Kansas Employment Law Blog Photo
 
HIPAA Settlement Highlights Focus on Security Concerns
12/15/2014

The latest announcement by HHS regarding settlement of an investigation under the HIPAA privacy, security, and breach-notification rules reflects an increased focus by HHS on security-related issues and the need for health plans and other covered entities to take reasonable steps to protect PHI from hacking, viruses, and malware attacks.

Background. The covered entity in this case (a non-profit community mental health services organization) reported a breach affecting the PHI of approximately 2,700 individuals. The breach was caused by a malware attack on the covered entity’s IT system. The system was using outdated software that made it vulnerable to attack. Following the HHS investigation, the covered entity agreed to a settlement that included a cash payment of $150,000 and a two-year corrective action plan.

Keep Your Software Updated! A key takeaway from this case is that covered entities will be held responsible for maintaining a sound IT infrastructure. System software must be kept up-to-date, and appropriate technical security measures must be implemented, such as firewalls capable of threat monitoring.

Common Sense Approach. Although covered entities may have varying degrees of technical sophistication, HHS’s press release emphasized the need for a “common sense approach” to risk mitigation. “This includes reviewing systems for unpatched vulnerabilities and unsupported software that can leave [PHI] susceptible to malware and other risks.”

Adopting Policies Isn’t Enough. Another key takeaway is that adopting policies and procedures to address the HIPAA privacy and security rules is only the beginning of an appropriate HIPAA compliance program. The policies must be implemented, followed, and      Continue Reading...

 
Court of Appeals Weighs in on H-2B Wage Rule
12/08/2014

In a recent decision, the U.S. Court of Appeals for the Third Circuit rejected the Department of Labor's (DOL) 2009 guidance regarding the use of private employer surveys for determining prevailing wages under the H-2B program.  The Court found that the usage of the private wage surveys had the effect of depressing wages which harms H-2B workers and U.S. workers.  The Court also found a harm to U.S. employer that could not afford to do a private wage survey and were required to use DOL's wage data which was higher than the private survey data.  The likely effect of the decision will be a push to the use of the DOL's wage data rather than private surveys. 

The decision is just another step down the windy and painful road of prevailing wage complications for H-2B employers.  Stay tuned as DOL plans to engage in further rulemaking on the H-2B prevailing wage front.

 
Corporate Media Policy Runs Afoul of the National Labor Relations Act
12/03/2014

Does your Company have a policy prohibiting employees from speaking to media representatives about the Company?  If so, your policy might be unlawful under the National Labor Relations Act (NLRA).  As a short review, the NLRA protects the rights of employees to engage in concerted activities for their mutual aid or protection with respect to their terms and conditions of employment.  In simple form, anything an employer does to interfere or prevent employees from joining together to address workplace concerns can run afoul of the NLRA. 

In a recent decision, an Administrative Law Judge (ALJ) found a Company media policy overbroad and prevented employees from engaging in protected activities under the NLRA.  The particular policy simply stated that if contacted by the media that "no information exchange is permitted" unless done so by the specifically appointed Company spokesperson.  While the Company tried to assert the policy did not expressly prohibit employees from engaging in NLRA protected activity, the ALJ noted the terms of the policy were "ill defined" and "the guideline, as written, could also encompass and prohibit communications about wages, labor disputes, and other terms and conditions of employment."  The ALJ followed a prior case from 2008 in which a similar corporate media policy was struck down as unlawful.  What is important to note is that in both cases the employer argued a significant need to limit media communications to the centralized corporate spokesperson for official comments to the media for a range of reasons.  These arguments failed and are likely to continue to fail in the immediate future. 

The policies      Continue Reading...

 
IRS Releases 2015 COLAs for Benefit Plans
12/02/2014

The IRS has released the annual cost of living adjustments for various benefit-plan limits. The adjusted amounts will apply for 2015. Here are the highlights:

  • Retirement plan elective deferrals (402(g) limit) - $18,000 ($500 increase)
  • Retirement plan catch-up contributions - $6,000 ($500)
  • Annual additions to a defined contribution plan (415 limit) - $53,000 ($1,000 increase)
  • Definition of highly compensated employee - $120,000 ($5,000 increase)
  • Annual compensation limit (401(a)(17) limit) - $265,000 ($5,000 increase)

For individuals age 50 and older, these increased limits represent the ability to electively contribute up to $24,000 to a 401(k) plan, 403(b) plan, or governmental 457(b) plan during 2015. 

Inflation-adjusted amounts for high deductible health plans (HDHPs) and health savings accounts (HSAs) were released earlier this year (see prior post here).

 
DOL Delays Proposed Amendments for White Collar Exemptions
11/26/2014

The Department of Labor recently announced that the roll-out of its proposed amendments to the white collar exemption regulations under the Fair Labor Standards Act (which were previously scheduled for a November release) have been pushed back to sometime in 2015.  Various reports have targeted a release date between February and May.   

From comments by the Secretary of Labor earlier this year, these amendments are expected to significantly restrict the scope of the white collar exemptions with the goal of making more employees eligible for overtime.  It’s likely that DOL will seek to achieve this goal through a combination of a higher minimum salary (currently $23,660 per year) along with stricter job duty requirements. 
 
While these changes may be significant, they are not imminent.  The proposed amendments will be open for a period of public comment that is at least 30 days, and usually from 90 to 120 days.  After that period is closed, DOL will digest the comments and determine if any of the amended regulations should be revised before they are published for final implementation.  It’s unlikely that any of the proposed changes will be in place before the end of 2015 at the earliest.   
 
President Obama to Announce Executive Action on Immigration
11/20/2014

President Obama is scheduled to announce his executive action on immigration tonight in a nationally televised speech.  The details of the plan will become more clear in the coming days; however, the early information seems to indicate an expansion of the already existing deferred action program.  This latest executive action (or frankly inaction) will expand coverage to another group of illegal aliens estimated to number around five million.  Putting aside all the rhetoric surrounding the action, President Obama will simply be promising all those in the eligible population (those living in the U.S. for at least five years) that apply to not deport them.  In addition, those individuals will be able to obtain a work authorization document which will allow them to legally work in the United States.  Stay tuned tonight and in the coming days as we get a better understanding of the full details of the proposal.  The key thing to remember is to tune out the political rhetoric from all sides and focus on the facts and details of the executive action.  From all indications, President Obama won't be doing anything different from what was already done several years ago when the deferred action program was launched.

 
EEOC Concern About Targeted Job Advertisements
11/19/2014

Does your company utilize social media outlets to recruit employees?  If so, you might take a moment to consider the EEO risks of utilizing targeted advertising the social media sites utilize on your behalf.  If your social media hiring is being targeted to a narrow set of social media users it could leave you exposed to an accusation of discriminatory hiring practices.  The possibility that your ads are being targeted at a specific age, race, gender, or ethnic population could attract the EEOC's attention.  This risk can be particularly high if your hiring is heavily utilizing targeted advertisements of this nature. 

 
EEOC Catches Grief Over Wellness Plan Litigation
11/18/2014

The political maneuvering following the mid-term elections has begun.  As discussed in a prior post (click here), the expectation of more Congressional "oversight" continues to become a reality.  In a recent Senate hearing, the EEOC Commissioner and the EEOC General Counsel were roughed up a bit over the EEOC's recently filed wellness plan litigation.  (Click here for Jason's prior article on the litigation)  The clear message coming out of the Senate hearing was that the EEOC should think very carefully before engaging in the course of filing litigation against employers as it relates to wellness plans.  One of the criticisms directed at the EEOC was the lack of ADA guidance as it relates to wellness plans.  Look for this to get further attention as the new legislature convenes in 2015.   

 
The Lessons of the Recent Ebola Outbreak
11/12/2014

Now that the U.S. has been officially declared Ebola-free, it's a good time to review some key takeaways from the treatment and quarantine of Ebola.  These lessons can be applied in just about any context.  Whether facing a deadly disease like Ebola or a major workplace change that feels like an Ebola outbreak.

1.  Educate and Inform:  Many employee fears can be addressed with timely education and information.  Ebola news coverage was unavoidable and as a result, there seemed to be a disproportionate fear of contracting and transmitting the disease in the U.S.  News coverage aside, statistics don't lie.  The CDC considers the risk of a U.S. outbreak to be very low.  There appear to have been ony two cases of Ebola acquired in the U.S. (both were healthcare workers in Dallas).  Both recovered and have been declared Ebola-free.  The other Ebola cases were individuals that acquired Ebola outside the U.S. 

2.  Identify and Focus on Real Risks:  Nothing incites fear and panic more than misinformation.  The Ebola outbreak gives employers an opportunity to remind employees of more realistic workplace concerns.  Ebola is not easily contracted and infection requires direct contact wtih an Ebola patient while the person is exhibiting symptons.  While the spread of Ebola in the workplace is unlikely, the characteristics of Ebola mimic a much more common plague in the U.S.  The symptoms include fever, headache, muscle pain, weakness, fatigue, diarrhea, vomiting, and stomach pain.  These sound very familiar.  When I hear these symptoms I think flu bug.  Take this as an      Continue Reading...

 
Happy Veteran's Day
11/11/2014

Today is a great day to remember the sacrifices made by our veterans.  Stop and take a moment to thank a veteran for their service to our country.  The freedoms we all enjoy on a daily basis are provided by those who are currently serving and those that have served in the past.  For employers, Veteran's Day is a great time to reflect on your employment policies and practices to ensure compliance with the Uniformed Services Employment and Reemployment Rights Act (USERRA).  For more reading on the topic check out Department of Labor Fact Sheet on USERRA located here

 
The Impact of Election Day 2014
11/06/2014

The elections of 2014 have come and gone in most jurisdictions (there are some runoff elections still pending).  The results for Washington will be a divided government with Republicans holding the House and Senate and Democrats holding the White House.  How this will play out in the next two years is anyone's guess.  The most likely obvious impact will be the need for both sides to compromise to move legislation forward.  This should hold the pace of dramatic change down quite a bit.  Here are a few things to keep an eye on:

1.  Immigration reform efforts might be one of the first testing grounds for this new relationship.  President Obama has vowed to take action via Executive Order while Congress seems to bristle at the idea.  Both sides seem to be preparing to "visit" about the issues.  This might be the year we see comprehensive immigration reform move forward.  Remember several years ago the Senate passed a comprehensive reform bill. 

2.  Administrative agencies continuing to push forward.  Over the last several years the Department of Labor, the National Labor Relations Board, the Occupational Safety and Health Administration and the Equal Employment Opportunity Commission have all pushed forward with a strong regulatory agenda.  These agencies are able to change the course and direction of labor and employment law as they manage enforcement of existing laws and regulations. 

3. With the likey continuation of agency activity expect to see Congress increase its "oversight" of these agencies.  The push back against the agencies will come via budgetary actions and/or increased hearings and scrutiny of actions.

From a legislative      Continue Reading...

 
IRS and HHS Rein in Minimum Value Plans
11/05/2014

New guidance from the IRS and HHS aims to quickly scuttle the use of health plans designed to push the limits of minimum value. These plans (sometimes referred to in the market simply as “minimum value plans,” “MVPs,” or “MV lite”) aimed to reduce cost by excluding coverage for key benefits, such as physician services or inpatient hospitalization, but were nonetheless said to provide minimum value because they qualified under the MV calculator.

The Concept. The idea behind MVPs was to create a plan that would allow a large employer to avoid all penalties under the ACA’s employer shared responsibility mandate at relatively low cost. As minimum essential coverage that provided minimum value, an MVP would allow a large employer to avoid all penalties, so long as the plan was affordable. And due to the relatively low cost, employers could make MVPs affordable with little or no premium subsidy.

But the effect of MVPs was not limited to penalty avoidance by employers. Employees who are offered coverage under an affordable, minimum value plan are ineligible for premium tax credits (PTCs) through state and federal exchanges, even if they turn down the employer-sponsored coverage. And with MVPs, this meant employees could be knocked out of PTC eligibility with an offer of coverage under a plan that intentionally excluded a significant category of benefits (e.g., inpatient hospitalization). This may well have been their undoing.

MV Calculator. Why did this seem to work? It all came down to the MV calculator. Final HHS regulations and      Continue Reading...

 
A Freaky Non-Compete Non-Sequitur
11/4/2014

Recently, a restaurant made headlines for something other than its food.  A restaurant employee leaked a version of the store's non-compete agreement and the document raised some eyebrows.  Specifically, the leaked document provided that employees would not work at any restaurants within three miles of a store if the other restaurant "derives more than 10% of its revenue from selling submarine, hero-type, deli-style, pita and/or wrapped or rolled sandwiches.:  Although there was no discussion about whether the store ever tried to enforce the non-compete agreement, it does raise some interesting questions for employers to consider when it comes to restrictive covenants like a non-compete.

The first question is most likely whether the agreement is enforceable.  Like most legal questions, the answer is "it depends".  In order to reach a more definitive answer there are a number of questions to ask.  In what state was the store located?  In what state is the dispute arising?  Was it a delivery driver, food preparation staff, hostess, waitress, or store manager that signed the agreement?  The answers to these types of questions can make a big difference and can determine whether the agreement is enforceable.

Another common question related to a non-compete agreement is why?  Employees who are asked to sign non-compete agreements frequenly ask employers why such an agreement is necessary.  A court considering enforcement of a non-compete is likely to wonder the same thing.  While employer responses may vary, typcially the goal is to protect confidential information, trade secrets, customer lists, etc.  The application of the non-compete to the types of concerns can vary dramatically depending on the employee and the specific position.  Employers should      Continue Reading...

 
CMS Indefinitely Delays HPID Implementation
11/01/2014

On the eve of the deadline for large controlling health plans (CHPs) to obtain an HPID, CMS has announced that it is indefinitely delaying enforcement of the regulations that require obtaining an HPID and using the HPID in covered transactions. The announcement is effective October 31, 2014 and applies “to all HIPAA covered entities, including healthcare providers, health plans, and healthcare clearinghouses.”

What Does This Mean for Large Health Plans? The immediate impact of this announcement appears to be that large CHPs are no longer required to obtain an HPID by the November 5, 2014 deadline. Whether or when they may be required to do so in the future will depend on when (or if) CMS decides to begin enforcing the regulations again.

What Does This Mean for Small Health Plans? The deadline for small CHPs to obtain an HPID was November 5, 2015. Technically, that deadline has been suspended as well, although with a year between now and then, it’s possible that CMS could reverse course and begin enforcing the rule again before then. So small plans should monitor the status of the rule, but likely will not want to attempt to obtain an HPID until further notice.

Where Did This Come From? The CMS announcement references a September 23, 2014 report from the National Committee on Vital and Health Statistics (NCVHS). In that report, the NCVHS unequivocally recommended that covered entities not begin using an HPID in transactions involving health plans. The report argues that there is already a      Continue Reading...

 
EEOC Turns Up the Heat on Employer Wellness Plans
10/31/2014

Adding to a flurry of recent activity (see here and here), the EEOC has challenged the wellness plan maintained by Honeywell International, alleging that it violates both the ADA and GINA. The EEOC is seeking a preliminary injunction against Honeywell that would stop further implementation of the plan.

Plan Terms. Based on the facts described in the EEOC’s court filings, Honeywell employees are asked to undergo a biometric screening that includes a blood draw. If the employee has family coverage, the employee’s spouse is asked to complete the biometric screening as well. If employees (or their spouses) do not complete the screening, they pay a “surcharge” on their annual premium of up to $2,500 (a base surcharge of $500, plus tobacco-related surcharges of $1,000 for individual coverage or $2,000 for family coverage). They also lose up to $1,500 in employer contributions to an HSA.

ADA - Voluntariness. The EEOC’s argument under the ADA is that the biometric screening under Honeywell’s plan is not voluntary and, thus, is a prohibited medical examination. Although employees are not required to submit to the biometric screening, the premium surcharges and lost HSA contributions are enough to render the screening involuntary.

ADA - Underwriting Safe Harbor. The EEOC also argues that the wellness plan is not protected by the ADA’s underwriting safe harbor. That safe harbor permits “establishing, sponsoring, observing or administering the terms of a bona fide benefit plan that are based on underwriting risks, classifying risks, or administering such risks that are based on      Continue Reading...

 


Authors
Don Berner Image
Don Berner, the Labor Law, OSHA, & Immigration Law Guy
Boyd Byers Image
Boyd Byers, the General Employment Law Guy
Jason Lacey Image
Jason Lacey, the Employee Benefits Guy
Additional Sources
Subscribe to Kansas Employment Law Letter Image
Subscribe to Kansas Legislative Insights Image