court also has appointed an independent fiduciary to terminate the plan and to collect, marshal, pay out and administer plan assets. Frank L. Rudy and David H. Bolstad, owners of the company, are removed as plan trustees and fiduciaries. Together with Robert J. Fischer, Western Mixers, Inc.’s chief financial officer, they are permanently enjoined and restrained from violating ERISA and from serving as fiduciary or service providers to any ERISA-covered plan in the future.

The Western Mixer’s judgement demonstrates that owners, operators and managers of businesses that exercise discretion and control over the funding, investment or administration of employee benefit plans or their assets face significant liability for failing to properly fulfill their responsibilities with respect to their employee benefit plans.  Businesses, their owners, board members, officers, and other members of management making decisions about the maintenance, funding, administration, termination, hiring or appointment of fiduciaries or service providers or other matters impacting the employee benefit plan should ensure that they understand the potential implications and responsibilities associated with these activities for themselves and their companies.  individuals who have authority or responsibility for employee benefit plans who also perform or take part in the performance of other company management functions also should pre-educate themselves about when ERISA may require that their plan responsibilities be put before otherwise applicable responsibilities to their company, appropriate processes for documenting decisions and activities and other procedures that can help position activities to mitigate exposures and promote defensibility.

For Help or More Information

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

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

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

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

Other Resources

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

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at ww.solutionslawpress.com. 

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

©2011 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.

Comments Off on Western Mixers & Officers Ordered To Pay $1.2M+ For Improperly Using Benefit Plan Funds For Company Operations, Other ERISA Violations | Employee Benefits, Employers, ERISA, Fiduciary Responsibility, Health Plans, Mental Health, Mental Health Parity, Retirement Plans, Tax | Tagged: , , , , , , | Permalink
Posted by Cynthia Marcotte Stamer

Plan Administrator Faces Civil & Criminal Prosecution For Allegedly Making Prohibited $3.2 Million Real Estate Investment

May 22, 2012

The U.S. Department of Labor has filed a complaint in the U.S. District Court for the District of Idaho against Matthew D. Hutcheson alleging that he violated the Employee Retirement Income Security Act (ERISA) by imprudently investing retirement plan assets in a now-failed real estate venture.  Hutcheson also faces a separate criminal indictment, which was filed in the same court on April 10, in connection with the same transaction.

 The Labor Department civil complaint alleges that, toward the end of 2010, Hutcheson used more than $3.2 million representing the retirement plan savings of workers from multiple employers for his own personal expenses and in an attempt to buy an interest in the Tamarack Resort – a failed ski and golf resort in Idaho.

 Labor Department officials charge this imprudent prohibited transaction has left affected retirement plans without sufficient funds to pay participants all the benefits owed to them.

The Labor Department also has filed an application for a temporary restraining order seeks to remove Hutcheson and other named defendants as fiduciaries of the affected plans, and seeks to appoint an independent fiduciary to administer the plans. In addition to Hutcheson, defendants include Hutcheson Walker Advisors LLC; Green Valley Holdings LLC; and the Retirement Security Plan and Trust, formerly known as the Pension Liquidity Plan and Trust.

Appropriate management of retirement and other employee benefit plan assets is a key obiligation of employee benefit plan investment advisors and other fiduciaries that have authority over plan assets.  Plan fiduciaries generally are required by ERISA 404 to invest prudently and for the exclusive benefit of plan participants and beneficiaries.  Additionally, ERISA generally prohibits plan fiduciaries from investing in or involving the plan or its assets in certain prohibited transactions or dealing with plan assets for the benefit of themselves or other third parties. 

Because violations of ERISA’s fiduciary responsibility rules can create personal liability, employer and other plan sponsors, plan fiduciaries and others participating in decisions or administration of a rebate exercise care in dealing with any rebate.  Many plan sponsors also may want to consider reviewing and tightening as warranted existing plan, trust, insurance policy, plan communications and other documentation to lower risks and promote desired characterization of rebates and other amounts paid into or with respect to their plans. 

For Help or More Information

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

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

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

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

Other Resources

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

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at ww.solutionslawpress.com. 

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

©2011 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.

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Posted by Cynthia Marcotte Stamer

Employee Plan Fee Disclosure Rules Clarified

May 22, 2012

The Department of Labor’s Employee Benefits Security Administration (EBSA) has made a technical correction to recently released participant-level fee disclosure regulation  (29 CFR § 2550.404a-5) contained in Field Assistance Bulletin No. 2012-02 (Fab 2012-02) as initially released on May 7, 2012. 

Fab 2012-02 contains frequently asked questions and answers about the Department’s participant-level fee disclosure regulation.  As originally released a sentence in the answer to Question 19 concerning quarterly Web site updates to “average annual total return” information inadvertently referred to the most recently completed calendar “year” rather than the most recently completed calendar “quarter.”

In its technical correction of this provision on May 17, 2012, EBSA revised the Faq to  track the regulation of the regulation amd re,pved the word “calendar”from the phrase “… 10-calendar year periods …” in the same sentence. See Q-19, n.2. The Fab as revised is available at: here.

For Help or More Information

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

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

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

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

Other Resources

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

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at ww.solutionslawpress.com. 

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

©2011 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.

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Posted by Cynthia Marcotte Stamer

OIG: “Extremely High” Prescription Drug Retail Pharmacy Billings Warrant Tighter Medicare Part D Oversight & Controls

May 18, 2012

The Office of Inspector General (OIG) of the Department of Health & Human Services (HHS) is recommending a “strong response” to improve Medicare Part D oversight of retail pharmacy prescriptions by the Centers for Medicare & Medicaid Services (CMS) based on findings of a recent study.  See here.  OIG says that  “extremely high” prescription drug billings by many retail pharmacies merit scrutiny under medical necessity or other grounds.    In anticipation of tighter controls, retail pharmacies, as well as the physician and other providers prescribing medications for Medicare Part D participants should review and tighten prescribing and billing practices to position their actions to withstand anticipated challenge in response to the OIG recommendations.

Under the Medicare Part D program, CMS contracts with private insurance companies, known as sponsors, to provide prescription drug coverage to beneficiaries who choose to enroll.  According to OIG, OIG has issued several reports that OIG has found that Part D had limited safeguards in place in the 6 years since Part D began.

In response to these concerns, OIG recently conducted a study based on an analysis of prescription drug event records.  Sponsors submit these records to CMS for each drug dispensed to beneficiaries enrolled in their plans.  Each record contains information about the pharmacy, prescriber, beneficiary, and drug.  OIG analyzed all of the records for drugs billed by retail pharmacies in 2009 and developed eight measures to describe Part D billing and to identify pharmacies with questionable billing.

Based on this study, OIG reports that retail pharmacies each billed Part D an average of nearly $1 million for prescriptions in 2009. According to OIG, the study revealed “questionable billing” by more than 2,600 of these pharmacies.  OIG reports that these pharmacies had ‘extremely high billing” for at least one of the eight measures developed and applied by OIG   For example, many pharmacies billed what OIG characterized as “extremely high” dollar amounts or numbers of prescriptions per beneficiary or per prescriber.  The Miami, Los Angeles, and Detroit areas were the most likely to have pharmacies with questionable billing.

Although OIG concedes that some of this billing may be legitimate, OIG believes that pharmacies that bill for extremely high amounts warrant further scrutiny The OIG report expresses concern that these high dollar prescription drug billings could mean that a pharmacy is billing for drugs that are not medically necessary or were never provided to the beneficiary.

Accordingly, OIG is recommending that CMS:  (1) strengthen the Medicare Drug Integrity Contractor’s monitoring of pharmacies and ability to find pharmacies for further review, (2) provide additional guidance to sponsors on monitoring pharmacy billing, (3) require sponsors to refer potential fraud and abuse incidents that may warrant further investigation, (4) develop risk scores for pharmacies, (5) further strengthen its compliance plan audits, and (6) follow up on the pharmacies identified as having questionable billing.  CMS concurred with four of the recommendations and partially concurred with the other two.

Private health plans and other payers are likely to check the study to decide whether it provides justification for closer scrutiny of prescription drug claims made to private payers. 

Whether or not private health plans follow suit, retail pharmacies and other providers should expect that CMS will increase scrutiny and challenges of prescription drug charges submitted to Medicare Part D.  Accordingly, retail pharmacies and the physician and other providers prescribing medications likely to be billed should tighten documentation and other procedures to defend against possible medical necessity and other challenges. 

For Help or More Information

If you need help these or other concerns, please contact the author of this update, Cynthia Marcotte Stamer.

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

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

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

Other Resources

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

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

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

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

[†] See FAQS About Affordable Care Act

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

Comments Off on OIG: “Extremely High” Prescription Drug Retail Pharmacy Billings Warrant Tighter Medicare Part D Oversight & Controls | Claims Administration, ERISA, Fiduciary Responsibility, Health Plans, Human Resources, Medicare Part D, Uncategorized | Tagged: , , | Permalink
Posted by Cynthia Marcotte Stamer

HHS OIG Finds The New York Hotel Trades Council and Hotel Association of New York City, Inc., Health Benefits Fund Reported Unallowable Costs on 2009 Medicare Cost Report

May 18, 2012

Health Plans taking in Medicare funds beware.  The  Department of Health & Human Services Office of Inspector General (OIG) is watching.

OIG says its audit of the New York Hotel Trades Council and Hotel Association of New York City, Inc., Health Benefits Fund (the Fund) found that the Fund  improperly reported $237,000 in Medicare Part B costs that were not reasonable and allowable.  According to OIG, the Fund reported that the Fund paid a total of $8.2 million for services provided to 3,180 plan members on its final 2009 cost report.  Of this amount, the Fund included Medicare Part B costs totaling $237,000  Specifically, the OIG says the Fund reported costs for services to plan members that were not Medicare-eligible, costs for services that were billed to both the Fund and Medicare by contracted providers, and costs for services not eligible for Medicare reimbursement.

While the disallowed costs made up a relatively small percentage of the total costs paid by the Fund, the audit report is notable in that it shows the need for health plans to be prepared to defend costs submitted to Medicare against potential challenge by OIG or other federal oversight officials.

In a separate compliance review, OIG also recently reported that Indiana University Health generally complied with Medicare billing requirements for selected inpatient and outpatient claims.  According to OIG, of 198 sampled claims, 35 selected inpatient and outpatient claims had errors, resulting in overpayments totaling $280,000 from October 2008 through September 2010.  See here.

Health plans and their fiduciaries and sponsors need to keep in mind that Federal health care oversight and enforcement is not just about detecting provider misconduct.  Federal officials also are watching the health plans.  While both audits found substantial compliance, the occurrence of the audits itself merits mention.   While OIG and other federal health program fraud and integrity oversight and enforcement activities against health care providers receive widespread attention, the conduct and results of these activities with regard to health plan often goes largely unremarked.  The OIG reports show that federal officials also are scrutinizing health plans to make sure that Medicare, Medicaid or other program funds are not being improperly expended to or accessed by health plans.  Accordingly, health plans receiving early retiree or other program subsidies, participating as Medicare Advantage plans, receiving subsidies or other federal funds, or coordinating benefits with these and other federal programs should prepare for possible federal review and, if applicable enforcement.

For Help or More Information

If you need help preparing to comply 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 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters. 

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

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

Other Resources

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

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

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

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

[†] See FAQS About Affordable Care Act

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

Comments Off on HHS OIG Finds The New York Hotel Trades Council and Hotel Association of New York City, Inc., Health Benefits Fund Reported Unallowable Costs on 2009 Medicare Cost Report | Claims Administration, ERISA, Fiduciary Responsibility, Health Plans, Human Resources, Medicare Part D, Uncategorized | Tagged: , , | Permalink
Posted by Cynthia Marcotte Stamer

New Mental Health Parity Resources Released In Celebration of Mental Health Awareness Month

May 9, 2012

The Department of Labor’s Employee Benefits Security Administration is celebrating Mental Health Awareness Month this May by adding a new Mental Health Parity webpage to its website resources, which is available here.

EBSA also has released a new resource titled “Understanding (and Common Misunderstandings Related to Implementation of the Mental Health Parity and Addiction Equity Act of 2008”(Publication) available here.

The new Publication highlights information about the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA).

The MHPAEA generally requires employment-based group health plans and health insurance issuers that provide group health coverage for mental health/substance use disorders to maintain parity between such benefits and their medical/surgical benefits.

Specifically, MHPAEA and its implementing regulations generally:

  • Provide that financial requirements (such as copays and deductibles), and quantitative treatment limitations (such as visit limits), applicable to mental health or substance use disorder benefits can generally be no more restrictive than the requirements or limitations applied to medical/surgical benefits;
  • Include requirements to provide for parity for nonquantitative treatment limitations (such as medical management standards);
  • Expand the parity requirements of an earlier law, the Mental Health Parity Act of 1996, such that plans and issuers may not impose a lifetime or annual dollar limit on mental health or substance use disorder benefits that is lower than the lifetime or annual dollar limit imposed on medical/surgical benefits.

The new Publication addresses various questions about the MHPAEA such as:

  • If a health plan may define mental health coverage as consisting solely of inpatient care benefits;
  • Whether the MHPAEA prohibits health plans from using separate managed behavioral health organizations to provide utilization review and other services with respect to mental health and/or substance abuse benefits (sometimes called a carve-out arrangements);
  • How quantitative and nonquantitative treatment limitations on mental health benefits are analyzed under the MHPAEA;
  • How the MHPAEA interacts with State mandates;
  • What plans are exempt from MHPAEA;
  • What participants and beneficiaries can do if they believe their group health plan is violating MHPEA; and
  • What the Departments of Treasury, Health & Human Services and Labor are doing to promote compliance.

In addition to the federal mental health  parity mandates under the MHPAEA, group health plans also are subject to mental health coverage mandates as part of the “essential benefits” requirements of the Affordable Care Act.  Health plans, their sponsors, adminstrators and fiduciaries should review their health plan provisions to confirm compliance with these current mental health mandates.

For Help or More Information

If you need help preparing to comply with the mental health parity requirements or other help 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 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters. 

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

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

Other Resources

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

 

 

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

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

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

[†] See FAQS About Affordable Care Act

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

Comments Off on New Mental Health Parity Resources Released In Celebration of Mental Health Awareness Month | Uncategorized | Tagged: , , | Permalink
Posted by Cynthia Marcotte Stamer

ERISA Advisory Opinion Addresses If Connecticut Group Health Plan Plan Is “Government Plan”

May 4, 2012
The Labor Department Employee Benefit Security Administration has released an Advisory Opinion discussing whether the Group Health Plan for Employees of the State of Connecticut would lose its status as a “governmental plan” within the meaning of section 3(32) of the Employee Retirement Income Security Act if the State permitted participation by certain private nonprofit employers who perform public service functions under contract with the State or receive substantial funding from governmental sources.
 
Interested persons can review Advisory Opinion 2012-01 here.

For Help or More Information

If you need help preparing to comply with the SBC requirements or other help 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 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters. 

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

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

Other Resources

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

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

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

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

[†] See FAQS About Affordable Care Act

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

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Posted by Cynthia Marcotte Stamer

Labor Department Annual Self-Insured Health Plan Report To Congress Released

May 3, 2012

The U.S. Department of Labor (Labor Department) submitted to Congress its 2012 Annual Report on Self-Insured Group Health Plans (2012 HP Report) today (May 4, 2012). 

The 2012 HP Report is the second the Labor Department has prepared to comply with the requirement of  Section 1253 of the Patient Protection and Affordable Care Act (the “Affordable Care Act”) that the Labor Secretart prepare an aggregate annual report that includes certain general information on self-insured group health plans using data collected from the Annual Return/Report of Employee Benefit Plan (the “Form 5500”), as well as certain data from financial filings of self-insured employers.

The Labor Department provided the the first report, Annual Report on Self-Insured Group Health Plans, March 2011 (March 2011 Report)to Congress in March 2011.  

Section I of the 2012 HP Report presents aggregate statistics describing self-insured plans that file a Form 5500 – generally, private-sector employee health plans that cover 100 or more participants or hold assets in trust.

 Section II of the 2012 HP Report presents certain available financial information on employers that sponsor such plans.  Section III shares various Labor Department conclusions relating to the 2012 HP Report data.

Along with the 2012 HP Report, the Labor Department also included two additional documents as Appendixes:

  • Appendix A, Group Health Plans Report: Abstract of 2009 Form 5500 Annual Reports Reflecting Statistical Year Filings, provides detailed statistics describing group health plans that file a Form 5500; and
  •  Appendix B, Self-Insured Health Benefit Plans 2012, presents a study that explores statistical issues associated with Form 5500 health plan data and analyzes available data on the financial status of employers that sponsor group health plans filing the Form 5500.

The 2012 HP Report shares and discusses various implications of statistics relating to practices and other elements of self-insured plans.  Among other things, the 2012 HP Report indicates that Sponsors of self-insured plans generally bear the risk associated with paying their plans’ covered health expenses. In contrast, sponsors of fully-insured plans generally pay premiums to insurers and transfer all such risk to them. Some sponsors retain the risk for a subset of benefits, but transfer the risk for the remaining benefits to health insurers – that is, they finance their plans’ benefits using a mixture of self-insurance and insurance.

A complete copy of the Report is available for review here.

For Help or More Information

If you need additional information about Affordable Care Act or other help 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 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters. 

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

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

Other Resources

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

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

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

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Posted by Cynthia Marcotte Stamer

NLRB Challenges Mandatory Arbitration Provisions

May 1, 2012

Employers should check handbooks or other policies include provisions that require employees to agree to mandatory individual arbitration or other waivers of rights to sue, file regulatory charges or seek other remedies should evaluate the advisability of updating those policies in light of recent National Labor Relations Board (NLRB) actions like those announced yesterday (April 30, 2012) against 24 Hour Fitness USA, Inc. (24-Hour Fitness).

In D.R. Horton, Inc., 357 NLRB No. 184, the Board earlier this year found that the employer, a home building company, violated Section 8(a)(1) of the Act by maintaining, as a condition of employment, a mandatory arbitration agreement that did not allow its employees to file joint, class, or collective employment-related claims in any forum, arbitral or judicial.

As a follow-up to that decision, the NLRB now is charging 24-Hour Fitness with violating federal labor law by insisting that all employment-related disputes be resolved by individual arbitration.  A California-based corporation which operates fitness centers across the country, 24-Hour Fitness requires employees to agree in writing, as a condition of employment, to forego any rights to “collective or class action” lawsuits or arbitrations.  Applying the rule it adopted earlier this year in D.R. Horton, Inc., 357 NLRB No. 184, the NLRB is charging this violates the collective bargaining and organizational rights of the National Labor Relations Act (NLRA).

The charges against 24-Hour Fitness stem from a charge filed by an employee at the 24 Hour Fitness center in San Ramon, California. Since at least the summer of 2010, the NLRB claims that the company has enforced its no-class-action policy by asserting it in litigation brought by employees in many cases, seven of which are cited in the complaint. In each case, employees, sought to bring workplace-related claims, such as wage and hour violations, on a class-wide basis. In response, 24-Hour Fitness sought to compel the employees to submit their common claims to individual arbitrations, citing the policy in its handbook.

The complaint calls for a hearing before an Administrative Law Judge on June 11, and seeks an order requiring the company’s fitness centers nationwide to stop maintaining and enforcing that portion of the policy that prohibits collective and class action, and to notify all judicial and arbitral forums in which it has opposed such action. 

The NLRB position regarding mandatory arbitration policies is of a series of activist positions that it has taken over the past year.  In light of this growing activism, employers should continue to strengthen their labor-management policies and practices to mitigate the growing labor exposures that result from this activist agenda. 
 
For Help or More Information
If you need help with labor and employment or other human resource, performance management, internal controls or compliance and risk management matters, please contact the author of this article, Cynthia Marcotte Stamer.  Board Certified in Labor & employment Law by the Texas Board of Legal Specialization,management attorney, author and consultant  Ms. Stamer is nationally and internationally recognized for more than 24 years of work helping private and governmental organizations and their management; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; schools and other governmental agencies and others design, administer and defend innovative compliance, risk management, workforce, compensation, employee benefit, privacy, procurement and other management policies and practices. Her experience includes extensive work helping employers carry out, audit, manage and defend worker classification,union-management relations, wage and hour, discrimination and other labor and employment laws, procurement, conflict of interest, discrimination management, privacy and data security, internal investigation and discipline and other workforce and internal controls policies, procedures and actions. 
Widely published on worker classification and other workforce risk management and compliance concerns, the immediate past-Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee and current Co-Chair of its Welfare Plan Committee, Vice Chair of the ABA TIPS Section Employee Benefits Committee,  a Council Representative of the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer works, publishes and speaks extensively on management, worker classification, re-engineering, investigations, human resources and workforce, employee benefits, compensation, internal controls and risk management, federal sentencing guideline and other enforcement resolution actions, and related matters.  She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters.Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly.

Other Resources

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

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at www.solutionslawpress.com. 

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

©2011 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press. All other rights reserved.

 

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Posted by Cynthia Marcotte Stamer

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

April 26, 2012

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

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

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

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

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

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

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

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

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

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

For Help or More Information

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

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

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

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

Other Resources

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

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

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

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

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

[†] See FAQS About Affordable Care Act

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

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Posted by Cynthia Marcotte Stamer

EEOC Sues Wendy’s Franchisee For Disability Discrimination

April 18, 2012

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

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

Wendy’s Suit

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

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

Expanding Disability Discrimination Exposures

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

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

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

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

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

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

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

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

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

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

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

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

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

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

About The Author

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

Other Helpful Resources & Other Information

If you found these updates of interest, you also be interested in one or more of the following other recent articles published in this electronic Solutions Law publication available for review here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail- by creating or updating your profile at here.

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

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

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Posted by Cynthia Marcotte Stamer

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

April 18, 2012

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

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

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

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

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

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

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

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

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

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

For Help or More Information

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

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

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

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

Other Resources

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

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at ww.solutionslawpress.com. 

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

©2011 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.

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Posted by Cynthia Marcotte Stamer

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

April 17, 2012

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

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

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

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

Enforcement Actions Highlight Growing HIPAA Exposures For Covered Entities

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

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

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

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

For Representation, Training & Other Resources

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

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

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

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

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

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

DC Court Enjoins Implementation of NLRB Poster Rule

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

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

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

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

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

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

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

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

OSHA $1Million Award Against AirTran Airways Highlights Retaliation Risks

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

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

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

Help Careflite Celebrate New Facility 1/11

Careflite Dedicates New Facility January 11, 2012

Manufacturer’s Excessive I-9 Documentation Triggers Discrimination Liability

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

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication click here. If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject to here.

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

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Posted by Cynthia Marcotte Stamer

DC Court Enjoins Implementation of NLRB Poster Rule

April 17, 2012

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

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

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

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

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

While the poster requirement is delayed, the NLRB continues to pursue an active regulatory and enforcement agenda.  See, e.g., Employers Face New Labor-Management Exposures Under Activist National Labor Relations Board.  Employers should continue to strengthen their labor-management policies and practices to mitigate the growing labor exposures that result from this activist agenda. 
 
For Help or More Information
If you need help with labor and employment or other human resource, performance management, internal controls or compliance and risk management matters, please contact the author of this article, Cynthia Marcotte Stamer.  Board Certified in Labor & employment Law by the Texas Board of Legal Specialization,management attorney, author and consultant  Ms. Stamer is nationally and internationally recognized for more than 24 years of work helping private and governmental organizations and their management; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; schools and other governmental agencies and others design, administer and defend innovative compliance, risk management, workforce, compensation, employee benefit, privacy, procurement and other management policies and practices. Her experience includes extensive work helping employers carry out, audit, manage and defend worker classification,union-management relations, wage and hour, discrimination and other labor and employment laws, procurement, conflict of interest, discrimination management, privacy and data security, internal investigation and discipline and other workforce and internal controls policies, procedures and actions. 
Widely published on worker classification and other workforce risk management and compliance concerns, the immediate past-Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee and current Co-Chair of its Welfare Plan Committee, Vice Chair of the ABA TIPS Section Employee Benefits Committee,  a Council Representative of the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer works, publishes and speaks extensively on management, worker classification, re-engineering, investigations, human resources and workforce, employee benefits, compensation, internal controls and risk management, federal sentencing guideline and other enforcement resolution actions, and related matters.  She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly.

Other Resources

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

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at www.solutionslawpress.com. 

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

©2011 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press. All other rights reserved.

 

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Posted by Cynthia Marcotte Stamer

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

March 20, 2012

Save The Date For SLP Webinar

 “Health Plan Communications Update: New Affordable Care Act SBC Rules & Beyond” April 25, 2012

Time is running short for health insurers and employer, union and other health plans, their sponsors and administrators to complete the necessary arrangements to be prepared to give the new “Summary of Benefits and Coverage” (SBC) and “Uniform Glossary” disclosure documents mandated by the summary of benefits and coverage requirements enacted under the Patient Protection and Affordable Care Act (Affordable Care Act).

Final SBC Regulations[*] implementing the Affordable Care Act’s summary of benefits and coverage requirements jointly published February 14, 2012 by the Departments of Labor, Health and Human Services (HHS), and the Treasury (the Departments) will require most health plans and health insurers begin providing the SBC and Uniform Glossary meeting Department standards to covered persons and coverage applicants beginning on the opening day of the first enrollment period beginning after September 22, 2012.

Completing the preparations to meet this deadline won’t be easy for most health plans and insurers.  Expect to need significant lead time to tailor a SBC and Glossary to your health plan, and complete other necessary arrangements to timely comply with the Final SBC Regulations. Most health plans will need significant time to complete the analysis needed to prepare a SBC appropriately tailored to their health plan.  In addition, most group health plans and insurers, their sponsors, administrators and fiduciaries also generally want to identify and make changes to their health plan design, documents, summary plan descriptions and other materials and practices in response to the new requirements.

The SBC Regulations contained detailed requirements about the required content of the SBC, as well as dictate that health plans and insurers covered by the SBC rules provide a Uniform Glossary of terms, many of which are likely to differ from definitions of the same or similar terms in plan documents, summary plan descriptions or other plan related documents. To help further clarify these requirements, the Departments on March 19, 2012 published a new FAQ[†] that clarifies certain information about the SBC Regulation and its deadline and other requirements.  In addition, the Affordable Care Act also requires that the SBC and other documents be translated where necessary to comply with the Affordable Care Act’s requirement that health plans and insurers communicate in culturally and linguistic manner. 

Taking time to make changes needed to identify and resolve potential conflicts and other ambiguities between required terms of the SBC and Glossary and existing health plan documentation, communications and procedures is particularly important in light of the United States Supreme Court’s May 16, 2011 ruling in Cigna Corp. v. Amara  In Amara, the Supreme Court ruled that federal courts may use equitable remedies provided for under the Employee Retirement Income Security Act to give a remedy to individuals hurt because summary plan descriptions or other communication or disclosure documents provided by the health plan contain terms that conflict with the official health plan documents under certain conditions.

April 25 Briefing Helps Health Plans, Fiduciaries, Insurers & Administrators Prepare

Solutions Law Press, Inc. plans to help health plans, their fiduciaries, employer and other sponsors, insurers and administrators prepare to comply with the new SBC and other requirements by hosting a webinar on  “Health Plan Communications Update: New Affordable Care Act SBC Rules & Beyond” April 25, 2012” from Noon to 1:30 Central Time on April 25. 2012.  For an invitation or more details about becoming an advertising sponsor or a participant, e-mail here.

For Help or More Information

If you need help preparing to comply with the SBC requirements or other help 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 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters. 

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

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

Other Resources

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

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

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

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

[†] See FAQS About Affordable Care Act

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

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Posted by Cynthia Marcotte Stamer

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

March 14, 2012

Small employers that provide health insurance coverage to their employees should consider whether they qualify for and should claim the small business health care tax credit authorized by Congress as part of the Patient Protection and Affordable Care Act (Affordable Care Act).

The small business health care tax credit enacted two years ago may provide a tax credit for certain small employers that pay at least half of the premiums for employee health insurance coverage under a qualifying arrangement may be eligible for this credit. The credit is specifically targeted to help small businesses and tax-exempt organizations provide health insurance for their employees.

Depending upon how they are structured, eligible small employers are likely subject to one of the following three tax-filing deadlines, which fall in coming weeks:

  • March 15: Corporations that file on a calendar year basis can figure the credit on Form 8941 and claim it as part of the general business credit on Form 3800, both of which are attached to their corporate income tax return.
  • April 17: Individuals have until April 17 to complete and file their returns on Form 1040. This includes Sole proprietors, as well as people who have business income reported to them on Schedules K-1—partners in partnerships, S corporation shareholders and beneficiaries of estates and trusts. They also attach Forms 8941 and 3800 to their return. The resulting credit is entered on Form 1040 Line 53.
  • May 15: Tax-exempt organizations that file on a calendar year basis can use Form 8941 and then claim the credit on Form 990-T, Line 44f.

Taxpayers needing more time to determine eligibility might consider obtaining an automatic tax-filing extension, usually for six months. See Form 4868 for individuals, Form 7004 and its instructions for businesses and Form 8868 for tax-exempt organizations.

Businesses that have already filed and later find that they qualified in 2010 or 2011 can still claim the credit by filing an amended return for one or both years. Corporations use Form 1120X, individuals use Form 1040X and tax-exempt organizations use Form 990-T.

Some businesses and tax-exempt organizations that already locked into health insurance plan structures and contributions may not have had the opportunity to make any needed adjustments to qualify for the credit for 2010 or 2011. These employers can still make the necessary changes to their health insurance plans so they qualify to claim the credit on 2012 returns or in years beyond. Eligible small employers can claim the credit for 2010 through 2013 and for two additional years beginning in 2014.

The recently-revamped Small Business Health Care Tax Credit page on IRS.gov provides additional information and resources designed to help small employers see if they qualify for the credit and then figure the amount of the credit, if any, that the employer qualifies to claim. These include a step-by-step guide for determining eligibility, examples of typical tax savings under various scenarios, answers to frequently-asked questions, a YouTube video and a webinar.

 For More Information Or Assistance

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 appeared in 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.

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Posted by Cynthia Marcotte Stamer

Health Plan BCBST To Pay $1.5 Million In 1st OCR Enforcement Action Prompted By HITECH Breach Report

March 13, 2012

Resolution Agreement Also 1st Announced With Health Plan

Health plans and other covered entities beware and prepare!  Health plans and other covered entities that report large breaches of unsecured protected health information to the Department of Health & Human Services (HHS) Office of Civil Rights and face potential civil monetary penalties (CMPs) for violating the Privacy & Security Rules of the Health Insurance Portability & Accountability Act of 1996 (HIPAA). 

The HIPAA investigation and exposures to CMPs likely to result following the report of a large breach of unsecured protected health information is demonstrated by a new Resolution Agreement announced March 13, 2012 by OCR.

 Blue Cross Blue Shield of Tennessee (BCBST) has agreed to pay the U.S. Department of Health and Human Services (HHS) $1,500,000 and to take certain other actions specified in a corrective action plan to settle potential violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy and Security Rules.  The BCBST Resolution Agreement is particularly significant, both as:

  • The first reported enforcement action directly resulting from the filing by a covered entity of a breach report required by the Health Information Technology for Economic and Clinical Health (HITECH) Act Breach Notification Rule; and
  • The first reported resolution agreement reached with a covered entity that is a health plan.

These notable enforcement firsts prove both the importance  the HITECH Breach Notification Rule’s significance as an OCR HIPAA enforcement tool, and the readiness of OCR to sanction health plans that breach HIPAA’s Privacy or Security Rules.

The OCR investigation that lead to the BCBST settlement began in response to the submission by BCBST of a notice required under the Breach Notification Rule of the theft of 57 unencrypted computer hard drives from a leased facility in Tennessee, which contained the protected health information (PHI) of over 1 million individuals.  Read more details here.

The Breach Notification Rule requires covered entities to report an impermissible use or disclosure of protected health information, or a “breach,” of 500 individuals or more to HHS and the media as well as an annual consolidated report of smaller breeches to HHS.[1] 

To resolve being officially sanctioned for HIPAA violations stemming from these findings under the strengthened enforcement rules and sanctions enacted as part of the HITECH Act, BCBST has agreed to pay $1,500,000 and adopt other corrective actions detailed in a corrective action plan.

Enforcement Actions Highlight Growing HIPAA Exposures For Covered Entities

The BCBST Resolution Agreements, like the 1st-ever $4.3 million HIPAA CMP that OCR imposed against Cignet Health of Prince George’s County, Md. (Cignet) in 2011 and a series of high dollar Resolution Agreements OCR has announced against various health care providers over the past few years highlight the significance of the HITECH Act amendments to HIPAA’s enforcement and CMP rules, as well as use of  its Breach Notification Rule as a tool in OCR’s investigation and enforcement efforts.

“This settlement sends an important message that OCR expects health plans and health care providers to have in place a carefully designed, delivered, and monitored HIPAA compliance program,” said OCR Director Leon Rodriguez. “The HITECH Breach Notification Rule is an important enforcement tool and OCR will continue to vigorously protect patients’ right to private and secure health information.” 

BCBST’s breach notification report clearly prompted the investigation that lead to the Resolution Agreement.  The opening of the investigation in response to the BCBST Breach Notification report reflects the need for covered entities to be prepared to respond to an investigation when these reports are made.  OCR officials previously have stated that it is the practice of OCR to conduct an investigation into all breaches of the protected health information of 500 individuals or more reported to it under the Breach Notification Rule. 

The BCBST Resolution Agreement provides yet another reminder to covered entities and their business associates of the need to carefully and appropriately manage their HIPAA responsibilities. See HIPAA Heats Up: HITECH Act Changes Take Effect & OCR Begins Posting Names, Other Details Of Unsecured PHI Breach Reports On Website.  Covered entities are urged to heed these warning by strengthening their HIPAA compliance and adopting other suitable safeguards to minimize HIPAA exposures.  For more tips, see here.

[1] The Breach Notification Rule also requires that covered entities report smaller breaches annually to OCR as part of a consolidated disclosure.

For Help or More Information

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

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

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

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

Other Resources

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

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at ww.solutionslawpress.com. 

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

©2011 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.

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March 21 New Deadline To Comment On Proposal To Extend Minimum Wage, Overtime Rules To In Home Care Workers

March 9, 2012
The U.S. Department of Labor’s Wage and Hour Division (WHD) has extended until March 12 the comment period for its proposed rule to provide minimum wage and overtime protections for nearly 2 million workers who provide in-home care services. See here.

In December, 2011, the WHD published a proposed rule that would expand minimum wage and overtime protections to all home care workers employed by third parties, such as staffing agencies. It also would clarify that individuals performing skilled in-home care work are entitled to minimum wage and overtime pay. However, individuals engaged by families for true companionship or fellowship activities, such as visiting with friends or pursuing hobbies, still would be considered “companions” and not be required to meet the act’s labor standards provisions. See Notice of Proposed Rulemaking[1] (NPRM). 

Among other things, the NPRM proposes to revise the companionship and live-in worker regulations under the Fair Labor Standards Act (FLSA):

  • To more clearly define the tasks that may be performed by an exempt companion;
  • To limit the companionship exemption to companions employed only by the family or household using the services; and
  • To provide that third party employers, such as in-home care staffing agencies, could not claim the companionship exemption or the overtime exemption for live-in domestic workers, even if the employee is jointly employed by the third party and the family or household.

When Congress expanded protections to “domestic service” workers in 1974, it exempted casual babysitters and companions for the aged and inform from both the minimum wage and overtime pay requirements of the FLSA and exempted live-in domestic workers from the overtime pay requirement only. While WHD has left regulations governing this exemption substantially unchanged since first issued in 1975, it now believes the in-home care service industry. workers employed by in-home care staffing agencies are not the workers that Congress envisioned in enacting the companionship exemption (i.e., neighbors performing elder sitting).

As a result of these determines, WHD is moving to modify its existing rules to broaden protections for professionally employed home care workers as well as outreaching to inform employers and workers about the requirements that it perceives employers of these workers must meet.  

The proposed tightening of regulations for home health workers follows a general toughening by WHD of its regulation and enforcement of wage and hour laws in the health care industry.  See, e.g. Home health care company in Dallas agrees to pay 80 nurses more than $92,000 in back wages following US Labor Department investigation; US Department of Labor secures nearly $62,000 in back overtime wages for 21 health care employees in Pine Bluff, Ark.; US Department of Labor initiative targeted toward increasing FLSA compliance in New York’s health care industry; US Department of Labor initiative targeted toward residential health care industry in Connecticut and Rhode Island to increase FLSA compliance; Partners HealthCare Systems agrees to pay 700 employees more than $2.7 million in overtime back wages to resolve U.S. Labor Department lawsuit; US Labor Department sues Kentucky home health care provider to obtain more than $512,000 in back wages and damages for 22 employees; and Buffalo, Minn.-based home health care provider agrees to pay more than $150,000 in back wages following US Labor Department investigation.

Many have expressed concerns about the potential added costs that changes proposed in the NPRM would trigger in providing in home health and companion care for aging and disabled family members.   The extension of the comment deadline provides added time for members of the public concerned about these rules to share their input.

Whether or not the proposed rule is adopted, the growing aggressiveness of the WHD and private plaintiffs to bring actions against employers violating minimum wage and overtime rules means health care and others employing home care workers should take well-documented steps to manage their risks.  These employers should both confirm the adequacy of their practices under existing rules, as well as evaluate and begin preparing to respond to the proposed modifications to these rules.  In both cases, employers of home care or other health care workers are encouraged to critically evaluate their classification or workers, both with respect to their status as employees versus contractor or leased employees, as well as their characterization as exempt versus non-exempt for wage and hour law purposes.  In addition, given the nature of the scheduled frequently worked by home care givers, their employers also generally should pay particular attention to the adequacy of practices for recordkeeping.

For Help or More Information
If you need help with these and other human resources or health care concerns controls matters, please contact the author of this article, Cynthia Marcotte Stamer.  Board Certified in Labor & employment Law by the Texas Board of Legal Specialization,management attorney, author and consultant  Ms. Stamer is nationally and internationally recognized for more than 24 years of work helping private and governmental organizations and their management; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; schools and other governmental agencies and others design, administer and defend innovative compliance, risk management, workforce, compensation, employee benefit, privacy, procurement and other management policies and practices. Her experience includes extensive work helping employers carry out, audit, manage and defend worker classification,union-management relations, wage and hour, discrimination and other labor and employment laws, procurement, conflict of interest, discrimination management, privacy and data security, internal investigation and discipline and other workforce and internal controls policies, procedures and actions. 
Widely published on worker classification and other workforce risk management and compliance concerns, the immediate past-Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee and current Co-Chair of its Welfare Plan Committee, Vice Chair of the ABA TIPS Section Employee Benefits Committee,  a Council Representative of the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer works, publishes and speaks extensively on management, worker classification, re-engineering, investigations, human resources and workforce, employee benefits, compensation, internal controls and risk management, federal sentencing guideline and other enforcement resolution actions, and related matters.  She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly.

Other Resources

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

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at www.solutionslawpress.com. 

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

©2011 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press. All other rights reserved.

 

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Posted by Cynthia Marcotte Stamer

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

March 9, 2012

The National Labor Relations Board Summary of Activities for Fiscal Year 2011 (Summary) released by NLRB Acting General Counsel Lafe Solomon this week reflects the increased activism and streamlined handling of matters by the NLRB in 2011

Statistics in the Summary reflect an increase in unfair labor practice complaints as well as an increase in the number of complaints that NLRB Regional offices found to merit formal prosecutions.  According to the Summary, In FY 2011, the Regional Offices issued 1,342 complaints as compared to 1,243 in FY 2010.  In addition to issuing almost 100 more complaints, the percentage of unfair labor practice cases in which a Regional Director determined that formal proceedings were warranted (the merit factor) rose from 35.6% in FY 2010 to 37%. Since 1980, the merit factor has fluctuated between 32% and 40%.

In addition to these results, the General Counsel chose to highlight accomplishments by the NLRB in expediting the handling of investigations and proceedings in several areas.  NLRB cut its working inventory of cases by moving matters through faster.  The working inventory of cases at the end of FY 2011 was 4,421, compared to 4,063 at the end of FY 2010. Other processing efficiency highlights included:

  • 91.7% of all initial elections were conducted within 56 days of the filing of the petition.
  • Initial elections in union representation elections were conducted in a median of 38 days from the filing of the petition.
  • A 93% settlement rate was achieved in the Regional Offices in meritorious unfair labor practice cases.
  • The Regional Offices won 87% of Board and Administrative Law Judge unfair labor practice and compliance decisions in whole or in part in FY 2011.
  • A total of $60,514,922 was recovered on behalf of employees as backpay or reimbursement of fees, dues, and fines, with 1,644 employees offered reinstatement.
  • The Agency exceeded two of its three ambitious overarching goals and came close to achieving the third, closing 84.7% of all representation cases within 100 days (target 85%), 72.5% of all unfair labor practice cases within 120 days (target 71.2%), and 83.2% of all meritorious unfair labor practice cases within 365 days (target 80.2%). The target for each 2011 overarching goal was higher than in FY 2010 and has been increased for FY 2012.
  • Agency representatives participated in over 600 outreach events during FY 2011.

Other statistics of note include:

  • The NLRB”s total case intake during FY 2011 declined to 24,990, compared to 26,585 cases in FY 2010, representing a 5.9% decrease in overall intake.  Unfair labor practice case intake declined 5.1% compared to 2010..Total representation case intake declined 2,813, a 12.2% decrease from the FY 2010.
  • Petitions filed in certification and decertification decreased 11.2% from 2,969 in FY 2010 to 2,634 in FY 2011. Petitions filed in unit deauthorization, unit amendment and unit clarification (UD, AC and UC) cases decreased by 23.8% from the previous year’s intake, with the filing of 179 petitions in FY 2011 compared to 235 filed in FY 2010.
For Help or More Information
If you need help with labor and employment or other human resource, performance management, internal controls or compliance and risk management matters, please contact the author of this article, Cynthia Marcotte Stamer.  Board Certified in Labor & employment Law by the Texas Board of Legal Specialization,management attorney, author and consultant  Ms. Stamer is nationally and internationally recognized for more than 24 years of work helping private and governmental organizations and their management; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; schools and other governmental agencies and others design, administer and defend innovative compliance, risk management, workforce, compensation, employee benefit, privacy, procurement and other management policies and practices. Her experience includes extensive work helping employers carry out, audit, manage and defend worker classification,union-management relations, wage and hour, discrimination and other labor and employment laws, procurement, conflict of interest, discrimination management, privacy and data security, internal investigation and discipline and other workforce and internal controls policies, procedures and actions. 
Widely published on worker classification and other workforce risk management and compliance concerns, the immediate past-Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee and current Co-Chair of its Welfare Plan Committee, Vice Chair of the ABA TIPS Section Employee Benefits Committee,  a Council Representative of the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer works, publishes and speaks extensively on management, worker classification, re-engineering, investigations, human resources and workforce, employee benefits, compensation, internal controls and risk management, federal sentencing guideline and other enforcement resolution actions, and related matters.  She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly.

Other Resources

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

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at www.solutionslawpress.com. 

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

©2011 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press. All other rights reserved.

 

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Posted by Cynthia Marcotte Stamer

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

March 8, 2012

Sullivan University System, Inc. learned the hard way that U.S employers that misclassify workers as independent contractors, as exempt for wage and hour law purposes or otherwise increasingly risk investigation and enforcement from federal and state agencies targeting perceived misclassification abuses.

Following an investigation by the Labor Department’s Wage and Hour Division, Kentucky based Sullivan University System Inc. will pay $483,201 in back wages to 248 employees who the Department found it wrongfully denied overtime pay while working as admissions officers and high school representatives. The investigation found that employees were incorrectly classified as exempt from the overtime provisions of the Fair Labor Standards Act and the employer failed to keep accurate records of the employees’ hours.

The Sullivan University System, Inc. settlement provides another example of the growing risks that U.S. employers face from misclassifying workers as exempt employees for purposes of wage and hour and overtime laws.    As a result of the mischaracterization of workers as contractors that the Labor Department determined to qualify as employees for purposes of wage and hour and overtime laws, the Labor Department found the employer failed to pay required overtime and to maintain required time records in violation of the Fair Labor Standards Act.

Wage and hour laws are only one of a myriad of areas in which the Department of Labor, Internal Revenue Service and other federal and state regulators increasingloy are scrutinizing worker classifications to uncover violations of applicable law resulting from the mischaracterization of workers as exempt or as non-employee service providers.

The Obama Administration is targeting employers that misclassify workers for enforcement.

Agency officials and members of Congress have sent numerous messages to U.S. employers to clean up their worker classification practices.  For instance, Labor Department enforcement actions increasingly show its employer misclassification audit and enforcement emphasis.  See, e.g.Employer Charged With Misclassifying & Underpaying Workers To Pay $754,578 FLSA Backpay Settlement; $1 Million + FLSA Overtime Settlement Shows Employers Should Tighten On-Call, Other Wage & Hour Practices.

Meanwhile, the Internal Revenue Service (IRS) continues to conduct worker classification audits while encouraging employers to self correct existing payroll tax misclassifications by participating in a new Voluntary Worker Classification Settlement Program (“Settlement Program”) announced in September. However the limited scope of the relief provided makes use of the program challenging for most employers. See New IRS Voluntary IRS Settlement Program Offers New Option For Resolving Payroll Tax Risks Of Misclassification But Employers Also Must Manage Other Legal Risks; Medical Resident Stipend Ruling Shows Health Care, Other Employers Should Review Payroll Practices; Employment Tax Takes Center Stage as IRS Begins National Research Project , Executive Compensation Audits.  

While these and other agencies continue to keep the heat up on employers that misclassify workers, Congress also continues to consider legislation that would further clarify and tighten worker classification rules.  See e.g., Review & Strengthen Defensibility of Existing Worker Classification Practices In Light of Rising Congressional & Regulatory Scrutiny; New IRS Worker Classification Settlement Program and Its Risks.

In her November 3, 2011 testimony to the House Subcommittee on Workforce Protections Committee on Education and the Workforce, U.S. Labor Department Wage & Hour Division (WHD) Deputy Administrator (WHD) Nancy Leppink confirmed that the Labor Department is joining a growing list of federal and state agencies that are making ending employee misclassification an audit and enforcement priority.  Ms Leppink testified that “employee misclassification is a serious and, according to all available evidence, growing problem” that the Obama Administration is “committed to working to end.”  See Testimony of Nancy J. Leppink, Deputy Wage and Hour Administrator, Wage and Hour Division, U.S. Department of Labor before the Subcommittee on Workforce Protections, Committee on Education and the Workforce, U.S. House of Representatives (November 3, 2011).

Her testimony also makes clear that interagency coöperation and sharing of information among agencies is an increasingly valuable tool to this effort. Ms. Leppink told the Subcommittee that the Labor Department is a part of a multi-agency Misclassification Initiative that seeks to strengthen and coördinate Federal and State efforts to enforce violations of the law that result from employee misclassification.

According to Ms. Leppink, the WHD’s exchange of information about investigations with other law enforcement agencies is as “particularly important with respect to our efforts to combat the violations of our laws that occur because of employees who are misclassified as independent contractors or other non-employees.” On September 19, 2011 the Labor Department and Internal Revenue Service (IRS) signed a Memorandum of Understanding (MOU) to share information about investigations with each other.  The MOU helps the IRS investigate if employers the Labor Department has found in violation of federal labor laws have paid the proper employment taxes. Similarly, the WHD also entered into MOUs with several state labor agencies that allow the Labor Department to share information about its investigations and coordinate misclassification enforcement when appropriate.

“These agreements mean that all levels of government are working together to solve this critical problem,” she said.

Employers Urged To Audit & Strengthen Worker Classification Practices

As Federal and state regulators take aim at misclassification abuses, U.S. employers need to review each arrangement where their business receives services that the business treats as not employed by their business, as well as any employees of their business that the business treats as exempt employees keeping in mind that they generally will bear the burden of proving the appropriateness of that characterization for most purposes of law.  

To guard against these and other growing risks of worker classification, employers receiving services from workers who are not considered employees for purposes of income or payroll should review within the scope of attorney-client privilege the defensibility of their existing worker classification, employee benefit, fringe benefit, employment, wage and hour, and other workforce policies and consult with qualified legal counsel about the advisability to adjust these practices to mitigate exposures to potential IRS, Labor Department or other penalties associated with worker misclassification.

Review and management of these issues is particularly timely in light of the opening by the Internal Revenue Service (IRS) of a new settlement program for resolving payroll tax issues resulting from misclassification.  Given broader labor and other risks, however, before taking advantage of a new Internal Revenue Service program offering employers the opportunity to resolve potential payroll tax liabilities arising from the misclassification of workers, employers should consider and develop a risk management their overall worker misclassification liability exposures.  See “New IRS Worker Classification Settlement Program and its Risks,” in the January, 2011 issue of the Dallas Bar Journal To read her article, see page 8 of the January, 2012 Dallas Bar Journal here.

For Help or More Information

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

Other Resources

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

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at www.solutionslawpress.com. 

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

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

 

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