Federal Appeals Court Blocks OSHA’s Mandate-or-Test Emergency Vaccine Rule: What Does This Mean for Employers?

Citing potential “grave statutory and constitutional issues” with the mandate-or-test emergency vaccine rule unveiled by OSHA on Thursday (11/4/2021), a federal appeals court just issued an order blocking the ETS from taking effect on a nationwide basis. That the ETS faced immediate litigation from opponents and was at least temporarily sidelined should come as little surprise – many law firms predicted an onslaught of legal challenges well before this move took place. The bigger question left in the wake of Saturday’s legal order: what should employers do now?

What Happened?

As every employer should know by now, the Occupational Safety and Health Administration (OSHA) published a mandate-or-test Emergency Temporary Standard (ETS) late last week which will soon require all covered employers with 100 or more employees to either mandate their workforce receive the vaccination against COVID-19 or test them weekly to ensure they are not infected. 

On Friday (11/5/21), a number of parties – including a management company, multiple supermarkets, and several individuals – filed suit in the Court of Appeals for the Fifth Circuit challenging OSHA’s ETS the day it came into effect. A quirk in the way OSHA’s emergency standards can be challenged allows opponents to bypass the lower courts and go directly to a federal Court of Appeals. The Fifth Circuit challenge is not alone; similar cases have also been filed in the Sixth, Seventh, Eighth, and Eleventh Circuits.

The Fifth Circuit petition asked the Court to find the ETS either exceeded the scope of OSHA’s authority or that it was unconstitutional. The challengers also pleaded with the Fifth Circuit to “stay” – or temporarily stop – enforcement of the ETS until it could be reviewed by the courts. 

Within 24 hours, the Fifth Circuit issued a brief order staying the ETS until it could be fully reviewed by the Court. The order was extremely terse, stating that “the petitions give cause to believe there are grave statutory and constitutional issues” with the ETS (perhaps purposefully mimicking the claim by OSHA that “grave” danger exists such to justify the emergency rule). 

What’s Next?

The Fifth Circuit instructed the government to respond to the request for a permanent injunction by 5:00pm on Monday, November 8, and allowed the challengers to reply to the government’s response by 5:00pm on Tuesday. This means it is possible that we will hear a final decision from the Fifth Circuit in the very near future.

We will probably see further rulings in the coming days and weeks from other federal appeals courts as well, some following in the Fifth Circuit’s footsteps and blocking the ETS, others ruling that the ETS stands on solid legal footing. With a patchwork of various legal rulings expected, there will ultimately be a unifying judicial order having the final say on this matter. Whether that ruling comes from the multidistrict litigation panel (an assembly of federal judges that manages certain kinds of national litigation spanning several jurisdictions) or the U.S. Supreme Court remains to be seen.

Where Does This Leave Employers?

At the moment, the outcome of the OSHA ETS is uncertain. While OSHA must refrain from enforcing the ETS until the Fifth Circuit says otherwise, this could change in the blink of an eye if a full panel of appeals court judges removes the stay. And again, with several separate lawsuits filed in different courts challenging the ETS, it is likely that a final binding and unifying determination will not be made for weeks or even months.

What Should You Do?

As of right now, an employer’s best course of action is to familiarize yourself with the requirements of the OSHA ETS and prepare to implement those requirements if the stay is lifted and the emergency rule is revived. After all, OSHA will most likely have little patience with non-compliant employers who claim they held off implementing the mandate-or-test rule while awaiting a final court ruling – and the agency has significant weapons at its disposal in the form of citations and penalties for those not following the ETS edicts.   

Employers should spend the coming weeks preparing for the ETS as if it will take effect but waiting to implement its measures until the final judicial outcome is certain. The earliest effective date for any of the ETS requirements is December 5, which includes the need for you to have a vaccination policy and various other technical standards in place. You will be hard pressed to develop these materials overnight, so spend this interim limbo time efficiently and be prepared to comply should the ETS ultimately be upheld. 

OSHA Issues ETS Requiring COVID-19 Tests or Vaccinations for Most Employers

The ETS places additional burdens on employers (and employees) already straining under workforce shortages, supply chain issues, and varying standards and guidance related to COVID-19. The ETS is expected to face multiple legal challenges.

Employers Covered

The OSHA ETS applies to employers with at least 100 employees company-wide.

It does not apply to:

• Workplaces covered under the Safer Federal Workforce Task Force COVID-19 Workplace Safety: Guidance for Federal Contractors and Subcontractors; or
• Settings where any employee provides healthcare services or healthcare support services when subject to the Emergency Temporary Standard for healthcare employers (Subpart U – 29 CFR §1910.502).

The ETS also does not apply to the employees of covered employers:

• Who do not report to a workplace where other individuals, such as coworkers or customers, are present;
• While working from home; or
• Who work exclusively outdoors.

At any time during the duration of the ETS, if an employer employs at least 100 workers, the requirements of the ETS will apply regardless of fluctuations in the size of the employer’s workforce.

Required Policy

OSHA’s ETS requires employers who have at least 100 employees (company-wide, not just at one facility) to institute either a mandatory vaccine policy or a weekly testing and mask policy.

Employers must inform employees of their policies and procedures designed to comply with the ETS, the Centers for Disease Control and Prevention’s “Key Things to Know About COVID-19 Vaccines,” OSHA’s prohibition against retaliation for reporting workplace illnesses or injuries and OSHA’s whistleblower protections, and the criminal penalties associated with knowingly supplying false statements or documentation.

Vaccination Exceptions Allowed in a Mandatory Vaccination Policy

If an employer adopts a mandatory vaccination policy to comply with the OSHA ETS, it must require vaccination of all employees (and of all new employees as soon as practicable), other than those:

• For whom a vaccine is medically contraindicated;
• For whom medical necessity requires a delay in vaccination; or
• Who are legally entitled to a reasonable accommodation under federal civil rights laws, because they have a disability or sincerely held religious beliefs, practices, or observances that conflict with the vaccination requirement.

How is Vaccination Status Determined?

The employer must require each vaccinated employee to provide acceptable proof of vaccination status, including whether they are fully or partially vaccinated.

Acceptable proof of vaccination status is:

• The record of immunization from a healthcare provider or pharmacy;
• A copy of the COVID-19 Vaccination Record Card;
• A copy of medical records documenting the vaccination;
• A copy of immunization records from a public health, state, or tribal immunization information system; or
• A copy of any other official documentation that contains the type of vaccine administered, date(s) of administration, and the name of the health care professional(s) or clinic site(s) administering the vaccine(s).
• Where an employee is unable to produce acceptable proof of vaccination (as outlined above), a signed and dated statement by the employee:
  • Attesting to their vaccination status (fully vaccinated or partially vaccinated);
  • Attesting that they have lost and are otherwise unable to produce proof required by this section; and
  • Including the following language: “I declare (or certify, verify, or state) that this statement about my vaccination status is true and accurate. I understand that knowingly providing false information regarding my vaccination status on this form may subject me to criminal penalties.”
  • An employee who attests to their vaccination status, to the best of their recollection, should include the following information in their attestation: the type of vaccine administered; date(s) of administration; and the name of the health care professional(s) or clinic site(s) administering the vaccine(s).

What Records Must Be Maintained?

According to the OSHA ETS, the employer must maintain a record of each employee’s vaccination status. The employer must preserve acceptable proof of vaccination for each employee who is fully or partially vaccinated, along with a roster of each employee’s vaccination status. Significantly, employers that have already ascertained vaccination status prior to the effective date of the ETS through another form, attestation, or proof and retained records, are exempted from re-determining the vaccination status of individuals whose fully vaccinated status has been previously documented.

In addition, the employer must maintain a record of each test result provided by each employee.

These records and roster are considered employee medical records and must be maintained as such records. They must not be disclosed except as required or authorized by federal law. These records and roster must be maintained and preserved while this section remains in effect, but are not subject to OSHA’s standard 30-year retention requirement.

Paid Time Off for Vaccine Time

According to the ETS, employers must provide paid time off for employees to get vaccinated (up to four hours) and to recover from any side effects. The ETS requires up to four hours of paid time to receive each dose of the vaccine, including travel time, at the employee’s regular rate of pay. The ETS requires “reasonable time and paid sick leave” to recover from the side effects of each dose of the vaccine.

Who Pays for Testing?

OSHA permits employers to pass the expense for testing to employees, subject to the requirements of other laws.

Whether employers can require employees to pay for their own tests will depend on state law and whether testing is offered as a reasonable accommodation. Many states have laws requiring employers to pay the cost of any required medical exams or tests or expense reimbursement laws, which may be implicated.

The Fair Labor Standards Act (FLSA) and state law will govern whether employers have to pay for the time associated with getting testing and awaiting results.

It is also unclear at this time whether, under the FLSA, the cost of testing may drop an employee’s effective rate of pay below the federal minimum wage.

Conflicting State Law?

Although some states have their own state OSHA plans, such plans generally must be “at least as effective as” the standard set by OSHA. In those states, the federal OSHA ETS will not apply immediately. 

There are currently 22 states that have OSHA-approved State Plans regulating private sector employers. (Alaska, Arizona, California, Hawaii, Indiana, Iowa, Kentucky, Maryland, Michigan, Minnesota, Nevada, New Mexico, North Carolina, Oregon, Tennessee, South Carolina, Utah, Vermont, Virginia, Washington, Wyoming, and Puerto Rico.) Those states have 30 days to adopt the federal standard or inform OSHA of their plans to do something else. In addition to their own OSHA plans, some states have passed laws prohibiting or limiting employers’ ability to require COVID-19 vaccines.

OSHA’s ETS is intended to comprehensively address the occupational safety and health issues of vaccination, wearing face coverings, and testing for COVID-19. It, therefore, preempts any state or local requirements on these issues, except those from an OSHA-approved State Plan. Thus, the ETS preempts any state or local requirements banning or limiting an employer from requiring vaccines, face coverings, or testing.

What Type of Tests are Required?

According to the OSHA ETS, the COVID-19 test must be:

• Cleared, approved, or authorized, including in an Emergency Use Authorization, by the Food and Drug Administration to detect current infection with the SARS-CoV-2 virus (e.g., a viral test);
• Administered in accordance with the authorized instructions; and
• Not both self-administered and self-read, unless observed by the employer or an authorized telehealth proctor.

Examples of tests that satisfy this requirement include tests with specimens that are processed by a laboratory (including home or on-site collected specimens that are processed individually or as pooled specimens), proctored over-the-counter tests, point-of-care tests, and tests where specimen collection and processing is done or observed by an employer.

When Must Testing Occur?

Employees who are not fully vaccinated must submit to testing at least weekly if present in the workplace at least once a week or within seven days before returning to work if away from the workplace for a week or longer.

For individuals who have received a positive COVID-19 test or who have been diagnosed with COVID-19, the ETS provides an exception from testing for the 90-day period following the positive diagnosis or test.

Employees who are not fully vaccinated and do not meet the testing requirements must be removed from the workplace pending a test result.

Removal for Positive Tests

Regardless of vaccination status, employees who test positive for COVID-19 or who are diagnosed with COVID-19 must be removed from the workplace until they meet certain return-to-work criteria. The ETS does not require paid leave for employees who are removed, but acknowledges that other laws may impose such obligations.

What Other Requirements Apply?

Masking: Subject to limited exceptions, employers are required to enforce the wearing of masks for those who are unvaccinated when indoors and when occupying a vehicle with another person for work purposes. Like testing costs, the ETS does not mandate employers to pay for face coverings required by the ETS.

Reporting: Employers are required to report work-related COVID-19 hospitalizations and fatalities to OSHA (within 24 hours of hospitalization and eight hours of a fatality). Under OSHA’s normal reporting standards, work-related hospitalizations and fatalities must be reported only if they occur within a certain time period following the work-related incident (24 hours for hospitalization and 30 days for a fatality). Those time periods do not apply to work-related COVID-19 hospitalizations or fatalities, meaning, employers must still notify OSHA even if the hospitalization or fatality occurs after those time periods.

Notice: Employers must require employees to provide prompt notice when they receive a positive COVID-19 test or are diagnosed with COVID-19.

When Does the ETS Take Effect?

The OSHA ETS takes effect immediately, except in those states that have their own state plans. However, employers have 60 days to comply with the testing requirements of the ETS and 30 days to comply with the remaining provisions. State plan states have 30 days from the effective date to adopt the federal standard or inform OSHA of their plans to do something else.

Fake Vaccine Cards May Become Employers’ Next New Headache: 5 Steps to Protect Your Company

As vaccine mandates increase, employers may face yet another headache in the continuing stream of pandemic-related concerns: employees presenting fake cards when asked to establish proof of vaccination. What can you do if you believe an employee has presented a fake vaccine card? And can your company be liable for relying on such falsified records?

How Widespread Is the Practice?

There are a growing number of Americans who are attempting to avoid vaccine mandates by using fake or bogus vaccination cards. As with the fake IDs used by underaged students to obtain alcohol, the internet has spawned a cottage industry marketing the bogus cards. The fake cards are increasingly available for vaccine hesitant customers, students, and employees who are willing to pay for the cards. 

Fake vaccination documents can be purchased through a variety of social media sites, the black market, and other internet platforms. Vaccine-hesitant employees and customers have also been caught making homemade versions of vaccine cards.

Bogus vaccination cards are illegal under federal and certain state laws. Indeed, workers using counterfeit vaccine cards are running a significant legal risk. The use and forgery of government seals such as the CDC vaccination card is illegal, with violations ranging from a fine of up to $5,000 or up to five years imprisonment. Many state laws also prohibit such activity.

Unfortunately, there is increasing evidence that many vaccine-hesitant people are willing to take the risk of criminal prosecution.

• One high profile example of the growing problem was evidenced by the recent 21-game suspension of an NHL player who was alleged to have used a fake vaccination card in response to the league’s COVID-19 policy. As a result of his actions, he will forfeit over a million dollars in pay.
• Three Vermont state troopers were forced to resign from their jobs after they were accused of playing a role in manufacturing counterfeit vaccination cards.
• In another reported case, a New Jersey woman calling herself the “AntiVaxMomma” on Instagram was arrested for selling hundreds of fake vaccine cards online for $200 apiece.
• The increasing demand for false documentation is also evidenced by a recent report that S. Customs agents in Tennessee and Alaska seized thousands of fake vaccination cards that came from China.

There have been increasing demand by some leaders, including Senator Chuck Schumer (NY), for law enforcement to step up efforts to shut down internet or online sales of fraudulent certification cards.

What’s at Risk?

Regardless of how many counterfeit vaccine cards are floating around, the key question is whether you may face safety or legal exposure if any of your employees have falsified or misrepresented their vaccination status.

From a workplace safety standpoint, there is no doubt that someone who has skirted your rules can present a threat to other workers, members of the public, and other third parties at the worksite. If you have eased safety and social distancing measures for employees who are vaccinated, and/or discontinued any COVID-19 testing requirements for inoculated workers, an unvaccinated person who slips through the cracks could pose a danger to those around them. This concern alone requires you to take this emerging problem seriously.

Fortunately, your company’s legal liability in such a scenario is most likely low. As long as you have taken reasonable measures to check the vaccination status of your workforce, someone who has misled you by using a fake vaccine card is unlikely to subject the company to a high level of legal exposure. Certainly, your company could be sued, but your odds of successfully defending such a claim would hinge on the reasonableness of your verification process. This means that you should establish reasonable parameters to check vaccine cards, not simply allowing managers or other gatekeepers to give them a quick, cursory glance without reviewing key details. The more reliable your verification system, the better your odds of defeating any negligence claims relating to an employee’s use of a phony vaccine card. The obvious implication is that simply using an “honor system” appears less likely to withstand challenges, from plaintiffs’ lawyers or agencies such as OSHA.

What Can You Do About It?

If you suspect that an employee has presented a falsified vaccine card – what can you do about it? You can certainly take serious action, up to an including termination of employment. If you are concerned about this issue, thee following five steps can put your company in a much stronger position:

1. Identify factors that reasonably indicate the need for further inquiry. Develop a list of factors that would lead you to make additional inquiries. This tool can save time, improve the effectiveness of your process and ensure consistency. Factors should include things like the absence of information called for on the now-familiar CDC Vaccination Record card, such as the manufacturer, lot number, date and identification of the vaccine provider. Other red flags could be misspellings (such as the woman who was arrested after presenting a counterfeit card saying she received the “Maderna” vaccine); inconsistent dates; the name of an unfamiliar manufacturer or provider; apparent “corrections” or illegible portions of the card; thin-cut paper rather than a card; a card that appears to have been cut with scissors; a card that appears to be fully printed instead of being at least partially handwritten; handwriting that appears to be entirely uniform (in an environment where shots were given on more than one date); or other objective information that would reasonably raise questions about the authenticity of a card. At the same time, avoid acting on speculation or unsubstantiated rumors. OSHA, CMS or other regulators may promulgate additional guidance on this process, which you should of course incorporate into your policies.
2. Apply to your practices consistently. When making additional inquiries, recognize the inherent risk of taking an action toward one employee (or group of employees) without treating others the same way. Singling out individuals or groups by asking more questions, seeking further documentation, or taking additional other steps raises the potential for discrimination or retaliation claims. Claims could of course be based on differences in gender, age, race, disability, sexual orientation, gender identity, religion, or any other protected categories. This makes consistent application of your process especially important.
3. Document the reasons why you are seeking more information about a specific card. If one or more factors lead you need more information or to question the authenticity of a vaccine card, clearly and objectively document your specific concerns. Such documentation not only reflects legitimate non-discriminatory reasons for making further inquiry, it also demonstrates that the company is exercising reasonable care before accepting vaccination cards, in the event OSHA or another agency challenges the integrity of your process.
4. Recognize the sensitivity of the subject matter. In posing questions about a card, you should of course respect the personal, confidential nature of each employee’s vaccination status. Also keep in mind that the pandemic and vaccine issues often stir strong feelings. Thus, make it a point to seek clarifying information in a respectful, non-accusatory manner. Staying focused on the objective factors that led to your inquiry and give the employee a fully opportunity to explain. Assure the employee of the confidentiality of your discussion and safeguard all information obtained in the process.
5. Ensure that your policies are clear. As we have discussed many times, it is important to clearly communicate your company’s approach to vaccines and workplace safety, in the form of policies, postings, meetings and emails. You should also confirm that your policies are up-to-date regarding the requirement that all employees must be truthful and accurate in all communications with the company, spelling out that dishonesty or other violations of this policy may result in termination, even for a first offense. Policies should leave no doubt as to how serious the company is about its commitment to workplace safety and honest, accurate communications.

Halloween Fun Without Spooky Consequences

Halloween may be the spookiest time of the year, but it doesn’t have to be frightening for HR professionals. Organizations can plan a fun event that is work-appropriate and accessible to all employees.

An office-based scavenger hunt is the favorite Halloween celebration to date for one company. The HR director remembers the scavenger hunt clues were Halloween-themed riddles and puzzles, and some employees dressed up and hid in broom closets to scare people. The scavenger hunt lasted 20 to 30 minutes, and the prize was a giant pumpkin head full of candy and a $100 gift card to Starbucks. 

Any Halloween event—whether in-person or virtual—should be voluntary. With that in mind, these tips and pieces of advice can help your group plan an event employees enjoy.

Avoid Costume Chaos

No court has ever ruled that a “Halloween defense” applies to a business facing a misconduct charge, so it’s necessary to provide guidelines for what costumes and conduct are and aren’t appropriate.

In today’s fraught political environment, even masks depicting our national leaders (of either party) are inadvisable costume choices, especially if one wishes to remain on good terms with co-workers. Employees should also refrain from sharing pics [over e-mail] of themselves in a questionable get-up. One quickly loses control over who sees them—ultimately leading to HR issues.

Keep it simple when reminding staff about costumes, but there is a tendency to over-complicate the message. A lengthy manifesto outlining what costumes are appropriate versus which are not, will likely go unread. 

Employees don’t have the attention span to read a lengthy e-mail like that. The better approach  is to let your employees know that Halloween costumes are fine, so long as they don’t violate the spirit or letter of your company dress code.

Tie It to the Times

At a company in Indiana, they are planning to resume the company’s long-standing dress-up tradition. The company set a COVID-19-related theme for Halloween this year. Staff members choosing to dress up must incorporate a mask into the costume. Remote employees have received special Zoom invitations to join in from home and are also encouraged to dress up. 

In the age of Zoom, it’s easy to involve remote workers in in-office events. Last year, the company encouraged remote employees to adopt spooky Halloween-themed backgrounds for Zoom calls, and that is continuing into this year.

Remote employees can decorate their home office with Halloween stuff, but the company also encourages them to use digital Halloween backgrounds for calls rather than the typical blurred background.

Make It Interactive

Events involving collaboration and teamwork provide the most employee engagement. Eliciting employees’ ideas for Halloween-themed advertising, packaging or window displays, or planning an outdoor scavenger hunt with clues related to the company’s history or products and services are often a hit.

It is prudent to avoid activities that include religious elements and anything overly terrifying.  Stay away from contests that involve physical contact, such as mummifying co-workers in toilet paper, as doing so can create potential COVID-19 as well as definite inappropriate conduct risks.

Give It a Halloween Twist

Dressing up is the first idea that comes to mind for Halloween celebrations, but the holiday is ideal for unique, creative themes. This year, a digital marketing agency is hosting weekly remote watch parties of Halloween episodes of iconic TV shows. The company also mailed acrylic paint markers to staff and encouraged them to paint a pumpkin and share their creations in Slack.

The company chose TV shows instead of movies because they’re shorter and more digestible. Employees can pop into the watch party around lunch, and it’s a fun time without distracting too much from work. They are also leaving space in the Friday companywide video call on Oct. 29 so employees can show off costumes.

Last year when business operations went fully remote, another company replaced its traditional costume dress-up with a “Crazy Hat” party. Employees came up with unique hat ideas showcased in a virtual event. This year the company is hosting a “Hocus Pocus”-themed event in which the remote employees can connect over Zoom or Skype.

Florida’s Minimum Wage Set to Change on Sept 30, 2021

Oct. 15th Deadline Nears for Medicare Part D Coverage Notices

Prior to each year’s Medicare Part D annual enrollment period, plan sponsors that offer prescription drug coverage must provide notices of creditable or noncreditable coverage to Medicare-eligible individuals.

The required notices may be provided in annual enrollment materials, separate mailings or electronically. Whether plan sponsors use the federal Centers for Medicare & Medicaid Services (CMS) model notices or other notices that meet prescribed standards, they must provide the required disclosures no later than Oct. 15, 2021.

Group health plan sponsors that provide prescription drug coverage to Medicare Part D-eligible individuals must also disclose annually to the CMS—generally, by March 1—whether the coverage is creditable or noncreditable. The disclosure obligation applies to all plan sponsors that provide prescription drug coverage, even those that do not offer prescription drug coverage to retirees.

Background

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 requires group health plan sponsors that provide prescription drug coverage to disclose annually to individuals eligible for Medicare Part D whether the plan’s coverage is “creditable” or “noncreditable.” Prescription drug coverage is creditable when it is at least actuarially equivalent to Medicare’s standard Part D coverage and noncreditable when it does not provide, on average, as much coverage as Medicare’s standard Part D plan. The CMS has provided a Creditable Coverage Simplified Determination method that plan sponsors can use to determine if a plan provides creditable coverage.

Disclosure of whether their prescription drug coverage is creditable allows individuals to make informed decisions about whether to remain in their current prescription drug plan or enroll in Medicare Part D during the Part D annual enrollment period. Individuals who do not enroll in Medicare Part D during their initial enrollment period (IEP), and who subsequently go at least 63 consecutive days without creditable coverage (e.g., they dropped their creditable coverage or have non-creditable coverage) generally will pay higher premiums if they enroll in a Medicare drug plan at a later date.

Who Gets the Notices?

Notices must be provided to all Part D eligible individuals who are covered under, or eligible for, the employer’s prescription drug plan—regardless of whether the coverage is primary or secondary to Medicare Part D. “Part D eligible individuals” are generally age 65 and older or under age 65 and disabled, and include active employees and their dependents, COBRA participants and their dependents, and retirees and their dependents.

Because the notices advise plan participants whether their prescription drug coverage is creditable or noncreditable, no notice is required when prescription drug coverage is not offered.

Also, employers that provide prescription drug coverage through a Medicare Part D Employer Group Waiver Plan (EGWP) are not required to provide the creditable coverage notice to individuals who are eligible for the EGWP.

Notice Requirements

The Medicare Part D annual enrollment period runs from Oct. 15 to Dec. 7. Each year, before the enrollment period begins (i.e., by Oct. 14), plan sponsors must notify Part D eligible individuals whether their prescription drug coverage is creditable or non-creditable. The Oct. 14 deadline applies to insured and self-funded plans, regardless of plan size, employer size or grandfathered status

Part D eligible individuals must be given notices of the creditable or non-creditable status of their prescription drug coverage:

• Before an individual’s IEP for Part D.
• Before the effective date of coverage for any Medicare-eligible individual who joins an employer plan.
• Whenever prescription drug coverage ends or creditable coverage status changes.
• Upon the individual’s request.

According to CMS, the requirement to provide the notice prior to an individual’s IEP will also be satisfied as long as the notice is provided to all plan participants each year before the beginning of the Medicare Part D annual enrollment period.

Model notices that can be used to satisfy creditable/non-creditable coverage disclosure requirements are available in both English and Spanish on the CMS website. Plan sponsors that choose not to use the model disclosure notices must provide notices that meet prescribed content standards.

Notices of creditable/non-creditable coverage may be included in annual enrollment materials, sent in separate mailings or delivered electronically. Plan sponsors may provide electronic notice to plan participants who have regular work-related computer access to the sponsor’s electronic information system. However, plan sponsors that use this disclosure method must inform participants that they are responsible for providing notices to any Medicare-eligible dependents covered under the group health plan.

Electronic notice may also be provided to employees who do not have regular work-related computer access to the plan sponsor’s electronic information system and to retirees or COBRA qualified beneficiaries, but only with a valid email address and their prior consent. Before individuals can effectively consent, they must be informed of the right to receive a paper copy, how to withdraw consent, how to update address information, and any hardware/software requirements to access and save the disclosure. In addition to emailing the notice to the individual, the sponsor must also post the notice (if not personalized) on its website.

In Closing

Plan sponsors that offer prescription drug coverage will have to determine whether their drug plan’s coverage satisfies CMS’s creditable coverage standard and provide appropriate creditable/noncreditable coverage disclosures to Medicare-eligible individuals no later than Oct. 15, 2021.

President’s Path Out of the Pandemic Adds Hurdles for Employers

On September 9, 2021, the White House issued Path Out of the Pandemic: President Biden’s COVID-19 Action Plan (the Plan). The Plan outlines a six-pronged approach, portions of which will impose new obligations on employers across the country.

Most notably for employers, the first prong of the Plan, “Vaccinating the Unvaccinated,” includes:

• Direction to the Department of Labor’s Occupational Safety and Health Administration (OSHA) to issue an Emergency Temporary Standard (ETS) requiring all employers with 100 or more employees to ensure that all employees are fully vaccinated or able to produce a negative COVID-19 test result on at least a weekly basis;
• A new Executive Order that requires certain government contractors to comply with guidance, to be published later this month by the Safer Federal Workforce Task Force (Task Force Guidance or Guidance), which presumably will require that employees who work on or in connection with certain government contracts be vaccinated, regardless of whether they work on a federal site;
• A statement that the Centers for Medicare & Medicaid Services (CMS) will be taking action to require COVID-19 vaccination for workers in most health care settings that receive Medicare or Medicaid reimbursement as a condition of Medicare/Medicaid reimbursement (similar to what was previously announced by the President in August 2021 for nursing homes); and
• Direction to OSHA to require covered employers to provide paid time off for employees to get vaccinated or recover from vaccination.

The Plan also calls on states to adopt vaccination requirements for all school employees as part of the effort to “keep schools safely open.”

The Plan indicates that the administration will increase the amount of COVID-19 testing by ramping up production of testing products, offering at-home rapid COVID-19 tests at cost through certain retailers, and expanding free testing at retail pharmacy sites, among other things.

While the Plan is far-reaching, there are still many unknowns. Employer obligations arising from OSHA’s ETS will be dictated by the timing and the specific ETS provisions and corresponding requirements. The only thing we know for certain about the forthcoming ETS is that employers will need to continue to adapt and be prepared to pivot if necessary.   It is also unclear how the new ETS will fit in with OSHA’s current COVID-19 Healthcare ETS, in 29 C.F.R. 1910 Subpart U, or impact OSHA’s current guidance for non-healthcare employers. Further, the 27 states with OSHA-approved State Plans, such as California, Washington, Oregon, and Virginia, will need to determine how to respond to the ETS, once it is issued, and if certain provisions require implementation alongside the state’s standards and regulations.

CMS also issued a press release urging Medicare and Medicaid-certified facilities to “make efforts now to get health care staff vaccinated.” However, the agency noted that it is still developing an Interim Final Rule with Comment Period that will be issued in October.

Employers who are impacted by the Plan, and who may be impacted by an ETS once issued, are advised to start thinking through how they will navigate many legal issues and operational challenges related to required vaccination and testing. These issues include policy requirements, workplace testing strategies, vaccination tracking and management, medical record collection and retention, and accommodations for religion, disability and pregnancy, as well as wage and hour implications, bargaining obligations for unionized workplaces, employee confidentiality and privacy issues. Further, employers should consider the logistical impact on federal contracts and how these obligations will interplay with other state or local mandates or restrictions on vaccinations.

Stay tuned as we dive into the Plan and corresponding guidance documents, as well as await further information from federal agencies responsible for complying with the Plan and its directives. 

Affordable Percentage Will Shrink for Employer Health Coverage in 2022

New Guidance Delays Some Key CAA and Other Health Benefit Effective Dates

New regulatory guidance from three federal agencies that enforce private-sector benefits laws will make employers’ daunting 2021 health benefit to-do lists slightly—but only slightly—more manageable heading into 2022.

Most importantly, the frequently asked questions (FAQ) guidance delays several of the most challenging 2021 and 2022 compliance requirements under the Consolidated Appropriations Act, 2021 (CAA) and the Patient Protection and Affordable Care Act (ACA): so-called “advanced explanations of benefits” (EOBs) providing good-faith estimates of the out-of-pocket costs for scheduled medical services; a “price comparison tool” to enable participants to compare cost-sharing amounts for specific network providers; extensive drug cost information that was to have been reported to the federal regulators in December 2021; and public pricing disclosures related to in-network rates, out-of-network allowed costs, and prescription drug prices.

The FAQ guidance, issued August 20, 2021, by the U.S. Department of Labor, U.S. Department of Health and Human Services, and U.S. Department of the Treasury, also provides some relief or useful clarifications related to other key 2021 health benefit compliance items for employers, including gag clauses, identification cards, continuity-of-care requirements, and provider directories.

The FAQ guidance neither delays nor provides other relief related to the new surprise medical billing requirements under the No Surprises Act, which was enacted as part of the CAA and is set to take effect January 1, 2022, or the Mental Health Parity and Addiction Equity Act “comparative analysis” required by the CAA, which is already in effect.

Here is a summary of the key employer takeaways in the new FAQ guidance.

Advanced EOBs

Under the No Surprises Act, plans are required to provide good-faith estimates of expected provider charges for a specific scheduled service, along with good-faith estimates of the cost sharing that would apply to a participant, and the amount already incurred toward any financial responsibility limits. This was initially set to take effect January 1, 2022, but the guidance indicates that the agencies will defer enforcement until regulations are issued on these plan disclosures and the disclosures required by medical providers. (Question 6)

Price Comparison Tool and Public Price Disclosures

Under the No Surprises Act, plans are required to offer online tools and phone support to enable participants to compare cost-sharing amounts for specific network providers in a specific region. Separately, under the ACA, plans are required to offer three “machine-readable files” on a public website covering in-network rates, out-of-network allowable amounts, and prescription drug prices. Both the No Surprises Act and ACA requirements were set to take effect on January 1, 2022. The guidance delays the effective date of the No Surprises Act requirements to January 1, 2023, and the ACA in-network and out-of-network requirements to July 1, 2022. The ACA prescription drug requirement is delayed until the agencies issue regulations on the matter. (Questions 1-3)

Drug Cost Reporting

The CAA requires employer plans to report very detailed prescription drug cost information to the agencies, including the 50 most commonly covered drugs per plan, the 50 most expensive drugs per plan, and the total health spending for each plan broken out into specific categories. The initial reports were to be provided to the agencies by December 27, 2021, and then by June 1, 2022. The agencies will defer enforcement related to the 2021 and 2022 reports until they issue further guidance, though the agencies “strongly encourage plans” to get ready to report 2020 and 2021 plan year data no later than December 27, 2022. (Question 12)

Gag Clauses

Under the CAA, plans cannot enter into network or other agreements that would prevent them from making available provider-specific cost or quality-of-care information to providers or participants, electronically accessing de-identified claims and encounter information for each participant (consistent with privacy laws), or sharing either of those types of information with business associates. Plans have to attest to the agencies each year that they have no such clauses in their agreements. This requirement took effect on enactment of the CAA on December 27, 2020, and is not changed by the FAQ guidance. The agencies have indicated that additional guidance is forthcoming on how plans will attest to their compliance. (Question 7)

Insurance Cards

Under the No Surprises Act, plans have to update physical or electronic insurance cards to include network and out-of-network deductibles and out-of-pocket limits and consumer assistance contact information. This is set to take effect on January 1, 2022, a date unchanged by the FAQ guidance. The guidance does clarify, though, that the agencies will consider both data actually on the cards and data “made available through information that is provided on the ID card.” (Question 4)

Continuity of Care

Under the No Surprises Act, when a provider or network contract is terminated, plans have to take steps to protect hospitalized or other continuing care patients. This requirement will take effect on January 1, 2022. The guidance clarifies that the agencies intend to issue formal regulations on this requirement, but will not do so before the effective date. Until such regulations take effect, plans will be held to a good-faith compliance standard. (Question 10)

Provider Directories

Under the No Surprises Act, plans are required to take several steps to improve provider directories, such as updating them at least every 90 days, and more promptly notifying participants about whether a particular provider is in the network. These requirements will take effect on January 1, 2022, and the guidance does not change that. The agencies do indicate that they intend to issue formal regulations in the future, and may also have specific additional guidance on required disclosure of balance billing information. (Questions 8 and 9)

FL Minimum Wage Increase in September 2021

Over the next six years, Florida’s minimum wage rate will increase gradually to $15 an hour.

On November 3, 2020, over 60 percent of Floridian voters approved Amendment 2, which increases the minimum wage and amends Florida’s Constitution.

Under the new mandate, Florida’s minimum wage rate (currently, $8.56) will increase to $10 an hour in September 2021. The minimum wage then will increase by $1 each year until it reaches $15 an hour in 2026. The minimum wage rate applies to all public and private sector employers, regardless of size or number of employees.

Employers must use the following hourly minimum wage schedule for non-tipped employees:

• Through December 31, 2020 – $8.56
• January 1, 2021 – $8.65
• September 30, 2021 – $10.00
• September 30, 2022 – $11.00
• September 30, 2023 – $12.00
• September 30, 2024 – $13.00
• September 30, 2025 – $14.00
• September 30, 2026 – $15.00

Beginning on September 30, 2027, the minimum wage rate will be adjusted annually by the Florida Department of Economic Opportunity based on changes to the Consumer Price Index for Urban Wage Earners and Clerical Workers.

Amendment 2 does not change the allowable tip credit for tipped employees meeting the eligibility requirements under the Fair Labor Standards Act. Florida employers may continue to take a tip credit of up to $3.02 per hour for properly classified tipped employees. The minimum cash wage rate for eligible tipped employees will increase as follows:

• Through December 31, 2020 – $5.54 per hour plus tips
• January 1, 2021 – $5.63 per hour plus tips
• September 30, 2021 – $6.98 per hour plus tips
• September 30, 2022 – $7.98 per hour plus tips
• September 30, 2023 – $8.98 per hour plus tips
• September 30, 2024 – $9.98 per hour plus tips
• September 30, 2025 – $10.98 per hour plus tips
• September 30, 2026 – $11.98 per hour plus tips

Florida is only the eighth state in the country (and the first in the South) to raise its minimum wage to $15 an hour, joining California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey, and New York. Florida is the first state to raise the minimum wage as high as $15 an hour by a citizens’ initiative ballot measure. Similar increases were introduced during the Florida legislative session in recent years, but the measure never passed.