In this report: Federal Legislative Update HR 3962 – Affordable Health Care for America Act HR 3930 – COBRA Continuation Protection Act of 2009 HR 3991 – Emergency Influenza Containment Act HR 1409 / S 560 – Employee Free Choice Act HR 2892 – E-Verify Extension HR 3567 – Respect for Marriage Act HR 2647 – FMLA Expansion Genetic Information Nondiscrimination Act (GINA) Court Report Oregon Supreme Court: Workers’ Comp Claim for Gastric Bypass Surgery Washington Court of Appeals: Time-loss Benefits after Firing Washington Court of Appeals: Medical Marijuana Law In Other News… New Excise Tax for Violations of COBRA, HIPAA OSHA to Issue H1N1 Standards for Health Care Settings EEOC Letter: Health Risk Assessment cannot be prerequisite to Health Reimbursement President Announces Initiatives for Retirement Savings DHS Rescinds Controversial No-Match Rule Immigration Agents Will Target Employers Washington Company Officials Plead Guilty to False I-9s Injured Workers’ Right to Sue in Oregon and Washington Referendum, Washington’s Domestic Partner Law, Passes Upcoming Dates and Deadlines Federal Legislative Update HR 3962 – Affordable Health Care for America Act Summary: HR 3962 represents the first time since the approval of Medicare and Medicaid in 1965 that a chamber of Congress has passed a comprehensive health reform bill. See the attached summary of provisions of HR 3962 and the two pending Senate bills. Status: Passed by the House November 7, 2009, 220-215, with 39 Democrats voting against the measure and only one GOP lawmaker voting in favor. Attention now shifts to the Senate. Democratic Senate leaders have been working to combine features of two reform bills, S 1679 approved by the Senate Health, Education, Labor and Pensions Committee in July 2009 and S 1796 approved by the Senate Finance Committee in October 2009. Outlook: Senate leaders have stated that they hope to introduce a merged bill by mid-November 2009, but a finalized version might not pass the Senate before the end of 2009. Supporters of the measure need 60 votes to overcome a threatened filibuster from Republicans. Given that not all Democrats will support the measure, Democratic leaders will need to convince at least a few Republicans to vote for a health care bill. Professional Pointer: Most of the debate to come will involve the public plan option, including two issues: 1) whether it will be an opt-out provision for states (similar to HIPAA high-risk opt- out pools), and 2) at what level the public option is triggered. Any public option is tied to Medicare. For employers, there are some specific issues that are pretty certain at this time: · Health care reform will pass, and will be effective January 1, 2013, as all the bills use 2013 as the beginning date. · Individuals will be required to purchase health insurance and employers will be required to offer health insurance to employees or pay a fee, as all of the bills include an individual mandate and an employer mandate. · There will be a "cadillac tax" on health plans but at a higher limit than in the Finance Committee bill. It will be dangerous for many Senators to agree to an additional tax on "wealthy Americans" to pay for part of health reform. To help fund the process and keep the cost down will require an additional tax; however, the thresholds by which the tax is paid will be raised (and will need to be offset by savings elsewhere). · Employers will likely pay some level of a fee that will be equal in dollars to the subsidy related to their employees, either as a direct dollar amount or as a per-employee fee; and the methodology to calculate such fee will be neutral to employers. · Employers will be mandated to provide some coverage to part-time employees or pay a fee to opt-out of coverage. · Self-insured plans will be required to have certain benefit levels based on actuarial benchmarks to be determined in the bill. As the final bill is reconciled and its provisions are known, employers should proceed cautiously with any medical plan overhauls, including the use of health reimbursement accounts, health savings accounts, and other cost-shifting programs to employees. However, employers should be aware that the health care reform bill will likely contain some form of phase-in or grandfathering for current health plans; employers making changes due to cost or competitive reasons should do so in the 2010 plan year if possible and not wait until after the bill's passage. HR 3930 – COBRA Continuation Protection Act of 2009 Summary: Extends the COBRA subsidy period from 9 months to 15 months, makes workers involuntarily terminated between January 1, 2010 and June 30, 2010 eligible for the subsidy, and extends the COBRA period from 18 months to 24 months for Assistance Eligible Individuals (AEI). The bill sunsets subsidies and extended COBRA periods on December 31, 2010, providing a limited window to take advantage of these added benefits. The American Recovery and Reinvestment Act of 2009 (ARRA) already requires an employer to subsidize the COBRA premium for an AEI – an employee whose qualifying event under COBRA is a result of involuntary termination from employment between September 1, 2008 and December 31, 2009, who is eligible for COBRA coverage and timely elects such coverage. The employer pays 65% of the COBRA premium, and the AEI pays 35%. The employer may receive a Federal tax credit to recoup the 65% premium payment. Status: Introduced into the House of Representatives on October 26, 2009 and referred to two House committees. Outlook: The Obama Administration has indicated support of extended benefits, but there is uncertainty whether the extension will pass the House and then the Senate. Professional pointer: If the COBRA subsidy period is not extended, employers must begin to prepare for the end of the subsidy period as to new AEIs. One major issue not referenced in the legislation is the eligibility of employees for the subsidy who are involuntarily terminated as of December 2009 but do not lose coverage under the health plan until the "last day of the month." Do these individuals lose coverage as of December 31, 2009 (an AEI) or lose coverage as of January 1, 2010 (not an AEI)? If the ARRA subsidy was not an issue, almost all employers, as part of common COBRA practice, would answer that the last day of coverage is December 31, 2009, and the first day the employee loses coverage is January 1, 2010. A health claim submitted as incurred at 11:59 PM on December 31, 2009 would be covered, and a health claim submitted as incurred at 12:01 AM on January 1, 2010 would not be covered. The relevant COBRA statute states that a health plan may provide an optional extension of coverage (until the end of the month) and that the COBRA period will commence as of the date of the loss of coverage. The date of the loss of coverage would, thus, appear to be January 1, 2010. However, the IRS ARRA information includes an example stating that if an employee is involuntarily terminated on November 15, 2009, and the employer does not use the optional extension of coverage (until the end of the month), the COBRA period is November 15, 2009 plus 18 months to May 15, 2010. If the employer does use the optional extension of coverage, then the COBRA period, and thus the date of loss of coverage, is November 30, 2009 (last day of month) to May 31, 2010. If an employee were to be involuntarily terminated on December 31, 2009 as the legislation states, being eligible for the subsidy, there is no situation where the employee would be actually eligible for the subsidy because the employee would have coverage through midnight as of the day of his or her termination. Hopefully, the IRS will address this situation. If not, employers must make a determination whether to offer the subsidy and risk the eligibility of tax credit or not offer the subsidy and risk the penalties under ARRA. Each situation will likely be a facts and circumstances decision. Employers need to be mindful about reductions in force and other involuntary terminations that may occur in December and communication to such employees regarding subsidy eligibility in COBRA election forms and severance agreements. HR 3991 – Emergency Influenza Containment Act Summary: Would provide five paid sick days to workers with contagious diseases who are told by their employers to stay home. The bill is a response to the outbreak of the H1N1 flu virus and would apply to businesses with 15 or more employees. Workers who follow their employer’s direction to stay home because of contagious illness cannot be fired, disciplined or retaliated against for staying home. The bill would not require employers to offer paid leave to their workers, but a worker who was advised or required to stay home because s/he was ill would be entitled to up to five days of paid leave. The measure would take effect 15 days after being signed and would expire after two years. The CDCP estimates that a sick employee reporting to work could infect at least 10% of the people with whom s/he has contact. Data from the US Bureau of Labor Statistics shows 39% of all private-sector workers -- nearly 40 million US workers – did not have paid sick days, and many of them were employed by restaurants, hotels and school cafeterias. Status: Introduced in the House November 5, 2009. The Education and Labor Committee will hold a hearing on the legislation on November 16, 2009. Outlook: In support of government efforts to quell the flu outbreak, the legislation could gain traction and might be approved by the House of Representatives soon. HR 1409 / S 560 – Employee Free Choice Act Summary: Possible modifications in the final version of the Employee Free Choice Act: Organizing – An employer’s right to call for a private ballot election may be retained, but the legislation may include a “quick” election requirement: after a union files a petition, an election would have to be held within a short period, perhaps as few as five to ten days. AFL-CIO President John Sweeney has said he would accept a fast election campaign instead of card check because it would meet his goal of minimizing management interference during organizing drives. Arbitration – While the mandatory arbitration provision might be dropped, a compromise may include a “final best offer” form of arbitration, where an arbitrator would choose the entirety of either the union or employer’s final contract proposal. Union Access – The legislation is likely to include enhanced union access to the workplace, potentially requiring employers to allow union representatives to appear at employer- sponsored meetings on unionization, to meet with individual employees and to have access to the employer’s e-mail systems and other communications tools. Increased Penalties on Employers – The penalty structure from the original version of EFCA may not change under a compromise version, including treble damages against employers for unfair labor practices. Status: Introduced in both the Senate and the House March 10. Has 227 co-sponsors. Outlook: Has been the subject of intense Senate negotiations this year: The bill lacks support to avoid a filibuster. Recent comments by key legislators indicate that a compromise that will meet organized labor’s objectives may be close. HR 2892 – E-Verify Extension (included in FY 2010 DHS Appropriations Act) Summary: Extends E-Verify, the federal government’s electronic employment verification system, for three years. It had been scheduled to expire on October 31, 2009. The provision includes $137 million to operate and improve the system. A provision that would have made E- Verify permanent was removed from the final bill. The Obama administration is enforcing an executive order that requires contractors to use the electronic verification system. Federal contracts must require companies conducting business with the federal government to enroll in E-Verify. The program will be voluntary for all other businesses. Status: Signed into law by President Obama on October 28, 2009. Outlook: Lawmakers and business groups continue to debate the best way to create and maintain an efficient and accurate nationwide verification system. Critics of E-Verify claim that the system has several security flaws and can be inaccurate and unreliable. It lacks the capacity to verify the employment eligibility of the millions of workers hired every year by US companies. E-Verify can be undermined by identify theft and false documents. When this occurs, employers and HR professionals can be subject to unfair penalties for mistakes. HR 3308 would require all US employers to use E-Verify. HR 2028, the New Employee Verification Act, would replace E-Verify with a paperless and more reliable, fraud-proof verification system. A coalition of employer groups called the HR Initiative for a Legal Workforce, of which SHRM is a member, supports HR 2028. HR 3567 – Respect for Marriage Act Summary: Would repeal the federal Defense of Marriage Act (DOMA). Requires that all marriages that are valid under state laws are also valid and recognized under federal law. States that have not legalized same-sex marriage would not be required to recognize same-sex marriages performed elsewhere, but same-sex marriage performed in a state where same-sex marriage has been legalized would be recognized for purposes of federal law. DOMA was enacted in 1996 and provides that for all purposes of federal law, such as ERISA and the federal tax code, the word “marriage” means “only a legal union between one man and one woman as husband and wife” and the word “spouse” refers “only to a person of the opposite sex who is a husband or wife.” DOMA also provides that no state is required to recognize a same-sex relationship considered a legal marriage in another state. Oregon and Washington currently do not perform or recognize same-sex marriages. The bill would make significant changes to the federally mandated benefits available to employees and their same-sex spouses. For example: · Employers with pension or 401(k) plans would be required to recognize same-sex spouses for purposes of determining the surviving spouse annuities or other death benefits under these retirement plans. · The federal income tax treatment of health coverage for an employee’s same-sex spouse would change such that employees would no longer have to be taxed on the income imputed for the employer’s contribution to the same-sex spouse’s coverage. · Employers would be required to permit employees to take family/medical leave to care for the illness of a same-sex spouse. Status: Introduced in the House September 15. Referred to the Subcommittee on the Constitution, Civil Rights, and Civil Liberties October 19. HR 2647 – FMLA Expansion (included in FY 2010 National Defense Authorization Act) Summary: Expands last year’s exigency and caregiver leave provisions for military families under FMLA. In January 2008, Congress amended the FMLA to provide: · Exigency leave - up to 12 weeks of leave for urgent needs related to a reservist family member’s (spouse, son, daughter, or parent) call to active service. · Caregiver leave - up to 26 weeks of unpaid leave to an employee to care for a family member (spouse, son, daughter, parent, or next of kin) who is injured while serving on active military duty. HR 2647: · expands the exigency leave benefits to include family members of active duty service members. · expands the caregiver leave provision to include veterans who are undergoing medical treatment, recuperation or therapy for serious injury or illness that occurred any time during the five years preceding the date of treatment. Status: Signed into law October 28.Effective upon enactment. Professional Pointer for Oregon employers: The Oregon Military Family Leave Act ("OMFLA") went effect in June 2009. OMFLA provides protected leave to the spouse or domestic partner of a member of the federal Armed Forces, the National Guard or the federal military reserve forces who has been called to (or notified of an impending call or order to) active duty, or who is on leave from active duty during a period of military conflict. OMFLA applies to employers with 25 or more employees. Now is a good time to review all Family and Medical Leave policies to ensure compliance with the federal expansion of Qualifying Exigency and Caregiver leave as well as OMFLA. The Genetic Information Nondiscrimination Act (GINA) The employment provisions (Title II) of GINA take effect on November 21, 2009. GINA prohibits employers of 15 or more employees from requesting, requiring or purchasing any genetic information from applicants or employees, with a few very limited exceptions. Employers who think that ‘genetic information’ means the results of a genetic test administered to an applicant or employee are partially correct, but the law is broader in its sweeping protections. ‘Genetic information’ is defined to include an individual’s genetic tests, requests for and receipt of genetic services, and family medical history. An employee’s genetic information includes any manifestation of a disease or disorder in the employee’s family members. ‘Family members’ include dependents plus all relatives to the fourth degree without regard to whether they are related by blood, marriage or adoption. Wellness programs that are neither ERISA plans nor group health plans under HIPAA (because they provide only referral services and no medical care) must comply with Title II of GINA and EEOC regulations. The law appears to build in an exception for the inadvertent request of a family medical history provided in the context of a voluntary wellness program. But in preliminary advisory letters, the EEOC is taking a hard line on the kind of program that it will consider a "voluntary wellness program" under GINA. If the wellness program is not "voluntary," any questions about family medical history will be illegal. One indicator may be if the employee gains or loses an economic benefit by participating or refusing to participate, but the EEOC has not provided clear guidance on that question. Prior HIPAA regulations would have permitted such programs in many cases, particularly where the reward was based on participation in the wellness program rather than its results, but under GINA such a program would be impermissible. Through a range of examples, the new regulations do offer employers options for redesigning their wellness plans to avoid violating GINA: · A wellness program that does not collect family medical history will be permissible under GINA, even if it includes participation or results-based rewards (although employers will still need to consider whether it satisfies HIPAA’s requirements). · Collecting family medical history but not offering any reward would be allowed if the information is not collected prior to or in connection with enrollment in the program. · Another option is to request two distinct health risk assessments from employees after (and unrelated to) enrollment in the health plan: one providing a reward for completing a health risk assessment that does not elicit any family medical history or other genetic information, and another purely voluntary health risk assessment that seeks information as to family medical history and genetic testing, to which no reward is tied. Practices that are permitted under the ADA may be unlawful under GINA. For example, employers may require employees to submit to medical examinations after making a conditional offer of employment, provided that they follow ADA’s limitations on these exams. But GINA changes the kinds of questions that those medical examinations can ask. GINA will prohibit employers from obtaining any genetic information (including a family medical history) from post-offer applicants. The same will be true when an employer requires an employee to submit to a fitness-for-duty examination. Title I provisions (for group health plans and health insurers) of GINA will be effective for plan years starting on and after December 7, 2009, based on new regulations issued by the Internal Revenue Service (IRS), the Department of Labor (DOL) and the Department of Health and Human Services (HHS). Title I provisions prohibit group health plans and insurers from collecting genetic information for underwriting purposes and prior to or in connection with enrollment. This includes changes to deductibles and other cost-sharing plus discounts, rebates, in-kind payments and other methods of altering premiums as a reward (or punishment) for completing a health risk assessment or participating in a wellness program. Offering reduced premiums or other rewards for providing genetic information (in this case, the family medical history that often is a routine part of health risk assessments) would be impermissible “underwriting.” The regulations include three exceptions: • GINA will not prohibit a health care provider who is treating an individual from requesting that the patient undergo genetic testing. • The rules permit a plan to obtain genetic test results and use them to make claims payment determinations when it is necessary to do so to determine whether the treatment provided to the patient was medically advisable. • Plans can request, but not require, genetic testing in certain very limited circumstances involving research, so long as the results are not used for underwriting, and then only with written notice to the individual that participation is voluntary and will not affect eligibility for benefits, premiums or contributions. The regulations will affect the application of HIPAA’s privacy rules to health information held by group health plans and insurers by clarifying that health information includes genetic information. Professional pointer: Employers that sponsor any group health or wellness plan should: · Review their plan documents and administration for compliance with these new rules prior to January 1, 2010, for calendar-year plans. · Confirm with their administrators and insurers that they have not set rates impermissibly based on genetic information and do not use genetic information for any underwriting purposes, including application of any existing condition exclusion period. · Avoid requesting or requiring any genetic testing or genetic information from their employees. Particularly for employers that are offering wellness programs in connection with an upcoming open enrollment season, special attention should be given to any health risk assessments or other enrollment forms that collect genetic information, medical history or any other information that might fall within GINA’s scope. · Acquire the EEOC’s new version of it’s ‘EEO – It’s the Law’ poster which includes a description of GINA's provisions. · If using enrollment forms or health risk assessments that might be expected to elicit family health histories, include language on the forms warning individuals not to reveal genetic information. The Portland law firm of Barran Liebman is offering a breakfast seminar on December 1. Rick Liebman and Paula Barran will discuss the impact that GINA will have for employers. Court Report Oregon Supreme Court: Workers’ Comp Claim for Gastric Bypass Surgery The Oregon Supreme Court has held that SAIF must pay for gastric bypass surgery Edward Sprague underwent in 2000 when he weighed 350 pounds. Sprague injured his knee on the job in 1976, filed a Workers’ Compensation claim and sought treatment. In 1999, he re-injured his knee and filed a new claim. He also successfully expanded his original claim to include a new condition, consequential arthritis in the knee. In 2000, his knee had deteriorated and his doctor recommended a knee replacement. Sprague needed to lose weight to be eligible for the knee surgery and to relieve pressure on the injured knee. His doctor recommended gastric bypass surgery, but SAIF refused to pay for it, arguing that it was not covered because it was “directed at” Sprague’s obesity, which had existed before the 1976 injury, rather than at the injury itself. The Supreme Court disagreed, concluding that the gastric bypass surgery was “directed to” Sprague’s arthritic knee condition, which was caused in major part by his compensable 1976 injury. To some extent, this case reflects a problem built into the Workers’ Comp system. Employers often have had to pay for an intervening medical issue before treating the Workers’ Comp issue. For example, if an employee who needed surgery had out-of-control diabetes, the carrier would decide whether it would pay for treating the diabetes. But judges have never mandated treating the diabetes. This has always been a carrier decision. Employers have been required to pay for employees’ weight loss programs before the employees undergo surgery, but with weight loss surgery as a preliminary step to other treatment, the employer would be liable for paying for treatment for any complications that resulted from the surgery. Further, if the employee should die as a result of the surgery, the carrier would be liable for death benefits also. The rulings place a much larger burden on employers because they increase the scope of what employers are liable for. Professional pointer: Employers should go back to the basics of hiring practices: · Look at the essential functions of the job and ask whether the applicant can safely perform those functions. · If you see an obesity problem in your workplace, initiate a wellness program to keep it from winding up in workers’ comp. · With the rise in the number of people who are overweight, expect more claims like this one. Further, the reasoning of the case may be applied to expand workers’ coverage to other treatments not obviously related to workplace injuries, such as smoking cessation. These rulings set a precedent for how we manage underlying medical conditions that have nothing to do with the injury at all. Washington Court of Appeals: Employer Must Continue Time-Loss Benefits Despite Firing Employee When an injured employee was ready to return to a light-duty job but could not, because the employer had fired him for a violation of its safety rules, he still remained eligible for wage replacement benefits, the Washington Court of Appeals held, because the employer had not previously contested its liability. Timothy Walker had been a Redi-Mix concrete truck driver for about a month when he took a turn too fast and rolled his truck. His employer, Glacier Northwest Inc., fired him several weeks later in accordance with company policy. Meanwhile, Walker received medical and time-loss compensation benefits for injuries suffered in the accident in accordance with state Department of Labor and Industries procedures. When Walker was released for light-duty work, Glacier refused to offer a position because it had fired him. The company then sought permission to stop paying compensation benefits. The Department of Labor and Industries ordered the payments to continue under Wash. Rev. Code 51-32-.090(4), which states that an employer may stop paying benefits to an injured worker after the employee is offered work that he or she can physically perform. Glacier did not offer Walker work because it had fired him. On appeal, the trial court ruled in favor of the employer. That decision was reversed by the appeals court. When an employee cannot perform light-duty work with the original employer, the employer may attempt to force the employee to find modified work elsewhere by requesting rehabilitation services from the Department of Labor and Industries, the appeals court noted, but Glacier did not do that. More importantly, the employer did not contest its liability for benefits when Walker was unable to perform any work and had been fired for cause. Only after Walker was able to perform modified work did Glacier assert his misconduct as a reason to terminate benefits. Washington Court of Appeals: Medical Marijuana Law The Washington Court of Appeals has held that there was no implied cause of action arising from the Washington State Medical Use of Marijuana Act (MUMA) against an employer who refused to hire a prospective employee who failed a pre-employment drug test allegedly due to her medical use of marijuana. “Jane Roe” sought and obtained authorization under MUMA to use medical marijuana to treat her migraine headaches. In 2006, she applied for a position as a customer service consultant with the employer, an outsourcing company that provided telemarketing support to its customers. The employer required all individuals to whom it had extended a conditional offer of employment to undergo a pre-employment drug test and to obtain a negative result. In October 2006, Roe received a conditional offer of employment, and the employer informed Roe of its drug-testing requirement. Roe then told the employer of her at-home medical use of marijuana. Roe underwent a drug test and tested positive for marijuana. The employer rescinded its conditional offer of employment because of the positive test result. Roe sued the employer for violations of the MUMA and for wrongful termination based on public policy. The MUMA permits physicians to prescribe marijuana for medical use for terminal and debilitating illnesses and exempts from criminal prosecution those authorized users of medical marijuana and their prescribing physicians. Roe argued that the MUMA created an implied cause of action against employers by medical marijuana users. She contended that because the MUMA prohibited medical marijuana users from being “penalized in any manner, or denied any right or privilege,” employers could not take adverse actions against such individuals based on their marijuana use. The Court of Appeals rejected this argument. Professional Pointer: This case confirms that the MUMA provides authorized medical marijuana users “only a defense to criminal prosecution” and does not create any new substantive employment rights. This decision should provide some comfort to Washington’s employers who conduct drug testing in the workplace – they will not be subject to liability for common law claims under the MUMA. In Other News… New Excise Tax Reporting for Violations of COBRA, HIPAA Takes Effect in 2010 Since the date of enactment of COBRA, HIPAA portability requirements and other federal mandates applicable to group health plans, the Internal Revenue Code has provided that employers are liable for excise taxes for failure to comply with such provisions. However, there had never been a method for self-reporting the excise tax, and the Internal Revenue Service (IRS) had not historically imposed these excise taxes as part of an audit. With the publication of final regulations on excise tax reporting, effective January 1, 2010, employers that sponsor group health plans now will be required to report and pay excise taxes for failing to satisfy certain federal group health plan mandates, unless timely corrected. In addition, excise tax reporting is required if comparable employer contribution rules are not satisfied for health savings accounts (HSAs) and Archer medical savings accounts (MSAs). Failure to file the excise tax return and pay the excise tax on or before the required due date will result in penalties and related interest unless the failure to timely file or pay is due to reasonable cause and not to willful neglect. An excise tax is imposed on employers for failure to comply with the requirements of: · COBRA · HIPAA portability, access and renewability · HIPAA nondiscrimination based on health status · Genetic Information Nondiscrimination Act (GINA) · Mental Health Parity and Addiction Equity Act of 2008 · Newborns’ and Mothers’ Health Protection Act (minimum hospital stays for newborns and mothers) · Michelle’s Law (coverage of dependent students on leaves of absence) · HSA comparable employer contribution rules · Archer MSA comparable employer contribution rules. The excise tax varies depending on which law the employer or plan has violated. For failures relating to COBRA and group health plan requirements, generally the excise tax is $100 per individual to whom the failure relates per day for each day of noncompliance. For failures relating to the Archer MSA and HSA comparable employer contribution requirements, generally the excise tax is 35% of the amount contributed by the employer to the Archer MSAs or the HSAs of all employees within the calendar year. There are exceptions to the tax for failures relating to COBRA and group plan requirements, where the failure to comply is not discovered when exercising reasonable diligence, or where the failure is due to reasonable cause, not willful neglect, and is timely corrected. For failures relating to the Archer MSA and HSA comparable employer contribution requirements, the excise tax may be waived in situations where the excise tax imposed is excessive relative to the failure involved. OSHA to Issue H1N1 Inspection Standards for Health Care Settings A compliance directive on H1N1 flu inspection standards for health care employers is coming soon, OSHA announced October 14, 2009. The directive reportedly will closely follow the new CDC guidance published October 14. It aims to ensure uniform inspection procedures for high and very high risk occupational exposures, such as in health care. OSHA inspectors will ensure that health care employers implement a hierarchy of controls, including source control, engineering and administrative measures, and encourage vaccination and other work practices recommended by the CDC. The CDC’s Interim Guidance on Infection Control Measures for 2009 H1N1 Influenza Settings lists personal protective equipment as the lowest level of control, behind eliminating potential flu exposures, engineering controls and administrative controls. Where OSHA inspectors determine that a facility has not violated any requirements but that additional measures could enhance the protection of employees, OSHA may provide the employer with a Hazard Alert Letter outlining measures to further protect workers. EEOC Letter: Health Risk Assessment Cannot Be Prerequisite to Health Reimbursement In an informal discussion letter posted to the EEOC website on October 6, 2009, the EEOC stated that the Americans with Disabilities Act (ADA) does not permit an employer to require its employees to complete a health risk assessment (HRA) to receive money from an employer- funded health reimbursement arrangement. The letter responded to an inquiry about the legality of an employer’s HRA. The HRA asked employees more than a hundred questions about topics including family health history, self care, personal health, women’s health, older adult health, nutrition, physical activity, alcohol and tobacco use, safety and health changes. Title I of the ADA strictly limits when an employer may obtain medical information from applicants and employees. An employer may ask disability-related questions and require medical examinations of its employees only when the inquiries or examinations are job-related and consistent with business necessity. This standard may be met when an employer reasonably believes based on objective evidence that an employee’s ability to perform essential job functions will be impaired by a medical condition or an employee will pose a direct threat due to a medical condition. Disability-related inquiries and medical examinations also are allowed when they follow up on reasonable accommodation requests or when monitoring is conducted under specific circumstances, or as part of a voluntary wellness program. An HRA would violate the ADA if it included such disability-related inquiries as how often employees feel depressed, whether they have been told that they have certain conditions (e.g., asthma, cancer, heart disease or diabetes), how many prescription medications they take or how much alcohol they drink as a prerequisite to obtaining reimbursement for health expenses. Such questions are not job-related and consistent with business necessity. When all employees must complete an HRA as a prerequisite for eligibility for a health insurance program, the employer has not demonstrated a concern that a particular employee will be unable to perform his or her job or will pose a direct threat because of a medical condition. When an HRA is part of a wellness program, it is not voluntary if it penalizes any employee who does not complete the questionnaire by making him or her ineligible to receive reimbursement for health expenses. The letter noted that the ADA would permit questions about whether an employee sees a personal doctor for routine care or has a health care directive, how many servings of vegetables or fruit an employee eats, whether he or she takes a vitamin supplement or eats breakfast and how much an employee exercises. President Announces Initiatives for Retirement Savings In his September 5, 2009, weekly radio address, President Obama announced a set of initiatives by the US Treasury Department and IRS intended to make it easier for employed Americans to save for retirement. The new federal steps, which do not require congressional action, include guidance and simplified procedures to: · Enable workers to convert their unused vacation or other leave into additional retirement savings. · Expand opportunities for automatic enrollment in 401(k) and other retirement plans. Automatic enrollment boosts participation in 401(k) retirement plans from about 70% to more than 90%, and is particularly effective in increasing participation of low-income and minority workers. But while nearly half of larger companies with 401(k) plans have adopted automatic enrollment, fewer medium-sized and small businesses have done so. · Allow Americans to save their income tax refunds in US Savings Bonds. Taxpayers can already instruct the IRS to deposit their refunds directly to an IRA or other savings vehicle. Now taxpayers will have another savings option – the ability to use their refunds to purchase US Savings Bonds by checking a box on their tax return, without having to open an account at Treasury or take any other action, and even if the taxpayer doesn't have a bank account. The savings bonds would be mailed to the taxpayer. · Provide easy-to-understand language to explain tax-favored retirement savings options to workers and small employers. Employees changing jobs and receiving payments from a retirement plan face several choices, including a tax-free rollover to another retirement account. These and other "life event" choices are not always well understood. These initiatives are distinct from the administration's earlier proposal that employers who do not currently offer a retirement plan be required to enroll their employees in direct-deposit individual retirement accounts (IRAs), and to automatically defer a portion of their salaries into these accounts. No legislation on that proposal has moved so far. In tandem with the president's radio address, the White House released a fact sheet and the Treasury Department and IRS issued a summary of new revenue rulings and notices related to the new initiatives. And the IRS has launched an online Retirement Plans Navigator that explains, in plain English, the different retirement plan options available to small employers. DHS Rescinds Controversial No-Match Rule The Department of Homeland Security (DHS) has issued a final rule, effective October 7, 2009, rescinding a set of regulations and procedures for employers that receive employee “no-match” letters from the Social Security Administration (SSA). It follows an announcement made by DHS Secretary Janet Napolitano in August that the Obama administration had decided to drop the controversial rule. The no-match rule was promulgated in August 2007 during the administration of President Bush in an attempt to strengthen enforcement of US immigration laws. The regulation provided guidelines and described the legal obligations of employers that receive “no-match” letters from the SSA. The SSA issues no-match letters if an employee’s name does not correspond correctly to a valid Social Security Number. The rule stated that a no-match letter could be sufficient to notify an employer that an employee might not be eligible to work in the United States. An employer who failed to act on a no-match letter would be considered to have ‘constructive knowledge’ that a worker was not eligible. The rule faced a challenge in federal court from a coalition of labor unions and business groups, including the AFL-CIO and the US Chamber of Commerce. The lawsuit claimed that DHS overstepped its authority in issuing the regulation and did not follow proper procedures. A federal district court judge in Northern California agreed with the plaintiffs’ arguments and issued a preliminary injunction blocking the no-match rule from taking effect. In 2008, the DHS responded to the judge’s request to amend the regulation and conduct an audit of the rule’s economic effect on small businesses. The case was still pending and implementation of the final rule in effect had been put on hold until Napolitano’s announcement. The DHS issued a proposed rule to rescind the regulation in August 2009 and asked for comments from the public. Comments by SHRM and the American Council on International Personnel (ACIP) were among 22 received. The SHRM/ACIP comment stated that rescinding the rule would take away guidance for employers on how to respond to SSA notices and to comply with DHS employee verification requirements. They suggested that DHS provide a safe harbor for employers who make good faith efforts to resolve discrepancies. In the final notice, DHS officials acknowledged that while “additional guidance would be valuable to employers,” there were no grounds to suggest that “if no-match rules are rescinded employers will have no guidance.” The notice stated that DHS has always provided guidance on how employers should comply with the employment verification requirements of federal immigration laws. The Senate responded in July 2009 by adding a provision to the DHS appropriations bill (S 1298) that would block DHS from rescinding the rule. However, the House-passed version of the bill (HR 2892) does not include a similar provision. The differences between the two bills must be reconciled by a conference committee. Immigration Agents Will Target Employers Under new enforcement guidelines issued April 30, 2009, ICE investigators will concentrate on building cases against businesses suspected of hiring undocumented immigrants before they raid workplaces and round up any illegal workers. This is a shift from recent tactics that resulted in high-profile worksite raids where thousands of suspected undocumented immigrants were arrested. Of the more than 6,000 arrests made related to worksite enforcement in 2008, only 135 were of business owners or managers. ICE will continue to arrest and process for removal any undocumented workers identified during worksite investigations. But a key change will be the focus on criminal prosecution of employers, including supervisors and managers, who hire illegal workers knowingly. The directive may mean that ICE investigators will use a variety of investigative tools to help build their cases against employers. For example, information on violations of minimum wage and overtime laws gathered by federal Wage and Hour Division investigators could help ICE identify companies that potentially violated immigration law. Under the new directive, verification of new hires’ work status and identification documents will be more important than ever. And ICE’s new enforcement guidelines could renew interest in developing an effective nationwide. Washington Company Officials Plead Guilty to False I-9 Form Statements Two corporate directors of Yamato Engine Specialists pleaded guilty August 20, 2009, to aiding and abetting the use of a false statement on federal immigration employment forms. The two admitted they knew employees at the family-owned Bellingham company submitted false names and Social Security numbers on the I-9 forms used to verify workers’ right-to-work status. The two directors will be sentenced to probation. This is western Washington’s first successful prosecution of an employer for knowingly hiring undocumented workers, US Attorney Jeffrey Sullivan said. One director admitted that he knew of an employee who left Yamato after an ICE audit of its I-9 forms. The worker returned the following year and filled out a second I-9 with documents the director admitted he knew were false. The other director admitted that she knew of another employee who filled out an I-9 form in one name and five years later completed a second form in another name under the new date. The company is expected to pay a significant fine under the directors’ guilty agreement. 28 illegal aliens were found to be working for Yamato. All have been put on removal proceeding, but allowed to remain in the country as potential witnesses pending the conclusion of the case. Employers are not required to be document experts, but do attest on the I-9 form that the documents provided by the worker appear to be genuine. ICE expects employers to use common sense in making that determination. Did You Know? Injured Workers May Have a Right to Sue in Oregon and Washington Employers in Oregon and Washington face the possibility – under certain circumstances – of injured workers bringing lawsuits outside of the Workers’ Compensation framework. Although a key component of the Workers’ Comp system is the exclusivity of the remedy, which protects employers from employees’ personal injury lawsuits, there are exceptions. One exception is when an employer’s intentional acts result in injury to an employee. If a manager assaults an employee or the employer knowingly violates safety standards, the employee can bring a tort lawsuit for damages outside of the Workers’ Comp system. Oregon and Washington both allow lawsuits contending intentional injury by the employer. Referendum 71, Washington’s Domestic Partner Law, passes Washington State’s “Everything but Marriage Act” (SB 5688) will go into effect after all. The Act was passed by the Legislature and signed by Governor Gregoire earlier this year and was to go into effect July 26. But a group called the Washington Values Alliance sponsored Referendum 71 in an effort to overturn the law with a public vote. The referendum to allow SB 5688 to become law passed 51% to 49%. The measure grants gay couples all the remaining state-provided benefits presently extended only to married heterosexual couples. It expands the domestic partnership law passed in 2007 that granted gay couples hospital visitation rights, the ability to authorize autopsies and organ donations, and inheritance rights when there is no will. Lawmakers expanded that law in 2008 to give gay domestic partners standing under laws covering probate and trusts, community property and guardianship. The new benefits under the current measure range from adoption and child support rights to public employment benefits, although any benefits that cost the state money, such as pensions, are delayed until 2014 because of the state's recession-fueled budget problems. Upcoming Dates and Deadlines Date Requirement DHS: Department of Homeland Security's rescission of "no-match" regulations was 11/6/09 effective. 11/21/09GINA: The employment provisions of GINA (Title II) take effect. HIPAA: The Department of Health and Human Services' interim final rule reflecting 11/30/09 higher penalties for HIPAA rules violations goes into effect. PPA: A qualified long-term-care rider may be added to an annuity or life insurance contract such that the rider is fully funded through a partial cash surrender. Prior to the 1/1/10 PPA, this would have been a taxable event. But as of taxable years beginning after Dec. 31, 2009, the act allows for this transaction as long as the investment in the original contract is large enough to support the transaction. 1/1/10 GINA: Title I of GINA takes effect for calendar-year plans. 1/1/10 Health insurance: Mental health parity provisions are effective for calendar-year plans. IRS: Internal Revenue Service regulations will require employers that sponsor group 1/1/10 health plans to report and pay excise taxes for failing to satisfy certain federal group health plan mandates. HIPAA: The HIPAA privacy and security rules become applicable to business 2/17/10 associates on this date. PPA: For collectively bargained plans, the rules on phased retirement pension 5/22/10 distributions apply after the first plan year that begins after the last of the agreements terminates or, if earlier, this date. EGTRRA: The Economic Growth and Tax Relief Reconciliation Act (EGTRRA) 12/31/10amendments to pension provisions of the Internal Revenue Code and ERISA do not expire because the PPA eliminates EGTRRA's sunset provision. Disclaimer: This report provides information only. It does not provide legal services or legal advice. Although we try to make our information accurate and useful, you should consult an attorney to verify, interpret and apply this information to your particular situation.
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