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Supreme Court Upholds ACA Tax Credits in Federal Exchanges
06/25/2015

In its much-anticipated decision in King v. Burwell, the Supreme Court has upheld the availability of the ACA's premium assistance tax credits for individuals purchasing insurance through a federally facilitated exchange, including the exchanges maintained for residents of Kansas and Missouri.

Background. This case addressed a seemingly simple proposition: Whether the phrase "an Exchange established by the State" meant only exchanges actually established and operated by one of the 50 states or the District of Columbia or whether it also included exchanges operated by the federal government in states that declined to establish their own exchanges. If the language meant only exchanges actually established and operated by one of the 50 states or the District of Columbia, the ACA's premium assistance tax credits would not be available to the residents of the 34 states that did not establish their own exchanges. This would have a ripple effect under the ACA by potentially limiting the impact of the individual mandate and the employer mandate and impairing the operation of the individual insurance market.

The Court's Analysis. The Supreme Court concluded that the statutory language (“an Exchange established by the State”) was ambiguous and that its meaning should be interpreted in the context of the broader structure of the ACA. It then held that the overall statutory scheme of the ACA compelled the conclusion that the tax credits should be available to individuals purchasing coverage through federally facilitated exchanges. Otherwise the individual insurance market would be destabilized in states with federally facilitated exchanges, likely leading to      Continue Reading...

 
Kansas Legislature (Finally) Finishes Record-Long 2015 Session
06/24/2015

Hiring Preference, Reinstatement Rights, and Tuition Breaks for Veterans  

First, the Kansas legislature enacted HB2154, which allows private employers to “adopt an employment policy that gives preference in hiring to a veteran, provided that the veteran meets the requirements of the vacant position.” To establish a veteran’s preference policy, employers must have a written policy and apply the policy consistently to all decisions regarding initial employment. The preference is only available to veterans who provide proof of honorable discharge or general discharge under honorable conditions.
 
The bill also expands employment reinstatement rights to employees working in Kansas who return from being ordered to state active duty for the Kansas Army National Guard, Kansas Air National Guard, or other military forces. The employees must provide the employer adequate notice and be released from state active duty under honorable conditions to qualify for reinstatement. Previously, this reinstatement right did not apply to members of the National Guard who were employed outside of their affiliated state. 
 
A third provision of the law provides that veterans, active duty members of the armed forces, and their spouses and children are considered residents for purposes of receiving in-state tuition at the public colleges and universities throughout Kansas.
 
Changes to Unemployment Insurance
 
The second change affecting Kansas employers involves the state’s unemployment system. Current law sets a weekly cap on unemployment benefits at 60% of the employee’s average weekly wages, with a maximum of $474 per week. The new law limits maximum weekly benefits at 55% of the employee’s wages,      Continue Reading...
 
Supreme Court Decides Abercrombie Case
06/23/2015

Ms. Elauf had applied for a position in the Abercrombie store in Tulsa, Oklahoma and was interviewed by the assistant store manager there while wearing a headscarf. The assistant store manager used the company’s system for evaluating employees and determined that she was qualified to be hired. Ms. Elauf never said that she wore the headscarf for any particular reason. The assistant manager was concerned, however, because she knew that wearing the headscarf conflicted with the company’s Look Policy. So, the assistant manager sought guidance from her store manager, and then ultimately from the district manager, who confirmed that wearing the headscarf violated the Look Policy, as would any headwear, “religious or otherwise.” Critically, the assistant manager told the district manager that she believed Ms. Elauf wore the headscarf for religious purposes. Ms. Elauf was not hired.

 The EEOC brought this claim on behalf of Ms. Elauf in federal court in Oklahoma. The district court granted summary judgment in favor of the employee, and after a trial on damages awarded her $20,000. The Tenth Circuit, which includes the federal district court in Kansas, reversed the Oklahoma district court ruling and awarded Abercrombie summary judgment. The Tenth Circuit found that an employer is not liable under Title VII for failing to accommodate a religious practice unless and until the applicant makes a request --- and provides the employer with actual knowledge of – their need for an accommodation. The matter was appealed to the Supreme Court, which reversed and remanded the Tenth Circuit      Continue Reading...
 
Make Sure You're Not Singing the "Summertime Blues"
05/31/2015

“Itsy Bitsy Teenie Weenie Yellow Polkadot Bikini”

Unless you’re a lifeguard, a swim suit is almost never proper attire in the workplace. But bikinis are usually the least of your worries when it comes summertime dress-code rule breakers. Some employees may think warmer weather justifies tank tops, shorts, and t-shirts in the office. If you’re wondering whether you should crack down on the employee who’s wearing the very-nice-pair-of-bejeweled-leather-but-still-flip-flops, the first step is to check your company’s dress code.
 
Dress codes should be structured around the necessities of your operation, and grounded in legitimate business purposes. For example, flip flops – no matter how nice – could pose a safety hazard in a workplace with dangerous machinery. And shorts and t-shirts may not fit the corporate business image that your company wants to project with its customer-facing positions. But probably most important, enforce your dress codes evenly. You don’t want to zero in on a female employee’s short shorts and issue discipline, but then ignore the male employee’s “My Co-Workers Are Idiots” t-shirt logo.
 
“Vacation”
 
The summer typically brings an avalanche of vacation requests, but you still have to run your business. So how can you ensure that your entire workforce doesn’t suddenly come down with the flu on July 3? There’s no magic bullet, but there are several things you can do to try to curb absenteeism during the summer, and all year round.
 
First, make sure your attendance policy is clear and precise. It should spell out exactly when employees can take excused absences (e.g., vacation, sick leave, or earned time off), and when      Continue Reading...
 
New IRS Q&As Clarify ACA Reporting Issues
05/29/2015

The IRS has updated two sets of Q&As on its website to clarify a variety of issues related to ACA reporting on Forms 1094-C and 1095-C. Here are some highlights:

  • ALE With No Full-Time Employees. An employer that qualifies as an "ALE member" does not have to report under Code Section 6056 if the employer does not have any full-time employees for any month of the year. This might happen, for example, if an entity is part of a larger group of entities that collectively employ 50 or more FTEs, but the particular entity in question has no full-time employees. This clarification would allow the employer to avoid filing Forms 1094-C and 1095-C, unless the employer actually provides coverage to one or more part-time employees under a self-insured plan sponsored by the employer.
     
  • Hand Delivery of Form 1095-C. An employer that is required to distribute Form 1095-C to an employee may hand deliver the Form 1095-C. It was unclear under prior guidance whether the only permitted distribution methods were first class mail and electronic delivery (with consent). 
     
  • Employee's SSN Required for Form 1095-C. When reporting individuals to whom coverage is provided (either on Form 1095-B or Part III of Form 1095-C), there is an option to use an individual's date of birth if the individual has not provided an SSN. However, when providing Form 1095-C to an employee, the employer must      Continue Reading...
 
Wage and Hour Self-Audits
05/20/2015

In all too many cases the first time an employer takes a critical look at its own wage and hour practices is in the context of an FLSA audit conducted by the Department of Labor. This is less than ideal because the employer has no opportunity to fix or correct issues on its own terms. If the DOL determines a violation has occurred, it will require the payment of back wages (typically going back two years) and depending on the facts and circumstances it can also require liquidated damages (effectively doubling the back wages). In extreme cases or those involving repeat offenses, DOL can impose additional monetary fines known as civil money penalties. 

The good news is that employers don’t have to wait for the DOL to knock on their door to internally assess their wage and hour compliance. Self-audits are an effective tool for this purpose. They can be tailored to the particular employer’s needs in order to stay cost-effective, but provide the most benefit when the scope is similar to what the DOL would do. 
 
Not only does the audit help with overall compliance, but it also demonstrates the employer’s good faith intent to comply with the FLSA.. This can be critical in litigation because it helps to refute the showing of willfulness that the plaintiff will be trying to make in order to extend the period of potential recovery (i.e. statute of limitations) from two years to three years. 
 
There are additional benefits to having legal counsel involved in the audit; namely, potential protection of the      Continue Reading...
 
New ACA FAQs Clarify the Preventive Care Mandate
05/15/2015

A new set of tri-agency FAQs has clarified several issues related to the preventive care mandate. Among the highlights:

  • BRCA Testing. A plan subject to the preventive care mandate must cover (without cost-sharing) BRCA genetic testing for women who have had a prior non-BRCA-related breast cancer or ovarian cancer diagnosis, even if those women are currently asymptomatic and cancer-free and even if there is no family history of BRCA-related cancer. 
     
  • Contraception. A plan subject to the preventive care mandate must cover (without cost-sharing) at least one form of contraception in each of the 18 distinct categories of contraceptive methods identified by the FDA. A plan may use reasonable medical management techniques to encourage use of specific services or FDA-approved items within a particular category (such as steering individuals toward generic prescription drugs), so long as the plan maintains an accessible and expedient exceptions process to allow for coverage (without cost-sharing) of a particular service or item determined by an individual's attending provider to be medically necessary for that individual. 
     
  • Well-Woman Preventive Care for Dependents. If a plan subject to the preventive care mandate covers dependent children, such children must be provided (without cost-sharing) the full range of recommended preventive services applicable to them based on their age group and health condition. This may include, for example, covering services for prenatal care of a pregnant dependent child.
     
  • Colonoscopy      Continue Reading...
 
2016 Inflation Adjusted Amounts for HSAs and HDHPs
05/08/2015

The IRS has released the 2016 inflation-adjusted amounts for health savings accounts (HSAs) and high-deductible health plans (HDHPs).

HDHP Minimums and Maximums. The minimum annual deductible for an HDHP will be $1,300 for self-only coverage and $2,600 for family coverage. These amounts have not changed from the 2015 amounts. The maximum annual out-of-pocket for an HDHP will increase to $6,550 for self-only coverage and $13,100 for family coverage.

"Embedded" ACA Out-of-Pocket Maximum. The Affordable Care Act also sets out-of-pocket maximums for non-grandfathered plans. For 2016, the ACA maximum will be $6,850 for self-only coverage and $13,700 for family coverage (compared to $6,550 and $13,100 for HDHPs). In addition, recent HHS guidance provides that, beginning in 2016, the self-only ACA out-of-pocket maximum must be "embedded" within the family ACA out-of-pocket maximum, meaning that no individual may be subject to out-of-pocket expenses in excess of the self-only maximum. In the case of a plan intended to be an HDHP, this means that (1) the out-of-pocket maximum cannot exceed the lower maximum applicable to HDHPs, and (2) the out-of-pocket maximum for an individual covered under a family plan cannot exceed the ACA maximum for self-only coverage. 

Example. An HDHP for 2016 has a family deductible of $13,100, with no other cost sharing. This is permissible because it does not exceed either the ACA out-of-pocket maximum limit ($13,700) or the lower HDHP out-of-pocket maximum limit ($13,100). However, the plan must further provide that no member of the family will be required to contribute more than $6,850 toward      Continue Reading...

 
DOL "Spouse" Rule on Hold in Four States
04/20/2015

The DOL recently issued a final rule modifying the definition of spouse under the FMLA.  The change would recognize a same-sex spouse for purposes of the FMLA based on where the celebration of the marriage occurred as opposed to where the employee lives.  Shortly after the issuance of the rule, the states of Texas, Louisiana, Arkansas, and Nebraska filed for and obtained a temporary injunction blocking the rules application in those states.  The DOL presently intends to enforce the rule as written in the other 46 states not participating in the filing.  Stay tuned for further developments.

 
H-1B Cap Update for 2016
04/07/2015

USCIS announced the cap for fiscal year 2016 (start date of October 1, 2015) has been reached.  For all those submitting applications for an H-1B, a lottery will be conducted to choose the applications to be considered for the 85,000 slots.  The lottery process is likely to take several weeks as USCIS processes the applications and conducts the random selection process.  Stay tuned and keep your fingers crossed. 

 
Work Authorization for H-4 Visa Holders
04/03/2015

The USCIS announced recently that certain H-4 visa holders (dependents of H-1B visa holders) will become eligible to receive work authorization.  This new rule takes effect on May 26, 2015 and is limited to a specific category of H-4 visa holders.  If the H-4 visa holder's spouse has an approved I-140 (permanent resident application) or has an H-1B extension in place beyond the six-year limit for H-1B status, the H-4 visa holder can apply for and receive an employment authorization document to allow them to work.  This is a significant change for the dependents of those individuals pursuing permanent residence as it will allow them the opportunity to obtain employment as well.  Keep in mind, however, that this rule has a very limited application and does not allow all H-4 visa holder's to obtain employment authorization.  If you qualify under this rule, now is the time to begin preparing the application for employment authorization to be ready to file on May 26th when the new rule takes effect.   

 

 
Wrestling Over Equal Pay
03/24/2015

After winning an Oscar for her role in Boyhood, Patricia Arquette concluded her acceptance speech with an impassioned demand for equal pay: "To every woman who gave birth to every taxpayer and citizen of this nation, we have fought for everybody else's equal rights. It's our time to have wage equality once and for all, and equal rights for women in the United States of America." The audience responded with wild cheers. Meryl Streep and Jennifer Lopez even got up out of their seats and waved their arms.

Not surprisingly, Hillary Clinton, Labor Secretary Tom Perez, and other Democrats praised Arquette's comments and used them to draw attention to the issue of equal pay. "I think we all cheered at Patricia Arquette's speech at the Oscars -- because she's right," Clinton told an audience of working women the next week.

Arquette's message also received support from an unexpected source: A.J. Lee, a three-time World Wrestling Entertainment (WWE) women's champion and one of the most-popular female wrestlers on the circuit. It started when Stephanie McMahon, one of WWE's owners, tweeted, "Thank You @PattyArquette for having the courage to fight for #WomensRights on such a grand platform." Lee then retweeted it, but added a haymaker directed toward McMahon: "Your female wrestlers have record selling merchandise and have starred in the highest-rated segment of the show several times, and yet they receive a faction of the wages and screen time of the majority of the male roster." Wrestling fans showered Lee with support.

Does Lee have      Continue Reading...

 
An ACA Anniversary
03/23/2015

It should not go without notice that today marks the fifth anniversary of the enactment of the Affordable Care Act. 

Love it or hate it, it is difficult to imagine a single piece of federal legislation in the last 30 years that has dominated the landscape in the way the ACA has. It has been to the Supreme Court three times in its short life, with the outcome of the third visit still in question. It has spawned thousands of pages of complex regulations that affect insurers, employers, and individuals. It has implemented reforms that have already substantially changed both the individual and group markets for health insurance. And we're just getting started. 

What will the next five years bring? A wholesale repeal seems unlikely, but can never be totally ruled out. On many of the elements that have already been implemented, a shift from interpretation to enforcement may start to occur. But there will also be countless further pages of interpretive guidance to digest. And one more big piece of the puzzle likely will be snapped into place with the implementation of the "Cadillac" tax in 2018. 

Whatever may come, the ACA seems certain to provide a continued source of conversation and complexity that will impact all of us. So raise a glass (or a finger) to acknowledge the moment and look forward (or not) to what may lie ahead. It's sure to be interesting. 

 
What's Going On Under the Green Dome?
03/16/2015

Budget issues and school finance reform continue to dominate the 2015 Kansas legislative session. But two interesting employment-related bills have been introduced. The first would limit employers from obtaining and using criminal background information in making hiring and other employment decisions. The second proposed law would amend the Kansas Act Against Discrimination to expand the range of protected classifications to include sexual orientation and gender identity.

The Committee on Veterans, Military, and Homeland Security introduced House Bill 2343, titled "An Act relating to employment; concerning fair consideration for persons with a record of criminal convictions." The bill includes the following provisions:

  • An employer may not conduct background checks on applicants unless it has made a good faith determination that the relevant position is of such sensitivity that a background check is warranted or if a background check is required by any federal or state law.
  • All job announcements and position descriptions must contain the following information if the position requires a background check (unless otherwise required by law): "This position is subject to a background check for any convictions directly related to its duties and responsibilities. Only job-related convictions will be considered and will not automatically disqualify the candidate."
  • Job applications may not inquire into an applicant's conviction history.
  • An employer may not use records of an arrest not followed by a valid conviction, or sealed, dismissed, or expunged convictions.
  • An employer may not inquire into or consider      Continue Reading...
 
Federal Legislation Would Clarify Wellness Plan Treatment Under ADA and GINA
03/16/2015

Federal legislation has been introduced that would clarify the treatment of employer wellness plans under the ADA and GINA. It is styled as the "Preserving Employee Wellness Programs Act." Under the act, any wellness plan that meets the requirements imposed by regulations issued under HIPAA and the ACA would not be treated as violating the ADA or Title I or Title II of GINA solely because the plan provides a reward. 

The legislation would respond to confusion over the EEOC's position on how employer obligations under the ADA and GINA intersect with the HIPAA and ACA rules that allow providing a reward (or penalty) to employees who participate in a "health-contingent" wellness program. Although the EEOC has never taken a formal regulatory position on the issue, it has sued several employers over their wellness programs, including at least one program that appeared to satisfy the requirements under HIPAA and the ACA (see prior articles here, here, and here). 

The EEOC is said to be working on a set of regulations to address this issue that may be near release. Employers will want to keep an eye on both these legislative and regulatory developments, as they could have an important (and hopefully helpful) impact on wellness plan design.

A copy of Senate Bill 620, the Preserving Employee Wellness Programs Act, is here

 


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
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