hr compliance update: health care reform, supreme court...

HR Compliance Update: Health Care

Reform, Supreme Court Decisions and

Top HR Issues to Know

Presented by Laura Kerekes, SPHR

Chief Knowledge Officer

and

Jonathan Pyle

Vice President, Customer Success

ThinkHR Corporation

A Live Webinar Event:

ThinkHR Confidential 8/22/2013 2

What We’ll Cover Today

You’ll get the inside scoop on:

The delay in the employer health care reform mandate;

The Supreme Court ruling overturning the Defense of Marriage Act

and what that might mean for your business

The Supreme Court definition of “supervisor” for EEO

Plus issues surrounding HR rules that every employer should know,

including (1) wages and hours, (2) required employee notifications, (3)

nondiscrimination in employment, (4) employee benefits, and (5) privacy

and safety.

We’ll also cover:

What federal laws apply to you based on company size

Immigration reform and the new I-9 Form

The EEOC focus for this year and what you need to know as an

employer


Hot Off the Presses!

• What does the delay in the employer health care

reform mandate mean to employers?

• If you are not a “large employer” (defined as employing 50

or more full-time equivalent employees), this change does

not apply to you.

• If you employ 50 or more FTEs, you have an additional

year (from 2014 to 2015) to comply with the mandate to

provide “affordable” group health insurance to your full-time

employees (those working 30+ hours per week) or pay a

penalty (“Play or Pay”)

• Other delays: Out of pocket caps, nondiscrimination for

fully-insured plans, automatic enrollment, exchange choices

(federal)

• All other aspects of the health care reform rules apply



• What is the impact of the Supreme Court’s Defense of

Marriage Act (DOMA) decision?

• Ruling leaves the responsibility for regulating and defining

marriage up to the states

• Means that same-sex couples who are legally married

must now be treated the same under federal law as married

opposite sex couples

• States that do not recognize same sex marriages may

continue to establish their own state laws relating to

marriage

• State of residence, not employment, governs

• This decision also has no impact on domestic partnerships



• Federal programs impacted in the states that recognize same

sex marriages:

• Family and Medical Leave Act (FMLA)

• Employee Retirement Income Security Act (ERISA)

• Health Insurance Portability and Accountability Act (HIPAA)

• Consolidated Omnibus Budget Reconciliation Act (COBRA)

• Affordable Care Act (ACA)

• Equal Employment Opportunity, Social Security, immigration

and tax laws

• Same-sex spouses in those states will become eligible for the

following:

• Pre-tax medical premium deductions and tax-favored

expense reimbursements under FSAs, HSAs, and HRAs

• COBRA benefits as dependents of employees

• FMLA benefits as dependents of employees

• Beneficiary rights under pension/retirement/insurance plans



• What should employers be doing now?

• Regulatory guidance will be issued soon (already later than

expected)

• In the meantime, review your policies and benefit plans and

prepare your employee communications to explain any

changes in your benefit programs



• Supreme Court decision narrowing the definition of “supervisor” under Title VII (EEO)

• Perceived as a victory for employers

• Defines “supervisor” under Title VII only if s/he is empowered by

the employer to take employment action against the alleged victim

of harassment or other unlawful activities

• Previously, the employer was held liable regardless of whether

the employer knew or should have known about the activity if a

supervisor was involved

• Now, the employer is liable only if the supervisor has the authority

to take tangible employment actions against other employees

• Employers are still responsible for exercising “reasonable care”

to prevent and correct any harassing behavior


Update: Immigration

• Experts expect a real push to implement immigration reform – more of a political issue now but could have HR implications

• Federal E-Verify system gaining momentum

• For employers, this has already resulted in strengthening the I-9 employment eligibility verification system

• New Form I-9: Effective May 7, 2013 – make sure you are using this form for new hires – do not have to go back and reverify current hires

• Copy of the new I-9 Form: http://www.uscis.gov/files/form/i-9.pdf

• Employer Handbook: http://www.uscis.gov/files/form/m-274.pdf

• Enhanced workplace enforcement efforts

• Tips for employers who are audited by DHS/USCIS:

• Keep your I-9s separate from the employee file for easy access by the auditors

• Audit your I-9s first – if there are mistakes, correct them in a different color pen and note date and reason for correction

http://www.uscis.gov/files/form/i-9.pdf



http://www.uscis.gov/files/form/m-274.pdf




Update: EEOC Enforcement

• The size of the Office of Federal Contracts Compliance

(OFCCP) budget has increased for 2013

• Strategic goals include increasing cases evaluated by 15%

and closing 10% more discrimination cases

• Plan priorities are to “combat employment discrimination

through strategic law enforcement”

• Special emphasis targets include disability, equal pay,

veterans and sex discrimination issues

• Greater emphasis will also be placed on Affirmative Action

compliance

• Tips for employers: Review employment, training and pay

actions, document the business reasons for actions that might

invite EEOC scrutiny; ensure managers are well-trained and

support the company’s EEO policies


HUMAN RESOURCES ISSUES YOU SHOULD KNOW ABOUT ‘What you don’t know CAN hurt you….”


First, let’s look at HR laws that may

apply to you……

NOTE: What follows are the HR rules that may

apply to your organization based on company

size. What does not show on these slides are

the compliance rules for federal contractors.


Laws That Apply Based On Size:

1 – 14 Employees

• Fair Labor Standards Act (FLSA): Minimum wage, overtime pay,

recordkeeping, youth employment standards

• Immigration Reform & Control Act (IRCA): Requires employers to collect

information regarding employee identity and right to work in the US

• Employee Polygraph Protection Act (EPPA): Prohibits employers from using lie

detector tests, except in certain circumstances

• Uniformed Services Employment & Re-employment Rights Act (USERRA):

Prohibits employment discrimination based on past, current or future military

service; includes health and pension plan coverage rights

• Equal Pay Act (EPA): Prohibits sex-based wage discrimination

• Consumer Credit Protection Act (CCPA): Protects employees from

discharge by employers based on wage garnishments

• Employee Retirement Income Security Act (ERISA): Regulates

pension and welfare benefit plans

• Federal Insurance Contributions Act (FICA): Imposes payroll taxes

to provide benefits for retired and disabled workers and their

dependents

•



1 – 14 Employees (continued)

• Occupational Safety & Health Act (OSHA): Regulates workplace safety and requires

recordkeeping. NOTE: Employers with 10 or fewer employees in certain industry

classification are partially exempt from keeping OSHA injury and illness records.

• Health Insurance Portability and Accountability Act (HIPAA): Protects participants in

group health plans

• Jury System Improvements Act: Prohibits employers from discharging or disciplining

employees summoned to serve as a jury in any US court

• Personal Responsibility and Work Opportunity Reconciliation Act: Requires employees to

report certain information on their newly-hired employees to designated state agencies

• Fair Credit Reporting Act (FCRA): Protects the privacy of consumer report information

and obligations of employers who use consumer reports for employment decisions

• Fair and Accurate Credit Transactions Act (FACTA): Requires proper disposal of

consumer report information

• Union laws: National Labor Relations Act (NLRA – Wagner Act), Labor-

Management Relations Act (Taft-Hartley Act): Prohibits employers and unions

from unfair labor practices

• Affordable Care Act (health care reform): Applies if the employer offers health

insurance



15 – 20 employees

• Title VII, Civil Rights Act: Prohibits employment discrimination based on race,

color, religion, sex and national origin

• Title I, Americans with Disabilities Act (ADA): Prohibits employment

discrimination against qualified individuals with disabilities

• Pregnancy Discrimination Act: Prohibits sex discrimination on the basis of

pregnancy, childbirth or related medical conditions

• Genetic Information Nondiscrimination Act (GINA): Prohibits discrimination on

the basis of genetic information



20 - 49 employees

• Age Discrimination in Employment Act (ADEA): Prohibits discrimination

against persons age 40 or older

• Consolidated Omnibus Budget Reconciliation Act (COBRA): Federal law

requires continuation of health coverage at cost plus 2% for up to 18 months/36

months in certain cases

• Most states have “mini-COBRA laws” covering employers with fewer

than 20 employees, so check your state rules. Those without coverage

include Alabama, Alaska, Arizona, Hawaii, Idaho, Indiana, Michigan, and

Montana.



50+ employees

• Family and Medical Leave Act (FMLA): Allows eligible

employees of covered employers to take unpaid, job and

benefits-protected leave for certain family and medical

reasons for up to 12 weeks in a 12-month period. Group

health insurance coverage is continued under the same

terms/conditions as if the employee was still actively at work.



100+ employees

• EEO-1 Reporting (annual): Requires employers to file an annual report that

counts employees by race, gender and ethnicity within certain job categories.

• Worker Adjustment & Retraining Notification Act (WARN): Requires

employers to provide at least 60 calendar days of advance notice in the event of

plant closings and mass layoffs.


1. Wage & Hour Topics 2. Required Employee

Notifications 3. Nondiscrimination 4. Employee Benefits 5. Privacy & Safety


HR Top 5: Wage and Hour

• The federal Fair Labor Standards Act (FLSA) is the major wage-

hour law covering employers

• Last two years have set records for compliance audits and

decisions surrounding worker misclassification for purposes of pay

and overtime AND employee versus independent contractor status

• DOL continued emphasis – the recovery of back wages and

taxes

• Tips:

• Ensure that your jobs are properly classified as exempt/nonexempt

and you are paying overtime correctly

• Use caution when hiring “independent” contractors


HR Top 5: Employee Notifications



• Outside of the federal and state tax rules, what follows below

are notifications you should provide to employees:

• Upon hire and/or eligibility for benefits:

• General Notice of COBRA rights (if over 20 employees (federal) or

your state has “mini-COBRA” plans for smaller employers)

• Benefits documents – Summary Plan Description, Summary of

Benefits and Coverage, Notice of Exchange Availability (October 1,

2013), health privacy rights under HIPAA, Women’s Health and

Cancer Rights, Mental Health Parity, CHIP notices, disclosure of

health plan grandfather status, notice of patient protections

• If credit report requested, a summary of rights under the Fair Credit

Reporting Act

• Workers Compensation coverage rights (state-specific and can

include additional notification regarding physician selection, etc)

• Unemployment coverage rights (state-specific)

• State disability and family leave rights (state-specific)

• Company policies, especially safety and non-discrimination rules

• Wage and employment notices (state specific)



• Outside of the federal and state tax rules, what follows below

are notifications you should provide to employees:

• Upon termination:

• General Notice of COBRA rights plus follow up COBRA notices

• Unemployment coverage rights (state-specific)

• Reminder of company confidentiality and nondisclosure rules

• Termination notice (state specific)

• Recommended: Change of address form (to ensure you are sending

the year’s W-2 to the correct address), acknowledgement

by terminating employee that final paycheck received,

checklist and sign off that all company materials have

been returned


HR Top 5: Nondiscrimination

• Age Discrimination in Employment Act (ADEA): Covers employers

with 20 or more employees (federal) and prohibits policies and practices

that treat applicants and employees less favorably because of age (over

40).

• Americans with Disabilities Act (ADA): Covers employers with 15 or

more employees (federal) and prohibits treating an applicant and

employee unfavorably because s/he has a disability, history of a disability

or perception of one. Employers are expected to accommodate workers

with disabilities as long it does not impose an undue hardship to the

business. New guidelines released May 15, 2013.

• Equal Pay Act (EPA): Requires that men and women in the same

workplace be given equal pay for equal work.

• Genetic Information Nondiscrimination Act of 2008 (GINA): Covers

all employers with 15 or more employees and prohibits employment

discrimination based on genetic information and protects health

information privacy.


HR Top 5: Nondiscrimination

• Title VII of the Civil Rights Act of 1964 prohibits discrimination in employment

on the basis of race, color, sex, religion and national origin. This sweeping federal

law covers employers with 15 or more employees.

• National Origin Discrimination: Prohibits policies and practices that treat

applicants and employees less favorably because they are from another

country, ethnicity, accent or perceived as such. In addition, the

Immigration Reform and Control Act of 1986 (IRCA) covers

discrimination based upon citizenship or immigration status.

• Religious Nondiscrimination requires employers to reasonably

accommodate religious practices and dress/grooming.

• Sex Nondiscrimination and Sexual Harassment: Requires

employers to follow up on harassment claims; some states require

specific management training

• Uniformed Services Employment and Reemployment Rights Act

(USERRA): Applies to all employers, regardless of size and prohibits

discrimination against persons for past, present or future military service

and provides for benefits and return rights for up to 5 years.


HR Top 5: Employee Benefits

• Employment Retirement Income Security Act of 1974 (ERISA): Sets

minimum standards for retirement and health benefit plans relating to

reporting and disclosure, fiduciary responsibility, administration, COBRA,

and HIPAA. ERISA does not require employers to offer benefits, but does

provides standards for those plans offered.

• Health Care Reform and Small Employer Impact:

• Small employer is defined as having less than 50 full-time equivalent

employees who regularly work 30 or more hours per week during a

testing period that can be up to 12 months

• Small business health care tax credit (fewer than 25 employees for

the taxable year, average annual wages less than $50,000, employer

pays at least 50% of premium cost: 35% for private employers; 25%

for tax-exempt . Starting in 2014, credit increases for up to 50% if

coverage purchased through the SHOP


HR Top 5: Employee Benefits

• Health Care Reform and Employer Impact (continued):

• 2014: Waiting periods for eligibility for benefits cannot exceed 90 days

• All plans must continue to cover employee’s dependents until age 26

• Plans must provide the Summary of Benefits and Coverage at specific

events

• Plans must provide a 60-day notification for plan changes, except at renewal

• For non-grandfathered plans: Plans must waive all cost sharing for

preventive care services, including women’s preventive care

• Plans must provide employees with notices of the available Exchanges

• 2014: Non-grandfathered plans limit the deductibles charged in network to

$2000 per individual and $4000 per family with out of pocket limits that are

the same for high deductible health plans ($6250 for individual and $12,500

for family)

• Pricing methods limited to family size, geography, tobacco use and age

(3:1 ratio)


HR Top 5: Privacy and Safety

• HIPAA and GINA privacy protections

• National Labor Relations Board activity relating to:

• Section 7 of the National Labor Relations Act protecting workers engaged

in “protected concerted activities”

• Social media

• “At-will” status

• Electronic communications

• Workplace Investigations

• OSHA Investigations and Compliance

• Department of Labor mandate to enhance enforcement of

safety regulations this year

• Summer – heat regulations for workers outside or in limited

air conditioned spaces

• Ensure that safety plans and workplace safety precautions

are up-to-date


Got Questions?

• HR Compliance issues can seem overwhelming

• Rely on us as one of your trusted advisors as you think

through the maze of HR rules and laws

• Rely on your insurance broker for specific help relating to

your plans and benefits strategy

• Need more information? Give us a call at 1-877-225-1101

or log in to our HR Live website.

• Questions??

hr compliance update: health care reform, supreme court...

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