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New ACA FAQ Addresses Elimination of Contraceptive Coverage

A new FAQ (Part XX in the series) addresses the disclosure obligations of an employer that elects to eliminate contraceptive coverage in light of the Supreme Court's Hobby Lobby decision. It describes obligations under ERISA and, specifically, the employer's obligation to update its SPD by adoption of a new SPD or summary of material modifications (SMM).

60-Day Deadline. SMMs generally must be provided by 210 days after the end of the plan year in which a plan modification occurs. However, a modification that is a material reduction in covered services or benefits under a group health plan must be provided within 60 days after the date the modification is effective. The FAQ indicates that a decision to reduce or eliminate contraceptive coverage would be considered a material reduction in covered services or benefits, thereby requiring notice within 60 days.
What About SBCs? Interestingly, the FAQ makes no reference to the summary of benefits and coverage (SBC). In general, if there is a mid-year plan modification that affects the content of a previously provided SBC, notice of the modification must be provided at least 60 days in advance of the effective date of the change.
Perhaps the failure to address this obligation reflects a conclusion that elimination of all or a portion of contraceptive coverage would not affect the content of the SBC and, therefore, does not trigger the advance-notice requirement. (A review of the sample SBC on the DOL's website shows no reference to contraception or other preventive care.) But any employer considering      Continue Reading...
Out and About - July 2014

Here's a listing of my scheduled speaking engagements for the next two months. Drop by and say hi, if I'm going to be near you.

  • July 15, 2014 - State and Federal Exchanges: Employer Notice and Other Administrative Impacts (panel) - EBIA Advanced Cafeteria Plans and Benefits Conference - Seattle, Washington
  • July 15, 2014 - Code § 4980H Plan Design and Administration Impacts (panel) - EBIA Advanced Cafeteria Plans and Benefits Conference - Seattle, Washington
  • July 16, 2014 - Information Reporting for Employer Plans Under Code §§ 6055 and 6056 (panel) - EBIA Advanced Cafeteria Plans and Benefits Conference - Seattle, Washington
  • July 17, 2014 - Health Care Reform Impacts for Small Employers - EBIA Advanced Cafeteria Plans and Benefits Conference - Seattle, Washington
  • August 12, 2014 - HIPAA Privacy and Security for Self-Insured Health Plans - Private Client Event - Webinar
Considering the Scope and Impact of the Supreme Court's Hobby Lobby Decision
The Supreme Court's Hobby Lobby decision answered the question whether certain for-profit employers may, on religious grounds, avoid complying with the ACA's contraception mandate. But in doing so, it raised a number of other questions regarding the scope and impact of its decision.
Background. The Hobby Lobby case involved three for-profit corporations (Hobby Lobby, Mardel, and Conestoga Wood Specialties) whose owners objected, on religious grounds, to fully complying with the portion of the ACA's preventive-care mandate that requires most health plans to provide coverage (without cost-sharing) for all FDA-approved contraceptive methods for women. Specifically, these owners objected to a subset of contraceptive methods that they believed to be abortive - drugs such as "Plan B" and devices such as IUDs.
Ruling in favor of these employers, the court held that a separate federal statute, the Religious Freedom Restoration Act (RFRA), prevented enforcement of the contraception mandate against these employers because doing so would violate a sincerely held religious belief of the employers and because the mandate to provide coverage was not the "least restrictive means" of implementing the government's interest in ensuring access to these contraceptive methods.
Which Employers? One question that remains after the court's decision is which employers might be able to obtain a similar reprieve from compliance with the mandate. On its face, the decision applies to closely held for-profit corporations whose owners have sincerely held religious beliefs that are shared by the corporation. But many definitional issues remain.
Closely Held. What does it mean for an organization to be closely      Continue Reading...
2015 Inflation Adjusted Amounts for HSAs and HDHPs

The IRS has released the 2015 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 increase to $1,300 for self-only coverage and $2,600 for family coverage. The maximum annual out-of-pocket for an HDHP will increase to $6,450 for self-only coverage and $12,900 for family coverage.

Relationship to ACA Maximum Out-of-Pocket. The Affordable Care Act also sets out-of-pocket maximums for non-grandfathered plans. For 2014, the ACA maximum and the HDHP maximum are the same. But the amounts are indexed at different rates, and for 2015 they will be different. The ACA maximum will be $6,600 for self-only coverage and $13,200 for family coverage (compared to $6,450 and $12,900 for HDHPs). What does this mean? A plan designed to satisfy the ACA maximums will not necessarily qualify as an HDHP. It will need to satisfy the lower maximum applicable to HDHPs. 

Maximum HSA Contribution. The maximum annual contribution to an HSA for 2015 will increase slightly to $3,350 for an individual with self-only HDHP coverage and $6,650 for an individual with family HDHP coverage. Catch-up contributions for individuals age 55 and older are not inflation-adjusted and remain at $1,000 per year.

Recall that these annual maximums are prorated on a monthly basis for an individual who is covered under an HDHP for less than the full year. Also, special rules apply when one or both spouses have HDHP coverage, with the general effect of limiting the household to a single family-level      Continue Reading...

DOL Proposes Rule to Raise Minimum Wage for Federal Contract Workers

The Department of Labor issued a proposed rule raising the minimum wage for employess working on federal government service and construction contracts to $10.10 per hour. The proposed rule implements Executive Order 13658, which was announced by President Obama on February 12. The Executive Order applies to new and renewed contracts with the federal government after January 1, 2015. The proposed rule now goes through a public comment period. To read the DOL's press release click here.  Stay tuned for further developments on the proposed rule.   

FMLA Master Class for Kansas Employers

Spend a day with Foulston Siefkin employment lawyers taking a deep dive into FMLA issues such as curbing abuse and fraud, ensuring that  you are in compliance with tricky notice requirements, and how to issue discipline and terminate employees without running afoul of the FMLA.  This day-long course is offered on June 18, 2014, starting at 8:30 a.m., at the Commerce Bank Center, 1551 N. Waterfront Parkway, Wichita, Kansas.  This course has been approved for up to 6.25 hours of PHR/SPHR credit.  If you’d like to sign up, please visit www.HRHero.com/ks-fmla to register.  If you use the “Friends of Foulston” code S1491, you can receive a 20% discount on the registration fee.

How About Lunch?

If you are an HR professional, or know someone who is, we invite you to join us at any one of our 2014 HR Box Lunches this year. This is a chance for you to join us for lunch, brush up on some of the top issues in your field, and earn some CLE. 

Here is the schedule:

The NLRB and the Non-Union Employee: July 16, 2014

FMLA Basic: August 21, 2014

Religion in the Workplace: September 9, 2014

Employee Benefits Update: September 25, 2014

***TO BE DETERMINED: October 7, 2014 (Please send topic suggestions to mknoblauch@foulston.com)

Union Avoidance: November 19, 2014

Wage & Hour Update: December 9, 2014 

You can learn more information and sign up for any of the above lunches here. We hope to see you soon!

Drunk employee who fell through roof still gets workers’ comp

After throwing back a few beers on a Sunday morning, an employee was instructed to repair the roof of a building. While he was on the roof, a swarm of ants attacked him, and he fell through the roof as he tried to brush them off. Although the employee’s blood alcohol level was over .09 percent at the time of the accident and he tested positive for marijuana and cocaine, the Kansas Court of Appeals held that the Workers’ Compensation Board was justified in awarding him workers’ comp benefits. The employer failed to show the employee’s intoxication “contributed to” his injury (a defense to workers comp liability) because a sober person could just as easily have fallen through the roof in the same circumstances. The case is Gideon v. Yost Properties.

Out and About - June 2014

Here's a listing of my scheduled speaking engagements for the next two months. Drop by and say hi, if I'm going to be near you.

  • June 4, 2014 - 2014 Health Care Reform Workshop - Foulston Siefkin LLP - Wichita, Kansas
  • June 5, 2014 - 2014 Health Care Reform Workshop - Foulston Siefkin LLP - Wichita, Kansas
  • June 10, 2014 - Employee Benefits and Insurance Coverage Issues Facing Cancer Patients - ABA Breast Cancer Task Force Webinar
  • June 11, 2014 - Overview of HIPAA Privacy and Security - Friends University Graduate Course in Health Law and Ethics - Wichita, Kansas
  • June 17, 2014 - DOL Audits of Employee Benefit Plans - Private Client Event - Webinar
  • June 19, 2014 - 2014 Health Care Reform Workshop - Foulston Siefkin LLP - Overland Park, Kansas
  • June 23, 2014 - Wellness Plans and ERISA - Private Client Event - Webinar
  • July 15, 2014 - State and Federal Exchanges: Employer Notice and Other Administrative Impacts (panel) - EBIA Advanced Cafeteria Plans and Benefits Conference - Seattle, Washington
  • July 15, 2014 - Code § 4980H Plan Design and Administration Impacts (panel) - EBIA Advanced Cafeteria Plans and Benefits Conference - Seattle, Washington
  • July 16, 2014 - Information Reporting for Employer Plans Under Code §§ 6055 and 6056 (panel) - EBIA Advanced Cafeteria Plans and Benefits Conference - Seattle, Washington
  • July 17, 2014 - Health Care Reform Impacts for Small Employers - EBIA Advanced Cafeteria Plans and Benefits Conference - Seattle, Washington


Foreign Student Employment

As the end of the school year approaches and summer begins, employers utilizing the services of foreign students as employees should take a moment to review the work authorization of those individuals.  It is important to remember the student's presence in the U.S. doesn't necessarily mean the student is authorized to work.  In addition, those students with work authorization may have an expiring work authorization which is equally problematic for employers. 

Foreign students in the U.S. typically obtain work authorization through one of two vehicles -- CPT or OPT.  CPT stands for curricular practical training and OPT stands for optional practical training.  The authority to work under CPT and OPT are dramatically different.  CPT is work authorization provided through the university for a specific employer for a limited time period (typically a semester).  Think of CPT as an internship while going to school.  Also remember that while CPT has a short approval length, the university can typically provide additional semesters of CPT time.  OPT is typically used by students upon completion of a degree program.  Students taking OPT time are not limited to a specific employer and receive an employment authorization document allowing work at any employer.  OPT is also generally for a twelve month period and in most cases cannot be renewed/extended. 

The key message for employers is to keep an eye on the types and expiration dates for work authorization.  Allowing a student to continue working after the expiration of the CPT or OPT time can result in fines for employers and immigration status problems for the student. 

DOL Updates COBRA Notice Regulations and Model COBRA Notices

Earlier this month, the Department of Labor (DOL) issued proposed amendments to the COBRA notice regulations and released updated model notices for the COBRA general notice and the COBRA election notice.

Proposed Regulations. The proposed changes in the actual regulations are largely unremarkable. The DOL is basically proposing to give itself the ability to update the model COBRA notices at any time by posting a new one to its website, rather than actually amending its regulations each time a model notice is updated. (The original model notices were issued as appendices to the actual regulations.)

The preamble to the proposed regulations provides some assurance that the new model notices may be relied on even though the regulations aren't final: “Until rulemaking is finalized and effective, the Department of Labor will consider use of the model notices available on its website, appropriately completed, to be good faith compliance with the notice content requirements of COBRA. The Department notes that the use of the model notices is not required. The model notices are provided solely for the purpose of facilitating compliance with the applicable notice requirements.”

New Model Notices. Both the model general notice and the model election notice have been updated and posted to the DOL website.

  • General Notice. Ignoring the ARRA COBRA-subsidy notices (remember those?!), this is the first update to the model general notice since 2004. Other than some general wordsmithing, the primary change is to add some general discussion of Marketplace coverage and the related premium-assistance tax credits and cost-sharing reductions.      Continue Reading...
Kansas Legislature Sends Teachers’ Due Process Rights Out for Recess

The Kansas Legislature passed, and the governor signed, House Bill No. 2506, which eliminates due process rights for most Kansas public school teachers, including elementary, junior high, and high school teachers. The new law does this by narrowly defining “teacher” to include only teachers and instructors at community colleges and technical colleges.  Accordingly, the statutory due process procedures for challenging a proposed termination apply only to these types of public teachers.  

Teachers employed by school districts will continue to receive contracts on a yearly basis. Both the teacher and the school district must provide proper notice of the intent not to renew the teacher’s contract for the succeeding school year. Previously, upon receipt from the school district of a notice of its intent to not renew a contract, the teacher would have had an opportunity to challenge the non-renewal through a due process hearing. The new law takes effect on July 1, 2014. 
Municipalities Subject to New Employment Rules Relating to Handguns

A new Kansas law (House Bill No. 2578) addresses a variety of issues relating to the regulation and possession of firearms and knives.  Many of the changes relate to municipal ordinances, the disposition of firearms confiscated by courts, or criminal laws. Most notably, the law prevents municipalities from enacting or enforcing laws restricting the purchase, transfer, ownership, storage, carrying, or transporting of guns or ammunition. This law also includes a number of provisions pertaining to employees’ concealed carry rights that may require many municipalities to change their employment policies and practices.   

Here are some of the new provisions:    
  • Municipalities are prohibited from requiring employees to disclose whether they possess a valid license to carry a concealed handgun. 
  • Employees of municipalities may not be terminated, demoted, disciplined, or otherwise discriminated against because of a refusal to disclose whether the employee possess a valid license to carry a concealed handgun.  
  • Municipalities may not create or maintain records regarding an employee’s possession of a valid license to carry a concealed handgun or that the employee has disclosed whether he or she possesses such a license.  All records of such information must be destroyed by July 31, 2014.  
  • Municipalities may prohibit the unconcealed carrying of a firearm into municipal buildings, so long as the building is conspicuously posted in accordance with the rules and regulations issued by the attorney general.    
  • Cities and counties may adopt and enforce ordinances relating to the personnel policies of the city or county and the carrying      Continue Reading...
In Memory of Wyatt Wright

We are deeply saddened by the untimely passing of our friend and colleague Wyatt Wright. Wyatt practiced employment law in Foulston Siefkin's Wichita office for over 20 years before transitioning to our Kansas City office in 2006. Many of our blog readers know Wyatt not only for being a great lawyer, but also for his zany antics at our annual employment law seminar. Vaughn Burkholder, who was one of Wyatt's closest friends at the firm for over 30 years, wrote the following tribute.     

For more than 31 years, Wyatt Wright devoted himself faithfully and fervently to representing clients of the Foulston Siefkin law firm. Had cancer not ended his life prematurely on March 28, 2014, he likely would have continued to do so for decades more. Wyatt was the sort of lawyer who impressed his clients, partners, judges, and opponents with his skill, dedication, and  tenacity—and impressed them even more with his self-deprecating humor and unfailing interest in them as people. 

Wyatt was born and raised in Larned. Although he flirted with rock stardom as the drummer for the renowned Larned band “LA Skits” throughout high school and college, he was destined to become a lawyer. Wyatt’s father Morgan Wright is a Larned lawyer who only recently gave up the practice of law. Following his father’s example, after graduating from KU, Wyatt earned his juris doctorate magna cum laude from Washburn Law School in 1980, having served on the Washburn Law Journal. Wyatt was then a law clerk for J. Richard Foth, Chief Judge of the Kansas Court of Appeals for two years. 
Having satisfied himself that he      Continue Reading...
NLRB Election Process Under Review

The NLRB is currently conducting public meetings concerning proposed changes to the union representation election process.  The proposed changes to the process stem back to the NLRB's attempts in 2011 to change the representation process.  The NLRB's effort in 2011 came to end after the final rule was invalidated by the federal courts.  As you might recall, the changes proposed in 2011 were primarily designed to assist unions and to hinder employer efforts to educate impacted employees.  Stay tuned for further developments.  To read the NLRB press release click here.


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