In an announcement about New York’s budget for fiscal year 2020, New York Governor Andrew Cuomo highlighted, among other things, an amendment to Section 3-110 of New York’s Election Law mandating three hours of paid time off for all New Yorkers to vote on election day.

Under the amendment, which is effective immediately, all New York employees who are registered to vote may request up to three hours of paid time off to vote, regardless of their work schedules, as long as the request is made at least two working days before the election.  New York employers may designate that any requested time be taken at the beginning or end of the employee’s shift.  Employers also must post a notice at least ten days in advance of an election to inform employees of the provisions New York Labor Law § 3-110. The notice must remain posted until the close of the polls on election day. Section 3-110 does not set forth any exceptions.

Employers with employees in the State of New York should review their time off policies to ensure compliance and should also ensure timely compliance with the posting requirement.

As employers are wrapping up their reporting under the Affordable Care Act (“ACA”) for the 2018 tax year (filings of Forms 1094-B/C and 1095-C/B with the IRS are due by April 1, 2019, if filing electronically), they should start preparing for new reporting obligations for the 2019 tax year.

After a string of failed efforts to repeal the ACA, Congress, through the Tax Cuts and Jobs Act of 2017 (“TCJA”), reduced the federal individual shared responsibility payment assessed (with limited exceptions) against individuals who failed to purchase health insurance to $0 beginning January 1, 2019. In response, to ensure the stability and provide more affordable rates for health coverage, States, such as New Jersey, have stepped in and adopted their own individual health insurance mandates. New Jersey’s individual health insurance mandate requires employers to verify health coverage information provided by individuals. To assist with employer reporting, New Jersey has launched an official website (lasted updated on March 19, 2019) with guidance on the filing requirements.

The New Jersey Health Insurance Market Preservation Act (“NJHIMPA”)

Beginning January 1, 2019, New Jersey requires its residents to maintain health insurance. The NJHIMPA requires New Jersey residents to have minimum essential health coverage throughout 2019 (and beyond), with certain qualifying exemptions. Failure to have health coverage or qualify for an exemption will result in a Shared Responsibility Payment (“SRP”) when taxpayers file their 2019 New Jersey Income Tax return. The amount of the SRP is generally based on income and family size and is capped at the statewide average premium for Bronze Health Plans in New Jersey. Individuals not required to file a 2019 New Jersey Income Tax return are exempt from this mandate. Most basic health coverage satisfies the requirement, including health insurance plans through an employer. However, certain employer plans that provide only very limited benefits, such as vision or dental, do not.

Use of Forms 1094 and 1095 Are Expected to Satisfy Employer Reporting in New Jersey

While the IRS has stated that it will continue to study whether and how the reporting requirements should change, if at all, for future years, in light of the effective repeal of the individual mandate by the TCJA, starting with 2019 tax year, the New Jersey Legislature requires third-party reporting to verify health coverage information provided by individual taxpayers.

The State expects employers that filed Form 1094-C/Form 1095-C federally in 2018, will use those forms for purposes of reporting in New Jersey. Filers of Form 1094-B/Form 1095-B should use those forms for New Jersey filings. Forms 1095-B have been used to report whether individuals have minimum essential coverage and, therefore, are not liable for the individual shared responsibility payment under the ACA. Forms 1095-C are used to report information about offers of health coverage and enrollment in health coverage for employees, to determine whether an applicable large employer (“ALE”) owes an employer shared responsibility payment, and to determine the eligibility of employees for the premium tax credit.

The State requires that employers provide New Jersey taxpayers and the State with the same Forms 1094 and 1095 health-care coverage information they send to the IRS. Employers will file health coverage forms through New Jersey’s system for filing of W-2 forms.

If the federal government discontinues or substantially alters Forms 1094-B, 1094-C, 1095-B, or 1095-C, New Jersey will deploy similar forms and require that they be sent to the State and to New Jersey taxpayers. Employers should check the website periodically for reporting updates.

Out-of-State Employers of New Jersey Residents Are Required to Report

Out-of-State employers that withhold and remit New Jersey Gross Income Tax for New Jersey residents have the same filing requirements as businesses located in New Jersey.

Deadline

The deadline to file 2019 coverage information electronically for the 2019 tax year is February 15, 2020. The State indicates that it will post further instructions on its website in mid-2019. This deadline is earlier than the deadline to file Forms 1094 and 1095 with the IRS, which for 2018 information returns was February 28, 2019 for paper filers and April 1, 2019 for electronic filers.

Guidance on Forms Sent to New Jersey

Requirements for the filings will vary depending on whether an employer is fully insured, self-insured, or a participating employer in a multi-employer plan. The size of a company will also affect reporting requirements as detailed in the State’s guidance.

Adult Children under Age 26

The ACA requires that adult children up to age 26 be covered by their parents’ health plan.

The NJHIMPA does not require Forms 1095-B or 1095-C to be provided separately to children covered by their parents’ health plans. However, the State recommends that employers advise their employees to provide a copy of any Form 1095-B or 1095-C containing coverage information to their children residing in New Jersey (presumably, so that they can properly file their New Jersey State Income Tax returns and avoid a SRP assessment).

Employer Takeaways

Employers in New Jersey and out-of-state employers with New Jersey residents should begin to prepare for reporting for the 2019 tax year, especially since the deadline to file in New Jersey is earlier than the deadline to file the applicable forms with the IRS. They should monitor the State’s website for further instructions on their reporting obligations.

Massachusetts, Vermont, and Washington, D.C. also have adopted individual health insurance mandates and several other states including California, Connecticut, Hawaii, Maryland, Rhode Island, Minnesota, and Washington are considering their own individual health insurance mandates. As more states adopt mandates, employers operating in multiple states should monitor their obligations in the various jurisdictions where their employees reside and expect reporting obligations to become more complex than they are under the ACA.

The information letter issued by the Department of Labor (the “DOL”) on February 27, 2019 (the “Information Letter”) provides a reminder to plan sponsors about the importance of disclosing the procedure for appointing authorized representatives in the benefit claim and appeal procedures for employee benefit plans subject to the Employee Retirement Income Security Act of 1976 (“ERISA”), as amended and also about the extent of the authority of the authorized representative. The Information Letter was in response to a query as to whether an entity that acts as a patient advocate and health care recovery expert for plan participants, in connection with initial benefit claims and appeals of adverse determinations (the “Entity”) could act as an authorized representative for claimants pursuant to Section 503 of ERISA.

While the Information Letter does not directly respond to the query from counsel to the Entity, the DOL’s response indicates that the Entity could be an authorized representative. The DOL states that, although a plan may establish reasonable procedures for determining whether an individual has been authorized to act on behalf of a claimant, “the procedure cannot prevent claimants from choosing for themselves who will act as their representative or preclude them from designating an authorized representative for the initial claim, an appeal of an adverse benefit determination, or both.”

The Information Letter further provides that the description of claim and appeal procedures included in a plan document and in the summary plan description for the plan must include any procedures for designating authorized representatives.  The Information Letter references the Benefit Claims Procedures Regulation FAQs, (the “FAQs”) which include FAQs on the appointment of authorized representatives. FAQ B-1 provides that, with one exception, an example of a reasonable procedure that a plan may establish to determine an authorized representative is completion of a form by the claimant identifying the authorized representative. The exception is where a claim involves urgent care, in which case a plan must permit a health care professional with knowledge of the claimant’s medical condition to act as the authorized representative if the claimant is not able to act on his or her own behalf.

FAQ B-2 addresses authorized representatives and assignment of benefits, a topic of particular interest to plan sponsors of self-insured group health plans. The FAQ states that an assignment of benefits to a health care provider does not constitute the designation of an authorized representative. The DOL explains that assignments are not a grant of authority to act on behalf of a claimant in pursuing and appealing a benefit determination. The DOL further notes that the validity of a designation of an authorized representative depends on whether the designation has been made in accordance with the procedures, if any, established by the plan.

In FAQ B-3, the DOL clarifies the notifications and disclosures that a plan must provide to an authorized representative. The DOL states that when a claimant clearly designates an authorized representative to act and receive notices on his or her behalf regarding a claim for benefits, the plan should, unless the claimant advises otherwise, direct all information and notifications to which the claimant is otherwise entitled to the authorized representative. Based on this view, the DOL cautions that it is important that both claimants and plans understand the extent to which an authorized representatives will be acting on behalf of a claimant.

An information letter issued by the DOL is informational only and is not binding on the DOL with respect to any particular factual situation.

Takeaways for Plan Sponsors

Based on the Information Letter, sponsors of employee benefit plans subject to ERISA should review the claim and appeal procedures to confirm that they include the procedure that claimants must follow to designate an authorized representative. If the procedure for designating an authorized representative is not included, the plan sponsor should consider amending the plan provide a reasonable procedure for claimants to follow if they wish to designate an authorized representative. As an example, the DOL has stated that requiring claimants to complete a form is a reasonable procedure.

Similarly, plan sponsors should review and update, as needed, the claims and appeal procedures in the summary plan descriptions for their ERISA plans and confirm that the authorized representatives are receiving appropriate notices and disclosures, as directed by the claimant. Plan sponsors may also want to verify that the current authorized representatives under their plans have been properly authorized by the claimants.

On March 18, 2019, New Jersey Governor Phil Murphy signed a bill amending the New Jersey Law Against Discrimination (LAD) to prohibit contractual provisions that result in the wavier of a right or remedy provided under the LAD or prevent the disclosure of information pertaining to claims of discrimination, retaliation or harassment.   The amendment, which is immediately effective, prohibits any provision in an employment agreement, other than a collective bargaining agreement, that:

  • Waives any substantive or procedural right or remedy relating to a claim of discrimination, retaliation, or harassment; or
  • Prospectively waives any right or remedy under the LAD.

The amendment also prohibits any provision in a settlement agreement that prevents the disclosure of “details relating to a claim of discrimination, retaliation or harassment.”  Settlement agreements that resolve claims of discrimination, retaliation or harassment must include “a bold, prominently placed notice that although the parties may have agreed to keep the settlement and underlying facts confidential, such a provision in an agreement is unenforceable against the employer if the employee publicly reveals sufficient details of the claim so that the employer is reasonably identifiable.”

New Jersey employers should consider this new amendment when reviewing and updating employment contracts and anti-discrimination and harassment policies.  Any prohibited provision in an agreement entered into on or after the effective date will be considered void as a matter of public policy.  The amendment entitles current and former employees to bring a civil action to recover common law tort remedies as well as attorney fees.

The amendment should also be considered when deciding whether or not to settle claims of discrimination, retaliation or harassment.  Details surrounding allegations of such claims may no longer remain confidential, which may lead to greater reputational risk.

The New York City Commission on Human Rights published legal enforcement guidance defining an individual’s right to wear “natural hair, treated or untreated hairstyles such a locs, cornrows, twists, braids, Bantu knots, fades, Afros, and/or the right to keep hair in an uncut or untrimmed state.”   The guidance applies to workplace grooming and appearance policies “that ban, limit, or otherwise restrict natural hair or hairstyles”:

[W]hile an employer can impose requirements around maintaining a work appropriate appearance, [employers] cannot enforce such policies in a discriminatory manner and/or target specific hair textures or hairstyles. Therefore, a grooming policy to maintain a ‘neat and orderly’ appearance that prohibits locs or cornrows is discriminatory against Black people because it presumes that these hairstyles, which are commonly associated with Black people, are inherently messy or disorderly. This type of policy is also rooted in racially discriminatory stereotypes about Black people, and racial stereotyping is unlawful discrimination under the [New York City Human Rights Law].

A grooming or appearance policy prohibiting natural hair and/or treated/untreated hairstyles to conform to the employer’s expectations “constitutes direct evidence of disparate treatment based on race” in violation of the City’s Human Rights Law. Examples of such policies include:

  • A grooming policy prohibiting twists, locs, braids, cornrows, Afros, Bantu knots, or fades which are commonly associated with Black people.
  • A grooming policy requiring employees to alter the state of their hair to conform to the company’s appearance standards, including having to straighten or relax hair (i.e, use of chemicals or heat).
  • A grooming policy banning hair that extends a certain number of inches from the scalp thereby limiting Afros.

Workplace policies prohibiting natural hair and/or treated/untreated hairstyles may not be implemented “to promote a certain corporate image, because of a customer preference, or under the guise of speculative health or safety concerns.” Where there is a legitimate health or safety concern, alternative ways to address the concern (e.g., hair ties, nets, head coverings and alternative safety equipment) must be considered before imposing a ban or restriction on the employee’s hairstyle.

Employers within New York City should review their workplace grooming and appearance policies to ensure compliance with the newly issued legal enforcement guidance.

Health care providers and custodial agencies operating in Illinois are now subject to new obligations under the Health Care Violence Prevention Act (210 ILCS 160/1 et seq.)(“HCVPA”), which went into effect on January 1, 2019. The HCVPA, which was enacted in response to two 2017 incidents involving inmates who assaulted hospital nurses, seeks to reduce the growing rates of violence against health care workers.

The HCVPA establishes both preventive and curative measures to protect health care workers. Health care providers are required to create an OSHA-compliant workplace violence prevention program. Each program must include:

(1) descriptions of the four classifications of workplace violence under the HCVPA;

(2) commitment by management and health care worker participation;

(3) worksite analysis and identification of potential hazards;

(4) hazard prevention and control;

(5) safety and health training (with required hours determined by rule); and

(6) recordkeeping and evaluation of the violence prevention program.

Hospitals and retail health care facilities are also required to provide resources to workers harmed by patients or their associates. Under the HCVPA’s guidelines, workers directly involved in an incident of workplace violence caused by a patients or their visitors have a right to employer-provided services, including acute treatment and access to psychological evaluation. Additionally, employers of health care workers must post notices in their facilities that detail zero tolerance for verbal aggression or physical assault. Notices must also inform violators that any physical assault will be reported to law enforcement. Rules detailing the requirements of the Notice (including size, format, etc.) have not yet been promulgated and no template Notice is currently available. The HCVPA prohibits management from preventing workers from reporting workplace violence to law enforcement, and any worker that contacts law enforcement or files a report with law enforcement must notify management of the underlying incident within three days. (Pursuant to 45 C.F.R. 164.512 (f)(5) and (j)(1), employees likely would not violate their obligations under HIPAA in directly reporting such an incident to law enforcement). A whistleblower provision further protects employees seeking to ensure the Act is enforced.

Hospitals and health care facilities are encouraged to collaborate with custodial agencies like the Department of Corrections to establish a protocol for committed patients that require treatment outside of custody. Custodial agencies must also comply with new guidelines under the law. Among these rules, custodial agencies must notify hospitals or medical treatment facilities of any significant medical, mental health, or violent safety concerns regarding a committed patient. Additionally, the HCVPA tasks custodial agencies with ensuring that guards or escorts accompany high-risk committed patients and that committed patients have the most comprehensive medical records practicable. The HCVPA also requires the Illinois Law Enforcement Training Standards Board to establish curriculum for custodial agency training.

Health care providers are encouraged to post the required notices and update/create policies that comply with the HCVPA while awaiting additional rules and regulations from Illinois lawmakers.

The U.S. Department of Justice reached a January 31, 2019 settlement of an American with Disabilities Act (“ADA”) Title III complaint against health care provider Selma Medical Associates relating to provision of medical services to an individual with opioid use disorder (“OUD”).  The settlement is notable for health care providers and employers as it makes clear that DOJ considers OUD as a disability under the ADA thereby triggering the full panoply of ADA rights for those with OUD.

The DOJ complaint was premised on the alleged refusal of Selma Medical to schedule a new patient family practice appointment after the patient disclosed he takes Suboxone.  Suboxone is a prescription medication approved by the Food and Drug Administration for treating OUD.  The complaint further alleged that Selma refused to treat patients with narcotic controlled substances, including Suboxone, thus imposing “eligibility criteria that screen out or tend to screen out individuals with OUD.”  The compliant also alleged a failure to make reasonable accommodations to policies, practices or procedures when necessary “to afford such goods, services, facilities, privileges, advantages, or accommodations to individuals with disabilities.”

Under the settlement, Selma agreed to:

  1. Not discriminate or deny services on the basis of disability, including OUD;
  2. Not use eligibility standards, criteria or methods of administration that tend to deny benefits on the basis of disability including OUD;
  3. To modify its policies as necessary;
  4. To draft and submit within 30 days for DOJ approval a non-discrimination policy and to remove any inappropriate existing policies;
  5. After DOJ approval, to adopt and disseminate to all employees the new non-discrimination policy;
  6. To train all management and employees within 60 days and annually for three years as to the new policy and ADA compliance with the initial training conducted live, with a Q&A opportunity, and by a trainer to be approved by DOJ;
  7. Submit compliance reports to DOJ for three years; and
  8. To pay compliant $30,000 in damages and a civil penalty to the U.S. of $10,000.

The DOJ-Selma Medical settlement is highly significant in an environment where in 2015, OUD affected 2 million people aged 12 and over (Drug and Alcohol Dependence, Vol. 169, Dec. 2016, pp. 117-127) and .6 million persons aged 12 or over had heroin use disorder (id.) and the lifetime percentage of individuals with Diagnostic and Statistical Manual-IV prescription OUD among adults 18 and over had more than doubled from 1.4% in 2001-2002 to 2.9% in 2012-2013 (id.), and likely higher today.  And, of course, this does not include those who are OUD for reasons other than prescriptions.  This means that health care providers are highly likely to encounter significant numbers of potentially challenging OUD patients.  DOJ has now made clear that providing the full range of care and services to such patients is required under the ADA – and that any failure to do so can lead to litigation, costly settlements and adverse publicity.

All employers, not just health care providers, should take note of this settlement as it clearly means that employers will also need to reasonably accommodate employees who seek time off for treatment or other accommodations unless the employer cannot show the requested accommodations would be an undue hardship.

The Selma Medical settlement is also a reminder that health care providers should make sure they have appropriate non-discrimination policies in place as required pursuant to Health and Human Services regulations for compliance under Title III of the ADA, the Rehabilitation Act of 1973, and the non-discrimination requirements of Section 1557 of the Affordable Care Act.  We can assist with any questions regarding the required policies and other issues as to compliance with the ADA, the Rehab Act and Section 1557.

 

In a major decision sure to provoke controversy and legislative attempts to overrule it, the en banc Seventh Circuit, by a vote of 8 to 4, has held in Kleber v. CareFusion Corp., (No. 17-1206, Jan 23, 2019), that Section 4(a)(2) of the federal Age Discrimination In Employment Act (“ADEA”) does not provide rejected external applicants with a cause of action.

The case was brought by Dale Kleber, a 58 year old applicant who applied for a position at CareFusion. The job description allegedly “required applicants to have ‘3 to 7 years (no more than 7 years)’” of relevant experience.

The Court focused closely on the text on §4(a)(2) which makes it unlawful for an employer:

to limit, segregate, or classify his employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s age.

29 U.S.C. §623(a)(2).

The majority noted that by its express terms, §4(a)(2) “proscribes certain conduct by employer(s) and limits its protection to employees.” The majority finds the ADEA protections of the Section apply only to those with “status as an employee.” The majority also notes that Congress amended Title VII of the Civil Rights Act of 1964 in 1972 expressly to cover “applicants for employment” but never passed legislation expressly to cover applicants in §4(a)(2) of the ADEA.

The decision of the Seventh Circuit applies only to federal courts in Illinois, Indiana, and Wisconsin. But as an en banc decision (a decision by all the active judges of the Court) it may be given some greater consideration by other courts. Employers facing ADEA hiring discrimination claims by non-employee applicants, may want to consider a motion to dismiss or for judgment on the pleadings relying on Kleber or to assert the defense in appropriate EEOC proceedings.

It is by no means certain, however, that other courts will reach the same conclusion as the Seventh Circuit. It is also likely that EEOC will not follow this decision outside the Seventh Circuit. And as noted at the outset, a legislative effort to reverse the result of Kleber by amending §4(a)(2) expressly to cover applicants is highly likely. Such a proposal might well pass in the House of Representatives. Its fate in the Senate, however, would be more problematic. In addition, whether President Trump would sign such a bill, if it did pass, is open to conjecture.

In addition, employers should be aware that they certainly may face the same applicant age discrimination claims by outside applicants premised on state and local human rights laws. Such state and local laws generally do not have limiting language like that upon which the Seventh Circuit based its decision in Kleber. Moreover, while employers often prefer federal to state courts, Kleber may encourage age discrimination plaintiffs who are applicants simply to sue under state law in state courts.

Despite Kleber, employers should still take care not to provide outside applicants with a basis for asserting age discrimination in hiring claims under state or local laws with broader language covering such applicants or in federal courts that choose not to follow Kleber. This is especially true as there is already putative class litigation challenging employers and social media platforms and hiring sites that allegedly target or limit notices of particular job openings to those in certain age bands. Consulting with employment counsel about such candidate sourcing activities and the effects of Kleber may be prudent at this point in time.

In the November 2018 mid-term elections, state ballot measures for the legalization of marijuana were approved in three states – Michigan, Missouri, and Utah – and rejected in one state – North Dakota.

Michigan

Michigan is now the 10th state in the country to legalize the recreational use of marijuana under certain conditions. Michigan residents approved Proposal 1, allowing for recreational marijuana to be consumed, purchased, or cultivated by those 21 and over. The new law went into effect December 6, 2018, but the commercial system will not be running for another year. The law imposes a 10% tax on marijuana sales and will create a licensure system for dispensaries. The law does not require an employer to permit or accommodate recreational use of marijuana, nor does it prohibit an employer from refusing to hire, discharging, disciplining, or taking any other adverse action because of the violation of a workplace drug policy or working under the influence.

Missouri

In Missouri, voters rejected two of three proposals regarding marijuana, but approved a ballot measure (Amendment 2) to allow for medical marijuana to be sold at a 4% tax. Notably, all three measures would have allowed for medical marijuana, but each measure varied in terms of tax, from 2% to 15%. The 4% tax will be used to sponsor veteran’s health issues.

The Missouri Department of Health and Senior Services will implement the law’s provisions, which will take all of 2019. Medical marijuana is not expected to be available for purchase until January 2020. While the law provides certain protections for patients, medical providers, and caregivers, the law does not permit a private right of action against an employer for wrongful discharge, discrimination, or any similar cause of action based on the employer’s prohibition of the employee being under the influence of marijuana while at work or for disciplining or discharging an employee for working or attempting to work while under the influence.

Utah

Utah voters approved Proposition 2, a medicinal marijuana proposal. Proposition 2, which was opposed by the Church of Jesus Christ of Latter-day Saints) was altered by legislation – the Utah Medical Cannabis Act (HB 3001) – after the election. On December 3, HB 3001 passed the legislature and was signed by Governor Gary Hebert. The bill stripped certain provisions of Proposition 2: patients who live more than 100 miles from a dispensary may not grow their own marijuana; patients must purchase medical marijuana through a state- or privately-run dispensary (the number of which has been reduced); and dispensaries must employee pharmacists to recommend dosages. In addition, HB 3001 added nurse practitioners, physician assistants, and high-ranking social workers to the list of health care workers that can recommend medical marijuana. HB 3001 is already the subject to two lawsuits, but currently it is scheduled to take effect on July 1, 2019.

Under the new Utah law, a patient cannot be discriminated against in the provision of medical care due to lawful use of medical marijuana, and the state may not discriminate against such users in employment. The new law, however, does not address medical marijuana use in the context of private employment. But employers may need to treat medical marijuana users the same as they treat employees with disabilities under state law, because the underlying conditions qualifying for medical marijuana use also qualify as disabilities under state law.

North Dakota

Voters in North Dakota rejected Measure 3, an initiative to legalize marijuana for recreational purposes.

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Employers and health care professionals should be ready to handle issues that arise with the potential conflict between state and federal law in devising compliance, both in terms of reporting and human resources issues. States continue to consider – and pass – legislation to legalize marijuana (both medicinal and recreational), and we are marching toward 50-state legalization. Almost all organizations – and particularly those with multi-state operations – must review and evaluate their current policies with respect to marijuana use by employees and patients.