ProView Standard: Emergency Flu Leave Bill, GINA Poster Due, Affordable Health Care for America Act, New FMLA Regulations

November 2009

House Democrats Introduce H1N1 Flu Emergency Sick-Leave Bill

WASHNGTON, D.C. – U.S. Rep. George Miller (D-CA), chairman of the House Education and Labor Committee, and Rep. Lynn Woolsey (D-CA), chair of the Workforce Protections Subcommittee, announced emergency temporary legislation [on November 3] that will guarantee five paid sick days for a worker sent home or directed to stay home by their employer for a contagious illness, such as the H1N1 flu virus. The House Education and Labor Committee will hold a hearing on the legislation the week of November 16.

Among other provisions, the Emergency Influenza Containment Act:

• Guarantees a sick worker up to five paid sick leave days a year if an employer ‘directs’ or ‘advises’ a sick employee to stay home or go home.
• Covers both full-time and part-time workers (on a pro-rated basis) in businesses with 15 or more workers. Employers that already provide at least 5 days’ paid sick leave are exempt.
• An employer can end paid sick leave at any time by informing the employee that the employer believes they’re well enough to return to work. Employees may continue on unpaid leave under the Family Medical Leave Act or other existing sick leave policies.
• Employees who follow their employer’s direction to stay home because of contagious illness cannot be fired, disciplined or made subject to retaliation for following directions. 
• Takes effect 15 days after being signed into law and sunsets after two years.

Read entire release

Special EEO Poster Notice

The Equal Employment Opportunity Commission (EEOC) recently issued an updated “Equal Employment Opportunity is the Law” poster to cover the new genetic information discrimination restrictions, and it is available free of charge.

The Genetic Information Nondiscrimination Act (GINA), which takes effect November 21, 2009, applies to employers with 15 or more employees and prohibits you from refusing to hire an applicant or from discriminating against any employee with respect to the compensation, terms, conditions, or privileges of employment because of “genetic information.” You also must post information in your workplace explaining the GINA requirements, just as you must post information on other discrimination and wage and hour laws.

As a result, the EEOC has updated its EEO poster to include the GINA requirements. This poster is available for free on the EEOC’s website at http://www.eeoc.gov/self_print_poster.pdf. As an alternative, you can post just the GINA requirement next to your current EEO poster, and the EEOC also has provided a supplemental poster online (again, free of charge) at http://www.eeoc.gov/gina_supplement.pdf.

So, be sure to update your workplace posters to include the GINA information before the November 21 effective date.

Reprinted with permission from HR Matters E-Tips, copyright Personnel Policy Service, Inc., Louisville, KY, all rights reserved, the HR Policy and Employment Law Compliance Experts for over 30 years, 1-800-437-3735.  Personnel Policy Service markets group legal service benefits and publishes HR information products, including the free weekly electronic newsletter, HR Matters E-Tips (www.ppspublishers.com/hrmetips.htm).  This article is not intended as legal advice.  Readers are encouraged to seek appropriate legal or other professional advice

The Affordable Health Care for America Act (“AHCAA”)

The U.S. House of Representatives moved closer to an overhaul of the nation’s health care delivery system by passing the Affordable Health Care for America Act (“AHCAA” or the “Act”) late in the evening of November 7, 2009. Passage of AHCAA was not a foregone conclusion headed into the weekend; however, a visit to the Hill by President Obama and adoption of an amendment restricting public funding for abortions ultimately swayed a number of key Democrats who originally had opposed it to vote for the Act. The Act was approved by the House with a vote of 220-215.

The key provisions of the Act include employer mandates, individual mandates, a regulated health insurance marketplace, known as the “Exchange,” a public health plan and various revenue generators to pay for the program. The key provisions of the Act are summarized below:

Employer Mandate – Play or Pay

Starting in 2013, the Act will require employers to either provide health coverage (an “offering employer”) to employees and their eligible dependents or pay a federal payroll tax equal to 8% of all compensation paid to employees (certain small employers are exempt from this tax or are subject to a graduated tax rate). An offering employer generally must automatically enroll eligible employees in their employment-based health plan and offer the employees the option of selecting individual or family health coverage. Under the Act, employers must contribute 72.5% of the premium cost for individual and 65% of the premium cost for family coverage, for the lowest-cost qualified plan. Family coverage under AHCAA includes the employee’s spouse and qualifying children. The Act also requires an offering employer to contribute to the Exchange for each employee who declines employer coverage, but enters the “Exchange” (described below) for insurance if the cost of the employer’s insurance is greater than 12% of the employee’s income. The contribution is generally 8% of the average salary for the employee. Small employers with annual payrolls at or below $500,000 are exempt from this requirement. The contribution phases up from 0-8% between an annual payroll of $500,000 and $750,000, at which point employers are subject to the full 8% contribution requirement.

Individual Mandates

Beginning in 2013, all individuals will be required to have acceptable health insurance coverage that meets or exceeds the qualifications of the federally-defined minimum benefit plan. The federal government will establish the baseline qualifications for coverage. Those who do not have this type of coverage will be required to pay a penalty equal to 2.5% of their income. Waivers are allowed for Native Americans, those with religious objections, dependents and individuals with a financial hardship, defined as premiums over 12% of income. Acceptable coverage generally includes grandfathered individual and employer plans, certain government coverage (e.g., Medicare, Medicaid, certain coverage provided to veterans, military employees, retirees and their families, and members of Indian tribes), and coverage obtained pursuant to the Exchange or an employer offer of coverage.

Health Insurance Exchange

AHCAA establishes a Health Insurance Exchange (to begin in 2013) (the “Exchange”) under the purview of the Health Choices Administration. The Exchange will be a regulated marketplace for individuals and small employers to comparison shop among private and public insurers, including new health insurance co-ops. The Commissioner of the Health Choices Administration is charged with establishing a process through which to obtain bids, negotiate and enter into contracts with qualified plans, as well as to ensure that different levels of benefits are offered through the Exchange with appropriate oversight and enforcement. In Year One, individuals not enrolled in other acceptable coverage, as well as small employers with 25 or fewer employees, are allowed into the Exchange. In Year Two, employers with 50 and fewer employees are allowed into the Exchange. In Year Three, the Commissioner is, at a minimum, required to open the Exchange to employers with 100 and fewer employees, but is permitted from that year forward to expand employer participation as appropriate, with the goal of allowing all employers access to the Exchange. States may opt to operate the Exchange at the state level in lieu of participating in the national Exchange, provided an electing state follows the federal rules.

Public Health Insurance Option

Under the Act, a national public plan will be established in 2013 to compete with private insurers in the Exchange. The public option will operate on a “level playing field” with private insurers, offering the same benefits, abiding by the same insurance market reforms, following provider network requirements and other consumer protections. The Secretary of Health and Human Services will administer the public option and negotiate rates for providers that participate in it. The public health insurance option is provided startup administrative funding, but is required to amortize these costs into future premiums as the option must be self-sustaining – i.e., financed through premiums – after the initial funding. Significantly, providers are presumed to be participants in the public option unless they opt out of participation.

Revenue Generation

The Act contains various provisions meant to generate revenue to pay for the expanded health care coverage called for under AHCAA. Revenue generators under the Act include:

• Distributions from FSAs, HRAs, and HSAs for medicine qualify only if for prescribed drugs or insulin. The Act limits nontaxable reimbursements from health flexible spending accounts, health reimbursement arrangements, and health savings accounts to medicines and drugs prescribed by a medical provider, or insulin. Over-the-counter drugs will no longer be reimbursable through these arrangements under the Act.
• Limitation on health flexible spending arrangements under cafeteria plans. The Act limits salary reduction contributions to health flexible spending arrangements to $2,500 (indexed to the consumer price index).
• Increase in penalty for nonqualified distributions from health savings accounts. The Act increases the 10% penalty on distributions from health savings accounts that are not used to pay for health-related expenditures to 20%.
• Denial of deduction for federal subsidies for prescription drug plans that have been excluded from gross income. Certain employers are eligible for federal subsidies with respect to prescription drug benefits provided to retirees, and the subsidies are excluded from gross income. The Act eliminates the ability of employers to deduct expenses for which they are subsidized.
• Surcharge on high income individuals. The Act levies a 5.4% tax on modified adjusted gross income in excess of $1 million in the case of a joint return ($500,000 in the case of other returns).
• Excise tax on medical devices. The Act establishes a 2.5% excise tax on medical devices sold for use in the U.S. The excise tax does not apply to exported devices and does not apply to retail sales of devices.

AHCAA grew out of H.R. 3200 (aka America’s Affordable Health Choices Act of 2009) and contains a series of compromises and new provisions not found within the predecessor act. The chart below illustrates key differences between AHCAA and H.R. 3200:

The Senate will now take up deliberations regarding national health care reform. After the House bill passed, key Senators went on record as opposing prominent components of the Act, including the “public plan.” However, Senate Majority Leader Harry Reid has indicated he supports a public option, which includes the ability for states to “opt out” if they can provide a reasonable alternative. Additionally, there are key differences between AHCCA and competing bills currently pending in the Senate, including the Health, Education, Labor and Pensions Committee’s (HELP’s) American Health Care Choices Act, and the Finance Committee’s American Health Future Act. The American Health Future Act, for example, does not embrace the “Play or Pay” approach adopted in the Act with respect to an employer mandate. Rather, the Finance Committee bill provides that, starting in 2013, employers with more than 50 employees who do not offer health care coverage to an employee must reimburse the government for each full-time employee (30 or more hours a week) who receives a “health care affordability tax credit,” equal to the average national Exchange credit, and a penalty of up to $400 per number of employees. While the Senate’s current proposed bills do not include the AHCCA’s surtax on high wage earners, the Finance Committee bill includes an excise tax on high-cost insurance plans. This so-called “Cadillac Tax,” which would again begin in 2013 (after the next presidential election), would be a nondeductible excise tax of 40% on premiums in excess of $8,000 for group health individual coverage and $21,000 for group health family coverage.

If these and other differences cannot be addressed in the Senate version of health care reform, the Act and whatever Senate legislation is passed, if any, will be sent to a joint committee for reconciliation. The reconciled bill would then need to be passed by both the House and the Senate. In short, there is still a long way to go before we will know all of the requirements of health care reform. It is impossible for anyone to predict what will ultimately appear in a bill that would be sent to the President for his signature. We will continue to issue Client Alerts addressing key issues under the Act and Senate legislation, as well as updating our clients to new developments in this area of the law.

Note : The information in this Alert was provided to Precept by Proskauer Rose LLP. Proskauer is an international full-service law firm with over 60 employee benefits attorneys located in offices across the United States. The information in this article is not intended as legal advice nor is it intended to provide a comprehensive review of the legal matters discussed. For more information about Proskauer, please contact Peter Marathas at (617) 526-9704 or pmarathas@proskauer.com. ©2009 Proskauer Rose LLP. All rights reserved. Used with permission.

New FMLA Requirements

The 2010 National Defense Authorization Act was signed into law by President Obama on October 28, 2009. Among other things, the bill amends the Family and Medical Leave Act of 1993 (“FMLA”) by expanding its leave provisions relating to "qualifying exigency leave" and "military caregiver leave." As the 2010 NDAA did not include an effective date when these new leave provisions become effective, we believe that all covered employers must amend their FMLA leave policies and practices immediately.

The new amendments extend "qualifying exigency leave" protections to families of active duty servicemembers deployed abroad so that the families can have time to manage certain personal affairs of the servicemember while s/he is on active duty. Previously, such leave was not available to employees whose family member (spouse, child or parent) was in the regular Armed Forces, but, rather, was available only to employees whose family member was in the Reserves or National Guard and who was ordered to active duty as part of a contingency operation. Now, in light of the amendments, FMLA leave is available to covered employees whose spouse, child or parent is in the Armed Forces on active duty and who is deployed overseas. Under the 2009 amended FMLA regulations promulgated by the U.S. Department of Labor (DOL), "qualifying exigencies" include time preparing for short notice deployment, arranging for child care, updating financial or legal arrangements, attending counseling, time for rest and recuperation, and post-deployment activities, among other things.

The 2010 NDAA also amended the FMLA to create leave protections for family members of injured veterans who provide military caregiver leave triggering the FMLA's 26-week leave entitlement. Under the amended law, an eligible employee is entitled to 26 weeks of leave to render care to the employee's spouse, child, parent, or next of kin who is a veteran of the Armed Forces, if at any time within the five-year period preceding the date on which the veteran undergoes medical treatment, therapy or recuperation for a serious injury or illness the veteran had been an active member of the Armed Forces (including those called to active duty in the Reserves or National Guard). Such leave would apply, as well, to the family member who provides care to a veteran whose injury or illness existed before the servicemember's active deployment and was aggravated by active duty service.

All FMLA policies and practices must be updated to reflect these amendments. This information should be communicated to all managers with decision-making authority concerning leaves of absence. We anticipate that the DOL will eventually update its required FMLA notice forms, as well as those relating to certification for protected FMLA leaves.

In the meantime, if you have any questions or require assistance in reviewing or updating your policies, procedures, or Employee Handbook provisions to come into FMLA compliance, please don't hesitate to contact your Precept Account Manager.

Note : The information in this Alert was provided to Precept by Proskauer Rose LLP. Proskauer is an international full-service law firm with over 60 employee benefits attorneys located in offices across the United States. The information in this article is not intended as legal advice nor is it intended to provide a comprehensive review of the legal matters discussed. For more information about Proskauer, please contact Peter Marathas at (617) 526-9704 or pmarathas@proskauer.com. ©2009 Proskauer Rose LLP. All rights reserved. Used with permission.

New York State Commissioner of Labor Offers Guidance on Notice of Rates of Pay and Overtime Rate Provided to New Hires

On October 29, 2009, the Commissioner of the New York State Department of Labor (NYSDOL), M. Patricia Smith, issued guidance in the form of a press release concerning the recently amended New York Labor Law § 195, which addresses employer notice and recordkeeping requirements.

Effective October 26, 2009, New York employers are required to provide written notice of the rate of pay, the overtime rate of pay, and the regular paydays to employees upon hiring. See Proskauer’s Client Alert. The Commissioner has now indicated that the notice to be given to newly-hired employees must be provided on a form available from the NYSDOL, accessible at www.labor.state.ny.us, which can also be found here.

Among other things, the form not only includes a general statement that overtime wages must be paid for all hours worked over 40 per week at the rate of 1½ times the employee’s regular rate of pay, but also highlights the following statement in a large box on the form: “[a]lmost all employees in New York must be paid overtime wages of 1½ times their regular rate of pay for all hours worked over 40 per workweek. A very limited number of specific categories of employees are covered by overtime at a lower overtime rate or not at all.”

The Commissioner’s statement to the effect that “almost all” employees are overtime-eligible ignores statutory exemptions that may apply to employees who fall within the executive, administrative, professional, computer professional, and outside sales exemptions, to name just the most prevalent categories of employees who are not overtime-eligible under federal or state laws. Since the amendment to New York Labor Law § 195.1 does state that the employee “acknowledgment shall conform to any requirements established by the Commissioner with regard to content and form,” New York employers may be obligated to utilize the NYSDOL form at least for their non-exempt employees.

Pursuant to the amendment, newly-hired employees must sign a form acknowledging that they have received the notice. The employer must keep the signed notice on file for at least six years. Notably, the NYSDOL-recommended form reminds employers that it is a criminal misdemeanor to knowingly make a false statement on that form.

In our considered view, the content of the form established by the Commissioner goes beyond the statutory requirements to give notice to employees of their rate of pay, pay date, and overtime rate, if applicable.

Note : The information in this Alert was provided to Precept by Proskauer Rose LLP. Proskauer is an international full-service law firm with over 60 employee benefits attorneys located in offices across the United States. The information in this article is not intended as legal advice nor is it intended to provide a comprehensive review of the legal matters discussed. For more information about Proskauer, please contact Peter Marathas at (617) 526-9704 or pmarathas@proskauer.com. ©2009 Proskauer Rose LLP. All rights reserved. Used with permission.

Doctor’s Orders: The Diabetes Epidemic: You Are At Risk

By Christopher H. Coulter, MD, MPH, Chief Medical Officer

The U.S. is having a diabetes epidemic: 23.6 million Americans have diabetes today, and that’s 13% of the adult population. The rate of diabetes has doubled in the last 10 years. If current trends continue, one in every three Americans will have diabetes at some point during their lifetime. It’s a serious concern – diabetics die at twice the rate of same-age peers, and diabetes shortens life spans an average of 10-15 years. Additionally, diabetes is a leading cause of heart disease, strokes, blindness, kidney failure, and amputations.

Diabetes is preventable and controllable. 95% of those who have diabetes have Type 2 diabetes, which is caused by obesity and generally has an adult onset, although we are now seeing this in adolescents and even children. Avoiding diabetes means maintaining a healthy weight, improving physical activity, and having a balanced diet.

Type 2 diabetes does not develop overnight. Most people first develop “pre-diabetes,” a condition in which the blood sugar is higher than normal, but not in a diabetic range. Individuals in this group also have high blood pressure, high cholesterol, and waist sizes of 40 inches or greater for both men and women. This is a group at high risk of developing full-blown diabetes. It is also important to keep an eye on blood sugar, since almost 20% of those with diabetes do not know they have it.

For those who do have diabetes, some are able to reverse the condition. Pregnant women may develop diabetes during pregnancy, and often this goes away after the child is born. Others who have developed diabetes sometimes have success with strict weight loss and diet plans to control or reverse diabetes, without the need for medication. Most of those who acquire diabetes, however, will require medication to control both the diabetes and its complications. This treatment is critically important, since good control of blood sugar for diabetics reduces the risk of blindness and kidney failure, and good control of blood pressure reduces the risk of heart disease and stroke.

The bottom line for you is to prevent diabetes where you can, check your blood sugar periodically to find pre-diabetes or early diabetes, and care for your diabetes aggressively if you have it. That’s how we can beat the diabetes epidemic.

For more information, please visit www.stopdiabetes.com.