Health Employment And Labor

labor and employment law for the healthcare industry

Posted on by Epstein Becker & Green, P.C.

Trade Secret, Proprietary Information, & Regulatory Requirements Concerns Contribute To Veto of New Jersey Social Media Bill

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By: James P. Flynn

The New Jersey Legislature was overwhelmingly in favor of a measure that would have barred employers from obtaining social media IDs and other social media related information from employees and applicants. Click here for A2878 as passed.  But Governor Chris Christie vetoed A-2878 because it would frustrate a business’s ability “to safeguard its business assets and proprietary information” and potentially conflict with regulatory requirements on businesses in regulated industries such as finance and healthcare. Click here for the Governor’s Veto Statement. While the Governor thought the bill well-intentioned, he conditionally vetoed it for painting “with too broad a brush,” citing the trade secrets/proprietary information concern as a primary motivation: “In view of the over-breadth of this well-intentioned bill, I return it with my recommendations that it be more properly balanced between protecting the privacy of employees and job candidates, while ensuring that employers may appropriately screen job candidates, manage their personnel, and protect their business assets and proprietary information.”

The Governor specifically recommended the bill be revised to:

  • Create an exception to allow investigation of work place misconduct or unauthorized transfer of confidential or proprietary data to a personal account;
  • Add language confirming that an employer may view, access, or utilize information about a current or prospective employee that can be obtained in the public domain;
  • Carve out of the definition of “personal account” any account, service or profile created, maintained, used or accessed by a current or prospective employee for business purposes of the employer or to engage in business related communications;
  • Eliminate provisions that would create a civil cause of action for affected employees or applicants;
  • Add a proviso stating that nothing in the act shall prevent an employer from implementing and enforcing a policy pertaining to the use of an employer issued electronic communications device or any accounts or services provided by the employer or that the employee uses for business purposes; and
  • Add a proviso stating that nothing in the act should be construed to prevent an employer from complying with the requirements of State or federal statutes, rules or regulations, case law or rules of self-regulatory organizations.

Click here for the bill as revised after the Governor’s veto statement.

These last two provisos are important ones, especially for the financial services industry and the healthcare industry. They are important because FINRA, for example, has laid out certain monitoring and record keeping requirements concerning social media used to communicate with clients and prospective clients concerning potential financial transactions. See, e.g., FINRA Guidance here.

There are likewise data security requirements emerging out of HIPAA and other bodies of law that may require security and monitoring of social media. Click here for a discussion of such issues by Dan Goldman (@danielg280), legal counsel at Mayo Clinic and Advisory Board member to the Mayo Clinic Center for Social Media. In an age of BYOD (Bring Your Own Device) and the consolidation of business and personal activity to a single mobile device, failure to include such exceptions would force employers into hard choices between required monitoring and desired seamlessness of the business/personal transition.

While many states have in the last year adopted such statutes, the interplay between the Governor and the Legislature in New Jersey plays out the competing interests nicely, and hopefully starts a trend toward a more measured approach to such questions. Accommodating these competing interests is not only a legislative challenge, but is one faced by employers and businesses every day.

Posted on by Epstein Becker & Green, P.C.

Affordable Care Act: Important Deadline for Employee Notices of the Health Insurance Marketplace (Exchange) Due October 1, 2013

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By Gretchen Harders and Michelle Capezza

On May 8, 2013, the Employee Benefits Security Administration of the Department of Labor (the “DOL”) issued Technical Release 2013-02 (the “Release”) providing important guidance under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the “Affordable Care Act”) with regard to the requirement that employers provide notices to their employees of the existence of the Health Insurance Marketplace, generally referred to previously as the Exchange.  These employee notices must be provided to existing employees no later than October 1, 2013.  This deadline is intended to correspond to the open enrollment period for the Marketplace commencing October 1, 2013 for coverage through the Marketplace beginning January 1, 2014.  The Release includes temporary guidance and two model employee notices of the Marketplace upon which employers may rely.  The Release further provides an updated model election notice for group health plans for purposes of the continuation coverage provisions under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) to include information of the health coverage options offered to individuals through the Marketplace for comparative purposes.

Employee Notice of the Marketplace.  The Affordable Care Act amended the Fair Labor Standards Act (“FLSA”) to require employers to issue employees a notice of the health coverage options available under the Marketplace.  The FLSA requirement was required to have been satisfied on or before March 1, 2013; however, given the regulatory delays in establishing and approving the Marketplace, the DOL extended the deadline.  The guidance under this Release is temporary through the applicability date of October 1, 2013, but may be relied upon until future guidance and regulations are issued.

Which employers are required to comply with the notice requirements?

Whether or not required to “pay or play” under the Affordable Care Act, all employers subject to the FLSA must provide the employee notice.  The FLSA generally applies to employers that employ one or more employees and are engaged in or produce goods for interstate commerce.  The FLSA also covers, among other things, hospitals, schools, institutions of higher education and federal, state and local government agencies.  To determine whether an employer is subject to the FLSA, the DOL provides an internet assistance tool at http://www.dol.gov/elaws/esa/flsa/scope/screen24.asp.

Which employees must receive the notice?

Employers must provide the employee notice to each employee whether or not the employee has part-time or full-time status.  It does not matter whether the employee is enrolled or eligible to enroll in a group health plan.  A separate notice is not required to dependents or other individuals who may become eligible for coverage under the plan, but are not employees.

What information must the notice provide?

The employee notice must contain the following information:

  • The existence of the Marketplace;
  • The contact information and description of services offered on the Marketplace;
  • A statement that the individual may be eligible for a premium tax credit if the employee purchases a qualified plan on the Marketplace; and
  • A statement that if the employee purchases a qualified plan on the Marketplace, the employee may lose the employer contribution to any health benefit plan offered by the employer and all or a portion of employer contributions may be excluded from federal income.

What are the DOL model notice(s)?

The DOL has provided two model employee notices available on its website, one for employers who do not offer a health plan and one for employers who offer a health plan to some or all employees.  The Release provides that employers may use the model notice(s) provided the notice(s) include the information described above.

The model employee notice for employers who do not offer health coverage includes the information described above, as well as an explanation of the impact of the availability of employer health coverage on the employee’s eligibility for subsidies on the Marketplace.  The model employee notice does not require the employer to provide specific contact information for the Marketplace in the state where the employee resides, but rather refers the employee to the http://www.healthcare.gov website for contact information for the Marketplace in the employee’s area.  This model employee notice requires the employer to provide contact information for the employer, including the employer’s EIN.  This is the information an employee will need to include in an application for a premium subsidy on a Marketplace.

The model employee notice for employers who do offer health coverage generally includes the same information as the model employee notice for employers who do not offer health coverage.  This model employee notice does, however, require the employer to provide contact information to obtain more information about the employer’s health care coverage.  The disclosure requires the employer to state whether the health care coverage is offered to all employees and, if not to all employees, a description of those employees eligible for health care coverage.  It also requires the employer to state whether it offers dependent coverage and which dependents are eligible.  Finally, the employer is required to disclose whether the health care coverage offered meets the minimum value standard and that the cost of coverage is intended to be affordable.  The Department of Treasury and Internal Revenue Service recently issued proposed guidance to assist employees in assessing whether the coverage offered provides minimum value.  See our prior blog post New Proposed guidance for Determining Whether Employer-Sponsored Health Plan Provides Minimum Value.

The model employee notice includes optional information that an employer may provide to the employee based on the Marketplace Employer Coverage Tool to better understand their coverage choices, including whether the employee is eligible in the next three months for employer coverage, whether the employer offers a health plan that meets the minimum value standard, the premium for employee-only coverage under the lowest-cost plan that meets the minimum value standard if the employee received the maximum discount for any tobacco cessation program, and what changes the employer will make for the next plan year.  Although this information is optional, it may be to an employer’s benefit to demonstrate, where appropriate, that its plan is providing minimum value and is affordable.

When must the employee notice be provided and what are the acceptable delivery methods?

Current employees before October 1, 2013 must be provided with the notice no later than October 1, 2013.  Beginning October 1, 2013, the employer must provide each new employee the notice at the time of hire, which will be considered timely provided in 2014 if provided within 14 days of the employee’s start date.

The employee notice must be provided free of charge in writing in a manner calculated to be understood by the average employee.  The employee notice may be provided by first class mail or electronically if in accordance with the DOL’s electronic disclosure safe harbor.

COBRA Model Notice.  Under COBRA, an individual who was covered by a group health plan the day before a qualifying event occurred may be eligible to elect COBRA continuation coverage.  These qualified beneficiaries must be provided with an election notice within 14 day after the plan administrator receives notice of a qualifying event.  The COBRA election notice is required to include specific information.

The DOL updated its model COBRA election notice to provide information about the Marketplace for the purposes of informing qualified beneficiaries that they may also be eligible for a premium tax credit to pay for coverage offered through the Marketplace.  It also includes clarification on the limit on pre-existing conditions exclusions beginning in 2014.  Such information is not specifically required under the Affordable Care Act and should have no impact on whether an employer is subject to the employer responsibility penalties if in fact a former employee obtains coverage on the Marketplace.

The Release provides that the use of the model COBRA election notice completed appropriately will be considered good faith compliance with the COBRA election requirements.  The model COBRA election notice does not provide a specific deadline or compliance date.  Employers may wish to review their existing COBRA election notices for changes relating to the Affordable Care Act.

Employers have long been waiting for specific guidance from the DOL on the employee notice requirements.  Now that it is here, compliance should be addressed well before the October 1, 2013 deadline.

Posted on by Epstein Becker & Green, P.C.

Court of Appeals Rules NLRB Notice Posting Violates Employer Free Speech Rights

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By Adam C. Abrahms and Steven M. Swirsky

In another major defeat for President Obama’s appointees to the National Labor Relations Board (NLRB or Board), the US Court of Appeals for the DC Circuit found that the Board lacked the authority to issue a 2011 rule which would have required all employers covered by the National Labor Relations Act (the “Act”), including those whose employees are not unionized,  to post a workplace notice to employees. The putative Notice, called a “Notification of Employee Rights Under the National Labor Relations Act,” is intended to ostensibly inform employees of their rights to join and be represented by unions and to engage in other activity protected by the Act. The rule would also have made it an unfair labor practice for an employer to fail to post the required notice and such failure also could be considered proof of anti-union animus in other Board proceedings.

Although proposed in 2011 and scheduled to become effective on April 30, 2012, the requirement has yet been put into effect. As we discussed previously, last year, the US District Court for the District of Columbia had held that the Board lacked the authority to make it an unfair labor practice for an employer to fail to post the notice, holding that this exceeded the Board’s authority under the Act. Just prior to the rule going into effect, the DC Court of Appeals issued an emergency injunction in support of the District Court’s opinion and the NLRB opted to not enforce the rule pending the appeal.

Perhaps what is most noteworthy about the Court’s recent opinion, authored by Senior Circuit Judge Randolph, is the Court’s reliance on employers’ free speech rights which are protected by Section 8(c) of the Act. That section of the Act ensures employers  the right  to communicate their views concerning unions to their employees. The Court noted that while Section 8(c) “precludes the Board from finding non coercive employer speech to be an unfair labor practice, or evidence of an unfair labor practice, the Board’s rule does both.” That is because under the rule an employer’s failure to post the required notice would constitute an unfair labor practice and the Board’s rule would have allowed the Board to “consider an employer’s ‘knowing and willful’ noncompliance to be ‘evidence of anti union animus in cases in which unlawful motive [is] an element of an unfair labor practice.”

The Court focused on the question of the right of employers to “free speech,” under both Section 8(c) of the Act and under the First Amendment to the Constitution, noting that the rule would have required employers to disseminate information and that “the right to disseminate another’s speech necessarily includes the right to decide not to disseminate it,” relying on analysis from prior Supreme Court and appellate court decisions which it referred to as “compelled speech” cases.

Interestingly, the Court’s conclusion that the Board’s rule violates Section 8(c) because it makes an employer’s failure to post the Board’s notice an unfair labor practice, and because it treats such a failure as evidence of anti-union animus, suggests the Board might be able to find an alternate route to a notice posting requirement if it did not seek to create such a remedy for an employer’s failure to post the notice.  However, the Court refused to leave the portion of the Board’s rule requiring the Notice posting in effect even without the enforcement and remedial provisions, because they were an inherent part  of the Board’s purpose in adopting the rule.  For now the beleaguered Board will need to decide whether it wishes to appeal this decision to the Supreme Court, attempt to craft  a new rule with the currently constituted Board that this same Court of Appeals has ruled was unconstitutionally appointed in its Noel Canning decision or postpone any action until a new Board is confirmed by the Senate.

Posted on by Epstein Becker & Green, P.C.

New Proposed Guidance for Determining Whether Employer-Sponsored Health Plan Provides Minimum Value

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By Michelle Capezza

Employers with fifty or more full-time employees (including full-time equivalent employees) are subject to the employer mandate penalties under the Patient Protection and Affordable Care Act of 2010, as amended  (the “ACA”) which become effective in 2014.  These penalties can be triggered if such employers fail to offer a health plan to their full-time employees and their dependents and have at least one full time employee who receives a premium tax credit or cost share reduction in connection with their enrollment in a qualified health plan through an Exchange.  These penalties can also be triggered if such employers offer coverage to 95% or more of their full-time employees and their dependents that either fails to offer minimum value (i.e., the plan’s share of the total allowed costs of benefits provided under the plan is less than 60% of the costs)  or offers coverage that is unaffordable (i.e., an employee’s cost of self-only coverage exceeds 9.5% of the taxpayer’s household income) and at least one full time employee receives a premium tax credit or cost share reduction in connection with their enrollment in a qualified health plan through an Exchange.

On May 3, 2013, the Department of the Treasury (“Treasury”) and the Internal Revenue Service (“IRS”) issued proposed regulations to provide assistance in determining whether health coverage under an employer-sponsored plan provides minimum value, as well as other rules regarding the health insurance premium tax credit (the “Proposed Regulations”).  Individuals generally may not receive a premium tax credit in connection with the enrollment in a qualified health plan through an Exchange if they are eligible for affordable coverage under an employer-sponsored plan that provides minimum value.  Under regulations issued by the Department of Health and Human Services (“HHS”) on February 25, 2013, there are several options for determining minimum value which include: (i) use of a Minimum Value Calculator; (ii) use of a safe harbor established by HHS and IRS; (iii) for plans with nonstandard features that are incompatible with the MV Calculator or a safe harbor, minimum value can be determined through an actuarial certification from a member of the American Academy of Actuaries; and (iv) a plan in the small group market can satisfy minimum value if it meets the requirements of any of the levels of metal coverage for a qualified health plan in an Exchange (i.e., bronze, silver, gold or platinum). The Proposed Regulations provide that employers must use the Minimum Value Calculator to measure standard plan features (unless a safe harbor applies) but the percentage may be adjusted based on an actuarial analysis of plan features that are outside the parameters of the calculator.  Plan designs meeting certain specifications were also proposed as safe harbors for determining minimum value.

In addition, the Proposed Regulations clarify that with regard to the health benefits considered in determining the minimum value, minimum value is based on the anticipated spending for a standard population and that the plan’s anticipated spending for benefits provided under any particular essential health benefits benchmark plan for any State counts towards minimum value.  Further, under the Proposed Regulations, all amounts contributed by an employer for the current plan year to a health savings account (“HSA”) are taken into account in determining the plan’s share of costs for purposes of minimum value and are treated as amounts available for first dollar coverage.  Amounts newly made available under a health reimbursement arrangement (“HRA”) that is integrated with an eligible employer plan for the current plan year count for purposes of minimum value in the same manner if the amounts may be used only for cost-sharing and may not be used to pay insurance premiums.  Importantly, the Proposed Regulations provide that a plan’s share of costs for minimum value purposes is determined without regard to reduced cost-sharing available under a nondiscriminatory wellness program; however, for programs designed to prevent or reduce tobacco use, the minimum value may be calculated assuming that every eligible individual satisfies the terms of the tobacco prevention/reduction program.   With respect to affordability, for plans that charge a higher premium for tobacco users, the affordability will also be determined based on the premium that is charged to non-tobacco users or tobacco users who complete the related wellness program such as attending smoking cessation classes.  Under a transition rule for plan years commencing before January 1, 2015, if an employee is eligible for a wellness program and incentives as in effect as of May 3, 2013,  then an employer offering health coverage will not be subject to an employer mandate penalty with respect to an employee who received a premium tax credit in connection with coverage in an Exchange because the employer’s offer of coverage was not affordable or did not satisfy minimum value if such coverage would have been affordable or satisfied minimum value based on the total required employee premium and cost-sharing for that group health plan that would have applied to the employee if  he or she met the requirements of the wellness program.

These Proposed Regulations are proposed to apply for taxable years ending after December 31, 2013 and may be applied for taxable years ending before January 1, 2015.  Treasury and the IRS request comments on all aspects of the proposed rules by July 2, 2013.

Posted on by Epstein Becker & Green, P.C.

What To Know About ACA Collective Bargaining, in Employment Law360

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Evan Rosen and Mark M. Trapp of the Labor and Employment practice co-wrote an article titled “What To Know About ACA Collective Bargaining.”

Following is an excerpt:

For the unionized employer, the advent of the Affordable Care Act requires careful strategic thought about its impact on upcoming collective bargaining negotiations. Indeed, for companies with a unionized workforce, the ACA poses additional challenges and strategic considerations above and beyond those confronting nonunionized workforces.

Click here to read the full article.

Posted on by Epstein Becker & Green, P.C.

Immigration Alert – New Form I-9 Becomes Effective on May 7, 2013

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By: Robert S. Groban, Jr.

Excerpt from EBG April 2013 Immigration Alert:

On March 8, 2013, the USCIS published a notice in the Federal Register announcing that it had recently revised the Employment Eligibility Verification form (“Form I-9”), and that employers must start using this new form by May 7, 2013.  Employers using prior versions of the Form I-9 on or after May 8, 2013, will violate the law and be subject to worksite enforcement fines and other penalties.

Click here to read the full Immigration Alert.

Posted on by Epstein Becker & Green, P.C.

NLRB Administrative Law Judge Finds Medical Center’s Technology Usage Policies Violated Employees Rights Under the National Labor Relations Act

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by: Steven M. Swirsky and D. Martin Stanberry

An NLRB Administrative Law Judge (“ALJ”) has found that two computer usage policies of University of Pittsburgh Medical Center (“UPMC”) violated the National Labor Relations Act (“Act”) because they had an unreasonable tendency to chill employee activities, including union organizing and employee discussions about terms and conditions of employment, protected by Section 7 of the Act.

The policies at issue prohibited employees from using the employer’s email and other electronic messaging systems “in a way that may be disruptive, offensive to others, or harmful to morale” or “[t]o solicit employees to support any group or organization, unless sanctioned by UPMC executive management.”

The ALJ, found that the policies, by using the terms and phrases “disruptive”, “offensive” and “harmful to morale” without providing examples or guidance to assist employees in interpreting the policy, “would reasonably be understood to include a spectrum of communication about unions, and … criticism of [the employer’s] working conditions, while permitting widespread nonwork use of the email system for an array of other subjects.”

The ALJ also found that the policy’s language restricting solicitation was unlawful because it provided managers with discretion to grant or deny solicitation in a manner thatdiscriminates against unions and union supporters.

The ALJ also found unlawful UPMC’s social media policy, which prohibited employees from using web-based applications to describe their affiliation with UPMC, disparage or misrepresent UPMC, or make false or misleading statements about UPMC,  largely the same reasons.

Alluding to an issue decided by the NLRB in the Register Guard decision, the ALJ noted that “a complete ban on employee email use would not raise a legal issue.” Practically speaking however, this is not necessarily true. The current Board has taken an activist stance regarding the potentially discriminatory application of workplace policies and, in the real world, very few employers maintain and enforce absolute prohibitions on the personal use of employer communications and electronic systems. Thus it may be quite difficult to prove consistent and non-discriminatory enforcement of such policies.

Posted on by Epstein Becker & Green, P.C.

Epstein Becker Green Releases New Version of Wage & Hour Guide App

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We are pleased to announce the release of a new version of our Wage & Hour Guide app that puts federal and state wage-hour laws at health care employers’ fingertips. To download the app, click here.Wage & Hour Guide App for Employers

The new version features an updated main screen design; added support for iOS 6, iPhone 5, iPad Mini, and fourth generation iPad; improved search capabilities; enhanced attorney profiles; expanded email functionality for sharing guide content with others; and easier access to additional wage and hour information on EBG’s website, including the Wage and Hour Division Investigation Checklist  and other resources.    The new version continues to be offered at no cost. 

The wage-hour app has proved to be an incredibly valuable tool for health care employers, answering many of their questions in seconds, while also providing them with a link to our wage-hour blog, where they can find developments in this ever important area of the law,” said Michael Kun, co-creator of the app and national Co-Chairperson of EBG’s Wage and Hour, Individual and Collective Actions practice group, in the Los Angeles office.

 How Does the App Work?

Rather than searching through a variety of cumbersome resources to locate applicable wage and hour laws, users of the Wage & Hour Guide app can follow easy-to-navigate steps to find the answers to many of their questions, including citations of federal statutes, regulations, and guidelines, as well as those of California, the District of Columbia, Georgia, Illinois, Maryland, New York, Texas, and Virginia. The following state guides were added after the initial launch of the app: Connecticut, Massachusetts, and New Jersey.  To provide the best experience possible, the app enables users to download the guide to their iPhone or iPad device for reference anywhere, at any time, with or without a connection.

Posted on by Epstein Becker & Green, P.C.

April 2013 Take 5 Newsletter: Five Recent Actions Employers Should Consider

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The April 2013 issue of Take 5 was written by David W. Garland, Chair of Epstein Becker Green’s Labor and Employment Steering Committee and a Member of the Firm in the New York and Newark offices.

In it, he summarizes five recent labor and employment actions that employers should consider:

  1. EEOC Releases Letter Addressing Wellness Programs and Reasonable Accommodation Obligations
  2. Paying Interns May Not Be Enough to Stave Off Wage and Hour Claims
  3. House Committee Votes Out Bill Prohibiting NLRB from Acting Without a Quorum
  4. New York City Human Rights Law Expanded to Prohibit “Unemployment” Discrimination
  5. New Jersey May Become the Latest State Law Banning Employers from Requesting Social Media Passwords

 Click here to read the full version on ebglaw.com

Posted on by Epstein Becker & Green, P.C.

District Court Decision Upholds OFCCP Authority Over Health Care Providers

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by: Kathleen M. Williams

A long-awaited decision on the jurisdiction of Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) over health care providers was released this week.  The decision, UPMC Braddock v. Seth Harris(Acting Secretary of Labor), by Judge Paul Friedman of the U.S. District Court for the District of Columbia, upholds broad and deep OFCCP jurisdiction – meaning that hospitals and other health care providers will be required to write affirmative action plans, track and report the race and sex of applicants, and be subjected to OFCCP compliance reviews with regard to the three affirmative action laws it enforces: Executive Order 11246; Section 503 the Rehabilitation Act of 1973; and the Vietnam Era Veterans Readjustment Assistance Act.

For years, a significant area of controversy with regard to OFCCP’s jurisdiction over health care providers has centered around the definition of a government “subcontractor.”  The issue in UPMC was whether three hospitals which did not directly contract with the federal government are nonetheless covered subcontractors.  The District Court has now held that those hospitals are covered subcontractors by virtue of their having entered into a contract with UPMC, the insurance carrier for UPMC Health Plan, to provide medical services to FEHBP insureds.

In so holding, the Court:

  • invalidated FEHBP regulations that expressly state that a subcontract to provide medical services is not  a government “subcontract,” holding that FEHBP lacks the authority to define “subcontract” in a way that it at odds with DOL regulations;
  • interpreted “non-personal services” to include medical services;
  • held that contracts with hospitals are “necessary to the performance” of the insurance company’s contract with the federal government, and thus covered government “subcontracts,” (and holding that an HMO, unlike a traditional insurer, contracts with the federal government to provide insurance as well as medical services);
  • held that the consent of the hospitals to become government contractors was not required (a decision in accord with longstanding OFCCP decisions).

This decision is expected to empower the OFCCP to be ever more aggressive in its assertion of jurisdiction over those who provide medical services to government employees and beneficiaries.  Although UPMC deals with hospital agreements with an HMO as opposed to a traditional insurer, the decision is broadly written and may well be held to be more broadly applicable.

For a detailed analysis of the history of OFCCP and the health care industry, see AHLA Connections, Vol. 15, Issue 5, May 2011 (“New Assertions of Jurisdiction by the OFCCP”) and a HEAL Blog post, “More on the Continuing Saga of OFCCP Jurisdiction in the Health Care Field,” posted June 1, 2012.