The Affordable Care Act added a patient-centered outcomes research (PCOR) fee on health plans to support clinical effectiveness research. The PCOR fee applies to plan years ending on or after Oct. 1, 2012, and before Oct. 1, 2019. The PCOR fee is due by July 31 of the calendar year following the close of the plan year. For plan years ending in 2014, the fee is due by July 31, 2015.
PCOR fees are required to be reported annually on Form 720, Quarterly Federal Excise Tax Return, for the second quarter of the calendar year. The due date of the return is July 31. Plan sponsors and insurers subject to PCOR fees but not other types of excise taxes should file Form 720 only for the second quarter, and no filings are needed for the other quarters. The PCOR fee can be paid electronically or mailed to the IRS with the Form 720 using a Form 720-V payment voucher for the second quarter. According to the IRS, the fee is tax-deductible as a business expense.
The PCOR fee is assessed based on the number of employees, spouses and dependents that are covered by the plan. The fee is $1 per covered life for plan years ending before Oct. 1, 2013, and $2 per covered life thereafter, subject to adjustment by the government. For plan years ending between Oct. 1, 2014, and Sept. 30, 2015, the fee is $2.08. The Form 720 instructions are expected to be updated soon to reflect this increased fee.
This chart summarizes the fee schedule based on the plan year end and shows the Form 720 due date. It also contains the quarter ending date that should be reported on the first page of the Form 720 (month and year only per IRS instructions). The plan year end date is not reported on the Form 720.
For insured plans, the insurance company is responsible for filing Form 720 and paying the PCOR fee. Therefore, employers with only fully- insured health plans have no filing requirement.
If an employer sponsors a self-insured health plan, the employer must file Form 720 and pay the PCOR fee. For self-insured plans with multiple employers, the named plan sponsor is generally required to file Form 720. A self-insured health plan is any plan providing accident or health coverage if any portion of such coverage is provided other than through an insurance policy.
Since the fee is a tax assessed against the plan sponsor and not the plan, most funded plans subject to ERISA must not pay the fee using plan assets since doing so would be considered a prohibited transaction by the U.S. Department of Labor (DOL). The DOL has provided some limited exceptions to this rule for plans with multiple employers if the plan sponsor exists solely for the purpose of sponsoring and administering the plan and has no source of funding independent of plan assets.
Plans sponsored by all types of employers, including tax-exempt organizations and governmental entities, are subject to the PCOR fee. Most health plans, including major medical plans, prescription drug plans and retiree-only plans, are subject to the PCOR fee, regardless of the number of plan participants. The special rules that apply to Health Reimbursement Accounts (HRAs) and Health Flexible Spending Accounts (FSAs) are discussed below.
Plans exempt from the fee include:
If a plan sponsor maintains more than one self-insured plan, the plans can be treated as a single plan if they have the same plan year. For example, if an employer has a self-insured medical plan and a separate self-insured prescription drug plan with the same plan year, each employee, spouse and dependent covered under both plans is only counted once for purposes of the PCOR fee.
The IRS has created a helpful chart showing how the PCOR fee applies to common types of health plans.
Health Reimbursement Accounts (HRAs) - Nearly all HRAs are subject to the PCOR fee because they do not meet the conditions for exemption. An HRA will be exempt from the PCOR fee if it provides benefits only for dental or vision expenses, or it meets the following three conditions:
Health Flexible Spending Accounts (FSAs) - A health FSA is exempt from the PCOR fee if it satisfies an availability condition and a maximum benefit condition.
Additional special rules for HRAs and FSAs . Once an employer determines that its HRA or FSA is subject to the PCOR fee, the employer should consider the following special rules:
The IRS provides different rules for determining the average number of covered lives (i.e., employees, spouses and dependents) under insured plans versus self-insured plans. The same method must be used consistently for the duration of any policy or plan year. However, the insurer or sponsor is not required to use the same method from one year to the next.
A plan sponsor of a self-insured plan may use any of the following three
methods to determine the number of covered lives for a plan year:
1. Actual count method. Count the covered lives on each day of the plan year and divide by the number of days in the plan year.
Example: An employer has 900 covered lives on Jan. 1, 901 on Jan. 2, 890 on
Jan. 3, etc., and the sum of the lives covered under the plan on each day of
the plan year is 328,500. The average number of covered lives is 900 (328,500 ÷
365 days).
2. Snapshot method. Count the covered lives on a single day in each quarter (or more than one day) and divide the total by the number of dates on which a count was made. The date or dates must be consistent for each quarter. For example, if the last day of the first quarter is chosen, then the last day of the second, third and fourth quarters should be used as well.
Example: An employer has 900 covered lives on Jan. 15, 910 on April 15, 890 on
July 15, and 880 on Oct. 15. The average number of covered lives is 895 [(900 +
910+ 890+ 880) ÷ 4 days].
As an alternative to counting actual lives, an employer can count the number of
employees with self-only coverage on the designated dates, plus the number of
employees with other than self-only coverage multiplied by 2.35.
3. Form 5500 method. If a Form 5500 for a plan is filed before the due date of the Form 720 for that year, the plan sponsor can determine the number of covered lives based on the Form 5500. If the plan offers just self-only coverage, the plan sponsor adds the participant counts at the beginning and end of the year (lines 5 and 6d on Form 5500) and divides by 2. If the plan also offers family or dependent coverage, the plan sponsor adds the participant counts at the beginning and end of the year (lines 5 and 6d on Form 5500) without dividing by 2.
Example: An employer offers single and family coverage with a plan year ending
on Dec. 31. The 2013 Form 5500 is filed on June 5, 2014, and reports 132
participants on line 5 and 148 participants on line 6d. The number of covered
lives is 280 (132 + 148).
To evaluate liability for PCOR fees, plan sponsors should identify all of their plans that provide medical benefits and determine if each plan is insured or self-insured. If any plan is self-insured, the plan sponsor should take the following actions:
While the rest of us were enjoying our Memorial Day holiday, the Department of Labor was busy posting the new model FMLA notices and medical certification forms… with an expiration date of May 31, 2018!
No more month-to-month extensions or lost sleep over when the long-awaited forms would be released.
That said, it couldn’t have taken DOL a whole lot of time to draft the updated forms. After a relatively close review of the new forms, the notable change is a reference to the Genetic Information Nondiscrimination Act (GINA). In the instructions to the health care provider on the certification for an employee’s serious health condition, the DOL has added the following simple instruction:
Do not provide information about genetic tests, as defined in 29 C.F.R. § 1635.3(f), genetic services, as defined in 29 C.F.R. § 1635.3(e), or the manifestation of disease or disorder in the employee’s family members, 29 C.F.R. § 1635.3(b).
The DOL added similar language to the other medical certification forms as well. For years, employers have included GINA disclaimers in their FMLA paperwork, and those disclaimers typically have been far more robust (and reader-friendly) than the cryptic one the DOL used above.
For easy reference, here are the links to the new FMLA forms:
The forms also can be accessed from this DOL web page.
According to recent news reports, nearly half of the 17 Exchanges run by states and the District of Columbia under the Affordable Care Act (ACA) are struggling financially:
Many of the online exchanges are wrestling with surging costs, especially for balky technology and expensive customer call centers — and tepid enrollment numbers. To ease the fiscal distress, officials are considering raising fees on insurers, sharing costs with other states and pressing state lawmakers for cash infusions. Some are weighing turning over part or all of their troubled marketplaces to the federal exchange, HealthCare.gov, which now works smoothly.
Of course, many states can’t solve their financial troubles easily. As independent entities, their income depends on fees imposed on insurers, which is then often passed on to the consumer signing up for health care. However, those fees are entirely contingent on how many people enroll in that particular Exchange; low enrollment invariably means higher costs.
Low enrollment is where the trouble thickens. The recently completed open enrollment period only rose 12 percent to 2.8 million sign-ups for state Exchanges, according to The Washington Post. Comparatively, the federal Exchange saw an increase of 61 percent to 8.8 million people.
According to the Post, state Exchanges have operating budgets between “$28 million and $32 million”. Most of the money tends to go to call centers, “Enrollment can be a lengthy process — and in several states, contractors are paid by the minute. An even bigger cost involves IT work to correct defective software that might, for example, make mistakes in calculating subsidies.”
However, The Fiscal Times contends that, “Some states may be misusing Obamacare grants in order to keep their state insurance exchanges operating—potentially flouting a provision in the law requiring them to cover the costs of the exchanges themselves starting this year.”
In fact, the ACA provided about $4.8 billion in grants to help states build and promote their Exchanges. As the article explains, before this year, states could use the grant money on overhead costs. However, a new provision that went into effect in January 2015 says that states can’t use the grants on maintenance and staffing costs; grant money must be spent on design, development and implementation costs.
The Fiscal Times spotlights California as a prime example of why state Exchanges are in troubled waters:
One of the worst examples comes from California, where the state’s exchange has been touted the most successful in the country for enrolling thousands of people. Covered California has already used up about $1.1 billion in federal funding to get its exchange up and running and is now expected to run a nearly $80 million deficit by the end of the year, according to the Orange County Register. The state has already set aside about $200 million to cover that, but the long-term sustainability of the program is very much in question.
In addition, state Exchanges like Hawaii might have to switch to the federal Exchange, Healthcare.gov, because of on-going financial solvency issues. “This is a contingency that is being imposed on any state-based exchange that doesn’t have a funded sustainability plan in play,” said Jeff Kissel, CEO of the Hawaii Health Connector.
According to the Post, states with the lowest enrollment are facing the biggest financial problems:
Turning operations over to the federal Exchange seems to be a popular alternative, but it doesn’t come without a cost: $10 million per Exchange, to be exact.
Although there are many options for state Exchanges to consider, it is likely that they will hold off on any final decisions until after the Supreme Court decides King v. Burwell. In this case, the Chief Justices will make a ruling in June that could either send a lifeline to ACA or remove a fundamental pillar of the law by under-cutting its ability to extend health insurance coverage to millions of Americans through its subsidy program.
The appellants in the King v. Burwell case say that IRS rule conflicts with the statutory language set forth in the ACA, which limits subsidy payments to individuals or families that enroll in the state-based Exchanges only. If the Court relies on a literal interpretation of the ACA’s language, millions of Americans who live in more than half of the states where the federal Exchange operates will not receive subsidies, thus undoing a fundamental pillar of the law. (Read more about the court case here.)
Plans and insurers must cover all 18 contraception methods approved by the U.S. Food and Drug Administration, according to a new set of questions and answers on the Affordable Care Act’s preventive care coverage requirements.
“Reasonable medical management” still may be used to steer members to specific products within those methods of contraception. A plan or insurer may impose cost-sharing on non-preferred items within a given method, as long as at least one form of contraception in each method is covered without cost-sharing.
However, an individual’s physician must be allowed to override the plan’s drug management techniques if the physician finds it medically necessary to cover without cost-sharing an item that a given plan or insurer has classified as non-preferred, according to one of the frequently asked questions from the U.S. Departments of Labor, Health and Human Services and the Treasury.
The ACA mandated all plans and insurers to cover preventive care items, as defined by the Public Health Service Act, without cost-sharing. Eighteen forms of female contraception are included under the preventive care list. The individual FAQs on contraception clarified the following requirements.
The FAQ comes just weeks after reports and news coverage detailed health plan violations of the women coverage provisions of the ACA.
Testing and Dependent Care Answers
In questions separate from contraception, plans and insurers were told they must cover breast cancer susceptibility (BRCA-1 or BRCA-2) testing without cost-sharing. The test identifies whether the woman has genetic mutations that make her more susceptible to BRCA-related breast cancer.
Another question stated that if colonoscopies are performed as preventive screening without cost-sharing, then plans could not impose cost-sharing on the anesthesia component of that service.
The U.S. Equal Employment Opportunity Commission (EEOC) recently issued proposed new rules clarifying its stance on the interplay between the Americans with Disabilities Act (ADA) and employer wellness programs. Officially called a “notice of proposed rulemaking” or NPRM, the new rules propose changes to the text of the EEOC’s ADA regulations and to the interpretive guidance explaining them.
If adopted, the NPRM will provide employers guidance on how they can use financial incentives or penalties to encourage employees to participate in wellness programs without violating the ADA, even if the programs include disability-related inquiries or medical examinations. This should be welcome news for employers, having spent nearly the past six years in limbo as a result of the EEOC’s virtual radio silence on this question.
A Brief History: How
Did We Get Here?
In 1990, the ADA was enacted to protect individuals with ADA-qualifying
disabilities from discrimination in the workplace. Under the ADA,
employers may conduct medical examinations and obtain medical histories as part
of their wellness programs so long as employee participation in them is
voluntary. The EEOC confirmed in 2000 that it considers a wellness
program voluntary, and therefore legal, where employees are neither required to
participate in it nor penalized for non-participation.
Then, in 2006, regulations were issued that exempted wellness programs from the nondiscrimination requirements of the Health Insurance Portability and Accountability Act (HIPAA) so long as they met certain requirements. These regulations also authorized employers for the first time to offer financial incentives of up to 20% of the cost of coverage to employees to encourage them to participate in wellness programs.
But between 2006 and 2009 the EEOC waffled on the legality of these financial incentives, stating that “the HIPAA rule is appropriate because the ADA lacks specific standards on financial incentives” in one instance, and that the EEOC was “continuing to examine what level, if any, of financial inducement to participate in a wellness program would be permissible under the ADA” in another.
Shortly thereafter, the 2010 enactment of President Obama’s Patient Protection and Affordable Care Act (ACA), which regulates corporate wellness programs, appeared to put this debate to rest. The ACA authorized employers to offer certain types of financial incentives to employees so long as the incentives did not exceed 30% of the cost of coverage to employees.
But in the years following the ACA’s enactment, the EEOC restated that it had not in fact taken any position on the legality of financial incentives. In the wake of this pronouncement, employers were left understandably confused and uncertain. To alleviate these sentiments, several federal agencies banded together and jointly issued regulations that authorized employers to reward employees for participating in wellness programs, including programs that involved medical examinations or questionnaires. These regulations also confirmed the previously set 30%–of-coverage ceiling and even provided for incentives of up to 50%of coverage for programs related to preventing or reducing the use of tobacco products.
After remaining silent about employer wellness programs for nearly five years, in August 2014, the EEOC awoke from its slumber and filed its very first lawsuit targeting wellness programs, EEOC v. Orion Energy Systems, alleging that they violate the ADA. In the following months, it filed similar suits against Flambeau, Inc., and Honeywell International, Inc. In EEOC v. Honeywell International, Inc., the EEOC took probably its most alarming position on the subject to date, asserting that a wellness program violates the ADA even if it fully complies with the ACA.
What’s In The NPRM?
According to EEOC Chair Jenny Yang, the purpose of the EEOC’s NPRM is to
reconcile HIPAA’s authorization of financial incentives to encourage
participation in wellness programs with the ADA’s requirement that medical
examinations and inquiries that are part of them be voluntary. To that
end, the NPRM explains:
Each of these parts of the NPRM is briefly discussed below.
What is an employee
wellness program?
In general, the term “wellness program” refers to a program or activity offered
by an employer to encourage its employees to improve their health and to reduce
overall health care costs. For instance, one program might encourage
employees to engage in healthier lifestyles, such as exercising daily, making
healthier diet choices, or quitting smoking. Another might obtain medical
information from them by asking them to complete health risk assessments or
undergo a screening for risk factors.
The NPRM defines wellness programs as programs that are reasonably designed to promote health or prevent disease. To meet this standard, programs must have a reasonable chance of improving the health of, or preventing disease in, its participating employees. The programs also must not be overly burdensome, a pretext for violating anti-discrimination laws, or highly suspect in the method chosen to promote health or prevent disease.
How is voluntary
defined?
The NPRM contains several requirements that must be met in order for
participation in wellness programs to be voluntary. Specifically,
employers may not:
Additionally, for wellness programs that are part of a group health plan, employers must provide a notice to employees clearly explaining what medical information will be obtained, how it will be used, who will receive it, restrictions on its disclosure, and the protections in place to prevent its improper disclosure.
What incentives may
you offer?
The NPRM clarifies that the offer of limited incentives is permitted and will
not render wellness programs involuntary. Under the NPRM, the maximum
allowable incentive employers can offer employees for participation in a
wellness program or for achieving certain health results is 30% of the total
cost of coverage to employees who participate in it. The total cost of
coverage is the amount that the employer and the employee pay, not just the
employee’s share of the cost. The maximum allowable penalty employers may
impose on employees who do not participate in the wellness program is the
same.
What about
confidentiality?
The NPRM does not change any of the exceptions to the confidentiality
provisions in the EEOC’s existing ADA regulations. It does, however, add
a new subsection that explains that employers may only receive information
collected by wellness programs in aggregate form that does not disclose, and is
not likely to disclose, the identity of the employees participating in it,
except as may be necessary to administer the plan.
Additionally, for a wellness program that is part of a group health plan, the health information that identifies an individual is “protected health information” and therefore subject to HIPAA. HIPAA mandates that employers maintain certain safeguards to protect the privacy of such personal health information and limits the uses and disclosure of it.
Keep in mind that the NPRM revisions discussed above only clarify the EEOC’s stance regarding how employers can use financial incentives to encourage their employees to participate in employer wellness programs without violating the ADA. It does not relieve employers of their obligation to ensure that their wellness programs comply with other anti-discrimination laws as well.
Is This The Law?
The NPRM is just a notice that alerts the public that the EEOC intends to
revise its ADA regulations and interpretive guidance as they relate to employer
wellness programs. It is also an open invitation for comments regarding
the proposed revisions. Anyone who would like to comment on the NPRM must
do so by June 19, 2015. After that, the EEOC will evaluate all of the
comments that it receives and may make revisions to the NPRM in response to
them. The EEOC then votes on a final rule, and once it is approved, it
will be published in the Federal Register.
Since the NPRM is just a proposed rule, you do not have to comply with it just yet. But our advice is that you bring your wellness program into compliance with the NPRM for a few reasons. For one, it is very unlikely that the EEOC, or a court, would fault you for complying with the NPRM until the final rule is published. Additionally, many of the requirements that are set forth in the NPRM are already required under currently existing law. Thus, while waiting for the EEOC to issue its final rule, in the very least, you should make sure that you do not:
In addition you should provide reasonable accommodations to employees with disabilities to enable them to participate in wellness programs and obtain any incentives offered (e.g., if an employer has a deaf employee and attending a diet and exercise class is part of its wellness program, then the employer should provide a sign language interpreter to enable the deaf employee to participate in the class); and ensure that any medical information is maintained in a confidential manner.
Wondering what your employee is smoking in the break room, likely in violation of your “no-smoking” policy? Chances are it is an electronic smoking device, such as an e-cigarette or vaporizer. What should you do about it? Anything?
Many people are familiar with the increasingly popular e-cigarettes and vaporizers, forcing employers to now grapple with the question of whether to permit these devices in the workplace. The answer to this question is constantly changing based on new and revised laws and regulations. It can be difficult to stay aware of this ever-changing issue.
Not A Fad
Electronic smoking devices, particularly vaporizers, are skyrocketing in
popularity. One example of this continued popularity is shown by Oxford
Dictionary’s selection of the word “vape” as the 2014 word of the year. With
around five million Americans currently “vaping” and a $2.5 billion industry
with a 23% rise in sales in 2014, the electronic smoking industry is here to
stay.
There is no indication that growth will slow down any time soon, as sales are projected to surpass $3.5 billion this year and are leaving companies scrambling to meet rising demand.
How They Work
At a basic level, e-cigarettes and vaporizers allow users to consume nicotine
or other substances without smoking tobacco. However, there are noted
differences between e-cigarettes and vaporizers. E-cigarettes are smaller
cigarette-like electronic devices with batteries that heat a cartridge
containing liquid nicotine until it produces an inhalable vapor.
A vaporizer is comparatively larger than an e-cigarette and resembles a large pen. The vaporizer gradually heat the “e-liquid” with warm air, so it tends to last longer than e-cigarettes. Also, the vaporizer is refillable whereas an e-cigarette cartridge must be replaced when spent. To distinguish electronic vapor from smoke, users have coined the term “vaping,” instead of smoking.
The cartridges and refillable liquids contain mostly liquid nicotine and flavoring. However, there are also small amounts of propylene glycol or vegetable glycerin. The e-liquids also come in a wide assortment of flavors, including traditional tobacco as well as kid-friendly ones like gummy bear, snickerdoodle and watermelon mint.
The Controversy.
So what is all the fuss over these devices? To put it simply, there is not a
lot of established data about the health risks. The technology is new, as the
first e-cigarette was marketed in 2002. Manufacturers only introduced
e-cigarettes to the United States in 2007.
Since the products are new, it is not surprising that scientific data is limited. Scientific studies generally conclude that e-cigarettes and vaporizers are less harmful to an individual’s health than traditional tobacco cigarettes. The problem is that no one knows exactly what “less harmful” means.
Due to these uncertainties, there is significant controversy surrounding these devices. Advocates emphasize the value of e-cigarettes and vaporizers as an effective cessation device. Opponents point to the potential health risks. Studies have found that e-cigarette vapor may contain metal particles, carcinogens like formaldehyde, and enough nicotine to cause measurable secondhand exposure. But the long-term effects of e-cigarette vapor and direct exposure to liquid nicotine are unknown.
Federal And State
Prohibitions.
State and local governments were among the first to take action against
e-cigarettes and vaporizers. New Jersey, Utah, and North Dakota placed bans on
the use of the devices in public places and hundreds of cities have followed
suit. For example, Los Angeles, New York, Boston, and Chicago all banned the
use of e-cigarettes in restaurants, bars, nightclubs, and other public spaces.
Several California cities even require vendors to acquire special licenses to
sell e-cigarettes.
The federal government is now weighing in on the debate. The FDA wants to keep a closer eye on e-cigarette manufacturers. The agency is concerned that manufacturers are not required to comply with cleanliness or safety standards. Manufacturers are also currently under no obligation to disclose ingredients. In 2014, the FDA released proposed regulations that would deem tobacco products, including electronic smoking devices, subject to the federal Food, Drug, and Cosmetic Act.
The proposed rule received more than 82,000 comments during the notice and comment period which ended in August of last year, which likely means that it could be some time before the final rules are released. If approved, it would give the FDA the authority to set age restrictions and the power to partake in rigorous scientific review to monitor the ingredients, manufacturing process, and therapeutic claims of e-cigarette companies.
The Pros And Cons
Why is this relevant to you?
Employers must take action and determine their company’s stance on the issue before a supervisor walks into the break room to find the crew puffing on e-cigarettes. While the debate between opposition groups and advocates is just heating up, don’t wait to act. Weigh the pros and cons of allowing electronic smoking devices in the workplace and determine what is best for your company.
There are many factors that employers must take into consideration. Rightly or wrongly, e-cigarettes are perceived as tobacco. The Surgeon General’s office categorizes e-cigarettes as a “tobacco product.” Many state and local governments restrict e-cigarette usage in the same way as tobacco. Some insurance companies already impose a surcharge on e-cigarette users’ premiums, equating e-cigarettes to tobacco.
Employers with nicotine-free hiring policies, particularly those in the healthcare industry, have started to specifically ban e-cigarette users. As a result, these employers are treating users of e-cigarettes and vaporizers the same as users of traditional tobacco products.
Give serious consideration to whether allowing e-cigarette use in your workplace undermines a smoke-free environment. Allowing this practice is likely to cause distractions, may cause questions or concern from customers, and may anger other employees concerned about the secondary impact on their health.
Although the long-term effects of e-cigarettes and vaporizers are currently unknown, the developing consensus is that secondhand vapor contains nicotine or something worse. As a result, secondhand vapor may pose a risk to pregnant women, the elderly, children, and individuals with asthmatic conditions particularly.
Our Advice
We think that the cautious course of action is to treat electronic smoking
devices the same as traditional cigarettes and other tobacco products under
your no-smoking policy. Taking this step and eliminating the risk is simple:
simply amend your employee handbook to include electronic smoking devices,
e-cigarettes, and vaporizers, in the definition of smoking. Employees will then
have to use e-cigarettes outside or offsite, depending on your particular
policy.
By amending your employee handbook, you reduce risk and eliminate distracting behavior. Nonsmoking employees (almost always the majority) will feel comfortable at work and employees who smoke will only be required to comply with an already familiar procedure. Most importantly, employees will not have to worry about the potential harm caused by e-cigarette use or secondhand vapor.
Although amending the handbook may be the easiest answer, remember to follow the proper procedures when amending your handbook. Ensure that any amendments are in compliance with state law, federal law, and especially the National Labor Relations Act. Finally, ensure that all employees receive a copy of the updated handbook, understand the revisions, and acknowledge in writing that they understand the revisions.
The IRS released the 2016 cost-of-living adjustment amounts for health savings accounts (HSAs). Adjustments have been made to the HSA contribution limit for individuals with family high deductible health plan (HDHP) coverage and to some of the deductible and out-of-pocket limitations for HSA-compatible HDHPs.
The HSA contribution limit for an individual with self-only HDHP coverage remains at $3,350 for 2016. The 2016 contribution limit for an individual with family coverage is increased to $6,750. These limits do not include the additional annual $1,000 catch-up contribution amount for individuals age 55 and older, which is not subject to cost-of-living adjustments.
HSA-compatible HDHPs are defined by certain minimum deductible amounts and maximum out-of-pocket expense amounts. For HDHP self-only coverage, the minimum deductible amount is unchanged for 2016 and cannot be less than $1,300. The 2016 maximum out-of-pocket expense amount for self-only coverage is increased to $6,550. For 2016 family coverage, the minimum deductible amount is unchanged at $2,600 and the out-of-expense amount increases to $13,100.
Florida’s 2015 legislative session started in March with many employment-related measures being introduced. They include:
SB 98, HB 25: Employment Discrimination Creating the Helen Gordon Davis Fair Pay Protection Act recognizing the importance of the Department of Economic Opportunity and the Florida Commission on Human Relations in ensuring fair pay; creating the Governor’s Recognition Award for Pay Equity in the Workplace; and requiring that the award be given annually to employers in Florida who have engaged in activities that eliminate barriers to equal pay for equal work for women
SB 114, HB 47: State Minimum Wage Increasing the state’s hourly minimum wage to $10.10.
SB 156, HB 33: Prohibited Discrimination Revising the Florida Civil Rights Act to include sexual orientation and gender identity or expression as protected characteristics; and prohibiting discrimination based on perceived race, color, religion, sex, national origin, age, sexual orientation, gender identity or expression, handicap, or marital status.
SB 192, SB 246, HB 1: Texting While Driving Revising penalties for violations of the Florida Ban on Texting While Driving Law to include enhanced penalties when the violation is committed in a school zone and removing requirement that provisions be enforced as secondary action by law enforcement.
SB 214, HB977: Discrimination in Employment Screening (“Ban the Box”) Prohibiting an employer from inquiring into or considering an applicant’s criminal history on an initial employment application, unless required to do so by law.
SB 356, HB 121: Employment of Felons Providing incentives for employment of person previously convicted of felony.
SB 456, HB 325: Labor Pools Revising the methods by which labor pools are to compensate day laborers.
SB 528, HB 683: Medical Use of Marijuana Permitting medical use of marijuana and providing licensure requirements for growers and retailers.
SB 890, HB 455: Florida Overtime Act of 2015 Requiring payment of time-and-one-half an employee’s regular rate of pay for all hours worked over eight in a day, over 40 in a work week, or on the seventh day of any workweek.
SB 892, HB 297: Safe Work Environments Subjecting employees to an “abusive work environment” is made an unlawful employment practice, and retaliation for reporting the practice is prohibited.
SB982, HB 625: Discrimination Based on Pregnancy Amending the Florida Civil Rights Act to prohibit discrimination based on pregnancy, childbirth, or related medical conditions. (The Florida Supreme Court in 2014 held that the Act protects against pregnancy discrimination.)
SB1318, HB 589: State Minimum Wage Making it a third degree felony to procure labor for less than minimum wage, i.e., “with intent to defraud or deceive a person.”
SB1396, HB 433: Employment Discrimination Amending the Florida Civil Rights Act to include unpaid interns within the definition of “employee.”
SB1490, HB 1185: Florida Healthy Working Families Act (“Mini FMLA”) Requiring employers to provide sick and safe leave to employees and creating a complaint procedure, plus a civil cause of action for damages and fees in the event of a violation. Employers of more than nine employees must provide paid sick and safe leave; employers of nine or fewer employees must provide unpaid sick and safe leave.
SB 126: Social Media Privacy Among other things, prohibiting an employer from requesting or requiring access to a social media account of an employee or prospective employee under certain circumstances.
SB 1096: Unemployment Compensation Prohibiting disqualification of victims of domestic violence from receiving benefits if they leave work voluntarily.
Job seekers are not the only ones who may say something inappropriate or botch a question during a job interview. A recent survey by CareerBuilder found that approximately 20% of hiring managers reported that they have asked an interview question only to find out later that asking the question possibly violated the law.
It is important for both interviewer and interviewee to understand what employers have (and don’t have) a legal right to ask in a job interview. Even though their intention may be harmless, hiring managers could be putting themselves at risk for legal action by asking certain questions, that some could argue are discriminatory.
A number of hiring managers responding to the poll said they didn’t know if it was legal to ask job applicants about arrest records. Attorneys familiar with the issue agreed that asking about applicants’ criminal records can be tricky for hiring managers.
The Equal Employment Opportunity Commission (EEOC) issued guidance in 2012 designed to help employers understand what they can and can’t ask regarding criminal records.
The EEOC guidance states that an “arrest does not establish that criminal conduct has occurred, and a job exclusion based on an arrest, in itself, is not job-related and consistent with business necessity. However, an employer may make an employment decision based on the conduct underlying an arrest if the conduct makes the individual unfit for the position in question.”
Asking job applicants about their criminal records has become something of a hot employment topic as a growing number of states and municipalities have enacted “ban-the-box” laws that prohibit employers from asking on job applications if job seekers have been convicted of a crime.
Ban-the-box laws generally allow employers to conduct background screenings and ask about convictions later in the employment process—such as during job interviews. However, the constantly changing legal landscape on what employers can and can’t ask on applications and during interviews can confuse and frustrate many hiring managers.
Generally, the best policy is to avoid questions about applicants’ age, marital status, political beliefs, disabilities, ethnicity, religion and family. Some questions that can be legal and seem relevant to the job can be problematic by the way the question is posed. For example, the question “Are you a U.S. citizen?” might seem reasonable if a hiring manager is trying to determine if an applicant is eligible to work in the U.S. However, the better and more legally prudent question is: “Are you eligible to work in the United States?” Asking about a person’s citizenship status could reveal information about ethnic and national origin that could expose employers to complaints of bias.
Many articles on handling OSHA inspections provide the same basic guidelines and little explanation of why employers should take certain steps. You may already know to take photos whenever the Compliance Officer (CO) takes shots and to take notes. But do you know why to take those photos and what to look for? What do you need to note in order to challenge citations when they are issued six months later?
Plan In Advance
Every company site should have a number of managers who know the basic steps to
take whenever any government investigator shows up. The most important step is
for site managers to know whom to call to obtain guidance. No executive or
in-house counsel will be pleased to learn of an investigation upon receipt of a
citation.
At most, site management can deal with evacuating and protecting employees, and dealing with first responders. The company needs a system in place so that with one call the site manager activates corporate support, including legal and risk management guidance, assistance to employees and families, and media management. Set up this system and practice response. Do not assume that you will never face a fatality or catastrophe. Tornadoes, vehicular accidents, and workplace violence can strike any employer.
Make sure that management takes an OSHA inspection seriously. Many employers are unprepared for the aggressive approach now dictated by the current administration. OSHA is a great organization, but even seemingly minor-sounding citations can harm the business. In some industries, a single citation classified as “serious” can harm bidding opportunities. Most of the recent six figure citations have involved repeat violations of routine items such as a missing electric cabinet switch label, a damaged extension cord, partially blocked electric cabinet, or one employee who missed his annual training.
Each violation can serve as the basis for a repeat violation of up to $70,000 per item at ANY company location in any Fed-OSHA state for five years. No inspection is minor. And by the way, OSHA’s improved IT system will allow the agency to better track your corporation’s performance, even when the company operates under many names.
Manage The Inspection
Step one is to ask “why” OSHA is present. Many inspections are triggered by a
complaint and OSHA must tell you the reasons. As of this January 2015,
employers in Fed-OSHA states must report to OSHA every hospitalization for more
than observation, as well as all amputations. An amputation can be as modest as
a tip of a finger. These focused responses increase the probability of an OSHA
visit.
In each of these circumstances, admit OSHA for the purpose of the complaint and limit the inspection to the scope of the complaint. OSHA will broaden the inspection if the officials observe hazards or if employees mention other hazards. But require OSHA to justify expanding the scope. Be courteous and professional with the Compliance Officer but know and exercise your rights. Always focus first on safety, but that attitude does not preclude making OSHA live by its own procedures.
Recognize that OSHA must establish: 1) an applicable standard; 2) a hazard; 3) employee exposure; and 4) that the employer knew of the violation or hazard, or should have known of it with the exercise of “reasonable diligence.” Make sure that a hazard exists. Measure fall distances, check guards, etc. The burden is on OSHA to prove these four elements, so check to see if OSHA can prove that any employees were exposed in the last six months or would reasonably be expected to be exposed in the normal course of business. Is the area isolated? Do employees work near the alleged hazard? How often do employees travel in that area? How long was the hazard present?
OSHA may not document the employer’s “knowledge” of a violation. Any supervising employee’s knowledge of a violation is “imputed” to the company, and even when OSHA cannot prove that a supervising employee knew of the issue, they can establish this element by showing that the employer should have known of the violation with the “exercise of reasonable diligence.”
So OSHA must prove that the employer didn’t enforce safety rules, training was inadequate or the employer made little effort to provide oversight. Show that the company did exercise this due diligence. Other important questions include how long a violation was present, when supervisory employees were last in the area, and whether the employer did any walk-arounds or inspections.
Take Your Time
Don’t be rushed and bullied about documents. Some documents such as OSHA Form
300s and MSDSs must be promptly provided, but you have the right to a
reasonable amount of time to provide other materials. Review them. Consider if
materials may be privileged or protected work product. Don’t volunteer
self-audits, insurance and consultant reports or other similar materials
without talking to counsel.
If documentation is weak, try to determine where on-the-job instruction occurred or where oral instructions were provided. Counsel may be able to use such information as defenses, to reduce the classification, or to build good will. Obtain legal guidance: remember that if you knew of a standard’s requirement and did not follow it, there is a possibility that OSHA might assert a “willful” classification.
In developing defenses dig, dig, dig. There are always more facts. Don’t delegate. Ask the questions yourself.
Exercise your right to sit in on or have counsel attend interviews of any employee who supervises employees because they can bind the company. If a fatality, project delay, or any ancillary legal matter is involved, explain to OSHA that an additional concern is with protecting the company in other legal arenas.
You have an absolute right to sit in with managers but you might as well show courtesy to the Compliance Officer. This is probably a time to involve outside counsel. You may also want to contact counsel about whether OSHA will define an employee as a supervisor. OSHA uses a broader definition than the NLRB, or the wage-hour division.
OSHA has the right to interview hourly employees in private, but you can briefly explain to the employees the reason that they are being interviewed, and that you appreciate their cooperation and to tell the truth. Sometimes it is okay to tell them the topics OSHA may discuss and that may allow a bit of briefing, but mainly encourage them to tell the truth. Ensure that employees know that you appreciate their cooperation with OSHA. OSHA is very sensitive to even a whiff of intimidation or threat of retaliation.
Multiemployer worksites present special challenges. When more than one employer is on site, OSHA can cite the employee’s employer (the “exposing employer”) and the “supervising” employer who was directing the work (such as at construction sites or for contingent workers) or the “creating” employer who generated the hazard, or the “correcting” employer who was responsible to address the hazard, or all of the above!
Unfortunately, it often seems that one employer on site will try to persuade OSHA of questionable facts and throw other employers under the proverbial bus. Be alert.
Push Back
Do go to the OSHA Informal Conference after citations are issued, and do
contest all citations if you have reasonable arguments. Remember that OSHA
focuses on safety and does not consider whether the Secretary can carry its
burdens before a Judge, but their attorneys do recognize this reality.
Negotiations may be fruitful, but don’t contest the matter if you have nothing
to back up your claims.
So long as you ensure OSHA knows that you will and are addressing any hazards, they will understand that your decision is dictated by business necessity and does not show a disregard for safety.
Finally. Do not miss the contest period! And be aware that many of the “State-OSHA plans” have different appeal processes.