Insured “Expatriate Plans” Get Temporary Reprieve From Affordable Care Act Compliance Thru 2015 If Meet Other Health Plan Mandates

March 13, 2013

“Expatriate health plans” within the meaning of the “FAQS About Affordable Care Act Implementation (Part XIII)”(the “Expat FAQ”) are not required to comply the Affordable Care Act (ACA) requirements for pre-January 1, 2016 plan years, as long as they comply with the applicable federal health plan mandates of pre-Affordable Care Act version of Title XXVII of the Public Health Service (PHS) Act and other applicable law under ERISA and the Internal Revenue Code (Code) under temporary transitional relief announced in the Expat FAQ jointly announced by the Agencies of Labor, Health and Human Services (HHS), and the Treasury (collectively, the Agencies) on March 8, 2013.

ACA & Other Federal Health Plan Rules Generally Apply To Expat Coverage

The Expat FAQ makes clear that the Agencies generally view expatriate health plans and other health benefit coverage provided by businesses subject to U.S. law for employees working outside their home country generally are subject to the mandates of ACA, as well as other federal health plan mandates. However, ERISA section 4(b)(4) may exempt from ERISA coverage “plans maintained outside the United States primarily for the benefit of persons substantially all of whom are nonresident aliens.” Similar exemptions also may be available for certain provisions of the Code or ERISA for these extra-territorial plans for nonresident aliens. For instance, for purposes of the eligibility non-discrimination rule of Code section 105(h), the Code specifies that an employer can disregard employees who are nonresident aliens and who receive no earned income (within the meaning of section 911(d)92) from the employer which constitutes income from sources within the United States within the meaning of section 861(a)(3).

Businesses should design and administer their health plans in accordance with all relevant federal health benefit regulations unless qualification for their plan for exemption is specifically verified.

Temporary Transitional ACA Relief For “Expatriate Health Plans”

While the Agencies gather further information and analyze the potential challenges expatriate plans may face in complying with the Affordable Care Act, the Expat FAQ states that for plan years beginning on or before December 31, 2015, the Agencies will treat expatriate health plans as treating the requirements of subtitles A and C of Title I of the Affordable Care Act if the plan and issuer comply with the pre-Affordable Care Act version of Title XXVII of the PHS Act, section 715 of ERISA, and section 9815 of the Code and other applicable law under ERISA and the Code including, for example, the mental health parity provisions, the HIPAA nondiscrimination provisions, the ERISA section 503 requirements for claims procedures, and any reporting and disclosure obligations under ERISA Part 1.

The Expat FAQ also confirms that the Agencies will treat coverage provided under an expatriate group health plan as a form of minimum essential coverage under section 5000A of the Code. If an individual has minimum essential coverage, the individual will not be subject to the “Individual Mandate” tax. Additionally, an employee who is offered “minimum essential coverage” by his/her employer will not be eligible for a subsidy in the Exchange if the employer coverage is “affordable” and provides “minimum value.” This means the employer will not be subject to a potential penalty under the ACA “Employer Shared Responsibility” provisions of new Code section 4980H.

Definition of “Expatriate Health Plan” Limited To Certain Insured Health Plans

Sponsors and insurers providing or administering health benefits with respect to employees working or living outside the United States are cautioned of the need to confirm that their program falls under the Expat FAQ’s definition of “expatriate health plan.” For purposes of this temporary transitional relief, the Expat FAQ defines an “expatriate health plan” as “an insured group health plan with respect to which enrollment is limited to primary insureds who reside outside of their home country for at least six months of the plan year and any covered dependents, and its associated group health insurance coverage.” The Expat FAQ confirms its definition of “expatriate health coverage” also applies for purposes of the Health Insurer Issuer Standards Related to Transitional Reinsurance Program of 45 CFR 153.400(a)(1)(iii) for plans with plan years ending on or before December 31, 2015.

This definition of expatriate health plan will not extend to all health coverage provided for employees of U.S. companies working outside the United States. Employers and administrators of self-insured health plans providing coverage for expatriate employees take note, however. Because this definition presently is limited to “insured group health plans,” it self-insured health coverage provided for expatriate employees presently do not qualify as expatriate health plans covered by the relief contained in the Expat FAQ. Likewise, the definition also does not apply to health coverage provided for employees working abroad for periods of less than six months. Sponsors, insurers and administrators of health plans providing coverage for employees of U.S. employer working outside their home countries that fall outside the Expat FAQ definition of an “expatriate health plan” should ensure that their programs timely comply with all applicable federal health plan mandates including ACA.

Agencies Invite Public Input On ACA Application To Expatriate Health Plans

The Agencies request comments on and information about the unique challenges that expatriate health plans may face in complying with provisions of the Affordable Care Act, including information about which particular types of plans face these challenges and with respect to which particular provisions of the Affordable Care Act. In anticipation of further input and analysis, the Expat FAQ speculates that potential challenges that could complicate Affordable Care Act compliance for an expatriate health plan might include:

Reconciling and coordinating the multiple regulatory regimes that apply to expatriate health plans might make it impossible or impracticable to comply with all the relevant rules at least in the near term;
Independent review organizations may not exist abroad;
It may be difficult for certain preventive services to be provided, or even be identified as preventive, when services are provided outside the United States by clinical providers that use different code sets and medical terminology to identify services.
Expatriate issuers may face challenges and delays in communicating with enrollees living abroad.
Due to the complex nature of these plans, standardized benefits disclosures can be difficult for issuers to produce.
Expatriate health plans may require additional regulatory approvals from foreign governments.
In some circumstances, it is possible that domestic and foreign law requirements conflict.

The Expat FAQ invites employers, insurers and other interested persons to provide input to the Agencies by sending their comments by May 8, 2013 to e.ohpsca-expat.ebsa@dol.gov. Sponsors, insurers and administrators should share their concerns and insights in response to this invitation.

Review and Update Plans To Manage Risks & Improve Effectiveness

Businesses providing health coverage to workers working outside of the United States should review their policies for compliance with the applicable requirements of the Affordable Care Act, to the extent applicable taking into account the Expat FAQ, as well as otherwise applicable requirements of ERISA, the Code, the PHS Act and other relevant federal laws. When conducting this review, sponsors, administrators and insurers also should consider opportunities to manage risks, improve plan value and cost effectiveness and mitigate other legal or operational concerns.

Health coverage provided to employees of U.S. businesses working outside the United States typically are provided under policies, plans and programs that often is provided pursuant to products or other arrangements that may not be designed, documented or administered to adequately comply with relevant federal health plan mandates. Beyond minimizing legal exposures that may result from overlooked compliance obligations, employer or other sponsors, administrators and insurers of these programs generally should familiarize themselves about the health care delivery systems, private and public health benefit programs, regulations and other relevant requirements and circumstances that may impact their business’ obligations to provide or contribute toward the cost of health care coverage, access to quality care by their employees and their families while working outside the United States or their home country, and legal and operational issues that may arise when employees are working oversees, transitioning between countries, have family members residing in different countries or other special circumstances.

The Expat FAQ is only one of a deluge of new guidance recently finalized or proposed by the Agencies. With the effective date of the 2014 Affordable Care Act reforms rapidly approaching, more guidance is impending. Stay tuned for additional updates about Affordable Care Act and other federal health plan rules and guidance.

For Help or More Information

If you need help reviewing and updating, administering or defending your group health insurance, employee benefit, human resources, insurance, health care matters or related documents or practices to respond to emerging health plan regulations, monitoring or commenting on these rules, defending your health plan or its administration, or other health or employee benefit, human resources or risk management 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 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

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

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, HR.com and other employee benefits and human resources publications. She also is 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.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested in exploring other Solutions Law Press, Inc. ™ tools, products, training and other resources here.

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 including:

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

1 Comment | 105(h), Bankruptcy, Corporate Compliance, Employee Benefits, Employers, Employment Tax, ERISA, Fair Labor Standards Act, Human Resources, I-9, Immigration, Insurance, Internal Controls, Patient Protection and Affordable Care Act, Payroll Tax, Tax, Uncategorized | Tagged: ACA, Affordable Care Act, Employer, expatriate, Health Care Reform, Health Plans, Insurance, Patient Protection & Affordable Care Act, Pay or Play, Shared Responsibility | Permalink
Posted by Cynthia Marcotte Stamer

OCR Plans To Survey Health Plans, Other Covered Entities Hit With HIPAA Audits in 2012

March 10, 2013

The Department of Health & Human Services (HHS) Office of Civil Rights (OCR) wants to ask the 115 health plans, health care clearinghouses, and health care providers (covered entities) that OCR audited in 2012 for compliance with Privacy and Security Rules of the Health Insurance Portability & Accountability Act (HIPAA) under its HIPAA Audit Program to share feedback about their experience. The planned survey announcement follows OCR’s recent released of restated HIPAA Privacy & Security Rules scheduled to take effect in September, 2013 and as OCR continues and expanding its HIPAA Audit Program in 2013. All together, the signs are clear that covered entities should update and strengthen their HIPAA compliance and risk management practices to withstand the tightened rules and enforcement.

OCR initiated the HIPAA Audit Program in 2012 to comply with Section 13411 of the Health Information Technology for Economic and Clinical Health Act’s requirement that it audit covered entity and business associate compliance with the HIPAA privacy, security, and breach notification rules. While it continues its HIPAA Audit Program in 2013, OCR also is evaluating the effectiveness of the HIPAA Audit Program audits in 2012.

To this end, OCR currently is conducting a review of the HIPAA Audit program to determine its efficacy in assessing the HIPAA compliance efforts of covered entities. As part of that review, OCR plans to ask covered entities audited under the HIPAA Audit Program in 2012 to complete an online survey about their experience. In anticipation of its conduct of the proposed surveys, OCR is inviting public comment on the burden to Covered Entities to complete the planned online survey, which OCR estimates will take two hours to complete through May 20, 2013. According to OCR, the survey will gather information on the effect of the audits on the audited entities and the entities’ opinions about the audit process. The online survey will be used to:

Measure the effect of the HIPAA Audit program on covered entities;
Gauge their attitudes towards the audit overall and in regards to major audit program features, such as the document request, communications received, the on-site visit, the audit report findings and recommendations;
Obtain estimates of costs incurred by covered entities, in time and money, spent responding to audit-related requests;
Seek feedback on the effect of the HIPAA Audit program on the day-to-day business operations; and
Assess whether improvements in HIPAA compliance were achieved as a result of the Audit program.

OCR says it will use the information, opinions, and comments collected using the online survey to produce recommendations for improving the HIPAA Audit program.

For instructions to comment or more details, see here.

For More Information Or Assistance

If you need assistance reviewing or responding to these or other health care 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 25 years experience advising health industry clients about these and other matters. Ms. Stamer has extensive experience advising and assisting health care providers and other health industry clients to establish and administer compliance and risk management policies and to respond to DEA and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns including a number of programs and publications on OCR Civil Rights rules and enforcement actions. Her insights on these and other related matters 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. You can get more information about her health industry experience here. If you need assistance with these or other compliance concerns, wish to ask 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.

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 about this communication click here.

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:

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS. ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN. ©2013 Cynthia Marcotte Stamer, P.C. Non-exclusive license to republish granted to Solutions Law Press. All other rights reserved.

Measure the effect of the HIPAA Audit program on covered entities;
Gauge their attitudes towards the audit overall and in regards to major audit program features, such as the document request, communications received, the on-site visit, the auditreport findings and recommendations;
Obtain estimates of costs incurred by covered entities, in time and money, spent responding to audit-related requests;
Seek feedback on the effect of the HIPAA Audit program on the day-to-day business operations; and
Assess whether improvements in HIPAA compliance were achieved as a result of the Audit program.

OCR says it will use the information, opinions, and comments collected using the online survey to produce recommendations for improving the HIPAA Audit program.

For instructions to comment or more details, see here.

For Help or More Information

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.

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.

About Solutions Law Press, Inc.™

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 publications available for review here including:

1 Comment | Employee Benefits, Employers, Employment Tax, Health Plans, HIPAA, Human Resources, Immigration, Insurance, Internal Controls, Payroll Tax | Tagged: ACA, Affordable Care Act, Employer, Health Care Reform, Health Plans, Insurance, Patient Protection & Affordable Care Act, Pay or Play, Shared Responsibility | Permalink
Posted by Cynthia Marcotte Stamer

Businesses Urged To Strengthen Their Worker Classification Defenses As IRS, Other Agencies Step Up Audits & Enforcement

March 10, 2013

Businesses using non-employee workers should heed the recently announced expansion of the Internal Revenue Service (IRS) Voluntary Classification VCS Program (VCS Program) as yet another warning to clean up their worker classification practices and defenses for all workers performing services for the business in any non-employee capacity.

Relying upon misclassifications of workers as nonemployed service providers presents many financial, legal and operational risks for businesses. When businesses treat workers as nonemployees who render services in such a way that makes the worker likely to qualify as a common law employee, the business runs the risk of overlooking or underestimating the costs and liabilities of employing those workers. The enforcement records of the U.S. Department of Labor Wage & Hour Division contains a lengthy and ever-lengthening record of businesses subjected to expensive backpay and penalty awards because the business failed to pay minimum wage or overtime to workers determined to qualify as common law employees entitled to minimum wage and overtime under the Fair Labor Standards Act. See, e.g., Employers Should Tighten Worker Classification Practices As Obama Administration Moves To Stamp Out Misclassification Abuses; $1 Million + FLSA Overtime Settlement Shows Employers Should Tighten On-Call, Other Wage & Hour Practices; Employer Charged With Misclassifying & Underpaying Workers To Pay $754,578 FLSA Back Pay Settlement.

Originally announced on September 22, 2011 in Announcement 2011-64, the VCS Program as modified by Announcement 2012-45 continues to offer businesses a carrot to reclassify as employees workers misclassified for payroll tax purposes as independent contractors, leased employees or other non-employee workers backed by the enforcement stick of the IRS’ promise to zealously impose penalties and interest against employers caught wrongfully misclassifying workers. While the IRS’s VCS Program and stepped up audits of worker classification provide a strong incentive for business to address their worker classification risks, the IRS is only one of many agencies on the alert for worker misclassification exposures. Worker misclassification also impacts wage and hour, safety, immigration, worker’s compensation, employee benefits, negligence and a host of other obligations.

All of these exposures carry potentially costly compensation, interest, and civil and in some cases even criminal penalty exposures for the businesses and their leaders. Consequently, businesses should act prudently and promptly to identify and address all of these risks and move forward holistically to manage their misclassification exposures.

Agencies charged with enforcement of these other laws as well as private plaintiffs also are on the alert for and pursing businesses for aggressive misclassification of workers in these other exposure areas. Since most businesses uniformly classify workers as either employees or non-employees for most purposes, business leaders must understand and manage the full scope of their businesses’ misclassification exposures when charting and implementing their strategy in response to the VCS Program or another voluntary compliance program, responding to an audit or other agency action, addressing a private plaintiff suit or conducting other risk management and compliance activities impacting or affected by worker classification concerns.

VCS Program Offers Limited Worker Misclassification Exposure Relief

Worker misclassification impacts a broad range of tax and non-tax legal obligations and risks well beyond income tax withholding, payroll and other employment tax liability and reporting and disclosure. A worker classification challenge or necessity determination in one area inherently prompts the need to address the worker reclassification and attendant risks in other areas.

Typically, in addition to treating a worker as a non-employee for tax purposes, a business also will treat the worker as a non-employee for immigration law eligibility to work, wage and hour, employment discrimination, employee benefits, fringe benefits, worker’s compensation, workplace safety, tort liability and insurance and other purposes.

Health Care Reform To Increase Worker Classification Risks

Businesses can look forward to these risks rising in 2014, when the “pay or play” employer shared responsibility, health plan non-discrimination, default enrollment and other new rules take effect under the Patient Protection & Affordable Care Act (ACA). Given these new ACA requirements and the government’s need to get as many workers covered as employees to make them work, as well as existing laws, IRS and other agencies are expanding staffing and stepping up enforcement against businesses that misclassify workers.

Whether and how ACA’s “pay-or-play” employer shared responsibility payment, default enrollment, insured health plan non-discrimination and other federal health plan rules apply to a business’ health plan requires a correct understanding of what workers considered employed by the business and how these workers are counted and classified for purposes of ACA and other federal health plan mandates.

ACA and other federal health plan rules decide what rules apply to which businesses or health plans based on the number of employees a business is considered to employ, their hours worked, their seasonal or other status, and other relevant classification as determined by the applicable rule. The ACA and other rules vary in the relevant number of employees that trigger applicability of the rule and how businesses must count workers to decide when a particular rule applies. Consequently, trying to predict the employer shared responsibility payment, if any under Internal Revenue Code (Code) Section 4980H or model the burden or cost of any other federal health benefit mandates requires each business know who counts and how to classify workers for each of these rules. Most of these rules start with a “common law” definition of employee then apply rules to add or ignore various workers. Because most federal health plan rules also take into account “commonly controlled” and “affiliated” businesses’ employees when determining rule coverage, businesses also may need to know that information for other related or commonly owned businesses.

For instance, when a business along with all commonly controlled or affiliated employers, if any, employ a combined workforce of 50 or more “full-time” and “full-time equivalent employees” (Large Employer) does not offer “affordable,” “minimum essential coverage” to every full-time employee and his dependents under a legally compliant health plan that provides “minimum essential value” within the meaning of ACA after 2013, the business generally should expect to pay a shared responsibility payment under Code Section 4980H for each month after 2013 that any “full-time” employee receives a tax subsidy or credit for enrolling in one of ACA’s health care exchanges. The amount of this required shared responsibility payment will be calculated under Code Section 4980H based on the plan design and coverage the employer health plan offers and the required employee contribution for employee only coverage.

If the business intends to continue to offer health coverage, it similarly will need to accurately understand which workers count as its employees for purposes of determining who gets coverage and the consequences to the business for those workers that qualify as full-time, common law employees not offered coverage.

In either case, ACA uses the common law employee test as the basis for classification of workers both to determine what businesses have sufficient full-time employees to become covered under these rules, the payment, if any, required under Code Section 4980H’s new employer shared responsibility payment requirements, as well as the workers entitled to benefit from these rules under employer sponsored health plans. Accordingly, These the already significant legal and financial consequences for employers that misclassify workers will rise significantly when ACA gets fully implemented beginning in 2014.

Consider VCP Program Relief In Context Of Other Worker Classification Risks

As part of a broader effort to get businesses properly to classify and fulfill tax and other responsibilities to workers, the IRS is offering certain qualifying businesses an opportunity to resolve payroll liabilities arising from past worker misclassifications under the VCS Program. The VCS Program settlement opportunity emerged in 2011 as worker misclassification amid rising scrutiny and enforcement by the IRS and other agencies against businesses for misclassification related violations of the Code, wage and hour, safety, discrimination, immigration and various other laws.

Touted by the IRS as providing “greater certainty for employers, workers and the government,” the VCS Program offers businesses that meet the eligibility criteria for the program the option to resolve past payroll tax liability for the misclassified workers by paying a settlement payment of just over one percent of the wages paid to the reclassified workers for the past year and by meeting other program criteria. When a business meets the VCS Program requirements, the IRS promises not to conduct a payroll tax audit or assess interest or penalties against the business for unpaid payroll taxes for the previously misclassified workers covered by the VCS Program. For more detail, 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.

The IRS hoped the threat of much larger liability if the IRS catches their misclassification in an audit would induce businesses to settle their exposure and come into compliance by participating in the VCS Program.

Part of the low participation stemmed from restrictions incorporated into the VCS Program. Not all businesses with misclassified workers qualified to use the program. The original criteria to enter the VCS Program established in 2011 required that a business:

Be treating the workers as nonemployees;
Consistently have treated the workers in the past as nonemployees;
To have filed all required Forms 1099 for amounts paid to the workers;
Not currently be under IRS audit;
Not be under audit by the Department of Labor or a state agency on the classification of these workers or contesting the classification of the workers in court; and
To agree to extend the statute of limitations on their payroll tax liabilities from three to six years.

After only about 1000 employers used the VCS Program to voluntarily resolve their payroll tax liability for misclassified workers, the IRS modified the program in hopes of making participation more attractive to businesses in Announcement 2012-45. As modified by Announcement 2012-45, employers under IRS audit, other than an employment tax audit, now qualify for the VCS Program. Announcement 2012-45 also eliminates the requirement that employers agree to extend their statute of limitations on payroll tax liability from three to six years.

A business that meets these adjusted criteria for participation now follows the following steps to enter the VCS Program:

Files the Form 8952, Application for Voluntary Classification Settlement Program, at least 60 days before the business plans to begin treating the workers as employees;
Adjusts its worker classification practices prospectively with respect to the previously misclassified workers;
Pays the required settlement fee; and
Properly classifies workers going forward.

While these changes may make participation in the VCS Program more attractive to some employers, many employers may view use of the VCS Program as too risky because of uncertainties about the proper classification of certain workers in light of the highly fact specific nature of the determination, as well as concerns about the effect that use of the VCS Program might have on the businesses non-tax misclassification exposures for workers that would be reclassified under the VCS Program.

Uncertainties Complication Worker Classification Risk Management

One of the biggest challenges to getting businesses to change their worker classifications is getting the businesses to accept the notion that long-standing worker classification practices in fact might not be defensible.

Although existing precedent and regulatory guidance makes clear that certain long-standing worker classification practices of many businesses would not hold up if scrutinized, business leaders understandably often discount the risk because these classifications historically have continued with little or no challenge in the past.

Even when business leaders recognize that changing enforcement patterns merit reconsideration of historical worker classification practices, they may be reluctant to reclassify the workers.

The common law employment test applied to decide if a worker is an employee for payroll, income tax, employee benefit plan and other purposes under the Code often relies on a subjective, highly fact-specific analysis of the particular circumstances of the worker. Employment status typically is presumed under the common law test for purposes of the Code and most other laws. This means that the business, rather than the IRS or other agency, generally bears the burden of proving the correctness of its classification of a worker as a non-employee for purposes of these determinations.

Given the business typically bears the burden of proving a worker is not an employee, a business receiving services from workers performing services in a capacity other than as a employee should ensure that the position in structural form and operation will withstand scrutiny under the common law and other applicable tests and retain the necessary evidence to support this characterization in anticipation of a potential future audit or other challenge.

Since the business can expect to bear the burden of proving the appropriateness of a nonemployee characterization, businesses also should exercise special care to avoid relying upon overly optimistic assessment of the facts and circumstances when assessing the defensibility of their characterization of the position.

When the factual evidence creates significant questions about the defensibility of a worker’s classification as a non-employee, an employing business generally should consider reclassifying or restructuring the position to be more defensible pursuant to a process designed to mitigate or resolve risks of the prior classification. Often, it also may be desirable for the business to incorporate certain contractual, compensation and other safeguards into the worker relationship, both to support the nonemployee characterization and to minimize future reclassification challenges and exposures.

Consider Importance of Attorney-Client Privilege As Risk Management Tool

Because of the broad reaching and potentially significant liability exposures arising from misclassification, business leaders generally should work to ensure that their risk analysis and decision-making discussion is conducted in a way that positions these discussions for protection under attorney-client privilege and attorney work product privilege.

The availability of the attorney-client and other evidentiary privilege to help shield the investigation and associated decision-making is particularly important because of the potentially significant civil and even criminal liability exposures that often arise from worker misclassification under various relevant laws.

The interwoven nature of the tax and non-tax risks merits particular awareness by business leaders of the need to use care in deciding the outside advisors and consultants that will help in the evaluation of the risks and structuring of solutions. With the VCS Program and other tax exposures in the limelight, businesses can expect that their accounting and other consultant advisors will recommend and even offer to lead the review. While appropriately structured involvement by these non-legal consultants can be a valuable tool, the blended nature of the misclassification exposures means that the evidentiary privileges that accountants often assert to help shield their tax related discussions from discovery in certain federal tax prosecutions are likely to provide inadequate protection against discovery given the broad non-tax related exposures inherent in the misclassification problem. For this reason, business leaders are urged to require that any audits and other activities by these non-legal consultants to evaluate or mitigate these exposures be engaged and conducted whenever possible within attorney-client privilege to protect and promote the ability to assert evidentiary protections against disclosure and discovery of sensitive discussions. Accordingly, while businesses definitely should incorporate appropriate tax advisors into the evaluation process, most businesses before commencing meaningful discussions with or engaging assessments by their accounting firm or other non-attorney tax advisor will want to engage counsel and coordinate their accounting and other non-attorney tax advisors” involvement and activities through qualified legal counsel to protect and maximize the ability to conduct the analysis of their risks and options within the protection of attorney-client privilege.

For Help With These Or Other Matters

If you need assistance in conducting a risk assessment of or responding to an IRS, Labor, HHS, DOJ, ICE, private claim or other legal challenges to your organization’s existing workforce classification or other labor and employment, employee benefit, compensation practices, compliance, or other internal controls and management concerns, please contact the author of this update, attorney Cynthia Marcotte Stamer.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experience worker classification and other employment, employee benefits and workforce matters, Ms. Stamer has more than 25 years experience advising and representing employer, employee benefit and other clients before the Internal Revenue Service, the Department of Labor, Immigration & Customs, Justice, and Health & Human Services, the Securities and Exchange Commission, Federal Trade Commission, state labor, insurance, tax and attorneys’ general, and other agencies, private plaintiffs and others on worker classification and related human resources, employee benefit, tax, internal controls, risk management and other legal and operational management concerns.

Ms. Stamer works extensively with employers, employee benefit plan sponsors, insurers, administrators, and fiduciaries, payroll and staffing companies, technology and other service providers and others to develop and run legally defensible programs, practices and policies that promote the client’s human resources, employee benefits or other management goals.

A Fellow in the American College of Employee Benefits Council, the immediate past Chair and current Welfare Benefit Committee Co-Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, the Vice Chair of the ABA TIPS Employee Benefits Committee, the Gulf States Area TEGE Council Exempt Organizations Coordinator, past-Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, and the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, Ms. Stamer also is a widely published author and highly regarded speaker on these and other employee benefit and human resources matters who is active in many other employee benefits, human resources and other management focused organizations who is published and speaks extensively on worker classification and related matters. She is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications.

You can learn more about Ms. Stamer and her experience, find out about upcoming training or other events, review some of her past training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer at www.CynthiaStamer.com.

About Solutions Law Press

1 Comment | 105(h), Cafeteria Plans, COBRA, Corporate Compliance, Disability, Disability, Disability Plans, Discrimination, Employee Benefits, Employers, Employment Tax, ERISA, Fair Labor Standards Act, family leave, FMLA, Government Contractors, Health Plans, HIPAA, Human Resources, I-9, Immigration, Income Tax, Insurance, Internal Controls, Internal Investigations, Labor Management Relations, Leave, medical leave, Military Leave, Nonresident aliens, OSHA, Payroll Tax, Restructuring, Retirement Plans, Tax, Tax Qualification, Unemployment Benefits, Unemployment Insurance, Union, VEVRRA, Wage & Hour | Tagged: contract labor, Determination Letters, Employee, Employee Benefits, Independent Contractor, leased employee, misclassificaton, payroll tax, plan qualification, Retirement Plans, staffing, Tax, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

Alert Employees Claiming Qualified Adoption Expenses and Education Credits About Changed IRS Procedures

March 8, 2013

Employers of employees who may be planning to deduct qualified adoption expenses or education credits may want to share recently released updates from the Internal Revenue Service (IRS) about procedures for claiming these tax benefits.

Special Procedures for Form 8839, Qualified Adoption Expenses

The IRS is reminding tax practitioners that Form 8839, Qualified Adoption Expenses, cannot be electronically filed this year but must be mailed to the IRS. Additionally, there is no longer a requirement to attach supporting documentation to this year’s return. However, documentation must be kept as part of a taxpayer’s records. See Tax Topic 607 for additional information on the Adoption Credit and adoption assistance programs.

E-filed Tax Returns with Incomplete Forms 8863, Education Credits, Experiencing Delays

The IRS also is alerting taxpayers of changes to the Form 8863, Education Credits, for Tax Year 2012. The changes made to help taxpayers and tax preparers understand the qualifications for the American Opportunity Tax Credit may throw some unsuspecting taxpayers for a loop. Checkboxes for lines 23-26 were added to confirm basic qualifications for taxpayers claiming this credit. If these lines are left blank, the IRS is warning that there will be a delay in the processing of the taxpayer’s return. To avoid delays, taxpayers are urged to complete Form 8863 correctly.

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 to respond to emerging health plan regulations, monitoring or commenting on these rules, defending your health plan or its administration, or other health or employee benefit, human resources or risk management 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.

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.

About Solutions Law Press, Inc.™

Other Helpful Resources & Other Information

Comments Off on Alert Employees Claiming Qualified Adoption Expenses and Education Credits About Changed IRS Procedures | Uncategorized | Tagged: ACA, Affordable Care Act, Employer, Health Care Reform, Health Plans, Insurance, Patient Protection & Affordable Care Act, Pay or Play, Shared Responsibility | Permalink
Posted by Cynthia Marcotte Stamer

13 Employer Tips For Coping With Health Care Reform Now!

March 5, 2013

Since the Supreme Court’s June 28, 2012 National Federation of Independent Business v. Sebelius health care reform ruling upholding the “pay or play” mandates of the Patient Protection & Affordable Care Act (ACA), most business leaders, plan fiduciaries, health insurers, administrators of employment-based group health plans have accepted the need to prepare for health care reform changes taking effect in 2014.

Unfortunately, delays in the release of anticipated regulatory guidance, the development and implementation of federal and state exchanges and other regulatory and market reforms have made it difficult for many businesses to understand their obligations, options, and their associated costs.

Most business and industry leaders report frustration with the continuing lack of clarity and uncertainty about rules and costs. Meanwhile, sequester just made life (and costs) worse for many small employers whose current 2013 health plan budget depends upon plans to benefit from he Small Business Health Care Tax Credit (SBHCTC) enacted as part of ACA.

Despite these continuing uncertainties and challenges, the impending January 1, 2014 deadline for compliance doesn’t allow most businesses the luxury for waiting for clarification. To complete the necessary arrangements, businesses unfortunately must decide the direction they plan to take and start working to implement their choice despite these existing uncertainties while managing their existing health benefit programs and costs through 2013.

Small Employers Relying On Health Plan Tax Credit Should Adjust Budgets In Response To Sequester Cut

For small employers and tax-exempt employers counting on the Small Business Health Care Tax Credit (SBHCTC) enacted as part of ACA to afford health care coverage for their employees, health benefit planning needs to begin with determining and dealing with any new problems that an almost 9% cut in the 2013 SBHCTC tax credit triggered by sequester may have on the amount of the credit for the current 2013 tax year.

ACA added the SBHCTC to the Internal Revenue Code (Code) to help and encourage qualifying small businesses to provide health coverage for their employees. For tax years 2010 through 2013, the maximum credit is 35 percent for a qualifying small business employer and 25 percent for small tax-exempt employers such as charities. See IRS 3 Simple Steps Publication for help estimating the credit. An enhanced version of the credit is scheduled to increase the tax credit rate to 50 percent and 35 percent, respectively in 2014.

Many small businesses are unaware that sequester automatically cut their 2013 SBHCTC tax credit. Under the sequester requirements of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, certain automatic budget cuts went into effect on March 1, 2013. These required cuts include an 8.7% reduction to the refundable part of the SBHCTC for otherwise qualifying small employers under Code Section 45R. As a result, qualifying employers counting on the SBHCTC credit to pay for employee health coverage need to know that this credit effectively is reduced by 8.7% percent. The sequestration reduction rate will apply until the end of the fiscal year on September 30, 2013 or intervening Congressional action, at which time the sequestration rate is subject to change.

Health Care Reform Coping Steps For All Businesses

While the sequester SBHCTC cut uniquely affects small businesses employing 25 or fewer workers, almost all businesses regardless of size are struggling to cope with the challenges of health care reform. The following steps may be helpful for many businesses working to chart a path for moving forward amid these uncertainties:

1. Know Your Workforce & Proper Worker Classifications For Purposes of Health Plan Rules

Whether and how ACA’s “pay-or-play” employer shared responsibility payment, default enrollment, insured health plan non-discrimination and other federal health plan rules apply to your company’s health plan requires a correct understanding of what workers considered employed by your business and how these workers are counted and classified for purposes of ACA and other federal health plan mandates is the first step to projecting the potential costs and liabilities of your business under Code Section 4980H.

Trying to predict the employer shared responsibility payment, if any under Code Section 4980H or model the burden or cost of any other federal health benefit mandate requires each business know who counts and how to classify workers for each of these rules. Most of these rules start with a “common law” definition of employee then apply rules to add or ignore various workers. Because most federal health plan rules also take into account “commonly controlled” and “affiliated” businesses’ employees when determining rule coverage, businesses also may need to know that information for other related or commonly owned businesses.

2. Make Rough Cost Projection To Preliminarily Decide Whether To “Pay” or “Play”

Under ACA, each business retains the option not to offer any health coverage for any employee or employee groups provided the business can tolerate the resulting consequences. When a business along with all commonly controlled or affiliated employers, if any, employ a combined workforce of 50 or more “full-time” and “full-time equivalent employees” (Large Employer) does not offer “affordable,” “minimum essential coverage” to every full-time employee and his dependents under a legally compliant health plan that provides “minimum essential value” within the meaning of ACA after 2013, the business generally should expect to pay a shared responsibility payment under Code Section 4980H for each month after 2013 that any “full-time” employee receives a tax subsidy or credit for enrolling in one of ACA’s health care exchanges. The amount of this required shared responsibility payment will be calculated under Code Section 4980H based on the plan design and coverage the employer health plan offers and the required employee contribution for employee only coverage. Consequently, most businesses should project the relative cost to their business of paying the shared responsibility payment under Code Section 4980H against the cost of providing coverage to decide if it makes sense to even consider continuing to offer health coverage.

While not yet final, recently proposed Internal Revenue Service (IRS) regulations that would implement Code Section 4980H (4980H Regulations) provide a fairly good roadmap for business leaders to use to project their likely shared responsibility payment if the business assumes that the cost of offering coverage to avoid paying the shared responsibility payment will not be less than its existing health plan costs. Starting with this assumption, the 4980H Regulations provide some roadmap that the business can use to project its likely shared responsibility payment if the business fails to offer health coverage under a plan offering minimum essential coverage to each full-time employee and their dependents. Using this assumption, a businesses also can get a rough comparison of the projected cost difference per full-time employee if the offers a plan providing minimum essential coverage to all full-time employees and their dependents with minimum essential value that turns out to be “unaffordable” to some of these employees under ACA.

While refinement of the data in the time and other employment records might help a business refine these estimates, the preliminary projections made using existing data and these assumptions generally will help a business decide if it wants to go ahead under the assumption it will pay or play. If the business plans only to pay the shared responsibility payment, its efforts should focus on collecting and retaining the data needed to prove compliance and minimize its liability by planning its workforce and taking advantage of any safe harbor or other elections available to it under the 4980H Regulations for counting and classifying its workers.

3. If Business Decides To Offer Health Coverage After 2013, Decide Plan Design

If the business intends to continue to offer health coverage, the business also needs to decide the plan coverage and terms of that plan. In all cases, any health coverage offered generally must be designed so the business prudently can afford to pay benefit and administration costs of the plan and also meet all applicable mandates. The mandates applicable to the plan generally are based on the size of the employer as determined by the applicable federal rules.

Within these parameters, the business generally has the following choices:

Offer health plan that provides minimum essential coverage with minimum essential value to all full-time employees, but pay a shared responsibility payment for full-time employees electing exchange coverage whose employee only contribution would be considered “unaffordable” under ACA because it exceeds 9.5% of their wages;
Offer health plan that provides minimum essential coverage with minimum essential value to all full-time employees, and subside the cost of coverage for any low-paid workers as necessary to prevent that coverage from being unaffordable for any worker;
Offer a health plan providing minimum essential coverage to some but not all full-time employees and pay the shared responsibility payment calculated under Code Section 4980H(b) for any full-time employee that elects coverage under the exchange to whom the plan is either unaffordable or doesn’t offer minimum essential coverage; or
Some combination of these options, designed to meet the other federal health plan rules applicable for health plans offered by businesses employing that number of workers.

When making these decisions, uncertainty about the cost of coverage, the income of the workers, and which low-income employees, if any, actually will choose to enroll in the health plan versus choose to get coverage from the exchange creates some uncertainty to the predictions. As guidance continues to emerge, however, the modeling of these issues becomes increasingly more reliable. In the meantime, businesses that plan to continue to offer coverage must make their best guess to project costs and design their health programs while keeping a careful eye on the emerging guidance and market cost data.

4. Understand The Cast Of Characters & What Hat(s) (Including You) They Wear

Employers and their management rely upon many vendors and advisors and assumptions when making plan design and risk management decisions. Many times, employer and members of their management unknowingly assume significant risk because of misperceptions about these allocations of duties and operational and legal accountability. Business and plan leaders need a correct understanding of these roles and responsibilities to understand the risks and to what extent they can rely upon a vendor or advisor to properly design and administer a health plan or carry out related obligations, what risks cannot be delegated, and how to manage these risks.

Under the Employee Retirement Income Security Act (ERISA), any party that exercises discretion or control over health plan administration, funds or certain other matters generally is considered a plan “fiduciary.” Fiduciaries generally are personally liable for prudently and appropriately administering their health plan related responsibilities prudently in accordance with ERISA and other applicable laws and the plan terms. Knowing who is acting as a fiduciary and understanding those duties and liabilities and how to manage these risks significantly affects the exposure that an employer or member of its management risks as a result of an employer’s sponsorship in a group health plan or other employee benefit program. Also, knowing what duties come first and how to prove that the fiduciary did the right thing is key to managing risks when an individual who has fiduciary responsibilities under ERISA also is responsible for carrying out other management duties of the sponsoring employer, a vendor or elsewhere that carries duties or interests that conflict with his health plan related fiduciary duties.

Also, by not knowing who the fiduciaries are, plans and their fiduciaries often fail to confirm the eligibility of some parties serving as fiduciaries, to arrange for bonding of service providers or fiduciaries as required to comply with Title I of ERISA. Failing to properly understand when the plan sponsor, member of its management or another party is or could be a fiduciary can create unnecessary and unexpected risks and lead to reliance upon vendors who provide advice but leave the employer or a management member holding the bag for resulting liability.

A correct understanding of the risks and who bears them is critical to understand the risks, opportunities to mitigate risk through effective contracting or other outsourcing, when outsourcing does not effectively transfer risks, where to invest resources for contract, plan or process review and changes or other risk management, and where to expect costs and risks and implement processes and procedures to deal with risks that cannot be outsourced or managed.

5. Know What Rules Apply To Your Plan, The Sponsoring Employer, The Plan Its Fiduciaries & Plan Vendors & How This Impacts You & Your Group Health Plan

The requirements for health plans and the resulting liabilities have undergone continuous changes. ACA adds to an already extensive list of complicated federal rules about health plans and their administration. ACA, the Code, ERISA, the Social Security Act, the Privacy, Security, and Administrative Simplification and Breach Notification rules of the Health Insurance Portability & Accountability Act (HIPAA) and various other federal laws also impose certain health plan related obligations and liabilities on health plan fiduciaries, their employer or other health plan sponsors and other parties. These ever-expanding requirements increasingly impose civil or criminal sanctions, excise tax or other liability on plan administrators or other parties for failing to maintain legally compliant plans, file required reports, give required notifications or meet other requirements. In many instances, this includes a requirement to know and self-report violations of some of these federal rules.

Since 2010, IRS regulations have required employers sponsoring group health plans not complying with mandates covered by Internal Revenue Code Section 6039D to self-report violations and pay related excise taxes. Under these regulations, the sponsoring employer (or in some cases, the insurer, HMO or third-party administrator) must report health plan compliance failures annually on IRS Form 8928 (“Return of Certain Excise Taxes Under Chapter 43 of the Internal Revenue Code”). Beyond any specific liability under ERISA or the particular law for such violations, the potential excise tax liability that can result under these provisions can be significant. For example, COBRA, HIPAA, and GINA violations typically carry excise tax liability of $100 per day per individual affected. Compliance with applicable federal group health plan mandates is critical to avoid these excise taxes as well as other federal group health plan liabilities.

6. Update Health Plan Documents, SPDs & Other Communications, Administrative Forms & Procedures, Contracts & Processes To Meet Requirements & Manage Exposures

Along with knowing what rules apply, timely updating written plan documents, communications and administration forms, administrative practices, contracts and other health plan related materials processes and procedures has never been more critical.

A tightly written plan document and other plan communications have never been more important. Federal law generally requires that health plan be established, maintained and administered in accordance with legally complaint, written plan documents and impose a growing list of standards and requirements governing the design and administration of these programs. In addition to the existing and impending ACA mandates, ERISA, the Code , the Social Security Act, federal eligibility and coverage continuation mandates of laws like the Consolidated Omnibus Budget Reconciliation Act (COBRA), the Uniformed Services Employment and Reemployment Rights Act (USERRA), the Health Insurance Portability & Accountability Act, the Family & Medical Leave Act, the Genetic Information and Nondiscrimination Act (GINA), Michelle’s Law, mental health parity and other laws regulate the eligibility, coverage, administration and other design features of employment-based health plans and their administration. ACA and other laws also require that employers, health plan administrators and fiduciaries protect the privacy of data, as well as comply with claims and appeals, communication, fiduciary responsibility, bonding, record keeping, reporting and other requirements.

Failing to update documents, communications, administrative forms and processes and other materials and practices can unleash a host of exposures. ERISA requires that that all material plan terms be set forth in a written plan document. Many other federal health plan mandates require that this plan document include certain specific provisions. Beyond these mandated terms, the ability to uphold and enforce plan terms often can be hurt or hindered by the tightness or sloppiness of the plan language.

Among other things, noncompliant plan documents, communications and practices can trigger unanticipated costs and liabilities by undermining the ability to administer plan terms and conditions. They also may expose the plan, plan fiduciaries and others to lawsuits, administrative enforcement and sanctions and other enforcement liabilities.

For this purpose of deciding what and how much to do, it is critical to keep in mind the devil is in the details. Not only must the documentation meet all technical mandates, the language, its clarity and specificity, and getting the plan document to match the actual processes that will be used to administer the plan and ensuring that the plan documents and processes match the summary plan description, summary of benefits and coverage, administrative forms and documentation and other plan communications and documentation in a legally compliant way significantly impacts the defensibility of the plan terms and the expense that the plan, its sponsor and fiduciaries can expect to incur to defend it.

7. Clean Up Claims and Appeals, SPDs & Other Practices To Enhance Defensibility

Proper health plan claims and appeals plan and summary plan description language, procedures, processing, notification and documentation is critical to maintain defensible claims and appeals decisions required to enforce plan terms and manage claims denial related liabilities and defense costs. Noncompliance with these requirements may prevent health plans from defending their claims or appeals denials, expose the plan administrator and plan fiduciaries involved or responsible for these activities to penalties, prompt unnecessary lawsuits, Labor Department enforcement or both; and drive up plan administration costs.

Among other things, existing court decisions document that many plans existing plan documents, summary plan descriptions and explanations of benefits, claims and appeals investigations and documentation and notifications often need improvement to meet the basic plan document, summary plan description and reasonable claims rules of the plan document, summary plan description, fiduciary responsibility, reasonable claims and appeals procedures of ERISA and its implementing regulations. Court precedent shows that inadequate drafting of these provisions, as well as specific provisions coverage and benefit provisions frequently undermines the defensibility of claims and appeals determinations. In addition to requiring that claims be processed and paid prudently in accordance with the terms of written plan documents, ERISA also requirements that plan fiduciaries decide and administer claims and appeals in accordance with reasonable claims procedures.

Although the Labor Department updated its regulations implementing this reasonable claims and appeals procedure requirement more than 10 years ago, the Department of Labor updated its ERISA claims and appeals regulations to include detailed health plan claims and appeals requirements, many group health plans, their administrators and insurers still have not updated their health plans, summary plan descriptions, claims and appeals notification, and claims and appeals procedures to comply with these requirements.

These omissions only become more significant under ACA. The external review and other detailed additional requirements that the Affordable Care Act dictates that group health plans not grandfathered from its provisions and its provisions holding these non-grandfathered plans strictly liable for deficiencies in their claims and appeals procedures makes the need to address inadequacies even more imperative for those non-grandfathered group health plans. Inadequate attention to these concerns can force a plan to pay benefits for claims otherwise not covered as well as additional defense costs and penalties.

8. Consistency Matters: Build Good Plan, Then Follow It

Good documentation and design on the front end should minimize ambiguities in the meaning of the plan and who is responsible for doing what when.

With these tools in place, delays and other hiccups that result from confusion about plan terms, how they apply to a particular circumstance or who is responsible for doing what, when should be minimized and much more easily resolved by timely, appropriate action by the proper responsible party. This facilitation of administration and its consistency can do much to enhance the defensibility of the plan and minimize other plan related risks and costs.

9. Ensure Correct Party Carries Out Plan and Communications Plan Functions And Communications Compliant, Timely, Prudent, Provable Manner

Having the proper party perform plan related responsibilities and respond to claims and inquiries in a compliant, timely, prudent manner is another key element to managing health plan risk and promoting enforceability. Ideally, the party appointed to act as the named fiduciary for purposes of carrying out a particular function also should conduct all plan communications regarding that function in terms that makes clear its role and negates responsibility or authority of others.

When an employer or other plan sponsor goes to the trouble to appoint a committee, service provider or other party to serve as the named fiduciary then chooses to communicate about the plan anyway, the Supreme Court in FMC v. Halliday made clear it runs the risk that the plan related communications may be considered discretionary fiduciary conduct for which it may be liable as a functional fiduciary. Meanwhile, these communications by nonfiduciaries also may create binding obligations upon the plan and its named fiduciaries to the extent made by a plan sponsor or conducted by a staff member or service provider performing responsibilities delegated by the plan fiduciary.

Beyond expanding the scope of potential fiduciaries, communications conducted by nonfiduciaries also tend to create defensibility for many other reasons. For instance, allowing unauthorized parties to perform plan functions may not comport with the plan terms, and are less likely to create and keep required documentation and follow procedures necessary to promote enforceability. Also, the communications, decisions and other actions by these nonfiduciary actors also are unlikely to qualify for discretionary review by the courts because grants of discretionary authority, if any in the written plan document to qualify the decisions of the named fiduciary for deferential review by courts typically will not extend to actions by these nonfiduciary parties. Furthermore, the likelihood that the communication or other activity conducted will not comply with the fiduciary responsibility or other requirements governing the performance of the plan related functions is significantly increased when a plan sponsor, service provider, member of management, or other party not who has not been appointed or accepted the appointment act as a named fiduciary undertakes to speak or act because that party very likely does not accept or fully appreciate the potential nature of its actions, the fiduciary and other legal rules applicable to the conduct, and the potential implications for the nonfiduciary actor, the plan and its fiduciaries.

10. Clean Up Date Collection, Protection & Reporting

Existing and impending ACA and other federal mandates require that group health plans, their sponsors collect, maintain and administer is exploding. Existing eligibility mandates, for example, already require that plans have access to a broad range of personal identifying, personal health and a broad range of other sensitive information about employees and dependents who are or may be eligible for coverage under the plan.

While employers and their health plans historically have collected and retained the names, place of residence, family relationships, social security number, and other similar information about employees and their dependents, these data collection, retention and reporting requirements have and will continue to expand dramatically in response to evolving legal requirements.

Already, health plans also from time to time need employee earnings, company ownership, employment status, family income, family, medical, military, and school leave information, divorce and child custody, enrollment in Medicare, Medicaid and other coverage and a broad range of other additional information. Under the ACA, these data needs will explode to include a whole new range of information about total family income, availability and enrollment in other coverage, cultural and language affiliations, and many other items.

Collecting, retaining and deploying this information will be critical to meeting existing and new plan administration and reporting requirements. How this data collection is conducted, shared, safeguarded against misuse or other legally sensitive contact by the employer, service providers, the plan and others will be essential to mitigate exposures to federal employment and other nondiscrimination, HIPAA and other privacy, fiduciary responsibility and other legal risks and obligations.

To the extent that payroll providers, third party administrators or other outside service providers will participate in the collection, retention, or use of this data, time also should be set aside both to conduct due diligence about their suitability, as well as to negotiate the necessary contractual arrangements and safeguards to make their involvement appropriate.

Finally, given the highly sensitive nature of this data, employers, health plans and others that will collect and use this data will need to implement appropriate safeguards to prevent and monitor for improper use, access or disclosure and to conduct the necessary training to suitably protect this data.

11. Monitor, Assess Implications & Provide Relevant Input to Regulators About Emerging Requirements & Interpretive Guidance Implementing 2014 Affordable Care Act & Other Mandates.

While the Supreme Court’s decision upheld as Constitutional ACA’s individual and employer shared responsibility mandates as a tax, many opportunities to impact its mandates remain.

Beyond the highly visible, continuing and often heated debates ranging in Congress and the court of public opinion on whether Congress should change its provisions, a plethora of regulatory interpretations issued or impending release by the implementing agencies, the IRS, HHS and Labor Department, and state insurance regulators will significantly impact what requirements and costs employers, insurers, individuals and governments will bear when the law takes effect. Businesses sponsoring health plans should carefully scrutinize this regulatory guidance and provide meaningful, timely input to Congress, the regulators or both as appropriate to help influence the direction of regulatory or Congressional actions that would materially impact these burdens.

12. Help Employees & Their Families Build Their Health Care Self-Management Skills

Whether or not your company plans to continue to sponsor employee health coverage after 2014, providing training and tools to help employees and their families strengthen their ability to understand and manage their health, health care needs and benefits can pay big dividends. Beyond the financial costs to employees and employers of paying to care for a serious illness or injury, productivity also suffers while employees dealing with their own or a family member’s chronic or serious health care condition. Wellness programs that encourage and support the efforts of employees and their families to stay healthy may be one valuable component of these efforts. Beyond trying to prevent the need to cope with illness behind wellness programs, however, opportunities to realize big financial, productivity and benefit value recognition rewards also exist in the too often overlooked opportunity to provide training, education and tools that employees and their families need to better understand and self-manage care, benefits, finances and life challenges that commonly arise when dealing with their own or a family member’s illness. Providing education, tools and other resources that can help employees access, organize and effectively use health care and benefit information to manage care and the consequences of illness, their benefits and how to use them, to participate more effectively in care and care decisions, to recognize and self-manage financial, lost-time and other challenges associated with the illness not addressable or covered by health benefit programs, and other practical skills can help reduce lost time and other productivity impacts while helping employees and their families get the most out of the health care dollars spent.

13. Pack Your Parachute-Plan Your Defense & Exist Strategies

With the parade of expense and liabilities associated with health plans, businesses sponsoring health plans and the management, service providers and others involved in their establishment, continuation, maintenance or administration are well advised to pack their survival kit and develop their exit strategies to position to soften the landing in case their health plan experiences a legal or operational disaster.

Too often, while these service providers and advisors encourage plan sponsors and fiduciaries to allow the vendor to lead them or even handle on an ongoing basis plan administration services by touting their services, experience, expert systems and process and commitment to stand behind the customer when making the sale or encouraging reliance upon their advice when tough decisions are made, they rush to stand behind exculpatory and on-sided indemnification provisions in their service contracts to limit or avoid liability, demand indemnification from their customer or both when things go wrong.

While ERISA may offer some relief from certain of these exculpatory provisions under some circumstances, plan sponsors and fiduciaries should work to credential service providers and require service providers to commit to being accountable for their services by requiring contracts acknowledge all promised services and standards of quality, require vendors to commit to provide legally compliant and prudently designed and administered services that meet or exceed applicable legal requirements, to provide liability-backed indemnification or other protection for damages and costs resulting from vendor imprudence or malfeasance, to allow for contract termination if the vendor becomes unsuitable for continued use due to changing law or other circumstances and requiring the vendor to return data and other documentation critical to defend past decisions and provide for ongoing administration. Keep documentation about advice, assurances and other relevant evidence received from vendors which could be useful in showing your company’s or plan’s efforts to make prudent efforts to provide for the proper administration of the plan. When concerns arise, use care to investigate and redress concerns in a timely, measured fashion which both shows the prudent response to the concern and reflects sensitivity to the fiduciary and other roles and responsibilities of the employer sponsor and other parties involved.

Get Moving Now

Since many compliance deadlines already have past and the impending deadlines allow plan sponsors and fiduciaries limited time to finish arrangements, businesses, fiduciaries and their service providers need to get moving immediately to update their health plans to meet existing and impending compliance and risk management risks under ACA and other federal laws, decisions and regulations.

Even as businesses move forward to respond to health care reform’s challenges, their leaders should continue to give input to Congress and regulators about the need to improve the rules and reduce business uncertainty and burdens. With many regulations still in proposed or interim form and health care reform and its costs still a concern for many Congressional leaders, significant opportunity still exists to provide input to federal and state regulators on many key aspects of ACA and its relationship to other applicable laws. Businesses and other health plan sponsors, plan fiduciaries, insurers and administrators, and other vendors must stay involved and alert. Zealously monitor new developments and share timely input with Congress and regulators about existing and emerging rules that present concerns and other opportunities for improvement even as you position to respond to these rules before they become fully implemented.

For Help or More Information

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.

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.

About Solutions Law Press, Inc.™

Other Helpful Resources & Other Information

2 Comments | 105(h), Bankruptcy, Corporate Compliance, Employee Benefits, Employers, Employment Tax, ERISA, Fair Labor Standards Act, Human Resources, I-9, Immigration, Insurance, Internal Controls, Patient Protection and Affordable Care Act, Payroll Tax, Tax, Uncategorized | Tagged: ACA, Affordable Care Act, Employer, Health Care Reform, Health Plans, Insurance, Patient Protection & Affordable Care Act, Pay or Play, Shared Responsibility | Permalink
Posted by Cynthia Marcotte Stamer

Sequester Will Cut ACA Small Businesses Health Care Tax Credits

March 5, 2013

Even as small and other businesses are struggling to cope with rising rates and impending new rules under the Patient Protection and Affordable Care Act (ACA), small businesses now must deal with being sideswiped by sequester.

Sequester will hurt certain small employers that were counting on the Small Business Health Care Tax Credit (SBHCTC) to afford health care coverage for their employees.

Under the sequester requirements of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, certain automatic budget cuts went into effect on March 1, 2013. These required cuts include an 8.7% reduction to the refundable part of the SBHCTC for otherwise qualifying small employers under Internal Revenue Code § 45R. As a result, employers qualifying for the SBHCTC should expect to see an 8.7% percent reduction in the amount of reimbursement received for health premiums under the SBHCTC. The sequestration reduction rate will apply until the end of the fiscal year on September 30, 2013 or intervening Congressional action, at which time the sequestration rate is subject to change.

Aside from the effects of sequester, small and other businesses health care costs and responsibilities continue to be shaped by a deluge of new rules rolling out under ACA, the Health Insurance Portability & Accountability Act (HIPAA), the Family & Medical Leave Act, and a host of other laws. Stay tuned here for more updates.

For Help With Compliance, Risk Management, Investigations, Policy Updates Or Other Needs

If you need help with other health and health plan related regulatory policy or enforcement developments, or to review or respond to these or other human resources, employee benefit, or other compliance, risk management, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

Nationally recognized as a knowledgable and innovative health benefit thought leader by business and government leaders for her extensive work, publications and leadership on health benefit and insurance and other related employee benefits, insurance, human resources and health care matters, Ms. Stamer has advised and defended employer and other health plan sponsors, administrators and fiduciaries, insurers, and others about benefit design, compliance, administration and defense for more than 25 years. Her work includes highly pragmatic, leading edge work helping clients to design, deploy, administer and defend catastrophic, mini-med, expatriate and medical tourism, occupational injury and 24-hour coverage, HRA, HSA HFSA and other defined contribution, Medicare Advantage, and other health plans, policies and practices to comply with the Affordable Care Act, HIPAA, ERISA, COBRA, Mental Health Parity, Internal Revenue Code, labor and employment, privacy, managed care and insurance and other federal and state laws and regulations.

In addition to her extensive legal resume, Ms. Stamer also is a highly regarded industry thought leader and author with extensive involvement in the leadership of a broad range of professional and civic organizations. For instance, Ms. Stamer is the founder and executive director of the Coalition for Responsible Health Care Policy and its PROJECT COPE; The Coalition on Patient Empowerment; a Fellow in the American College of Employee Benefits Counsel, the American Bar Association and the State Bar of Texas; Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group; the Immediate Past Chair of the ABA RPTE Employee Benefit & Other Compensation Committee and the current ABA RPTE Employee Benefit & Other Compensation Committee Welfare Benefits Committee Co-Chair; a Council Member of the ABA Joint Committee on Employee Benefits; Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; Immediate Past Gulf States Area TEGE Council Exempt Organization Coordinator; a current or former Editorial Advisory Board Member of Insurance Thought Leadership, HR.com, Employee Benefit News, the BNA Employee Benefits CD-Rolm and various other BNA HR and Employee Benefits publications; a former national board member and Dallas Chapter President of WEB, Network of Benefits Professionals; a former Southwest Benefits Association Board Member; the past Dallas HR Government Relations Committee Chair; a former SHRM Region IV Board Member and National Consultants Forum Board Member,; past Dallas Bar Association Employee Benefits & Compensation Committee Chair, and a former Texas Association of Business State Board and Regional and Dallas Chapter Chair.

For help with these or other compliance concerns, to ask about compliance audit or training, or for legal representation on these or other matters please contact Ms. Stamer at (469) 767-8872 or via e-mail here.

About Solutions Law Press, Inc.™

Comments Off on Sequester Will Cut ACA Small Businesses Health Care Tax Credits | Corporate Compliance, Employers, Excise Tax, Health Plans, HIPAA, Human Resources, Insurance, Internal Controls, Internal Investigations, Payroll Tax, Privacy, Risk Management, Tax, Tax Credit | Tagged: ACA, Employer, Employers, Employment, Health Care Reform, Health Plans, Labor Department, PPACA, Small Business Health Care Tax Credit, wage and hour, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

Premier Insurance Services Pays $120,000 In Back Wages, Damages, Penalties Because Commission-Only Comp Violated Minimum Wage, Overtime Laws

March 2, 2013

Insurance brokerage and other businesses paying commission-only compensation should review the defensibility of their payment practices in response to the agreement by Premier Insurance Services (Premier) to pay $119,570 in minimum wage and overtime back wages, liquidated damages and civil money penalties.

The settlement arises from an investigation by the U.S. Department of Labor’s Wage and Hour Division (DOL) that determined that the insurer willfully violated minimum wage, overtime and record-keeping provisions of the Fair Labor Standards Act (FLSA). According to DOL, its investigators found that the commission-only pay practice used by the Colton, California-based employer at all of its locations resulted in employees being paid below the federal minimum wage and failing to receive an overtime premium for hours worked beyond 40 per week. DOL also charges that Premier failed to maintain employee time records.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers also are required to maintain accurate time and payroll records.

The FLSA provides that employers who violate the law are, as a general rule, liable to employees for their back wages and an equal amount in liquidated damages. Liquidated damages are paid directly to the affected employees.

Under the settlement, Premier will pay $43,297 in minimum wage and overtime back wages due to 90 employees and an equal amount in liquidated damages. Because of the willful nature of the violations, the employer will also pay $32,976 in civil money penalties.

Premier also signed a settlement agreement with the Labor Department in which it committed to implement a timekeeping system to document employees’ hours worked, assure payment of at least the federal minimum wage of $7.25 per hour and accurately determine and pay overtime.

The Premier settlement follows DOL’s settlement of a related case last year after investigators discovered similar violations involving Upland, California-based Speedlane Insurance Services. This company was owned and operated by a close relative of Premier’s owner. That investigation resulted in $200,000 in back wages due to 96 employees.

The DOL’s announcement of the settlements alerts employers of the need to ensure that commission-based compensation meet FLSA requirements.

“Paying employees on a commission-only basis does not give employers a green light to dodge minimum wage and overtime pay requirements,” said Priscilla Garcia, director of DOL’s West Covina District Office when announcing the Premier settlement. “Premier Insurance Services knowingly violated the most basic labor laws to make a profit at the expense of their employees. This case should put other employers on notice that if they fail to pay their employees in compliance with federal law, our department will not hesitate to investigate. Employers may be found liable not only for back wages, but also for liquidated damages and other penalties.” (Emphasis added).

FLSA Violations Generally Costly; Enforcement Rising

The enforcement record of the Labor Department confirms these risks and reflects DOL’s targeting of U.S. employers that violate wage and hour laws.

Under the Obama Administration, DOL officials have made it a priority to enforce overtime, record keeping, worker classification and other wage and hour law requirements. See e.g., Boston Furs Sued For $1M For Violations Of Fair Labor Standards Act; Record $2.3 Millh ion+ Backpay Order; Minimum Wage, Overtime Risks Highlighted By Labor Department Strike Force Targeting Residential Care & Group Homes; Review & Strengthen Defensibility of Existing Worker Classification Practices In Light of Rising Congressional & Regulatory Scrutiny; 250 New Investigators, Renewed DOL Enforcement Emphasis Signal Rising Wage & Hour Risks For Employers; Quest Diagnostics, Inc. To Pay $688,000 In Overtime Backpay. In an effort to further promote compliance and enforcement of these rules, the Labor Department is using smart phone applications, social media and a host of other new tools to educate and recruit workers in its effort to find and prosecute violators. See, e.g. New Employee Smart Phone App New Tool In Labor Department’s Aggressive Wage & Hour Law Enforcement Campaign Against Restaurant & Other Employers. As a result of these effort, employers violating the FLSA now face heightened risk of enforcement from both the Labor Department and private litigation.

Employers Should Strengthen Practices For Defensibility

To minimize exposure under the FLSA, employers should review and document the defensibility of their existing practices for classifying and compensating workers under existing Federal and state wage and hour laws and take other actions to minimize their potential liability under applicable wages and hour laws. Steps advisable as part of this process include, but are not necessarily limited to:

Audit of each position current classified as exempt to assess its continued sustainability and to develop documentation justifying that characterization;
Audit characterization of workers obtained from staffing, employee leasing, independent contractor and other arrangements and implement contractual and other oversight arrangements to minimize risks that these relationships could create if workers are recharacterized as employed by the employer receiving these services;
Review the characterization of on-call and other time demands placed on employees to confirm that all compensable time is properly identified, tracked, documented, compensated and reported;
Review of existing practices for tracking compensable hours and paying non-exempt employees for compliance with applicable regulations and to identify opportunities to minimize costs and liabilities arising out of the regulatory mandates;
If the audit raises questions about the appropriateness of the classification of an employee as exempt, self-initiation of proper corrective action after consultation with qualified legal counsel;
Review of existing documentation and record keeping practices for hourly employees;
Exploration of available options and alternatives for calculating required wage payments to non-exempt employees; and
Re-engineering of work rules and other practices to minimize costs and liabilities as appropriate in light of the regulations and enforcement exposures.

Because of the potentially significant liability exposure, employers generally will want to consult with qualified legal counsel before starting their risk assessment and assess risks and claims within the scope of attorney-client privilege to help protect the ability to claim attorney-client privilege or other evidentiary protections to help shelter conversations or certain other sensitive risk activities from discovery under the rules of evidence.

For Help With Investigations, Policy Updates Or Other Needs

If you need help in conducting a risk assessment of or responding to an IRS, DOL, Justice Department, or other federal or state agencies or other private plaintiff or other legal challenges to your organization’s existing workforce classification or other labor and employment, compliance, employee benefit or compensation practices, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469) 767-8872 .

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 23 years of work helping employers; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; and others design, administer and defend innovative workforce, compensation, employee benefit and management policies and practices. The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer often has worked, extensively on these and other workforce and performance related matters. She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For more information about Ms. Stamer and her experience or to get access to other publications by Ms. Stamer see here or contact Ms. Stamer directly.

About Solutions Law Press, Inc.™

Comments Off on Premier Insurance Services Pays $120,000 In Back Wages, Damages, Penalties Because Commission-Only Comp Violated Minimum Wage, Overtime Laws | Corporate Compliance, Employers, Human Resources, Internal Controls, Internal Investigations, Risk Management, Wage & Hour | Tagged: Backpay, Employer, Employment, employment law, Fair Labor Standards Act, FSLA, IT, Labor Department, Minimum Wage, Technology, Wage & Hour, wage and hour, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

OSHA Citation Of Michigan VA Reminder To Manage Workplace Safety

March 1, 2013

The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) citation of the Battle Creek Veterans Administration Medical Center, following a safety inspection conducted in July as part of OSHA’s Federal Agency Targeting Inspection Program for seven notices of unsafe or unhealthful working conditions reminds employers that OSHA expects employers to maintain safe workplaces.

Under the Occupational Safety and Health Act, federal agencies must comply with the same safety standards as private-sector employers. According to OSHA, its inspection uncovered several repeat safety violations, as well as certain other serious safety violations.

OSHA reports that three repeat safety violations involved failing to evaluate the workplace to identify if permit-required confined spaces were present and label such spaces with danger signs; failing to adequately guard automated laundry equipment to prevent employees from entering the work area, and failing to fully guard the belt and pulley of an air compressor. To issue notices for repeat violations, OSHA must have issued at least one other notice for the same violation at one of the agency’s establishments within the same standard industrial classification code, commonly known as the SIC code. OSHA previously has cited U.S. Department of Veterans Affairs facilities in Danville and North Chicago, Illinois, and Minneapolis, Minnesota for the same safety and health violations.

The serious safety violations found included three serious safety violations for unguarded floor openings in the general repair shop; failing to inspect powered industrial trucks prior to placing them in service, and failing to remove trucks from service in need of repair. Additionally, OSHA found a circuit breaker panel was not mounted correctly. OSHA issues a serious notice when it finds a substantial probability that death or serious physical harm could result from a hazard about which the employer knew or should have known.

Beyond the repeated and serious violations, OSHA reports it also found one other-than-serious violation for failing to close unused openings on electrical cabinets and junction boxes. An other-than-serious violation is one that has a direct relationship to job safety and health, but probably would not cause death or serious physical harm.

The medical center has 15 business days from receipt of the notices to comply, request an informal conference with OSHA’s area director or appeal the notices by submitting a summary of the agency’s position on the unresolved issues to OSHA’s regional administrator.

While the medical center and other federal agencies are required to comply with the same OSHA rules as private sector employers, the VA and other federal agencies don’t face the same liabilities when cited. OSHA cannot propose monetary penalties against another federal agency for failure to comply with OSHA standards.

The risks for private sector employers is illustrated by another recent OSHA. OSHA recently cited Riddell All-American Sports Co. with eight serious violations following an OSHA investigation, which found that the company exposed workers to multiple safety and health hazards at its San Antonio facility. The violations include failing to ensure electrical equipment was free from recognized hazards, provide adequate machine guarding while employees operate industrial sewing machines and provide a fall protection program to prevent falls from the basket of a powered industrial truck. The Elyria, Ohio-based company, which employs about 25 workers in San Antonio, paints helmets for various sports. Proposed penalties total $44,000. Read the News Release.

Since private sector employers that don’t enjoy the VA’s immunity liability run much greater risks for failing to maintain workplace safety, including significant civil and in the case of a workplace death, potentially even criminal penalties, private sector hospitals and other organizations should exercise special care to ensure appropriate safety in their workplaces. “The Battle Creek Veterans Administration Medical Center failed to properly ensure the facility was in compliance with established safety and health procedures,” said Robert Bonack, director of OSHA’s Lansing Area Office. “All employers, including federal employers, are responsible for knowing what hazards exist in their facilities and taking appropriate precautions by following OSHA standards so workers are not exposed to such hazards.”

For Help With Compliance, Risk Management, Investigations, Policy Updates Or Other Needs

About Solutions Law Press, Inc.™

Comments Off on OSHA Citation Of Michigan VA Reminder To Manage Workplace Safety | Corporate Compliance, Employers, GINA, Health Plans, HIPAA, Human Resources, Insurance, Internal Controls, Internal Investigations, Privacy, Risk Management, Whistleblower | Tagged: Backpay, Employer, Employment, employment law, Fair Labor Standards Act, FSLA, Health, Hospital, IT, Labor Department, Medical Center, Minimum Wage, OSHA, Safety, Technology, Wage & Hour, wage and hour, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

Labor Department Targeting Businesses Violating Overtime, Other Wage & Hour Laws

February 25, 2013

The Labor Department’s strong commitment to the investigation and enforcement of federal wage and hour law violations is reflected in its announcement of yet another wave of successful enforcement actions against a wide range of employers during December including the following:

Car Wash Employees Receive Back Wages. Labor Department officials say Genter’s Detailing Inc. in Frisco, Texas, has paid 53 detail and car wash employees $22,345, following a W&HD investigation that found the employer violated the Fair Labor Standards Act (FLSA) by making illegal deductions from employees’ wages for damages to dealership vehicles, resulting in wages below the federal minimum of $7.25 per hour. The company provides car wash and detailing services to car dealerships in the Dallas-Fort Worth area, in Katy and in Austin. More Details Here.

Oklahoma Electrical Services Company Pays Back Wages. Labor Department officials report Lighthouse Electric Inc. in Tulsa, Okla., has paid $42,452 in overtime back wages to 18 current and former electricians following an investigation that found Lighthouse Electric improperly failed to pay employees for time spent traveling to and from their facility to a work site in violation of the FLSA. More Details Here.

Web-based Auto Company Violated FLSA. Labor Department Officials report Auto Cricket Corp., doing business as AutoCricket.com, has agreed to pay $76,589 in back wages to 414 employees following a W&HD investigation that found the company deducted short rest periods as non-work hours from employee totals of hours worked in violation of the FLSA. Additionally, the company paid overtime for hours worked beyond 80 during a biweekly pay period, instead of time and one-half for all hours worked over 40 in a seven-day workweek. More Details Here.

South Carolina Restaurants Pay $391,000 in Back Wages. Labor Department officials report that three San Jose Mexican restaurants, individually owned and operated by Eraclio Leon, Gregorio Leon Sr. and Antonio Leon, have agreed to pay $390,960 in back wages to 37 employees after the W&HD found the South Carolina businesses violated the FLSA by failing to properly compensate employees for all work hours. Investigators determined that tipped employees, such as servers, were paid direct wages below $2.13 per hour and kitchen staff were paid flat salaries each month. More Details Here.

San Francisco Grocer to Pay Back Wages to 25 Workers. The Labor Department announced a U.S. District Court has ordered Casa Guadalupe to pay $110,071 in overtime back wages and liquidated damages to 25 current and former employees at its three San Francisco stores. The Labor Department also assessed $11,687 in civil penalties against the employer because of the willful and repeat nature of the violations. The grocery store chain admitted not paying required overtime wages. Investigators found similar violations in 2010 that resulted in $6,496 in overtime back wages due to three workers. More Details Here.

Environment Services Company Pays Back Wages To Misclassified Environmental Scientists. The Labor Department also announced that Groundwater and Environmental Services Inc., doing business as GES, will pay $187,165 in back wages to 69 employees after the W&HD found FLSA violations resulting from the company’s misclassification of junior environmental scientists and junior baseline samplers as exempt from overtime pay. The company collects water samples from property owners in close proximity to oil and gas well drilling sites for baseline sampling surveys. The investigation was part of a Wage and Hour Division’s multiyear enforcement initiative focused on the oil and gas industry. More Details Here.

Oklahoma Manufacturer Pays $85,000 for Overtime. Labor Department officials announced Deerebuilt LLC in Ardmore, Okla., has paid $85,105 in overtime back wages to 112 current and former employees following a W&HD investigation that found that the employer paid “straight time” for all hours worked, failing to pay overtime at time and one-half employees’ regular rates of pay for hours worked beyond 40 in a workweek, as required by the FLSA. The employer paid employees for overtime hours worked on weekends with separate checks, at straight-time rates. More Details Here.

Oklahoma City Company Faulted for FLSA & Davis-Bacon Violations. The Labor Department announced that Mallett Plumbing and Utility Co. in Oklahoma City has paid $100,264 in back wages to 19 current and former plumbers after an investigation found violations of the FLSA and the Davis-Bacon Act. The W&HD says the company failed to pay workers for overtime and failed to pay prevailing wage rates and fringe benefits. A W&HD investigation found Mallett Plumbing and Utility paid straight time for all hours worked and failed to pay employees the required wages and fringe benefits applicable to the classifications of work they performed while working on building alterations and construction projects for the Health Resources and Services Administration and the Federal Aviation Administration. More Details Here.

The Christmas Light Co. Inc. According to the Labor Department, an investigation by its Dallas Wage and Hour Division office found that The Christmas Light Co. Inc. violated the FLSA by failing to pay 233 installers and removers the minimum and overtime wages and keep records required by law. The complaint filed in the Northern District of Texas seeks back wages and liquidated damages of nearly $500,000 and an injunction against future violations of the FLSA.

FLSA Violations Generally Costly; Enforcement Rising

The enforcement record of the Labor Department confirms that the Labor Department’s suit against the Christmas Light Co. Inc. lawsuit is reflective of a strong enforcement commitment targeting U.S. employers using aggressive worker classification or other pay practices to avoid paying minimum wage or overtime to workers. Under the Obama Administration, DOL officials have made it a priority to enforce overtime, record keeping, worker classification and other wage and hour law requirements. See e.g., Boston Furs Sued For $1M For Violations Of Fair Labor Standards Act; Record $2.3 Millh ion+ Backpay Order; Minimum Wage, Overtime Risks Highlighted By Labor Department Strike Force Targeting Residential Care & Group Homes; Review & Strengthen Defensibility of Existing Worker Classification Practices In Light of Rising Congressional & Regulatory Scrutiny; 250 New Investigators, Renewed DOL Enforcement Emphasis Signal Rising Wage & Hour Risks For Employers; Quest Diagnostics, Inc. To Pay $688,000 In Overtime Backpay. In an effort to further promote compliance and enforcement of these rules, the Labor Department is using smart phone applications, social media and a host of other new tools to educate and recruit workers in its effort to find and prosecute violators. See, e.g. New Employee Smart Phone App New Tool In Labor Department’s Aggressive Wage & Hour Law Enforcement Campaign Against Restaurant & Other Employers. As a result of these effort, employers violating the FLSA now face heightened risk of enforcement from both the Labor Department and private litigation.

Employers Should Strengthen Practices For Defensibility

Audit of each position current classified as exempt to assess its continued sustainability and to develop documentation justifying that characterization;
Audit characterization of workers obtained from staffing, employee leasing, independent contractor and other arrangements and implement contractual and other oversight arrangements to minimize risks that these relationships could create if workers are recharacterized as employed by the employer receiving these services;
Review the characterization of on-call and other time demands placed on employees to confirm that all compensable time is properly identified, tracked, documented, compensated and reported;
Review existing practices for tracking compensable hours and paying non-exempt employees for compliance with applicable regulations and to identify opportunities to minimize costs and liabilities arising out of the regulatory mandates;
If the audit raises questions about the appropriateness of the classification of an employee as exempt, self-initiate proper corrective action after consultation with qualified legal counsel;
Review existing documentation and record keeping practices for hourly employees;
Explore available options and alternatives for calculating required wage payments to non-exempt employees;
Consider advisability of tracking hours and activities of employees considered exempt;
Evaluate and manage risks of outsourced labor such as leased, contract or other similar “off-payroll” workers;
Re-engineerwork rules and other practices to minimize costs and liabilities as appropriate in light of the regulations and enforcement exposures; and
Consider and properly coordinate worker classification for health and other employee benefit plan eligibility and other purposes to mitigate risks from unanticipated employee benefit liabilities resulting from misclassification.

For Help With Investigations, Policy Updates Or Other Needs

About Solutions Law Press, Inc.™

New OCR HIPAA De-Identification Guidance Among Developments Covered In 12/12 HIPAA Update

Comments Off on Labor Department Targeting Businesses Violating Overtime, Other Wage & Hour Laws | Corporate Compliance, Employers, Human Resources, Internal Controls, Internal Investigations, Risk Management, Wage & Hour | Permalink
Posted by Cynthia Marcotte Stamer

Wal-Mart Settlement Shows ADA Risks When Considering Employee Return To Work Accommodation Requests & Inquiries

February 25, 2013

From handling requests for light duty or other modifications follow a leave to investigating the medical justification for leaves or the fitness of an employee to return to work following a medical absence, employers need to use care to manage disability discrimination exposures.

Today’s announcement by the Equal Employment Opportunity Commission (EEOC) that Wal-Mart Stores, Inc. and Wal-Mart Stores East, L.P. (Wal-Mart) will pay $50,000 in back pay and damages to settle an EEOC disability discrimination lawsuit highlights the potential disability discrimination risks that employers can face when deciding not to provide a requested accommodation to a worker returning from medical leave while other recent enforcement actions show ADA risks from simply making medical inquiries to a worker on or returning from medical leave.

In its lawsuit against Wal-Mart, Case No. 2:11-CV-00834, filed in the U.S. District Court for the District of New Mexico, the EEOC charged that a Carlsbad, N.M Wal-Mart store violated the Americans With Disabilities Act (ADA) by firing a part-time sales clerk, Marcia Arney because the store refused to provide temporary accommodations ordered by her physician following a period of medical leave.

According to the EEOC lawsuit, when Arney, a 22-year Wal-Mart employee, showed the store manager a note from her doctor requesting an accommodation involving periodic breaks off her feet, the manager refused to return her to her job unless she obtained a medical release with no restrictions. The EEOC claims that had Wal-Mart inquired further, it would have known the accommodation need was temporary and in any case, that Wal-Mart easily could have accommodated the restriction.

Under the consent decree settling the suit, Wal-Mart will conduct annual live ADA training of management officials at its Carlsbad store and post a notice on its agreement with the EEOC so that employees are aware of procedures for reporting disability discrimination. Wal-Mart also committed to not require disabled workers to produce a full release from their doctor upon returning from a medical leave. Further, Wal-Mart agreed to engage in an interactive process with disabled employees to find a reasonable accommodation to assist them in performing their jobs and to report future requests for accommodation, as well as charges and lawsuits alleging disability discrimination to the EEOC for the duration of the decree.

Title I of the ADA prohibits employers from discriminating against individuals on the basis of disability in various aspects of employment. The ADA’s provisions on disability-related inquiries and medical examinations reflect Congress’s intent to protect the rights of applicants and employees to be assessed on merit alone, while protecting the rights of employers to make sure that individuals in the workplace can efficiently perform the essential functions of their jobs. An employer generally violates the ADA if it requires its employees to undergo medical examinations or submit to disability-related inquiries that are not related to how the employee performs his or her job duties, or if it requires its employees to disclose overbroad medical history or medical records. Title I of the ADA also generally requires employers to make reasonable accommodations to employees’ and applicants’ disabilities as long as this does not pose an undue hardship or the employer the employer otherwise proves employing a disabled person with reasonable accommodation could not eliminate significant safety concerns. Employers generally bear the burden of proving these or other defenses. Employers are also prohibited from excluding individuals with disabilities unless they show that the exclusion is consistent with business necessity and they are prohibited from retaliating against employees for opposing practices contrary to the ADA. Violations of the ADA can expose businesses to substantial liability.

As reflected by the Wal-Mart, violations of the employment provisions of the ADA may be prosecuted by the EEOC or by private lawsuits and can result in significant judgments. Disabled employees or applicants that can prove they fully were denied reasonable accommodations or otherwise 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 lawsuit against Wal-Mart is part of a wave of lawsuits in which the EEOC or other agencies under the Obama Administration are aggressively challenging medical examination and other medical screenings by private and public employers. In the Wal-Mart case, the suit challenged an employer’s refusal to provide requested accommodations. In other cases, however, the EEOC or other agencies under the Obama Administration also have challenged medical inquiries made by an employer to employees during or returning from leave. Both types of suits send clear signals that employers should use care in making medical inquiries and responding to requests for accommodation from employees taking or returning from medical leaves. See, e.g., Employer Pays $475,000 To Settle ADA Discrimination Lawsuit Challenging Medical Fitness Testing For EMTs, Firefighters & Other Public Safety Worker’s.

To help mitigate the expanded employment liability risks , businesses generally should act to manage their exposures. Management needs to recognize the likely need to defend medical inquiries, decisions to refuse accommodation requests or other similar actions that arise when dealing with employees taking or returning from medical leave due to a disability, illness or injury. Employers need to critically check and document the legitimate business justification for making a medical inquiry or refusing a requested accommodation based on a well-documented investigation and analysis tailored to the specific situation of each requesting employee.

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 discrimination charge. Businesses need to ensure that all required records and statistics are collected. In addition, businesses also should consider strengthening 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 including:

Comments Off on Wal-Mart Settlement Shows ADA Risks When Considering Employee Return To Work Accommodation Requests & Inquiries | ADA, Corporate Compliance, EEOC, Employers, GINA, Human Resources, OFCCP, Retaliation | Permalink
Posted by Cynthia Marcotte Stamer

HHS Releases Final Rule on Health Insurance Market, Rate Review, Pre-Existing Conditions & Other ACA Market Reform Rules

February 25, 2013

The U.S. Department of Health and Human Services (HHS) on February 22, 2013 released its Final Rule implementing many of the key market reform provisions of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the “Affordable Care Act”) applicable to non-grandfathered health plans and health insurance issuers.

The 145 page regulations and associated guidance package scheduled for official publication in the Federal Register on February 27, 2013 clarifies and implements the Affordable Care Act’s provisions relating to Guaranteed Availability and Renewability; Health Insurance Premiums; Single Risk Pool; Catastrophic Plans, Utilization Data Collection and Reporting under the Federal Rate Review Program and certain other matters.

Among other thing, the Final Regulations:

Clarify the approach HHS will use to enforce the applicable requirements of the Affordable Care Act with respect to health insurance issuers and group health plans that are nonfederal governmental plans
Amend the standards for health insurance issuers and states on reporting, utilization, and collection of data under the federal rate review program
Revise the timeline for states to propose state-specific thresholds for review and approval by the Centers for Medicare & Medicaid Services (CMS)
Allow health insurance issuers to vary the premium rate for health insurance coverage in the individual and small group markets only based on family size, geography, and age and tobacco use within limits
Direct health insurance issuers to offer coverage to and accept every employer or individual who applies for coverage in the group and individual market, subject to certain exceptions including how these requirements inter-relate with the Affordable Care Act’s restrictions on pre-existing condition limitations and exclusions
Direct health insurance issuers to renew or continue in force coverage in the group and individual market, subject to certain exceptions
Codify the requirement that issuers maintain a single risk pool for the individual market and a single risk pool for the small group market (unless a state decides to merge the markets into a single risk pool)
Outline standards for enrollment in catastrophic plans for young adults and people who cannot otherwise afford health insurance
Amend the standards under the rate review program in 45 CFR part 154 by among other things, changing the timeline for states to propose state-specific thresholds for review and approval by CMS, requiring health insurance issuers to submit data relating to proposed rate increases in a standardized format specified by the Secretary of HHS and modifying criteria and factors for states to have an effective rate review program

Along with responding to these regulations, health insurers, group health plans and their insurers and others need to stay tuned. These regulations are just one of a deluge of regulations and other interpretations that HHS and other agencies are rolling out in the rush to meet the impending deadlines for the implementaton of the Affordable Care Act. For instance, along with this guidance, HHS along with the Internal Revenue Service and Employee Benefit Security Administration also last week issued FAQ XII, which discusses the co-pay, deductible and certain other aspects of the cost sharing limits of the Affordable Care Act. In previous weeks, the agencies also have issued or proposed regulations about waiting period, employer shared responsibility, essential health benefits, and various other elements of the rules. Additional guidance is impending.

For Help With Compliance, Risk Management, Investigations, Policy Updates Or Other Needs

About Solutions Law Press, Inc.™

Comments Off on HHS Releases Final Rule on Health Insurance Market, Rate Review, Pre-Existing Conditions & Other ACA Market Reform Rules | Corporate Compliance, Employers, GINA, Health Plans, HIPAA, Human Resources, Insurance, Internal Controls, Internal Investigations, Privacy, Risk Management, Whistleblower | Tagged: Backpay, Employer, Employment, employment law, Fair Labor Standards Act, FSLA, IT, Labor Department, Minimum Wage, Technology, Wage & Hour, wage and hour, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

FTC, HIPAA Rules Require Health Plans & Employers Strengthen Data Security on Mobile Devices and Applications

February 23, 2013

Thinking about or using mobile devices and applications in your heath care, health plan, workforce or related operations or struggling to meet the demands of employees, plan members or others to allow use of these tools? Be sure that you’ve taken appropriate steps to design, implement and manage legal responsibilities and risks associated with the development and use of these tools.

While the popularity, accessibility and cost-effectiveness of mobile devices and applications provides a strong incentive for health and other employee benefit plans, employers, their business associates, workforce members and customers to use mobile devices and applications, the use of these technologies and applications to collect, access, or use personal health care, financial, or other sensitive information presents special challenges and risks. Unfortunately, as the use of these tools proliferates, federal officials are increasingly concerned that the data security protections afforded by many of the devices and applications in use on these highly popular smart phone, tablet and other mobile devices and applications is highly lacking. See FTC Settlement With Mobile Device & App Developer Shows Developers & Businesses Need To Manage Mobile App & Data Security.

As federal regulators and law enforcement responds to growing concerns about cyber security and other risks, heath care, health plan and other businesses, their employees, customers, and other business partners jumping on the mobile device and application bandwagon, health, application bandwagon, and the device and application developers developing and offering these tools must take appropriate steps to manage the personal health, financial, and other sensitive information and data that these tools use, create, access or disclose.

Of course, most health plan sponsors, fiduciaries, administrators and service providers already recognize the need to use care when dealing with health plan data. The Health Insurance Portability & Accountability Act (HIPAA) generally requires that health care providers, health plans, health care clearinghouses and their businesses associates safeguard personal health care information or “PHI” and restrict its use, access and disclosure in accordance with the extensive and highly detailed requirements of the Privacy, Security and Breach Notification Regulations of the Department of Health & Human Services Office of Civil Rights (OCR).

OCR’s collection of several multi-million dollar settlements as well as its statements in its recent restated HIPAA regulations and other OCR guidance make clear that OCR views HIPAA as imposing significant responsibilities upon covered entities and their business associates to safeguard and restrict access to PHI on mobile devices and applications. OCR’s Long-Anticipated Omnibus HIPAA Privacy, Security, Breach Notification & Enforcement Rule Tightens Privacy Requirements, Require Action; Breaches resulting from the loss or theft of unencrypted ePHI on mobile or other computer devices or systems has been a common basis of investigation and sanctions since that time, particularly since the Breach Notification rules took effect. OCR Pops Idaho Hospice In 1st HIPAA Breach Settlement Affecting < 500 Patients; Providence To Pay $100000 & Implement Other Safeguards; OCR Hits Alaska Medicaid For $1.7M+ For HIPAA Security Breach; OCR Audit Program Kickoff Further Heats HIPAA Privacy Risks; $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. These actions and statements of OCR provide a clear warning to HIPAA-covered entities and their business associates to expect significant consequences for failing to properly encrypt and safeguard ePHI used, accessed or disclosed on mobile devices and applications.

Of course, HIPAA isn’t the only law and health plans should not be the only area of concern when employers or their health or other employee benefit plan fiduciaries and service providers are considering mobile device and application use. In addition to HIPAA’s health plan requirements concerning PHI, mobile devices and applications used in connection with employment, benefit plan, and related operations also can trigger a host of privacy, data security and other rules requiring data security and other safeguards. Federal laws like the Internal Revenue Code, the Fair Credit Reporting Act, Graham-Leech-Biliey, the Fair & Accurate Credit Transactions Act (FACTA) or other Federal Trade Commission (FTC) Rules, state data security, data breach, identity theft or other privacy rules or both are just a few of the many and constantly expanding regulatory requirements that can apply. Depending on the nature of the data and the circumstances of the unanticipated use or disclosure, invasion of privacy or other common or statutory laws also may come into play.

With the use of these applications by consumers and business proliferates, Congress, OCR, the FTC, state regulators and others are upping the responsibilities and the liability of businesses that fail to appropriately consider and implement security in their mobile devices and applications. Following on OCR’s restatement of its HIPAA regulations, the Obama Administration’s announcement of new cyber security initiatives, and a plethora of other federal and state regulatory and enforcement actions against businesses for data security missteps, the FTC recently launched a campaign to ensure that companies secure the software and devices mobile device and application providers provide consumers.

Earlier this month, the FTC introduced Mobile App Developers: Start with Security, a new business guide that encourages app developers to aim for reasonable data security.

On June 4, 2013, the FTC also plans to host a public forum on malware and other mobile security threats in order to examine the security of existing and developing mobile technologies and the roles that various members of the mobile ecosystem can play in protecting consumers.

Along side this educational outreach, the FTC also is moving to punish businesses that fail to act responsibly to protect sensitive data. This trend is illustrated by the FTC’s announcement this week of its first settlement with a mobile device manufacturer.

FTC Charges Against HTC America

This week, the FTC announced that mobile device giant HTC American, Inc. will to settle FTC charges that the company failed to take reasonable steps to secure the software it developed for its smart phones and tablet computers and introduced security flaws that placed sensitive information about millions of consumers at risk.

A leading mobile device manufacturer in the United States, HTC America develops and manufactures mobile devices based on the Android, Windows Mobile, and Windows Phone operating systems. HTC America has customized the software on these devices in order to differentiate itself from competitors and to comply with the requirements of mobile network operators.

In its first-ever complaint against a mobile device or application developer, the FTC charged HTC America failed to incorporate and administer appropriate safeguards for personal financial and other sensitive data accessed and used in these applications when designing or customizing the software on its mobile devices. Among other things, the complaint alleged that HTC America failed to provide its engineering staff with adequate security training, failed to review or test the software on its mobile devices for potential security vulnerabilities, failed to follow well-known and commonly accepted secure coding practices, and failed to establish a process for receiving and addressing vulnerability reports from third parties.

To illustrate the consequences of these alleged failures, the FTC’s complaint details several vulnerabilities found on HTC America’s devices, including the insecure implementation of two logging applications – Carrier IQ and HTC Loggers – as well as programming flaws that would allow third-party applications to bypass Android’s permission-based security model.

Due to these vulnerabilities, the FTC charged, millions of HTC devices compromised sensitive device functionality, potentially permitting malicious applications to send text messages, record audio, and even install additional malware onto a consumer’s device, all without the user’s knowledge or consent. The FTC alleged that malware placed on consumers’ devices without their permission could be used to record and transmit information entered into or stored on the device, including, for example, financial account numbers and related access codes or medical information such as text messages received from healthcare providers and calendar entries about doctor’s appointments. In addition, malicious applications could exploit the vulnerabilities on HTC devices to gain unauthorized access to a variety of other sensitive information, such as the user’s geolocation information and the contents of the user’s text messages.

Moreover, the FTC complaint alleged that the user manuals for HTC Android-based devices contained deceptive representations, and that the user interface for the company’s Tell HTC application was also deceptive. In both cases, the security vulnerabilities in HTC Android-based devices undermined consent mechanisms that would have otherwise prevented unauthorized access or transmission of sensitive information.

HTC America Settlement

The settlement not only requires the establishment of a comprehensive security program, but also prohibits HTC America from making any false or misleading statements about the security and privacy of consumers’ data on HTC devices. Under the settlement agreement, HTC American must:

Fix vulnerabilities found in millions of HTC devices;
Establish a comprehensive security program designed to address security risks during the development of HTC devices; and
Undergo independent security assessments every other year for the next 20 years.

HTC America and its network operator partners are also in the process of deploying the security patches required by the settlement to consumers’ devices. Many consumers have already received the required security updates. The FTC is encouraging consumers using HTC America applications to apply the updates as soon as possible.

The FTC Commission vote to accept the consent agreement package containing the proposed consent order for public comment was 3-0-2, with Chairman Jon Leibowitz not participating and Commissioner Maureen Ohlhausen recused. The FTC will publish a description of the consent agreement package in the Federal Register shortly.

In accordance with FTC procedures, the settlement agreement will be subject to public comment through March 22, after which the Commission will decide whether to make the proposed consent order final. Interested parties can submit comments electronically or in paper form using instructions in the “Invitation To Comment” part of the “Supplementary Information” section. Comments in paper form should be mailed or delivered to: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.

Act To Manage Mobile Application Device & Security

Given the expanding awareness, expectations and enforcement of OCR, FTC and others, health care, health plan and other industry participants deciding whether and when to use, or allow others to use mobile devices or applications to access data or carry out other activities and the mobile device or other technology developers and providers offering products or services to these organizations must get serious about security.

These and other related activities send a clear message that health care, health insurance mobile device and application users and developers must incorporate and administer appropriate processes and safeguards to protect PHI, personal financial and other sensitive data. In response to these developments, industry mobile device and application developers and the health care, health insurance and other businesses must consider carefully before deploying or allowing others to deploy or use these tools in relation to data within their operations or systems. Before and when using or permitting customers, business partners, employees or others to use tools, these organizations must ensure the adequacy of the design and security safeguards for their devices, software and applications, as well as their disclaimers and associated consumer disclosures and consents. Because of the special legal and operational expectations for these organizations, health care, health insurance and other industry provides must resist pressure to allow the use of these tools unless and until they can verify that these legal and operational requisites are fulfilled.

For Help With Compliance, Risk Management, Investigations, Policy Updates Or Other Needs

Nationally recognized for her extensive work, publications and leadership on HIPAA and other privacy and data security concerns, Ms. Stamer has extensive experience representing, advising and assisting health care providers, health plans, their business associates and other health industry clients to establish and administer medical and other privacy and data security, employment, employee benefits, and to handle other compliance and risk management policies and practices; to investigate and respond to OCR and other 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.

A Fellow in the American College of Employee Benefit Counsel, State Bar of Texas and American Bar Association, Vice President of the North Texas Health Care Compliance Professionals Association, the Former Chair of the ABA RPTE Employee Benefit & Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice Chair of the ABA TIPS Employee Benefit Committee, an ABA Joint Committee on Employee Benefits Council Representative, 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 serves 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 on HIPAA and other data privacy and security concerns 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 third year will serve in 2013 as the appointed scribe for the ABA Joint Committee on Employee Benefits Agency meeting with OCR. Her insights on HIPAA risk management and compliance often appear in medical privacy related publications of a broad range of health care, health plan and other industry publications Among others, she has conducted privacy training for the Association of State & Territorial Health Plans (ASTHO), the Los Angeles Health Department, SHRM, HIMMS, the American Bar Association, the Health Care Compliance Association, a multitude of health plan, insurance and financial services, education, employer employee benefit and other clients, trade and professional associations and others. You can get more information about her HIPAA and other experience here.

In addition to this extensive HIPAA specific experience, Ms. Stamer also is recognized for her experience and skill aiding clients with a diverse range of other employment, employee benefits, health and safety, public policy, and other compliance and risk management concerns.

About Solutions Law Press, Inc.™

Comments Off on FTC, HIPAA Rules Require Health Plans & Employers Strengthen Data Security on Mobile Devices and Applications | Corporate Compliance, Employers, GINA, Health Plans, HIPAA, Human Resources, Insurance, Internal Controls, Internal Investigations, Privacy, Risk Management, Whistleblower | Tagged: Backpay, Employer, Employment, employment law, Fair Labor Standards Act, FSLA, IT, Labor Department, Minimum Wage, Technology, Wage & Hour, wage and hour, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

3/13 JCEB Teleconference Explores Foreign Transferees: Outbound, Inbound, Equity And Treaty Issues

February 19, 2013

Cynthia Marcotte Stamer will share her insights on health and welfare benefit challenges for multinational employers as one of the featured panelists on the “Foreign Transferees: Outbound, Inbound, Equity And Treaty Issues” Teleconference hosted by the American Bar Association Joint Committee on Employee Benefits on March 13, 2013 from 10:00-11:30 a.m. Central Time.

Intended to help broad-based U.S. and European community benefits attorneys and others seeking to understand common and unique issues associated with employee transferees, granting of equity compensation and associated treaty issues, including:
Basic issues associated with transfers including granting of past service credits, vesting and distribution issues
Case studies involving employee transfers between the U.S. and the UK.
Use of international deferred compensation programs.
Unique health and welfare issues associated with international transfers.
Interesting/Global equity issues to avoid.

Moderated by Elizabeth Drigotas, PriceWaterhouseCoopers, Washington, DC, the program will feature a diverse and highly experienced group of distinguished government and private speakers including:

M. Grace Fleeman, Senior Technical Reviewer, Branch 1, (Associate Chief Counsel International)), Internal Revenue Service, U.S. Department of the Treasury, Washington, DC (invited)
Andrew C. Liazos, McDermott Will & Emery, Boston, MA
Matthew Preston, Clifford Chance, London, UK
Cynthia Marcotte Stamer, Cynthia Marcotte Stamer, PC, Addison, TX.

To register or for additional information, see here.

About Ms. Stamer

Sought out nationally and internationally as an industry thought leader and problem solver, attorney, Cynthia Marcotte Stamer has more than 25 years experience helping domestic and foreign private and public businesses, employer and union plan sponsors, health and other employee benefit plans, associations, their fiduciaries, administrators, and vendors, group health, Medicare and Medicaid Advantage, and other insurers, governmental and community leaders and others develop, implement, administer and defend creative, legally compliant and operationally effective health and other employee benefit, employment, insurance, pension and retirement, health care, workers’ compensation and workforce plans, practices, and policies.

Recognized in International Who’s Who, the founder and Executive Director of Project COPE: The Coalition on Patient Empowerment and its affiliate, the Coalition on Responsible Health Policy; a Fellow in the American College of Employee Benefits Counsel, American Bar Association, and State Bar of Texas; Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Immediate Past Chair of the ABA RPTE Employee Benefit & Other Compensation Committee, current ABA RPTE Employee Benefit & Other Compensation Committee Welfare Benefits Committee Co-Chair and Substantive Groups Committee Member, and a Council Member of the ABA Joint Committee on Employee Benefits, Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, and Immediate Past Gulf States Area TEGE Council Exempt Organization Chair, Ms. Stamer helps these and other clients. to design, document, administer and defend managed care and insurance programs, processes, and products; to monitor and manage evolving regulatory, contractual and fiduciary obligations and risks; to draft, negotiate, interpret and enforce managed care and other contracts, plan documents, insurance policies, administrative services agreements, and other agreements, policies, procedures and controls; to credential, monitor and manage fiduciaries, service providers, consultants and others providing services relating to programs; to conduct and defend litigation, audits, and other enforcement actions; to deal with legislators, regulators, auditors and others; and to fulfill legal obligations, mitigate legal risks and improve operational effectiveness.

As a core focus of her practice, Ms. Stamer continuously counsels, represents and defends self-insured and insured managed care and health, disability and welfare, pension, deferred compensation and other employee benefit plans; employer, association, insurer, and other employee benefit and insurance program sponsors; plan fiduciaries, administrators, brokers, consultants and other service providers; Medicare and Medicaid Advantage and other group, individual, stop-loss and other reinsurance, fiduciary liability and other insurers; health and insurance technology and other outsourcing companies; human resources, insurance and employee benefit consulting organizations; and other insurance, employee benefit and human resources industry clients, domestic and foreign governments and others about a diverse range of employee benefit, insurance, employment, tax, regulatory, risk management, public policy and related matters.

Ms. Stamer’s health benefit experience includes extensive and highly-innovative dealings with insured and self-insured managed care, defined contribution, indemnity and other health benefit, disability, life, occupational injury, Medicare and Medicaid Advantage, and other welfare benefit and insurance plans and policies; and a wide range of other employee benefits, compensation, insurance, equity and other related arrangements. Her work includes leading edge development and use of 24-hour coverage and other occupational injury, ex-pat and other medical tourism products, HRA, HSA, HRA and other defined contribution, hi-deductible, deductible reimbursement, min-med and other limited benefit plans, 24-hour and occupational benefit, fraternal benefit and association, and other medical programs as well as a broad range of claims, appeals, audit, and other administrative processes and tools designed to promote defensibility and mitigate risks.

Along side this domestic work, Ms. Stamer also has extensive international experience. 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 design, administration, operations, compliance, public policy and regulatory, and other challenges arising in the administration of multinational workforces and populations. Throughout her career, Ms. Stamer has advised both U.S. based businesses and foreign owned or operated businesses about design and administration of employment, employee benefit, worker’s compensation, employment tax, occupational safety, discipline and promotion, collective bargaining, recruiting, compliance, risk management and other personnel practices for multinational workforces. She has worked extensively on the design and administration of pension, severance, health and other benefit and compensation programs for their multinational workforce. She assists businesses with cross-border and domestic employment, consulting, independent contractor, subcontractor, employee leasing and other staffing and vendor agreements; multinational Foreign Corrupt Practices Act, Federal Sentencing Guidelines, and other compliance programs and practices; design, drafting, interpretation, implementation, and coordination pension, health care, severance, education, insurance, employment, tax, unemployment, disability, and other programs and requirements; represents and advises businesses, associations and government agencies before U.S. and foreign governments in connection with tax, employment, and other compliance matters, trade relationships and missions, public policy advocacy.

A widely published author and highly sought out speaker whose HR & Benefits Update has been recognized as among the “Top 50” HR Blogs To Watch, Ms. Stamer also regularly authors materials and conducts workshops and professional, management and other training on employee benefits, human resources, health care and other compliance and management topics for the ABA, Aspen Publishers, the Bureau of National Affairs (BNA), SHRM, World At Work, Insurance Thought Leadership, Government Institutes, Inc., Solutions Law Press, Inc., the Society of Professional Benefits Administrators, HealthLeaders, Managed Care Executive, CEO Magazine, Business Insurance and many other industry, professional and business publications. An Editorial Advisory Board Member of the Institute of Human Resources (IHR/HR.com), Employee Benefit News, and 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. Ms. Stamer also is widely recognized for her regulatory and public policy advocacy, publications, and public speaking on privacy and other compliance, risk management concerns. For the past two years, Ms. Stamer has serve as the appointed scribe for the ABA Joint Committee on Employee Benefits annual agency meeting with OCR and has lead numerous programs for the ABA and others on this topic. 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.

About Solutions Law Press, Inc.™

Comments Off on 3/13 JCEB Teleconference Explores Foreign Transferees: Outbound, Inbound, Equity And Treaty Issues | Corporate Compliance, Employers, GINA, Health Plans, HIPAA, Human Resources, Insurance, Internal Controls, Internal Investigations, Privacy, Risk Management, Whistleblower | Tagged: Backpay, Employer, Employment, employment law, Fair Labor Standards Act, FSLA, IT, Labor Department, Minimum Wage, Technology, Wage & Hour, wage and hour, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

SLP Readers Get $400 Discount To Learn Key Health Care Reform Coping Strategies At 2/21-22 Employer Health & Human Capital Strategy Congress In Lake Mary, FL

February 5, 2013

Solutions Law Press, Inc. (SLP) readers qualify for up to a $400 discount on their registration to learn key insights from on strategies for charting the path forward to drive employee wellness, strengthen the workforce and impact global business competitiveness in the face of the impending health care reforms of the Patient Protection & Affordable Care Act from SLP Editor/Author Cynthia Marcotte Stamer and other leading employer health care decision makers at the 8^th Annual Employer Health & Human Capital Strategy Congress that the World Health Congress is hosting on February 21-22, 2013 at The Westin Lake Mary, Orlando North Conference Center in Lake Mary, Florida.

About the Program

Nationally recognized industry thought leader and attorney SLP Editor attorney Cynthia Marcotte Stamer will help kick off the program when she joins a panel of prominent HR leaders discussing “Assessing Alternatives and Opportunities: Defined Contribution and Exchanges-What are the Long-Term Implications on Your Human Capital Strategy” beginning at 9:30 a.m. on February 21, 2013.

Following this keynote panel, attendees also will learn other key ideas and strategies to help their organizations cope with Health Care Reform as they participate in a host of other insightful and timely presentations by dynamic team of prominent HR and other industry experts and network with other management and human resources leaders .including:

John Rother, National Coalition on Health care
Shawn Leavitt, Carlson Companies
Rebecca Mariet Lynn-Crockford, Suntrust Banks, Inc
Jo-Ann Gastin, Lockton Companies, LLC
Paul Grundy, M.D., Patient-Centered Primary Care Collaborative
Roger C. Merring, M.D., Perdue Farm Inc.
Sam Nussbaum, Wellpoint, Inc.
Benjamin H. Hoffman, M.D., GE Energy
Bruce Sherman, MD, Employers Health Coalition

For a full agenda and other details on the program, see here.

SLP Reader Registration Discount

SLP is delighted to announce that the World Health Congress is offering SLP readers the opportunity to claim a $400 discount off the otherwise applicable registration fee when registering for the program. To register and claim this discount, enter registration code “GHH925” at the designated location when registering for the program here.

About Ms. Stamer

Sought out nationally and internationally as an industry thought leader and problem solver, SLP Editor and author attorney, Cynthia Marcotte Stamer has spent more than 25 years helping private and public employers, employer and union plan sponsors, health and other employee benefit plans, associations, their fiduciaries, administrators, and vendors, group health, Medicare and Medicaid Advantage, and other insurers, governmental and community leaders and others develop, implement, administer and defend creative, legally compliant and operationally effective health and other employee benefit, employment, insurance, health care and workforce plans, policies, practices, operations and policies.

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. Her Patient Empowerment Toolkit™, Play4Life Community Program™, and other patient empowerment, health care quality, and other industry thought leadership, advocacy and solutions have drawn the attention of business, government and community leaders for their insightfulness and practicality.

A widely published author and highly sought out speaker whose HR & Benefits Update has been recognized as among the “Top 50” HR Blogs To Watch, Ms. Stamer also regularly authors materials and conducts workshops and professional, management and other training on employee benefits, human resources, health care and other compliance and management topics for the ABA, Aspen Publishers, the Bureau of National Affairs (BNA), SHRM, World At Work, Insurance Thought Leadership, Government Institutes, Inc., Solutions Law Press, Inc., the Society of Professional Benefits Administrators, HealthLeaders, Managed Care Executive, CEO Magazine, Business Insurance and many other industry, professional and business publications. An Editorial Advisory Board Member of the Institute of Human Resources (IHR/HR.com), Employee Benefit News, and 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 directly via email here or (469) 767-8872.

About Solutions Law Press, Inc.™

Comments Off on SLP Readers Get $400 Discount To Learn Key Health Care Reform Coping Strategies At 2/21-22 Employer Health & Human Capital Strategy Congress In Lake Mary, FL | Corporate Compliance, Employers, GINA, Health Plans, HIPAA, Human Resources, Insurance, Internal Controls, Internal Investigations, Privacy, Risk Management, Whistleblower | Tagged: Backpay, Employer, Employment, employment law, Fair Labor Standards Act, FSLA, IT, Labor Department, Minimum Wage, Technology, Wage & Hour, wage and hour, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

Stamer Talks on “What the Wind Blew In: Coping with Health Care Reform: 2013 and Beyond” May 2 At 24th Annual RPTE Spring Symposia In Washington, D.C.

January 28, 2013

Cynthia Marcotte Stamer will a featured panelists discussing “What the Wind Blew In: Coping with Health Care Reform: 2013 and Beyond” on Thursday, May 2, 2013 at 24th Annual RPTE Spring Symposia at the Capital Hilton in Washington, DC. The Symposia scheduled to take place on May 2–3, 2013 will cover a broad range of timely topics on real estate, trusts and estates and other related concerns. To register, review the full agenda or get additional information about the Symposium, see here.

About Ms. Stamer

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

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

Author of the hundreds of publications and workshops these and other employment, employee benefits, health care, insurance, workforce and other management matters, Ms. Stamer’s insights on employee benefits, insurance, health care and workforce matters in Atlantic Information Services, The Bureau of National Affairs, HealthLeaders, Modern Healthcare, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other publications. Nationally known for her work on health care reform and related matters, Ms. Stamer also regularly conducts training and speaks on these and other management, compliance and public policy concerns. For additional information about Ms. Stamer, upcoming training, publications or other materials or events, see here or contact Ms. Stamer directly via email here or (469) 767-8872.

About Solutions Law Press, Inc.™

Comments Off on Stamer Talks on “What the Wind Blew In: Coping with Health Care Reform: 2013 and Beyond” May 2 At 24th Annual RPTE Spring Symposia In Washington, D.C. | Corporate Compliance, Employers, GINA, Health Plans, HIPAA, Human Resources, Insurance, Internal Controls, Internal Investigations, Privacy, Risk Management, Whistleblower | Tagged: Backpay, Employer, Employment, employment law, Fair Labor Standards Act, FSLA, IT, Labor Department, Minimum Wage, Technology, Wage & Hour, wage and hour, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

IRS Will Begin Accepting Returns Claiming Education Credits By Mid-February

January 28, 2013

As preparations continue for the Jan. 30 opening of the 2013 filing season for most taxpayers, the Internal Revenue Service has announced that it beginprocessing of tax returns claiming education credits n by the middle of February.

Taxpayers using Form 8863, Education Credits, can begin filing their tax returns after the IRS updates its processing systems. Form 8863 is used to claim two higher education credits — the American Opportunity Tax Credit and the Lifetime Learning Credit.

The IRS emphasized that the delayed start will have no impact on taxpayers claiming other education-related tax benefits, such as the tuition and fees deduction and the student loan interest deduction. People otherwise able to file and claiming these benefits can start filing Jan. 30, 2013

As it does every year, the IRS reviews and tests its systems in advance of the opening of the tax season to protect taxpayers from processing errors and refund delays. The IRS discovered during testing that programming modifications are needed to accurately process Forms 8863. Filers who are otherwise able to file but use the Form 8863 will be able to file by mid-February. No action needs to be taken by the taxpayer or their tax professional. Typically through the mid-February period, about 3 million tax returns include Form 8863, less than a quarter of those filed during the year.

The IRS remains on track to open the tax season on January 30 for most taxpayers. The January 30 opening includes people claiming the student loan interest deduction on the Form 1040 series or the higher education tuition or fees on Form 8917, Tuition and Fees Deduction. Forms that will be able to be filed later are listed on IRS.gov.

For Help With Compliance, Risk Management, Investigations, Policy Updates Or Other Needs

About Solutions Law Press, Inc.™

Comments Off on IRS Will Begin Accepting Returns Claiming Education Credits By Mid-February | Corporate Compliance, Employers, GINA, Health Plans, HIPAA, Human Resources, Insurance, Internal Controls, Internal Investigations, Privacy, Risk Management, Whistleblower | Tagged: Backpay, Employer, Employment, employment law, Fair Labor Standards Act, FSLA, IT, Labor Department, Minimum Wage, Technology, Wage & Hour, wage and hour, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

IRS Shares Procedures Employers Use To Claim Increased Monthly Transit Benefit Exclusion Allowed By Administrative Taxpayer Relief Act

January 28, 2013

The Administrative Taxpayer Relief Act retroactively increased monthly transit benefit limit that employers can provide to employees on a tax-free basis for 2012 from $125 per month to $240 per month. Notice 2013-8 provides a special correction procedure for employers who paid benefits in excess of $125 per month in 2012 and wish to make corrections on their fourth quarter Form 941.

Notice 2013-8 will be published in Internal Revenue Bulletin 2013-7 on February 11, 2013

For Help With Compliance, Risk Management, Investigations, Policy Updates Or Other Needs

About Solutions Law Press, Inc.™

Comments Off on IRS Shares Procedures Employers Use To Claim Increased Monthly Transit Benefit Exclusion Allowed By Administrative Taxpayer Relief Act | Corporate Compliance, Employers, GINA, Health Plans, HIPAA, Human Resources, Insurance, Internal Controls, Internal Investigations, Privacy, Risk Management, Whistleblower | Tagged: Employer, Employment, transit benefit exclusion | Permalink
Posted by Cynthia Marcotte Stamer

Employers ACA Health Reforms Prohibit Using HRAs To Pay Individual Medical Policy Premiums & Impact Other HRA Arrangements

January 27, 2013

Since the enactment of the Patient Protection & Affordable Care Act (ACA), many employers searching for health plan solutions may have been asked to consider replacing or modifying their existing insured or self-insured group health plan with a “health reimbursement arrangement” (HRA) or other arrangement which would reimburse employees for premiums paid for individual health insurance policies. New guidance released on Thursday, January 24, 2013 indicates that such arrangements are prohibited as part of the ACA health care reforms.

“FAQS About Affordable Care Implementation (Part XI)” (FAQ) available here issued by the Departments of Labor, Health and Human Services (HHS), and the Treasury (collectively, the Agencies) on January 24, 2013 sends a clear message to employers that trying to escape ACA or other federal group health plan mandates by replacing their traditional insured or group health plans or policies with health reimbursement arrangements (HRAs) or other arrangements under which the employer agrees to provide a fixed defined contribution to be used to buy or reimburses employees for buying individual health insurance generally won’t pass legal muster. The FAQ also indicates that employers sponsoring HRAs that only reimburse medical expenses, not individual health insurance premiums also need to review their arrangements to verify that those programs also comply with ACA and other applicable rules.

Concerning the use of HRAs to pay for individual health insurance policy premiums, the FAQ states that PHS Act Section 2711 generally prohibits an employer-sponsored HRA cannot be integrated with individual market coverage or with an employer plan that provides coverage through individual policies. Under ACA, employers that improperly offer arrangements that violate PHS Section 2711 or other group health plans risk exposing themselves to liability for significant unanticipated health benefit claims, as well as other penalties and costs. Therefore, employers that have or are contemplating arrangements that provide or reimburse premiums for individual health insurance coverage are urged to contact qualified legal counsel with documented experience with ACA and other group health plan requirements for advice before establishing or continuing such arrangements.

The FAQ’s guidance about the use of individual insurance policies to arrange coverage for employees is one of several issues addressed in the FAQ and part of a wave of new guidance that has and is emerging as the Obama Administration moves to full implementation of the ACA reforms. Employers, plan fiduciaries, insurers, and others involved in the design or administration of health benefit programs need to monitor carefully this emerging guidance as they move quickly to tailor their programs in response to these evolving rules. For help monitoring or responding to these evolving rules, contact the author of this update, Cynthia Marcotte Stamer.

For Help With Compliance, Risk Management, Investigations, Policy Updates Or Other Needs

About Solutions Law Press, Inc.™

Comments Off on Employers ACA Health Reforms Prohibit Using HRAs To Pay Individual Medical Policy Premiums & Impact Other HRA Arrangements | Corporate Compliance, Employers, GINA, Health Plans, HIPAA, Human Resources, Insurance, Internal Controls, Internal Investigations, Privacy, Risk Management, Whistleblower | Tagged: Backpay, Employer, Employment, employment law, Fair Labor Standards Act, FSLA, IT, Labor Department, Minimum Wage, Technology, Wage & Hour, wage and hour, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

ADA May Require Food Allergy Accommodation By Employers, Schools & Businesses

January 25, 2013

The Justice Department’s recently Lesley University Settlement (Settlement) announced by the Justice Department on December, 21, 2012 should be a reminder to employers and others covered by the Americans With Disabilities Act (ADA) of the potential advisability of establishing policies or taking other steps to position their practices for providing food in the workplace or at workplace events or to the public to withstand challenge under the ADA.

While technically referring to only schools, its recognition of some food allergies as disabilities under the ADA makes the Settlement likely to have significant implications for other businesses and organizations regulated by the employment, public accommodation, education or other disability discrimination rules of the ADA under certain circumstances. Consequently, schools, as well as employers and businesses covered by the ADA should evaluate their practices for offering and providing accommodations for food allergies to minimize their exposure to disability discrimination charges under the ADA in light of the settlement.

Background of Lesley University Settlement

The charges of discrimination against Lesley University resulting in the Settlement challenged a university meal plan that Lesley University required all students living on campus to take part in, and pay for the meal plan. Lesley University mandated that each student buy the meal service plan – even if some students with severe allergies could not eat the food available through the plan without risk of illness. The Justice Department charged that Leslie University violated the ADA by failing to appropriate accommodate the special food needs for these students. The Settlement Agreement resolves Justice Department that Lesley University with illegally discriminating in violation of the ADA by failing to adequately accommodate the special food needs with severe food allergies that constituted a disability under the ADA.

While the Lesley University Settlement specifically concerned a school meal plan, the Justice Department’s treatment of persons with severe food allergies as disabled within the meaning of the ADA has potential implications for all types of entities regulated by the ADA. Meanwhile, schools in particular should carefully review the Settlement as the Justice Department says it expects some but all aspects of the Settlement “will serve as a model for other schools – particularly those that require students to participate in a meal plan.”

Under the Settlement, Lesley University agreed to act to change its food plan to ensure that its students with celiac disease and other food allergies to take advantage of and fully and equally enjoy the university’s food services in compliance with the ADA as well as requires Lesley to consider exempting from its mandatory plan students who cannot, because of disability, take full advantage of the University’s meal service plan.

Among other things, Lesley University agreed to:

Provide gluten-free and allergen-free food options in its dining hall food lines in addition to its standard meal options;
Allow students with known allergies to pre-order allergen-free meals;
Display notices about food allergies and identify foods containing specific allergens;
Train food service and university staff about food allergy-related issues;
Provide a dedicated space in its main dining hall to store and prepare gluten-free and allergen-free foods; and
Work to retain vendors that accept students’ prepaid meal cards that also offer food without allergens.

Food Allergies as Disability Under ADA

According to the Justice Department, a disability as defined by the ADA is a mental or physical impairment that substantially limits a major life activity, such as eating. Major life activities also include major bodily functions, such as the functions of the gastrointestinal system. Some individuals with food allergies have a disability as defined by the ADA – particularly those with more significant or severe responses to certain foods. This would include individuals with celiac disease and others who have autoimmune responses to certain foods, the symptoms of which may include difficulty swallowing and breathing, asthma, or anaphylactic shock.

Settlement Implications For Employers, Schools & Other Businesses

Since the ADA has a common disability definition, this means that the recognition of food allergies as a disability likely will be used in other situations involving employers under the ADA’s employment provisions, businesses under the public accommodation provisions or others.

While the Settlement reflects that food allergies may be disabilities, the Justice Department says the Settlement does not mean that the ADA requires that every place of public accommodation that serves food to the public under all circumstances provide gluten-free or allergen-free food. Accordingly to the Justice Department, the Lesley Agreement involved a mandatory meal program for a defined group of students. Because its meal plan was mandatory for all students living on campus, the Justice Department says the ADA required that the University make reasonable changes to the plan to accommodate students with celiac disease and other food allergies.

The Justice Department has pointed out that the rules governing when accommodation is required are different for schools versus restaurants or others that serve food to the general public. According to the Justice Department, the public accommodation provisions of the ADA may require a restaurant or other business to take some reasonable steps to accommodate individuals with disabilities where it does not result in “fundamental alteration” of that restaurant’s operations. Examples of such accommodations might include answering questions from diners about menu item ingredients, where the ingredients are known, or omitting or substituting certain ingredients upon request if the restaurant normally does this for other customers.

However, the Justice Department has indicated that for purposes of the ADA’s public accommodation provisions, organizations are not required to accommodations that would require that the business to make a “fundamental alteration” to its operations. For this purpose, the Justice Department has indicated that fundamental alteration is “a modification that is so significant that it alters the essential nature of the good or services that a business offers.” For example, the Justice Department says a restaurant is not required to alter its menu or provide different foods to meet particular dietary needs.

While the Equal Employment Opportunity Commission (EEOC) and not the Justice Department has authority for the interpretation and enforcement of the ADA’s employment provisions, employers also can expect that the EEOC and/or private plaintiff’s will follow the lead in arguing that food allergies may qualify as disabilities for purposes of determining when employers serving or offering food in workplaces or at work-related events also may be required to make or offer accommodations to address the special needs of individuals with disabilities.

Although many employers may be tempted to discount the relevance of the Justice Department’s recognition of food allergies as a disability based on pre Americans With Disabilities Act Amendment Act (ADAAA) cases that viewed food allergies as not rising to the level of a disability under the ADA. Since the ADAAA has greatly expanded the definition of a disability and made it easier for an employee to show that a condition is disabling within the meaning of the ADA, employers are cautioned against assuming that food allergies or other disabilities don’t qualify as disabilities based on pre-ADAAA precedent.

The ADAAA makes it more difficult for employers to establish that food allergies or other medical conditions are not disabilities. As amended by the ADAAA, the ADA presently extends covers individuals as disabled when they have conditions that are “episodic or in remission,” as long as the condition causes symptoms which affect a “major life activity” when active.

Also, the ADAAA now provides that employers can no longer consider whether an individual could ameliorate the effects of the condition through medication or whether other actions.

In reliance upon these changes, the EEOC now takes the position that allergies producing life-threatening reactions are per se substantially limiting under the ADAAA.

Given the likelihood that the EEOC and private plaintiffs now are likely to assert that individuals affected by food allergies rights to accommodation or other ADA based claims in reliance upon the ADAAA, the settlement is likely to fuel added claims against employers, as well as schools and businesses under the ADA’s public accommodations provisions. In response to these exposures, schools, businesses and employers should consider whether their existing practices and training of workers about ordering, offering or providing food should be tightened to reduce potential exposures under the ADA.

About The Author

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 including:

Comments Off on ADA May Require Food Allergy Accommodation By Employers, Schools & Businesses | ADA, Corporate Compliance, EEOC, Employers, GINA, Human Resources, OFCCP, Retaliation | Permalink
Posted by Cynthia Marcotte Stamer

Employer Deadline To Give ACA Notice of Exchange Coverage Options Delayed

January 25, 2013

The Department of Labor has extended the deadline for employers to notify employees about the existence of and their rights under the health exchanges required by new Section 18B of the Fair Labor Standards Act (FLSA), as added by Section 1512 of the Patient Protection & Affordable Care Act (ACA). The extension announced in Frequently Answered Question (FAQ) here provides a welcome temporary reprieve to employers who otherwise would have been required to notify employees by March 1, 2013.

As part of the impending implementation of ACA’s health care reform, FLSA § 18B generally requires each applicable employer provide each employee a written notice (Exchange Notice) in accordance with regulations promulgated by the Secretary of Labor:

Informing the employee of the existence of Exchanges including a description of the services provided by the Exchanges, and the way the employee may contact Exchanges to request assistance;
If the employer plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs, that the employee may be eligible for a premium tax credit under section 36B of the Internal Revenue Code (the Code) if the employee purchases a qualified health plan through an Exchange; and
If the employee purchases a qualified health plan through an Exchange, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes. The Department of Labor expects that the timing for distribution of notices will be the late summer or fall of 2013, which will coordinate with the open enrollment period for Exchanges.

Before the Department’s announcement in the FAQ, the deadline for employers to begin giving employees Exchange Notices was the later of March 1, 2013 or at the time of hiring. The FAQ extends this deadline until a date to be set by the Department in future guidance, which the Department expects will require employers to distribute the notices in the late summer or fall of 2013 to coordinate with the open enrollment period for Exchanges.

According to the announcement of the delay, the Department delayed the impending March 1, 2013 deadline to give the (Exchange Notice) to better coordinate with related Health and Human Service and Internal Revenue Service efforts and to allow more time to comply and to distribute the Exchange Notices to employees at a meaningful time.

In addition to providing added time to provide the Exchange Notice, the Department also has announced that it is considering providing model, generic language that employers could use to provide the Exchange Notice. to satisfy the notice requirement. As a compliance alternative, the Department also is considering allowing employers to meet the Exchange Notice requirement by providing employees with information using the employer coverage template as discussed in the preamble to the Proposed Rule on Medicaid, Children’s Health Insurance Programs, and Exchanges: Essential Health Benefits in Alternative Benefit Plans, Eligibility Notices, Fair Hearing and Appeal Processes for Medicaid and Exchange Eligibility Appeals and Other Provisions Related to Eligibility and Enrollment for Exchanges, Medicaid and CHIP, and Medicaid Premiums and Cost Sharing (78 FR 4594, at 4641), which will be available for download at the Exchange web site as part of the streamlined application that will be used by the Exchange, Medicaid, and CHIP.

The Exchange Notice is just one of a multitude of notices and other mandates that ACA requires that employers or their health plans, insurers, or both to meet. Although the Exchange Notice gives employers a little more time to provide the Exchange Notices, employer and other health plan sponsors, fiduciaries, administrators and insurers are urged to continue to diligently move forward to update their plans, communications, processes and other arrangements to comply with existing and impending ACA mandates while keeping a watchful eye on for additional guidance that may require additional tailoring of these arrangements.

Stay tuned for updates about future guidance on complying with the notice requirement under FLSA section 18B and other developments.

For Help With Compliance, Risk Management, Investigations, Policy Updates Or Other Needs

About Solutions Law Press, Inc.™

Comments Off on Employer Deadline To Give ACA Notice of Exchange Coverage Options Delayed | Corporate Compliance, Employers, GINA, Health Plans, HIPAA, Human Resources, Insurance, Internal Controls, Internal Investigations, Privacy, Risk Management, Whistleblower | Tagged: Backpay, Employer, Employment, employment law, Fair Labor Standards Act, FSLA, IT, Labor Department, Minimum Wage, Technology, Wage & Hour, wage and hour, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

Hear Stamer Speak On “Coping With Health Care Reform Now” At 2/14 Dallas ICEBS Meeting

January 23, 2013

Cynthia Marcotte Stamer will share key information and practical strategies for “Coping with Health Care Reform Now” at the Dallas Chaper ICEBS Valentines Day luncheon meeting on February 14, 2012. The meeting is scheduled from 11:30 a.m. to 1:30 p.m on February 14, 2012 at Haggar Clothing Company at 11511 Luna Road, Dallas, Texas . Interested persons may register or get other details at http://www.dfwiscebs.org.

With the initial debate about the Constitutionality of the Patient Protection & Affordable Care Act (ACA) decided and making a Congressional reprieve highly improbable, employer and other health plan sponsors, insurers, fiduciaries and administrators are scrambling to update plan documents, communications, processes and procedures to meet current ACA and other health plan rules, while bracing to cope with the sweeping health care reforms slated to take effect in 2014. These already daunting tasks are made more challenging by the continuing uncertainty of the constantly evolving regulations, evolving marketplace, increases in health plan costs and ever-shrinking corporate budgets.

To help health plan sponsors, fiduciaries, administrators and insurers deal with the tough business of implementation, attorney Cynthia Marcotte Stamer will discuss practical strategies, legal updates and other information needed for to cope with health care reform now and to prepare to meet future health plan regulations and challenges including:

The Latest On Key ACA & Other Health Care Reform Regulations Such As ACA’s Requirements On Fees Employers Sponsoring Self-Insured Health Plans & Insurers Must Pay To Fund The Patient-Centered Outcomes Research Institute, Contraceptive and Other Preventive Services, Nondiscrimination, Essential Health Benefits, Internal Claims and Appeals and External Review, Medical Loss Ratios, Large Employer Automatic Enrollment, Summary of Benefits & Coverage, Culturally & Linguistically Appropriateness, Value-Based Insurance Design, Wellness Programs, Exchanges, the Employer Pay-Or-Plan Mandates, Wellness Reporting, Wellness Programs, W-2 Reporting of Employer Provided Health Coverage, Employer Plan Minimum Value & The Premium Tax Credit And Other ACA & Other Federal Health Plan Mandates;
Key Changes To HIPAA Privacy Regulations & What Health Plans & Employers Should Expect To Be Required To Do To Comply With These Changes By the September, 2013 Deadline;
What’s Happened, Happening & Likely To Happen With Exchanges;
A 12-Step Practical Process For Helping Employers Managing ACA & Other Health Plan Compliance Responsibilities & Risks; and
Tips On What To Watch For And Options For Maintaining Flexibility To Respond To Evolving Rules; and
Answer Common Questions That Health Plan Sponsors and Administrators Are Struggling With Submitted By Audience Members

Registrants are encouraged to help shape the program to reflect their questions and concerns by e-mailing their proposed questions prior to the program to cstamer@solutionslawyer.net. The program’s educational* discussion will be tailored taking into account this input with significant time set aside to share practical information and possible approaches for addressing questions and concerns of shared concern identified from this audience input.

About Ms. Stamer

A Fellow in the American College of Employee Benefits Counsel, the American Bar Association & the State Bar of Texas, recognized in International Who’s Who, and Board Certified in Labor & Employment Law, Cynthia Marcotte Stamer is nationally and internationally recognized for her extensive and highly practical, solutions-oriented health plan work, advocacy, publications, programs and leadership.

For more than 25 years, Ms. Stamer has advised and represented 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, governments and others on health and other employee benefit, employment, insurance and health care compliance, risk management, public policy, administration and defense. Throughout her career, Ms. Stamer has worked extensively with employer and other health plan sponsors, insurers, plan administrators and other service providers, outsourcers and others to develop innovative health benefit programs and solutions and to document, administer and defend those arrangements in the mist of rising costs, evolving regulations and changing markets.

A primary drafter of the Bolivian Social Security privatization law with extensive regulatory and public policy experience, Ms. Stamer has been involved domestically and internationally as an advocate and advisor on health care, pension and Social Security, workforce and insurance reform and regulation. She presently serves as the scribe for the ABA JCEB Annual Agency Meeting with the Office of Civil Rights. She also represents 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.

Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and the ABA RPTE Employee Benefits Group, Ms. Stamer presently serves as Co-Chair of the ABA RPTE Section Welfare Plan Committee; Vice Chair of the ABA TIPS Employee Benefit Committee; as a Council Representative of the ABA Joint Committee on Employee Benefits; an Editorial Advisory Board Member for the Institute of Human Resources (IHR/HR.com), Employee Benefit News and Insurance Thought Leadership; Editor and Publisher of various Solutions Law Press, Inc. publications, and previously served on the Editorial Advisor Board of the the BNA Employee Benefits CD-Rolm.

A popular and prolific author and speaker, Ms. Stamer’s Solutions Law Press, Inc. HR & Benefits Update publication was recognized as one of the Top 50 Human Resources Blogs To Watch in 2012. 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.

* Registrants are reminded that this discussion is provided for general information and educational purposes. Accordingly, registrants are reminded that the discussion does not constitute legal advice, a substitute for legal advice or establish an attorney-client or other professional relationship.

About Solutions Law Press, Inc.™

Comments Off on Hear Stamer Speak On “Coping With Health Care Reform Now” At 2/14 Dallas ICEBS Meeting | Corporate Compliance, Employers, GINA, Health Plans, HIPAA, Human Resources, Insurance, Internal Controls, Internal Investigations, Privacy, Risk Management, Whistleblower | Tagged: Backpay, Employer, Employment, employment law, Fair Labor Standards Act, FSLA, IT, Labor Department, Minimum Wage, Technology, Wage & Hour, wage and hour, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

BNSF OSHA Whistleblower Settlement Gives Employers Insights About Policies OSHA View As Prohibited

January 18, 2013

Review and update your policies and be careful how you handle employee reports of injury or safety concerns. That’s the message of the settlement recently announced with BNSF Railway Co. of Fort Worth, Texas (BNSF). BNSF has signed a settlement with the Occupational Safety and Health Administration (OSHA) to voluntarily revise several personnel policies that OSHA alleged violated the whistleblower provisions of the Federal Railroad Safety Act. The law protects railroad workers from retaliation for, among other acts, reporting suspected violations of federal laws and regulations related to railroad safety and security, hazardous safety or security conditions, and injuries.

The whistleblower provisions of the 22 statutes enforced by OSHA protect employees who report violations of various commercial motor vehicle, airline, nuclear, pipeline, environmental, railroad, public transportation, maritime, consumer product, health care reform, securities, food safety, and consumer financial reform laws and regulations.OSHA charged that BNSF Policies of assigning points to workers reporting safety violations or injuries and other practices deterred or penalized workers protected by the whistleblower provisions of the law.

The major terms of the BNSF settlement available at http://www.whistleblowers.gov/acts/bnsf_accord.html include:

Changing BNSF’s disciplinary policy so that injuries no longer play a role in determining the length of an employee’s probation following a record suspension for a serious rule violation. As of Aug. 31, 2012, BNSF has reduced the probations of 136 employees who were serving longer probations because they had been injured on-the-job.
Eliminating a policy that assigned points to employees who sustained on-the-job injuries.
Revising a program that required increased safety counseling and prescribed operations testing so that work-related injuries will no longer be the basis for enrolling employees in the program. As part of the negotiations leading up to the accord, BNSF removed from the program approximately 400 workers.
Instituting a higher level review by BNSF’s upper management and legal department for cases in which an employee who reports an on-duty personal injury is also assessed discipline related to the incident giving rise to the injury.
Implementing a training program for BNSF’s managers and labor relations and human resources professionals to educate them about their responsibilities under the FRSA. The training will be incorporated into BNSF’s annual supervisor certification program.
Making settlement offers in 36 cases to employees who filed whistleblower complaints with OSHA alleging they were harmed by one or more of the company’s previous policies.

Between August 2007, when OSHA was assigned responsibility for whistleblower complaints under FRSA, and September 2012, OSHA received 1,206 FRSA whistleblower complaints. The number of FRSA whistleblower complaints that OSHA currently receives surpasses the number of whistleblower complaints that OSHA receives under any of the other 21 whistleblower protection statutes it enforces except for Section 11(c) of the Occupational Safety and Health Act of 1970. More than 60 percent of the FRSA complaints filed with OSHA involve an allegation that a railroad worker has been retaliated against for reporting an on-the-job injury.

“Protecting America’s railroad workers who report on-the-job injuries from retaliation is an essential element in OSHA’s mission. This accord makes significant progress toward ensuring that BNSF employees who report injuries do not suffer any adverse consequences for doing so,” said Assistant Secretary of Labor for Occupational Safety and Health Dr. David Michaels. “It also sets the tone for other railroad employers throughout the U.S. to take steps to ensure that their workers are not harassed, intimidated or terminated, in whole or part, for reporting workplace injuries.”

“Ensuring that employees can report injuries or illnesses without fear of retaliation is crucial to protecting worker safety and health,” said Michaels. “If employees do not feel free to report injuries or illnesses, the employer’s entire workforce is put at risk because employers do not learn of and correct dangerous conditions that have resulted in injuries.” Read the News Release.

For Help With Investigations, Policy Updates Or Other Needs

About Solutions Law Press, Inc.™

New OCR HIPAA De-Identification Guidance Among Developments Covered In 12/12 HIPAA Update

Comments Off on BNSF OSHA Whistleblower Settlement Gives Employers Insights About Policies OSHA View As Prohibited | Corporate Compliance, Employers, Human Resources, Internal Controls, Internal Investigations, Risk Management, Wage & Hour | Tagged: Backpay, Employer, Employment, employment law, Fair Labor Standards Act, FSLA, IT, Labor Department, Minimum Wage, OSHA, Safety, Technology, Wage & Hour, wage and hour, Whistleblower, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

OCR Publishes Long-Anticipated Omnibus Restatement of HIPAA Privacy, Security, Breach Notification & Enforcement Rules

January 17, 2013

Health plans, their employer or other sponsors, insurers, fiduciaries, administrative service providers and other business associates have a lot of work to do.

Health plans, health care clearinghouses and their business associates will need to review and update their policies and practices for handling and disclosing personally identifiable health care information (“PHI”) in response to the omnibus restatement of the Department of Health & Human Services (“HHS”) Office of Civil Rights (“OCR”) of its of its regulations (the “2013 Regulations”) implementing the Privacy and Security Rules under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The Rulemaking announced January 17, 2013 may be viewed here.

The 2013 Regulations Overview

Since 2003, HIPAA generally has required that health care providers, health plans, health care clearinghouses and their business associates (“Covered Entities”) restrict and safeguard individually identifiable health care information (“PHI”) of individuals and afford other protections to individuals that are the subject of that information. The 2013 Regulations published today complete the implementation of changes to HIPAA that Congress enacted when it passed the Health Information Technology for Economic and Clinical Health (HITECH) Act in 2009 as well as make other changes to the prior regulations that OCR found desirable based on its experience administering and enforcing the law over the past decade.

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

Among other things, the 2013 Regulations:

Revise OCR’s HIPAA regulations to reflect the HITECH Act’s amendment of HIPAA to add the contractors and subcontractors of health plans, health care providers and health care clearinghouses that qualify as business associates to the parties directly responsible for complying with and subject to HIPAA’s civil and criminal penalties for violating HIPAA’s Privacy, Security, and Breach Notification rules;
Update previous interim regulations implementing HITECH Act breach notification rules that require Covered Entities including business associates to give specific notifications to individuals whose PHI is breached, HHS and in some cases, the media when a breach of unsecured information happens;
Update interim enforcement guidance OCR previously published to implement increased penalties and other changes to HIPAA’s civil and criminal sanctions enacted by the HITECH Act;
Implement HITECH Act amendments to HIPAA that tighten the conditions under which Covered Entities are allowed to use or disclose PHI for marketing and fundraising purposes and prohibit Covered Entities from selling an individual’s health information without getting the individual’s authorization in the manner required by the 2013 Regulations;
Update OCR’s rules about the individual rights that HIPAA requires that Covered Entities to afford to individuals who are the subject of PHI used or possessed by a Covered Entity to reflect tightened requirements enacted by the HITECH Act that allow individuals to order their health care provider not to share information about their treatment with health plans when the individual pays cash for the care and to clarify that individuals can require Covered Entities to provide electronic PHI in electronic form;
Revise the regulations to reflect amendments to HIPAA made as part of the Genetic Information Nondiscrimination Act of 2008 (GINA) which added genetic information to the definition of PHI protected under the HIPAA Privacy Rule and prohibits health plans from using or disclosing genetic information for underwriting purposes; and
Clarifies and revises other provisions to reflect other interpretations and information guidance that OCR has issued since HIPAA was passed and to make certain other changes that OCR found appropriate based on its experience administering and enforcing the rules.

Liability & Enforcement Risks Heighten Need To Act To Review & Update Policies & Practices

The restated rules in the 2013 Regulations make it imperative that Covered Entities review the revised rules carefully and updated their policies, practices, business associate agreements, training and documentation to comply with the updated requirements and other enforcement and liability risks. OCR even prior to the regulations has aggressively investigated and enforced the HIPAA requirements.

The commitment of OCR to enforcement most recently was demonstrated by its recent settlement with Hospice of North Idaho (HONI). On January 2, 2013, OCR announced HONI will pay OCR $50,000 to settle potential HIPAA violations that occurred in connection with the theft of an unencrypted laptop computer containing ePHI. The HONI settlement is the first settlement involving a breach of ePHI affecting fewer than 500 individuals.

While the HONI settlement marks the first settlement on a small breach, this is not the first time OCR has sought sanctions against a covered entity for data breaches involving the loss or theft of unencrypted data on a Laptop, storage device or other computer device. Rather, OCR continues to rollout a growing list of enforcement actions demonstrating the potential risks of HIPAA violations are significant and growing. OCR Hits Alaska Medicaid For $1.7M+ For HIPAA Security Breach; OCR Audit Program Kickoff Further Heats HIPAA Privacy Risks; $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; Providence To Pay $100000 & Implement Other Safeguards.

Coupled with statements by OCR about its intolerance, the HONI and other settlements provide a strong warning to covered entities of the need to carefully and appropriately manage their HIPAA encryption and other Privacy and Security responsibilities. Covered entities are urged to heed these warning by strengthening their HIPAA compliance and adopting other suitable safeguards to minimize HIPAA exposures.

In response to the 2013 Regulations and these expanding exposures, all Covered Entities should review critically and carefully the adequacy of their current HIPAA Privacy and Security compliance policies, monitoring, training, breach notification and other practices taking into consideration OCR’s investigation and enforcement actions, emerging litigation and other enforcement data; their own and reports of other security and privacy breaches and near misses; and other developments to decide if additional steps are necessary or advisable. In response to these expanding exposures, all covered entities and their business associates should review critically and carefully the adequacy of their current HIPAA Privacy and Security compliance policies, monitoring, training, breach notification and other practices taking into consideration OCR’s investigation and enforcement actions, emerging litigation and other enforcement data; their own and reports of other security and privacy breaches and near misses, and other developments to decide if tightening their policies, practices, documentation or training is necessary or advisable.

For Help With Compliance, Risk Management, Investigations, Policy Updates Or Other Needs

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

About Solutions Law Press, Inc.™

Comments Off on OCR Publishes Long-Anticipated Omnibus Restatement of HIPAA Privacy, Security, Breach Notification & Enforcement Rules | Corporate Compliance, Employers, GINA, Health Plans, HIPAA, Human Resources, Insurance, Internal Controls, Internal Investigations, Privacy, Risk Management, Whistleblower | Tagged: Backpay, Employer, Employment, employment law, Fair Labor Standards Act, FSLA, IT, Labor Department, Minimum Wage, Technology, Wage & Hour, wage and hour, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

OCR Gives HIPAA Guidance On Safety Disclosures

January 17, 2013

Tbe Office of Civil Rights (OCR) has issued a letter to health care providers to ensure that they are aware of their ability under the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule to take action, consistent with their ethical standards or other legal obligations, to disclose necessary information about a patient to law enforcement, family members of the patient, or other persons, when they believe the patient presents a serious danger to himself or other people. For more information, see: http://www.hhs.gov/ocr/office/lettertonationhcp.pdf. The Guidance is released on the same day that OCR released its long-awaited omnibus restatement of its HIPAA regulations.

HIPAAFor Help With Compliance, Risk Management, Investigations, Policy Updates Or Other Needs

A Fellow in the American College of Employee Benefit Counsel, State Bar of Texas and American Bar Association, Vice President of the North Texas Health Care Compliance Professionals Association, the Former Chair of the ABA RPTE Employee Benefit & Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice Chair of the ABA TIPS Employee Benefit Committee, an ABA Joint Committee on Employee Benefits Council Representative, 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 serves 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 on HIPAA and other data privacy and security concerns 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 third year will serve in 2013 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, SHRM, HIMMS, the American Bar Association, the Health Care Compliance Association, a multitude of health plan, insurance and financial services, education, employer employee benefit and other clients, trade and professional associations and others. You can get more information about her HIPAA and other experience here.

About Solutions Law Press, Inc.™

Comments Off on OCR Gives HIPAA Guidance On Safety Disclosures | Data Security, GINA, Health Plans, Insurance | Tagged: HIPAA | Permalink
Posted by Cynthia Marcotte Stamer

IRS Offers New Simplified Option For Businesses Claiming Home Office Deductions For Home-Based Business Owners & Workers

January 16, 2013

IRS Says Eligible Home-Based Businesses May Deduct up to $1,500; Saves Taxpayers 1.6 Million Hours A Year

The Internal Revenue Service (IRS) has announced a simplified option that many owners of home-based businesses and some home-based workers may use to figure their deductions for the business use of their homes.

In tax year 2010, the most recent year for which figures are available, nearly 3.4 million taxpayers claimed deductions for business use of a home (commonly referred to as the home office deduction).

The new optional deduction, capped at $1,500 per year based on $5 a square foot for up to 300 square feet, will reduce the paperwork and recordkeeping burden on small businesses by an estimated 1.6 million hours annually.

“This is a common-sense rule to provide taxpayers an easier way to calculate and claim the home office deduction,” said Acting IRS Commissioner Steven T. Miller. “The IRS continues to look for similar ways to combat complexity and encourages people to look at this option as they consider tax planning in 2013.”

The new option provides eligible taxpayers an easier path to claiming the home office deduction. Currently, the IRS generally requires a home-based business to fill out a 43-line form (Form 8829) often with complex calculations of allocated expenses, depreciation and carryovers of unused deductions. Taxpayers claiming the optional deduction will complete a significantly simplified form.

Though homeowners using the new option cannot depreciate the portion of their home used in a trade or business, they can claim allowable mortgage interest, real estate taxes and casualty losses on the home as itemized deductions on Schedule A. These deductions need not be allocated between personal and business use, as is required under the regular method.

Business expenses unrelated to the home, such as advertising, supplies and wages paid to employees are still fully deductible.

Current restrictions on the home office deduction, such as the requirement that a home office must be used regularly and exclusively for business and the limit tied to the income derived from the particular business, still apply under the new option.

The new simplified option is available starting with the 2013 return most taxpayers file early in 2014. Further details on the new option can be found in Revenue Procedure 2013-13, posted on IRS.gov. Revenue Procedure 2013-13 is effective for taxable years beginning on or after January 1, 2013, and the IRS welcomes public comment on this new option to improve it for tax year 2014 and later years. There are three ways to submit comments.

E-mail to: Notice.Comments@irscounsel.treas.gov. Include “Rev. Proc. 2013-13” in the subject line.
Mail to: Internal Revenue Service, CC:PA:LPD:PR (Rev. Proc. 2013-13), Room 5203, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044.
Hand deliver to: CC:PA:LPD:PR (Rev. Proc. 2013-13), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue NW, Washington, DC, between 8 a.m. and 4 p.m., Monday through Friday.

The deadline for comment is April 15, 2013.

For Help With Compliance, Risk Management, Investigations, Policy Updates Or Other Needs

If you need help with these or other health benefit or other human resources, employee benefit, insurance, compensation or other compliance, risk management, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, a member of the Editorial Advisory Board and expert panels of HR.com, Employee Benefit News, InsuranceThoughtLeadership.com, and Solutions Law Press, Inc., management attorney and consultant Ms. Stamer has 25 years of leading edge experience helping employers; health and other employee benefit plans and their sponsors, administrators, fiduciaries; TPAs, insurers, governments, 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 representing advising these and other clients, governmental bodies, insurance and financial services organizations, third party administrators and others to develop, design, defend and administer creative health, disability, severance and other employee benefit and compensation arrangements, products and services. She also helps these and other clients monitor, address and respond to federal, state, and international health care and insurance and other regulatory, legislative, audit and enforcement developments. Ms. Stamer has worked, extensively on these and other workforce and performance related matters. In addition to her continuous day-to-day involvement helping businesses to manage employment and employee benefit plan concerns, she also has extensive public policy and regulatory experience with these and other matters domestically and internationally. A former member of the Executive Committee of the Texas Association of Business and past Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, Ms. Stamer served as a primary advisor to the Government of Bolivia on its pension privatization law, and has been intimately involved in federal, state, and international workforce, health care, pension and social security, tax, education, immigration, education and other legislative and regulatory reform in the US and abroad. 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 get access to other publications by Ms. Stamer see here or contact Ms. Stamer directly. Ms. Stamer regularly works with agencies, publishes and speaks extensively on human resources and employee benefits, 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 on HIPAA and other data privacy and security concerns 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. You can get more information about her HIPAA and other experience here.

If you need help with these or other compliance concerns, wish to ask 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.

About Solutions Law Press, Inc.™

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 assists 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 explore 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. 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.

Comments Off on IRS Offers New Simplified Option For Businesses Claiming Home Office Deductions For Home-Based Business Owners & Workers | Corporate Compliance, Employers, GINA, Health Plans, HIPAA, Human Resources, Insurance, Internal Controls, Internal Investigations, Privacy, Risk Management, Whistleblower | Tagged: Backpay, Employer, Employment, employment law, Fair Labor Standards Act, FSLA, IT, Labor Department, Minimum Wage, Technology, Wage & Hour, wage and hour, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

IRS Announces Cost of Living & American Taxpayer Relief Act Income Tax Adjustments

January 16, 2013

Revenue Procedure 2013-15 provides the 2013 cost-of-living adjustments for inflation for certain items. The guidance includes adjustments to the tax tables, including items whose values were specified in the American Taxpayer Relief Act of 2012 (ATRA), such as:

The beginning of the 39.6% income tax brackets;
The beginning income levels for the limitation on certain itemized deductions; and
The beginning income levels for the phaseout of the personal exemptions[

In addition Revenue Procedure 2013-5 modifies Revenue Procedure 2011-52 to reflect an amendment to section 132(f)(2) made by ATRA concerning qualified transportation fringe benefits. Specifically, for 2012, the monthly limitation regarding the aggregate fringe benefit exclusion amount for transit passes and transportation in a commuter highway vehicle is $240.

Revenue Procedure 2013-15 will be published in Internal Revenue Bulletin 2013-5 on January 28, 2013.

For Help With Compliance, Risk Management, Investigations, Policy Updates Or Other Needs

About Solutions Law Press, Inc.™

About Solutions Law Press, Inc.™

Comments Off on IRS Announces Cost of Living & American Taxpayer Relief Act Income Tax Adjustments | Corporate Compliance, Employers, GINA, Health Plans, HIPAA, Human Resources, Insurance, Internal Controls, Internal Investigations, Privacy, Risk Management, Whistleblower | Tagged: Backpay, Employer, Employment, employment law, Fair Labor Standards Act, FSLA, IT, Labor Department, Minimum Wage, Technology, Wage & Hour, wage and hour, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

Tax-Related ID Theft Growing Problem For IRS, Taxpayers

January 14, 2013

Employers and others collecting, retaining or reporting employee or other tax identification numbers or other sensitive information for tax withholding or reporting purposes should take appropriate steps to protect that information against possible identity theft or other misuse.

The wealth of sensitive personal identification information and financial records makes tax records a highly attractive source of data for identity thieves. According to the Internal Revenue Service (IRS), tax-related identity theft incidents have risen significantly in recent years. Identity theft case receipts increased by more than 650 percent from FY 2008 to FY 2012. At the end of FY 2012, the IRS had almost 650,000 identity-theft cases in its inventory servicewide. The IRS reports the problem has grown worse as organized criminal actors have found ways to steal the Social Security numbers (SSNs) of taxpayers, file tax returns using those taxpayers’ names and SSNs, and obtain fraudulent tax refunds. Then, when the real taxpayer files a return claiming the refund, that return is rejected. The impact on victims is significant. More than 75 percent of taxpayers filing returns are due refunds, which average some $3,000 and are not paid until the IRS fully resolves a case.

When the IRS Commissioner testified in 2008 about identity theft before a Senate Finance Committee hearing. he stated: “My overall goal as the IRS Commissioner is that when a taxpayer [who is an identity theft victim] contacts us with an issue or concern, we have in place a seamless process that gets the issue resolved promptly.” Later that year, the IRS established an “Identity Protection Specialized Unit” (or “IPSU”), which was designed to provide centralized assistance to victims of identity theft. The National Taxpayer Advocate supported the commitment to centralized and prompt victim assistance.

Since that time, the IRS has created numerous task forces and other teams in recent years in an attempt to improve its identity theft processes, yet victims still face the same “labyrinth of procedures and drawn-out timeframes for resolution” that they faced five years ago. The IRS is instructing its employees to advise identity theft victims that it will take 180 days – half a year – to resolve their cases. Complicated cases inevitably will take longer. Thus, the IRS’s procedural changes are not providing faster relief.

The report also says the IRS has decided to reverse course and decentralize victim assistance. It recently created specialized units within each of 21 individual functions to work on identity theft cases, apparently under the belief that most identity theft cases involve a single issue that the relevant specialized unit can work most efficiently. The report expresses concern about this backtracking from a centralized approach.

The Taxpayer Advocate Service (TAS) itself handled nearly 55,000 identity theft cases in FY 2012, most of which involved multiple issues that required actions by multiple units. The report expresses concern that creation of 21 specialized units will erode the centralized role of the IPSU, require taxpayers to speak with multiple functions, increase the time it takes to resolve cases, and heighten the risk that some issues may not be addressed.

“Taxpayers need ‘one-stop shopping’ – a single point of contact they can work with to resolve all issues in their cases – and the IRS needs a ‘traffic cop’ to make sure that all units complete their actions and that parts of cases do not fall through the cracks,” Olson said. “And six months is an unacceptable period of time to expect taxpayer-victims to wait. The IRS must do more to provide the prompt and seamless assistance to identity theft victims that Commissioner Shulman promised.”

While the IRS continues to work on protecting taxpayer data against theft and investigating and resolving tax-related identity theft cases, businesses that collect, retain and report employee, contractor or other personal financial information for tax related or other purposes are urged to take steps to protect the data that they collect and retain against identity theft. Since identity theft may begin when a worker misrepresents his or her identity at the commencement of employment, many employers find it beneficial to take reasonable steps to verify the identity and veracity of the documentation that a worker presents when commencing employment. Once data is collected, businesses and others that have access to personal financial information or other data collected for tax purposes need to recognize their responsibility to safeguard that information against improper use and disclosure under the Internal Revenue Code as well as other applicable laws. If confronted with a “no-match” letter from the Social Security Administration or a complaint or other indication that a worker may have misrepresented his or her identity, or another indication of a breach of this data, businesses should contact experienced legal counsel to aid in the proper investigation of these concerns and the resolution of concerns resulting from this investigation. Where appropriate, the business may need to report its concerns to the IRS or advise a worker or other party reporting a likely identity theft of taxpayer information to the TAS or other appropriate officials.

Businesses needing assistance with investigation or mitigation of a potential theft of tax or other sensitive data, see www.cynthiastamer.com or contact attorney Cynthia Marcotte Stamer.

For Help With Compliance, Risk Management, Investigations, Policy Updates Or Other Needs

About Solutions Law Press, Inc.™

About Solutions Law Press, Inc.™

Comments Off on Tax-Related ID Theft Growing Problem For IRS, Taxpayers | Corporate Compliance, Employers, GINA, Health Plans, HIPAA, Human Resources, Insurance, Internal Controls, Internal Investigations, Privacy, Risk Management, Whistleblower | Tagged: Backpay, Employer, Employment, employment law, Fair Labor Standards Act, FSLA, IT, Labor Department, Minimum Wage, Technology, Wage & Hour, wage and hour, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

Tax Saver’s Credit Helps Low & Moderate Income Workers Save For Retirement; Possible Tool To Help Boost Their Participation In Employer Plans

January 11, 2013

As part of its continuing effort to boost retirement savings among Americans, the Internal Revenue Service is reminding low- and moderate-income workers to take steps now to save for retirement and earn a special tax credit in 2012 and the years ahead. Employers sponsoring retirement plans where low participation by low- and moderate income workers adversely impacts the ability of the plan to meet applicable nondiscrimination tests may want to consider incorporating information about the availability of the saver’s credit into their plan related communications as an added tool for helping these workers recognize the potential benefits of contributing.

The saver’s credit helps qualifying low to moderate income workers offset part of the first $2,000 workers voluntarily contribute to IRAs and to 401(k) plans and similar workplace retirement programs. Also known as the retirement savings contributions credit, the saver’s credit is available in addition to any other tax savings that apply.

The saver’s credit can be claimed by:

Married couples filing jointly with incomes up to $57,500 in 2012 or $59,000 in 2013;
Heads of Household with incomes up to $43,125 in 2012 or $44,250 in 2013; and
Married individuals filing separately and singles with incomes up to $28,750 in 2012 or $29,500 in 2013.

Eligible workers still have until April 15, 2013 to make qualifying retirement contributions and get the saver’s credit on their 2012 tax return by setting up a new individual retirement arrangement or adding money to an existing IRA. However, elective deferrals (contributions) must be made by the end of the year to a 401(k) plan or similar workplace program, such as a 403(b) plan for employees of public schools and certain tax-exempt organizations, a governmental 457 plan for state or local government employees, and the Thrift Savings Plan for federal employees. Employees who are unable to set aside money for this year may want to schedule their 2013 contributions soon so their employer can begin withholding them in January.

Like other tax credits, the saver’s credit can increase a taxpayer’s refund or reduce the tax owed. Though the maximum saver’s credit is $1,000, $2,000 for married couples, the IRS cautioned that it is often much less and, due in part to the impact of other deductions and credits, may, in fact, be zero for some taxpayers.

A taxpayer’s credit amount is based on his or her filing status, adjusted gross income, tax liability and amount contributed to qualifying retirement programs. Form 8880 is used to claim the saver’s credit, and its instructions have details on figuring the credit correctly.

In tax-year 2010, the most recent year for which complete figures are available, saver’s credits totaling just over $1 billion were claimed on more than 6.1 million individual income tax returns. Saver’s credits claimed on these returns averaged $204 for joint filers, $165 for heads of household and $122 for single filers.

The saver’s credit supplements other tax benefits available to people who set money aside for retirement. For example, most workers may deduct their contributions to a traditional IRA. Though Roth IRA contributions are not deductible, qualifying withdrawals, usually after retirement, are tax-free. Normally, contributions to 401(k) and similar workplace plans are not taxed until withdrawn.

Other special rules that apply to the saver’s credit include the following:

Eligible taxpayers must be at least 18 years of age.
Anyone claimed as a dependent on someone else’s return cannot take the credit.
A student cannot take the credit. A person enrolled as a full-time student during any part of 5 calendar months during the year is considered a student.

Certain retirement plan distributions reduce the contribution amount used to figure the credit. For 2012, this rule applies to distributions received after 2009 and before the due date, including extensions, of the 2012 return. Form 8880 and its instructions have details on making this computation.

Begun in 2002 as a temporary provision, the saver’s credit was made a permanent part of the tax code in legislation enacted in 2006. To help preserve the value of the credit, income limits are now adjusted annually to keep pace with inflation. More information about the credit is on IRS.gov.

For Help or More Information

About Solutions Law Press, Inc.™

About Solutions Law Press, Inc.™

1 Comment | Corporate Compliance, Employers, GINA, Human Resources, Insurance, Internal Controls, Internal Investigations, Privacy, Retirement Plans, Risk Management, Whistleblower | Tagged: Backpay, Employer, Employment, employment law, Fair Labor Standards Act, FSLA, IT, Labor Department, Minimum Wage, Technology, Wage & Hour, wage and hour, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

Self-Insured Health Plan Sponsors, Health Insurers Brace To Pay New ACA-Imposed Fees

January 10, 2013

Employers and other self-insured group health plan sponsors and health insurers, adjust your budgets and prepare to open up your wallets to pay additional fees mandated by the Patient Protection and Affordable Care Act (“PPACA”).

Self-insured employers and health insurers generally must begin paying a new fee imposed as part of PPACA. PPACA generally requires that health insurance policy issuers and plan sponsors of self-insured health plans pay the new fee for policy and plan years ending on or after October 1, 2012, and before October 1, 2019 or policy and plan years ending on or after October 1, 2012, and before October 1, 2019. July 31, 2013 is the deadline for reporting and payment of the first fee payment required by these provisions.

The Internal Revenue Service (IRS) and Department of Treasury published final regulations (“Regulations”) implementing these new rules on December 6, 2012. These Regulations include many provisions that are likely to come as a surprise to many employer and other health plan sponsors. Health insurers, employers and other sponsors of self-insured health plans and others responsible for their funding and administration need to review these regulations and make other arrangements to budget for and timely report and pay this required fee.

New Fees Help Fund New Patient-Centered Outcomes Research Institute

PPACA amended the Internal Revenue Code (“Code”) to require the new fee to help fund the establishment and operation of the new Patient-Centered Outcomes Research Institute (the ‘‘Institute’’) to be created by PPACA. Congress intends that the Institute will be a private, nonprofit corporation charged with conducting research to help assist patients, clinicians, purchasers, and policy-makers in making informed health decisions by advancing the quality and relevance of evidence-based medicine through the synthesis and dissemination of comparative clinical effectiveness research findings.

PPACA added new Sections 4375, 4376, and 4377 to the Code to provide a funding source for the Trust Fund. These new Code Sections impose require issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans to pay the new fee by July 31, 2012 for each plan year beginning after September 30, 2012 and before October 1, 2019 to fund the Patient-Centered Outcomes Research Trust Fund (the “Trust Fund”), which in turn will help pay the costs of the Institute.

Code Section 4377(c) provides that the fees imposed by sections 4375 and 4376 are treated as taxes for purposes of subtitle F of the Code (sections 6001 through 7874 that set forth the rules of federal tax procedure and administration).

Fee Amount Calculation & Payment

As amended by PPACA, the Code requires that employers sponsoring self-insured group health plans and most health insurers file a return and pay a fee equal to $1 multiplied by the average number of lives covered under the plan or policy by July 31, 2012. The amount of this fee will increase to $2 multiplied by the average number of lives for post-September 30, 2013 plan years. For post-September 30, 2014 plan years, the Code provides for further adjustments in the fee based on increases in the projected per capita amount of National Health Expenditures.

To meet this requirement, health insurers and plan sponsors must file a Form 720, Quarterly Federal Excise Tax Return along with the required payment once a year on or before July 31 of the calendar year following the last day of the policy year or plan year for which the fee is required to report and pay the fee.

Overview of ACA Rules Requiring Payment of Fee

The Code now separately assesses a fee on issuers of health insurance policies and on plan sponsors of self-insured health plans for each policy year ending on or after October 1, 2012 and before October 1, 2019. Code Section 4375 requires payment of a fee by “issuers” of “specified health insurance policies.” Code Section 4376 requires “sponsors” of self-insured health plans to pay a fee.

Each of these Code Sections basically uses the same formula to calculate the required fee owing by a health insurance issuer or a self-insured plan sponsor. The amount of the required fee due on July 31, 2013 for plan years beginning on or before October 1, 2013 will be one dollar multiplied by the average number of lives covered by the policy or plan. The fee due on July 31, 2014 for plan years beginning between October 2, 2013 and October 1, 2014 is set to increase to two dollars multiplied by the average number of lives covered under the policy. For policy or plan years ending on or after October 1, 2014, PPACA provides for additional increases in the required fee based on increases in the projected per capita amount of National Health Expenditures. See Treas. Reg. §§ 46.4375–1; Rejecting arguments that Congress only intended to require that either the insurer or the plan sponsor pay a fee annually, the Regulations construe these requirements as obligating both a self-insured health plans sponsor and an insurer to pay a separate fee annually, even if the fee is assessed upon the same lives.

The Preamble to the Regulations states that a self-insured plan sponsor must pay the fee with respect to arrangements where the plan design layers a self-insured portion of the plan with an insured portion, even though the insurer also must pay the fee with respect to the insured portion.

The fee calculation differs slightly for purposes of determining the fee a self-insured plan sponsor owes versus the fee owed by an insurer. Regardless, however, the Regulations state that for purposes of calculating these numbers, retirees and beneficiaries continuing coverage under the group medical coverage continuation rules generally count. The Preamble to the Regulations states that the IRS views retiree-only plans and COBRA coverage subject to the tax imposed under Code § 4375 and plan sponsors may be required to pay the tax under Code § 4376. Concerning retiree-only coverage, the Preamble states:

Although group health plans that have fewer than two participants who are current employees (such as retiree-only plans) are excluded from the requirements of Code chapter 100 (setting forth requirements applicable to group health plans such as portability, nondiscrimination, and market reform requirements), this exclusion does not apply to Code §§ 4375 and 4376 because these sections are in chapter 34; and
For self-insured arrangements, Code § 4376(c)(2)(A) states explicitly that an applicable self-insured health plan includes a plan established or maintained by one or more employers for the benefit of their employees or former employees.

Section 4376 Fee For Self-Insured Plan Sponsors

Applicability of Code Section 4376 Fee To Self-Insured Health Plans. The fee under Code Section 4376 applies to the plan sponsor of an applicable self-insured health plan.

Section 4376(c) defines an applicable self-insured health plan as any plan for providing accident or health coverage if any portion of the coverage is provided other than through an insurance policy, and the plan is established or maintained by either:

One or more employers for the benefit of their employees or former employees;
One or more employee organizations for the benefit of their members or former members;
Jointly by one or more employers and one or more employee organizations for the benefit of employees or former employees;
By a voluntary employees’ beneficiary association described in Code Section 501(c)(9); or
By any organization described in section 501(c)(6), or (6) if not previously described, by a multiple employer welfare arrangement (as defined in section 3(40) of the Employee Retirement Income Security Act (“ERISA”), a rural electric cooperative under ERISA Section 3(40)(B)(iv), or a rural telephone cooperative association under ERISA Section 3(40)(B)(v). See Code § 4376; Regulation §46.4376–1(a), (b)(1).

Code Section 4376(b)(1) requires that the plan sponsor of a self-insured health plan pay the required fee for self-insured health plans imposed by Section 4376(a). For this purpose, Code Section 4376(b)(2) defines a plan sponsor as:

The employer in the case of a plan established or maintained by a single employer;
The employee organization in the case of a plan established or maintained by an employee organization;
The association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the plan in the case of: (1) a plan established or maintained by two or more employers or jointly by one or more employers and one or more employee organizations; (2) a multiple employer welfare arrangement; or (3) a voluntary employees’ beneficiary association described in Code Section 501(c)(9); or
The cooperative or association that establishes the plan in the case of a plan established or maintained by a rural electric cooperative or rural telephone cooperative association within the meaning of ERISA.

Regulation § 46.4376-2(b)(2) defines plan sponsor to mean the following:

The employer for a self-insured health plan established or maintained by a single employer;
The employee organization for a self-insured health plan established or maintained by an employee organization;
The joint board of trustees for a multiemployer plan within the meaning of Code §414(f));
The committee, in the case of a multiple employer welfare arrangement within the meaning of Section 3(40) of the Employee Retirement Income Security Act (“ERISA”);
The cooperative or association that establishes or maintains an applicable self-insured health plan established or maintained by a rural electric cooperative under ERISA § 3(40)(B)(iv) or rural cooperative association under ERISA 3(40)(B)(v);
The trustee, in the case of an applicable self-insured health plan established or maintained by a voluntary employees’ beneficiary association under Code § 501(c)(9) not merely serving as a funding vehicle for a plan that is established or maintained by an employer or other person;
In the case of an applicable self-insured health plan the plan sponsor of which is not previously described, the person identified by the terms of the document under which the plan is operated as the plan sponsor, or the person designated by the terms of the document under which the plan is operated as the plan sponsor for Code § 4376 purposes, provided that designation is made in writing, and that person has consented to the designation in writing, by no later than the date by which the return paying the fee under section 4376 for that plan year is required to be filed, after which date that designation for that plan year may not be changed or revoked, and provided further that a person may be designated as the plan sponsor only if the person is one of the persons establishing or maintaining the plan (for example, one of the employers that establishes or maintains the plan with one or more other employers or employee organizations); or
Where an applicable self-insured health plan sponsor is not previously and for which no identification or designation of a plan sponsor has been made under the prior paragraph the plan sponsor means, each employer that establishes or maintains the plan with respect to employees of that employer, each employee organization that establishes or maintains the plan with respect to members of that employee organization, and each board of trustees, cooperative, or association that establishes or maintains the plan.

While the fee will impact most health insurance policies and self-insured plans, the Code does exempt a few arrangements. See Code § 4376. Regulation § 46.4376-1(b)(2) construes these exemptions to include the following categories of programs:

A plan that provides benefits substantially all of which are excepted benefits for purposes of the HIPAA Portability Rules under Code § 9832(c). Pursuant to this provision, for instance, the Regulations state that a health flexible spending arrangement (health FSA) under Code § 106(c)(2)) that satisfies the requirements to be treated as an excepted benefit under Code § 9832(c) and Regulation § 54.9831–1(c)(3)(v) is not an applicable self-insured health plan. However, a health FSA that is not treated as an excepted benefit under Code § 9832(c) and Regulation § 54.9831–1(c)(3)(v) is an applicable self-insured health plan.
An employee assistance program, disease management program, or wellness program if the program does not provide significant benefits in the nature of medical care or treatment.
A plan that, as demonstrated by the facts and circumstances surrounding the adoption and operation of the plan, was designed specifically to cover primarily employees who are working and residing outside the United States (as defined in § 46.4377–1(a)(3)). See Regulation § 46.4376–1(b)(ii).

Where the same plan sponsor maintains multiple self-insured arrangements Regulation § 46.4376(b)(iii) specifies that the employer may treat two or more arrangements established or maintained by the same plan sponsor that provide accident and health coverage other than through an insurance policy and that have the same plan year as a single applicable self-insured health plan for purposes of reporting and calculating the Code § 4376 fee.

Calculation Of Self-Insured Plan Fee Under Code § 4376

Regulation § 46.4376-1 requires that a self-insured plan sponsor determine the number of covered lives for purposes of calculating the fee using on of the following methods:

The actual count method where the plan sponsor adds the totals of lives covered for each day of the plan year and divides that total by the number of days in the plan year;
The snapshot method, the plan sponsor adds the totals of lives covered on a date during the first, second, or third month of each quarter of the plan year (or more dates in each quarter if an equal number of dates is used in each quarter), and divides that total by the number of dates on which a count was made in accordance with rules set forth in the Regulations. For instance, Each date used for the second, third and fourth quarter must be within three days of the date in that quarter that corresponds to the date used for the first quarter, and all dates used must fall within the same plan year. If a plan sponsor uses multiple dates for the first quarter, the plan sponsor must use dates in the second, third, and fourth quarters that correspond to each of the dates used for the first quarter or are within three days of such corresponding dates, and all dates used must fall within the same plan year. The 30th and 31st day of a month are treated as the last day of the month for purposes of determining the corresponding date for any month that has fewer than 31 days. The number of lives covered on a designated date using this method may be determined using either the snapshot factor method or the snapshot count method set forth in the Regulations. In the snapshot factor method, the number of lives covered on a date is equal to the sum of: (1) the number of participants with self-only coverage on that date; plus (2) the number of participants with coverage other than self-only coverage on the date multiplied by 2.35. In the snapshot count method, the number of lives covered on a date equals the actual number of lives covered on the designated date. The plan sponsor must use the same method of calculating the average number of lives covered under the plan consistently for the duration of the plan year. However, a plan sponsor may use a different method from one plan year to the next.
The Form 5500 method, where the plan sponsor determines the average number of lives covered under a plan for a plan year as the result of the sum of the total participants covered at the beginning and the end of the plan year, as reported on the Form 5500 or Form 5500–SF for the applicable self-insured health plan, divided by 2. This method is only available if the Form 5500 is filed by the due date for payment of the fee. This means where a plan administrator extends filing beyond July 31, the plan sponsor cannot use this method.

The Regulations establish a special rule for lives covered solely by the fully-insured options under an applicable self-insured health plan. Under this special rule, when an applicable self-insured health plan provides accident and health coverage through fully insured options and self-insured options, the plan sponsor is permitted to disregard the lives that are covered solely under the fully-insured options in determining the lives covered taken into account for the actual count method, the snapshot method, and the Form 5500 method.

As for insured plans, the Regulations also provide special rules for determining the fee the first year the fee is in effect. Under this rule, for a plan year beginning before July 11, 2012, and ending on or after October 1, 2012, a plan sponsor may determine the average number of lives covered under the plan for the plan year using any reasonable method.

Section 4375 Fee For Insurers

The fee under Code Section 4375 generally applies to issuers of a “specified health insurance policy.” Code Section 4375(c) generally defines a specified health insurance policy as any accident or health insurance policy (including a policy under a group health plan) issued with respect to individuals residing in the United States. Code Section 4377(a)(1) defines accident and health coverage as any coverage that, if provided by an insurance policy, would cause the policy to be a specified health insurance policy under Code Section 4375. See Treas. Reg. § 46.4375–1.

Policies Subject To Fee. Regulation § 46.4377–1(a) defines a “specified health insurance policy” as “any accident and health insurance policy (including a policy under a group health plan) issued with respect to individuals residing in the United States” other than those recognized as exempt by the Regulation. The Regulation makes clear that this includes any policy that provides accident and health coverage to an active employee, former employee, or qualifying beneficiary, as continuation coverage required under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) or similar continuation coverage under other Federal law or state law.

However Regulation § 46.4377-1(a)(ii) exempts the following arrangements from the definition of a specified health insurance policy.

Any insurance policy if substantially all of its coverage is of excepted benefits described in Code Section 9832(c);
Any group policy issued to an employer where the facts and circumstances show that the group policy was designed and issued specifically to cover primarily employees who are working and residing outside of the United States for purposes of Regulation § 46.4377–1(a)(3);
Any stop loss or indemnity reinsurance policy; or
Any insurance policy to the extent it provides an employee assistance program, disease management program, or wellness program if the program does not provide significant benefits in the nature of medical care or treatment.

Fee Calculation. The amount of the fee an insurer must pay for a policy for a policy year under Code § 4375 is equal to the product of the average number of lives covered under the policy for the policy year, multiplied by the applicable dollar amount for that policy year.

The applicable dollar amount multiplier is $1 for the fee due on October 1, 2013; $2 for the fee due on October 1, 2014, and the adjusted amount for fees due after October 1, 2014.

Determination Of The Average Number Of Lives Covered. To determine the average number of lives covered under a specified health insurance policy during a policy year, the Regulation requires an issuer to use one of the following methods:

The actual count method, where the issuer determines the average number of lives covered under a policy for a policy year under the actual count method by adding the total number of lives covered for each day of the policy year and dividing that total by the number of days in the policy year;
The snapshot method, where the issuer determines the average number of lives covered under a policy for a policy year by adding the totals of lives covered on a date during the first, second, or third month of each quarter (or more dates in each quarter if an equal number of dates is used for each quarter), and dividing that total by the number of dates on which a count is made. Each date used for the second, third and fourth quarters must be within three days of the date in that quarter that corresponds to the date used for the first quarter, and all dates used must be within the same policy year. If an issuer uses multiple dates for the first quarter, the issuer must use dates in the second, third, and fourth quarters that correspond to each of the dates used for the first quarter or are within three days of such corresponding dates, and all dates used must be within the same policy year. The 30th and 31st day of a month are treated as the last day of the month for purposes of determining the corresponding date for any month that has fewer than 31 days (for example, if either March 30 or March 31 is used as a counting date for a calendar year policy, June 30 is the corresponding date for the second quarter);
The member months method, where the issuer determines the average number of lives covered under all policies in effect for a calendar year based on the member months (an amount that equals the sum of the totals of lives covered on prespecified days in each month of the reporting period) reported on the National Association of Insurance Commissioners (“NAIC”) Supplemental Health Care Exhibit filed for that calendar year. Under this method, the average number of lives covered under the policies in effect for the calendar year equals the member months divided by 12; or
The state form method, where an insurer not required to file NAIC annual financial statements may determine the number of lives covered under all policies in effect for the calendar year using a form filed with the issuer’s state of domicile and a method similar to the member months method if the form reports the number of lives covered in the same manner as member months are reported on the NAIC Supplemental Health Care Exhibit. See Regulation § 46.4375–1(c)(2)(i).

Issuers must use the same method of calculating the average number of lives covered under a policy consistently for the duration of the year and must use the same method of computing lives for all policies for which a liability is reported on a Form 720, “Quarterly Federal Excise Tax Return,” for a particular year. Regulation § 46.4375–1(c)(2)(ii). However, the Regulation allows an issuer that determines the average number of lives covered by using the actual count method or the snapshot method to change its method of computing the average lives covered to the snapshot method or actual count method, respectively, provided that the issuer uses the same method for computing the average lives covered for all policies for which a liability is reported on the Form 720 for that year. Regulation § 46.4375–1(c)(2).

The Regulations also impose various other special rules. For instance, the Regulations state that if the issuer elects to determine the average number of lives covered for all policies in effect during a calendar year using the member months method or the state form method, the applicable dollar amount with respect to such issuer’s policies for such calendar year is the applicable dollar amount for policy years ending on December 31 of such calendar year, except that the applicable dollar amount with respect to such an issuer’s policies for calendar year 2019 is the applicable dollar amount for policy years ending on September 30, 2019. The Regulations provide various examples of these calculations to illustrate the rules.

The Regulations also provide special rules for the first year and the last year the fee is in effect for an insurer. See Regulation § § 46.4375–1(c).

Plans, Insurers Should Evaluate Options, Plan To Pay Required Fees

The impending obligation provides yet another reason that employers and other self-insured plan sponsors, administrators, insurers, and vendors should re-evaluate their existing health plan designs and costs. Most health insurers and self-insured health plan sponsors will want not only to budget for the impending additional costs associated with these fees, but also evaluate options for mitigating their impact, as well as the costs and administrative burden of tracking and making the required filings. For instance, insurers and plan sponsors of programs subject to these new fees generally will want to evaluate which of the options for collecting the data and calculating the fees will most benefit them. Also, where plan designs used by particular employer or other plan sponsors include both insured and self-insured features, the insurer, plan sponsor and their advisors may want to consider the advisability of restructuring or redesigning plans to mitigate fees or administrative or other expenses. In all cases, parties should audit their programs to ensure that each program and its element is identified and properly taken into account to avoid inadvertent oversights resulting in penalties or other avoidable costs.

For Help With Compliance, Risk Management, Investigations, Policy Updates Or Other Needs

About Solutions Law Press, Inc.™

About Solutions Law Press, Inc.™

Comments Off on Self-Insured Health Plan Sponsors, Health Insurers Brace To Pay New ACA-Imposed Fees | Corporate Compliance, Employers, GINA, Health Plans, HIPAA, Human Resources, Insurance, Internal Controls, Internal Investigations, Privacy, Risk Management, Whistleblower | Tagged: Backpay, Employer, Employment, employment law, Fair Labor Standards Act, FSLA, IT, Labor Department, Minimum Wage, Technology, Wage & Hour, wage and hour, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

1st OCR Small HIPAA Breach Settlement Shows Plans, Other Covered Entities At Risk From Small Breach Reports Too

January 3, 2013

$50K Settlement Shows Small Breach Reports Carry Enforcement Risk

Properly encrypt and protected electronic protected health information (ePHI) on laptops and in other mediums! That’s the clear message of the Department of Health and Human Services (HHS) Office of Civil Rights (OCR) in its announcement of its first settlement under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Security Rule involving a breach of ePHI of fewer than 500 individuals by a HIPAA-covered entity, Hospice of North Idaho (HONI).

In announcing the settlement against HONI, OCR sent a clear message that OCR stands ready to penalize these health care providers, health plans, healthcare clearinghouses and their businesses associates (covered entities) when their failure to properly secure and protect ePHI on laptops or in other systems results in a breach of ePHI even when the breach affects fewer than 500 individuals.

OCR Director Leon Rodriguez reiterated OCR’s expectation that covered entities will properly encrypt ePHI on mobile or other devices in OCR’s announcement of the HONI settlement. “This action sends a strong message to the health care industry that, regardless of size, covered entities must take action and will be held accountable for safeguarding their patients’ health information.” said OCR Director Leon Rodriguez. “Encryption is an easy method for making lost information unusable, unreadable and undecipherable.”

In light of this latest clear warning, health plans and their fiduciaries, sponsors and administrators, health care providers, health care clearinghouses and their business associates should review plans, practices and data security as affecting ePHI and other protected health information on mobile and other devices.

HONI Settlement For Small Breach Notification

On January 2, 2013, OCR announced HONI will pay OCR $50,000 to settle potential HIPAA violations that occurred in connection with the theft of an unencrypted laptop computer containing ePHI. The HONI settlement is the first settlement involving a breach of ePHI affecting fewer than 500 individuals. Read the full HONI Resolution Agreement here.

OCR opened an investigation after HONI reported to HHS that an unencrypted laptop computer containing ePHI of 441 patients had been stolen in June 2010. HONI team members regularly use Laptops containing ePHI their field work. Over the course of the investigation, OCR discovered that HONI had not conducted a risk analysis to safeguard ePHI or have in place policies or procedures to address mobile device security as required by the HIPAA Security Rule. Since the June 2010 theft, HONI has taken extensive additional steps to improve their HIPAA Privacy and Security compliance program.

HIPAA Security & Breach Notification For ePHI

The HONI settlement is notable because it marks the first time OCR has sanctioned a covered entity as a result of an OCR investigation stemming from the covered entity’s report of a breach of unsecured protected health information involving fewer than 500 individuals under new breach notification rules added to HIPAA in 2009.

Under the originally enacted requirements of HIPAA, covered entities and their business associates are required to restrict the use, access and disclosure of protected health information and establish and administer various other policies and safeguards in relation to protected health information. Additionally, the Security Rules require specific encryption and other safeguards when covered entities collect, create, use, access, retain or disclose ePHI.

The Health Information Technology for Economic and Clinical Health (HITECH) Act amended HIPAA, among other things to tighten certain HIPAA requirements, expand its provisions to directly apply to business associates, as well as covered entities and to impose specific breach notification requirements. The HITECH Act 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 (Large Breach) to the Secretary of HHS and the media within 60 days after the discovery of the breach. Smaller breaches affecting less than 500 individuals (Small Breach) must be reported to the Secretary on an annual basis. Since the Breach Notification Rule took effect, OCR’s announced policy has been to investigate all Large Breaches and such investigations have resulted in settlements or other corrective action in relation to various Large Breaches. Until now, however, OCR has not made public any resolution agreements requiring settlement payments involving any Small Breaches.

Enforcement Actions Highlight Growing HIPAA Exposures For Covered Entities

While the HONI settlement marks the first settlement on a small breach, this is not the first time OCR has sought sanctions against a covered entity for data breaches involving the loss or theft of unencrypted data on a Laptop, storage device or other computer device. In fact, OCR’s first resolution agreement – reached before Congress added the HIPAA Breach Notification Rules to HIPAA – stemmed from such a breach. Providence To Pay $100000 & Implement Other Safeguards. Breaches resulting from the loss or theft of unencrypted ePHI on mobile or other computer devices or systems has been a common basis of investigation and sanctions since that time, particularly since the Breach Notification rules took effect including breaches of ePHI involving compromised health plan information. See, e.g., OCR Hits Alaska Medicaid For $1.7M+ For HIPAA Security Breach. Coupled with statements by OCR about its intolerance, the HONI and other settlements provide a strong warning to covered entities to properly encrypt ePHI on mobile and other devices.

Furthermore, the HONI settlement also adds to growing 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 encryption and other Privacy and Security responsibilities. See OCR Audit Program Kickoff Further Heats HIPAA Privacy Risks; $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 decide if additional steps are necessary or advisable.

New OCR HIPAA Mobile Device Educational Tool

While OCR enforcement of HIPAA has significantly increased, compliance and enforcement of the encryption and other Security Rule requirements of HIPAA are a special focus of OCR.

To further promote compliance with the Breach Notification Rule as it relates to ePHI on mobile devices, OCR and the HHS Office of the National Coordinator for Health Information Technology (ONC) recently kicked off a new educational initiative, Mobile Devices: Know the RISKS. Take the STEPS. PROTECT and SECURE Health Information. The program offers health care providers and organizations practical tips on ways to protect their patients’ health information when using mobile devices such as laptops, tablets, and smartphones. For more information, see here. For more information on HIPAA compliance and risk management tips, see here.

For Help With Compliance, Risk Management, Investigations, Policy Updates Or Other Needs

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

About Solutions Law Press, Inc.™

About Solutions Law Press, Inc.™

1 Comment | Corporate Compliance, Employers, GINA, Health Plans, HIPAA, Human Resources, Insurance, Internal Controls, Internal Investigations, Privacy, Risk Management, Whistleblower | Tagged: Backpay, Employer, Employment, employment law, Fair Labor Standards Act, FSLA, IT, Labor Department, Minimum Wage, Technology, Wage & Hour, wage and hour, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

Labor Department Targeting Businesses Violating Overtime, Other Wage & Hour Laws

December 27, 2012

Employers should make reviewing and tightening their worker classification and pay practices a high priority in light of the continuing aggressive investigation and enforcement of minimum wage, overtime and other federal pay law violations by the U.S. Department of Labor (Labor Department) Wage and Hour Division (W&HD).

Latest Enforcement Shows Commitment

FLSA Violations Generally Costly; Enforcement Rising

Employers Should Strengthen Practices For Defensibility

Audit of each position current classified as exempt to assess its continued sustainability and to develop documentation justifying that characterization;
Audit characterization of workers obtained from staffing, employee leasing, independent contractor and other arrangements and implement contractual and other oversight arrangements to minimize risks that these relationships could create if workers are recharacterized as employed by the employer receiving these services;
Review the characterization of on-call and other time demands placed on employees to confirm that all compensable time is properly identified, tracked, documented, compensated and reported;
Review existing practices for tracking compensable hours and paying non-exempt employees for compliance with applicable regulations and to identify opportunities to minimize costs and liabilities arising out of the regulatory mandates;
If the audit raises questions about the appropriateness of the classification of an employee as exempt, self-initiate proper corrective action after consultation with qualified legal counsel;
Review existing documentation and record keeping practices for hourly employees;
Explore available options and alternatives for calculating required wage payments to non-exempt employees;
Consider advisability of tracking hours and activities of employees considered exempt;
Evaluate and manage risks of outsourced labor such as leased, contract or other similar “off-payroll” workers;
Re-engineerwork rules and other practices to minimize costs and liabilities as appropriate in light of the regulations and enforcement exposures; and
Consider and properly coordinate worker classification for health and other employee benefit plan eligibility and other purposes to mitigate risks from unanticipated employee benefit liabilities resulting from misclassification.

For Help With Investigations, Policy Updates Or Other Needs

About Solutions Law Press, Inc.™

1 Comment | Corporate Compliance, Employers, Human Resources, Internal Controls, Internal Investigations, Risk Management, Wage & Hour | Tagged: Backpay, Employer, Employment, employment law, Fair Labor Standards Act, FSLA, IT, Labor Department, Minimum Wage, Technology, Wage & Hour, wage and hour, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

Company President, Officer Can’t Use Bankruptcy To Avoid Liability For Using Plan Money For Company Operations

December 27, 2012

John Dombek III and John Dombek Jr. cannot use personal bankruptcy to avoid complying with a federal court order to restore $69,521 in health-care premiums and retirement plan contributions withheld from the paychecks of employees at several companies that are part of the JJD Industries in violation of the Employee Retirement Income Security Act (ERISA). The recent judgement against the two men in Solis v. John Dombek Jr., John Dombek III, Wisconsin Tool & Stamping Co. 401(k) Profit Sharing Plan & Trust, J.D. Acquisition 401(k) Profit Sharing Plan and Trust, and the JJD Industries Group Health Plan is a reminder to business owners, management and others with discretionary control over employee contributions or other plan assets of the importance of ensuring that all employee contributions withheld from pay and other plan assets are used only for appropriate plan expenses and timely deposited in trust or otherwise appropriately applied. Businesses owners and managers should treat these and other similar judgmentsas 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.

Company Leaders Ordered To Restore Misdirected Monies

A Chicago federal court ordered the two men to make restitution of $69,521 of employee contributions withheld from employee pay that the court ruled the Dombeks mismanaged by failing to ensure the timely deposit of these funds with the plans. See

Dombek III, who is president of the JJD Industries Group, and Dombek Jr. were co-fiduciaries of the Wisconsin Tool & Stamping Co. 401(k) plan and have been ordered to restore $22,164.45 in unremitted contributions and lost opportunity costs to the plan. Dombek III is also liable for an additional $2,222.78 in unremitted contributions and lost opportunity costs to the J.D. Acquisition 401(k) plan.

Dombek III must also restore $45,134.08 in unremitted contributions and lost opportunity costs to the JJD Industries sponsored group health plan. The company contracted with Blue Cross and Blue Shield of Illinois to provide health and dental benefits to the employees of its related companies, including Wisconsin Tool & Stamping Co., J.D. Acquisition Corp., Akorat Metal Fabricators Inc./Smithco Fabricators Inc. and Pavo Inc./Injection Plastics Corp. The companies paid their premiums separately, and premiums were partially funded through weekly employee payroll deductions.

The judgment also bars Dombek Jr. and Dombek III from serving as fiduciaries or service providers to any employee benefit plan subject to ERISA for a period of five years. An independent fiduciary will oversee the termination of the 401(k) plans of both Wisconsin Tool & Stamping and J.D. Acquisition, as well as the distribution of plan assets to eligible participants.

The Dombeks will not be able to claim bankruptcy protection to avoid liability for the judgments. Dombek Jr. and Dombek III both previously had filed for Chapter 7 bankruptcy protection. The Labor Department filed separate complaints to determine the dischargeability of these obligations and seek the enforcement of any monetary judgment against both individuals to restore the funds to the employee benefit programs. On October 5 and October 16, 2012, the U.S. Bankruptcy Court for the Northern District of Illinois granted the Labor Department’s motions for default judgment, finding that the debts Dombek Jr. and Dombek III owed to the plans were not dischargeable in bankruptcy.

Business Leaders Risk Personal Liability When Employee Contributions Used In Company Operations

The judgement is another reminder to business owners and leaders not to allow employee contributions or other plan assets to be used to pay company expenses or otherwise misdirected. The judgment is one many enforcement actions that the Department of Labor regularly takes against businesses and business leaders that allow plan assets to be used for company operations or other improper purposes.

“Failing to administer health insurance premiums properly demonstrates a total lack of concern for employees and their families,” said Steve Haugen, director of the Chicago Regional Office of the Labor Department’s Employee Benefit Security Administration. “Incorporating employees’ voluntary salary contributions into the general assets of a company and failing to forward them to the retirement plan are violations of both the law and the trust workers have placed in their employers.”

The judgement shows 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 to 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 registerto 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

1 Comment | Employee Benefits, Employers, ERISA, Fiduciary Responsibility, Health Plans, Mental Health, Mental Health Parity, Retirement Plans, Tax | Tagged: Bankruptcy, ERISA, fee disclosure, Fiduciary, plan investiments, prohibited traansaction, Prudence | Permalink
Posted by Cynthia Marcotte Stamer

Peter Madoff 10 Sentence For Defrauding ERISA Plans Reminder Manage Plan Investment Responsibilities

December 27, 2012

Peter Madoff (Madoff), the former Chief Compliance Officer and Senior Managing Director of Bernard L. Madoff Investment Securities LLC (BLMI), was sentenced on December 20, 2012 to 10 years in prison after he pled guilty among other things, to conspiracy to commit securities fraud, tax fraud, mail fraud, ERISA fraud and falsifying records of an investment adviser.

In addition to the prison term, Madoff also was sentenced to one year of supervised release, ordered to pay a $200 special assessment, and ordered to forfeit $143.1 billion, including all of his real and personal property. This amount represents all of the investor funds paid into BLMIS from 1996 – the start of Madoff’s involvement in the conspiracy – through December 2008.

As part of the defendant’s forfeiture, the Government previously entered into a settlement with Madoff’s family that requires the forfeiture of all of his wife Marion’s and daughter Shana’s assets, and assets belonging to other family members. The surrendered assets include, among other things, several homes, a Ferrari and more than $10 million in cash and securities. Marion Madoff was left with approximately $771,733 to live on for the rest of her life.

Madoff’s Sentence Part of Continuing Actions Seeking To Rectify BLMIS Fraud

Among other things, the Superseding Information against Madoff charged that the overt acts in the conspiracy count also included, among other things, making false statements to investors about BLMIS’s compliance program and the nature and scope of its Investment Advisory business. Madoff pled guilty in June 2012. He was sentenced in Manhattan federal court by U.S. District Judge Laura Taylor Swain.

Manhattan U.S. Attorney Preet Bharara said: “Peter Madoff was a gatekeeper, who was supposed to guard against fraud, but instead enabled it – facilitating his brother Bernie’s breathtaking scheme by falsifying compliance records and lying to both regulators and clients of BLMIS. The decade he will spend in prison and the disgorgement of his assets are a just result. Our efforts to hold to account anyone and everyone who played a role in this unprecedented Ponzi scheme continue.”

According to the Superseding Information to which Madoff pled guilty and other court filings:

Madoff was employed at BLMIS from 1965 through December 2008. Beginning in 1969, he became the Chief Compliance Officer (“CCO”) and Senior Managing Director of BLMIS. In his role as CCO, Madoff created false and misleading BLMIS compliance documents, as well as false reports that were filed with the U.S. Securities and Exchange Commission (“SEC”) that materially misstated the nature and scope of BLMIS’s Investment Advisory (“IA”) business.
As CCO, Madoff created numerous false compliance documents in which he stated that he had performed compliance reviews of the trading in the BLMIS IA business on a regular basis, when in reality, the reviews were never performed. The false statements were designed to mislead regulators, auditors, and IA clients.
In August 2006, BLMIS registered as an investment adviser with the SEC. As a registered investment adviser, on at least an annual basis, BLMIS was required to file forms with the SEC that are used as part of the oversight process of investment advisers. Madoff was integrally involved with both the SEC registration process and in the creation of the forms, known as “Forms ADV,” which were materially false and misleading. The numerous false statements in the Forms ADV created the false appearance that BLMIS’s IA business had a small number of highly sophisticated clients and far fewer assets under management than was actually the case. Madoff also misrepresented that he, as CCO, ensured that reviews of the IA trading were being performed.
From 1998 through 2008, Madoff engaged in a tax fraud scheme involving the transfer of wealth within the Madoff family in ways that allowed him to avoid paying millions of dollars in required taxes to the IRS. Most, if not all of the “wealth,” came directly or indirectly from IA client funds held at BLMIS. The schemes in which he engaged also allowed Bernard L. Madoff to evade his tax obligations.
The methods by which Madoff engaged in tax fraud included the following:
Madoff also arranged for his wife to have a “no-show” job at BLMIS from which she received between approximately $100,000 to $160,000 per year in salary, a 401(k), and health benefits to which she was not entitled.
In December 2008, when the collapse of BLMIS was virtually certain, Madoff agreed with others to send the $300 million that remained in the IA accounts to preferred employees, family members and friends. BLMIS collapsed before the funds were ever disbursed. On December 10, 2008, one day prior to BLMIS’s collapse, Madoff also withdrew $200,000 from BLMIS for his personal use.
Madoff received approximately $15,700,000 from Bernard L. Madoff and his wife, and executed sham promissory notes to make it appear that the transfers were loans, in order to avoid paying taxes;
Madoff gave approximately $9,900,000 to family members, and in order to avoid paying taxes, executed sham promissory notes to make it appear that the transfers of these funds were loans;
Madoff did not pay taxes on approximately $7,750,000 that he received from BLMIS;
Madoff received approximately $16,800,000 from Bernard L. Madoff from two sham trades, and disguised the proceeds of the trades as long-term stock transactions in order to take advantage of the lower tax rate for long-term capital gains;
Madoff charged approximately $175,000 in personal expenses to a corporate American Express card and did not report those expenses as income.

Madoff Victim Compensation Process Continues

In addition to the sentencing of Madoff, the Government has taken steps to clear the way to begin distributing assets forfeited by Peter Madoff in connection with the victim compensation process by filing a motion requesting that the Court find restitution to be impracticable, A similar motion was granted by United States Circuit Judge Denny Chin, who as a United States District Judge sentenced Bernard L. Madoff in 2009. The Department of Justice intends to return the assets forfeited as a result of the Madoff fraud to victims through the remission process.

Richard C. Breeden was retained to serve as Special Master on behalf of the Department of Justice to administer the process of compensating the victims of the Madoff fraud with the forfeited funds. A former chairman of the SEC, Mr. Breeden is Chairman of Richard C. Breeden & Co., which has been involved in (among other things) the administration and distribution of securities fraud claims since 1996. Among other things, Mr. Breeden has served as Corporate Monitor of WorldCom, Inc. and KPMG under its deferred prosecution agreement with the U.S. Attorney’s Office. Mr. Breeden also served as remission special master in connection with the fraud committed through Adelphia Communications Corporation. In April 2012, more than $728 million forfeited in connection with this Office’s investigation and prosecution of the Adelphia fraud was distributed to approximately 8,500 victims, the largest single distribution of forfeited assets to victims in Department of Justice history.

Now that a new Special Master has been retained, and given the pledge of SIPC Trustee Irving Picard and his counsel to lend their support and resources to the new Special Master for the benefit of the fraud victims, we expect the victim claims process to begin shortly. It is anticipated that victims who filed claims in the SIPA proceeding will not have to refile their claims to be eligible for remission. New information about the remission Special Master, and information about the victim claims process, will be posted on the Office’s Madoff website at http://www.justice.gov/usao/nys/vw_cases/madoff.html as soon as it becomes available, along with a link to a dedicated website Mr. Breeden’s firm will establish in connection with the remission proceedings.

Investment Advisors and Others With Discretion Over Funds Should Exercise Fiduciary Care

While the Madorf scandle represents an exceptionally large and long-standing stream of mishandling of employee benefit funds, the investigations and prosecutions also serve as a reminder of the need to carefully comply with the fiduciary responsibility and other requirements of ERISA and other laws to investment advisors and other employee benefit plan asset service providers, plan committees and fiduciaries and the plan sponsors, boards and other individuals responsible for investing or handling employee benefit monies or choosing the parties that possess and exercise that discretion.

ERISA generally requires that plan asset investments be made prudently and for the exclusive benefit of participants and beneficiaries. Service providers or others with discretionary responsibiliity or that are investment managers of plan assets must be prudently selected based on careful credentialing and other procedures. e No prohibited transactions should be permitted. Fees and other compensation must be set appropriately and properly reported in accordance with ERISA’s fee disclosure rules. The actions and performance of parties investing in plan assets and their investment performance must be reviewed and monitored prudently. Proper bonding must be maintained. Concerns and questions about these activities must be timely investigated in a prudent manner. Failure to properly conduct these and other ERISA fiduciary responsibilities can expose responsible parties to personal liability for losses, profits improperly realized, a fiduciary administrative penalties, disqualification to serve in plan fiduciary or other positions, and attorneys fees and other costs of recovery, as well as in certain cases like the Madorff fraud, criminal prosecution.

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 to monitor or respond to evolving laws and regulations, drafting or administering programs, resolving or defending audits, investigations or disputes or other employee benefit, human resources, safety, compliance or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

About Ms. 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 see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to 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 including:

1 Comment | ADA, Corporate Compliance, EEOC, Employers, GINA, Human Resources, OFCCP, Retaliation | Tagged: defined benefit plan, Employer, ERISA, Fiduciary Responsibility, Human Resources, pension plan, plan qualification, profit sharing plan, Retirement Plans, Tax | Permalink
Posted by Cynthia Marcotte Stamer

IRS Plans To Issue 2013 Withholding Guidance By 12/31

December 26, 2012

With employers facing continuing uncertainty about how Congress will address expiring payroll and other tax provisions, the Internal Revenue Service (IRS) plans to issue guidance before December 31 on employer withholding responsibilities in 2013.

In a statement issued this week, the IRS said, “We are aware that employers have questions about 2013 withholding. Since Congress is still considering changes to the tax law, we continue to closely monitor the situation. We intend to issue guidance by the end of the year on appropriate withholding for 2013.”

For Help or More Information

About Ms. 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.

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 see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to 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 including:

Comments Off on IRS Plans To Issue 2013 Withholding Guidance By 12/31 | ADA, Corporate Compliance, EEOC, Employers, GINA, Human Resources, OFCCP, Retaliation | Tagged: Employers, Employment Tax, payroll tax, Withholding | Permalink
Posted by Cynthia Marcotte Stamer

ESOP, Other Employee Plan Investments In Company Stock Land Plans, Fiduciaries, Sponsors & Others In Hot Water

December 10, 2012

Companies that sponsor employee benefit plans that have purchased or own stock in their sponsor beware. Declines in the stock value of company stock purchased by employee stock ownership plans (ESOP) or other employee benefit plans in their plan sponsor have a growing number of plans and the plan sponsors, sponsoring company owners and management, plan trustees and other plan fiduciaries in hot water with the Department of Labor. ESOP or other employee plans that have purchased or allow investments in company stock and their sponsors, fiduciaries and advisors should carefully review for defensibility the current stock value, the purchase price and analysis supporting that purchase and other aspects of these investments of plan assets and take carefully documented action to prove the prudence and other appropriateness of the investment and continued retention of the investment in these assets.

Company Stock Investments Carry Special ERISA Risks

Purchases of company stock by an ESOP or other employee benefit plan can create a wide range of risks under the fiduciary responsibility rules of the Employee Retirement Income Security Act (ERISA). When making investment or other decisions under an employee benefit plan, the general fiduciary duty standards of ERISA § 404 generally require plan fiduciaries to act prudently and solely in the interest of participants and beneficiaries. Meanwhile, except in certain narrow circumstances and subject to fulfillment of ERISA § 404, the prohibited transaction rules of ERISA § 406 among other things prohibits plan fiduciaries from causing the plan to engage in a transaction, if he knows or should know that such transaction is a direct or indirect:

Sale or exchange, or leasing, of any property between the plan and a party in interest;
Furnishing of goods, services, or facilities between the plan and a party in interest;
Transfer to, or use by or for the benefit of a party in interest, of any assets of the plan; or
Acquisition, on behalf of the plan, of any employer security or employer real property in violation of section 1107 (a) of this title.

Stock Drops Create Rising Exposures For Plans Invested In Company Stock

Amid economic downturns or other situations where the stock value of company held by plans significantly lower than the price the plan paid for the stock, the Labor Department, plaintiffs in private lawsuits or both may bring “stock drop” or other lawsuits against the plan, its sponsor and its officers and board members, its fiduciaries and others for breach of fiduciary duties under these rules. See e.g., Enron v. Tittle, 463 F.3d 410 (5th Cir. 2006); In Re: BP p.l.c. ERISA Litig., No. 4:10-cv-4214 (S.D. Texas); Vivian v. Worldcom (N.D. Cal. 2002). Since the sponsoring company is a party-in-interest of the plan, using plan assets to purchase company stock or other activities resulting in the inclusion of company stock among the plan assets held by the plan creates presumptions of impropriety that impose higher than usual burdens upon the plan, its sponsor and fiduciaries to prove the appropriateness of the transaction. See e.g., Pfeil v. State Street Bank & Trust Co., 671 F.3d 585 (6th Cir. 2012).

The filing of stock drop cases tends to rise and fall in reflection to the economic times. Following the economic downturn in 2002, federal courts saw a surge in stop drop case challenges as well as Labor Department enforcement actions. The number of these cases dropped as the economy improved later in the decade only to rise again between 2010 and the present in response to the current economic crisis.

Tough Economic Times Fueled Stock Drops Creating Rising Risks & Enforcement

The latest economic downturn is fueling resurgence in these “stock drop” challenges. Fifteen stop drop lawsuits were filed during 2010 and 2011. Additional suits and Labor Department stop drop challenges have emerged this year.

In Griffin v. Flagstar Bancorp, Inc., No. 11-1497 (6th Cir. 2012), for instance, plaintiffs alleged various fiduciaries allegedly breached their duties under ERISA by allowing employer stock to be offered as a 401(k) plan investment option while the company was facing a precarious financial situation. The Griffin court overruled the lower court’s dismissal of the plaintiff’s lawsuit. The Court of Appeals held that the defendants offering of company stock to plan participants made ERISA’s “safe harbor” (Section 404(c)) provision for participant self-directed investments inapplicable. The Sixth Circuit ruled “[a]fter reviewing the factual allegations in the complaint – which go far beyond documenting a simple drop in stock price to recite announcements from Flagstar itself, statements by analysts and financial media publications, and actions taken by Flagstar suggesting a precarious financial situation– we must conclude that the complaint raises a plausible claim for breach of fiduciary duty.”

In addition to private class action lawsuits like Griffin, plans holding company stock, their sponsors, owners, management and fiduciaries also need to be ready to defend against investigations and enforcement by the Labor Department, which often zealously investigates and takes enforcement action against plans, their fiduciaries, sponsors, company boards and management and others for losses to plan asset values resulting due to the investment or retention of investments by their plans in company stock. See also Labor Department Backs M&I Employees In Stock-Plan Suit.

Labor Department Suits Show Particular Risks For ESOPs

Over the past year, the Labor Department has been particularly aggressive in taking action when the value of company stock purchased or held by employee stock purchase plans or “ESOPS” drops significantly.

Rembar

For instance, the purchase by the Rembar Inc. Employee Stock Ownership Plan (“Rembar Plan”) of all the stock of its sponsor, Rembar Inc. has landed the trust company that served as the Plan’s independent fiduciary and Rembar Inc.’s owner and Chief Executive Officer in hot water.

The Labor Department is suing Rembar Inc.’s Chief Executive Officer and owner, Frank Firor, First Bankers Trust Services Inc. and the Rembar Plan to recover losses that the Labor Department charges Rembar Plan participants suffered because the Rembar Plan paid too much when it purchased all of the stock of Rembar Inc.

Rembar Inc. manufactures and distributes precision parts made from refractory metals. The Labor Department lawsuit alleges that, in June 2005, First Bankers Trust Services allowed the Rembar Plan to purchase 100 percent of the company’s stock from Firor and Firor’s relatives for $15.5 million. A Labor Department investigation found that First Bankers Trust Services failed to comply with its duty to understand the valuation report that set the purchase price, identify and question assumptions in the report, and verify that the conclusions in the report were consistent with the company’s financial data. As a result of First Bankers Trust Services’ failure to comply with its fiduciary duties, the Labor Department claims the Rembar Plan overpaid for the stock and suffered losses. The suit seeks, among other things, to recover jointly from First Bankers Trust Services and Firor all losses suffered by the Rembar Plan.

Maran

Similarly, the Labor Department also has filed an ERISA stock drop lawsuit against the Maran Inc. Employee Stock Ownership Plan (Maran Plan), First Bankers Trust Services Inc. and others to recover losses suffered by participants.

According to the pleadings, First Bankers Trust Services was hired as an independent fiduciary and trustee in connection with the company’s ESOP to decide whether, and at what price, to purchase shares of Maran Inc. from majority shareholders. The suit charges First Bankers Trust Services violated ERISA in 2006 when it approved the ESOP’s purchase of 49 percent of the outstanding stock of Maran Inc. for about $71 million, which was more than the fair market value. The Labor Department claims that as a result of the purchase of overvalued stock, the Maran Plan participants suffered significant losses. The suit seeks to recover all losses and have First Bankers Trust Services enjoined from serving as a fiduciary to ESOP plans.

Parrot

Likewise, the Labor Department in April sued in the U.S. District Court for the Northern District of California seeking to recover losses suffered by participants in the Parrot Cellular Employee Stock Ownership Plan (Parrot Plan).

The suit names as a defendant Dennis Webb, the principal owner of Entrepreneurial Ventures Inc. (EVI), which operates Parrot Cellular telephone retail stores in northern and central California, and is the sponsor of the Parrot Plan; EVI executives Matthew Fidiam and J. Robert Gallucci; Consulting Fiduciaries Inc., an Illinois company that served as the independent fiduciary and investment manager for the Parrot Plan in 2002 when the Parrot Plan bought 90 percent of EVI stock.

According to the pleadings, the Parrot Plan paid for more than $28 million to buy approximately 90 percent of EVI’s stock in 2002. Around the same time as the stock purchase, EVI also set aside $4 million pursuant to a deferred compensation agreement with Webb and entered into a second executive compensation agreement with Webb for $12 million.

The Labor Department charges defendants allegedly violated ERISA by rejecting their fiduciary duties of loyalty and prudence to the plan, engaging in self-dealing, permitting or engaging in prohibited transactions, and failing to monitor the performance of the plan’s appraiser when they caused or permitted the Parrot Plan to purchase EVI stock for more than fair market value. The suit also charges that Webb enriched himself by millions of dollars at the expense of the plan and its participants because a reasonable value for the company as of November 2002 was far less than the amounts the Parrot Plan paid for the stock and the total deferred compensation agreements entered into with Webb.

In addition to seeking the recovery of all losses to the Parrot Plan resulting from the above violations, the Labor Department’s suit seeks the disgorgement of unjust profits from Webb that he received from the two deferred compensation agreements and from his sale of EVI stock to the Parrot Plan.

Plans, Sponsors and Fiduciaries Must Act Continously To Manage Risks

These and other actions send a stong message for ESOP and other employee benefit plans, their fiduciaries and sponsors about the need to continuously and prudently evaluate and monitor the investment of plan assets in company stock,the analysis and decisions about whether to continue to keep and offer this stock under the plan, as well as the qualifications, credentials and conduct of the fiduciaries and others empowered to influence these decisions. The Labor Department’s statement in announcing the Parrot litigation sums up the messages from these cases. “Plan officials are required by law to manage the ESOP in a careful, prudent manner and to act solely to benefit the plan’s participants,” said Jean Ackerman, director of EBSA’s San Francisco Regional Office, which conducted the investigation. “This action underscores the department’s commitment to protect the benefits that employers promise to their employees.” Plan fiduciaries, sponsors and their management, service providers and consultants participating in these activities need to both act with care and carefully document their actions to position to defend potential challenges.

Plans, their sponsors and fiduciaries also should ensure that appropriate steps are taken in selecting the fiduciaries, management and service providers responsible for administering or overseeing the administration of their plans, the selection of vendors, and other critical details. Appropriate background checks and other credentialing should be done both at commencement and periodically. Bonding and fiduciary liability insurance should be arranged and reviewed periodically along with their activities. Documentation of these and other steps should be carefully created and preserved.

When and if a change in stock value or other event that could compromise the investment occurs, consideration should be given as to the responsibilities that such events create under ERISA. As company leaders often have dual responsibilities to both the company and the plan, it is important that the company sponsoring the plan, its management and owners learn in advance how these responsibilities impact each other so that they are aware of the issues and have a good understanding of responsibilities and options as situations evolve.

For Help or More Information

About Ms. 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 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 see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to 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 including:

Comments Off on ESOP, Other Employee Plan Investments In Company Stock Land Plans, Fiduciaries, Sponsors & Others In Hot Water | ADA, Corporate Compliance, EEOC, Employers, GINA, Human Resources, OFCCP, Retaliation | Tagged: 404, 406, defined benefit plan, Employer, ERISA, exclusive benefit, Fiduciary Responsibility, Human Resources, pension plan, plan qualification, profit sharing plan, Prudence, Retirement Plans, Tax | Permalink
Posted by Cynthia Marcotte Stamer

Confirm Qualified Plans Updated By Reviewing Against 2012 Required Plan Qualification Requirements Change List

December 9, 2012

Qualified plan sponsors, fiduciaries, administrators and advisors and other service providers should review the 2012 Cumulative List of Changes in Plan Qualification Requirements (2012 Cumulative List) in Notice 2012-76 to identify any required or recommended changes to promote continued fulfillment of applicable qualification requirements.

The Internal Revenue Service (IRS) publishes a cumulative list annually to guide plan sponsors and practitioners submitting qualifed plan determination letter applications for plans during the upcoming year. The 2012 Cumulative Listinforms plan sponsors of issues the Service has specifically identified for review in determining whether a plan filing in Cycle C has been properly updated. Specifically, the 2012 Cumulative List reflects law changes under the Pension Protection Act of 2006 (PPA ’06), Pub. L. 109-280; the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery and Iraq Accountability Appropriations Act, 2007, Pub. L. 110-28; the Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART Act), Pub. L. 110-245; the Worker, Retiree, and Employer Recovery Act of 2008 (WRERA), Pub. L. 110-458; the Small Business Jobs Act of 2010 (SBJA), Pub. L. 111-240; the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (PRA 2010), Pub. L. No. 111-192; and the Moving Ahead for Progress in the 21st Century Act (MAP-21), Pub. L. 112-141.

The 2012 Cumulative List sets forth guidance and regulations implementing these requirements and provides certain model amendment language. 2012 Retirement Plan Notices are published here.

The IRS intends that the 2012 Cumulative List will be used by plan sponsors and practitioners submitting determination letter applications for plans during the period beginning February 1, 2013 and ending January 31, 2014. In order to be qualified, a plan must comply with all relevant qualification requirements, not just those on the 2012 Cumulative List including those enacted or effective after publication of the 2012 Cumulative List. The list of changes in the Cumulative List does not extend the deadline for amending a qualified plan to comply with any statutory, regulatory, or guidance changes.

Plans using 2012 Cumulative List will primarily be single employer individually designed defined contribution plans and single employer individually designed defined benefit plans that are in Cycle C, and § 414(d) governmental plans (including governmental multiemployer or governmental multiple employer plans) that choose to file during Cycle C. Generally an individually designed plan is in Cycle C if the last digit of the employer identification number of the plan sponsor is 3 or 8. In addition, the 2012 Cumulative List will be used by sponsors of defined benefit pre-approved plans (that is, defined benefit plans that are master and prototype (M&P) or volume submitter (VS) plans) for the second submission under the remedial amendment cycle described in Rev. Proc. 2007-44.

The IRS issued Notice 2012-76 in conjunction with the determination letter program for individually designed plans eligible for Cycle C. The IRS is scheduled to accept determination letter applications for Cycle C individually designed plans from February 1, 2013 to January 31, 2014. In addition, the Service will start accepting opinion and advisory letter applications for defined benefit pre-approved plans beginning on February 1, 2013. The 12-month submission period for non-mass submitter sponsors and practitioners, word-for-word identical adopters, and M&P minor modifier placeholder applications will end on January 31, 2014. The 9-month submission period for mass submitters will end on October 31, 2013.

For Help or More Information

About Ms. 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 registerto receive future updates about developments on these and other concerns see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to 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 including:

Comments Off on Confirm Qualified Plans Updated By Reviewing Against 2012 Required Plan Qualification Requirements Change List | ADA, Corporate Compliance, EEOC, Employers, GINA, Human Resources, OFCCP, Retaliation | Tagged: defined benefit plan, Employer, Human Resources, pension plan, plan qualification, profit sharing plan, Retirement Plans, Tax | Permalink
Posted by Cynthia Marcotte Stamer

Catch Up On Health Reform & Other Key Employee Benefits & Insurance Issues Emerging Issues and Litigation Relating to Life, Health, Disability and ERISA Symposium In Ft. Lauderdale

December 7, 2012

Cynthia Marcotte Stamer will be one of the featured panelists discussing “Implications of PPACA” on January 18, 2013 at the American Bar Association Tort Trial & Insurance Practice Section’s (TIPS) 39th Annual TIPS Midwinter Symposium on Insurance and Employee Benefits “Emerging Issues and Litigation Relating to Life, Health, Disability and ERISA” in Fort Lauderdale.

The “Implications on PPACA” program scheduled at 3:30 p.m. on January 18, 2012 is one of many content-rich series of programs on employee benefit and insurance issues that leading practitioners will lead during the Symposium W Hotel Fort Lauderdale in Fort Lauderdale, FL on January 17-19, 2013. To register, review the full agenda or get additional information about the Symposium, see here.

About Ms. Stamer

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

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

Author of the hundreds of publications and workshops these and other employment, employee benefits, health care, insurance, workforce and other management matters, Ms. Stamer’s insights on employee benefits, insurance, health care and workforce matters in Atlantic Information Services, The Bureau of National Affairs, HealthLeaders, Modern Healthcare, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other publications. Nationally known for her work on health care reform and related matters, Ms. Stamer also regularly conducts training and speaks on these and other management, compliance and public policy concerns. For more information about Ms. Stamer, upcoming training, publications or other materials or events, see here or contact Ms. Stamer directly via email here or (469) 767-8872.

Comments Off on Catch Up On Health Reform & Other Key Employee Benefits & Insurance Issues Emerging Issues and Litigation Relating to Life, Health, Disability and ERISA Symposium In Ft. Lauderdale | 105(h), Affordable Care Act, CHIP, COBRA, Disability, Disability, Employee Benefits, Employers, Employment Tax, ERISA, Excise Tax, Fiduciary Responsibility, FMLA, Health Care Reform, Health Plans, HIPAA, Human Resources, Income Tax, Insurance, Malpractice, Medicare Part D, Mental Health, Mental Health Parity, Patient Empowerment, Patient Protection and Affordable Care Act, Payroll Tax, Preemption, Prescription Drugs, Protected Health Information, Reporting & Disclosure, Tax Credit, Wellness Programs | Tagged: Affordable Care Act, ERISA, HIPAA | Permalink
Posted by Cynthia Marcotte Stamer

2013 Standard Mileage Rates Announced

December 4, 2012

The Internal Revenue Service (IRS) has released the 2013 Standard Mileage Rates.

Notice 2012-72 has the optional 2013 standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes. It also includes the amount taxpayers must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that may be used in computing the allowance under a fixed and variable rate (FAVR) plan.

Under the Notice the applicable standard mileage rates for 2013 are as follows:

The standard mileage rate for transportation or travel expenses is 56.5 cents per mile for all miles of business use (business standard mileage rate).
The standard mileage rate is 14 cents per mile for use of an automobile in rendering gratuitous services to a charitable organization under § 170.
The standard mileage rate is 24 cents per mile for use of an automobile (1) for medical care described in § 213, or (2) as part of a move for which the expenses are deductible under § 217.

For automobiles a taxpayer uses for business purposes, the Notice sets the portion of the business standard mileage rate treated as depreciation as 23 cents per mile for 2013.

For purposes of computing the allowance under a FAVR plan, the Notice provides the standard automobile cost may not exceed $28,100 for automobiles (excluding trucks and vans) or $29,900 for trucks and vans.

The 2013 rates set forth in the Notice are effective for (1) deductible transportation expenses paid or incurred on or after January 1, 2013, and (2) mileage allowances or reimbursements paid to an employee or to a charitable volunteer (a) on or after January 1, 2013, and (b) for transportation expenses the employee or charitable volunteer pays or incurs on or after January 1, 2013.

Taxpayers, employers and others using these rates for income and deduction purposes are cautioned to keep appropriate records of mileage and to verify that they are using the proper rates when claiming mileage.

For Help or More Information

About Ms. 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 watch 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 see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to 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 including:

Comments Off on 2013 Standard Mileage Rates Announced | Employee Benefits, Employers, Executive Compensation | Tagged: deductions, Fringe Benefits, Tax, transportation, transportation allowance | Permalink
Posted by Cynthia Marcotte Stamer

IRS Shares Rules Allowing Government Plans To Switch Remedial Amendment Cycles

December 4, 2012

The Internal Revenue Service (IRS) has modified its determination letter procedures for individually designed “governmental plans” within the meaning of § 414(d) (governmental plan). Rev. Proc. 2012-50 modifies the determination letter procedures in Rev. Proc. 2007-44, 2007-2 C.B. 54, to provide that the sponsor of an individually designed governmental plan may elect Cycle E (instead of Cycle C) as the second remedial amendment cycle for the plan by filing a determination letter application for the plan during the one-year submission period for the second Cycle E (February 1, 2015 through January 31, 2016) instead of the second Cycle C (February 1, 2013 through January 31, 2014). This modification applies only to the second remedial amendment cycle.

The IRS has established a system of staggered, cyclical remedial amendment periods under § 401(b). Under this system, every individually designed plan has a five-year remedial amendment period or cycle, and every pre-approved plan (that is, a master and prototype or volume submitter plan) has a six-year remedial amendment period or cycle. In general, Rev. Proc. 2007-44 extends the remedial amendment period for any disqualifying provision to the end of a plan’s remedial amendment cycle that includes the date on which the remedial amendment period with respect to the provision would otherwise end under § 1.401(b)-1.

The five-year remedial amendment cycle applicable to an individually designed plan is generally based on the sponsoring employer’s taxpayer identification number. However, the applicable cycle for all individually designed governmental plans under Rev. Proc. 2007-44 is Cycle C. The six-year remedial amendment cycle for pre-approved plans, including governmental plans that are pre-approved, is contained in section 18 of Rev. Proc. 2007-44.

Rev. Proc. 2009-36, 2009-35 I.R.B. 304, modified Rev. Proc. 2007-44 to provide that the sponsor of an individually designed governmental plan could elect Cycle E (instead of Cycle C) as the initial remedial amendment cycle for the plan by submitting a determination letter application for the plan during the initial Cycle E submission period (instead of the initial Cycle C submission period).

Under Rev. Proc. 2007-44, the second Cycle C submission period begins February 1, 2013, and ends January 31, 2014. The second Cycle E submission period begins February 1, 2015, and ends January 31, 2016.

the new guidance allowing governmental plans to switch their remedial amendment period is intended to allow governmental plans greater flexibility to various unique issues in the process of securing approval for amendments from the governing body with authority to consider plan amendments during legislative sessions. To take advantage of this option governmental plans must elect to make the change by filing a determination letter application for the plan during the one-year submission period for the second Cycle E (February 1, 2015 through January 31, 2016). No election form or notice to the Service is required.

If the sponsor of an individually designed governmental plan elects to file a determination letter application for the plan during the Cycle E submission period, all requirements for an individually designed plan submitted for a determination letter during the Cycle E submission period are applicable to the sponsor’s plan, including the requirement to amend the plan for all applicable items on the Cycle E Cumulative List and the requirement to timely adopt any interim amendments that are required for a governmental plan during Cycle C and Cycle D.

A sponsor’s election of Cycle E, instead of Cycle C, as the second remedial amendment cycle for an individually designed governmental plan applies only to that plan and only to that cycle. For any subsequent remedial amendment cycle, the plan’s cycle will revert to Cycle C. Therefore, if a sponsor of a governmental plan files a determination letter application for the plan during the second Cycle E submission period ending on January 31, 2016, the determination letter that is issued will expire at the end of the third Cycle C submission period (January 31, 2019).

determination letter issued to a sponsor of an individually designed governmental plan for the initial remedial amendment cycle ordinarily expires at the end of the second Cycle C (January 31, 2014), regardless of whether the sponsor elected Cycle E as the plan’s initial cycle in accordance with Rev. Proc. 2009-36. The Rev. Proc. extends this date to the end of the second Cycle E (January 31, 2016) if the sponsor elects Cycle E as the plan’s second remedial amendment cycle in accordance with this revenue procedure.

For Help or More Information

About Ms. 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 watch 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 see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to 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 including:

Comments Off on IRS Shares Rules Allowing Government Plans To Switch Remedial Amendment Cycles | Uncategorized | Tagged: 403(b), governmental plans, Retirement Plans | Permalink
Posted by Cynthia Marcotte Stamer

Reminder To Amend Health FSA Plan Terms To Include ACA $2500 Contribution Before 2013 Plan Year Begins

December 4, 2012

Employers and other health plan sponsors, insurers, and their administrators and service providers are reminded that the $2500 limit on pre-tax contributions to health flexible spending account plans under Internal Revenue Code section 125(i) takes effect on the first day of the 2013 plan year. Notice 2012-40 makes clear that the IRS requires that this limitation be included in the plan document before the first day of the plan year for the plan to remain qualified under Code section 125. Employers making this amendment likely wll want to draft this provision to preserve the option to adjust the limit as adjusted in the Code for post-2013 plan years. Code section 125(i) provides for inflation adjustments the $2500.00 limit after 2013.

Most health flexible spending account plans already cap the annual contribution that employees can contribute to limit exposure to the “at-risk” requirements of current IRS regulations. The at risk rule is a requirement imposed by IRS regulations that mandates that a health flexble spending account plan must make the full amount of the annual contribution of an employee available to the employee beginning with the first day of the plan year. This provision has been highly contested as there is no express Code language authorizing or mandating this at risk requirement. Along with providing guidance about the Code section 125(i) limit Notice 2012-40 also indicates that the IRS is reconsidering the need for and future of the at-risk requirement.

Health FSA Limit Change Just Tip of Iceberg

The new Code section 125(i) limit is only one of a plethora of statutory and regulatory changes impacting health benefit arrangements enacted by health care reform. The effective date of these requirements spans from 2009 to 2017. As implementation of these changes moves forward health plan design and administration requirements are changing rapidly as the Departments of Health and Human Services IRS, Department of Labor and state insurance agencies finalize arrangements and guidance governing the implementation and enforcement of the ACA health care reforms scheduled to take effect and to tweek guidance on provisions already effective under the law. Employers and insurers now must get cracking to update their programs and cost estimates to comply with both existing and new guidance while keeping a close eye out for potential changes to ACA or other federal or state health coverage laws as the new Congress is expected to continue to discuss refinements or other changes when the new Congress begins work in January 2013.

What Should Employers Do To Cope With These & Other Health Plan Mandates?

Facing the operational and financial challenges of meeting these mandates, many business leaders continue report significant concern about what they should do to respond to these requirements. For some practical steps that businesses confronting these issues should take to cope with ACA and other health plan responsibilities, check out the “12 Steps Every Employer With A Health Plan Should Do Now” article by Cynthia Marcotte Stamer in the October 26, 2012 online edition of Texas CEO Magazine. To read the full article, see here.

Clearly in light of the new guidance, employers, insurers, health plan fiduciaries and their service providers need to act quickly to familiarize themselves with the guidance and make any need adjustments to their plans, communications, practices and budgets warranted by the new guidance and remain vigilent for and prepared to do the same with other guidance and reform proposals as it is released.

Beyond responding to the new guidance and other future developments, most health plan sponsors, insurers, administrators and other fiduciaries, and their vendors also should consider conducting this specific analysis and update of their health benefit programs in the context of a broader strategy.

In her 12-Steps Article, Ms. Stamer writes, “While most employers and insurers of employment-based group health plans view with great concern radically expanded health plan responsibilities taking effect in 2014, many are failing to take steps critical to manage exposures and costs already arising from the Affordable Care Act (ACA) and other federal health plan regulations.”

In the article, Ms Stamer discusses the following 12 steps that she suggests most businesses consider to help catch up with current responsibilities and to help their business manage future costs and responsibilities:

Know The Cast Of Characters & What Hat(s) They Wear
Know What Rules Apply, and How They Affect a Group Health Plan
Review and Update Health Plan Documents to Meet Requirements and Manage Exposure
Update the Plan For Changing Compliance Requirements and Enhanced Defensibility
Consistency Matters: Build Good Plan Design, Documentation and Processes, and Follow Them
Ensure the Correct Party Carefully Communicates About Coverage and Claims in a Compliant, Timely, Prudent, Provable Manner
Prepare For ACA’s Expanded Data Gathering and Reporting Requirements
Select, Contract and Manage Vendors With Care
Help Plan Members Build Their Health Care Coping Skills With Training and Supportive Tools
Pack The Parachute and Locate The Nearest Exit Doors
Get Moving On Compliance and Risk Management Issues
Provide Input On Affordable Care Act Rules

For Help or More Information

About Ms. 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 watch 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 see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to 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 including:

Comments Off on Reminder To Amend Health FSA Plan Terms To Include ACA $2500 Contribution Before 2013 Plan Year Begins | ADA, Corporate Compliance, EEOC, Employers, GINA, Human Resources, OFCCP, Retaliation | Permalink
Posted by Cynthia Marcotte Stamer

Bank’ $1Million Plus Overtime Settlement Shows Risks of Misapplying FLSA’s Administrative Exemption

December 1, 2012

Department of Labor (Labor Department) officials are pointing to a more than $1 million backpay settlement paid by First Republic Bank as a reminder of the risks that employers run by treating employees as exempt from minimum wage, overtime and recordkeeping requirements without confirming that the facts surrounding the employment of each employee considered exempt in fact meet every condition that the Fair Labor Standards Act (FLSA) requires to qualify as exempt.

First Republic Bank paid $1,009,643.93 in overtime back wages for 392 First Republic Bank employees in California, Connecticut, Massachusetts, New York and Oregon after the Labor Department found the San Francisco-based bank wrongly classified the employees as exempt from the FLSA’s overtime and recordkeeping requirements, resulting in violations of the Fair Labor Standards Act’s overtime and record-keeping provisions. The Labor Department announced the settlement resulting in the payment on November 27, 2012.

The settlement came after an investigation by the Labor Department’s Wage and Hour Division found that the San Francisco-based bank wrongly classified the employees as exempt from overtime, resulting in violations of the FLSA’s overtime and record-keeping provisions.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers also are required to maintain accurate time and payroll records.

While the FLSA provides an exemption from both minimum wage and overtime pay requirements for individuals employed in bona fide executive, administrative, professional and outside sales positions, as well as certain computer employees, job titles do not determine the applicability of this or other FLSA exemptions. In order for an exemption to apply, an employee’s specific job duties and salary must meet all the requirements of the department’s regulations. To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week.

Investigators found that First Republic Bank failed to consider the FLSA’s criteria that allow certain administrative and professional employees to be exempt from receiving overtime pay. In fact, the employees were entitled to overtime compensation at one and one-half times their regular rates for hours worked over 40 in a week. Additionally, the bank failed to include bonus payments in nonexempt employees’ regular rates of pay when computing overtime compensation, in violation of the act. Record-keeping violations resulted from the employer’s failure to record the number of hours worked by the misclassified employees.

“It is essential that employers take the time to carefully assess the FLSA classification of their workforce,” said Secretary of Labor Hilda L. Solis in the Labor Department’s announcement of the settlement. “As this investigation demonstrates, improper classification results in improper wages and causes workers real economic harm.”

FLSA Violations Generally Costly; Enforcement Rising

The enforcement record of the Labor Department confirms that employers that improperly treat workers as exempt from the FLSA’s overtime, minimum wage and recordkeeping requriements run a big risk. The Labor Deprtment and private plaintiffs alike regularly target employers that use aggressive worker classification or other pay practices to avoid paying minimum wage or overtime to workers. Under the Obama Administration, DOL officials have made it a priority to enforce overtime, record keeping, worker classification and other wage and hour law requirements. See e.g., Boston Furs Sued For $1M For Violations Of Fair Labor Standards Act; Record $2.3 Million+ Backpay Order; Minimum Wage, Overtime Risks Highlighted By Labor Department Strike Force Targeting Residential Care & Group Homes; Review & Strengthen Defensibility of Existing Worker Classification Practices In Light of Rising Congressional & Regulatory Scrutiny; 250 New Investigators, Renewed DOL Enforcement Emphasis Signal Rising Wage & Hour Risks For Employers; Quest Diagnostics, Inc. To Pay $688,000 In Overtime Backpay. In an effort to further promote compliance and enforcement of these rules, the Labor Department is using smart phone applications, social media and a host of other new tools to educate and recruit workers in its effort to find and prosecute violators. See, e.g. New Employee Smart Phone App New Tool In Labor Department’s Aggressive Wage & Hour Law Enforcement Campaign Against Restaurant & Other Employers. As a result of these effort, employers violating the FLSA now face heightened risk of enforcement from both the Labor Department and private litigation.

Employers Should Strengthen Practices For Defensibility

Audit of each position current classified as exempt to assess its continued sustainability and to develop documentation justifying that characterization;
Audit characterization of workers obtained from staffing, employee leasing, independent contractor and other arrangements and implement contractual and other oversight arrangements to minimize risks that these relationships could create if workers are recharacterized as employed by the employer receiving these services;
Review the characterization of on-call and other time demands placed on employees to confirm that all compensable time is properly identified, tracked, documented, compensated and reported;
Review of existing practices for tracking compensable hours and paying non-exempt employees for compliance with applicable regulations and to identify opportunities to minimize costs and liabilities arising out of the regulatory mandates;
If the audit raises questions about the appropriateness of the classification of an employee as exempt, self-initiation of proper corrective action after consultation with qualified legal counsel;
Review of existing documentation and record keeping practices for hourly employees;
Exploration of available options and alternatives for calculating required wage payments to non-exempt employees; and
Re-engineering of work rules and other practices to minimize costs and liabilities as appropriate in light of the regulations and enforcement exposures.

For Help With Investigations, Policy Updates Or Other Needs

About Solutions Law Press, Inc.™

Comments Off on Bank’ $1Million Plus Overtime Settlement Shows Risks of Misapplying FLSA’s Administrative Exemption | Corporate Compliance, Employers, Human Resources, Internal Controls, Internal Investigations, Risk Management, Wage & Hour | Tagged: Backpay, Employer, Employment, employment law, Fair Labor Standards Act, FSLA, IT, Labor Department, Minimum Wage, Technology, Wage & Hour, wage and hour, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

Labor Department Serves The Christmas Light Co. & Its Owner With Holiday Season FLSA Lawsuit

November 30, 2012

The U.S. Department of Labor (Labor Department) kicked off the 2013 Holiday Season by filing a lawsuit against The Christmas Light Co. Inc. and owner William F. Rathburn to recover approximately $240,881 in wages and an additional amount in liquidated damages under the Fair Labor Standards Act (FLSA) on behalf of 233 employees who installed and removed lights for the company. Yet another in a growing list of lawsuits against U.S. employers accused of failing to comply with FLSA minimum wage and overtime rules, the lawsuit reflects the significant risks that U.S. businesses risk by failing to properly track and pay employees covered by the FLSA as required.

Holiday Season FLSA Suit Casts Shadow Over The Christmas Light Co. Inc.

According to the Labor Department, an investigation by its Dallas Wage and Hour Division office found that The Christmas Light Co. Inc. violated the FLSA by failing to pay 233 installers and removers the minimum and overtime wages and keep records required by law. The complaint filed in the Northern District of Texas seeks back wages and liquidated damages of nearly $500,000 and an injunction against future violations of the FLSA.

The Labor Department says that its investigation determined that the company violated the FLSA by paying non-exempt workers a flat rate for installing and removing Christmas lights without regard to the number of hours the employees had worked. Investigators also found that in most cases employees were paid “straight time” rather than overtime at time and one-half their regular rates for hours worked over 40 in a week, as required. Additionally, the Labor Department found that the company failed to keeprecords required by the FLSA.

The lawsuit against The Christmas Light Co. Inc. spotlights a growing emphasis by the Labor Department on investigation and enforcement of employer violations of the FLSA. “The Labor Department holds employers accountable when they do not properly pay their workers,” said Cynthia Watson, regional administrator for the Wage and Hour Division in the Southwest. “Failing to pay minimum and overtime wages is unacceptable. Such behavior robs workers of their rightful wages and undercuts those hardworking and conscientious employers who obey the law. This lawsuit demonstrates that the department will use all enforcement tools available, including litigation, to recover workers’ wages and ensure a level playing field for law-abiding employers.”

FLSA Violations Generally Costly; Enforcement Rising

Employers Should Strengthen Practices For Defensibility

Audit of each position current classified as exempt to assess its continued sustainability and to develop documentation justifying that characterization;
Audit characterization of workers obtained from staffing, employee leasing, independent contractor and other arrangements and implement contractual and other oversight arrangements to minimize risks that these relationships could create if workers are recharacterized as employed by the employer receiving these services;
Review the characterization of on-call and other time demands placed on employees to confirm that all compensable time is properly identified, tracked, documented, compensated and reported;
Review of existing practices for tracking compensable hours and paying non-exempt employees for compliance with applicable regulations and to identify opportunities to minimize costs and liabilities arising out of the regulatory mandates;
If the audit raises questions about the appropriateness of the classification of an employee as exempt, self-initiation of proper corrective action after consultation with qualified legal counsel;
Review of existing documentation and record keeping practices for hourly employees;
Exploration of available options and alternatives for calculating required wage payments to non-exempt employees; and
Re-engineering of work rules and other practices to minimize costs and liabilities as appropriate in light of the regulations and enforcement exposures.

For Help With Investigations, Policy Updates Or Other Needs

About Solutions Law Press, Inc.™

Comments Off on Labor Department Serves The Christmas Light Co. & Its Owner With Holiday Season FLSA Lawsuit | Corporate Compliance, Employers, Human Resources, Internal Controls, Internal Investigations, Risk Management, Wage & Hour | Tagged: Backpay, Employer, Employment, employment law, Fair Labor Standards Act, FSLA, IT, Labor Department, Minimum Wage, Technology, Wage & Hour, wage and hour, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

Boston Hides and Furs Ltd. Sued For $1 Million For Alleged Willful FLSA Wage & Hour Law Violations

November 28, 2012

U.S. employers using aggressive worker classification or other pay practices to avoid paying overtime should heed the expensive lesson that the U.S. Department of Labor (DOL) hopes to teach employer Boston Hides & Furs Ltd. and members of its management in a lawsuit filed in Boston.

Citing “knowing, deliberate and intentional” violations of federal wage and hour law, the DOL is suing Boston Hides and Furs Ltd. and company officials seeking at least $500,000 in back wages and an equal amount in liquidated damages for allegedly underpaying employees of the Chelsea wholesale animal hide business. See Solis v. Boston Hides & Furs Ltd., Anthony Andreottola, Angelo Andreottola and Antoinetta Andreottola Parisi, CV-1:12-CV-11997-MLW. The suit illustrates the significant liability that companies or their owners or management risk by failing to properly pay workers covered by the FLSA and meet other FLSA requirements.

FLSA Generally

The FLSA generally requires that an employee pay each covered employees at least the federal minimum wage of $7.25 per hour as well as time and one-half their regular rates for every hour they work beyond 40 per week. When the state minimum wage is higher than the federally mandated wage, and employees work more than 40 hours in a week calculated in accordance with applicable state laws, employees paid at the minimum permissible level are entitled to overtime compensation based on the higher state minimum wage. Time credited may be determined differently under state law versus the FLSA. Employers must make sure proper crediting, record keeping and payment in time to meet both applicable requirements.

The FLSA also requires employers to keep accurate records of covered employees’ wages, hours and other conditions of employment and prohibits employers from retaliating against employees who exercise their rights under the law. Special rules also may apply to the employment of children or other special populations.

The rules generally establish a legal presumption that a worker performing services is working as a covered employee of the recipient. Unfortunately, many businesses that receive services often unintentionally incur liability because they ill-advisedly misclassify workers as performing services as independent contractors, salaried employees or otherwise exempt by failing to recognize the implications of this presumption. The presumption that a worker is a covered employee generally means that an employer that treats a worker as exempt bears bear the burden of providing that a worker is not a covered employee and keeping accurate records to show that it has properly tracked the hours of and paid each covered employee.

The FLSA provides that employers who violate the law are, as a general rule, liable to employees for back wages and an equal amount in liquidated damages. State wage and hour laws also typically provide for back pay and liquidated damage awards. Attorneys’ fees and other costs often also are recoverable. In certain instances where the violations are knowing, deliberate and intentional, violators often may risk criminal as well as civil liability.

DOL Sues Boston Hides and Furs Ltd For Knowing, Deliberate & Willful FLSA Violations

The DOL lawsuit seeks to recover more than $1 million from Boston Hides and Furs Ltd and various company officials for allegedly engaging in knowing and deliberate violations of the FLSA minimum wage, overtime and retaliation rules.

The DOL filed the lawsuit in federal court in the U.S. District Court for the District of Massachusetts after a DOL Wage & Hour Division investigation found the employer committed willful and repeated violations of the minimum wage, overtime and record-keeping provisions of the FLSA including offering for shipment or sale “hot goods” produced in violation of the law during a period spanning at least three years. The suit also asserts that the company unlawfully retaliated against several workers by firing them after they cooperated with the federal investigation.

In its complaint, the DOL claims the investigation found that 14 Boston Hides & Furs employees worked approximately 10 hours per day, six days per week processing hides and furs for shipping to tanneries. DOL says Boston Hides paid these workers a daily cash wage of $50 to $70, which amounted to an hourly pay rate far below the federal minimum wage of $7.25 per hour. The employees also were not paid time and one-half the required state minimum wage of $8 applicable for those hours worked above 40 in a week. Additionally, the defendants failed to keep adequate records of the workers’ employment, work hours and pay rates, and a representative of the defendants falsely told investigators that the company’s payroll records included all employees.

The lawsuit also charges that the defendants ordered employees to hide in a nearby house when DOL Wage and Hour Division investigators first arrived at Boston Hides & Furs so they could not be interviewed. Two days after investigators subsequently interviewed the workers, the defendants fired the workers. During their employment, DOL claims company officials threatened and subjected the workers to verbally abusive treatment on an ongoing basis, particularly when they asked about their pay rates.

In addition to back wages and liquidated damages, the DOL lawsuit seeks to permanently prohibit the defendants from future FLSA violations — including a prohibition against shipping any goods handled by workers who were paid in violation of the law — and compensatory and punitive damages for the workers on account of their unlawful firing. The Wage and Hour Division also has assessed $100,000 in civil money penalties against Boston Hides & Furs Ltd. for willful violations of the FLSA.

Overtime & Other Wage & Hour Enforcement Risks Rising

Employers increasingly risk triggering significant liability by failing to properly characterize, track and pay workers for compensable time in violation of the FSLA or other laws. Unfortunately, many employers often are overly optimistic or otherwise fail to properly understand and apply FLSA rules for characterizing on-call or other time, classifying workers as exempt versus non-exempt or making other key determinations.

The potential that noncompliant employers will incur these liabilities has risen significantly in recent years. Under the Obama Administration, DOL officials have made it a priority to enforce overtime, record keeping, worker classification and other wage and hour law requirements. While all employers face heightened prosecution risks, federal officials specifically are targeting government contractors, health care, technology and certain other industry employers for special scrutiny. DOL also is using smart phone applications, social media and a host of other new tools to educate and recruit workers in its effort to find and prosecute violators. See, e.g. New Employee Smart Phone App New Tool In Labor Department’s Aggressive Wage & Hour Law Enforcement Campaign Against Restaurant & Other Employers. Meanwhile, private enforcement of these requirements by also has soared following the highly-publicized implementation of updated FLSA regulations on the classification of workers during the last Bush Administration. See Record $2.3 Million+ Backpay Order; Minimum Wage, Overtime Risks Highlighted By Labor Department Strike Force Targeting Residential Care & Group Homes; Review & Strengthen Defensibility of Existing Worker Classification Practices In Light of Rising Congressional & Regulatory Scrutiny; 250 New Investigators, Renewed DOL Enforcement Emphasis Signal Rising Wage & Hour Risks For Employers; Quest Diagnostics, Inc. To Pay $688,000 In Overtime Backpay.

Employers Should Strengthen Practices For Defensibility

Audit of each position current classified as exempt to assess its continued sustainability and to develop documentation justifying that characterization;
Audit characterization of workers obtained from staffing, employee leasing, independent contractor and other arrangements and implement contractual and other oversight arrangements to minimize risks that these relationships could create if workers are recharacterized as employed by the employer receiving these services;
Review the characterization of on-call and other time demands placed on employees to confirm that all compensable time is properly identified, tracked, documented, compensated and reported;
Review of existing practices for tracking compensable hours and paying non-exempt employees for compliance with applicable regulations and to identify opportunities to minimize costs and liabilities arising out of the regulatory mandates;
If the audit raises questions about the appropriateness of the classification of an employee as exempt, self-initiation of appropriate corrective action after consultation with qualified legal counsel;
Review of existing documentation and record keeping practices for hourly employees;
Exploration of available options and alternatives for calculating required wage payments to non-exempt employees; and
Reengineering of work rules and other practices to minimize costs and liabilities as appropriate in light of the regulations and enforcement exposures.

For Help With Investigations, Policy Updates Or Other Needs

If you need help in conducting a risk assessment of or responding to an IRS, DOL, Justice Department, PBGC, private plaintiff or other legal challenges to your organization’s existing workforce classification or other labor and employment, employee benefit or compensation practices, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469) 767-8872 .

About Solutions Law Press, Inc.™

Comments Off on Boston Hides and Furs Ltd. Sued For $1 Million For Alleged Willful FLSA Wage & Hour Law Violations | Corporate Compliance, Employers, Human Resources, Internal Controls, Internal Investigations, Risk Management, Wage & Hour | Tagged: Backpay, Employer, Employment, employment law, Fair Labor Standards Act, FSLA, IT, Labor Department, Minimum Wage, Technology, Wage & Hour, wage and hour, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

2013 Maximum Yearly PBGC Guaranteed Pension Benefit Amount To Increase Slightly In 2013

November 28, 2012

The yearly maximum guaranteed benefit for a 65-year-old retiree under the Pension Benefit Guaranty Corporation (PBGC) insurance program will increase to almost $57,500 in 2013, up from $56,000 in 2012. Beginning in 2013, the PBGC announced November 27, 2012 that the maximum yearly guarantee for a 65-year-old retiree is $57,477.24. The increase is not retroactive.

The slight increase in the guaranteed benefit is likely to be meaningful for the many pensioners receiving benefits under pension plans covered by the PBGC insurance program. This program insures guaranteed benefits amounts for pensioners of defined benefit plans covered by the PBGC insurance programs that are underfunded under the PBGC rules when terminated and otherwise meet program requirements. Most retirees who get their pension from PBGC — almost 85 percent — receive the full amount of their promised benefit. In some cases, retirees can receive more than the PBGC maximum guarantee.

The PBGC maximum guarantee is based on a formula prescribed by federal law. Yearly amounts are higher for people older than age 65, and lower for those who retire earlier or choose survivor benefits (see chart). If a pension plan ends in 2013, but a retiree does not begin collecting benefits until a future year, the 2013 rates still apply. For plans that terminate as a result of bankruptcy, the maximum yearly rates are guided by the limits in effect on the day the bankruptcy started, not the day the plan ended.

The following chart shows the 2013 annual and monthly maximum benefit guarantees for retirees from ages 45 to 75. The maximum amount is lower for retirees who begin getting benefits at ages below 65, reflecting the fact that younger retirees receive more monthly pension checks over a longer lifetime. The maximum amount is higher for benefits starting at ages above 65, because older retirees receive fewer monthly pension checks over their expected lifetimes.

PBGC Maximum Monthly Guarantees for 2013
Age	Annual Maximum	Monthly Maximum	Monthly Joint and 50% Survivor Maximum*
75	174,730.80	14,560.90	13,104.81
74	158,867.04	13,238.92	11,915.03
73	143,003.40	11,916.95	10,725.26
72	127,139.64	10,594.97	9,535.47
71	111,275.88	9,272.99	8,345.69
70	95,412.24	7,951.02	7,155.92
69	85,641.12	7,136.76	6,423.08
68	77,019.48	6,418.29	5,776.46
67	69,547.44	5,795.62	5,216.06
66	63,225.00	5,268.75	4,741.88
65	57,477.24	4,789.77	4,310.79
64	53,453.88	4,454.49	4,009.04
63	49,430.40	4,119.20	3,707.28
62	45,407.04	3,783.92	3,405.53
61	41,383.56	3,448.63	3,103.77
60	37,360.20	3,113.35	2,802.02
59	35,061.12	2,921.76	2,629.58
58	32,762.04	2,730.17	2,457.15
57	30,462.96	2,538.58	2,284.72
56	28,163.88	2,346.99	2,112.29
55	25,864.80	2,155.40	1,939.86
54	24,715.20	2,059.60	1,853.64
53	23,565.72	1,963.81	1,767.43
52	22,416.12	1,868.01	1,681.21
51	21,266.52	1,772.21	1,594.99
50	20,117.04	1,676.42	1,508.78
49	18,967.44	1,580.62	1,422.56
48	17,817.96	1,484.83	1,336.35
47	16,668.36	1,389.03	1,250.13
46	15,518.88	1,293.24	1,163.92
45	14,369.28	1,197.44	1,077.70
* Both spouses the same age

The PBGC insurance program is funded through insurance premiums paid by covered plans. In recent years, the number of underfunded plans has increased due to a lagging economy, declines in market performance and other factors. The demands on the PBGC insurance program prompted Congress to increase premiums, modify pension funding rules and enact various other reforms in an effort to shore up the PBGC insurance program. The PBGC also has undertaken a number of regulatory and operational reforms. Companies sponsoring plans covered by the PBGC insurance program should review their existing funding and insurance requirements to ensure that they are in compliance with existing rules and taking advantage of the most favorable opportunities under these rules. In addition, companies sponsoring defined benefit plans govered by the PBGC insurance program and/or the Internal Revenue Code and Employee Retirement Income Security Act’s minimum funding rules or entities that are part of commonly controlled or affiliated groups of companies, purchasing stock or assets from such company groups or lending to or investing in such entities should evaluate the funding status of these programs and the responsibilities and liability exposures that might impact their interests.

For additional information, see PBGC’s fact sheet “Pension Gurantees” and for information about the benefits guaranteed by the PBGC, see “Making Sense of the Maximum Insurance Benefit.”

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 to respond to emerging health plan regulations, monitoring or commenting on these rules, defending your health plan or its administration, or other health or employee benefit, human resources or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

About Ms. 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 registerto receive future updates about developments on these and other concerns see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to 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 including:

Comments Off on 2013 Maximum Yearly PBGC Guaranteed Pension Benefit Amount To Increase Slightly In 2013 | ADA, Corporate Compliance, EEOC, Employers, GINA, Human Resources, OFCCP, Retaliation | Tagged: 401(k), Bankruptcy, defined benefit, Employee Benefits, Employers, ERISA, hardship withdrawals, Hurricane Sandy, PBGC, plan loans, retirement | Permalink
Posted by Cynthia Marcotte Stamer

New OCR HIPAA De-Identification Guidance Among Developments Covered In 12/12 HIPAA Update Web Workshop

November 27, 2012

Get Up To Date On Details of New De-Identification Guidance & Other HIPAA Developments By Participating In 12/12 HIPAA Update Web Workshop

Health care providers, health plans, health care clearinghouses (covered entities) and their business associates and leadership should check and update their policies and practices for the de-identification of protected health information (PHI) in light of newly-released Guidance Regarding Methods for De-identification of Protected Health Information in Accordance With the Health Insurance Portability and Accountablity Act (HIPAA) Privacy Rule (Guidance) released by the Department of Health & Human Services (HHS) Office of Civil Rights yesterday (November 26, 2012).

Solutions Law Press, Inc. will host a one-hour, online HIPAA Update Workshop on the Guidance and other recent regulatory and enforcement developments under HIPAA for covered entities and their business associates on Wednesday, December 12 beginning at Noon Central Time. To register, see here.

PHI collected by health care providers, health plans, their management, sponsors, and vendors often includes a wealth of information valuable for use for functions unrelated to the HIPAA-covered functions and activities that leads covered entities or their business associates to collect or keep this data. While it might be tempting to repurpose this information for business planning and marketing purposes, covered entities and their business partners or associates frequently assume that covered entities and others that they deal with must take proper steps to that no PHI is used, accessed, disclosed or shared unless that action is allowed under the Privacy Rules, properly de-identified, or both.

When planning to rely upon the de-identification of PHI to engage in these activities, parties planning to rely upon HIPAA’s exception for de-identified PHI will want to consult new guidance just released by OCR about the de-identification requirements before moving forward. Existing Privacy Rules and the Guidance recognize two alternative methods that covered entities and their business can use to properly de-identify PHI for purposes of the HIPAA Privacy Rule.

OCR published the Guidance to help covered entities to understand what qualifies as de-identification, the general process by which de-identified information is created, and the options available for performing de-identification for purposes of the HIPAA Privacy Rule. The publication of this guidance was mandated as part of amendments to HIPAA enacted by Health Information Technology for Economic and Clinical Health (HITECH) Act included in the American Recovery and Reinvestment Act of 2009 (ARRA). Section 13424(c) of the HITECH Act requires the HHS to issue guidance on how best to implement the requirements for the de-identification of health information contained in the Privacy Rule.

De-identification & Its Rationale Under Privacy Rule

The Privacy Rule was designed to protect individually identifiable health information through permitting only certain uses and disclosures of PHI provided by the Rule, or as authorized by the individual subject of the information. However, in recognition of the potential utility of health information even when it is not individually identifiable, §164.502(d) of the Privacy Rule permits a covered entity or its business associate to create information that is not individually identifiable by following the de-identification standard and implementation specifications in Privacy Rule §164.514(a)-(b). These provisions allow the entity to use and disclose information that neither identifies nor provides a reasonable basis to identify an individual provided the Covered Entity can show that the PHI has been de-identified in accordance with either the Expert Determination Method or the Safe Harbor Method of the de-identification standard of the Privacy Rule and is not re-identified. Regardless of the method used to de-identify PHI, the Privacy Rule does not restrict the use or disclosure of de-identified health information, as it is no longer considered PHI and is not re-identified.

Privacy Rule De-Identification Implementation Standards Permit Alternative Methods of De-identification

Section 164.514(a) of the HIPAA Privacy Rule provides the standard for de-identification of protected health information. Under this standard, health information is not individually identifiable if it does not identify an individual and if the covered entity has no reasonable basis to believe it can be used to identify an individual. See Privacy Rule § 164.514.

Sections 164.514(b) and (c) of the Privacy Rule contain the implementation specifications that a covered entity must follow to meet the de-identification standard. As summarized in Figure 1, the Privacy Rule provides two methods by which health information can be designated as de-identified:

The formal determination by a qualified expert in accordance with the Privacy Rule (Expert Determination Method); or
The removal of specified individual identifiers as well as absence of actual knowledge by the covered entity that the remaining information could be used alone or in combination with other information to identify the individual (Safe Harbor Method).

In order for PHI to qualify as de-identified under the “Expert Determination Method, Privacy Rule § 164.514(b)(1) requires that a person with appropriate knowledge of and experience with generally accepted statistical and scientific principles and methods for rendering information not individually identifiable:

Applying such principles and methods, determines that the risk is very small that the information could be used, alone or in combination with other reasonably available information, by an anticipated recipient to identify an individual who is a subject of the information; and
Documents the methods and results of the analysis that justify such determination.

Alternatively, Privacy Rule § 164.514(b)(2) provides that PHI will qualify as de-identified under the Safe Harbor Method if:

All of an extensive list of identifiers of the individual or of relatives, employers, or household members of the individual, are removed from the data; and
The covered entity does not have actual knowledge that the information could be used alone or in combination with other information to identify an individual who is a subject of the information.

As long as the data is not re-identified, the Guidance indicates that a covered entity may prove fulfillment of the de-identification standard of Privacy Rule §164.514(a) by showing satisfaction of all applicable requirements of either method. Under the Privacy Rule, de-identified health information created following these methods is no longer protected by the Privacy Rule because it does not fall within the definition of PHI. Of course, de-identification leads to information loss which may limit the usefulness of the resulting health information in certain circumstances. Consequently, covered entities may wish to select de-identification strategies that minimize such loss.

Both alternatives for de-identification under the Privacy Rule require that covered entities and their business associates decide whether and how to keep the option for re-identification of PHI slated for de-identification and where applicable, appropriately manage the re-identification opportunity and data to avoid violation of the Privacy Rule.

According to the Privacy Rule, if a covered entity or business associate successfully undertook an effort to identify the subject of de-identified information it maintained, the health information now related to a specific individual would again be protected by the Privacy Rule, as it would meet the definition of PHI. Disclosure of a code or other means of record identification designed to enable coded or otherwise de-identified information to be re-identified is also considered a disclosure of PHI. In this regard, Privacy Rule §164.514(c) specifies that if the covered entity assigns a code or other means of record identification to allow information de-identified under this section to be re-identified by the covered entity, themeans of record identification is not derived from or related to information about the individual and is not otherwise capable of being translated so as to identify the individual; it can’t use elements of the protected PHI as the re-identification key,must safeguard the key, and can’t use or disclose the key or other re-identification tool for any other purpose.

Preparing For, Guiding & Documenting The De-identification Process For Defensibility

The Guidance stresses that importance of documentation for which values in health data correspond to PHI, as well as the systems that manage PHI and its risk of identification or re-identification in the de-identification process cannot be overstated.

The Guidance provides guidance to help guide covered entities and their business associates through the steps and analysis of using the Expert Determination versus Safe Harbor Method. A review of this Guidance makes clear that the design and administration of the de-identification process under either method requires careful and well-documented planning, analysis and implementation to fulfill and to keep the documentation that a covered entity or business associate might need to defend its decision to treat and use PHI as de-identified under the Privacy Rule against a potential audit or enforcement inquiry. The Guidance also seeks to further illuminate the requirements for effective de-identification through a series of questions and answers, supplemented by work flow and other charts, examples and other illustrations and tips on the proper use of each alternative Method and managing risks and the process associated with that Method. A Glossary of Terms also is shared. The discussion in the Guidance makes clear that covered entities and their businesses associates using either Method to de-identify PHI should be prepared to make a number of judgments about which Method to use, whether and how to make arrangements for re-identification, and how to properly manage the process to meet the requirements of the implementation standard and manage re-identification or other risks.

Register For 12/12 HIPAA Update Web Workshop To Catch Up On De-Identification Guidance & Other HIPAA & Texas HIPAA Regulatory & Enforcement Developments

Training and compliance mandates applicable to covered entities and their business associates under the newly strengthened Texas HIPAA law and HIPAA’s Privacy and Breach Notification Rules make it more important than ever that covered entities and their business associates get the timely training and other assistance needed to properly comply with requirements for the protection of PHI under the new Guidance and other HIPAA and Texas HIPAA mandates.

To aid in this process, Solutions Law Press, Inc. will host a 2012 HIPAA Update Web Workshop covering the new Guidance on de-identification and other regulatory and enforcement developments under HIPAA and the newly amended Texas HIPAA law on December 12, 2012 from 1:00 P.M.-2:00 P.M. Eastern | Noon – 1:00 P.M. Central | 11:00 A.M-Noon Mountain | 10:00A.M-11:00 A.M. Pacific Time.

Expanded health care privacy mandates of the Texas Medical Records Privacy Act that take effect September 1, 2012 and HIPAA regulations require covered entities and their business associates conduct training and take other steps to protect the privacy and security of PHI.

Complete HIPAA Training While You Catch Up On The Latest On HIPAA & Texas Medical Records Privacy Rules & Get Helpful Compliance And Risk Management Tips!

Health care providers, health plans, health care clearinghouses face new imperatives to strengthen their HIPAA and other procedures for handling protected health information and other sensitive information to manage expanding risks and responsibilities arising from evolving rules, expanding enforcement and oversight, and rising penalties and other liabilities.

The $4.3 million HIPAA Civil Monetary Penalty and growing list of $1 million plus resolution payments announced by the Office of Civil Rights coupled with its commitment to investigate all large breaches reported under the HITECH Act Breach Notification Rule and other stepped up enforcement and newly initiated audit activities send a clear signal that HIPAA-covered entities and their business associates face significant exposures for failing to appropriately manage their HIPAA and other responsibilities when handling protected health information. Meanwhile, Texas House Bill 300 has raised maximum state civil penalties for unlawful disclosures of Protected Health Information under the Texas Medical Records Privacy Act to from $5,000 to $1.5 million per year. Meanwhile HITECH Act amendments to HIPAA require covered entities provide notification of certain breaches while Texas House Bill 300 adds its own specific requirements to provide notice of certain breaches of computerized data containing sensitive personal information.

With Texas House Bill 300 expanding covered entities responsibilities and liabilities and OCR issuing new regulations and other guidance to implement amendments to the HIPAA Privacy & Security Standards and implement and enforce the HITECH Act Breach Notification Rule, health care providers, health plans and insurers, their brokers, third-party administrators, and other covered entities, as well as their business associates and employer and union clients must review and tighten their policies, practices, business associate and other contracts, and enforcement to manage HIPAA and other compliance and manage risks arising from the access, collection, use, protection and disclosure of PHI to meet expanding mandates and to guard against growing liability exposures under HIPAA and other federal and state laws.

Pre-approved for various types of continuing and professional education credit, the December 12, 2012 HIPAA Update Workshop will brief participants on the De-Identification Guidance as well as the latest on other regulatory and enforcement guidance under the HIPAA Privacy, Security and Breach Notification rules and guidance and share compliance and risk management lessons emerging from recent OCR enforcement and audit activities and other selected federal and state litigation and enforcement actions impacting the handling of protected health information. Among other things, the workshop will cover:

The De-Identification Guidance just released by OCR on November 26, 2012;
The latest HIPAA Privacy, Security & Breach Notification Guidance, Audits & Enforcement
Highlights Texas House Bill’s Amendments To Texas Medical Records Privacy Law That Took Effect September 1, 2012
Post HITECH Act Heightened Liability Risks: Audits, Civil Penalties, Criminal Penalties & State Lawsuits
Expansion of HIPAA Responsibilities & Liabilities To Business Associates & What Covered Entities & Business Associates Should Do In Response
HIPAA Data Breach Notification Requirements
Practical Challenges & Strategies For Managing These Responsibilities
Tips For Coordinating HIPAA & Other Federal & State Medical Privacy, Financial Information, Identity Theft & Date Security Compliance and Risk Management
Practical Strategies For Monitoring & Responding To New Requirements & Changing Rules
Participant Questions

About The Speaker

The workshop will be conducted by attorney Cynthia Marcotte Stamer. A Fellow in the American College of Employee Benefits Counsel, recognized in International Who’s Who, North Texas Health Care Compliance Professionals Association Vice-President and Board Certified in Labor & Employment Law, attorney Cynthia Marcotte Stamer has 25 years experience advising and representing private and public health care providers, 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 privacy and data security, health care, health and other employee benefit. employment, insurance and related matters. A well-known and prolific author and popular speaker, Ms. Stamer has worked extensively with heath care providers, health plans and other payers, health and insurance IT and data systems, and others on HIPAA and other privacy and data security concerns. She served as the scrivener for the ABA JCEB Agency Meetings with the Office of Civil Rights on HIPAA Privacy for the past two years. She 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 HIPAA and other privacy and data security risks and requirements as well as a broad range of other health, employee benefits, human resources, insurance, tax, compliance and other matters and representing clients in dealings with OCR and other HHS agencies, as well as the Departments of Labor, Treasury, Federal Trade Commission, HUD and Justice, Congress and state legislatures, and various state attorneys general, insurance, labor, worker’s compensation, medical licensure and disciplinary 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 HIPAA and other privacy, health care, employee benefits, human resources, insurance 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. Her insights on privacy and other matters are quoted in Modern Healthcare, HealthLeaders, Benefits, Caring for the Elderly, The Wall Street Journal and many other publications. 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 ask about arranging counseling, training or presentations or other services by Ms. Stamer, see www.CynthiaStamer.com.

Registration

The Registration Fee is $125.00 per person. Registration Fee Discounts available for groups of three or more. Pre-payment required via website registration required 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.

Continuing Education Credit

The HIPAA Update Workshop is approved to be offered for general certification credit by the State Bar of Texas, Texas Department of Insurance, HRCI and WorldAtWork education credit for the time period offered subject to fulfillment all applicable accrediting agency requirements, completion of required procedures. Note that the applicable credentialing agency retain 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. 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.

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 explore 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.

Comments Off on New OCR HIPAA De-Identification Guidance Among Developments Covered In 12/12 HIPAA Update Web Workshop | ADA, Civil Rights, Consumer Protection, Corporate Compliance, Data Security, Disease Management, Drug & Alcohol, Employers, ERISA, Fiduciary Responsibility, GINA, Health Plans, HIPAA, Human Resources, Insurance, Internal Controls, Medicare Part D, Prescription Drugs, Privacy, Wellness Programs | Tagged: compliance, Health Care, Heatlh Plans, HIPAA, PHI, Texas Medical Records Privacy | Permalink
Posted by Cynthia Marcotte Stamer

SLP Hosts Complimentary 11/27 WEB Briefing On 11/20 ACA Wellness, Pre-Ex & Essential Benefits Guidance

November 26, 2012

Solutions Law Press, Inc. invites employer and other group health plan sponsors, fiduciaries, administrators, insurers, brokers and consultants and others involved in the design and administration of employment-based group health plans to take part in a complimentary Health Care Executive Study Group internet briefing on new and proposed guidance interpreting audit pre-existing condition limitation, wellness and disease management and essential health benefit rules of the Patient Protection & Affordable Care Act (“ACA”) published by Departments of Labor and Health & Human Services on November 20, 2012 to be conducted by attorney Cynthia Marcotte Stamer.

How To Participate

To take part in this complimentary 30 minute briefing, please follow the following steps:

Register here before Noon Central Daylight Time on November 27; then
Join the meeting on Tuesday, November 27, 2012 by 12:00 PM Central Standard Time by connecting over the internet at https://www2.gotomeeting.com/join/606483282
To listen to the presentation, either:
- Use your microphone and speakers (VoIP) – a headset is recommended;
- Call in using your telephone using the following:
  - Dial +1 (312) 878-3082
  - Access Code: 606-483-282
  - Audio PIN: Shown after joining the meeting
  - GoToMeeting®[*] Meeting ID: 606-483-282

Persons having questions or wishing to get more information about participation in the briefing should send an e-mail here or call (214) 452.8297.

About The November 20, 2012 ACA Guidance

The briefing with discuss highlights of the guidance that Departments of Labor and Health & Human Services issued published on November 20, 2012 implementing ACA provisions that make it illegal for insurance companies to discriminate against people with pre-existing conditions, as well as guidance impacting wellness and disease management programs and the “essential health benefits” definition that plays a key role in defining the benefits package mandates applicable to exchange and other health plans and policies required to comply with ACA’s mandates. This guidance includes:

A proposed rule that, beginning in 2014, prohibits health insurance companies from discriminating against individuals because of a pre-existing or chronic condition;
A proposed rule outlining policies and standards for coverage of essential health benefits and companion letter sent to states on the flexibility in implementing the essential health benefits in Medicaid; and
A proposed rule implementing and expanding employment-based wellness programs under ACA.

With this guidance impacting key plan design and cost concerns, employers and other health plan sponsors, plan fiduciaries and administrators, insurers and their vendors will need to act quickly to evaluate the potential implications of this guidance in light of already existing rules and enforcement positions, their plan design and costs, and market and other factors.

Attorney Cynthia Marcotte Stamer To Conduct Briefing

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 watch 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 author 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 see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to cstamer@solutionslawyer.net.

About Solutions Law Press, Inc.

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.

[*] GoToMeeting® Online Meetings Made Easy®.

1 Comment | Uncategorized | Tagged: Affordable Care Act, Employer, Employers, Essential health benefits, Health Insurance, Health Plans, Human Resources, Insurance, pre-existing conditions, Wellness Programs | Permalink
Posted by Cynthia Marcotte Stamer

Rare Court Order Telling Union To Stop Filing Grievances Example Of Employer Risks When Caught Between Competiting Unions

November 23, 2012

A district court judge in Washington has ordered the International Longshore and Warehouse Union (ILWU) to stop processing grievances and filing lawsuits against a competitive union, the International Brotherhood of Electrical Workers (IBEW), and, pending the outcome of further litigation, employers assigning work of plugging in, unplugging and monitoring refrigerated shipping containers at the Port of Portland to IBEW. The litigation between the two competing unions shows how employers can get caught in risky, no-win liability exposures as a result of power battles between competing unions over the right to represent workers performing services for the employers.

The injunctive order steps from a dispute between both unions over which union is entitled to represent a group of workers. Both unions claim the work, citing various contracts and collective bargaining agreements. In August 2012, the National Labor Relations Board issued a decision concluding that the employees represented by the IBEW are entitled to the work. Despite that ruling, the ILWU and two of its locals have continued to file and process grievances against employers serving as carriers at the port, seeking lost wages for work assigned to the IBEW. The ILWU also filed a claim against the IBEW in federal court under the Labor-Management Relations Act.

In granting the petition for injunctive relief from the NLRB’s Regional Office in Seattle late Wednesday, November 22, 2012, U.S. District Judge Michael H. Simon found that, by filing grievances and seeking enforcement of subsequent awards despite the Board’s decision, the ILWU had the unlawful secondary object of pressuring shipping carriers to stop doing business with the Port of Portland. He enjoined the union from filing, processing, maintaining, prosecuting, or threatening grievances or new lawsuits in the matter against the union as well as the carrier employers. With respect to the dispute with IBEW, the court ruled that the continued filing of the grievances against the IBEW constituted an unfair labor practice because the NLRB ruling already had recognized the IBEW as the authorized representative of the covered employees performing the work.

Concerning his decisions to also bar the ILWU from suing and filing charges against the employing carriers that have been caught in the war between the two unions, the Court issued a temporary injunction pending the outcome of the litigation. The court noted that the question of whether the NLRB ruling prohibited the carrier employers from subcontracting work covered by the NLRB order could not be permanently resolved based in the facts on the record, but that the IBEW had produced sufficient evidence of likely success on merits and irreparable harm to justify the court’s issuance of a temporary injunction.

While federal courts rarely enjoin unions under the National Labor Relations Act, the federal court in this matter found in light of the NLRB ruling in favor of the other union, the court’s decision in favor of the IBEW allows the IBEW to move forward for the time being as the representative of the workers. Concurrently, the court’s decision allows the employers caught between the two unions to continue operations for the time being by assigning work to the IBEW workers unless and until the ILWU proves its entitlement to that work.

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 to respond to emerging health plan regulations, monitoring or commenting on these rules, defending your health plan or its administration, or other health or employee benefit, human resources or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

About Ms. Stamer

A Board Certified Labor & Employment attorney and 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.

Ms. Stamer is widely known for her extensive and creative knowledge and experienced with these and other labor and 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 registerto receive future updates about developments on these and other concerns see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to 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 including:

Comments Off on Rare Court Order Telling Union To Stop Filing Grievances Example Of Employer Risks When Caught Between Competiting Unions | ADA, Corporate Compliance, EEOC, Employers, GINA, Human Resources, OFCCP, Retaliation | Tagged: Employer, NLRA, NLRB, unfair labor practices, Union | Permalink
Posted by Cynthia Marcotte Stamer

IRS OKs Retirement Plans Allowing Plan Loans & Hardship Withdrawals To Hurricane Sandy Victims

November 23, 2012

Retirement plan fiduciaries of plans covering participants impacted by Hurricane Sandy seeking loans or hardship withdrawals received some welcome guidance from the Internal Revenue Service (IRS).

The IRS announced November 16 that 401(k)s and similar employer-sponsored retirement plans can make loans and hardship distributions to victims of Hurricane Sandy and members of their families. Read News Release IR-2012-93. For more information, read Announcement 2012-44.

Plan fiduciaries dealing with requests or wishing to offer this option to participants affected by Hurricane Sandy should check this guidance along with existing plan terms and associated loan and hardship withdrawal rules to confirm that their plan terms contain all necessary provisions to use this guidance and their plan’s loan or hardship withdrawal provisions before moving forward. Assuming that the plan contains appropriate provisions and the necessary requirements are met,the guidance says plan fiduciaries can authorize these requests.

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 to respond to emerging health plan regulations, monitoring or commenting on these rules, defending your health plan or its administration, or other health or employee benefit, human resources or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

About Ms. 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 registerto receive future updates about developments on these and other concerns see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to 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 including:

Comments Off on IRS OKs Retirement Plans Allowing Plan Loans & Hardship Withdrawals To Hurricane Sandy Victims | ADA, Corporate Compliance, EEOC, Employers, GINA, Human Resources, OFCCP, Retaliation | Tagged: 401(k), Employee Benefits, Employers, hardship withdrawals, Hurricane Sandy, plan loans | Permalink
Posted by Cynthia Marcotte Stamer

Agencies Release ACA Wellness, Adult Pre-Existing Condition, Essential Health Benefits Guidance; Briefing Planned

November 20, 2012

Employers and other health plan sponsors, insurers, and their administrators and service providers should consider the advisability of updating health plan cost projections, plan documents and procedures, communications and other practices in response to new and proposed guidance interpreting federal health plan rules under the Patient Protection and Affordable Care Act (ACA) released today (November 20, 2012).

Solutions Law Press, Inc. plans will host a webex executive study group briefing to update its members and other interested persons on this new and proposed guidance on Tuesday, November 27, 2012 at Noon Central Time. Interested persons wishing details about registration for this briefing should send an e-mail here.

Guidance Released Today

Earlier today, the Departments of Labor and Health & Human Services issued guidance implementing ACA provisions that make it illegal for insurance companies to discriminate against people with pre-existing conditions, as well as guidance impacting wellness and disease management programs and the “essential health benefits” definition that plays a key role in defining the benefits package mandates applicable to exchange and other health plans and policies required to comply with ACA’s mandates. This guidance includes:

A proposed rule that, beginning in 2014, prohibits health insurance companies from discriminating against individuals because of a pre-existing or chronic condition. Under the rule, insurance companies would be allowed to vary premiums within limits, only based on age, tobacco use, family size and geography. Health insurance companies would be prohibited from denying coverage to any American because of a pre-existing condition or from charging higher premiums to certain enrollees because of their current or past health problems, gender, occupation, and small employer size or industry that the agencies intend to ensure that people for whom coverage would otherwise be unaffordable and young adults have access to a catastrophic coverage plan in the individual market. See HHS Proposed Regulation – Health Insurance Market Rules available here;
A proposed rule outlining policies and standards for coverage of essential health benefits, while giving states more flexibility to implement the Affordable Care Act. Essential health benefits are a core set of benefits that would give consumers a consistent way to compare health plans in the individual and small group markets. A companion letter on the flexibility in implementing the essential health benefits in Medicaid was also sent to states. Related to Essential Health Benefits, Actuarial Value, and Accreditation available here; and
A proposed rule implementing and expanding employment-based wellness programs that the agencies intend to promote health and help control health care spending, while prohibiting what the agencies consider unfair underwriting practices that impermissibly discriminate based on health status. See Proposed regulations here; Study available here; Fact Sheet available here.

Today’s Guidance Just Tip of Iceberg

The guidance published today is the first in an expected deluge of regulatory pronouncements that HHS, DOL, the Internal Revenue Service and state insurance agencies are expected to issue as the rush to finalize arrangements and guidance governing the implementation and enforcement of the ACA health care reforms scheduled to take effect and to tweek guidance on provisions already effective under the law. This guidance adds to the extensive list of previously issued guidance previously published by the Agencies since Congress passed ACA. With the election behind the US and the Supreme Court having rejected initial challenges by businesses and individuals to the employer and individual mandates last Summer, employers and insurers now must get cracking to update their programs and cost estimates to comply with both existing and new guidance while keeping a close eye out for potential changes to ACA or other federal or state health coverage laws as the new Congress is expected to continue to discuss refinements or other changes when the new Congress begins work in January 2013.

What Should Employers Do To Cope With These & Other Health Plan Mandates?

Know The Cast Of Characters & What Hat(s) They Wear
Know What Rules Apply, and How They Affect a Group Health Plan
Review and Update Health Plan Documents to Meet Requirements and Manage Exposure
Update the Plan For Changing Compliance Requirements and Enhanced Defensibility
Consistency Matters: Build Good Plan Design, Documentation and Processes, and Follow Them
Ensure the Correct Party Carefully Communicates About Coverage and Claims in a Compliant, Timely, Prudent, Provable Manner
Prepare For ACA’s Expanded Data Gathering and Reporting Requirements
Select, Contract and Manage Vendors With Care
Help Plan Members Build Their Health Care Coping Skills With Training and Supportive Tools
Pack The Parachute and Locate The Nearest Exit Doors
Get Moving On Compliance and Risk Management Issues
Provide Input On Affordable Care Act Rules

For Help or More Information

About Ms. 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 registerto receive future updates about developments on these and other concerns see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to 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 including:

1 Comment | ADA, Corporate Compliance, EEOC, Employers, GINA, Human Resources, OFCCP, Retaliation | Tagged: ADA, Corporate Compliance, Disability Discrimination, Employee Benefits, Employers, Employment, Health Insurance, Health Plans, Human Resources | Permalink
Posted by Cynthia Marcotte Stamer

New Employee Smart Phone App New Tool In Labor Department’s Aggressive Wage & Hour Law Enforcement Campaign Against Restaurant & Other Employers

November 9, 2012

Restaurant and other U.S. employers should audit and tighten their pay and record keeping practices as the U.S. Department of Labor (DOL) Wage & Hour Division’s deploys its new employee Smart Phone application and other technology tools that DOL plans to use in waging war against employers that violate the Fair Labor Standards Act (FLSA) minimum wage, overtime and record-keeping requirements against employers.

DOL Unveils New Smart Phone Employee App & Other Tools To Promote FLSA Compliance

Under the Obama Administration, the DOL has undertaken a wide range of efforts to promote compliance with and enforce the minimum wage, overtime and other requirements of the FLSA against restaurant and other employers. As part of this enforcement and compliance campaign, DOL is developing and deploying new Smartphone applications and other tools that it hopes with help employees and DOL enforce the FLSA.

One of the newest of these tools is a new Smartphone application intended for use by employees. DOL recently has developed a Smartphone application available here that DOL intends will help employees independently track the hours they work and determine the wages their employer owes them. Available in English and Spanish, DOL reports users can track regular work hours, break times and any overtime hours for one or more employers. DOL touts the new application as allowing workers to keep their own records instead of having to rely on their employers’ records.

The new timekeeping application tool for employees is just one of several new resources that the DOL hopes will support its enforcement and compliance initiatives. For instance, the free mobile application “Eat Shop Sleep” available here from the DOL allows consumers, employees and other members of the public to check if the DOL Wage and Hour Division has investigated a hotel, restaurant or retail location and whether DOL found FLSA violations.

FLSA Wage & Hour Violations Can Carry Big Liability

The FLSA requires that covered nonexempt employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates for hours worked beyond 40 per week. In accordance with the FLSA, an employer of a tipped employee is required to pay no less than $2.13 an hour in direct wages provided that amount plus the tips received equals at least the federal minimum wage of $7.25 an hour. If an employee’s tips combined with the employer’s direct wages do not equal the minimum wage, the employer must make up the difference. Employers are required to provide employees notice of the FLSA’s tip credit provisions, to maintain accurate time and payroll records, and to comply with the act’s restrictions applying to workers under age 18.

Violation of these requirements can result in significant civil or even criminal liability. Under the FLSA’s civil remedy provisions, employers violating minimum wage or overtime requirements can be held liable for back pay plus exemplary damages, attorneys’ fees and other costs. Additional liability can arise from civil penalties imposed for record-keeping violations. If the violations are found to be knowing and willful, criminal penalties also are possible. Since such violations can qualify as a felony under the FLSA, these liabilities can extend both to the employing entity as well as owners or management officials under certain circumstances.

Under the Obama Administration, enforcement of these rules in the restaurant and other industries with low paid workforces has become a key Labor Department priority, as evidenced by recent enforcement actions that the DOL has taken against Oklahoma-based El Tequila LLC restaurants and Florida-based Domino’s Pizza franchise operator PDQ Pizza.

Lawsuit against El Tequila LLC Seeks $1M In Back pay

On October 25, the DOL announced it is suing Tulsa-based El Tequila LLC and its owner, Carlos Aguirre, for alleged violations of the FLSA’s minimum wage, overtime and record-keeping provisions which DOL claims resulted in a total of approximately $1 million in unpaid wages owed to 221 kitchen and wait staff, hosts and bussers at four restaurant locations.

DOL charges that El Tequila LLC violated the FLSA by paying FLSA-covered employees, who in some cases worked as many as 72 hours in a week, a fixed salary without overtime pay for hours worked in excess of 40 hours in a week. In addition to overtime violations, DOL charges this practice resulted in minimum wage violations because employees did not always receive at least the federal minimum wage of $7.25 per hour. DOL also claims investigators found that wait personnel were required to turn their tips over to management at the end of every shift, which caused their pay to fall below the minimum wage. Finally, the suit charges employer did not keep proper records as required.

The suit filed in the Northern District of Oklahoma, Tulsa Division, seeks to recover the full amount of nearly $1 million in back wages for the employees as well as an injunction prohibiting future violations of the FLSA.

Florida-Based Domino’s Pizza Franchise To Pay $371,675 Back pay Settlement

DOL’s announcement of its El Tequila LLC lawsuit follows on the heels of DOL’s October 24 announcement that Melbourne, Florida-based PDQ Pizza, doing business as Domino’s Pizza, has paid $371,675 back pay to settle DOL charges that it violated the FLSA’s overtime, minimum wage and record-keeping provisions.

According to DOL, PDQ operates Domino’s Pizza franchises in 19 locations in Palm Beach, Indian River and Brevard counties.

DOL says its Investigators found systemic violations resulting from the company’s failure to properly compensate tip-earning employees, such as delivery drivers, for all of their hours worked. Even when performing nontipped duties such as cooking, cleaning and stocking, DOL says PDQ Pizza paid the workers as if they were tipped employees, with hourly wage rates as low as $5.15 rather than the required federal minimum wage of $7.25.

DOL also charges that the employer made illegal deductions from employees’ wages for uniforms, and failed to properly calculate and compensate tipped employees for all overtime hours (those worked in excess of 40 in a week).

Finally, DOL charged the employer failed to record and designate hours worked as tipped or nontipped in order to pay employees correctly, which violates the FLSA’s record-keeping provisions.

Following the investigations, DOL reports PDQ Pizza paid all back wages owed and agreed to support future compliance with the FLSA. The company also committed to changing its timekeeping and payroll practices to ensure that all hours worked by tipped and nontipped employees are properly recorded and compensated in accordance with the FLSA.

South Carolina Ponchos Restaurants Pay $486,000 Backpay Settlement

PDQ Pizza’s settlement isn’t unusual. Earlier in October, Poncho’s Inc. – doing business as Poncho’s Mexican Restaurant I, II and III – and Papa’s and Beer Mexican Restaurant agreed to pay 85 employees a total of $485,913 in back wages under a FLSA settlement covering DOL charges of overtime, minimum wage and record-keeping violations at all four restaurant locations.

At Pancho’s Mexican Restaurant I, II and III, investigators found that employees were not properly compensated for all work hours. By reviewing payroll records and conducting employee interviews, investigators determined that tip-earning employees such as servers were made to rely primarily on tips for pay and consequently earned wages that fell below $2.13 per hour in violation of the FLSA’s minimum wage provision. Additionally, other employees such as kitchen staff were paid flat salaries each month — without regard to hours worked — that did not satisfy minimum wage or overtime pay requirements. The employer also failed to maintain accurate records of employees’ work hours and wages. As a result, 38 employees will receive a total of $414,079 in back wages.

DOL says the Papa’s and Beer Mexican Restaurant investigation revealed that the employer made impermissible deductions for uniforms and other expenses from the wages of tip-earning employees, causing their hourly wages to fall below the federal minimum wage. Additionally, other employees such as kitchen staff were paid flat salaries each month — without regard to hours worked — that did not satisfy minimum wage or overtime pay requirements. The employer also failed to record the hours worked by kitchen staff. As a result, a total of $71,834 in back wages is owed to 47 employees.

The restaurants have agreed to maintain future compliance with the FLSA by keeping accurate records of all hours worked by all employees, paying them at least the federal minimum wage, providing overtime compensation, and informing employees in advance that the tip credit will be used.

Restaurant & Other Employers Of Low-Paid Workers Face High Enforcement Risks

While the Obama Administration has made FLSA enforcement in general a priority, it is particularly targeting restaurant and certain other categories of employers who employ low-income workers for scrutiny and enforcement. “The restaurant industry employs some of our country’s lowest-paid, most vulnerable workers,” said Secretary of Labor Hilda L. Solis. “When violations of the FLSA are discovered, the Labor Department will take appropriate action to ensure workers receive the wages they have earned and to which they are legally entitled.”

The Ponchos investigations were conducted under a multiyear enforcement initiative focused on the restaurant industry in South Carolina, where widespread noncompliance with the FLSA has been found. Since the start of fiscal year 2009, the division’s Columbia District Office has concluded more than 300 investigations under the initiative, resulting in more than $2.5 million in back wages recovered for more than 2,500 workers.

“We found many low-wage employees working up to 65 hours a week without any overtime compensation and receiving pay below the federal minimum wage. Unfortunately, significant labor violations like the ones we found in this case are all too common in the restaurant industry,” said Michelle Garvey, director of the division’s Columbia office in the announcement concerning the Ponchos settlement. “We are pleased that these workers finally will be paid their rightful wages and, as demonstrated by our ongoing initiative, we will continue to investigate South Carolina restaurants to remedy violations and ensure sustained compliance with the law.”

In light of these enforcement emphasis and the growing range of tools that the Labor Department is deploying to find and prosecute FLSA violations, restaurant and other employers should use care to ensure that their practices for classifying workers as exempt or non-exempt, recording hours worked and compensating non-exempt workers comply with the FLSA and other relevant laws. When evaluating and deciding how to address potential FLSA exposures, it is critical that employers avoid the temptation to wear role tinted glasses when making wage and hour worker classification or compensable time determinations or take for granted the legal defensibility of past practices within their own or industry workforces.

Under the FSLA and applicable state wage and hour laws, employers generally bear the burden of proving that they have properly paid their employees in accordance with the FLSA. Additionally, the FLSA and most applicable state wage and hour laws typically mandate that employers maintain records of the hours worked by employees by non-exempt employees, documentation of the employer’s proper payment of its non-exempt employees in accordance with the minimum wage and overtime mandates of the FLSA, and certain other records. Since the burden of proof of compliance generally rests upon the employer, employers should take steps to ensure their ability to demonstrate that they have properly paid non-exempt employees in accordance with applicable FLSA and state wage and hour mandates and that employees not paid in accordance with these mandates qualify as exempt from coverage under the FLSA.

These mistakes can be very costly. Employers that fail to properly pay employees under Federal and state wage and hour regulations face substantial risk. In addition to liability for back pay awards, violation of wage and hour mandates carries substantial civil – and in the case of willful violations, even criminal- liability exposure. Civil awards commonly include back pay, punitive damages and attorneys’ fees.

The potential that noncompliant employers will incur these liabilities has risen significantly in recent years. Under the Obama Administration, Labor Department officials have made it a priority to enforce overtime, recordkeeping, worker classification and other wage and hour law requirements. While all employers face heightened prosecution risks, federal officials specifically are targeting government contractors, health care, technology and certain other industry employers for special scrutiny. Meanwhile, private enforcement of these requirements by also has soared following the highly-publicized implementation of updated FLSA regulations regarding the classification of workers during the last Bush Administration. See Minimum Wage, Overtime Risks Highlighted By Labor Department Strike Force Targeting Residential Care & Group Homes; Review & Strengthen Defensibility of Existing Worker Classification Practices In Light of Rising Congressional & Regulatory Scrutiny; 250 New Investigators, Renewed DOL Enforcement Emphasis Signal Rising Wage & Hour Risks For Employers; Quest Diagnostics, Inc. To Pay $688,000 In Overtime Backpay.

Employers Should Strengthen Practices For Defensibility

As a consequence, most employers should review and document the defensibility of their existing practices for classifying and compensating workers under existing Federal and state wage and hour laws and take appropriate steps to minimize their potential liability under applicable wages and hour laws. To minimize exposure under the FLSA, employers should review and document the defensibility of their existing practices for classifying and compensating workers under existing Federal and state wage and hour laws and take appropriate steps to minimize their potential liability under applicable wages and hour laws. Steps advisable as part of this process include, but are not necessarily limited to:

Audit of each position current classified as exempt to assess its continued sustainability and to develop documentation justifying that characterization;
Audit characterization of workers obtained from staffing, employee leasing, independent contractor and other arrangements and implement contractual and other oversight arrangements to minimize risks that these relationships could create if workers are recharacterized as employed by the employer receiving these services;
Review the characterization of on-call and other time demands placed on employees to confirm that all compensable time is properly identified, tracked, documented, compensated and reported;
Review of existing practices for tracking compensable hours and paying non-exempt employees for compliance with applicable regulations and to identify opportunities to minimize costs and liabilities arising out of the regulatory mandates;
If the audit raises questions about the appropriateness of the classification of an employee as exempt, self-initiation of appropriate corrective action after consultation with qualified legal counsel;
Review of existing documentation and recordkeeping practices for hourly employees;
Exploration of available options and alternatives for calculating required wage payments to non-exempt employees; and
Reengineering of work rules and other practices to minimize costs and liabilities as appropriate in light of the regulations.

Because of the potentially significant liability exposure, employers generally will want to consult with qualified legal counsel prior to the commencement of their assessment and to conduct the assessment within the scope of attorney-client privilege to minimize risks that might arise out of communications made in the course of conducting this sensitive investigation.

For Help With Investigations, Policy Updates Or Other Needs

If you need assistance in conducting a risk assessment of or responding to an IRS, Labor Department or other legal challenges to your organization’s existing pay, workforce classification or other labor and employment, employee benefit or compensation practices, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469)767-8872 .

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 23 years of work helping employers; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; and others design, administer and defend innovative workforce, compensation, employee benefit and management policies and practices. The immediate Past Chair and current Welfare Benefit Committee Co-Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and HR.com editorial advisory board member, Ms. Stamer frequently has worked, extensively on these and other workforce and performance related matters. She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters.Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly.

About Solutions Law Press, Inc.™

Comments Off on New Employee Smart Phone App New Tool In Labor Department’s Aggressive Wage & Hour Law Enforcement Campaign Against Restaurant & Other Employers | Employers, Human Resources, Internal Controls, Internal Investigations, Risk Management, Wage & Hour | Tagged: Backpay, Employer, Employment, employment law, Fair Labor Standards Act, FSLA, IT, Labor Department, Minimum Wage, Technology, Wage & Hour, wage and hour, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

12 Steps Every Employer With A Health Plan Should Do Now No Matter Who Wins the Election

October 29, 2012

Business leaders concerned about what to do to manage health benefit costs, responsibilities and liabilities over the next year and to position to cope with impending shifts in the health plan regulatory landscape ahead should check out the “12 Steps Every Employer With A Health Plan Should Do Now” article by Cynthia Marcotte Stamer in the October 26, 2012 online edition of Texas CEO Magazine.

Nationally recognized for quarter century of work advising businesses and governments about health benefit and other employee benefits and human resources matters, Ms. Stamer says regardless of who wins the Presidential election next week, employers need to get moving to deal with current health plan obligations and exposures and brace for new future challenges.

Ms. Stamer writes, “While most employers and insurers of employment-based group health plans view with great concern radically expanded health plan responsibilities taking effect in 2014, many are failing to take steps critical to manage exposures and costs already arising from the Affordable Care Act (ACA) and other federal health plan regulations.”

In the article, Ms Stamer discusses the following 12 steps that she suggests most businesses consider to help catch up with current responsibilities and to help position their business to anticipate and manage future costs and responsibilities:

Know The Cast Of Characters & What Hat(s) They Wear
Know What Rules Apply, and How They Affect a Group Health Plan
Review and Update Health Plan Documents to Meet Requirements and Manage Exposure
Update the Plan For Changing Compliance Requirements and Enhanced Defensibility
Consistency Matters: Build Good Plan Design, Documentation and Processes, and Follow Them
Ensure the Correct Party Carefully Communicates About Coverage and Claims in a Compliant, Timely, Prudent, Provable Manner
Prepare For ACA’s Expanded Data Gathering and Reporting Requirements
Select, Contract and Manage Vendors With Care
Help Plan Members Build Their Health Care Coping Skills With Training and Supportive Tools
Pack The Parachute and Locate The Nearest Exit Doors
Get Moving On Compliance and Risk Management Issues
Provide Input On Affordable Care Act Rules

For Help or More Information

About Ms. 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 registerto receive future updates about developments on these and other concerns see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to 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 including:

Comments Off on 12 Steps Every Employer With A Health Plan Should Do Now No Matter Who Wins the Election | ADA, Corporate Compliance, EEOC, Employers, GINA, Human Resources, OFCCP, Retaliation | Tagged: ADA, Corporate Compliance, Disability Discrimination, Employee Benefits, Employers, Employment, Health Insurance, Health Plans, Human Resources | Permalink
Posted by Cynthia Marcotte Stamer

Boost Employee Recognition of Value Of Employer & Other Retirement Savings Tools & Plans

October 22, 2012

Studies suggest that employees need to save an estimated 40% of current earnings to have sufficient savings to fund the anticipated cost to keep up their lifestyle post retirement for their expected post retirement life expectancy. Although times are tough, American workers need to understand the importance of taking advantage of employer sponsored and other retirement saving and funding tools. Here is a free Department of Labor resource that employers might want to include in their retirement education toolkit.

For More Information Or Assistance

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

About Ms. Stamer

Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization, an American College of Employee Benefits Counsel Fellow, past Chair and current Welfare Benefit Committee Co_Chair of the American Bar Association (ABA) RPTE Employee Benefit & Other Compensation Group, a Council Member of the ABA Joint Committee on Employee Benefits, current TIPS Employee Benefits Committee, Vice Chair, and Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, management attorney and consultant Cynthia Marcotte Stamer has more than 25 years experience advising and representing employers, health and other employee benefit plans, their sponsors, fiduciaries and plan administrators, consultants, vendors, outsourcers, insurers, governments and others about employment, employee benefit, compensation, and a wide range of other performance, legal and operational risk management practices and concerns. As a part of this work, Ms. Stamer has worked extensively with clients to manage risks and defend practices under a wide range of laws and circumstances. Her experience includes extensive work advising and representing employers, plans, plan fiduciaries, trustees, investors, and others about managing and resolving risks relating to distressed pension and other employee benefit plans, downsizing and other workforce re-engineering and other similar matters. A prolific author and popular speaker, Ms. Stamer also publishes, conducts client and other training, testifies, speaks and consults extensively on other employment and employee benefit risk management practices and concerns for the ABA, World At Work, SHRM, American Health Lawyers Association, Institute of Internal Auditors, Society for Professional Benefits Administrators, HCCA, Southwest Benefits Association and many other organizations. An Editorial Advisory Board member and contributing author of HR.com, Insurance Thought Leaders, Employee Benefit News and many other publications, her insights on these and related topics have appeared in Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, Managed Healthcare, Health Leaders, various ABA publications and a many other national and local publications. To learn more about Ms. Stamer, her experience, involvements, programs and publications, see here or contact Ms. Stamer.

Other Resources & Developments

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

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

Comments Off on Boost Employee Recognition of Value Of Employer & Other Retirement Savings Tools & Plans | Bankruptcy, Corporate Compliance, Employers, ERISA, Fiduciary Responsibility, Internal Controls, Reporting & Disclosure, Restructuring, Retirement Plans | Tagged: defined benefit plan, disclosure, ERISA, funding, Labor Department, notices, PBGC, pension plans, reporting, underfunded plans | Permalink
Posted by Cynthia Marcotte Stamer

Texas Landscaper’s $106,000 In Minimum Wage & Overtime Settlement Reminds Employers To Prepare For FLSA Enforcement

October 17, 2012

Midland, Texas-based landscaper, Turf Specialties Inc. (TSI) will pay $106,818 in back wages to 70 current and former landscape workers to settle charges made by the U.S. Department of Labor Wage and Hour Division (DOL) that TSI payment of workers a fixed, bi-weekly salary violated the Fair Labor Standards Act (FLSA) minimum and overtime provisions. The settlement is a reminder to landscape and other U.S. employers of the importance of insuring that their company designs and administers worker classification, salary and other wage and compensation practices and data to defend against wage and other charges and claims.

FLSA & Other Minimum Wage & Overtime Violations Risky

The FLSA requires that properly classify covered non-exempt workers and pay the workers at least the federal minimum wage of $7.25 per hour for all regular hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers treating workers performing serves as exempt from the FLSA minimum wage, overtime and other rules generally bear the burden of proving that the worker either is not properly classified as a common law employee or qualifies as exempt from the FLSA requirements under one of the applicable FLSA exemptions. For non-exempt employees, the applicable employer also generally is responsible for collecting and maintaining records of hours worked and its proper payment of minimum wage and overtime in accordance with the FLSA requirements. In addition to these federal rules, employers generally also are subject to various state minimum wage and overtime requirements. Beyond the risk of enforcement by the DOL and state labor officials, employers violating these rules also generally run the risk of lawsuits brought by employees or groups of employees, seeking actual damages, attorneys fees and costs and punitive or other awards.

TSI Action Illustrates Big Risks of Misclassification Or Other FLSA Violations

The TSI settlement announced today highlights some of the risks that employers run when they get caught playing fast and loose with the FLSA or other wage and hour laws.

According to today’s announcement, a DOL investigation of TSI uncovered a series of FLSA wage and hour DOL investigators found that TSI paid the landscape employees a fixed, biweekly salary that in many workweeks amounted to less than the federal minimum wage of $7.25 per hour and did not compensate the employees at time and one-half their regular rates of pay for hours worked in excess of 40 hours in a particular workweek. DOL also says that TSI committed other minimum wage and overtime violations by improperly deducting from employees’ paychecks amounts for uniforms, broken tools and equipment damage. Investigators also found that several employees working as “crew leaders” were improperly classified as exempt from the FLSA’s overtime provision and consequently denied proper overtime compensation.

TSI Settlement Highlights Rising Risks

One of a growing number of costly wage and hour law settlements, the TSI settlement is a relatively small reminder of how costly a mistake employers can make by engaging in overly aggressive worker classification or pay practices. Through the settlement, TSI avoided potentially much greater fines by agreeing to pay all back wages of more than $106,000 due to the affected workers and committing to future compliance with the FLSA. It comes on the same day as another employer might not get off that lucky. Along with the TSI announcement, DOL also announced that it sued to recover $285,000 in back wages for 171 Ohio restaurant workers working under restaurants three restaurants doing business as El Rancho Grande.Highlighting the growing exposure employers generally face from the heightened Labor Department emphasis on overtime and other wage and hour law enforcement, .the settlement also demonstrates the significant risks that employers face from mischaracterizing or failing to properly pay for on-call, standby or other similar times required of non-exempt employees. Employers and others providing workforce staffing should check and tighten existing worker classification, timekeeping and classification, record keeping and other practices and take other steps to strengthen the defensibility of their practices. As the DOL and private plaintiffs become increasingly aggressive about enforcing these rules, settlements of hundreds of thousands to millions of dollars are increasingly common. See, e.g. Record $2.3 Million+ H-2A Backpay Order Plus Civil Money Penalty Reminds Businesses Employing Foreign Workers To Manage Compliance; Employer Charged With Misclassifying & Underpaying Workers To Pay $754,578 FLSA Back pay Settlement; March 21 New Deadline To Comment On Proposal To Extend Minimum Wage, Overtime Rules To In Home Care Workers; $1 Million + FLSA Overtime Settlement Shows Employers Should Tighten On-Call, Other Wage & Hour Practices; 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.

Unfortunately, many employers often are overly optimistic or otherwise fail to properly understand and apply FLSA rules for characterizing on-call or other time, classifying workers as exempt versus non-exempt or making other key determinations.

Employers wearing rose-tinted glasses when making wage and hour worker classification or compensable time determinations tend to overlook the significance of the burden of proof they can expect to bear should their classification be challenged. Under the FLSA and applicable state wage and hour laws, employers generally bear the burden of proving that they have properly paid their employees in accordance with the FLSA. Additionally, the FLSA and most applicable state wage and hour laws typically mandate that employers maintain records of the hours worked by employees by non-exempt employees, documentation of the employer’s proper payment of its non-exempt employees in accordance with the minimum wage and overtime mandates of the FLSA, and certain other records. Since the burden of proof of compliance generally rests upon the employer, employers should take steps to ensure their ability to demonstrate that they have properly paid non-exempt employees in accordance with applicable FLSA and state wage and hour mandates and that employees not paid in accordance with these mandates qualify as exempt from coverage under the FLSA.

These mistakes can be very costly. Employers that fail to properly pay employees under Federal and state wage and hour regulations face substantial risk. In addition to liability for back pay awards, violation of wage and hour mandates carries substantial civil – and in the case of willful violations, even criminal liability exposure. Civil awards commonly include back pay, punitive damages and attorneys’ fees.

The potential that noncompliant employers will incur these liabilities has risen significantly in recent years. Under the Obama Administration, Labor Department officials have made it a priority to enforce overtime, record keeping, worker classification and other wage and hour law requirements. While all employers face heightened prosecution risks, federal officials specifically are targeting government contractors, health care, technology and certain other industry employers for special scrutiny. Meanwhile, private enforcement of these requirements by also has soared after the highly publicized implementation of updated FLSA regulations on the classification of workers during the last Bush Administration. See Minimum Wage, Overtime Risks Highlighted By Labor Department Strike Force Targeting Residential Care & Group Homes; Review & Strengthen Defensibility of Existing Worker Classification Practices In Light of Rising Congressional & Regulatory Scrutiny; 250 New Investigators, Renewed DOL Enforcement Emphasis Signal Rising Wage & Hour Risks For Employers; Quest Diagnostics, Inc. To Pay $688,000 In Overtime Backpay.

Employers Should Strengthen Worker Classification & Pay Practices For Defensibility

As a result, most employers should check and document the defensibility of their existing practices for classifying and compensating workers under existing Federal and state wage and hour laws and take proper steps to minimize their potential liability under applicable wages and hour laws. To minimize exposure under the FLSA, employers should review and document the defensibility of their existing practices for classifying and compensating workers under existing Federal and state wage and hour laws and tighten processes as needed to minimize their potential liability under applicable wages and hour laws. Steps advisable as part of this process include, but are not necessarily limited to:

Audit of each that the employer treats as either contract labor, salaried or otherwise exempt to assess its continued sustainability and to develop documentation justifying that characterization;
Audit characterization of workers obtained from staffing, employee leasing, independent contractor and other arrangements and implement contractual and other oversight arrangements to minimize risks that these relationships could create if workers are recharacterized as employed by the employer receiving these services;
Review situations where the employer pays a worker salary, flat fees for weeks of work, on-call, standby, per job, per diem or other ways other than on an hourly basisto confirm that all compensable time is properly identified, tracked, documented, compensated and reported;
Review of existing practices for tracking compensable hours and paying non-exempt employees for compliance with applicable regulations and to identify opportunities to minimize costs and liabilities arising out of the regulatory mandates;
If the audit raises questions about the appropriateness of the classification of an employee as exempt, consult with qualified, experienced legal counsel about options and the advisability of corrective action;
Review of existing documentation and recordkeeping practices for hourly, salaried, and other employees and contractors to build a safety net to help mitigate exposures in the event of reclassification or other challenges;
Explore available options and alternatives for calculating required wage payments to non-exempt employees;
Reengineer work rules and other practices to minimize costs and liabilities as appropriate in light of the regulations;
Re-evaluate these arrangements periodically, as well as in the event of a challenge by a similar worker; and
Stay vigilent.

Because of the potentially significant liability exposure, employers generally will want to consult with qualified legal counsel before beginning an assessment and to conduct the assessment within the scope of attorney-client privilege to minimize risks that might arise out of communications made in the course of conducting this sensitive investigation. Because conversations among leadership, with vendors, or with accounting or other consulting service providers about worker classification, wage and other compensation arrangements typically do not enjoy the protection of attorney-client privilege, employers also should exercise caution about securing the assistance of these service providers to conduct risk audits, or when discussing concerns or possible remedies with these parties unless and until proper arrangements are made to include those discussions within the scope of attorney-client privilege or making other suitable arrangements to manage the risks of these disclosures.

For Help With Investigations, Policy Updates Or Other Needs

If you need help in conducting a risk assessment of or responding to an IRS, Labor Department or other agency or private plaintiff legal challenges to your organization’s existing workforce classification, pay or other labor and employment, employee benefit or compensation practices, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469) 767-8872 .

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 23 years of work helping employers; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; and others design, administer and defend innovative workforce, compensation, employee benefit and management policies and practices. A member of the Editorial Advisory Board of HR.com, the immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer frequently has worked, extensively on these and other workforce and performance related matters. She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters.Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly.

About Solutions Law Press, Inc.™

Comments Off on Texas Landscaper’s $106,000 In Minimum Wage & Overtime Settlement Reminds Employers To Prepare For FLSA Enforcement | Employers, Human Resources, Internal Controls, Internal Investigations, Risk Management, Wage & Hour | Tagged: Backpay, Employer, Employment, employment law, Fair Labor Standards Act, FSLA, IT, Labor Department, Minimum Wage, Technology, Wage & Hour, wage and hour, Worker Classification | Permalink
Posted by Cynthia Marcotte Stamer

10/16 NTHCPA Free Study Group Meeting On “Health Care Compliance Spooks & Goblins” Participatory Roundtable Study Group

October 14, 2012

Texas healthcare compliance professionals and other health care leaders concerned about managing their compliance risks and exposures may wish to consider joining the North Texas Healthcare Compliance Professionals Association on October 16, 2012 for lunch and a lively roundtable discussion of health care compliance concerns. “Health Care Compliance Spooks & Goblins” to be led by Erma Lee, JPS Health Network District Compliance Officer and NTHCPA President on Tuesday, October 16, 2012 from 11:30 a.m. to 1:30 p.m. at the Dallas Ft Worth Hospital Council Offices at 250 Decker Drive, Irving, TX 75062-2706. Parties wishing to take part should RSVP here by 6:00 p.m. on October 15, 2012.

With North Texas area health care providers increasingly among those targeted for attention by the high-profile HEAT Task Force and other health care fraud stings, audits, and enforcement and requirements and enforcement tightening a myriad of other compliance areas, health care world increasingly makes health care facilities and providers negotiate a challenging spookhouse full of compliance and enforcement risks for health care organizations and their compliance teams.

The NTHCPA invites health care compliance professionals and other health industry leaders to share their top compliance spooks and exchange strategies for finding and managing your health care compliance demons with other North Texas health care compliance leaders by participating in this lively participatory roundtable discussion at this month’s NTHCPA Meeting.

RSVP & Register For Invites & Updates

The meeting will be held from 11:30 a.m. to 1:30 p.m. on October 16, 2012 at the offices of the Dallas Ft Worth Hospital Council, 250 Decker Drive, Irving, TX 75062-2706.

There is no charge to take part in the meeting. To help us to arrange for adequate space and refreshments for this meeting, however, advance registration is required. RSVP here by 6:00 p.m on October 15, 2012. A complimentary light lunch will be provided for those who timely R.S.V.P. Walk in guests will be accommodated on a space-available basis. While we welcome last-minute attendees, please let us know you are coming and update us if your plans change so that we can plan for appropriate space and meals!

Mark Your Calendars & Save The Date

The NTHCPA has an exciting series of future programs planned for upcoming months. Interested persons should also mark their calendars and save the date to take part in these upcoming NTHCPA Meetings and programs:

November 20, 2012 – “After November-Lame Duck Sequestration: Implications for Health Care”

Steve Love, President, and Chief Executive Officer, Dallas-Fort Worth Hospital Council

December 18, 2012 – No Study Group Meeting In Celebration of The Holiday Season

January 15, 2013 – “Physician Compensation Compliance Risks & Performance Management Tools”

Alice L. King. National Practice Leader Physician Compensation and Alignment, Towers Watson

February 19, 2013 – “CHNAs, 501(r)(9), Governance & Other Tax Challenges Facing Exempt Organizations”

Nancy Z. Evetts, Mid-America Region Leader, Not-For Profit Tax, Deloitte Tax LLP

About the NTHCPA

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

Would you or someone you know like to join the NTHCPA, get notice of upcoming meetings or events and network on relevant professional developments with other health care professionals? Stay on top of information about upcoming meetings and share and dialogue with other NTHCPA members about health care compliance challenges and developments by participating in our meetings and events, joining our Linked In Group here and checking out the NTHCPA News here. To be added to our invitation list, we also encourage interested persons to make sure we have your current contact information by sending your current contact information including name, title, company, preferred mailing address, e-mail, and telephone number to Vice-President Cynthia Marcotte Stamer here.

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

Stay In Touch. Check Out NTHCPA’s Newsletter, the NTHCPA News here!

Comments Off on 10/16 NTHCPA Free Study Group Meeting On “Health Care Compliance Spooks & Goblins” Participatory Roundtable Study Group | Uncategorized | Tagged: Events, Health Care, Health Care Fraud, Health Care Risk Management, Hospital, Medicare, Meetings, Physicians | Permalink
Posted by Cynthia Marcotte Stamer

NLRB’s Nailing of Bel Air Hotel Reminder RIFs, Other Reengineering & Transactions Impacting Workforce Requirement Proper Risk Management

October 5, 2012

Severance Deals Get Hotel Bel-Air Nailed By NLRB For Labor Law Violations

A National Labor Relations Board (NLRB) decision that nails Hotel Bel-Air (Hotel) for offering severance packages to unionized workers highlights one of a range of potentially costly missteps that businesses conducting reductions in force or other re-engineering risk if they fail to properly understand and manage legal requirements when designing and implementing the change.

Since labor and other workforce-related risks are long-standing, some businesses, their leaders and consultants may be tempted to assume that prior experience means these are handled. The fact specific nature of the risks and changing rules and enforcement, however, makes it critical not to be over-confident. Legal and operational mismanagement of these risks can disrupt achievement of the purpose of the change and add significant added cost and exposure for the business and its management. Proper use of qualified legal counsel as part of the process is important both to help identify and properly manage risk and to leverage attorney-client privilege to help shield sensitive communications in the planning and implementation of these activities from discovery.

Employer’s Obligations To Negotiate & Deal With Union

Once a union is recognized as the certified representative of employees in a workplace, the National Labor Relations Act (NLRA) generally prohibits the employer from unilaterally changing term and conditions of employment or from going around the union to bargain directly with employees over layoffs, the effects of layoffs and other material terms and conditions of employment. As part of this responsibility, the NLRA and other federal and state laws generally require that employers provide notification to the union of planned reductions in force, plant closings or other operational changes that might impact the workforce and bargain in good faith with the union before conducting layoffs, or offering or making in work rules, compensation, severance or other benefits or other terms or conditions of employment.

In general, an employer’s duty to bargain with a union generally also continues to apply when the collective bargaining agreement between the union and the employer expires unless and until the parties reach agreement or impasse. While negotiations continue, the employer’s obligation to refrain from making unilateral changes generally encompasses a duty to refrain from implementation unless and until an overall impasse has been reached on bargaining for the agreement as a whole. See Pleasantview Nursing Home, 335 NLRB 96 (2001) citing Bottom Line Enterprises, 302 NLRB 373 (1991). The NLRB considers negotiations to be in progress, and will not find a genuine impasse to exist, until the parties are warranted in assuming that further bargaining would be “futile” or that there is “no realistic possibility that continuation of discussion . . . would be fruitful.” Saint-Gobain Abrasives, Inc., 343 NLRB 542 556 (2004).

Because the existence of impasse is a factual determination that depends on a variety of factors, including the contemporaneous understanding of the parties as to the state of negotiations, the good faith of the parties, the importance of the disputed issues, the parties’ bargaining history, and the length of their negotiations, Taft Broadcasting Co., 163 NLRB 475, 478 (1967), parties to the negotiation often do not necessarily agree when they have reached impasse. As the September 28 decision by the NLRB against the Hotel shows, employers that act unilaterally based on an overly optimistic determination of impasse suffer significant financial and other operational and legal risks for engaging in unfair labor practices in violation of Section 8 of the NLRA.

NLRB Nails Hotel Bel-Air For Failing To Bargain, Offering Severance Around Union

In its September 28, 2012 Bel-Air Hotel Decision, the NLRB ruled the Hotel engaged in unfair labor practices in violation of the NLRA when it offered severance packages to laid off workers in return for the workers’ waiver of recall rights without bargaining to impasse with the union representing its workers, UNITE HERE Local 11 (Union), about the effects of the temporary shutdown.

The NLRB also ruled the Hotel engaged in unlawful direct dealing by contacting the employees about severance packages without going through the Union even though the Hotel’s contract with the union had expired when the Hotel contacted the laid off union employees to offer severance in return for waivers. As a result, the NLRB ordered the Hotel to rescind the waiver and release forms signed by the Union members and to meet and bargain with the Union on these terms.

Bel-Air Hotel Decision Background

The NLRB order against the Hotel resulted from unfair labor practice charges that the Union filed against the Hotel after the Hotel offered severance packages directly to workers in exchange for the workers’ waiver of their recall rights while the workers were laid off during the Hotel’s temporary closure for renovations in 2009.

Before the Hotel offered the severance package directly to the laid off workers, the Hotel and the Union bargained for nine months about the terms of a separation agreement and recall rights for employees who would lose their jobs during a planned 2-year shutdown of the facility for renovation. In April, 2010, the Hotel gave the Union what it said was the “last, best, and final offer” on severance pay for unit employees laid off during the temporary renovation closure. While the Union and the Hotel did talk after the Hotel made this final offer. Unfortunately, the parties did not reach an agreement before their existing collective bargaining agreement expired or before the Hotel shut down the facility for renovation. After the shutdown, the Union and the Hotel stopped formal negotiations but had some “off the record” informal communications until June. With no resolution by the end of June, the Hotel moved forward unilaterally to offer severance directly to the laid off employees as outlined in its final offer.

Although the facility was closed and the employees already laid off when the Hotel’s contract with the Union expired, the Union claimed the Hotel remained obligated to negotiate with the Union. The Union said a flurry of “off-the-record” discussions between the Hotel and the Union leading up to and after the termination showed the parties had not reached impasse. The Union also separately charged that the Hotel violated the NLRA by going around the Union to directly contact employees to offer severance payments in exchange for waiving their right to return to their jobs when the Hotel reopened after renovation.

In response to unfair labor practices charges filed by the Union, Hotel management among other things argued that the Union no longer represented the employees when it offered severance and because the parties’ contract had expired and the parties were at impasse when the Hotel made the offer.

Union Remained Representative Despite Layoff & Temporary Facilities Shutdown

The NLRB found “meritless” the Hotel’s effort to rely upon the NLRB’s decision in Sterling Processing Corp., 291 NLRB 208 (1988) to support the Hotel’s claim that it had no duty to bargain or extend the severance offers through the Union because it made the unilateral severance offer when the facility was closed and the employees were already laid off.

In Sterling, the NLRB found the employer’s unilateral modification of preclosure wages and working conditions did not violate Section 8(a)(5) of the NLRA because when the employer acted unilaterally, there were no employees for the union to represent because when the employer took its unilateral action, the employer already had permanently closed the facility and terminated all employees with no reasonable expectation of reemployment.

The NLRB ruled that the circumstances when the Hotel acted were distinguishable from Sterling because the unit employees on layoff from the Hotel retained a reasonable expectation of recall from layoff since the Hotel’s closure was only temporary and the Hotel had only laid off, and not yet discharged the employees when it made the unilateral severance offers. According to the NLRB, the terms of the severance offer evidenced the existence of an expectation of recall because under the terms of that offer, employees who accepted a severance payment waived their recall rights. See, Rockwood Energy & Mineral Corp., 299 NLRB 1136, 1139 fn. 11 (1990), enfd. 942 F.2d 169 (3d Cir. 1991)(finding that lengthy suspension of production did not relieve employer of its bargaining obligation where laid off employees had “some expectation of recall,” and distinguishing Sterling).

No Impasse Because Of Informal “Off The Record” Communications

The Hotel also separately and unsuccessfully argued that its direct offer of severance benefits to laid off employees was not an unfair labor practice because the parties had bargained to impasse before the offer was made. In response to the Union’s claim that a series of “off-the-record” exchanges between the Union and Hotel after the contract expired reflected a continuation of bargaining, the Hotel argued that an impasse existed because the Union was not engaged in good faith negotiations and there was not any possibility that the informal discussions between the Union and the Hotel would result in any fruitful change in the parties positions.

In an effort to support its position, the Hotel management argued that the Union’s negotiation behavior with other Los Angeles hotels showed the Union had a practice of “artificially extend[ing] negotiations in bad faith” that supported the Hotel’s claim that continued negotiation would be futile. The NLRB rejected this argument too. It said evidence that the Union did not bargain in good faith to string out negotiations when negotiating with other businesses as part of a campaign to coerce all hotels city wide to agree to a standard contract had no probative relevance for purposes of determining if the Hotel and the Union had bargained to impasse in their negotiations and did not prove bad faith by the Union for purposes of its negotiation with the Hotel.

Having rejected these and other Hotel arguments and evidence of impasse, the NLRB ruled that the evidence indicated that the parties continued communications had narrowed their differences before and after the Hotel made its last final offer on April 9. Given this progress, the NLRB ruled that parties’ participation in informal off the record discussions well into June were sufficient to show the existence of some possibility that continued negotiations might result in a fruitful change in the parties position sufficient to obligate the Hotel to continue to bargain with the Union.

NLRB Order Carries Heavy Cost for Bel-Air Hotel

Complying the NLRB’s orders to remedy the breach will be painful and expensive for the Hotel, particularly since by the time the order was issued, the renovation was substantially completed.

To fulfill the requirements of the Order, the Hotel must, among other things:

Bargain with the Union as the recognized and exclusive collective-bargaining representative of the employees about the effects on bargaining unit employees of the temporary shutdown of the hotel for renovation and, if an understanding is reached, embody the understanding in a signed collective bargaining agreement;
Not deal directly with bargaining unit employees about severance, waiver and release or other terms or arrangements relating to the impact of the temporary shutdown on the bargaining unit employees
Rescind the waiver and release agreements signed by individual bargaining unit employees which included the waiver of rehire rights; and
Post a NLRB-mandated written notice in the workplace for 60 consecutive days in conspicuous places.

This means that the Hotel will have to work through issues about how to find positions for employees, if any, who originally agreed to waive their rehire rights who now wish to be rehired, as well as engage in expensive bargaining and the implementation of the terms of any resulting collective bargaining agreement.

Union Duties One of Many Potential HR RIF & Deal Traps

The NLRB’s prounion ruling is unsurprising. Since the Obama Administration took office, its NLRB appointments, rule changes and other activism are intended to and are promoting the strength and efforts of labor. See e.g. Labor Risks Rising For Employers Despite NLRB Loss Of Arizona Secret Ballot Challenge : HR Article by Ms. Cynthia Marcotte Stamer .

Collective bargaining responsibilities like those that resulted in the NLRB order against the Hotel are only one of many potential labor, human resources and benefits-related traps that businesses need to negotiate carefully when planning and executing layoffs or other workforce restructurings in connection with cost or other restructurings, business transactions or other activities impacting the workforce.

Some examples of other issues and risks that businesses involved in changes impacting their workforce also may need to manage include but are not limited to the need to manage discrimination, federal and state leave, whistleblower and retaliation, and other general employment-related legal risks and responsibilities; to give Worker Adjustment and Retraining Act (WARN) or state law required plant closing or other notifications to workers, unions, government officials, vendors, customers, lenders or other creditors, insurers or others; to disclose, review, modify or terminate contracts, employee benefit plan documents, communications and other materials; to modify fiduciary, officer, board or other assignments and other related insurance, indemnification, bonding and related arrangements; to comply with employee benefit and compensation related plan document, fiduciary responsibility, discrimination, communication, benefit funding or distribution, reporting and disclosure and other Employee Retirement Income Security Act, Internal Revenue Code, securities and other laws and regulations; privacy, trade secret, and other data integration, confidentiality, and information security and management concerns; Sarbanes-Oxley and other securities, accounting or related requirements; system and data integration; and many others.

Because improper handling of these or other responsibilities in connection with these responsibilities can significantly undermine the businesses’ ability to realize the financial and operational goals behind the action, as well as expose the business to potentially costly liability, businesses anticipating or conducting reductions in the force or other activities that will impact their workforce should seek advice and help from qualified legal counsel experienced with these concerns early to mitigate these concerns.

If you have any questions or need help with these or 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 25 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-mail to 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 including:

Comments Off on NLRB’s Nailing of Bel Air Hotel Reminder RIFs, Other Reengineering & Transactions Impacting Workforce Requirement Proper Risk Management | ADA, Corporate Compliance, EEOC, Employers, GINA, Human Resources, OFCCP, Retaliation | Tagged: ADA, Corporate Compliance, Disability Discrimination, Employee Benefits, Employers, Employment, Health Insurance, Health Plans, Human Resources, Management, NLLRB, NLRA, reductions in force, Severance, unfair labor practices, Union | Permalink
Posted by Cynthia Marcotte Stamer

Tighten Employment Disability Risk Management As Obama Declares 12/10 National Disability Employment Awareness Month

October 1, 2012

In his proclaimation today, President Obama reaffirmed his often stated commitment to the aggressive enforcement of disability laws and other efforts to promote opportunities for disabled individuals, stating:

“[My Administration remains committed to helping our businesses, schools, and communities support our entire workforce. To meet this challenge,… we are striving to make it easier to get and keep those jobs by improving compliance with Section 508 of the Rehabilitation Act.

As the administration marks the month, U.S. employers and other business leaders can expect the Obama Administration will be stepping up its already aggressive outreach to disabled Americans to promote awareness of their disability law rights and tools for asserting and enforcing these rights.

Business Faces Growing Employment Disability Exposures

As part of his administration’s commitment, the Obama Administration has moved to aggressively enforce the disability and accommodations of teh Americans With Disabilities Act, Section 508 of the Rehabilitation Act, and other federal disability discrimination laws. The reach and effectiveness of these efforts has been enhanced by statutory and regulatory changes that require employers to exercise greater efforts to meet their compliance obligations and manage their disability and other discrimination risks.

ADA Exposures Heightened

The ADA, for instance, 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. 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).

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.

Recent enforcement, regulatory and other activities by the EEOC demonstrate that the EEOC is enthusiastically moving forward to exercise its regulatory and enforcement powers under these enhanced ADA provisions to tighten requirements for employers and to enforce its rules. See e.g., Leprino Foods To Pay $550K To Settle OFCCP Charge Pre-Hire Screening Test Illegally Discriminated « As EEOC Steps Up ADA Accommodation Enforcement, New DOD Apple App, Other Resources Released; Wal-Mart Settlement Shows ADA Risks When Considering Employee Return To Work Accommodation Requests & Inquiries; Employer Pays $475,000 To Settle ADA Discrimination Lawsuit Challenging Medical Fitness Testing For EMTs, Firefighters & Other Public Safety Worker’s.

Rehabilitation Act Risks For Government Contractors

Beyond the generally applicable risks applicable to all employers of more than 15 employees under the ADA, federal and state government contractors face additional responsibilities and risks.

OFCCP has made clear that it will conduct compliance evaluations and host compliance assistance events to ensure that federal contractors comply and are aware of their responsibilities under EO 11246, Section 503 and VEVRAA.

While many government contractors may be tempted to become complacent about OFCCP exposures based on reports of the OFCCP’s relatively low enforcement in the past, see Report Says OFCCP Enforcement Data Show Infrequent Veteran, Disability Bias Findings | Bloomberg BNA recent enforcement data documents OFCCP is getting much more serious and aggressive about auditing and enforcing compliance with its affirmative action and other requirements against government contractors under the Obama Administration. See, OFCCP Enforcement Data is Available on a New DOL Website. See also, Affirmative Action Update: OFCCP Enforcement Statistics Show Increase in Violations. The readiness of OFCCP to enforce its rules is illustrated by the settlement of an OFCCP action filed against federal contractor Nash Finch Co. (Nash Finch) announceed last week. Under the settlement, Nash Finch to pay $188,500 in back wages and interest and offer jobs to certain women applicants who OFCCP charged Nash rejected for the entry-level position of order selector at the company’s distribution facility in Lumberton, Minnesota. See Settlement of OFCCP Employment Discrimination Charge Reminder To ARRA, Other Government Contractors Of Heightened Enforcement Risks.

These government contractor disability discrimination risks are particularly acute where the government contractor works on or provides supplies on contacts or projects funded in whole or in part by monies provided under the American Recovery and Reinvestment Act of 2009 (“ARRA”). When the contract or project in question receives any funding out of the $787 billion of stimulus funding provided by ARRA, special OFCCP rules applicable to ARRA funded projects necessitates that federal contractors exercise special care to understand and meet their responsibilities and manage associated exposures. See, e.g. Settlement of OFCCP Employment Discrimination Charge Reminder To ARRA, Other Government Contractors Of Heightened Enforcement Risks.

Businesses Should Act To Manage Risks

The ADAAA amendments, the Rehabilitation Act’s expanded reach, and 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 and claim protection as disabled under the ADA, the Rehabilitation Act, and other disability discrimination laws.

In light of these and other developments and risks, 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, the Rehabilitation Act and other laws. 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.

Likewise, businesses should be prepared for the EEOC, OFCCP 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.

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.

If you have any questions or need help reviewing and updating your organization’s employment and/or employee practices in response to the Rehabilitation Act, ADA, 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, Board Certified Labor and Employment Attorney and Management Consultant Cynthia Marcotte Stamer at 469..

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 25 years human resource, employee benefits and management 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

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.

Comments Off on Tighten Employment Disability Risk Management As Obama Declares 12/10 National Disability Employment Awareness Month | ADA, Affirmative Action, Corporate Compliance, Disability, Disability, Disability Plans, EEOC, EEOC, Employers, FMLA, GINA, Government Contractors, Human Resources, Labor Management Relations, OFCCP, Retaliation, USERRA, VEVRRA | Tagged: ADA, Corporate Compliance, Disability Discrimination, Employee Benefits, Employers, Employment, Health Insurance, Health Plans, Human Resources | Permalink
Posted by Cynthia Marcotte Stamer

Tighten Disability Discrimination Defenses As National Disability Employment Awareness Month Promises To Whip Up New Claims & Awareness

October 1, 2012

President Obama’s declaration today (October 1, 2012) of October as National Disability Employment Awareness Month reminds business that U.S. businesses and their leaders need to tighten their disability discrimination risk management and compliance in light of the Obama Administration’s emphasis on aggressively interpreting and enforcing disability discrimination laws, rising private plaintiff lawsuits and other recent regulatory and judicial changes. With the Administration expected to step up further its already substantial educational outreach to the disabled and their advocates, U.S. employers should brace for this month’s celebration to fuel even more disability discrimination claims and other activity by the disabled and their activists.

Since taking office, President Obama has make enforcing and expanding the rights of the disabled in employment and other areas a leading priority.

In his proclamation today, President Obama reaffirmed his often stated commitment to the aggressive enforcement of disability laws and other efforts to promote opportunities for disabled individuals, stating:

Business Faces Growing Employment Disability Exposures

As part of his administration’s commitment, the Obama Administration has moved to aggressively enforce the disability and accommodations of the Americans With Disabilities Act (ADA), Section 508 of the Rehabilitation Act, and other federal disability discrimination laws. The reach and effectiveness of these efforts has been enhanced by statutory and regulatory changes that require employers to exercise greater efforts to meet their compliance obligations and manage their disability and other discrimination risks.

ADA Exposures Heightened

The ADA, for instance, 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. 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 experienced 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).

In recent years, amendments to the original provisions of the ADA have made it easier for plaintiffs and the EEOC to prove 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 part 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 significantly stepped up enforcement of the ADA and other federal discrimination laws.

Recent enforcement, regulatory and other activities by the EEOC show that the EEOC is enthusiastically moving forward to exercise its regulatory and enforcement powers under these enhanced ADA provisions to tighten requirements for employers and to enforce its rules. See e.g., Leprino Foods To Pay $550K To Settle OFCCP Charge Pre-Hire Screening Test Illegally Discriminated « As EEOC Steps Up ADA Accommodation Enforcement, New DOD Apple App, Other Resources Released; Wal-Mart Settlement Shows ADA Risks When Considering Employee Return To Work Accommodation Requests & Inquiries; Employer Pays $475,000 To Settle ADA Discrimination Lawsuit Challenging Medical Fitness Testing For EMTs, Firefighters & Other Public Safety Worker’s.

Rising Rehabilitation Act Risks For Government Contractors

Beyond the generally applicable risks applicable to all employers of more than 15 employees under the ADA, federal and state government contractors face more responsibilities and risks.

Subject to limited exceptions, government contractors providing services or supplies on ARRA or other government-funded contracts or projects must comply both with generally applicable employment discrimination requirements and special statutory and contractual nondiscrimination, affirmative action, and recordkeeping requirements applicable government contractors. For instance, federal law generally requires government contractors to comply with the special equal employment opportunity requirements of Executive Order 11246 (EO 11246); Section 503 of the Rehabilitation Act of 1973 (Section 503); and the Vietnam Veterans’ Readjustment Assistance Act of 1974 (VEVRAA). Pursuant to these laws, business with the federal government, both contractors and subcontractors, generally must follow a number of statutory and contractual requirements to follow the fair and reasonable standard that they not discriminate in employment on the basis of sex, race, color, religion, national origin, disability or status as a protected veteran. OFCCP generally audits and enforces these requirements. Memo to Funding Recipients: Compliance with Applicable Nondiscrimination and Equal Opportunity Statutes, Regulations, and Executive Orders.

These government contractor disability discrimination risks are particularly acute where the government contractor works on or provides supplies on contacts or projects funded in whole or in part by monies provided under ARRA. When the contract or project in question receives any funding out of the $787 billion of stimulus funding provided by ARRA, special OFCCP rules applicable to ARRA funded projects necessitates that federal contractors exercise special care to understand and meet their responsibilities and manage associated exposures. See, e.g. Settlement of OFCCP Employment Discrimination Charge Reminder To ARRA, Other Government Contractors Of Heightened Enforcement Risks.

GINA & Other Medical Information Nondiscrimination & Privacy Risks

Employers also need to use care to ensure that their hiring and other employment practices, as well as their employee benefits, workers’ compensation and wellness practices are up to date and properly managed to mitigate exposures under laws like the Genetic Information and Nondiscrimination Act (GINA), the ADA’s medical information privacy requirements, as well as the privacy and nondiscrimination rules of the Health Insurance Portability & Accountability Act and other relevant federal and state laws.

Signed into law by President Bush on May 21, 2008 and in effect since November 21, 2009, for instance, Title VII of GINA amended the Civil Rights Act to prohibit employment discrimination based on genetic information and to restrict 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 now 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:

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 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. Under these HIPAA and GINA rules, health plans generally may not make certain medical inquiries or discriminate against employees or their family members based on family or individual medical history or genetic information. In addition, health plans and others are required to safeguard personal medical information and may only share that information only under very limited circumstances requiring specific documentation be in place and that the parties can prove that the access and use of that information is appropriately restricted. Violation of these and other rules can have significant civil and in some cases even criminal liabilities for companies, plans, plan fiduciaries and company officials that take part in violations of these rules.

Businesses Should Act To Manage Risks

The ADAAA amendments, the Rehabilitation Act’s expanded reach, and 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 have fewer legal shields to defend themselves against these claims. These changes will make it easier for certain employees to qualify and claim protection as disabled under the ADA, the Rehabilitation Act, and other disability discrimination laws.

All U.S. businesses should review and tighten the adequacy of their existing compliance and risk management practices to promote and document compliance. These efforts should focus on all relevant hiring, recruitment, promotion, compensation, recordkeeping and reporting policies and practices internally, as well as those of any recruiting agencies, subcontractors or other business partners whose actions might impact on compliance.

In light of these and other developments and risks, 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, the Rehabilitation Act and other laws. Management should exercise caution to carefully and appropriately assess and identify 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 management might be tempted to assume fall outside the ADA’s scope.

Likewise, businesses should be ready for the EEOC, OFCCP 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.

In the face of the rising emphasis of OFCCP, the EEOC and other federal and state agencies on these audit and enforcement activities, government contractors should exercise additional compliance and risk management efforts beyond these generally recommended steps. Among other things, these steps should include the following:

Government contractors and subcontractors should specifically review their existing or proposed contracts and involvements to identify projects or contracts which may involve federal or state contracts or funding that could trigger responsibility. In this respect, businesses should conduct well-documented inquiries when proposing and accepting contracts to ensure that potential obligations as a government contractor are not overlooked because of inadequate intake procedures. Businesses also should keep in mind that ARRA and other federal program funds often may be filtered through a complex maze of federal grants or program funding to states or other organizations, which may pass along government contractor status and liability when subcontracting for services as part of the implementation of broader programs. Since the existence of these obligations often is signaled by contractual representations in the contracts with these parties, careful review of contractual or bid specifications and commitments is essential. However, it also generally is advisable also to inquire about whether the requested products or services are provided pursuant to programs or contracts subject to these requirements early in the process.
In addition to working to identify contracts and arrangements that are covered by OFCCP or other requirements, government contractors and other businesses also should reconfirm and continuously monitor the specific reporting, affirmative action, and other requirements that apply to any programs that may be subject to OFCCP requirements to ensure that they fully understand and implement appropriate procedures to comply with these conditions as well as pass along the obligation to make similarly necessary arrangements to any subcontractors or suppliers that the government contractor involves as a subcontractor.
Throughout the course of the contract, the government contractor also should take steps to maintain and file all required reports and monitor and audit operational compliance with these and other requirements.
The organization should develop and administer appropriate procedures for monitoring and investigating potential compliance concerns and maintaining documentation of that activity. Any known potential deficiencies or complaints should be promptly investigated and redressed with the assistance of qualified counsel in a prompt manner to mitigate potential risks.
Documentation should be carefully retained and organized on a real time and continuous basis to faciliate efficiency and effectiveness in completing required reports, monitoring compliance indicators and responding to OFCCP, EEOC or private plaintiff charges as well as other compliance inquiries.
Any audit inquiries or charges should be promptly referred to qualified legal counsel for timely evaluation and response.
When available and affordable, management should consider securing appropriate employment practices liability coverage, indemnification from business partners and other liability protection and assurance to help mitigate investigagtion and defense costs.
Board members or other senior management should include periodic review of compliance in their agenda.

If you have any questions or need help reviewing and updating your organization’s employment and/or employee practices in response to the Rehabilitation Act, ADA, GINA or other applicable laws, or if we may be of help with regard to any other workforce management, employee benefits or compensation matters, please do not hesitate to contact the author of this update, Board Certified Labor and Employment Attorney and Management Consultant Cynthia Marcotte Stamer at 469.767.8872.

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 meet their business and operational goals and manage legal, operational and other risks. Board certified in labor and employment law by the Texas Board of Legal Specialization, with more than 25 years human resource, employee benefits and management 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-mail here.

Other Helpful Resources & Other Information

Comments Off on Tighten Disability Discrimination Defenses As National Disability Employment Awareness Month Promises To Whip Up New Claims & Awareness | ADA, Affirmative Action, Civil Rights, Corporate Compliance, Data Security, Disability Plans, Discrimination, EEOC, Employers, GINA, Government Contractors, VEVRRA | Tagged: ADA, Disability, Disability Discrimination, EEOC, Employer, GINA, Human Resources, Rehabilitation Act, Risk Management | Permalink
Posted by Cynthia Marcotte Stamer

Settlement of OFCCP Employment Discrimination Charge Reminder To ARRA, Other Government Contractors Of Heightened Enforcement Risks

September 29, 2012

Federal contractor Nash Finch Co. (Nash Finch) will pay $188,500 in back wages and interest and offer jobs to certain women applicants who the U.S Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) charged Nash rejected for the entry-level position of order selector at the company’s distribution facility in Lumberton, Minnesota under a consent decree approved by an OFCCP administrative law judge this week.

Nash Finch Settlement Highlights

Minneapolis-based and the second-largest wholesale food distributor in the U.S., Nash Finch distributes food products to military commissaries around the world. Since the start of the OFCCP review period on May 1, 2005, Nash Finch has received payments of more than $14 million from the U.S. Department of Defense.

The consent decree resolves an OFCCP administrative action commenced after OFCCP investigators conducted a review of Nash Finch’s employment practices at the Lumberton facility from May 1, 2005, to Dec. 31, 2006. OFCCP asserted that Nash Finch had failed to ensure qualified female job applicants received equal consideration for employment without regard to sex as required by Executive Order 11246. OFCCP filed a complaint with the Labor Department’s Office of Administrative Law Judges on Nov. 30, 2010, alleging that Nash Finch systematically had discriminated against women who applied for jobs as order selectors during a nine-month period in 2006. See Solis v. Nash Finch Co., OFCCP Case Number: 2011-OFC-00004. Under the consent decree, Nash Finch will pay $188,500 in back pay and interest to the 84 women. In addition to the financial remedies, the settlement requires Nash Finch to extend job offers to up to 12 women in the original class as order selector positions become available. The company must also submit progress reports to OFCCP for the next two years.

Reflective of the growing emphasis of OFCCP and other federal agencies on audit and enforcement of compliance with federal employment discrimination and affirmative action laws, the Nash Finch charges and resultant settlement highlight that the Obama Administration’s emphasis on employment discrimination and other civil rights laws expansion and enforcement is resulting in increased liability for employers that fail to take appropriate steps to manage compliance related risks.

Settlements Remind ARRA & Other Federal Government Contractors To Act To Defend Against Heightened Requirements & Enforcement

The OFCCP action and settlement against Nash Finch and other recent OFCCP and other employment discrimination law enforcement actions and settlements against government contractors and other U.S. employers remind U.S. businesses that provide services or supplies directly or as subcontractors on federally funded projects or contracts to review and tighten their employment discrimination, affirmative action and other employment practices in light of the Obama Administration’s heightened emphasis on auditing and enforcing OFCCP and other nondiscrimination and affirmative action rules.

While all U.S businesses face heightened exposures to discrimination-related enforcement risks and liability under the Obama Administration’s enforcement policies, businesses providing services or supplies directly or as subcontractors on projects funded in whole or in part by monies provided under the American Recovery and Reinvestment Act of 2009 (“ARRA”) or other federally funded projects or contracts are particularly at risk. See e.g., Leprino Foods To Pay $550K To Settle OFCCP Charge Pre-Hire Screening Test Illegally Discriminated « As EEOC Steps Up ADA Accommodation Enforcement, New DOD Apple App, Other Resources Released; Wal-Mart Settlement Shows ADA Risks When Considering Employee Return To Work Accommodation Requests & Inquiries; Employer Pays $475,000 To Settle ADA Discrimination Lawsuit Challenging Medical Fitness Testing For EMTs, Firefighters & Other Public Safety Worker’s.

Subject to limited exceptions, government contractors providing services or supplies on ARRA or other government funded contracts or projects must comply both with generally applicable employment discrimination requirements and special statutory and contractual nondiscrimination, affirmative action, and recordkeeping requirements applicable government contractors. For instance, federal law generally requires government contractors to comply with the special equal employment opportunity requirements of Executive Order 11246 (EO 11246); Section 503 of the Rehabilitation Act of 1973 (Section 503); and the Vietnam Veterans’ Readjustment Assistance Act of 1974 (VEVRAA). Pursuant to these laws, business with the federal government, both contractors and subcontractors, generally must follow a number of statutory and contractual requirements to follow the fair and reasonable standard that they not discriminate in employment on the basis of sex, race, color, religion, national origin, disability or status as a protected veteran. OFCCP generally audits and enforces these requirements. Memo to Funding Recipients: Compliance with Applicable Nondiscrimination and Equal Opportunity Statutes, Regulations, and Executive Orders. OFCCP has made clear that it will conduct compliance evaluations and host compliance assistance events to ensure that federal contractors comply and are aware of their responsibilities under EO 11246, Section 503 and VEVRAA. While many government contractors may be tempted to become complacent about OFCCP exposures based on reports of the OFCCP’s relatively low enforcement in the past, see Report Says OFCCP Enforcement Data Show Infrequent Veteran, Disability Bias Findings | Bloomberg BNA recent enforcement data documents OFCCP is getting much more serious and aggressive about auditing and enforcing compliance with its affirmative action and other requirements against government contractors under the Obama Administration. See, OFCCP Enforcement Data is Available on a New DOL Website. See also, Affirmative Action Update: OFCCP Enforcement Statistics Show Increase in Violations.

Government Contractors On ARRA Funded Projects Particularly Exposed

When the contract or project in question receives any funding out of the $787 billion of stimulus funding provided by ARRA, special OFCCP rules applicable to ARRA funded projects necessitates that federal contractors exercise special care to understand and meet their responsibilities and manage associated exposures.

For one thing, the range of businesses required to comply with OFCCP’s equal employment opportunity requirements for government contractors is broader. Government contractors who sometimes qualify as exempt from certain OFCCP rules may not qualify as exempt when working on ARRA funded projects. Government contractors that on other types of federally-funded projects might qualify as exempt from certain OFCCP requirements often are unaware that the range of federal contractors required to comply with the OFCCP equal employment opportunity and related rules of ARRA is much broader than often applies for federal projects funded from other sources. Smaller government contractors run the risk of unknowingly incurring liability by mistakenly assuming that the small size of their contract exempts them from otherwise applicable OFCCP requirements. Consequently, before relying on any assumed exemption, a government contractor providing goods or services for ARRA-funded project directly or as a subcontractor should specifically verify the applicability of those exemptions and document that analysis.

Furthermore, all government contractors on ARRA-funded projects need to understand that they operate subject to heightened compliance and enforcement scrutiny. The OFCCP particularly scrutinizes government contractor equal employment opportunity and other civil rights requirements on ARRA funded projects. The “Procedures for Scheduling and Conducting Compliance Evaluations of American Recovery and Reinvestment Act of 2009 (ARRA) Funded Contractors” issued July 7, 2009. See OFCCP Order No. ADM 0901/SEL the “ARRA Procedures”) subject government contractors on ARRA funded projects to special rules and heightened OFCCP oversight. OFCCP has established separate scheduling procedures to provide for compliance evaluations of ARRA funded contractors separate from those usually applicable to government contractors because ARRA also obligates OFCCP separately to track its ARRA-related and non-ARRA-related enforcement activities.

The ARRA Procedures require that Regional, District and Area offices conduct a full compliance evaluation, including a full desk audit and onsite review, of every ARRA funded contractor establishment scheduled, even in the absence of systemic discrimination indicators. Normally applied by OFCCP to non-ARRA government contract reviews, Active Case Management (ACM) procedures normally allow OFCCP to conduct only an abbreviated desk audit in the absence of systematic discrimination indicators in non-ARRA compliance evaluations. These ACM procedures will not be used in ARRA compliance evaluations.

Due to the special nature of ARRA, OFCCP also has indicated that the ARRA compliance evaluations will not apply the following scheduling exceptions typically applicable in non-ARRA contract compliance reviews. For instance, OFCCP ARRA procedures state:

No more than 25 establishments per contractor exception: Presently, for contractors with multiple establishments, the Federal Contractor Scheduling System (FCSS) limits the number of compliance evaluations scheduled to 25 new evaluations during a scheduling cycle. The 25-establishment limit does not apply to ARRA compliance evaluations.
Two year exception: Traditionally, contractor establishments that have been reviewed by OFCCP are excepted from further review for a 24-month period. Under ARRA scheduling procedures, ARRA funded contractor establishments may be eligible for an ARRA compliance evaluation even if they have been reviewed within the previous 24 months. However, pre-award clearance is not required for contractor establishments reviewed by OFCCP within the past 24 months.

However, ARRA scheduling procedures will apply the following scheduling exceptions:

ARRA funded contractor establishments that have undergone an FCSS compliance evaluation will be excepted from scheduling and review under ARRA procedures for six months from the date of the FCSS case closure.
ARRA funded contractor establishments that have undergone an ARRA compliance evaluation will not be subject to another ARRA evaluation.
ARRA funded contractor establishments that have undergone an ARRA evaluation will also be excepted from scheduling for a standard OFCCP compliance evaluation, pursuant to FCSS, for 24 months from the date of closure of the ARRA compliance evaluation.

ARRA funded contractors also are subject to other special pre-award clearance, pre-award intake, pre-award classification and other special procedures. The ARRA Procedures also set for special requirements particularly applicable to construction contracts funded by ARRA.

The special procedures and heightened compliance review procedures provided for under the ARRA Procedures indicate that government contractors or subcontractors providing services or supplies on projects funded with ARRA funds will want to place special attention on compliance with OFCCP and other federal equal employment opportunity and other employment regulation compliance.

Government Contractors, Other US Employers Urged To Act To Manage Exposures

In the face of the rising emphasis of OFCCP, the EEOC and other federal and state agencies on these audit and enforcement activities, government contractors and other U.S. businesses should act to position themselves to defend against likely challenges and scrutiny. All government contractors and other businesses should review and tighten the adequacy of their existing compliance and risk management practices to promote and document compliance. These efforts should focus on all relevant hiring, recruitment, promotion, compensation, recordkeeping and reporting policies and practices internally, as well as those of any recruiting agencies, subcontractors or other business partners whose actions might impact on compliance. Among other things, these steps should include the following:

Government contractors and subcontractors should specifically review their existing or proposed contracts and involvements to identify projects or contracts which may involve federal or state contracts or funding that could trigger responsibility. In this respect, businesses should conduct well-documented inquiries when proposing and accepting contracts to ensure that potential obligations as a government contractor are not overlooked because of inadequate intake procedures. Businesses also should keep in mind that ARRA and other federal program funds often may be filtered through a complex maze of federal grants or program funding to states or other organizations, which may pass along government contractor status and liability when subcontracting for services as part of the implementation of broader programs. Since the existence of these obligations often is signaled by contractual representations in the contracts with these parties, careful review of contractual or bid specifications and commitments is essential. However, it also generally is advisable also to inquire about whether the requested products or services are provided pursuant to programs or contracts subject to these requirements early in the process.
In addition to working to identify contracts and arrangements that are covered by OFCCP or other requirements, government contractors and other businesses also should reconfirm and continuously monitor the specific reporting, affirmative action, and other requirements that apply to any programs that may be subject to OFCCP requirements to ensure that they fully understand and implement appropriate procedures to comply with these conditions as well as pass along the obligation to make similarly necessary arrangements to any subcontractors or suppliers that the government contractor involves as a subcontractor.
Throughout the course of the contract, the government contractor also should take steps to maintain and file all required reports and monitor and audit operational compliance with these and other requirements.
The organization should develop and administer appropriate procedures for monitoring and investigating potential compliance concerns and maintaining documentation of that activity. Any known potential deficiencies or complaints should be promptly investigated and redressed with the assistance of qualified counsel in a prompt manner to mitigate potential risks.
Documentation should be carefully retained and organized on a real time and continuous basis to faciliate efficiency and effectiveness in completing required reports, monitoring compliance indicators and responding to OFCCP, EEOC or private plaintiff charges as well as other compliance inquiries.
Any audit inquiries or charges should be promptly referred to qualified legal counsel for timely evaluation and response.
When available and affordable, management should consider securing appropriate employment practices liability coverage, indemnification from business partners and other liability protection and assurance to help mitigate investigagtion and defense costs.
Board members or other senior management should include periodic review of compliance in their agenda.

If you have any questions or need help reviewing and updating your organization’s employment, employee benefits, contracting or other risk management or internal controls compliance practices, responding to an OFCCP, EEOC or other government or private plaintiff charge or investigation, or if we may be of assistance with regard to any other workforce or compliance management, employee benefits, compensation matters, please do not hesitate to contact the author of this update, Cynthia Marcotte Stamer.

About The Author

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 including:

Comments Off on Settlement of OFCCP Employment Discrimination Charge Reminder To ARRA, Other Government Contractors Of Heightened Enforcement Risks | ADA, Corporate Compliance, EEOC, Employers, GINA, Human Resources, OFCCP, Retaliation | Tagged: ADA, Corporate Compliance, Disability Discrimination, Employee Benefits, Employers, Employment, Health Insurance, Health Plans, Human Resources | Permalink
Posted by Cynthia Marcotte Stamer

$1.25M NLRB Backpay Order Highlights Risks of Mismanaging Union Risks In Health Care & Others M&A Deals

September 23, 2012

California nursing home buyer must pay estimated $1.25 million in backpay and interest, recognize union & hire 50 employees of seller following purchase

Last week’s National Labor Relations Board (NLRB) order requiring the buyer of a California nursing home to pay approximately $1.25 million in backpay and interest, rehire 50 employees and recognize the seller’s union reminders buyers of union-organized businesses of some of the significant risks of mishandling union-related obligations in merger and acquisition, bankruptcy and other corporate transactions under the National Labor Relations Act (NLRA) and other federal labor laws.

Buyer’s Obligations To Honor Seller’s Collective Bargaining Obligations

Under the NLRA, new owners of a union facility that are “successors” of the seller generally must recognize and bargain with the existing union if “the bargaining unit remains unchanged and a majority of employees hired by the new employer were represented by a recently certified bargaining agent.” See NLRB v. Burns Sec. Servs., 406 U.S. 272, 281 (1972).

In assembling its workforce, a successor employer also generally “may not refuse to hire the predecessor’s employees solely because they were represented by a union or to avoid having to recognize a union.” U.S. Marine Corp., 293 NLRB 669, 670 (1989), enfd., 944 F.2d 1305 (7th Cir. 1991).

Nasaky, Inc. NLRB Order

Last week’s NLRB Order requires Nasaky, Inc., the buyer of the Yuba Skilled Nursing Center in Yuba City, California, to recognize and honor collective bargaining obligations that the seller Nazareth Enterprises owed the before the sale and rehire and pay backpay and interest to make whole 50 of the seller’s former employees who the NLRB determined Nasaky, Inc. wrongfully refused to hire when it took over the facility from the prior owner, Nazareth Enterprises.

Before Nasaky, Inc. bought the nursing home, many of the employees at the nursing home were represented by the Service Employees International Union, United Healthcare Workers West (Union). After Nasaky, Inc. agreed to buy the facility but before it took control of its operations, Nasaky, Inc. advertised in the media for new workers to staff the facility and told existing employees at the facility that they must reapply to have a chance of keeping their jobs under the new ownership.

When Nasaky, Inc. took operating control of the Facility, facility operations continued as before with the same patients receiving the same services. The main difference was the workforce. The new staff included 90 employees in erstwhile bargaining unit positions, of which forty were former employees of the predecessor employer and fifty were newcomers. Nasaky, Inc. then took the position that the change in the workforce excused it from responsibility for recognizing or bargaining with the Union or honoring the collective bargaining agreement between the Union and seller Nazareth Enterprises.

When the union demanded that Nasaky, Inc. recognize the Union and honor the Union’s collective bargaining agreement with Nazareth Enterprises, Nasaky, Inc. refused. Instead, Nasaky, Inc. notified the union that it would not allow the Union on its premises, would not honor the Union’s collective bargaining agreement with the seller, and did not accept any of the predecessor’s terms and conditions of employment. The Union then filed charges with the NLRB, charging that Nazareth Enterprises had breached its obligations as a successor under the NLRA.

After NLRB Regional Director Joseph F. Frankl agreed and issued a complaint, California Administrative Law Judge Gerald Etchingham found all the allegations true based on a two-day hearing. He rejected all of Nasaky’s explanations for why it declined to hire most of those who had worked for the previous employer. See ALJ Decision. Since Nasaky, Inc did not file exceptions, the NLRB ordered Nasaky, Inc. immediately to recognize and bargain with the Union, hire the former employees and make them whole. The amount of backpay and interest is expected to approximate $1.25 million.

Managing Labor Exposures In Business Transactions

The NLRB’s order against Nasaky, Inc. highlights some of the business and operational risks that buyers and sellers can face if labor-management relations are misperceived or mismanaged in connection with business transactions. Because the existence of collective bargaining agreements or other labor obligations can substantially affect the operational flexibility of a buyer, buyers need to investigate and carefully evaluate the potential existence and nature of their obligations as part of their due diligence strategy before the transaction. A well-considered understanding of whether the structure of the transaction is likely to result in the buyer being considered a successor for purposes of union organizing and collective bargaining obligations also is very important so that the buyer and seller can properly appreciate and deal with any resulting responsibilities.

Beyond the potential duty to recognize a seller’s collective bargaining obligations, buyers and sellers also should consider the potential consequences of the proposed transaction on severance, pension, health, layoff and recall and other rights and obligations that may arise. At minimum, the existence of these responsibilities and their attendant costs are likely to impact the course of the negotiations.

When a worksite is union organized, for instance, additional obligations may arise in the handling of reductions in force or other transactions as a result of the union presence. For example, in addition to otherwise applicable responsibilities applicable to non-union affected transaction, the Worker Adjustment Retraining Act (WARN) and other plant closing laws and/or collective bargaining agreements may impose special notification or other requirements before a reduction in force or other transaction related activities.

Similarly, the existence of collective bargaining agreements also may trigger obligations for one or both parties to engage in collective bargaining over contemplated changes in terms and conditions of employment, to provide severance, to accellerate or fund severance, benefits or other obligations, to provide continued health or other coverage, to honor seniority, recall or other rights or deal with a host of other special contractual obligations.

Where the collective bargaining arrangements of the seller currently or in the past have included obligations to contribute to a multiemployer, collectively bargained pension or welfare plan, the buyer and seller also need to consider both the potential for withdrawal liability or other obligations and any opportunities to minimize these exposures in structuring the allocation of the arrangement. In this case, both parties need to recognize that differences exist between the federals for determining when successor liability results under the withdrawal liability rules than typically apply other labor and employment law purposes. While buyers and sellers often presume that the stock versus assess sale distinction that typically applies for many other legal purposes will apply, this can be an expensive mistake in the case of determining a buyer’s obligation to honor the seller’s collective bargaining obligations post deal. Likewise, buyers can be exposed to multiemployer successor liability from asset transactions, although it may be possible to mitigate or avoid such liabilities by incorporating appropriate representations in the sale documents or through other steps. Since these multiemployer withdrawal and contribution liabilities generally attach on a controlled group basis, both parties need to properly appreciate and address these concerns early in the transaction to mitigate their risks and properly value the transaction.

In light of these and other potential labor-related risks that may affect corporate and other business transactions, parties contemplating or participating in these transactions are urged to engage and consult with competent legal counsel with specific experience in such labor management relations and multiemployer benefit plan matters early in the process.

About The Author

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-mail to 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 including:

1 Comment | ADA, Corporate Compliance, EEOC, Employers, GINA, Human Resources, OFCCP, Retaliation | Tagged: ADA, Collective Bargaining, collectively bargained, Corporate Compliance, Disability Discrimination, Employee Benefits, Employers, Employment, Health Insurance, Health Plans, Human Resources, Labor-Management, multiemployer health plans, multiemployer pension plans, NLRA, NLRB, Union, withdrawal liability | Permalink
Posted by Cynthia Marcotte Stamer

As EEOC Steps Up ADA Accommodation Enforcement, New DOD Apple App, Other Resources Released

September 18, 2012

With the Equal Employment Opportunity Commission (EEOC) and other federal agencies prioritizing disability discrimination law enforcement, businesses and individuals looking to find solutions to help accommodate persons with disabilities may find a new free app for Apple Devices from the Department of Defense (DOD) Computer/Electronic Accommodations Program helpful.

New DOD Accommodation Apple App & Other Accommodation Aids

The DOD Apple application is an example of the many new resources that the federal government is providing to promote compliance with disability discrimination laws and to help people with disabilities under the Obama Administration.

The DOD Apple application now available in the iTunes App Store lets users browse the latest news and tips on assistive technology, scan CAP’s calendar of events and stay connected to the disability community. DOD says an Android version is coming soon.

CAP works to make the Federal Government a model employer of people with disabilities by providing job accommodations and equal access to electronic and information technology. With disabilities and other discrimination law compliance audit and enforcement rising, this new application provides another timely resource for government contractors and agencies, and other businesses looking to provide accommodations and manage disability risks.

The DOD application is just one of many emerging training and other tools that the agencies are rolling out to promote employment and other opportunities for people with disabilities. The Federal Government is devoting increasing resources to educating the disabled about resources including employment discrimination protections and other aids. The October 10 Work Incentive Seminar Event webinar is another example. To be held on October 10, 2012 from 3 – 4:30 p.m. Eastern Time, the webinar is for people who receive Social Security disability benefits and want to learn how the Ticket to Work program can help them earn money and become financially independent. It also will discuss writing a resume, job interview tips, whether or not to discuss your disability with a potential employer and tips for on the job success. Officials invites interested parties to register online or call 1-866-968-7842 (V) or 1-866-833-2967 (TTY/TDD).

Rising Liability & Enforcement Make Accommodation & Other Disability Law Risk Management Critical

Managing disability risks and meeting accommodation obligations is increasingly important as US government agencies place growing emphasis on enforcing disability discrimination laws and regulations that increasingly result in significant liability for U.S. businesses.

For instance, in June, 2012, the U.S. Justice Department announced a $10,250,000 settlement with JPI Construction L.P. (JPI) and six other JPI firms is the largest-ever disability-based housing discrimination settlement. The settlement resolves Justice Department charges the JPI and its affiliates illegally discriminated on the basis of disability in the design and construction of multifamily housing complexes.

Under the settlement of disability charges initiated against JPI a few years ago, JPI will pay $10,250,000 into an accessibility fund to update properties so they comply with the Americans with Disabilities Act and the Fair Housing Act (FHA), and to increase the availability of housing that is accessible to people with disabilities.

The record settlement follows the reaffirmation of the Obama Administration’s continuing committment to find and punish companies that illegally discriminate or fail to provide required accommodations in violation of Federal disability discrimination laws made by President Obama and others to mark the 13th Anniversary of the June 22, 1999 Supreme Court decision in Olmstead v. L.C.

As part of that anniversary celebration of Olmstead, the Obama Administration reaffirmed its continuing commitment to fight disability discriminated and touted the success of its “significant progress continuing to enforce Olmstead as well as more broadly helping to level the playing field for people with disabilities.”

In Olmstead, the Supreme Court ruled in that the unjustified institutional isolation of people with disabilities is a form of unlawful discrimination under the 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 HUD and related areas, the Department of Education in education and related fields and a host of other agencies.

The enforcement of disability discrimination and accommodation requirements in the employment space is even more zealous making big dollar EEOC and private plaintiff judgements and settlements increasingly common. See, e.g. Employer Pays $475,000 To Settle ADA Discrimination Lawsuit Challenging Medical Fitness Testing For EMTs, Firefighters & Other Public Safety Worker’s.

Where the entity is a private or government agency that is a government contractor or receiving other federal funds or grants, compliance with the ADA and other nondiscrimination and civil rights laws is particularly important as the contracts or regulations pursuant to which these funds are granted typically require compliance with these and other special nondiscrimination rules. In the case of funds provided under the 2009 Stimulus Bill, the scope of businesses subject to these requirements and the likelihood of audits was specifically increased in many ways, making recipients of these funds at particular risk for failing to fulfill requirements.

These Federal enforcement activities are further heightened by rising private litigation of disability claims. These public and private actions are encouraged by changes made by Congress to the ADA, which make it easier for plaintiff’s bringing disabilities claims to win, as well as the proactive agenda of the Obama Administration in enforcing disability discrimination laws.

In light of these continuing enforcement efforts, businesses should continue and heighten their diligence against possible disability discrimination exposures by strengthening policies, practices, training and documentation to keep up compliance and to position to defend against possible charges.

About The Author

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 including:

$1.5 M HIPAA Security Breach Resolution Agreement Shows Looming HIPAA Risks

September 17, 2012

Health plans, health care providers, health care clearinghouses and their business associates have yet another $1 million plus reminder of the importance of taking proper steps to secure electronic protected health information and take other steps required to comply with the Health Insurance Portability & Accountability Act of 1996 (HIPAA).

Massachusetts Eye and Ear Infirmary and Massachusetts Eye and Ear Associates, Inc. (collectively referred to as “MEEI”) will pay the U.S. Department of Health and Human Services’ (HHS) $1.5 million and take a series of corrective actions to settle potential violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Security Rule under the resolution agreement available here (“Resolution Agreement”) announced by the Department of Health & Human Services (HHS) Office of Civil Rights (OCR) on September 17, 2012.

MEEI Resolution Agreement

The Resolution Agreement settles charges that resulted from an OCR investigation commenced in response to a HIPAA breach report submitted by MEEI reporting the theft of an unencrypted personal laptop containing the electronic protected health information (ePHI) of MEEI patients and research subjects. The laptop information included patient prescriptions and clinical information.

OCR’s investigation indicated that MEEI failed to take necessary steps to comply with certain requirements of the HIPAA Security Rule, such as conducting a thorough analysis of the risk to the confidentiality of ePHI maintained on portable devices, implementing security measures sufficient to ensure the confidentiality of ePHI that MEEI created, maintained, and transmitted using portable devices, adopting and implementing policies and procedures to restrict access to ePHI to authorized users of portable devices , and adopting and implementing policies and procedures to address security incident identification, reporting, and response. OCR’s investigation indicated that these failures continued over an extended period of time, demonstrating a long-term organizational disregard for the requirements of the Security Rule.

To settle the charges, MEEI will pay a $1.5 million settlement to OCR. In addition, the Resolution Agreement also requires MEEI to adhere to a corrective action plan which includes reviewing, revising and maintaining policies and procedures to ensure compliance with the Security Rule, and retaining an independent monitor who will conduct assessments of MEEI’s compliance with the corrective action plan and render semi-annual reports to HHS for a 3-year period.

Enforcement Actions Highlight Growing HIPAA Exposures For Covered Entities

The MEEI Resolution Agreement follows on the resolution agreements previously announced this year against a health plan and various health care providers, all but one of which resulted in a settlement agreement of more than $1 million.

For instance, earlier this year, OCR required that Blue Cross Blue Shield of Tennessee (BCBST) to pay $1.5 million to resolve HIPAA violations charges.

Like the PCS, BCBST and other announced resolution agreements, the MEEI Resolution Agreement 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 HIPAA Heats Up: HITECH Act Changes Take Effect & OCR Begins Posting Names, Other Details Of Unsecured PHI Breach Reports On Website.

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 audit, investigation and enforcement actions, emerging litigation and other enforcement data, their own and reports of other security and privacy breaches and near misses, evolving rules and technology, and other developments to determine if additional steps are necessary or advisable. For 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.

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 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.

1 Comment | Employers, Health Plans, HIPAA, Human Resources, Insurance | Tagged: Health Plans, HIPAA, OCR, Privacy, Resolution agreement | Permalink
Posted by Cynthia Marcotte Stamer

Stamer Speaks On “The Practical Nitty Gritty For Coping With Health Care Reform NOW” 9/25 At DFW Web Meeting

September 10, 2012

Please Join WEB Dallas on Tuesday, September 25, 2012 for:
The Practical Nitty Gritty For Coping With Health Care Reform NOW
To register, please click here .

HRCI (SHRM) and WorldatWork Recertification Credit PENDING

With the initial debate about the Constitutionality of the Patient Protection & Affordable Care Act (ACA) now decided, employer and other health plan sponsors, insurers, fiduciaries and administrators are rushing to finish updating plan documents, communications, processes and procedures to meet current and impending ACA and other federal plan mandates while keeping a close eye out for more changes on the horizon. To help health plan sponsors, fiduciaries, administrators and insurers deal with the tough business of implementation, attorney Cynthia Marcotte Stamer will:

Share Her Practical 12-Step Process For Helping Employers Dealing With Today Health Plan Compliance Challenges
Share Key Updates and Tips For Dealing With New Summary of Benefits & Communications (SBC), Claims and Appeals, & Other Mandates
Share What To Watch For And Options For Maintaining Flexibility To Respond To Evolving Rules
Answer Common Questions That Health Plan Sponsors and Administrators Are Struggling With Submitted By Audience Members

Her Solutions Law Press, Inc. HR & Benefits Update publication has been recognized as one of the Top 50 Human Resources Blogs To Watch in 2012. 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.

LUNCHEON DATE & TIME: Tuesday, September 25, 2012
Registration: 11:30 to noon
Program: 12:00 to 1:15 PM
LOCATION: Doubletree Hotel, 4099 Valley View Lane, Dallas, Texas, 75244, 972-385-9000. Located on the NW Corner of Midway and LBJ Freeway (near Wal-Mart and Wendys). Parking is available in the front and back of the hotel.

COST TO ATTEND MEETING:
Member who registers in advance: $25 ($30 if a walk-in)
NonMember who registers in advance: $35 ($40 if a walk-in)
Walk-In Policy: Those without reservations are seated only if space permits. REGISTER BY: Tuesday morning, August 25, 2012. TO CANCEL: email tyneeta.morris@greyhound.com or call 214-849-7366 by noon, Friday, September 21, 2012.

Registration Procedures: . Please register online, whether or not you pay with a credit card. To register for the meeting, click the link at the top of this page. For those who do not want to pay online with a credit card, check the box at the bottom of the online registration form which reads “Check here if you do not wish to pay at this time”. Please do not hit “Reply” to this meeting notice.

If mailing a check, mail at least one week in advance of the meeting and include a copy of the registration form . Make payable to the Dallas Chapter of WEB, and send to: Dallas Chapter of WEB, c/o Carol Parker, Administration & Compliance Manager, Children’s Medical Center Dallas, 1935 Medical District Drive, Dallas, Texas 75235. WEB’s Tax ID# is 52-1360024. When paying at the door, we accept cash or checks, no credit cards are taken at the door.

QUESTION ABOUT THE MEETING? Contact Tyneeta Morris at 214-849-7366, tyneeta.morris@greyhound.com or Carol Parker at 214-456-6953, Carol.Parker@childrens.com.

Questions about membership? Contact Sherlynn at dallaswebmembership@tx.rr.com. To contact members of the Dallas WEB Board, please click here . Our next meeting will be October 30, 2012. Join us for: Benefits Jeopardy Please visit our website for more information on upcoming meetings.

If you are not already a WEB member, we hope you will join. Please visit our website and click Join WEB Now.

A special thanks to our current sponsors. Click their logos below to learn more about them!

Comments Off on Stamer Speaks On “The Practical Nitty Gritty For Coping With Health Care Reform NOW” 9/25 At DFW Web Meeting | Claims Administration, Employee Benefits, Employers, ERISA, Fiduciary Responsibility, Health Plans, Human Resources, Patient Empowerment, Patient Protection and Affordable Care Act, Reporting & Disclosure | Tagged: Employee Benefits, Health Plans, HR, WEB | Permalink
Posted by Cynthia Marcotte Stamer

Labor Risks Rising For Employers Despite NLRB Loss Of Arizona Secret Ballot Challenge

September 6, 2012

Businesses concerned about Obama Administration-backed efforts to promote its pro-labor agenda must stay diligent despite the set back suffered by the National Labor Relations Board (NLRB) in its attempt to a Federal Judge to challenge state laws that purport to require secret balloting in union elections in NLRB v. State of Arizona.

Federal District Judge Frederick J. Martone handed the NLRB a temporary setback in its campaign to prevent states from enacting legislation that would interfere with NLRB efforts to strengthen labor organizing powers by restricting secret ballot protections when he rejected the NLRB claims that an Arizona Constitutional Amendment mandating secret balloting in union elections was an unconstitutional infringement on the NLRB’s powers in his September 5, 2012 decision in NLRB v. State of Arizona, the Court left the door open for a potentially successful challenge to the Arizona secret ballot amendment in the future depending on how Arizona applies the law. Furthermore, considered in the context of the Obama Administration’s broader pro-union regulatory and enforcement agenda, the NLRB’s challenge to the Arizona and other state secret ballot laws reminds businesses that their operation face a minefield of mounting labor-management relations risks icluding many that create traps for management sometimes even in the case of non-union workplaces. In light of these expanding exposures, business leaders should update their policies and practices to mitigate the rising risks while keeping a close eye on the Obama Administration’s ongoing effort to expand the power of organized labor by challenging secret ballot mandates in Arizona and other states and the plethora of other pro-union regulatory and enforcement efforts.

NLRB Attacks On Workers’ Secret Balloting Rights

Undermining worker’s secret ballot rights is a key initiative that organized labor with the support of the Obama Administration has promoted to help union organization efforts.

Secret balloting of workers in union organizing elections is designed to promote the ability of worker’s to vote their wishes free from the fear of retaliation by unions or management. It has been a key element of the NLRA since its enactment.

The current method for workers to form a union in a particular workplace generally is a two-step process that begins with the submission by organizers to the NLRB of a petition or authorization card signed by at least 30% of the employees requesting recognition of the union. Under existing law, once the NLRB verifies that the organizers have met the petition or authorization card requirement, it generally orders a secret ballot election unless more than 50% of the workers have signed authorization cards and either:

The employer notifies the NLRB that it is waiving the secret ballot and voluntarily recognizing the union; or
The NLRB orders the employer to recognize a union based on the NLRB’s determination that the employer has engaged in unfair labor practices that make a fair election unlikely.

Since the Obama Administration came to power, however, labor with the support of the NLRB and the Obama Administration have included efforts to eliminate or get around secret balloting as part of their broader campaign to strengthen and promote unions and their power. These efforts are reflected in the sharp increase in orders by the NLRB with new Obama appointees that employers recognize unions without balloting, the Obama Administration and Congressional Democrats are pushing to enact the Employee Free Choice Act, which would make union recognition mandatory without any balloting when the NLRB verifies that over 50% of the employees signed authorization cards, and challenges to state laws that would impede these efforts like that brought against the State of Arizona. While Congressional Democrats and the Administration have thus far failed to get the legislation passed, they continue to voice their support for and intention to pursue its enactment after the elections in November.

NLRB’s Challenge To Arizona Constitution’s Secret Ballot Provision

In NLRB v. State of Arizona, Judge Frederick J. Martone on September 5, 2012 handed the NLRB a temporary setback in its campaign to prevent states from enacting legislation that would interfere with its efforts to avoid or cut secret ballot protection when it granted the State of Arizona’s motion to dismiss the case but left the door open for future action.

As Federal legislation and enforcement actions that would limit workers’ rights to vote in a secret ballot rights have continued, Arizona and various other states have enacted laws to protect secret ballot rights in their states.

In January 2011, the NLRB advised Arizona and three other states that recently adopted “secret-ballot amendments” conflicted with longstanding federal labor law by restricting the methods by which employees can choose a union. When no agreement could be reached, the NLRB filed suit to have the Arizona amendment declared unconstitutional.

The Arizona lawsuit challenged a 2010 constitutional amendment to the Arizona Constitution that states”[t]he right to vote by secret ballot for employee representation is fundamental and shall be guaranteed where local, state or federal law permits or requires elections, designations or authorizations for employee representation.” Arizona Constitution, Article 2 § 37. In its lawsuit, the NLRB asked the Federal Court to declare Article 2 § 37 unconstitutional and preempted to the extent that it applies to private employers, private employees, and labor organizations subject to the NLRA on the grounds that the state secret ballot rule “creates a state forum to protect employee representation rights, a task which Congress assigned exclusively to the NLRB.

Among its other efforts to defend the statute, Arizona argued there was no preemption because the state’s “guarantee” of a secret ballot election would only apply if the voluntary recognition option is not selected.

In reaching its ruling, the Federal Court hung its hat on this argument. “It is possible that state litigation invoking (the amendment) may impermissibly clash with the NLRB’s jurisdiction to resolve disputes over employee recognition, conduct secret ballot elections, and address unfair labor practices,” Judge Martone wrote. However, because the amendment has not yet been applied, Judge Martone wrote that he could not assume that it would conflict with the NLRA.

Arizona Decision A Temporary Victory In Battle In Labor-Management Relations War

While the court rejected the NLRB challenge of the Arizona secret ballot requirement this week, the NLRB’s announced disagreement with the decision coupled with the limited scope of the ruling makes clear that businesses watch for another NLRB challenge based on the implementation of the law as well as other new regulatory and enforcement traps for employers.

The court battle over Arizona’s secret ballot amendment is just one of the many areas where the NLRB under the Obama Administration is pursuing a pro-union agenda. In addition to challenging state laws that might operate to restrict union organizing or other activities, the NLRB also has adopted and is promoting the adoption of other pro-labor rules as well as stepping up enforcement on behalf of labor. See e.g., NLRB Moves To Promote Non-Union Employee Use of Collective Action Rights By Launching Webpage; NLRB Report Shows Rise In Unfair Labor Practice Complaints Formal Proceedings Comments Feed; NLRB Settlement Shows Care Necessary When Using Social Networking & Other Policies Restricting Employee Communications. As part of these efforts, for instance, the NLRB increasingly is challenging the authority of employers to enforce mandatory arbitration provisions in employee handbooks or employment agreements, to regulate social media, and to engage in a broad range of other common employer practices while at the same time, it is using its regulatory powers to promote employer posting and other requirements designed to educate workers about their organizational rights. As many of these new rules apply both to unionized workplaces and ununionized workplace, these and other evolving rules often leave all employers to significant and often underappreciated labor law risks in a broad range of circumstances. This risk tends to take on particular significance for unorganized workforces due to a low awareness or appreciation of these changes or their implications on unorganized workforces by their management team. Mistakes are increasingly costly in the current enforcement environment.

Costly Consequences For Employers

The statistics show the cost of management mishandling of labor relations in today’s environment is expensive and growing. This pro-labor regulatory and enforcement agenda as resulted in a significant rise in NLRB unfair labor practice charges in recent years. According to NLRB statistics, the number of unfair labor practice charges brought by the NLRB steadily rose from 2009 to 2011. The number of charges filed by was 1,342 in 2011, 1,242 in 2010, 1,166 in 2009 and 1,108 in 2008. Moreover, NLRB statistics also document that backpay and other remedies also have risen sharply during this period. For instance, in 2008, the NLRB ordered a total of $68,800,000 in backpay, fees, dues and fines in 9,400 cases. In contrast, in 2009, the NLRB ordered $77,700,000 in backpay, fees, dues and fines against employers even though the number of cases dropped to 8,700,000 cases. This trend continued in 2010, where out of 8,300 cases, the NLRB ordered employers to pay $86,100,000 in backpay, fees, dues and fines. See NLRB Statistics. See also NLRB Case Decisions.

In light of this increased activism, employers should exercise care when using mandatory arbitration, compensation gag rule, or other similar provisions; dealing with requests for employee representation by union and non-union employees in organizing, contracting and even disciplinary actions; establishing and administering social networking, communication and other policies; and a wide range of other situations. In addition, employers concerned about these or other labor activities should consult competent counsel for advice about appropriate options and risks for dealing with these activities.

If you have any questions or need help reviewing and updating your organization’s employment and/or employee practices in response to the NLRA 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

Board certified in labor and employment law by the Texas Board of Legal Specialization, with more than 20 years human resource, labor and employment 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, labor management, 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-mail to cstamer@solutionslawyer.net

If you find this of interest, you also be interested reviewing some of Ms. Stamer’s other recent updates, including:

1 Comment | ADA, Corporate Compliance, EEOC, Employers, GINA, Human Resources, Labor Management Relations, OFCCP, Retaliation | Tagged: Collective Bargaining, Corporate Compliance, Employers, Employment, Health Plans, Human Resources, Labor, Labor-Management, Risk Management, Unfair Labor Practice, Union | Permalink
Posted by Cynthia Marcotte Stamer

USI Advisors Will Pay $1.27 Million To Settle Charges It Violated ERISA Fee Disclosure Requirements

August 23, 2012

USI Advisors Inc. (USI) will pay $1,265,608.70 to 13 pension plans to resolve charges it violated the Employee Retirement Income Security Act (ERISA) by failing to properly disclose 12b-1 fees it collected off of fund investments. The complaint behind the settlement reflects the commitment of the U.S Department of Labor Employee Benefit Security Administration (EBSA) to enforcing Employee Retirement Income Security Act (ERISA) fee disclosure and other requirements against service providers to employee benefit plans. With regulations tightening, the tough economy driving greater scrutiny of plan investments, expenditures and performance, and enforcement rising, plan vendors, and the employee benefit plan sponsors and fiduciaries responsible for their engagement, compensation and oversight need to ensure the adequacy of their processes for deciding and reporting compensation, as well as the qualification, selection and oversight of vendors and fiduciaries generally.

USI Settlement

An investigation by the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) USI, fiduciary investment adviser made investments in mutual funds on behalf of ERISA-covered defined benefit plan clients and received 12b-1 fees from those funds. A 12b-1 fee is paid by a mutual fund out of fund assets to cover certain expenses. USI Advisors failed to fully disclose the receipt of the 12b-1 fees, and to use those fees for the benefit of the plans either by directly crediting the amounts to the plans or by offsetting other fees the plans would be obligated to pay the company.

“If you, as an investment adviser, are a fiduciary under ERISA with respect to plan investments in mutual funds, you cannot use your fiduciary authority to receive an additional fee or to receive compensation from third parties for your own personal account in transactions involving plan assets. We are very pleased that this settlement addresses the problems we identified with USI’s practices and restores funds to the plans and their participants,” said Phyllis C. Borzi, assistant secretary of labor for employee benefits security. “We are also very pleased that recently finalized fee disclosure regulations issued by the Labor Department will require fiduciaries like USI to be more transparent about the fees they receive when dealing with their plan clients.”

Under the terms of the settlement, USI Advisors has agreed not to provide bundled investment advisory and actuarial services to any ERISA-covered defined benefit plan client without first entering into a written agreement, contract or letter of understanding that specifies the services provided and whether the company or its affiliates will act as a fiduciary to those plans. USI Advisors also will provide to clients a description of all compensation and fees received, in any form, from any source, involving any investment or transaction related to them.

The alleged violations in this case occurred between 2004 and 2010. USI Advisors is a wholly owned subsidiary of USI Consulting Group, a Goldman Sachs Capital Partners Co.

The investigation conducted by EBSA as part of the agency’s Consultant/Adviser Project, highlights the need for employee benefit plan fiduciaries and vendors alike to properly identify and report all vendor compensation received by employee benefit plan investment advisors and other service providers in compliance with ERISA’s fee disclosure and other requirements. The Consultant/Adviser Project targets vendors and advisors to employee benefit plans for review, and where applicable, enforcement action when service providers violate ERISA’s requirements. EBSA has made misconduct by consultants, advisors and other service providers a priority as part of its broader emphasis on enforcement of ERISA’s fiduciary responsibility and reporting requirements.

Tightening Rules, Enforcement & Tough Times Driving Risks

The EBSA’s announcement of the USI settlement comes as it continues to move forward to strengthen the transparency of vendor compensation and other fiduciary regulations and enforcement. Just shortly before today’s announcement, EBSA recently clarified its guidance about how its rules affect 401(k) plan brokerage window arrangements in response to public feedback. Field Assistance Bulletin No. 2012-02R published July 30, 2012, modifies and replaces Q&A 30 of Field Assistance Bulletin No. 2012-02 (issued May 7, 2012) with a new Q&A 39.

EBSA’s final fee disclosure regulation[i] published on requires plan administrators to make to disclose specified information about retirement plan fees and expenses to participants and beneficiaries. The regulation requires plan administrators to give participants and beneficiaries more informationm about administrative and investment fees and expenses in their 401(k) plans.

EBSA issued Field Assistance Bulletin No. 2012-02, which provided guidance to its field enforcement personnel in question and answer format on the obligations of plan administrators under the fee disclosure regulation on May 7, 2012. In response to questions and concerns about statements in Question 30 regarding brokerage windows and other arrangements that enable plan participants and beneficiaries to select investments beyond those designated by the plan, EBSA issued Field Assistance Bulletin No. 2012-02 which supersedes Field Assistance Bulletin 2012-02 by modifying its provisions about brokerage windows and inviting more public comments for EBSA to use to consider further clarification of this guidance.

As did its predecessor, Field Assistance Bulletin No. 2012-02R specifies that while the fee disclosure regulation covers “brokerage windows,” “self-directed brokerage accounts,” and other similar plan arrangements that enable participants and beneficiaries to select investments beyond those designated by the plan, its coverage of brokerage windows is limited to the disclosure requirements in paragraph (c) of the regulation relating to plan-related information. The disclosure requirements for investment-related information in paragraph (d) of the regulation do not apply to brokerage windows, self-directed brokerage accounts, and similar arrangements or to any investment selected by a participant or beneficiary that is not designated by the plan (i.e., any investments made through the window, account, or arrangement).

Beyond meeting the technicalities of the fee disclosure requirements, plan sponsors, fiduciaries and vendors should also ensure that their selection, oversight, determination of compensation and other dealings with plan vendors and consultants meet the general fiduciary responsibility, prohibited transaction, bonding and other requriements of ERISA, as well as any applicable securities and tax requirements.

Through its participant fee disclosure and other stepped up fiduciary regulations and enforcement, EBSA is sending clear signals that it stands ready to investigate and take action against service providers or others that charge excessive fees, failure to adequately justify or appropriately disclose fees or other compensation from plan transactions, or other fiduciary protections of ERISA. In the face of these requirements, plan fiduciaries, sponsors, advisors and vendors should carefully review the appropriateness of compensation received or promised to plan vendors, as well as the adequacy of practices for identifying and reporting that compensation and the selection and oversight of the vendors receiving that compensation.

For Help or More Information

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 registerto receive future updates about developments on these and other concerns from Ms. Stamer here.

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.

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:

[i]See 75 FR 64910 (Oct. 20, 2010).

1 Comment | Corporate Compliance, Defined Contribution Plans, Employers, ERISA, Excise Tax, Fiduciary Responsibility, Human Resources, Income Tax, Reporting & Disclosure, Retirement Plans | Tagged: 401(k) plans, brokerage accounts, compliance, Employee Benefits, Employer, ERISA, fee disclosure regulation, Fiduciary Responsibility, Finance, Health Care Reform. Employer, Management, Plan Sponosr, Retirement Plans, Risk Managment | Permalink
Posted by Cynthia Marcotte Stamer

Wal-Mart Settlement Shows ADA Risks When Considering Employee Return To Work Accommodation Requests & Inquiries

August 23, 2012

The lawsuit against Wal-Mart is part of a wave of lawsuits in which the EEOC or other agencies under the Obama Administration are aggressively challenging medical examination and other medical screenings by private and public employers. In the Wal-Mart case, the suit challenged an employer’s refusal to provide requested accommodations. In other cases, however, the EEOC or other agencies under the Obama Administration also have challenged medical inquiries made by an employer to employees during or returning from leave. Both types of suits send clear signals that employers should use care in making medical inquiries and responding to requests for accommodation from employees taking or returning from medical leaves. See, e.g., Employer Pays $475,000 To Settle ADA Discrimination Lawsuit Challenging Medical Fitness Testing For EMTs, Firefighters & Other Public Safety Worker’s.

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.

About The Author

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 including:

Stamer Speaks On HIPAA Developments On 9/14 At ABA Joint Tax/RPTE Fall Meeting In Boston

August 14, 2012

Cynthia Marcotte Stamer will discuss recent HIPAA and other medical privacy developments impacting group health plans at a joint “Employee Benefits Welfare Benefits Design, EEOC and FMLA Update X “ session scheduled from 9:30 a.m. to 11:00 a.m. on September 14, 2012 at the American Bar Association jointly hosted by the Subcommittees on Welfare Plan Design, EEOC, FMLA and Leaves Issues (TX) and Cafeteria Plans and Reimbursement Accounts and Subcommittee on Welfare Plans at the American Bar Association Section of Taxation and Section of Real Property, Trust & Estate Law, Trust & Estate Division (RPTE) 2012 Joint Fall CLE Meeting In Boston.

Ms. Stamer will be among the a distinguished group of panelists scheduled to discuss regulatory and other developments under the Affordable Care Act and emerging issues related to stop-loss coverage, claims procedures, COBRA audits, DOL compliance initiatives, HIPAA/HITECH audits and enforcement (and regulations if released) and other concerns impacting health and welfare plan design and administration.

A noted Texas-based employee benefits and employment lawyer, policy consultant, author and speaker, Ms. Stamer has serves as the Scribe for the ABA JCEB Agency Meeting on the HIPAA Privacy Rules with the HHS Office of Civil Rights and has extensive experience on HIPAA and other health, financial, and other privacy and data security concerns as well as a broad range of other human resources, employee benefits and health care concerns.

A Fellow in the American College of Employee Benefits Counsel, the American Bar Association and the State Bar of Texas, Past Chair of the RPTE Employee Benefits and Other Compensation Group and current co-Chair of its Welfare Benefits Committee, Ms. Stamer is nationally and internationally known for her innovative leadership and work with businesses, governments, and communities on health and other insurance and employee benefits, patient education and empowerment, wellness and disease management, and other programs, policies, and processes. For more than 24 years, Ms. Stamer’s legal practice has focused on advising and representing employers, insurers, health care providers, community leaders and governments about health care and employee benefits policy and process improvement, quality, performance management, education, compliance, communications, risk management, reimbursement and finance, and other related matters. In addition to her legal practice, Stamer also extensively consults and provides leadership to a broad range of clients, professional and civic organizations, and others on strategies for improving the health care system and the ability of health care providers, payers, employers, community organizations, government agencies to promote the ability of patients and their families to access cost-effective, quality, affordable health care and other resource needs. She also has worked extensively with a broad range of business and government clients on health care, pension, social security, workforce, insurance and many other related policy matters.

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

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

Ms. Stamer will speak along a distinguished group of governmental and private panelists. Other panelists include:

Kevin Knopf, Attorney-Adviser, Office of Benefits Tax Counsel, Department of Treasury, Washington, DC;
Stephen B. Tackney, Deputy Associate Chief Counsel, Employee Benefits, Office of Division Counsel/Associate Chief Counsel, TE/GE, IRS, Washington, DC;
Russ Weinheimer, Senior Counsel, Office of the Chief Counsel, Tax Exempt and Government Entities, IRS, Washington, DC;
Amy Turner, Senior Advisor, Department of Labor, Employee Benefits Security Administration, Washington, DC;
Andy R. Anderson, Morgan Lewis, Chicago, IL; Chad R. DeGroot, Laner Muchin, Chicago, IL;
William M. Freedman, Dinsmore & Shohl LLP, Cincinnati, OH;
Bernard Kearse, Kearse Law Firm, Atlanta, GA;
Elizabeth Leight, Society of Professional Benefit Administrators, Chevy Chase, MD;
Gabriel Marinaro, Dykema, Bloomfield Hills, MI;
Linda Mendel, Vorys Sater Seymour & Pease LLP, Columbus, OH; Carrie A. Simons, Ropes & Gray, Boston, MA; Mark Stember, Kilpatrick Townsend & Stockton LLP, Washington, DC

To register or learn more about the Joint Fall CLE Meeting, see here. For additional information about Ms. Stamer, see here or contact Ms. Stamer directly via email here or (469) 767-8872.

Comments Off on Stamer Speaks On HIPAA Developments On 9/14 At ABA Joint Tax/RPTE Fall Meeting In Boston | Employers, ERISA, Fiduciary Responsibility, Health Plans, HIPAA | Tagged: Employee Benefits, Health Care, Health Plans, HIPAA, Tax | Permalink
Posted by Cynthia Marcotte Stamer

Employer Pays $475,000 To Settle ADA Discrimination Lawsuit Challenging Medical Fitness Testing For EMTs, Firefighters & Other Public Safety Worker’s

August 13, 2012

Employers that require employees to submit to medical examinations, question employees about physician or mental conditions or disabilities while on medical leave or for other fitness for duty assessments, or engage in other similar activities should evaluate the defensibility of those practices in light of the growing challenges to these and other employee screening practices by the Obama Administration and private plaintiff attorneys like the Justice Department disability discrimination complaint that lead to a $475,000 settlement against Baltimore County, Maryland.

Baltimore County Nailed For Health Screening of Public Safety Workers

On August 7, 2012, the Justice Department announced that Baltimore County, Maryland will pay $475,000 and change its hiring procedures to resolve a Justice Department lawsuit filed that charged the county violated the Americans with Disabilities Act (ADA) by requiring employees to submit to medical examinations and disability-related inquiries without a proper reason, and by excluding applicants from emergency medical technician (EMT) positions because of their diabetes. The prosecution is notable both for the Justice Department’s challenge of health screenings of EMTs and other workers in key safety positions generally as well as the Justice Department’s challenges to the employer’s medical inquiries to workers on medical leave.

Title I of the ADA prohibits employers from discriminating against individuals on the basis of disability in various aspects of employment. The ADA’s provisions concerning disability-related inquiries and medical examinations reflect Congress’s intent to protect the rights of applicants and employees to be assessed on merit alone, while protecting the rights of employers to ensure that individuals in the workplace can efficiently perform the essential functions of their jobs. An employer generally violates the ADA if it requires its employees to undergo medical examinations or submit to disability-related inquiries that are not related to how the employee performs his or her job duties, or if it requires its employees to disclose overbroad medical history or medical records. Title I of the ADA also generally requires employers to make reasonable accommodations to employees’ and applicants’ disabilities as long as this does not pose an undue hardship or the employer the employer otherwise proves employing a disabled person with reasonable accommodation could not eliminate significant safety concerns. Employers generally bear the burden of proving these or other defenses. Employers are also prohibited from excluding individuals with disabilities unless they show that the exclusion is consistent with business necessity and they are prohibited from retaliating against employees for opposing practices contrary to the ADA. Violations of the ADA can expose businesses to substantial liability.

As reflected by the Baltimore County settlement, violations of the employment provisions of the ADA may be prosecuted by the EEOC or by private lawsuits and can result in significant judgments. 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 U.S. Justice Department lawsuit against Baltimore County, Maryland is one in a growing series of lawsuits in which the Justice Department or Equal Employment Opportunity Commission (EEOC) is aggressively challenging medical examination and other medical screenings by private and public employers. In its lawsuit against the County, the Justice Department complaint identified 10 current and former police officers, firefighters, EMTs, civilian employees and applicants who were allegedly subjected to inappropriate and intrusive medical examinations and/or other disability-based discrimination. Justice Department officials claimed the County required some employees to undergo medical examinations or respond to medical inquiries that were unrelated to their ability to perform the functions of their jobs. The complaint also alleged the County required employees to submit to medical examinations that were improperly timed, such as requiring an employee who was on medical leave and undergoing medical treatment to submit to a medical exam even though the employee was not attempting to return to work yet.

According to the complaint, numerous affected employees – some of whom had worked for the County for decades – submitted to the improper medical exams for fear of discipline or termination if they refused. The complaint also alleges that the county retaliated against an employee who tried to caution against the unlawful medical exams and refused to hire two qualified applicants for EMT positions because they had diabetes.

In the proposed consent decree filed on August 7, 2012 and awaiting District Court approval, the County seeks to resolve the lawsuit by agreeing to:

Pay $475,000 to the complainants and provide additional work-related benefits (including retirement benefits and back pay, plus interest);
Adopt new policies and procedures regarding the administration of medical examinations and inquiries;
Refrain from using the services of the medical examiner who conducted the overbroad medical examinations in question;
End the automatic exclusion of job applicants who have insulin-dependent diabetes mellitus; and
Give ADA training to all current supervisory employees and all employees who participate in making personnel decisions.

Obama Administration Aggressively Enforcing & Interpreting Employment & Other Disability Discrimination Laws

The Baltimore County suit is reflective of the aggressive emphasis that the Obama Administration is placing on challenging employers that require employees to undergo medical screening, respond to medical inquiries or engage in other practices that the EEOC, Justice Department or other Obama Administration officials under Title I of the ADA, as well as its heavy emphasis upon enforcement of the ADA and other disability discrimination laws against U.S. businesses and state and local government agencies generally.

The Justice Department action against Baltimore County is part of the Obama Administration’s sweeping effort to enforce employment and other disability discrimination laws against businesses and state and local government agencies alike. While the Administration’s disability law enforcement reaches broadly, disability discrimination enforcement is particularly notable in the area of employment law. This enforcement targets both public employers like Baltimore County, and private employers. In the private employer arena, for instance, the EEOC earlier this year sued Wendy’s franchisee, CTW L.L.C., (Texas Wendy’s) for allegedly violating the ADA 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. 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.”

As illustrated by the suits against Baltimore County, Texas Wendy’s and many other public and private employers, 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.

Defending disability discrimination charges has become more complicated due to both the aggressive interpretation and enforcement of the ADA under the Obama Administration and amendments to the ADA that aid private plaintiffs, the EEOC, the Justice Department and others to prove their case. Provisions of the ADA Amendments Act (ADAAA) that expand the definition of “disability” under the ADA, signed into law on September 25, 2008, broadened 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 ADAAA:

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 significantly stepped up enforcement of the ADA and other federal discrimination laws.

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. Given the Obama Administration’s well-documented, self-touted activism of the EEOC, Justice Department and other federal agencies in prosecuting disability discrimination and promoting a pro-disability enforcement agenda, businesses are encouraged to review and tighten their employment disability discrimination compliance procedures and documentation.

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 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 taking into account both the broadened disability definition and the aggressive interpretative stance of the Obama Administration. Businesses also generally should tighten job performance and other employment recordkeeping to promote the 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.

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.

Obama Administration Also Aggressively Prosecutes Disability Discrimination In Other Business Operations

Guarding against disability discrimination in employment is not the only area that businesses need to prepare to defend against. The Obama Administration also has trumpeted its commitment to the aggressive enforcement of the public accommodation provisions of the ADA and other federal disability discrimination laws. In June, 2012, for instance, President Obama himself made a point of reaffirming his administration’s “commitment to fighting discrimination, and to addressing the needs and concerns of those living with disabilities.”

As part of its significant commitment to disability discrimination enforcement, the Civil Rights Division at the Justice Department has aggressively enforced the public accommodation provisions of the ADA and other federal disability discrimination laws against state agencies and private businesses that it perceives to have improperly discriminated against disabled individuals. For instance, the Justice Department entered into a landmark settlement agreement with the Commonwealth of Virginia, 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 Justice Department has a website dedicated to disabilities law 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. Statutory, regulatory or enforcement changes have expanded the scope and applicability of disability and various other federal nondiscrimination and other laws and risks of charges of discrimination.

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.

About The Author

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 including:

Employers & Plan Fiduciaries Reminded To Confirm Credentials & Bonding For Internal Staff, Plan Fidiciaries & Vendors Dealing With Benefits

August 13, 2012

Businesses sponsoring employee benefit plans and officers, directors, employees and others acting as fiduciaries with respect to these employee benefit plans should take steps to confirm that all of the appropriate fiduciary bonds required by the Employee Retirement Income Security Act of 1974, as amended (ERISA) are in place, that all employee benefit plans sponsored are appropriately covered, and that all individuals serving in key positions requiring bonding are covered and appropriately qualified to serve in that capacity under ERISA and the terms of the bond. Adequate attention to these concerns not only is a required component of ERISA’s fiduciary compliance, it also may provide invaluable protection if a dishonesty or other fiduciary breach results in a loss or other exposure.

ERISA generally requires that every employee benefit plan fiduciary, as well as every other person who handles funds or other property of a plan (a “plan official”), be bonded if they have some discretionary control over a plan or the assets of a related trust. While some narrow exceptions are available to this bonding requirement, these exceptions are very narrow and apply only if certain narrow criteria are met. Plan sponsors and other plan fiduciaries should take steps to ensure that all of the bonding requirements applicable to their employee benefit plans are met at least annually. Monitoring these compliance obligations is important not only for the 401(k) and other retirement plans typically associated with these requirements, but also for self-insured medical and other ERISA-covered employee benefit plans. This process of credentialing persons involved with the plan and auditing bonding generally should begin with adopting a written policy requiring bonding and verification of credentials and that that appropriate bonds are in place for all internal personnel and outside service providers.

Steps should be taken to ensure that the required fiduciary bonds are secured in sufficient amounts and scope to meet ERISA’s requirements. In addition to confirming the existence and amount of the fiduciary bonds, plan sponsors and fiduciaries should confirm that each employee plan for which bonding is required is listed in the bond and that the bond covers all individuals or organizations that ERISA requires to be bonded. For this purpose, the review should verify the sufficiency and adequacy of bonding in effect for both internal personnel as well as outside service providers. In the case of internal personnel, the adequacy of the bonds should be reviewed annually to ensure that bond amounts are appropriate. Unless a service provider provides a legal opinion that adequately demonstrates that an ERISA bonding exemption applies, plan sponsors and fiduciaries also should require that third party service providers provide proof of appropriate bonding as well as to contract to be bonded in accordance with ERISA and other applicable laws, to provide proof of their bonded status or documentation of their exemption, and to provide notice of events that could impact on their bonded status. When verifying the bonding requirements, it also is a good idea to conduct a criminal background check and other prudent investigation to reconfirm the credentials and suitability of individuals and organizations serving in fiduciary positions or otherwise acting in a capacity covered by ERISA’s bonding requirements. ERISA generally prohibits individuals convicted of certain crimes from serving, and prohibits plan sponsors, fiduciaries or others from knowingly hiring, retaining, employing or otherwise allowing these convicted individuals during or for the 13-year period after the later of the conviction or the end of imprisonment, to serve as:

An administrator, fiduciary, officer, trustee, custodian, counsel, agent, employee, or

representative in any capacity of any employee benefit plan,

A consultant or adviser to an employee benefit plan, including but not limited to any entity whose activities are in whole or substantial part devoted to providing goods or services to any employee benefit plan, or
In any capacity that involves decision-making authority or custody or control of the moneys, funds, assets, or property of any employee benefit plan.

Because ERISA’s bonding and prudent selection of fiduciaries and service provider requirements, breach of its provisions carries all the usual exposures of a fiduciary breach.

Bonding exposures can arise in audit or as part of a broader fiduciary investigation.The likelihood of discovery in an audit or investigation by the Labor Department in the course of an audit is high, as review of bonding is a standard part of audits and investigations. The Employee Benefit Security Administration (EBSA) Enforcement Manual specifies in connection with the conduct of a fiduciary investigation or audit:

… the Investigator/Auditor will ordinarily determine whether a plan is in compliance with the bonding, reporting, and disclosure provisions of ERISA by completing an ERISA Bonding Checklist … These checklists will be filled out in fiduciary cases and retained in the RO workpaper case file unless violations are uncovered, developed, and reported in the ROI.

In the best case scenario, where the bonding noncompliance comes to light in the course of an EBSA audit where no plan loss resulted, the responsible fiduciary generally runs at least a risk that EBSA will assess the 20 percent fiduciary penalty under ERISA Section 502(l). If the bonding lapse comes to light in connection with a fiduciary breach that resulted in damages to the plan by a fiduciary or other party, the bonding insufficiency may be itself a breach of fiduciary duty resulting in injury to the plan and where this breach left the plan unprotected against an act of dishonesty or fiduciary breach by an individual who should have been bonded, may spread liability for the wrongful acts of the wrongdoer to a plan sponsor, member of management or other party serving in a fiduciary role who otherwise would not be liable but for definiciences in the bonding or other credentialing responsibilities.

Under ERISA Section 409, a fiduciary generally is personally liable for injuries to the plan arising from his own breach (such as failure to properly bond) or resulting from breaches of another co-fiduciary who he knew or should have known through prudent exercise of his responsibilities.

Of course, in the most serious cases, such as embezzlement or other criminal acts by a fiduciary of ERISA, the consequences can be quite dire. Knowing or intentional violation of ERISA’s fiduciary responsibilities exposes the guilty fiduciary to fines of up to $10,000, imprisonment for not more than five years, or both. Even where the violation is not knowing or willful, however, allowing disqualified persons to serve in fiduciary roles can have serious consequences such as exposure to Department of Labor penalties and personal liability for breach of fiduciary duty for damages resulting to the plan if it is established that the retention of services was an imprudent engagement of such an individual that caused the loss. When conducting such a background check, care should be taken to comply with the applicable notice and consent requirements for conducting third party conducted background checks under the Fair Credit Reporting Act (FCRA) and otherwise applicable law. As such background investigations generally would be conducted in such a manner as to qualify as a credit check for purposes of the FCRA, conducting background checks in a manner that violates the FCRA credit check requirements itself can be a source of significant liability.

1 Comment | Affordable Care Act, Claims Administration, Corporate Compliance, Employers, ERISA, Excise Tax, Fiduciary Responsibility, Health Plans, Human Resources, Income Tax, Patient Empowerment, Patient Protection and Affordable Care Act, Payroll Tax, Preemption, Privacy, Reporting & Disclosure, Tax, Wellness | Tagged: compliance, Employee Benefits, Employer, Finance, Health Benefits, Health Care Reform, Health Care Reform. Employer, Health Plans, Management, Plan Sponosr, Risk Managment | Permalink
Posted by Cynthia Marcotte Stamer

HIPAA & Texas Law Require HIPAA Training. Register Now For August 14 HIPAA Update Workshop!

August 8, 2012

Texas House Bill 300 Medical Records Privacy Act Amendments & HIPAA Regulations Require HIPAA Privacy Training!

Register Now!

HIPAA Update

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

Texas Department Of Insurance Continuing Education Credit, HRCI and World At Work Education Credit Approved!

Expanded health care privacy mandates of the Texas Medical Records Privacy Act that take effect September 1, 2012 and HIPAA regulations require covered entities and their business associates conduct training and take other steps to protect the privacy and security of personal health information (“PHI”).

Complete HIPAA Training While You Catch Up On The Latest On HIPAA & Texas Medical Records Privacy Rules & Get Helpful Compliance And Risk Management Tips!

With Texas House Bill 300 expanding covered entities responsibilities and liabilities and OCR issuing new regulations and other guidance to implement amendments to the HIPAA Privacy & Security Standards and implement and enforce the HITECH Act Breach Notification Rule, health care providers, health plans and insurers, their brokers, third party administrators, and other covered entities, as well as their business associates and employer and union clients must review and tighten their policies, practices, business associate and other contracts, and enforcement to manage HIPAA and other compliance and manage risks arising from the access, collection, use, protection and disclosure of PHI to meet expanding mandates and to guard against growing liability exposures under HIPAA and other federal and state laws.

Solutions Law Press, Inc. invites you to catch up on the latest on these and other key HIPAA requirements and enforcement and learn tips for managing risks and liabilities by participating in the “HIPAA Update Workshop” on Tuesday, August 14, 2012. Participants may choose to attend the live briefing in Addison, Texas or participate 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 HIPAA & Texas House Bill 300 Privacy, Security & Breach Notification Guidance & Enforcement

The HIPAA Update Workshop will brief participants on the latest HIPAA Privacy, Security and Breach Notification rules and guidance and share compliance and risk management lessons emerging from recent OCR enforcement and audit activities and other selected federal and state litigation and enforcement actions impacting the handling of protected health information. Among other things, the workshop will cover:

√ Latest HIPAA Privacy, Security & Breach Notification Rules, Guidance & Enforcement

√Latest on Texas House Bill Amendments To Texas Medical Records Privacy Law Effective September 1, 2012

√Post HITECH Act Heightened Liability Risks: Audits, Civil Penalties, Criminal Penalties & State Lawsuits

√ Expansion of HIPAA Responsibilities & Liabilities To Business Associates & What Covered Entities & Business Associates Should Do In Response

√ HIPAA Data Breach Notification Requirements & Practical Challenges & Strategies For Managing These Responsibilities

√ HIPAA Compliance & Risk Management Coordination With Other Federal & State Medical Privacy, Financial Information, Identity Theft & Date Security Responsibilities

√ Breach Preparedness & Response Planning

√ Practical Steps & Best Practices For Compliance & Risk Management

√ 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, North Texas Health Care Compliance Professionals Association Vice-President and Board Certified in Labor & Employment Law, attorney Cynthia Marcotte Stamer has 25 years experience advising and representing private and public health care providers, 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 privacy and data security, health care, health and other employee benefit. employment, insurance and related matters. A well-known and prolific author and popular speaker, Ms. Stamer has served as the scrivener for the ABA JCEB Agency Meetings with the Office of Civil Rights on HIPAA Privacy for the past two years. She 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 HIPAA and other privacy and data security risks and requirements as well as a broad range of other health, employee benefits, human resources, insurance, tax, compliance and other matters and representing clients in dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, Federal Trade Commission, HUD and Justice, as well as a state legislatures attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators. A prolific author and popular speaker, Ms. Stamer regularly authors materials and conducts workshops and professional, management and other training on HIPAA and other privacy, health care, employee benefits, human resources, insurance 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. Her insights on privacy and other matters are quoted in Modern Healthcare, HealthLeaders, Benefits, Caring for the Elderly, The Wall Street Journal and many other publications. 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

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 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.

*Tex. Dept. of Insurance, HRICI, WorldAtWork, CLE & Other Continuing Education Credit

These programs are approved to be offered for general certification credit by the Texas Department of Insurance, HRCI and WorldAtWork education credit for the time period offered subject to fulfillment all applicable accrediting agency requirements, completion of required procedures and payment of the additional service processing fee of $10.00. An application for State Bar of Texas continuing education legal education credit is pending. The Texas Department of Insurance has approved the HIPAA Update program is approved for 1.5 hours of General Credit and .5 Hours of Ethics Credit. The applicable credentialing agency retain 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. 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.

Check Out Our Health Plan-U & Other Workshops Including:

HIPAA Update*

August 14, 2012

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

Health Plan Communications Update: SBCs, SPDs & Beyond*

August 28, 2012

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

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.

Comments Off on HIPAA & Texas Law Require HIPAA Training. Register Now For August 14 HIPAA Update Workshop! | Uncategorized | Tagged: compliance, Health Care, Heatlh Plans, HIPAA, PHI, Texas Medical Records Privacy | Permalink
Posted by Cynthia Marcotte Stamer

EBSA Updates Guidance On Fee Disclosure Requirements For 401(k) Plan Brokerage Window Arrangements

August 6, 2012

U.S. Department of Labor’s Employee Benefits Security Administration recently clarified its guidance about how its rules affect 401(k) plan brokerage window arrangements in response to public feedback. Field Assistance Bulletin No. 2012-02R published July 30, 2012, modifies and replaces Q&A 30 of Field Assistance Bulletin No. 2012-02 (issued May 7, 2012) with a new Q&A 39.

New Q-39 of Field Assistance Bulletin No. 2012-02R addresses when a plan offers an investment platform that includes a brokerage window, self-directed brokerage account, or similar plan arrangement but the fiduciary did not designate any of the funds on the platform or available through the brokerage window, self-directed brokerage account, or similar plan arrangement as “designated investment alternatives” under the plan, if the brokerage account platform or the brokerage window, self-directed brokerage account, or similar plan arrangement is a designated investment alternative for purposes of the regulation. According to Field Assistance Bulletin No. 2012-02R, it is not. According to the Field Assistance Bulletin, the regulation does not require that a plan have a particular number of “designated investment alternative” (DIA), and the Bulletin does not prohibit the use of a platform or a brokerage window, self-directed brokerage account, or similar plan arrangement in an individual account plan. Rather, whether an investment alternative is a DIA for purposes of the regulation depends on whether it is specifically identified as available under the plan.

However Question 39 also cautions plan administrators and fiduciaries about the need to ensure other applicable ERISA obligations are fulfilled. Field Assistance Bulletin 2012-02R notes it does not change the 404(c) regulation or the requirements for relief from fiduciary liability under section 404(c) of ERISA or address the application of ERISA’s general fiduciary requirements to SEPs or SIMPLE IRA plans. Also, fiduciaries of such plans with platforms or brokerage windows, self-directed brokerage accounts, or similar plan arrangements that enable participants and beneficiaries to select investments beyond those designated by the plan are still bound by ERISA section 404(a)’s statutory duties of prudence and loyalty to participants and beneficiaries who use the platform or the brokerage window, self-directed brokerage account, or similar plan arrangement, including taking into account the nature and quality of services provided in connection with the platform or the brokerage window, self-directed brokerage account, or similar plan arrangement. It also notes that that a 401(k) or other individual account plan fiduciary’s failure to designate investment alternatives to avoid investment disclosures under the regulation, raises questions under ERISA section 404(a)’s general statutory fiduciary duties of prudence and loyalty.

For Help or More Information

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 registerto 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:

[i]See 75 FR 64910 (Oct. 20, 2010).

Federal Mandate That Employer Health Plans Must Cover 100% Of Contraceptive, Other Women’s Health Services With No Cost Sharing Now Effective

August 6, 2012

August 1 Effective Date Of Obama Administration Addition of Contraception & Other Women’s Health Services To Already Lengthy List of Prevention Services Plans Must Cover

Effective August 1, 2012, federal regulators expanded the list of prevention-related services that the Patient Protection & Affordable Care Act (Affordable Care Act) requires that non-grandfathered group health plans cover in-network at no cost to covered persons to include eight more prevention-related health services for women including coverage for the mandate to cover certain contraceptive services that has engendered much debate and opposition from various religious organizations and others.

Employers and other sponsors and insurers of group health plans should review and update their health plan documents, contracts, communications and administration practices to ensure that their health plans and policies appropriately cover these and other prevention-related services that current federal regulations mandate that group health plans (other than grandfathered plans) must cover to comply with the Affordable Care Act.

Non-Grandfathered Health Plans Must Cover Expansive List of Prevention Services

As part of the sweeping reforms enacted by the Affordable Care Act, Congress has mandated that except for certain plans that qualify as “grandfathered,” group health plans and insurers generally must pay for 100% of the cost to cover hundreds of prevention-related health care services for individuals covered under their health plans without any co-payments or other cost-sharing.identified in the services without cost sharing.

Federal regulations have mandated since 2010 that group health plans and insurers provide in-network coverage in accordance with federal regulations implementing the Affordable Care Act’s prevention-related health services mandates for more than 800 prevention-related services listed in regulations originally published in 2009. See Agencies Release Regulations Implementing Affordable Care Act Preventive Care Mandates. The Affordable Care Act gives federal authorities the power to expand or modify this list. Following publication of the original list, the Obama Administration engaged in lengthy discussion considerations about the scope of contraceptive and other women’s health services that would qualify as prevention related services including lengthy discussions and negotiations about mandates to provide contraceptive services viewed as highly controversial by many religious organizations and several other employers. See Affordable Care Act To Require Health Plans Cover Contraception & Other Women’s Health Procedures.

Obama Administration Adds Contraceptive & Other Women’s Health Services To Required List Effective 8/1/2012

The Obama Administration moved forward on its promise to add contraceptive services and a broad list of other women’s health services to the list of prevention-related health services that employer-sponsored health plans must cover without cost to employees despite objections from religious organizations and others that the contraception mandate violates the Constitution’s freedom of religion protections.

The Obama Administration’s announcement earlier this year that it intended to move forward with plans to mandate that group health plans – including those of certain employers affiliated with religious organizations to cover contraceptive counseling and other services as prevention-related services has prompted outcry and legal challenges from a broad range of religious organizations and others. See e.g., University of Notre Dame v. Sebelius; Hercules Industries, Inc. v. Sebelius. On July 27, 2012, a Colorado District Court granted a temporary injunction barring enforcement of the contraceptive coverage mandate against a small, Catholic family-owned business challenging the mandate as a violation of the Constitutional religious freedoms of its owners. See Hercules Industries, Inc. v. Sebelius.

While these and other litigants continue to challenge the contraceptive mandates, Obama Administration officials continue to voice their commitment to standby and enforce the contraceptive and other prevention-related services mandates as implemented by current regulation. Employer and other health plan sponsors and fiduciaries that do not wish to risk exposure for violating these mandates should review and update their health plan documents, summary plan descriptions and other communications, and administrative and other procedures as necessary to comply with the applicable requirements of the regulations.

For Help or More Information

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 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:

1 Comment | Affordable Care Act, Claims Administration, Corporate Compliance, Employers, ERISA, Excise Tax, Fiduciary Responsibility, Health Plans, Human Resources, Patient Empowerment, Patient Protection and Affordable Care Act, Preemption, Privacy, Reporting & Disclosure, Tax, Wellness | Tagged: compliance, Employee Benefits, Employer, Finance, Health Care Reform. Employer, Health Plans, Management, Mandated Benefits, Plan Sponosr, preventive care, Risk Managment, Women's Health | Permalink
Posted by Cynthia Marcotte Stamer

Use NIH & Other Free Government Resources To Help Round Out Wellness Programs

August 6, 2012

While tight budgets may require employers, families and communities to cut back on a broad range of expenditures, limited budge Employers, communities and families struggling to find affordable resources to promote and manage obesity and other wellness challenges should check out the wealth of free and other cost-effective resources available from the National Institutes on Health (NIH). See NIH Health Information: Obesity.

Using these and other free or government subsidized resources from NIH or other government agencies, as well as the broad range of reputable resources available from non-profits like the National Kidney Foundation, the American Diabetes Association, the American Heart Association and others can help employers, communities and families stretch their wellness dollars and support efforts to promote wellness.

Obesity & Weight Control Film Series

NIH has developed an extensive video library that provide resources and education to fight obesity and other health challenges. The HBO Documentary Films series on obesity, “The Weight of the Nation,” that originally premiered in May 2012 provides a four-part series—Consequences, Choices, Children in Crisis, and Challenges—highlighting several NIH research advances and addressed the factors contributing to the country’s obesity problem. You can view “The Weight of the Nation” at HBO.com The “Weight of the Nation” HMO film series is the centerpiece to a public awareness campaign, which also includes a three-part HBO Family series for kids, 12 short films, a website and social media, and a nationwide community-based outreach effort using free film discussion guides and other tools. To get a film screening kit, visit hbo.com/theweightofthenation.

NIH Weight Control Research & Health Information

In addition to its video resources, NIH also has an extensive library of other resources on weight control and obesity. Examples of these resources include:

With budgets tight, using these and other free or government subsidized resources from NIH or other government agencies, as well as the broad range of reputable resources available from non-profitscan help employers, communities and families continue and support their ongoing wellness efforts.

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

Sharing and promoting the use of practical practices, tools, information and ideas that patients and their families, health care providers, employers, health plans, communities and policymakers can share and offer to help patients, their families and others in their care communities to understand and work together to better help the patients, their family and their professional and private care community plan for and manage these needs is the purpose of Project COPE: The Coalition on Patient Empowerment, a community outreach project of theThe Coalition for Responsible Health Policy.

The Coalition for Responsible Health Care Policy and its Project Cope are founded and operated based on the belief that thee best opportunities to improve access to quality, affordable health care for all Americans is for every American, and every employer, insurer, and community organization to seize the opportunity to be good Samaritans. The government, health care providers, insurers and community organizations can help by providing education and resources to make understanding and dealing with the realities of illness, disability or aging easier for a patient and their family, the affected employers and others. At the end of the day, however, caring for people requires the human touch. Americans can best improve health care by speaking up, stepping up and taking the reins to control health care decisions and to help bridge the gap themselves rather than waiting for government or others to make decisions and take care of matters. Building health care neighborhoods filled with good neighbors throughout the community is the key.

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

We also encourage you and others to help develop real meaningful improvements by joining Project COPE: Coalition for Patient Empowerment here by sharing ideas, tools and other solutions and other resources. The Coalition For Responsible Health Care Policy provides a resource that concerned Americans can use to share, monitor and discuss the Health Care Reform law and other health care, insurance and related laws, regulations, policies and practices and options for promoting access to quality, affordable healthcare through the design, administration and enforcement of these regulations.

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 . You also can access information about how you can arrange for training on “Building Your Family’s Health Care Toolkit,” using the “PlayForLife” resources to organize low cost wellness programs in your workplace, school, church or other communities, and other process improvement, compliance and other training and other resources for health care providers, employers, health plans, community leaders and others here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail by creating or updating your profile here. You can access other recent updates and other informative publications and resources.

Some examples of recent publications that may be of interest include:

For important information concerning this communication click here.

1 Comment | Uncategorized | Permalink
Posted by Cynthia Marcotte Stamer

96% Employers of 50+ Employees, 36% Employers of Smaller Employers Provide Health Coverage

August 4, 2012

Kaisers State Health Facts.org reports that almost 96% of large private sector employers (50+ employees) offer health insurance to employees, compared to 36% of small employers. On average, private sector employers cover 74% of premiums for family coverage. As the pay-or-pay mandate of the Patient Protection & Affordable Care Act (Affordable Care Act) approaches, U.S. employers of all size will decide whether to continue to provide health care coverage under the significantly expanded federal mandates governing those plans or to pay the required assessment to the federal government for failing to provide that coverage.

For Help or More Information

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 registerto 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:

Comments Off on 96% Employers of 50+ Employees, 36% Employers of Smaller Employers Provide Health Coverage | Claims Administration, Employee Benefits, Employers, ERISA, Fiduciary Responsibility, Health Plans, Human Resources, Insurance, Mental Health | Tagged: Affordable Care Act, ERISA plans, Health Plans, Mandated Benefits, Mental Health, Mental Health Parity, MHPAEA | Permalink
Posted by Cynthia Marcotte Stamer

12 Steps Every Employer With A Health Plan Should Do Now To Manage 2012-14 Health Plan Risks & Liabilities

August 1, 2012

August 1 marked the effective date of yet another Affordable Care Act mandate: the controversial contraceptive coverage and other women’s health preventive coverage benefits mandates. Although many mandates have taken effect over the past two years, few employer plans are adequately updated. Here’s some suggestions about what employers and fiduciaries responsible for group health plan sponsorship or administration and their vendors should do now to manage exposures arising from current Affordable Care Act and other federal health plan rules. Following the Supreme Court’s June 28, 2012 National Federation of Independent Business v. Sebelius ruling, most employers and insurers of employment based group health plans now are bracing to cope with radical changes in their health plan related responsibilities scheduled to take effect in 2014.

While anticipating and preparing to cope with these future changes health plan sponsors, fiduciaries, administrators and advisors need to manage the substantial and growing health plan related costs and liabilities that the sponsorship or administration of an employee health plan between now and 2014 is likely to create for their company and its management. Consequently, while planning for 2014, employers sponsoring health plans and their management, insurers, administrators and vendors must act now to update and administer their group health plans timely to comply with the requirements of the Affordable Care Act and other federal rules that have, or in coming months will, take effect pending the law’s full rollout in 2014.

For most health plans, these steps should include the following:

Know The Cast Of Characters & What Hat(s) (Including You) They Wear & Prudently Select, Contract With & Monitor Them To Manage Risks

Employers and their management rely upon many vendors and advisors and assumptions when making plan design and risk management decisions. Many times, employer and members of their management unknowingly assume significant risk because of misperceptions about these allocations of duties and operational and legal accountability. An correct understanding of these roles and responsibilities is the foundation for knowing where the risks come from, who and to what extent a business or its management can rely upon a vendor or advisor to properly design and administer a health plan or carry out related obligations, what risks cannot be delegated, and how to manage these risks.

Under the Employee Retirement Income Security Act (ERISA), party or parties that exercise discretion or control over health plan administration, funds or certain other matters are generally called “fiduciaries.” Fiduciaries generally are personally liable for prudently and appropriately administering their health plan related responsibilities prudently in accordance with ERISA and other applicable laws and the plan terms. Knowing who is acting as a fiduciary and understanding those duties and liabilities and how to manage these risks significantly affects the exposure that an employer or member of its management risks as a result of an employer’s sponsorship in a group health plan or other employee benefit program. Also, knowing what duties come first and how to prove that the fiduciary did the right thing is critical to managing risks when an individual who has fiduciary responsibilities under ERISA also has other responsibilities in the management of the sponsoring employer, a vendor or elsewhere that carries duties or interests that conflict with his health plan related fiduciary duties.

The plan sponsor or members of its leadership, a service provider or members of their staff generally may be a fiduciary for purposes of ERISA if it either is named as the fiduciary, it functionally exercises the discretion to be considered a fiduciary, or it otherwise has discretionary power over plan administration or other fiduciary matters. Many plan sponsors and their management unwittingly take on liability that they assume rests with an insurer or service provider because the company or members of its management are named as the plan administrator or named fiduciary with regard to duties that the company has hired an insurer or service provider to provide or allowed that service provider to disclaim fiduciary or discretionary status with regard to those responsibilities. Also, by not knowing who the fiduciaries are, plans and their fiduciaries often fail to confirm the eligibility of all parties serving as fiduciaries, to arrange for bonding of service providers or fiduciaries as required to comply with Title I of ERISA. Failing to properly understand when the plan sponsor, member of its management or another party is or could be a fiduciary can create unnecessary and unexpected risks and lead to reliance upon vendors who provide advice but leave the employer holding the bag for resulting liability.

In addition to fiduciary status, employer and other plan sponsors also need to understand the additional responsibilities and exposures that the employer bears as a plan sponsor. Beyond contractual and fiduciary liabilities, federal law increasingly imposes excise tax or other liability for failing to maintain legally compliant plans, file required reports, provide required notifications or fulfill other requirements. The Affordable Care Act, the Internal Revenue Code, the Social Security Act, the Privacy, Security, and Administrative Simplification For instance, the Health Insurance Portability & Accountability Act (HIPAA) and various other federal laws also impose certain health plan related obligations and liabilities on employer or other health plan sponsors and other parties. The Internal Revenue Service interprets Internal Revenue Code § 6039D as obligating employers sponsoring health plans that violate these and certain other federal health plan rules to self-identify, self-report, and self-assess and pay excise and other taxes due under the Internal Revenue Code as a result of this non-compliance. Knowing what everyone’s roles and responsibilities are is a critical first step to properly understanding and managing health plan responsibilities and related risks.

An accurate understanding of the risks and who bears them is critical to understand the risks, opportunities to mitigate risk through effective contracting or other outsourcing, when outsourcing does not effectively transfer risks, where to invest resources for contract, plan or process review and changes or other risk management, and where to expect costs and risks and implement processes and procedures to deal with risks that cannot be outsourced or managed.

Know What Rules Apply To Your Plan, The Sponsoring Employer, The Plan Its Fiduciaries & Plan Related Vendors & How This Impacts You & Your Group Health Plan

The requirements and rules impacting health plans and their liabilities have undergone continuous changes. Amid these changing requirements, health plans, their sponsors, fiduciaries, insurers, and service providers often may not have kept their knowledge, much less their plan documents, summary plan descriptions and other communications, administrative forms and procedures and other materials and practices up to date. These requirements and their compliance and risk management significance may vary depending upon whether the reviewing or regulated party is the plan, its sponsor, fiduciary, insurer or services in some other rules; how the plans are arranged and documented, the risk and indemnification allocations negotiated among the parties, the risk tolerance of the party, and other factors. Proper understanding of these rules and their implications is critical to understand and manage the applicable risks and exposures.

Review & Update Health Plan Documents, SPDs & Other Communications, Administrative Forms & Procedures, Contracts & Processes To Meet Requirements & Manage Exposures

Timely updating written plan documents, communications and administration forms, administrative practices, contracts and other health plan related materials processes and procedures has never been more critical.

Federal law generally requires that health plan be established, maintained and administered in accordance with legally complaint, written plan documents and impose a growing list of standards and requirements governing the design and administration of these programs. In addition, ERISA, the Internal Revenue Code, the Social Security Act, federal eligibility and coverage continuation mandates of laws like the Consolidated Omnibus Budget Reconciliation Act (COBRA), the Health Insurance Portability & Accountability Act, the Family & Medical Leave Act, Michelle’s Law and others require that health plan administrators or sponsors communicate plan terms and other relevant information to participants and beneficiaries.

Failing to update documents, communications, administrative forms and processes and other materials and practices can unleash a host of exposures. Among other things, noncompliant plans, communications and practices can trigger unanticipated costs and liabilities by undermining the ability to administer plan terms and conditions. They also may expose the plan, plan fiduciaries and others to lawsuits, administrative enforcement and sanctions and other enforcement liabilities.

Beyond these exposures, employers who sponsor group health plans that violate certain federal group health plan mandates have a duty to self-report certain regulatory plan failures and pay excise taxes where such failures are not corrected in a timely fashion once discovered, or are due to willful neglect. Internal Revenue Code Section 6039D imposes excise taxes for failure to comply with health care continuation (COBRA) , health plan portability (HIPAA), genetic nondiscrimination (GINA), mental health parity (MHPAEA) , minimum hospital stays for newborns and mothers (Newborns’ and Mothers’ Health Protection Act), coverage of dependent students on medically necessary leaves of absence (Michelle’s Law), health savings account (HSA) and Archer medical savings account (Archer MSA) contribution comparability and various other federal requirements incorporated into the Internal Revenue Code. Since 2010, Internal Revenue Service regulations have required employers sponsoring group health plans not complying with mandates covered by Internal Revenue Code Section 6039D to self-report violations and pay related excise taxes. Under these regulations, the sponsoring employer (or in some cases, the insurer, HMO or third-party administrator) must report health plan compliance failures annually on IRS Form 8928 (“Return of Certain Excise Taxes Under Chapter 43 of the Internal Revenue Code”) and self-assess and pay resulting excise taxes. The potential excise tax liability that can result under these provisions can be significant. For example, COBRA, HIPAA, and GINA violations typically carry excise tax liability of $100 per day per individual affected. Compliance with applicable federal group health plan mandates is critical to avoid these excise taxes as well as other federal group health plan liabilities.

For this purpose of deciding what and how much to do, it is critical to keep in mind the devil is in the details. Not only must the documentation meet all technical mandates, the language, its clarity and specificity, and getting the plan document to match the actual processes that will be used to administer the plan and ensuring that the plan documents and processes match the summary plan description, summary of benefits and coverage, administrative forms and documentation and other plan communications and documentation in a legally compliant way significantly impacts the defensibility of the plan terms and the cost that the plan, its sponsor and fiduciaries can expect to incur to defend it.

Update & Tighten Claims and Appeals Plan & SPD Language, EOBs & Other Notifications, Processes, Contracts & Other Practices For Changing Compliance Requirements & Enhanced Defensibility

Unfortunately, most group health plans, their insurers and administrators need to substantially strengthen their plan documentation; handling; timeliness; notifications and other claims denials; and other claims and other appeals processes and documentation to meet existing regulations and otherwise strengthen their defensibility. Among other things, existing court decisions document that many plans existing plan documents, summary plan descriptions and explanations of benefits, claims and appeals investigations and documentation and notifications often need improvement to meet the basic plan document, summary plan description and reasonable claims rules of the plan document, summary plan description, fiduciary responsibility, reasonable claims and appeals procedures of ERISA and its implementing regulations. Court precedent shows that inadequate drafting of these provisions, as well as specific provisions coverage and benefit provisions frequently undermines the defensibility of claims and appeals determinations. In addition to requiring that claims be processed and paid prudently in accordance with the terms of written plan documents, ERISA also requirements that plan fiduciaries decide and administer claims and appeals in accordance with reasonable claims procedures. Although the Labor Department updated its regulations implementing this reasonable claims and appeals procedure requirement more than 10 years ago, the Department of Labor updated its ERISA claims and appeals regulations to include detailed health plan claims and appeals requirements, many group health plans, their administrators and insurers still have not updated their health plans, summary plan descriptions, claims and appeals notification, and claims and appeals procedures to comply with these requirements. The external review and other detailed additional requirements that the Affordable Care Act dictates that group health plans not grandfathered from its provisions and its provisions holding these non-grandfathered plans strictly liable for deficiencies in their claims and appeals procedures makes the need to address inadequacies even more imperative for those non-grandfathered group health plans. Inadequate attention to these concerns can force a plan to pay benefits for claims otherwise not covered as well as other defense costs and penalties.

Consistency Matters: Build Good Plan Design, Documentation & Processes, Then Follow Them.

Defensible health plan administration starts with the building and adopting strong, legally compliant plan terms and processes that are carefully documented and communicated in a prudent, legally compliant way. The next key is to actually use this investment by conducting plan administration and related operations consistent with the terms and allocated responsibilities to administer the plan in a documented, legally compliant and prudent manner. Good documentation and design on the front end should minimize ambiguities in the meaning of the plan and who is responsible for doing what when. With these tools in place, delays and other hiccups that result from confusion about plan terms, how they apply to a particular circumstance or who is responsible for doing what, when should be minimized and much more easily resolved by timely, appropriate action by the proper responsible party. This facilitation of administration and its consistency can do much to enhance the defensibility of the plan and minimize other plan related risks and costs.

Ensure Correct Party Carefully Communicates About Coverage and Claims in Compliant, Timely, Prudent, Provable Manner

Having the proper party respond to claims and inquiries in a compliant, timely, prudent manner is another key element to managing health plan risk and promoting enforceability. Ideally, the party appointed to act as the named fiduciary for purposes of carrying out a particular function also should conduct all plan communications regarding that function in terms that makes clear its role and negates responsibility or authority of others. When an employer or other plan sponsor goes to the trouble to appoint a committee, service provider or other party to serve as the named fiduciary then chooses to communicate about the plan anyway, the Supreme Court in FMC v. Halliday made clear it runs the risk that the plan related communications may be considered discretionary fiduciary conduct for which it may be liable as a functional fiduciary. Meanwhile, these communications by non-fiduciaries also may create binding obligations upon the plan and its named fiduciaries to the extent made by a plan sponsor or conducted by a staff member or service provider performing responsibilities delegated by the plan fiduciary. Beyond expanding the scope of potential fiduciaries, communications conducted by nonfiduciaries also tend to create defensibility for many other reasons. For instance, allowing unauthorized parties to perform plan functions may not comport with the plan terms, and are less likely to create and preserve required documentation and follow procedures necessary to promote enforceability. Also, the communications, decisions and other actions by these non-fiduciary actors also are unlikely to qualify for discretionary review by the courts because grants of discretionary authority, if any in the written plan document to qualify the decisions of the named fiduciary for deferential review by courts typically will not extend to actions by these non-fiduciary parties. Furthermore, the likelihood that the communication or other activity conducted will not comply with the fiduciary responsibility or other requirements governing the performance of the plan related functions is significantly increased when a plan sponsor, service provider, member of management, or other party not who has not been appointed or accepted the appointment act as a named fiduciary undertakes to speak or act because that party very likely does not accept or fully appreciate the potential nature of its actions, the fiduciary and other legal rules applicable to the conduct, and the potential implications for the non-fiduciary actor, the plan and its fiduciaries.

Design and Implement Updated, Properly Secured Payroll, Enrollment, Eligibility and Other Data Collection Features To Meet New Requirements and Prepare For Added Affordable Care Act Data Gathering and Reporting Requirements.

Existing and impending Affordable Care Act mandates require that group health plans, their sponsors collect, maintain and administer is exploding. Existing eligibility mandates, for example, already require that plans have access to a broad range of personal indentifying, personal health and a broad range of other sensitive information about employees and dependents who are or may be eligible for coverage under the plan. While employers and their health plans historically have collected and retained the names, place of residence, family relationships, social security number, and other similar information about employees and their dependents, these data collection, retention and reporting requirements have and will continued to expand dramatically in response to evolving legal requirements. Already, health plans also from time to time need employee earnings, company ownership, employment status, family income, family, medical, military, and school leave information, divorce and child custody, enrollment in Medicare, Medicaid and other coverage and a broad range of other additional information. Under the Affordable Care Act, these data needs will explode to include a whole new range of information about total family income, availability and enrollment in other coverage, cultural and language affiliations, and many other items. Collecting, retaining and deploying this information will be critical to meeting existing and new plan administration and reporting requirements. How this data collection is conducted, shared, safeguarded against misuse or other legally sensitive contact by the employer, service providers, the plan and others will be essential to mitigate exposures to federal employment and other nondiscrimination, HIPAA and other privacy, fiduciary responsibility and other legal risks and obligations. To the extent that payroll providers, third party administrators or other outside service providers will participate in the collection, retention, or use of this data, time also should be set aside both to conduct due diligence about their suitability, as well as to negotiate the necessary contractual arrangements and safeguards to make their involvement appropriate. Finally, given the highly sensitive nature of this data, employers, health plans and others that will collect and use this data will need to implement appropriate safeguards to prevent and monitor for improper use, access or disclosure and to conduct the necessary training to suitably protect this data.

Monitor, Assess Implications & Provide Relevant Input to Regulators About Emerging Requirements & Interpretive Guidance Implementing 2014 Affordable Care Act & Other Mandates.

While the Supreme Court’s decision upholds the constitutionality of the Affordable Care Act’s individual mandates, many opportunities to impact its mandates remain. Beyond the highly visible, continuing and often heated debates ranging in Congress and the court of public opinion concerning whether Congress should modify or repeal its provisions, a plethora of regulatory interpretations issued or impending release by the implementing agencies, the Internal Revenue Service, Department of Health & Human Services, Department of Labor and state insurance regulators will significantly impact what requirements and costs employers, insurers, individuals and governments will bear when the law takes effect. Businesses sponsoring health plans should carefully scrutinize this regulatory guidance and provide meaningful, timely input to Congress, the regulators or both as appropriate to help influence the direction of regulatory or Congressional actions that would materially impact these burdens.

Help Employees & Their Families Build Their Health Care Coping Skills With Training & Supportive Tools

Whether or not your company plans to continue to sponsor employee health coverage after 2014, providing training and tools to help employees and their families strengthen their ability to understand and manage their health, health care needs and benefits can pay big dividends. Beyond the financial costs to employees and employers of paying to care for a serious illness or injury, productivity also suffers while employees dealing with their own or a family member’s chronic or serious health care condition. Wellness programs that encourage and support the efforts of employees and their families to stay healthy may be one valuable part of these efforts. Beyond trying to prevent the need to cope with illness behind wellness programs, however, opportunities to realize big financial, productivity and benefit value recognition rewards also exist in the too often overlooked opportunity to provide training, education and tools that employees and their families need to better understand and self-manage care, benefits, finances and life challenges that commonly arise when dealing with their own or a family member’s illness. Providing education, tools and other resources that can help employees access, organize and effectively use health care and benefit information to manage care and the consequences of illness, their benefits and how to use them, to take part more effectively in care and care decisions, to recognize and self-manage financial, lost-time and other challenges associated with the illness not addressable or covered by health benefit programs, and other practical skills can help reduce lost time and other productivity impacts while helping employees and their families get the most out of the health care dollars spent.

Pack Your Parachute & Locate The Nearest Exit Doors

With the parade of expenses and liabilities associated with health plans, businesses sponsoring health plans and the management, service providers and others involved in their establishment, continuation, maintenance or administration are well advised to pack their survival kit and develop their exit strategies to position to soften the landing in case their health plan experiences a legal or operational disaster.

Employers and other health plan sponsors and fiduciaries typically hire and rely upon a host of vendors and advisors to design and administer their health plans. When selecting and hiring these service providers, health plan sponsors and fiduciaries are well-advised to investigate carefully their credentials as well as require the vendors to provide written commitments to stand behind their advice and services. Too often, while these service providers and advisors encourage plan sponsors and fiduciaries to allow the vendor to lead them or even handle on an ongoing basis plan administration services by touting their services, experience, expert systems and process and commitment to stand behind the customer when making the sale or encouraging reliance upon their advice when tough decisions are made, they rush to stand behind exculpatory and on-sided indemnification provisions in their service contracts to limit or avoid liability, demand indemnification from their customer or both when things go wrong. While ERISA may offer some relief from certain of these exculpatory provisions under some circumstances, plan sponsors and fiduciaries should work to credential service providers and require service providers to commit to being accountable for their services by requiring contracts acknowledge all promised services and standards of quality, require vendors to commit to provide legally compliant and prudently designed and administered services that meet or exceed applicable legal requirements, to provide liability-backed indemnification or other protection for damages and costs resulting from vendor imprudence or malfeasance, to allow for contract termination if the vendor becomes unsuitable for continued use due to changing law or other circumstances and requiring the vendor to return data and other documentation critical to defend past decisions and provide for ongoing administration. Keep documentation about advice, assurances and other relevant evidence received from vendors which could be useful in showing your company’s or plan’s efforts to make prudent efforts to provide for the proper administration of the plan. When concerns arise, use care to investigate and redress concerns in a timely, measured fashion which both shows the prudent response to the concern and reflects sensitivity to the fiduciary and other roles and responsibilities of the employer sponsor and other parties involved.

Get Moving Now On Your Compliance & Risk Management Issues.

Since many compliance deadlines already have past and the impending deadlines allow plan sponsors and fiduciaries limited time to finish arrangements, businesses, fiduciaries and their service providers need to get moving immediately to update their health plans to meet existing and impending compliance and risk management risks under the Affordable Care Act and other federal laws, decisions and regulations.

Monitor, Assess Implications & Provide Relevant Input to Regulators About Emerging Requirements & Interpretive Guidance Implementing 2014 Affordable Care Act & Other Mandates.

While the Supreme Court upheld the individual mandate, employer and other health plan sponsors, Congress continues to debate changes to the Affordable Care Act and other federal health plan rules. Meanwhile, significant opportunity still exists to provide input to federal and state regulators on many key aspects of the Affordable Care Act and its relationship to other applicable laws even as court challenges to contraceptive coverage and other specific requirements are emerging. Businesses and other health plan sponsors, plan fiduciaries, insurers and administrators, and other vendors must stay involved and alert. Zealously monitor new developments and share timely input with Congress and regulators about existing and emerging rules that present concerns and other opportunities for improvement even as you position to respond to these rules before they become fully implemented.

For Help or More Information

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 registerto 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:

Comments Off on 12 Steps Every Employer With A Health Plan Should Do Now To Manage 2012-14 Health Plan Risks & Liabilities | Affordable Care Act, Claims Administration, Corporate Compliance, Data Security, Employers, ERISA, Excise Tax, Fiduciary Responsibility, Health Plans, Human Resources, Income Tax, Patient Empowerment, Patient Protection and Affordable Care Act, Payroll Tax, Preemption, Privacy, Reporting & Disclosure, Tax, Wellness | Tagged: compliance, Employee Benefits, Employer, Finance, Health Benefits, Health Care Reform, Health Care Reform. Employer, Health Plans, Management, Plan Sponosr, Risk Managment | Permalink
Posted by Cynthia Marcotte Stamer

Congress Gives Defined Benefit Plan Sponsors Welcome Funding Relief, Raises PBGC Premiums & Makes Other Reforms

July 31, 2012

The Employee Retirement Income Security Act of 1974, as amended (ERISA) and the Internal Revenue Code generally require employers that sponsor defined benefit pension plans make sufficient contributions to their defined benefit pension plans to ensure that their plans meet minimum funding requirements.

Failure to meet minimum funding requirements triggers a series of complicated reporting and disclosure, funding and excise tax liabilities, liens and other obligations that are serious and require prompt redress through prompt payment of required contributions and penalties, request for funding waivers or termination under a series of complicated rules or both. Special controlled group, lien and successor liability rules incorporated into these funding requirements often spread the risk of funding deficiencies under these rules by extending liabilities to commonly controlled or affiliated employers, lenders, potential purchasers and others dealing with these plans or the businesses that sponsor them.

Because employer funding obligations under these rules depend heavily upon interest and other investment performance used to calculate funding levels, employer funding obligations tend to spike during economic depressions or slowdowns, resulting in sharp increases in funding obligations for employers at a time when the tight economy already makes finances tight. Congress has faced growing pressure to provide some sort of defined benefit pension plan funding relief as low investment returns and strained corporate budgets during the ongoing economic crisis have fueled an underfunding epidemic among employers sponsoring defined benefit pension plans and threatened the financial viability of many sponsoring employers and the federal insurance program responsible for providing backup insurance for private employer defined benefit commitments administered by the PBGC.

MAP-21 provides immediate defined benefit plan funding relief by changing how the interest rates that employers must use to calculate their current defined benefit plan funding obligations are calculated. MAP-21 defined benefit plan funding reforms effectively decrease current defined benefit plan funding costs by establishing a minimum and maximum for the interest segment rates defined benefit plans use to calculate currently required funding based on a historic 25-year average of those segment rates. It is important that employers and plan fiduciaries keep in mind that the MAP-21 interest rate change applies to the calculation of current funding obligations that employer. It does not apply for purposes of calculating lump sum distributions, limits on deductible contributions to single-employer plans, PBGC variable-rate premiums, fi

With many employers continuing to meet defined benefit plan funding requirements driven up by the continued excessively low investment performance of their benefit plan investment in the slow economic environment, defined benefit pension plan funding relief included in the “Moving Ahead for Progress in the 21st Century Act”(MAP–21”) signed into law by President Obama on July 6, 2012 provides welcome and much-needed pension funding relief. For many financially strapped businesses that sponsor defined benefit plans, the MAP-21 relief may allow the employer to avoid terminating its defined benefit plan, escape costly underfunding consequences that many defined benefit plan sponsors fear will financially cripple or bankrupt their companies, or both.

MAP-21 provides immediate funding relief for financially strapped defined benefit plan sponsors and makes various other reforms impacting defined benefit pension plans and the Pension Benefit Guarantee Corporation (PBGC) insurance program that helps to insure certain benefit commitments made under these defined benefit plans. The MAP-21 funding relief is intended to help employers struggling to meet heightened pension funding obligations brought about by the decline in investment performance resulting from the economic downturn.

nancial reporting under Section 4010 of ERISA, and qualified transfers of excess pension assets to retiree medical accounts.

In addition to changing the rules for calculating interest rates for purposes of determining defined benefit plan minimum funding obligations, MAP-21 also extends rules allowing transfers of excess pension assets to retiree health accounts to December 31, 2021 and expands those transfer rules also to allow transfers to fund retiree group term life insurance accounts.

Finally, in addition to these changes to defined benefit pension plan funding rules, MAP-21 also reorganizes the PBGC organizational structure and increases PBGC insurance premiums.

While the MAP-21 reforms will provide welcome relief, sponsoring businesses, their commonly controlled and affiliated employers, lenders, investors and successors still must exercise care to carefully monitor the funding status of defined benefit plans and the potential liabilities and responsibilities associated with these plans. Appropriate steps should be taken to maintain required funding levels or, at the first sign of trouble, to seek experienced legal and actuarial advice and help to identify and take prompt steps to pursue options to head off a potential crisis by freezing or terminating the plan, providing required notifications and disclosures to participants and beneficiaries, the PBGC, lenders, investors, and other concerned parties, and other actions to mitigate exposures.

For More Information Or Assistance

A Fellow in the the American College of Employee Benefits Council, Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization, Immediate Past Chair and current Welfare Plan Committee Co-Chair of the American Bar Association (ABA) RPTE Employee Benefit & Other Compensation Group, a Council Member of the ABA Joint Committee on Employee Benefits, Vice-Chair of the ABA TIPS Employee Benefits Commitee, Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, management attorney and consultant Cynthia Marcotte Stamer nearly 25 years experience advising and representing employers, employee benefit plans, their sponsors, bankruptcy creditors, debtors and trustees, plan fiduciaries and plan administrators, consultants, vendors, outsourcers, insurers, governments and others about employment, employee benefit, compensation, and a wide range of other performance, legal and operational risk management practices and concerns. As a part of this work, Ms. Stamer has worked extensively with clients to manage risks and defend practices under a wide range of laws and circumstances. Her experience includes extensive work advising and representing employers, plans, plan fiduciaries, trustees, investors, and others about managing and resolving risks relating to distressed pension and other employee benefit plans, downsizing and other workforce reengineering and other similar matters. A prolific author and popular speaker, Ms. Stamer also publishes, conducts client and other training, speaks and consults extensively on GINA and other employment and employee benefit risk management practices and concerns for the ABA, World At Work, SHRM, American Health Lawyers Association, Institute of Internal Auditors, Society for Professional Benefits Administrators, HCCA, Southwest Benefits Association and many other organizations. Her insights on these and related topics have appeared in Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, Managed Healthcare, Health Leaders, various ABA publications and a many other national and local publications. To learn more about Ms. Stamer, her experience, involvements, programs and publications, see here or contact Ms. Stamer.

Other Resources & Developments

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

If you or someone else you know would like to receive future updates and notices about upcoming programs and events, please be sure that we have your current contact information – including your preferred e-mail- by creating or updating your profile at here. To unsubscribe, send an e-mail with “Unsubscribe” in the subject here. For important information concerning this communication click here.

Comments Off on Congress Gives Defined Benefit Plan Sponsors Welcome Funding Relief, Raises PBGC Premiums & Makes Other Reforms | Bankruptcy, Corporate Compliance, Employers, ERISA, Fiduciary Responsibility, Internal Controls, Reporting & Disclosure, Restructuring, Retirement Plans | Tagged: defined benefit plan, disclosure, ERISA, funding, Labor Department, notices, PBGC, pension plans, reporting, underfunded plans | Permalink
Posted by Cynthia Marcotte Stamer

New Health Plan Partnership, Data Sharing With Federal Health Care Fraud Enforcers Promises Greater Federal Oversight of Providers & Health Plans

July 30, 2012

Health care providers and payers should ensure that practices for billing private payers can withstand the scrutiny of federal and state health care fraud enforcers after the July 26, 2012 announcement of a ground-breaking new public-private antifraud initiative between federal and state health care fraud fighters and a private insurers under which private insurers will share an unprecedented amount of private health claims data, fraud detection practices, and other coöperation with federal and state official fraud prevention and prosecution efforts. While the partnership signals a new opportunity for health plans to secure federal support if their efforts to monitor and address suspected health care fraud impacting private health plans, private payers also should keep in mind that federal fraud prosecutors also are likely to use the data and information gleened from the partnership to identify and redress noncompliance by private health plans with federal Medicare and other federal program secondary payor, nondiscrimination and other coordination of benefits requirements; Affordable Care Act and other federal benefit, coverage and eligibility requirements and other applicable rules. Accordingly, even while anticipating greater support by federal agencies in the fight against fraud affecting private payers, health insurers and other private health plans also should tighten their practices to prepare for heightened scrutiny and enforcement by federal officials of federal health plan rules.

Government Health Care Fraud Fighters Partner With Private Insurers

The Federal health care fraud fighting departmental duo of the Departments of Health and Human Services (HHS) Justice (DOJ) last week expanded their network of fraud fighting resources by launching a “ground-breaking” partnership among the federal government, State officials, several leading private health insurance organizations, and other health care anti-fraud groups to prevent health care fraud. HHS and DOJ say the following organizations and government agencies are among the first to join this partnership:

America’s Health Insurance Plans
Amerigroup Corporation
Blue Cross and Blue Shield Association
Blue Cross and Blue Shield of Louisiana
Centers for Medicare & Medicaid Services
Coalition Against Insurance Fraud
Federal Bureau of Investigations
Health and Human Services Office of Inspector General
Humana Inc.
Independence Blue Cross
National Association of Insurance Commissioners
National Association of Medicaid Fraud Control Units
National Health Care Anti-Fraud Association
National Insurance Crime Bureau
New York Office of Medicaid Inspector General
Travelers
Tufts Health Plan
UnitedHealth Group
U.S. Department of Health and Human Services
U.S. Department of Justice
WellPoint, Inc.

HHS & DOJ Say Partnering With Private Insurers Will Give Ongoing Anti-Fraud Efforts Even More Punch

In announcing the new partnership on July 26, 2012, HHS Secretary Kathleen Sebelius and Attorney General Eric Holder touted this new voluntary, collaborative public-private arrangement as the “next step” in the Obama administration’s efforts to combat health care fraud.

“This partnership is a critical step forward in strengthening our nation’s fight against health care fraud,” said Attorney General Holder. “This Administration has established a record of success in combating devastating fraud crimes, but there is more we can and must do to protect patients, consumers, essential health care programs, and precious taxpayer dollars. Bringing additional health care industry leaders and experts into this work will allow us to act more quickly and effectively in identifying and stopping fraud schemes, seeking justice for victims, and safeguarding our health care system.”

“This partnership puts criminals on notice that we will find them and stop them before they steal health care dollars,” Secretary Sebelius said. “Thanks to this initiative today and the anti-fraud tools that were made available by the health care law, we are working to stamp out these crimes and abuse in our health care system.”

Partnership Allows Feds To Use Private Payer Claims Data, Knowledge & Other Fraud Detection Resources

According to HHS and DOJ, the new partnership is designed to share information and best practices in order to improve detection and prevent payment of fraudulent health care billings. Its goal is to reveal and halt scams that cut across a number of public and private payers. HHS and DOJ say the partnership will private insurers to share their anti-fraud insights more easily with investigators, prosecutors, policymakers and other stakeholders and law enforcement officials more effectively to identify and prevent suspicious activities, better protect patients’ confidential information and use the full range of tools and authorities provided by the Patient Protection & Affordable Care Act (Affordable Care Act) and other statutes to combat and prosecute illegal actions.

One unprecedented element of this partnership will involve the sharing of information on specific schemes, utilized billing codes and geographical fraud hotspots between the public and private partners. The partners say the planned sharing of claims data and other information will help partners prevent, detect and respond to potential health care billing fraud by:

Helping partners to take action, to prevent losses to both government and private health plans before they occur;
Improving their ability to spot and stop payments billed to different insurers for care delivered to the same patient on the same day in two different cities;
In the future to use sophisticated technology and analytics on industry-wide healthcare data to predict and detect health care fraud schemes.

Presumably, this will involve the extension of the use of state-of-the-art technology and data mining practices like those the Centers for Medicare & Medicaid Services (CMS) already uses to review claims, to track suspected fraud trends and flag suspected fraudulent activity.

Partnership Expands Use & Reach of New Affordable Care Act & Other Health Care Fraud Detection & Enforcement Tools & Collaboration

The partnership builds upon and extends the reach and use of expanded legal tools created by the Affordable Care Act and other laws that Federal and state officials are using in their highly publicized war against health care fraud, waste and abuse in Medicare, Medicaid, the Children’s Health Insurance Program (CHIP) and, increasingly, private insurance plans. Using these and other new tools, convictions under the Health Care Fraud and Abuse Control Program increased by over 27% (583 to 743) between 2009 and 2011, and the number of defendants facing criminal charges filed by federal prosecutors in 2011 increased by 74% compared with 2008 (1,430 vs. 821).

The Affordable Care Act and other legislative changes and related programs have significantly strengthened the powers of HHS, DOJ and other federal and state agencies to investigate and prosecute health care fraud. Among other things, these amendments and programs include:

Qui tam and other whistleblower incentives and programs that encourage employees, patients, competitors and others to report suspicious behavior;
Require providers, plans to self-identify, self-report and self-correct false claims and certain other non-compliance;
Increase the federal sentencing guidelines for health care fraud offenses by 20-50% for crimes that involve more than $1 million in losses;
Create penalties for obstructing a fraud investigation or audit;
Make it easier for the government to recapture any funds acquired through fraudulent practices;
Make it easier for the Department of Justice (DOJ) to investigate potential fraud or wrongdoing at facilities like nursing homes;
Under the risk-based provider enrollment rules, providers and suppliers wishing to take part in Medicare, Medicaid, and CHIP who federal officials view as posing a higher risk of fraud or abuse now must undergo licensure checks, site visits and other heightened scrutiny including ongoing monitoring as part of the new Automated Provider Screening (APS) system CMS implemented in December 2011. The APS uses existing information from public and private sources to automatically and continuously verify information submitted on a provider’s Medicare enrollment application including licensure status Secretary to impose a temporary moratorium on newly enrolling providers or suppliers of a particular type or in certain geographic areas if necessary to prevent or combat fraud, waste, and abuse.
Increased information sharing and coördination of investigations and enforcement among states, CMS, and its law enforcement partners at the Office of the Inspector General (OIG) and DOJ including the highly publicized activities of the Health Care Fraud Prevention and Enforcement Action Team (HEAT), a joint effort between HHS and DOJ to fight health care fraud.
The power of CMS, in consultation with OIG, to suspend Medicare payments and require States to suspend Medicaid and SCHIP payments to providers or suppliers during the investigation of a credible allegation of fraud;
The deployment and use of the sophisticated data collection and mining technologies of CMS’ new Fraud Prevention System, which since June 30, 2011 has used advanced predictive modeling technology to screen all Medicare fee-for-service claims before payment and target investigative resources on areas that this profile identifies as reflecting heightened risks of health care fraud vulnerability to allow regulators and prosecutors to more efficiently identify and respond to suspected fraudulent claims and emerging trends;
Focused fraud prevention, detection and enforcement activities on Home Health agencies, Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) suppliers and certain other categories of providers and suppliers that federal officials view as historically presenting heightened concerns;
Expansion of the overpayment detection and recovery activities ofthe Recovery Audit Contractor (RAC) program to Medicaid, Medicare Advantage, and Medicare Part D programs; and
Various other tools.

Health Plan Partnership Latest Wrinkle In Fed’s Efforts To Use Private Whistleblower & Other Resources To Find Fraud

The partnership with the health plans is the latest wrinkle in a growing network of private relationships and outreach that HHS and DOJ use to discover health care fraud. By partnering with health plans, HHS and DOJ have recruited the health plans to help federal officials find and redress potential fraud in public and private health plans.

HHS and DOJ already know the value of getting private citizens to watch for and report suspected illegal behavior. Indeed, extended qui tam and other whistleblower activities already are paying off big for federal officials. For example, a former executive’s qui tam claim helped bring about the settlement announced in June, 2012 under which Christus Spohn Health System Corporation recently paid more than $5 million to settle Justice Departmentclaims that it profited from violations of the False Claims Act by inappropriately admitted patients to inpatient status for outpatient procedures. The investigation leading to the settlement began in March 2008 after Christus – Shoreline’s former director of case management filed a lawsuit under seal under the qui tam provisions of the False Claims Act alleging the six hospitals were submitting false claims to the Medicare program by billing for services that should have been performed on an outpatient basis as if they were more expensive inpatient services. The allegations stated that these hospitals were routinely billing outpatient surgical procedures as if they required an inpatient level of care even though the patients often were discharged from the hospital in less than 24 hours. The federal False Claims Act empowers private citizens with knowledge of fraud against the United States to present those allegations to the United States by bringing a lawsuit on behalf of the United States under seal. If the government’s investigation substantiates those allegations, then the private citizen is entitled to share in any recovery. In this case, that person will receive 20% of the $5,100,481.74 recovery.

With qui tam and other reports of suspected fraud an increasingly frequent and valuable tool in the federal and state wars on health care fraud, officials have added a wide range of programs encouraging and in some cases financially rewarding individuals and businesses that report circumstances leading to fraud convictions. The partnership with health plans reflects the latest wrinkle in these efforts.

Health Plans Also Targeted For Federal Health Care Fraud & Other Enforcement

While welcoming federal efforts in their private war against health care fraud, private health insurers and other payers also need to prepare to defend their own practices against a separate but equally determined wave of federal enforcement of federal health plan laws against payers.

The debate leading up to and activities of the Obama Administration since the passage of the Affordable Care Act make clear that health plans also stand in the line of fire for enforcement by federal health care officials. With alleged excesses and abuses by health plans among the leading arguments used by administration officials and Congressional supporters to justify the passage of the Affordable Care Act’s insurance reforms, it should come as no surprise that federal regulators are aggressively moving to enforce federal health care regulations against health plans and insurers.

For instance, the Obama Administration has been very aggressive in its implementation of the “Medical Loss Ratio,” “Rate Review” and other features of the health care law it touts as holding insurers accountable and has widely publicized its efforts to use these provisions to force insurers to forego rate increases and make other changes. Recent audits of Medicare Advantage and other private health plans and payers by the HHS Office of Inspector General (OIG) have identified several areas of concern, according to OIG. OIG in February, 2012 issued a publication entitled Medicare Advantage Organizations’ Identification of Potential Fraud and Abuse that reports flawed performance by Medicare Advantage plans under both Part C and Part D with regard to the measurement, detection and implementation of corrective action and referral of potentially fraudulent or abusive practices. The report notes a “lack of common understanding of key fraud and abuse program terms and raise questions about whether all MA organizations are implementing their programs to detect and address potential fraud and abuse effectively.” See also e.g. Medicare Advantage Plans’ Fraud Oversight Weak, Says OIG.

Medicare Advantage Plans are not the only plans targeted for enforcement. For many years, CMS, the Department of Defense and other agencies have been stepping up oversight and enforcement of federal rules that prohibit discrimination by health plans against individuals also covered by Medicare, Medicaid, CHIP, PIP, Department of Defense TRICARE and other federal programs and requiring these plans to pay benefits primary to government program benefits. Sophisticated new electronic data reporting rules are enhancing the enforceability of these rules.

Meanwhile, private health plans also face increased exposures for noncompliance with other laws. As currently interpreted by the Internal Revenue Service, employer or other sponsors of group health plans that fail to comply with the portability rules of the Health Insurance Portability & Accountability Act (HIPAA), mental health parity, medical coverage continuation mandates of the Consolidated Omnibus Budget Reconciliation Act (COBRA) or Michelle’s Law, the genetic nondiscrimination requirements of the Genetic Information & Nondiscrimination Act (GINA) and a host of other laws have an obligation under Internal Revenue Code Section 5001 to self-det eect, self-report and self-assess and pay excise tax penalties even as these plans face federal civil liability from Employee Benefit Security Administration, HHS and private plaintiff actions. As the implementation of the Affordable Care Act, agency officials responsible for the enforcement of these laws are promising stepped up enforcement of these and other federal health plan regulations.

Health Care Providers & Health Plans Both Must Act To Manage Risks & Compliance

In response to the growing emphasis and effectiveness of Federal officials in investigating and taking action against health care providers and payers, both health plans and health care providers should take proper steps to help prevent, detect and timely redress health care fraud and other noncompliance exposures within their organization and to position their organization to respond and defend against potential investigations or charges. In light of the growing qui tam risks, these activities should include both comprehensive compliance review and oversight, as well as tightened internal investigation, exit interview and other human resources and business partner oversight, reporting and investigation policies and practices to help find and redress potential fraud or other qui tam, retaliation and similar exposures early and more effectively.

For Help or More Information

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 registerto 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:

Comments Off on New Health Plan Partnership, Data Sharing With Federal Health Care Fraud Enforcers Promises Greater Federal Oversight of Providers & Health Plans | Claims Administration, Employee Benefits, Employers, ERISA, Fiduciary Responsibility, Health Plans, Human Resources, Insurance, Mental Health | Tagged: Affordable Care Act, ERISA plans, Health Plans, Mandated Benefits, Mental Health, Mental Health Parity, MHPAEA | Permalink
Posted by Cynthia Marcotte Stamer

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.

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 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.™

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

3 Comments | Uncategorized | Tagged: Affordable Care Act, Employer, Essential health benefits, group health plan, Health Insurance, health plan costs, insurance plan, Patient Protection & Affordable Care Act, Patient Protection and Affordable Care Act | Permalink
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.

Comments Off on Leprino Foods To Pay $550K To Settle OFCCP Charge Pre-Hire Screening Test Illegally Discriminated | Employers, Health Plans, HIPAA, Human Resources, Insurance | Tagged: background check, EEOC, employment discrimination, Government Contractors, Human Resources, OFCCP, Pre-Hire Tests, Prehiring Screening | Permalink
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

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:

Comments Off on Update Health Plans For Expanded MHPAEA & Health Care Reform Mental Health Mandates | Claims Administration, Employee Benefits, Employers, ERISA, Fiduciary Responsibility, Health Plans, Human Resources, Insurance, Mental Health | Tagged: Affordable Care Act, ERISA plans, Health Plans, Mandated Benefits, Mental Health, Mental Health Parity, MHPAEA | Permalink
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

Comments Off on Record $2.3 Million+ H-2A Backpay Order Plus Civil Money Penalty Reminds Businesses Employing Foreign Workers To Manage Compliance | Affirmative Action, Child Labor, EEOC, Employee Benefits, Employers, Fair Labor Standards Act, Human Resources, I-9, Immigration, Internal Controls, Internal Investigations, Mental Health, Mental Health Parity, Retirement Plans, Tax, Wage & Hour | Tagged: Employer, Ex Pat, FLSA, H-2A, Human Resources, I-9, Immigration, multinational, Visas, wage and hour | Permalink
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 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

Comments Off on Stamer Speaks 11/15 About Things Plan Committees Must Do Differently In 2012 At SWBA Meeting | Employee Benefits, Employers, ERISA, Fiduciary Responsibility, Health Plans, Mental Health, Mental Health Parity, Retirement Plans, Tax | Tagged: ERISA, fee disclosure, Fiduciary, participant fee disclosuyrenvestment-advisor, plan investiments, prohibited traansaction, Prudence | Permalink
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.

[*] 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 Supreme Court Decision Puts Health Plans Under Fire To Complete ACA-Required Summary of Benefits & Communications & Other Health Plan Updates | Affordable Care Act, Employee Benefits, Employers, ERISA, Health Plans, Human Resources | Tagged: Affordable Care Act, Employers, Health Care Reform, Health Plans, Summary of Benefits and Communications | Permalink
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

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: ERISA, fee disclosure, Fiduciary, participant fee disclosuyrenvestment-advisor, plan investiments, prohibited traansaction, Prudence | 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.

√ 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

* 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

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

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!

Learn Latest On 2012/2013 Federal Health Plan Requirements

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.™ 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.

Comments Off on Coping With Health Care Reform: 2012 Health Plan Update Workshop July 24, 2012: Register Now! | Uncategorized | Tagged: ADA, Affordable Care Act, ERISA, FMLA, GINA, Health Care Reform, Health Plans, Patient Protection and Affordable Care Act | 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 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 OCRâ€™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

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

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 â€“ including your preferred e-mail â€“ 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 â€œRemoveâ€ in the Subject to here.

Comments Off on OCR Hits Alaska Medicaid For $1.7M+ For HIPAA Security Breach | Employers, Health Plans, HIPAA, Human Resources, Insurance | Tagged: Health Plans, HIPAA, OCR, Privacy, Resolution agreement | Permalink
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.

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.

Comments Off on Model Language May Aid Section 83(b) Elections Even As Executive & Other Special Compensation Carry Growing Liability Traps | Corporate Compliance, Employee Benefits, Employers, ERISA, Executive Compensation, Income Tax, Payroll Tax, Tax, Tax Qualification | Tagged: 83, 83(b) Executive Compensation, Deferred Compensation, Dodd-Frank, Shareholder Disclosure | Permalink
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

Comments Off on IRS To Offer Help For U.S. Citizens Overseas With Foreign Retirement Plans, Dual Citizenship Tax Issues | Corporate Compliance, Employers, Fair Labor Standards Act, Human Resources, Internal Controls, Internal Investigations, Wage & Hour | Tagged: ex patriate, multinational, reporting, Tax, taxpayer identification numbers, Withholding | Permalink
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.

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.

About The Author

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.

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: ADA, Corporate Compliance, Disability Discrimination, Employee Benefits, Employers, Employment, Health Insurance, Health Plans, Human Resources | 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).

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.

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.

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).

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.

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.

About The Author

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.

Comments Off on Obama’s Reaffirms Commitment Prosecute Disability Discrimination To Mark Omlstead Anniversary | ADA, Corporate Compliance, EEOC, Employers, GINA, Human Resources, OFCCP, Retaliation | Tagged: ADA, Corporate Compliance, Disability Discrimination, Employee Benefits, Employers, Employment, Health Insurance, Health Plans, Human Resources | Permalink
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

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

Comments Off on IRS Changing Individual Taxpayer ID Number Application Requirements | Corporate Compliance, Employers, Fair Labor Standards Act, Human Resources, Internal Controls, Internal Investigations, Wage & Hour | Tagged: reporting, Tax, taxpayer identification numbers, Withholding | Permalink
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

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

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

Comments Off on NLRB Moves To Promote Non-Union Employee Use of Collective Action Rights By Launching Webpage | Corporate Compliance, Employers, Fair Labor Standards Act, Human Resources, Internal Controls, Internal Investigations, Wage & Hour | Tagged: NLRA, NLRB | Permalink
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

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.

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

For Help or More Information

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

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: ADA, Affordable Care Act, Employers, group health plan, Health, Health Insurance, Health Plans, HIPAA, Mental Health Benefits, Mental Health Parity, Substance Abuse Benefits, weight loss, Wellness, Wellness Programs | 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

Comments Off on Tighten Defensibility of Criminal & Other Background Check Practices In Light of Labor Department Non-Discrimination Regulation & Enforcement Emphasis | ADA, Affirmative Action, Bankruptcy, Civil Rights, Corporate Compliance, Disability, EEOC, Employee Benefits, Employers, GINA, Government Contractors, Internal Controls, Labor Management Relations, Mental Health, Mental Health Parity, Nonresident aliens, OFCCP, Rehabilitation Act, Tax | Tagged: background check, criminal background check, Discrimination, Employer, FCRA, job bank | Permalink
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

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

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: ADA, Affordable Care Act, group health plan, Health Insurance, Health Plans, HIPAA, Mental Health Benefits, Mental Health Parity, Substance Abuse Benefits | 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

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

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: Bankruptcy, ERISA, fee disclosure, Fiduciary, plan investiments, prohibited traansaction, Prudence | 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

Comments Off on Plan Administrator Faces Civil & Criminal Prosecution For Allegedly Making Prohibited $3.2 Million Real Estate Investment | Employee Benefits, Employers, ERISA, Fiduciary Responsibility, Mental Health, Mental Health Parity, Retirement Plans, Tax | Tagged: 404, 406, ERISA, fiduciary liabiity, Fiduciary Responsibility, investment, investment advisor, plan administrator, prohibited transactions | Permalink
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

Comments Off on Employee Plan Fee Disclosure Rules Clarified | Employee Benefits, Employers, ERISA, Fiduciary Responsibility, Health Plans, Mental Health, Mental Health Parity, Retirement Plans, Tax | Tagged: ERISA, fee disclosure, Fiduciary, participant fee disclosuyrenvestment-advisor, plan investiments, prohibited traansaction, Prudence | Permalink
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.

[*] 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: Health Care Fraud, Health Plans, OIG | Permalink
Posted by Cynthia Marcotte Stamer

$50K Settlement Shows Small Breach Reports Carry Enforcement Risk

Get Up To Date On Details of New De-Identification Guidance & Other HIPAA Developments By Participating In 12/12 HIPAA Update Web Workshop

Texas House Bill 300 Medical Records Privacy Act Amendments & HIPAA Regulations Require HIPAA Privacy Training!

HIPAA Update

August 14, 2012

Texas Department Of Insurance Continuing Education Credit, HRCI and World At Work Education Credit Approved!

Complete HIPAA Training While You Catch Up On The Latest On HIPAA & Texas Medical Records Privacy Rules & Get Helpful Compliance And Risk Management Tips!

Learn Latest On HIPAA & Texas House Bill 300 Privacy, Security & Breach Notification Guidance & Enforcement

About The Speaker

Registration

*Tex. Dept. of Insurance, HRICI, WorldAtWork, CLE & Other Continuing Education Credit

Check Out Our Health Plan-U & Other Workshops Including:

About Solutions Law Press, Inc.™

NIH Weight Control Research & Health Information

Email Subscription

Pages

Recent Posts

Archives

Share this blog

Solutions Law Press HR & Benefits Update