In the new issue of Take 5, our colleagues examine five employment, labor, and workforce management issues that will continue to be reviewed and remain top of mind for employers under the Trump administration:
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I’d like to recommend an upcoming complimentary webinar, “EEOC Wellness Regulations – What Do They Mean for Employer-Sponsored Programs? (April 22, 2015, 12:00 p.m. EDT) presented by my Epstein Becker Green colleagues Frank C. Morris, Jr. and Adam C. Solander.
Below is a description of the webinar:
On April 16, 2015, the Equal Employment Opportunity Commission (“EEOC”) released its long-awaited proposed regulations governing employer-provided wellness programs under the American’s with Disabilities Act (“ADA”). Although the EEOC had not previously issued regulations governing wellness programs, the EEOC has filed a series of lawsuits against employers alleging that their wellness programs violated the ADA. Additionally, the EEOC has issued a number of public statements, which have concerned employers, indicating that the EEOC’s regulation of wellness programs would conflict with the regulations governing wellness programs under the Affordable Care Act (“ACA”) and jeopardize the programs currently offered to employees.
During this webinar, Epstein Becker Green attorneys will:
- summarize the EEOC’s recently released proposed regulations
- discuss where the EEOC’s proposed regulations are inconsistent with the rules currently in place under the ACA and the implications of the rules on wellness programs
- examine the requests for comments issued by the EEOC and how its proposed regulations may change in the future
- provide an analysis of what employers should still be concerned about and the implications of the proposed regulations on the EEOC’s lawsuits against employers
Who Should Attend:
- Employers that offer, or are considering offering, wellness programs
- Wellness providers, insurers, and administrators
To register for this complimentary webinar, please click here.
As expected, the last day of the Supreme Court’s term proved to be an incendiary one with the recent spirit of Court unanimity broken by two 5-4 decisions in highly-controversial cases. The media and various interest groups already are reporting the results and, as often is the case in cause-oriented litigation, they are not entirely accurate in their analyses of either opinion.
In Harris v. Quinn, the conservative majority of the Court, in an opinion written by Justice Alito, held that an Illinois regulatory program that required quasi-public health care workers to pay fees to a labor union to cover the costs of wage bargaining violated the First Amendment. The union entered into collective-bargaining agreements with the State that contained an agency-fee provision, which requires all bargaining unit members who do not wish to join the union to pay the union a fee for the cost of certain activities, including those tied to the collective-bargaining process.
The Court below had agreed with the State that agency fees were justified under the Court’s earlier precedents, particularly Abood v. Detroit Bd. of Ed., 431 U. S. 209 (1977). However, the Supreme Court’s majority, besides noting what it finds to be the weakness of Abood, focused particularly on the fact that the employees in question were not really public employees. Other than the fees paid to them, all of the indicia of employer status inured to the covered patients who had complete control over the selection of the workers and their conditions.
Justice Kagan, writing for the four liberal dissenters, sees the matter as allowing the straightforward application of Abood to the “fair share” provision at issue here that she argues covers all public employees. This, of course, was not the majority view. However, before proclaiming public employee unionization as seriously imperiled, as some commentators already have, please note that the majority criticized, but did not overrule, Abood. And, I’d suggest that that isn’t likely to happen anytime soon because I believe that the Chief Justice, who has attempted to be a moderating force on the Court, going back at least to the Affordable Care Act decision, and Justice Kennedy, as well, are just not going to go there. They are strong supporters of stare decisis, and they will stay that way.
An even more controversial decision is the long-awaited holding in Burwell v. Hobby Lobby Stores, Inc. Headlines already are blasting out the breaking news that “Justices Say For-Profits Can Avoid ACA Contraception Mandate.” Well, not exactly.
Over a lengthy and impassioned dissent by Justice Ginsburg, writing for the four liberals (herself and Justices Breyer, Kagan and Sotomayor), the majority, again led by the opinion of Justice Alito, held that the Religious Freedom Restoration Act of 1993 (RFRA), which prohibits the “Government [from] substantially burden[ing] a person’s exercise of religion prevented the application to closely-held (non-public) corporations of the Affordable Care Act provision requiring that employers offer birth control coverage to their employees. The Court held that closely held for-profit corporations are entitled to religious freedom protections and, in contravention of RFRA, the government did not demonstrate that the mandate was the least restrictive means of furthering a compelling government interest.
Both sides of the discussion are hailing Hobby Lobby as a landmark in the long standing public debate over abortion rights. It is not EBG’s role to enter that debate or here to render legal advice, but we respectfully suggest that the decision’s reach is already being overstated by both sides. In the first place, the decision does not allow very many employers to opt out of birth control coverage – only closely-held for-profit companies that have a good-faith ideological core, as clearly was the case for Hobby Lobby. That renders such companies functionally the same as non-profits that are exempted from the mandate by the government. Publicly-held companies are not affected by the decision (though some are likely to argue that Citizens United might require such an extension. Nor are privately-held companies that can’t demonstrate an ingrained belief system.
Moreover the decision implies a number of significant qualifications. For example, RFRA doesn’t shield employers who might cloak illegal discrimination (e.g., against gay people or racial minorities) as a religious practice. Moreover, the decision concerns only the contraceptive mandate and doesn’t necessarily mean that all mandates must fail if they conflict with an employer’s an employer’s religious beliefs. Importantly, Justice Kennedy’s concurring opinion suggests that the government could pay for the coverage itself, so that women receive it. It is not unlikely that the Obama administration will seek to do just that. In any event, per the majority, the government’s shortcoming was that it hadn’t shown that the mandate was the least restrictive means to accomplish its end.
Not only did Justice Kennedy concur in a manner overtly respectful of the dissent, but the fact that Chief Justice Roberts didn’t assign the opinion to himself strongly suggests that he is not prepared to stand in a position of strong conflict with the Court’s liberals but instead to be a mediating figure.
The number of unanimous opinions of the Court this term has been the highest in recent years. Notwithstanding the inherently divisive nature of the two controversial opinions decided today, one thinks that it is not unlikely that greater concord will be the hallmark of the Roberts Court as it was for the Warren Court in earlier times.
We recommend this recent post on the Hospitality Labor and Employment Law blog: “IRS Releases Proposed Rules on Employer’s Information Reporting Requirements Under the Employer Mandate of the Affordable Care Act,” by Kara Maciel, Adam Solander, and Brandon Ge, our colleagues at Epstein Becker Green.
Following is an excerpt:
On September 5, 2013, the Internal Revenue Service (“IRS”) released two proposed rules to implement important reporting requirements under the Patient Protection and Affordable Care Act (“ACA”), which will help determine penalties under the Employer Mandate and should be of great importance to hospitality employers.
One rule would require information reporting by insurers, self-insuring employers, and other parties that provide health coverage (“minimum essential coverage”). The other rule would require employers that are subject to the employer mandate to report information to the IRS and employees regarding the minimum essential coverage they offer their full-time employees. There will be public hearings to discuss the rules on November 18 (for the proposed rule on large employer reporting) and 19 (for the proposed rule on minimum essential coverage reporting). Affected entities also have an opportunity to comment, with comments due for both rules on November 8, 2013.
Read the full post here.
A recent article in Bloomberg BNA’s Health Insurance Report will be of interest to retail industry employers: “ACA’s Employer ‘Pay or Play’ Mandate Delayed – What Now for Employers?” by Frank C. Morris, Jr., and Adam C. Solander, colleagues of ours, based in Epstein Becker Green’s Washington, DC, office. Following is an excerpt:
The past few weeks have changed the way that most employers will prepare for the employer ‘‘shared responsibility” provisions of the Affordable Care Act (ACA). Over the past year or so, employers have scrambled to understand their obligations with respect to the shared responsibility rules and implement system changes, oftentimes with imperfect information to guide their efforts to comply with ACA.
Understanding the difficulties that both employers and the health insurance exchanges or marketplaces would have, the Internal Revenue Service (IRS) on July 2 issued a press release stating it would delay the shared responsibility provisions and certain other reporting requirements for one year, until Jan. 1, 2015.
On July 9, the IRS published Notice 2013-45 (Notice), providing additional information on the one-year delay. Specifically, the following three ACA requirements are delayed:
- The employer shared responsibility provisions under Section 4980H of the Internal Revenue Code (Code), otherwise known as the employer mandate;
- Information reporting requirements under Section 6056 of the Code, which are linked to the employer mandate; and
- Information reporting requirements under Section 6055 of the Code, which apply to self-insuring employers, insurers, and certain other providers of ‘‘minimum essential coverage,” as defined by ACA.
The IRS notice clarifies that only the above three requirements are delayed. The notice does not affect the effective date or application of other ACA provisions, such as the premium tax credit or the individual mandate. Given the fact that the law itself is not delayed, the notice has raised significant issues for employers despite their being generally pleased with the mandate and penalty delay. This article will discuss the impact of the delay and some of the issues that employers should consider as a result of the delay.
The attached file is reproduced with permission from Health Insurance Report, 19 HPPR 28, 7/31/13. Copyright © 2013 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com
Our Epstein Becker Green colleague Stuart M. Gerson recently commented in an article titled “4th Circuit Upholds ACA’s Employer Mandate, Says Insurance Regulation Within Commerce,” by Mary Anne Pazanowski, in Bloomberg BNA’s Health Care Daily Report. Following is an excerpt:
A unanimous U.S. Court of Appeals for the Fourth Circuit July 11 declared the Affordable Care Act’s employer mandate a valid exercise of Congress’s power to regulate commerce under the U.S. Constitution’s Commerce Clause (Liberty University Inc. v. Lew, 4th Cir., No. 10-2347, 7/11/13).
In an opinion co-authored by Judges Diana Gribbon Motz, James A. Wynn Jr., and Andre M. Davis, the court held that the mandate is ‘‘simply an example of Congress’s longstanding authority to regulate employee compensation offered and paid for by employers in interstate commerce.”
The ruling comes in a case filed by Liberty University Inc. and two individual plaintiffs that challenged both the individual and employer mandates. Treasury Secretary Jacob Lew has been substituted as a defendant in place of former Secretary Timothy Geithner.
Stuart Gerson, a former acting U.S. attorney general who is now an attorney with Epstein Becker Green in Washington, told BNA July 11 that ‘‘there is considerable force to the Fourth Circuit’s view that health insurance decisions affect employment, which itself is a matter of interstate commerce.”
He predicted that, if the case returns to the Supreme Court—as seems likely based on a July 11 press release from the university’s attorneys—there would be four solid votes to uphold the Fourth Circuit’s ruling. But, he said, ‘‘it is difficult to predict how the chief justice and the other four conservative justices come out on this point.” He added, though, that ‘‘one must at least recognize that there is a difference between an individual’s decision not to engage in commerce and the clear commercial activity in which Liberty indisputably engages.”
Of course, Gerson said, if the conservatives on the high court vote to uphold Liberty’s challenge to the employer mandate, Chief Justice John G. Roberts Jr. ‘‘could again perform the legerdemain and create a fifth vote for affirmance by holding that the employer man- date is supportable under the tax power as was the individual mandate in NFIB. The Fourth Circuit’s alternative reasoning allows for this result.”
Bloomberg BNA’s Daily Labor Report recently published an article coauthored our Epstein Becker Green colleagues Kara M. Maciel and Adam C. Solander: “For Employers with High Turnover and Large Numbers of Seasonal Workers, the ACA Creates Unique Compliance Issues.” (Click to download the article in PDF format.)
Following is an excerpt:
The Affordable Care Act provides unique compliance obligations for employers in certain industries, such as the retail, lodging, restaurant, and grocery sectors, many of which employ large numbers of part-time and seasonal employees, and may comprise multiple smaller employers.
Of paramount concern for these employers, as for all employers, is the impending application of the shared responsibility rules. The guidance to date has been very much a mixed bag for these high-turnover industries. Some of the shared responsibility provisions will have a greater impact on these industries because of their size and employee mix, while others provide useful interpretations that will lessen some of the negative impacts of these rules.
This article will briefly examine the four major steps required under the shared responsibility rules in the context of these industries. These include: (1) determining whether the business is subject to the shared responsibility rules; (2) identifying the number of full-time employees a particular employer may have; (3) examining the way the shared responsibility rules relate to high-turnover industries; and (4) identifying strategies for compliance.
As background, the employer shared responsibility rules provide that ‘‘applicable large employers” with 50 or more full-time employees (including full-time equivalent employees) will be subject to a tax penalty if any full-time employee receives a premium tax credit or cost-sharing reduction to purchase health coverage through a health insurance exchange.
Generally, an employee is eligible for a cost-sharing subsidy if: (1) an employer does not offer the majority of its full-time employees (and their dependents) the opportunity to enroll in coverage; or (2) an employer offers its full-time employees the opportunity to enroll in coverage, but the coverage is ‘‘unaffordable” or does not provide ‘‘minimum value.”
Conceptually, the shared responsibility rules are not difficult to understand. However, as with all things ACA, the devil is in the details and the details are what complicate shared responsibility compliance for high- turnover industries.
Our colleagues Kara Maciel, Frank C. Morris Jr., Elizabeth Bradley, and Adam Solander have posted a client advisory on the recent ACA employer mandate delay, exploring the ramifications and unresolved issues that employers should consider. Following is an excerpt:
In reaction to employers’ concerns about the many difficulties posed in efforts to comply with the Employer Mandate provisions of the Affordable Care Act (“ACA”), the Obama administration (“Administration”) announced late yesterday that it is delaying the implementation of the penalty provisions and other aspects of the shared responsibility regulations until 2015. While the delay may have been to accommodate stakeholder requests, the delay also may have accommodated the Administration in connection with its readiness to implement the Employer Mandate. This delay could be a precursor to other implementation delays as the Administration seeks to make the ACA’s implementation successful, especially in light of intense scrutiny as to implementation and an inability to amend the law in Congress.
On May 8, 2013, the Employee Benefits Security Administration of the Department of Labor (the “DOL”) issued Technical Release 2013-02 (the “Release”) providing important guidance under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the “Affordable Care Act”) with regard to the requirement that employers provide notices to their employees of the existence of the Health Insurance Marketplace, generally referred to previously as the Exchange. These employee notices must be provided to existing employees no later than October 1, 2013. This deadline is intended to correspond to the open enrollment period for the Marketplace commencing October 1, 2013 for coverage through the Marketplace beginning January 1, 2014. The Release includes temporary guidance and two model employee notices of the Marketplace upon which employers may rely. The Release further provides an updated model election notice for group health plans for purposes of the continuation coverage provisions under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) to include information of the health coverage options offered to individuals through the Marketplace for comparative purposes.
Employee Notice of the Marketplace. The Affordable Care Act amended the Fair Labor Standards Act (“FLSA”) to require employers to issue employees a notice of the health coverage options available under the Marketplace. The FLSA requirement was required to have been satisfied on or before March 1, 2013; however, given the regulatory delays in establishing and approving the Marketplace, the DOL extended the deadline. The guidance under this Release is temporary through the applicability date of October 1, 2013, but may be relied upon until future guidance and regulations are issued.
Which employers are required to comply with the notice requirements?
Whether or not required to “pay or play” under the Affordable Care Act, all employers subject to the FLSA must provide the employee notice. The FLSA generally applies to employers that employ one or more employees and are engaged in or produce goods for interstate commerce. The FLSA also covers, among other things, hospitals, schools, institutions of higher education and federal, state and local government agencies. To determine whether an employer is subject to the FLSA, the DOL provides an internet assistance tool at http://www.dol.gov/elaws/esa/flsa/scope/screen24.asp.
Which employees must receive the notice?
Employers must provide the employee notice to each employee whether or not the employee has part-time or full-time status. It does not matter whether the employee is enrolled or eligible to enroll in a group health plan. A separate notice is not required to dependents or other individuals who may become eligible for coverage under the plan, but are not employees.
What information must the notice provide?
The employee notice must contain the following information:
- The existence of the Marketplace;
- The contact information and description of services offered on the Marketplace;
- A statement that the individual may be eligible for a premium tax credit if the employee purchases a qualified plan on the Marketplace; and
- A statement that if the employee purchases a qualified plan on the Marketplace, the employee may lose the employer contribution to any health benefit plan offered by the employer and all or a portion of employer contributions may be excluded from federal income.
What are the DOL model notice(s)?
The DOL has provided two model employee notices available on its website, one for employers who do not offer a health plan and one for employers who offer a health plan to some or all employees. The Release provides that employers may use the model notice(s) provided the notice(s) include the information described above.
The model employee notice for employers who do not offer health coverage includes the information described above, as well as an explanation of the impact of the availability of employer health coverage on the employee’s eligibility for subsidies on the Marketplace. The model employee notice does not require the employer to provide specific contact information for the Marketplace in the state where the employee resides, but rather refers the employee to the http://www.healthcare.gov website for contact information for the Marketplace in the employee’s area. This model employee notice requires the employer to provide contact information for the employer, including the employer’s EIN. This is the information an employee will need to include in an application for a premium subsidy on a Marketplace.
The model employee notice for employers who do offer health coverage generally includes the same information as the model employee notice for employers who do not offer health coverage. This model employee notice does, however, require the employer to provide contact information to obtain more information about the employer’s health care coverage. The disclosure requires the employer to state whether the health care coverage is offered to all employees and, if not to all employees, a description of those employees eligible for health care coverage. It also requires the employer to state whether it offers dependent coverage and which dependents are eligible. Finally, the employer is required to disclose whether the health care coverage offered meets the minimum value standard and that the cost of coverage is intended to be affordable. The Department of Treasury and Internal Revenue Service recently issued proposed guidance to assist employees in assessing whether the coverage offered provides minimum value. See our prior blog post New Proposed guidance for Determining Whether Employer-Sponsored Health Plan Provides Minimum Value.
The model employee notice includes optional information that an employer may provide to the employee based on the Marketplace Employer Coverage Tool to better understand their coverage choices, including whether the employee is eligible in the next three months for employer coverage, whether the employer offers a health plan that meets the minimum value standard, the premium for employee-only coverage under the lowest-cost plan that meets the minimum value standard if the employee received the maximum discount for any tobacco cessation program, and what changes the employer will make for the next plan year. Although this information is optional, it may be to an employer’s benefit to demonstrate, where appropriate, that its plan is providing minimum value and is affordable.
When must the employee notice be provided and what are the acceptable delivery methods?
Current employees before October 1, 2013 must be provided with the notice no later than October 1, 2013. Beginning October 1, 2013, the employer must provide each new employee the notice at the time of hire, which will be considered timely provided in 2014 if provided within 14 days of the employee’s start date.
The employee notice must be provided free of charge in writing in a manner calculated to be understood by the average employee. The employee notice may be provided by first class mail or electronically if in accordance with the DOL’s electronic disclosure safe harbor.
COBRA Model Notice. Under COBRA, an individual who was covered by a group health plan the day before a qualifying event occurred may be eligible to elect COBRA continuation coverage. These qualified beneficiaries must be provided with an election notice within 14 day after the plan administrator receives notice of a qualifying event. The COBRA election notice is required to include specific information.
The DOL updated its model COBRA election notice to provide information about the Marketplace for the purposes of informing qualified beneficiaries that they may also be eligible for a premium tax credit to pay for coverage offered through the Marketplace. It also includes clarification on the limit on pre-existing conditions exclusions beginning in 2014. Such information is not specifically required under the Affordable Care Act and should have no impact on whether an employer is subject to the employer responsibility penalties if in fact a former employee obtains coverage on the Marketplace.
The Release provides that the use of the model COBRA election notice completed appropriately will be considered good faith compliance with the COBRA election requirements. The model COBRA election notice does not provide a specific deadline or compliance date. Employers may wish to review their existing COBRA election notices for changes relating to the Affordable Care Act.
Employers have long been waiting for specific guidance from the DOL on the employee notice requirements. Now that it is here, compliance should be addressed well before the October 1, 2013 deadline.
Tuesday, April 30, 2013
12:00 p.m. – 1:00 p.m. EDT/ 9:00 a.m. – 10:00 a.m. PDT
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Please join Epstein Becker Green’s Labor & Employment and Employee Benefits practitioners as they review the Affordable Care Act and its ongoing impact on retail employers and their group health plans and programs.
U.S. government agencies are moving quickly to implement the Affordable Care Act. Rules have been released over the past few months concerning participation in health benefit exchanges; the 90-day waiting period limitation; employer responsibility penalties; discrimination based on pre-existing conditions; and expanded employment-based wellness programs.
This webcast will provide an update on the implementation of the law, including planning for 2014 and beyond, and will focus on how the law will impact retail employers both large and small, and what they should do now to plan for it.
During this program, Epstein Becker Green practitioners will discuss:
• The structure of the law and basic concepts affecting retail employers
• The Affordable Care Act implementation timeline
• Critical employer decision making and planning for 2014
• New developments
Presenting Epstein Becker Green Attorneys:
Registration Is Complimentary and Reservations Are Limited. Don’t Miss This Opportunity!
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