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5 Holiday Party Best Practices - December 2017

Workplace-sponsored holiday parties present a host of liabilities for organizations each year. Factors like choice of venue and employees’ religious affiliations can create friction even before alcohol is thrown into the mix. Below are some best practices for hosting a successful holiday party.

1. Update Your Employee Handbook

Prior to the event, make sure your employee handbook is up to date regarding applicable holiday party topics, including the following:

- Outlining anti-harassment policies

- Enforcing a dress code

- Forbidding alcohol consumption while conducting business

- Expressing consequences for inappropriate behavior, like overt drunkenness

2. Make it Optional

Generally, if a workplace function is mandatory, employees must be compensated for their time. Depending on the number of employees, enforcing and tracking attendance may be difficult. With this in mind, it can simply be easier to make the party optional.

3. Keep it Festive

There are many arguments concerning the appropriateness of observing one holiday over another. For instance, some workplaces may favor a “Christmas party” over a more inclusive celebration. However, focusing on the holiday spirit—and avoiding religious celebrations—can help avoid unwanted employee divisions or discrimination suits.

4. Control or Limit Alcohol

Many organizations offer alcohol at holiday parties, but that comes with additional risks.

Consider some of the following methods to help control employee consumption:

- Offer drink tickets (with a maximum limit)

- Charge for drinks

- Only offer lower-alcohol drinks, like beer, wine or hard cider

5. Designate a Monitor

If you decide to offer alcohol, make sure there is a company-designated person to flag inappropriate behavior and ensure everyone leaves the party safely.

IRS Issues New Guidance on Qualified Small Employer HRAs - November 2017


On Oct. 31, 2017, the Internal Revenue Service (IRS) issued Notice 2017-67 to provide comprehensive guidance on a variety of topics regarding qualified small employer health reimbursement arrangements (QSEHRAs). Small employers that do not maintain group health plans may establish QSEHRAs for their employees, effective for plan years beginning on or after Jan. 1, 2017. Unlike other health accounts, QSEHRAs can be used to reimburse employees for their health insurance premiums.

Notice 2017-67 clarifies the technical rules for QSEHRAs, including the requirements that employees provide proof of minimum essential coverage (MEC) and that employers provide a written notice to eligible employees each year.


Small employers with QSEHRAs should confirm that their QSEHRAs comply with this new guidance. Notice 2017-62 applies to plan years beginning on or after Nov. 20, 2017. In addition, employers may need to provide their initial written notice by Feb. 19, 2018.


Beginning Jan. 1, 2017, employers that are not applicable large employers under the Affordable Care Act and do not maintain group health plans may sponsor QSEHRAs to pay for employees’ individual health insurance policies and other out-of-pocket medical expenses on a tax-favored basis. To qualify as a QSEHRA, the reimbursement arrangement must meet the following criteria:

  • The QSEHRA must be funded solely by the employer. Employees cannot make their own salary reduction contributions.
  • QSEHRA payments or reimbursements must be limited to medical care expenses incurred by the employee or the employee’s family members, after the employee provides proof of coverage.
  • The maximum amount of payments and reimbursements from the QSEHRA for any year cannot exceed $4,950 (or $10,000 for QSEHRAs that also reimburse medical expenses of the employee’s family members). These amounts are adjusted annually for inflation. For 2018, the total amount of payments and reimbursements from a QSEHRA cannot exceed $5,050 ($10,250 for family coverage).
  • The QSEHRA must be provided on the same terms to all eligible employees.

IRS Guidance on QSEHRAs – Notice 2017-67

Notice 2017-67 provides detailed guidance on a wide range of topics for QSEHRAs, including the criteria for QSEHRAs, the tax consequences of the arrangement, the impact on eligibility for health savings account (HSA) contributions and the written notice requirement.

The guidance applies for plan years beginning on or after Nov. 20, 2017, although QSEHRAs established before that date may rely on this guidance. Also, employers that established QSEHRAs for 2017 in accordance with a reasonable good faith interpretation of the law may continue to operate their QSEHRAs based on those terms until the last day of the plan year that began in 2017.

Written Notice

An employer funding a QSEHRA for any year must provide a written notice to each eligible employee at least 90 days before the beginning of each year. For employees who become eligible to participate in the QSEHRA during the year, the notice must be provided by the date on which the employee becomes eligible to participate. If an employer fails to provide this notice for a reason other than reasonable cause, the employer may be subject to a penalty of $50 per employee for each failure, up to a maximum annual penalty of $2,500 for all notice failures during the year. On Feb. 27, 2017, the IRS delayed the initial notice deadline pending its issuance of further guidance. 

Notice 2017-67 provides a new deadline for the initial QSEHRA notice, as well as sample language that employers may use.

Initial Notice Deadline – An eligible employer that provides a QSEHRA during 2017 or 2018 must provide the initial written notice to eligible employees by the later of (1) Feb. 19, 2018, or (2) 90 days before the first day of the QSEHRA’s plan year. According to the IRS, penalties may apply to any employer that does not timely provide the written notice.

Same Terms Requirement

Notice 2017-67 explains what it means for a QSEHRA to be provided on the same terms to all eligible employees. For example, to satisfy this requirement:

  • The QSEHRA must be operated on a uniform and consistent basis for all eligible employees;
  • Eligible employees cannot be allowed to waive coverage; and
  • If an employer is part of a controlled group or affiliated service group (as determined under Internal Revenue Code Section 414), each employer in the group must provide a QSEHRA to all eligible employees on the same terms.

In addition, Notice 2017-67 confirms that a QSEHRA may be designed to limit reimbursements to certain medical expenses (for example, health insurance premiums or cost-sharing expenses that are medical expenses). However, a QSEHRA will fail to satisfy the same terms requirement if, under the facts and circumstances, the plan’s reimbursement limit causes the QSEHRA not to be effectively available to all eligible employees. This may occur, for example, if a QSEHRA limits reimbursements to Medicare or Medicare supplement policies.

Maximum Benefit and Reimbursements

QSEHRAs may use the statutory dollar limits in effect for the preceding year to determine permitted benefits, rather than the dollar limits in effect for the current year. IRS Notice 2017-67 also confirms that any carryovers of unused amounts from a prior plan year are taken into account when determining an employee’s maximum annual benefit. An employee’s total permitted benefit, taking into account both carry-over amounts and newly available amounts, may not exceed the applicable statutory dollar limit.

In addition, a QSEHRA may reimburse premiums for coverage under the group health plan of a spouse’s employer. However, the reimbursement is taxable to the extent that the spouse’s share of premiums was paid on a pre-tax basis.

Proof of Coverage

Before a QSEHRA can reimburse an expense for any plan year, the eligible employee must first provide proof that he or she had MEC for the month during which the expense was incurred. This proof must consist of either:

  • A document from a third party (for example, the insurer) showing that the employee had coverage (for example, an insurance card or explanation of benefits) and an attestation by the employee that the coverage was MEC; or
  • An attestation by the employee stating that the employee had MEC, the date the coverage began and the name of the coverage provider.

Notice 2017-67 includes model attestation language that employers may use. The initial proof of MEC must be provided with respect to each individual whose expenses are eligible for reimbursement before the first expense reimbursement. Following the initial proof, the employee must attest with each new request for reimbursement during the plan year that the employee and the individual whose expenses are being reimbursed (if different) continue to have MEC. This attestation can be part of the form for requesting reimbursement.

Employer Reporting

Employers that sponsor QSEHRAs must report the amount of payments and reimbursements that an eligible employee is entitled to receive from the QSEHRA for the calendar year in box 12 of the employee’s Form W-2 using code FF, without regard to the payments or reimbursements actually received. Notice 2017-67 provides detailed rules for this reporting.

In addition, Notice 2017-67 confirms that an employer providing a QSEHRA is not required to provide IRS Forms 1095-B (Section 6056 statements) to covered employees. However, a QSEHRA is subject to the Patient-Centered Outcomes Research Institute (PCORI) fee, which applies for plan years ending before Oct. 1, 2019.

HSA Contributions

Employers that sponsor QSEHRAs may contribute to employees’ HSAs and may allow employees to make pre-tax HSA contributions through a Section 125 plan.

Notice 2017-67 also addresses how QSEHRA coverage impacts an individual’s eligibility for HSA contributions. To be HSA-eligible, an individual must be covered by a high deductible health plan (HDHP) and not be covered by other health coverage that provides benefits below the HDHP minimum deductible. According to the IRS, if the QSEHRA only reimburses health insurance premiums, it will not cause an individual to be ineligible for HSA contributions. However, individuals who are covered by QSEHRAs that reimburse any medical expenses, including cost sharing, are not eligible for HSA contributions.

New Rules for Disability Benefit Claims May Be Delayed - October 2017

On Dec. 16, 2016, the Department of Labor (DOL) released a final rule to strengthen the claims and appeals requirements for plans that provide disability benefits and are subject to the Employee Retirement Income Security Act (ERISA). The final rule is currently scheduled to apply to claims that are filed on or after Jan. 1, 2018. However, on Oct. 12, 2017, the DOL proposed to delay the final rule for 90 days—until April 1, 2018.

According to the DOL, concerns have been raised that the final rule will impair workers’ access to disability benefits by driving up costs and increasing litigation. During the delay, the DOL will review the final rule to determine whether it is unnecessary, ineffective or imposes costs that exceed its benefits, consistent with President Donald Trump’s executive order on reducing regulatory burdens.


Sponsors of ERISA plans that include disability benefits should continue to monitor the status of the final rule. If the new requirements take effect, entities that administer disability claims will be required to provide new procedural protections to disability claimants.

ERISA Requirements

Section 503 of ERISA requires every employee benefit plan to:

  • Provide adequate notice in writing to any participant or beneficiary whose claim for benefits under the plan has been denied, setting forth the specific reasons for the denial, written in a manner calculated to be understood by the participant; and
  • Afford a reasonable opportunity to any participant whose claim for benefits has been denied for a full and fair review by the appropriate named fiduciary of the decision denying the claim.

The DOL first adopted claims procedure regulations for employee benefit plans in 1977. In 2000, the DOL updated its claims procedure regulations by improving and strengthening the minimum requirements for employee benefit plans, including plans that provide disability benefits. Effective for plan years beginning on or after Sept. 23, 2010, the Affordable Care Act (ACA) amended ERISA to include enhanced internal claims and appeals requirements for group health plans.

Additional Protections for Disability Claimants

The final rule requires that plans, plan fiduciaries and insurance providers comply with additional procedural protections when dealing with disability benefit claimants. The final rule includes the following requirements for the processing of claims and appeals for disability benefits:

  • Improvement to Basic Disclosure Requirements: Benefit denial notices must contain a more complete discussion of why the plan denied a claim and the standards used in making the decision.
  • Right to Claim File and Internal Protocols: Benefit denial notices must include a statement that the claimant is entitled to receive, upon request, the entire claim file and other relevant documents. Benefit denial notices also have to include the internal rules, guidelines, protocols, standards or other similar criteria of the plan that were used in denying a claim or a statement that none were used.
  • Right to Review and Respond to New Information Before Final Decision: The final rule prohibits plans from denying benefits on appeal based on new or additional evidence or rationales that were not included when the benefit was denied at the claims stage, unless the claimant is given notice and a fair opportunity to respond.
  • Avoiding Conflicts of Interest: Plans must ensure that disability benefit claims and appeals are adjudicated in a manner designed to ensure the independence and impartiality of the persons involved in making the decision. For example, a claims adjudicator or medical or vocational expert could not be hired, promoted, terminated or compensated based on the likelihood of the person denying benefit claims.
  • Deemed Exhaustion of Claims and Appeal Processes: If plans do not adhere to all claims processing rules, the claimant is deemed to have exhausted the administrative remedies available under the plan, unless the violation was the result of a minor error and other specified conditions are met. If the claimant is deemed to have exhausted the administrative remedies available under the plan, the claim or appeal is deemed denied on review without the exercise of discretion by a fiduciary and the claimant may immediately pursue his or her claim in court.
  • Certain Coverage Rescissions Are Adverse Benefit Determinations Subject to the Claims Procedure Protections: Rescissions of coverage, including retroactive terminations due to alleged misrepresentation of fact (for example, errors in the application for coverage), must be treated as adverse benefit determinations that trigger the plan’s appeals procedures. Rescissions for nonpayment of premiums are not covered by this provision.
  • Notices Written in a Culturally and Linguistically Appropriate Manner: Similar to the ACA standard for group health plan notices, the final rule requires that benefit denial notices be provided in a culturally and linguistically appropriate manner in certain situations.

Proposed Delay

On Oct. 10, 2017, the DOL issued a proposed rule that would delay the applicability of the final rule by 90 days—until April 1, 2018. According to the DOL, after the final rule was published, concerns were raised that its new requirements will impair workers’ access to these benefits by driving up costs.

The DOL concluded that, consistent with President Trump’s policy on alleviating unnecessary regulatory burdens, it is appropriate to give the public an additional opportunity to submit comments on the potential impact of the final rule. The DOL stated that it will review these comments as part of its effort to examine regulatory alternatives. Based on its review, the DOL may decide to allow all or part of the final rule to take effect as written, propose a further extension, withdraw the final rule or propose amendments to the final rule.

Medicare Part D Notices Are Due by Oct. 14, 2017 - September 2017

Each year, Medicare Part D requires group health plan sponsors to disclose to individuals who are eligible for Medicare Part D and to the Centers for Medicare and Medicaid Services (CMS) whether the health plan’s prescription drug coverage is creditable. Plan sponsors must provide the annual disclosure notice to Medicare-eligible individuals before Oct. 15, 2017—the start date of the annual enrollment period for Medicare Part D. CMS has provided model disclosure notices for employers to use.

This notice is important because Medicare beneficiaries who are not covered by creditable prescription drug coverage and who choose not to enroll in Medicare Part D when first eligible will likely pay higher premiums if they enroll at a later date. Thus, although there are no specific penalties associated with this notice requirement, failing to provide the notice may trigger adverse employee relations issues.


Employers should confirm whether their health plans’ prescription drug coverage is creditable or non-creditable and prepare to send their Medicare Part D disclosure notices by Oct. 14, 2017. To make the process easier, employers who send out open enrollment packets prior to Oct. 15 often include the Medicare Part D notices in these packets.

Creditable Coverage

A group health plan’s prescription drug coverage is considered creditable if its actuarial value equals or exceeds the actuarial value of standard Medicare Part D prescription drug coverage. In general, this actuarial determination measures whether the expected amount of paid claims under the group health plan’s prescription drug coverage is at least as much as the expected amount of paid claims under the Medicare Part D prescription drug benefit. For plans that have multiple benefit options (for example, PPO, HDHP and HMO), the creditable coverage test must be applied separately for each benefit option.

Model Notices

CMS has provided two model notices for employers to use:

A Model Creditable Coverage Disclosure Notice for when the health plan’s prescription drug coverage is creditable; and

A Model Non-creditable Coverage Disclosure Notice for when the health plan’s prescription drug coverage is not creditable.

These model notices are also available in Spanish on CMS’ website.

Employers are not required to use the model notices from CMS. However, if the model language is not used, a plan sponsor’s notices must include certain information, including a disclosure about whether the plan’s coverage is creditable and explanations of the meaning of creditable coverage and why creditable coverage is important.

Notice Recipients

The creditable coverage disclosure notice must be provided to Medicare Part D-eligible individuals who are covered by, or who apply for, the health plan’s prescription drug coverage. An individual is eligible for Medicare Part D if he or she:

  • Is entitled to Medicare Part A or is enrolled in Medicare Part B; and
  • Lives in the service area of a Medicare Part D plan.

In general, an individual becomes entitled to Medicare Part A when he or she actually has Part A coverage, and not simply when he or she is first eligible. Medicare Part D-eligible individuals may include active employees, disabled employees, COBRA participants and retirees, as well as their covered spouses and dependents.

As a practical matter, group health plan sponsors often provide the creditable coverage disclosure notices to all plan participants.

Timing of Notices

At a minimum, creditable coverage disclosure notices must be provided at the following times:

  1. Prior to the Medicare Part D annual coordinated election period—beginning Oct. 15 through Dec. 7 of each year
  2. Prior to an individual’s initial enrollment period for Medicare Part D
  3. Prior to the effective date of coverage for any Medicare-eligible individual who joins the plan
  4. Whenever prescription drug coverage ends or changes so that it is no longer creditable or becomes creditable
  5. Upon a beneficiary’s request

If the creditable coverage disclosure notice is provided to all plan participants annually before Oct. 15 of each year, items (1) and (2) above will be satisfied. “Prior to,” as used above, means the individual must have been provided with the notice within the past 12 months. In addition to providing the notice each year before Oct. 15, plan sponsors should consider including the notice in plan enrollment materials provided to new hires.

Method of Delivering Notices

Plan sponsors have flexibility in how they must provide their creditable coverage disclosure notices. The disclosure notices can be provided separately, or if certain conditions are met, they can be provided with other plan participant materials, like annual open enrollment materials. The notices can also be sent electronically in some instances.

As a general rule, a single disclosure notice may be provided to the covered Medicare beneficiary and all of his or her Medicare Part Deligible dependents covered under the same plan. However, if it is known that any spouse or dependent who is eligible for Medicare Part D lives at a different address than where the participant materials were mailed, a separate notice must be provided to the Medicare-eligible spouse or dependent residing at a different address.

Electronic Delivery

Creditable coverage disclosure notices may be sent electronically under certain circumstances. CMS has issued guidance indicating that health plan sponsors may use the electronic disclosure standards under Department of Labor (DOL) regulations in order to send the creditable coverage disclosure notices electronically. According to CMS, these regulations allow a plan sponsor to provide a creditable coverage disclosure notice electronically to plan participants who have the ability to access electronic documents at their regular place of work, if they have access to the sponsor's electronic information system on a daily basis as part of their work duties.

The DOL’s regulations for electronic delivery require that:

  • The plan administrator use appropriate and reasonable means to ensure that the system for furnishing documents results in actual receipt of transmitted information;
  • Notice is provided to each recipient, at the time the electronic document is furnished, of the significance of the document; and
  • A paper version of the document is available on request.

Also, if a plan sponsor uses electronic delivery, the sponsor must inform the plan participant that the participant is responsible for providing a copy of the electronic disclosure to their Medicare-eligible dependents covered under the group health plan.

In addition, the guidance from CMS indicates that a plan sponsor may provide a disclosure notice electronically to retirees if the Medicare-eligible individual has indicated to the sponsor that he or she has adequate access to electronic information. According to CMS, before individuals agree to receive their information via electronic means, they must be informed of their right to obtain a paper version, how to withdraw their consent and update address information, and any hardware or software requirements to access and retain the creditable coverage disclosure notice.

If the individual consents to an electronic transfer of the notice, a valid email address must be provided to the plan sponsor and the consent from the individual must be submitted electronically to the plan sponsor. According to CMS, this ensures the individual’s ability to access the information as well as ensures that the system for furnishing these documents results in actual receipt. In addition to having the disclosure notice sent to the individual’s email address, the notice (except for personalized notices) must be posted on the plan sponsor’s website, if applicable, with a link on the sponsor’s home page to the disclosure notice.

Disclosure to CMS

Plan sponsors are also required to disclose to CMS whether their prescription drug coverage is creditable. The disclosure must be made to CMS on an annual basis, or upon any change that affects whether the coverage is creditable. At a minimum, the CMS creditable coverage disclosure notice must be provided at the following times:

  • Within 60 days after the beginning date of the plan year for which the entity is providing the form;
  • Within 30 days after the termination of the prescription drug plan; and
  • Within 30 days after any change in the creditable coverage status of the prescription drug plan.

Plan sponsors are required to provide the disclosure notice to CMS through completion of the disclosure form on the CMS Creditable Coverage Disclosure webpage. This is the sole method for compliance with the CMS disclosure requirement, unless a specific exception applies.

HIPAA Nondiscrimination Rules - August 2017

The Health Insurance Portability and Accountability Act (HIPAA) prohibits group health plans and group health insurance issuers from discriminating against individuals with regard to eligibility, premiums or coverage based upon a health status-related factor.

In addition, the Affordable Care Act (ACA) made a number of important changes to the HIPAA nondiscrimination provisions. Many of these ACA changes became effective for plan years beginning on or after Jan. 1, 2014. However, some ACA changes, such as the prohibition on preexisting condition exclusions for enrollees under age 19, became effective in prior years.

While the HIPAA nondiscrimination rules are not new requirements for group health plans, employers should take the opportunity to regularly review their health plans to confirm they do not violate any of the provisions within the HIPAA nondiscrimination rules, as amended by the ACA. 

Links And Resources

  • The Department of Labor has a self-compliance tool that includes a checklist for compliance with HIPAA’s nondiscrimination rules.

Final regulations on HIPAA’s nondiscrimination rules for wellness programs.

Health Status-Related Factors

HIPAA identifies these as health status-related factors:

  • Health status;
  • Medical condition (both physical and mental illnesses);
  • Claims experience;
  • Receipt of health care;
  • Medical history;
  • Genetic information;
  • Evidence of insurability; and
  • Disability.

The ACA added the following broad, “catch all” category to the list of health status-related factors: any other health status-related factor determined appropriate by the Department of Health and Human Services (HHS).

Similarly Situated Individuals

The HIPAA nondiscrimination rules generally apply within a group of similarly situated individuals. As a general rule, employers that offer health insurance benefits to their employees may not treat individuals within a group of similarly situated individuals differently. However, certain individuals may be treated as distinct groups of similarly situated individuals for purposes of the HIPAA nondiscrimination rules.

For example, an employer may provide different health benefits for employees in different groups if the distinction between the groups is based upon a bona fide employment-based classification.

The following employment classifications may reflect bona fide business practices:

  • Full-time versus part-time employees;
  • Occupation;
  • Date of hire;
  • Geographic location;
  • Membership in a collective bargaining unit;
  • Length of service; and
  • Current versus former employees.

Discrimination in Eligibility

Employers and health insurance issuers may not discriminate with respect to eligibility between similarly situated employees based upon a health factor. Eligibility rules include those related to enrollment, the effective date of coverage and eligibility for benefit packages. Employers may not require an employee to pass a physical examination in order to be eligible to enroll in the health plan, even if the individual is a late enrollee, or exclude individuals from coverage because they participate in dangerous activities or have a history of high health claims.

Discrimination in Premiums

Employers may not charge an individual within a group of similarly situated individuals a different rate for coverage based upon that individual’s health factors. However, if an employer has a wellness program in place that complies with HIPAA’s requirements governing wellness plans, an employer may establish premium contribution rates that vary based upon an individual’s participation in the wellness program.

HIPAA does not prohibit a health insurance issuer from considering all relevant health factors of the applicants in order to establish aggregate rates for coverage provided under a group health plan. However, the issuer is required to blend the individual-by-individual rates into an overall group rate and provide a per participant rate to the employer. Employers may not charge an individual within a group of similarly situated individuals a different rate for coverage based upon that individual’s health factors.

Benefit Limitations

A group health plan or issuer may include benefit limitations within their health plan so long as they apply uniformly to all similarly situated individuals under the health plan. For example, coverage may be denied for treatment that is not medically necessary. While limits or exclusions applicable to all similarly situated employees are permissible under the HIPAA nondiscrimination rules, employers and issuers must also determine whether the plan design violates laws such as the Americans with Disabilities Act (ADA) and the Pregnancy Discrimination Act.

In the event an employer or issuer implements a plan design change effective at the beginning of the plan year, it will not be considered to be directed at any one individual. However, a plan design change implemented in the middle of the plan year will be reviewed under a facts and circumstances test to determine if the changes were made in anticipation of a specific individual’s claim for treatment—which violates the HIPAA nondiscrimination rules.

PreExisting Condition Limitations and Exclusions

While HIPAA allowed the use of preexisting condition limitations and exclusions, it applied certain restrictions and required that the limitation or exclusion be applied uniformly to all similarly situated individuals. Effective for plan years beginning on or after Sept. 23, 2010, the ACA prohibited a plan or issuer from imposing preexisting condition exclusions for enrollees under age 19. Effective for plan years beginning on or after Jan. 1, 2014, preexisting condition exclusions for all enrollees are prohibited.

Actively-at-Work Provisions

An employer or issuer may not delay enrollment in the health plan until an employee is actively at work, unless individuals who are absent from work due to any health factor are treated, for purposes of health coverage, as if they are actively at work.

Non-Confinement Clauses

Non-confinement clauses are most often used to allocate responsibility for coverage of individuals that are confined to a hospital at the time an employer moves its coverage from one issuer to another. A plan or issuer may not deny coverage or delay an individual’s effective date for coverage because the individual is confined to a hospital.

Final regulations under HIPAA address the interaction between HIPAA and state laws that require the prior carrier to continue to cover expenses incurred as a result of a confinement which began while the prior carrier insured the confined individual. The application of these state laws allows an issuer to delay coverage to an individual who is confined because state law requires the prior issuer to continue to pay claims related to that confined individual until the confinement ends. The final regulations make it clear that an issuer, regardless of state law, must make an individual’s coverage effective even when that individual is confined to a hospital. The regulations indicate that the state laws be used as a coordination of benefits provision, but confirm that an individual’s effective date under the new issuer’s health plan cannot be delayed due to confinement.

Source of Injury Restrictions

An employer may not charge an employee a higher premium or deny enrollment in the health plan based upon an employee’s participation in a dangerous or hazardous activity (for example, skydiving or bungee jumping). However, the health plan may exclude coverage for treatment of injuries related to the participation in these activities.

A health plan may not exclude benefits because they are related to an act of domestic violence or a medical condition. For example, a health plan may not exclude coverage for treatment of self-inflicted injuries sustained in connection with an attempted suicide if the injuries were also caused by a medical condition such as depression. The final HIPAA regulations clarify that benefits may not be denied for injuries resulting from a medical condition even if the medical condition was not diagnosed before the injury.

More Favorable Treatment of Individuals

Employers and issuers are not prohibited from establishing more favorable rules for eligibility for individuals with an adverse health factor, such as a disability, than for individuals without an adverse health factor. The following example demonstrates an acceptable and common plan provision that treats individuals with a health factor more favorably.

Example: An employer offers a health plan that provides benefits for eligible employees, their spouses and dependents. Dependents are eligible for coverage until they reach age 26. However, dependent children who are disabled are eligible for coverage beyond the age of 26.

Health Reimbursement Arrangements

Health reimbursement arrangements (HRAs) are tax-favored accounts intended to reimburse employees for medical expenses not otherwise covered by the health plan. Unused funds within an HRA may be carried over from year to year. The final regulations address whether HRAs with a carry-over feature violate the HIPAA nondiscrimination rules by including the following example.

Example: An employer sponsors a group health plan that is available to all current employees. Under the plan, the medical care expenses of each employee (and the employee’s dependents) are reimbursed up to an annual maximum amount. The maximum reimbursement amount with respect to an employee for a year is $1500 multiplied by the number of years the employee has participated in the plan, reduced by the total reimbursements for prior years.

This example clarifies that even though unused employer-provided medical care reimbursement amounts carried forward from year to year varies among employees within the same group of similarly situated individuals based upon prior claims experience, the HRA does not violate the HIPAA nondiscrimination rules. Employees who have participated in the plan for the same length of time are eligible for the same total benefit over that length of time and the restriction on the maximum reimbursement amount is not directed at any individual participants or beneficiaries based on any health factor.

Genetic Information

The Genetic Information Nondiscrimination Act of 2008 (GINA) included provisions related to genetic information that affect the HIPAA nondiscrimination rules. Genetic information is defined as information about genetic tests of an individual or the individual’s family members, information about the manifestation of a family member’s disease or disorder and an individual’s request for or receipt of genetic services. Genetic information also includes information about the fetus of a pregnant individual or family member or embryo in the case of assisted reproductive technology.

Specifically, GINA prohibits a group health plan from:

  • Adjusting premiums or contribution amounts based on genetic information;
  • Requesting or requiring an individual or an individual’s family member to undergo a genetic test (this does not apply to health care providers);
  • Requesting, requiring or purchasing genetic information prior to or in connection with enrollment in the plan; or
  • Using genetic information for underwriting purposes.

However, group health plans may use the results of genetic tests for payment purposes as defined by the HIPAA Privacy Rules, as long as the minimum amount of information necessary is used. Also group health plans may request genetic information for research purposes if all applicable requirements are met.

Wellness Programs

The final HIPAA regulations provided guidance on when wellness programs comply with the HIPAA nondiscrimination rules. The ACA codified the HIPAA rules for nondiscriminatory wellness plans, while also increasing the maximum permissible reward that can be offered under health-contingent wellness programs. Effective in 2014, the wellness program incentive limit increased to 30 percent of the premium (50 percent for wellness programs designed to prevent or reduce tobacco use).

On June 6, 2013, final regulations were issued on the ACA’s nondiscrimination requirements for wellness plans. These rules became effective for plan years beginning on or after Jan. 1, 2014 and apply to both grandfathered and non-grandfathered plans. While the final regulations generally retain the HIPAA rules’ nondiscrimination requirements for health-contingent wellness programs, there are some important differences that may require changes to the design and operation of wellness plans.

New Fiduciary Rule Takes Effect for HSAs - July 2017

In April 2016, the Department of Labor (DOL) released a final rule that expands who is considered a “fiduciary” when providing investment advice to retirement plans and their participants. The final rule’s guidance also applies to individual retirement accounts (IRAs) and health savings accounts (HSAs). After being delayed, the final rule became effective on June 9, 2017.

Under the rule, a person is a fiduciary if the person receives compensation for providing investment advice with the understanding that it is based on the particular needs of the person being advised or that it is directed at a specific plan sponsor, plan participant or account owner. Fiduciary status is significant because fiduciaries are required to act in their clients’ best interests and may be held personally liable in the event of a fiduciary breach.


Individuals who provide advice on HSAs may be considered fiduciaries if their communications rise to the level of investment recommendations covered by the final rule. Employers should review their arrangements with HSA service providers to determine if the providers will qualify as fiduciaries under the new rule. Advisors should also review their business practices in light of the final rule’s expanded definition and make any necessary modifications.

Fiduciary Role

The Employee Retirement Income Security Act (ERISA) and the federal Internal Revenue Code (Code) impose standards of conduct on individuals who manage an employee benefit plan and its assets, who are called fiduciaries. For example, fiduciaries are required to act prudently and solely in the interest of plan participants and beneficiaries. Fiduciaries can be held personally liable for losses when there is a fiduciary breach of duty. In addition, certain transactions are prohibited in order to prevent dealings with parties who may be in a position to exercise improper influence over the plan.

Under ERISA and the Code, people who give investment advice for a fee are considered fiduciaries, regardless of whether that fee is paid directly by the customer or by a third party.

According to the DOL, the final rule compels more investment advisors to put their clients’ best interests first by requiring them to comply with federal fiduciary standards and the prohibited transaction rules. It also distinguishes activities that are not investment advice, like education. In addition, the final rule includes certain exemptions from the prohibited transaction rules, including a best interest contract (BIC) exemption that allows common types of compensation to be paid if the terms of the exemption are satisfied.

Effective Date

The final rule’s expanded definition of fiduciary originally was set to take effect on April 10, 2017. However, this effective date was delayed by 60 days—until June 9, 2017—in response to a memorandum issued by President Donald Trump that directed the DOL to re-examine the final rule and consider whether it should be revised or rescinded. Although the final rule became effective on June 9, 2017, the DOL has indicated that the rule’s requirements may not align with President Trump’s deregulation goals and that changes may be proposed in the future. On June 29, 2017, the DOL issued a request for comments in connection with its continued examination of the final fiduciary rule.

Other provisions of the final fiduciary rule related to prohibited transaction exemptions for investment advisors are scheduled to take effect on Jan. 1, 2018. Until this time, HSA investment advisors that rely on the BIC exemption will only be required to comply with the exemption’s impartial conduct standards.

Covered Employee Benefits

In addition to ERISA plans and IRAs, the final rule covers HSAs, Archer medical savings accounts, Coverdell Education Savings Accounts and ERISA-covered 403(b) plans. While acknowledging that HSAs generally hold fewer assets and may exist for shorter durations than IRAs, the DOL determined that HSA owners are entitled to receive the same protections from conflicted investment advice as IRA owners. The DOL also recognized that HSAs may have associated investment accounts that can be used as long-term savings accounts for retiree health care expenses. 

In addition, the DOL clarified that the final rule does not apply to recommendations to welfare plans (such as health plans, disability plans or term life insurance) where they do not contain an investment component.

Investment Advice

Under the final rule, a person is a fiduciary if the person receives compensation for providing investment advice with the understanding that it is based on the particular needs of the person being advised or that it is directed to a specific plan sponsor, plan participant or account owner.

Investment advice includes:

* Investment recommendations, which means advice on buying, holding, selling, or exchanging securities or other investment property, or advice on investing securities or other property after a rollover or distribution from a plan.

* Investment management recommendations, which means advice on investment policies or strategies, portfolio compensation, selection of others to provide investment advice or investment management services, selection of investment account arrangements (for example, brokerage versus advisory), or recommendations with respect to rollovers, transfers or distributions from a plan or IRA. 

Also, to become a fiduciary, the person providing the investment advice must:

  • Represent or acknowledge that he or she is acting as a fiduciary under ERISA or the Code;
  • Provide investment advice pursuant to a written or verbal agreement, arrangement or understanding that the advice is based on the particular needs of the advice recipient; or
  • Direct investment advice regarding the advisability of a particular investment or management decision to a specific recipient(s).


In the final rule, the DOL clarifies that some common communications do not meet the definition of “recommendation,” and, thus, do not constitute fiduciary investment advice.

Investment education

A plan sponsor, service provider or others can provide investment educational information without becoming a fiduciary.

General communications

General communications that a reasonable person would not view as an investment recommendation, such as general circulation newsletters, remarks or presentations in widely attended speeches and conferences or general marketing materials, are not investment advice.

Platform providers

Service providers or third-party administrators that offer a “platform” or selection of investment alternatives for a defined contribution retirement plan (for example, a 401(k) plan) without regard to the individualized needs of the plan, its participants or beneficiaries are not providing investment advice.

The final rule explains that a plan sponsor’s employee does not become a fiduciary by providing advice to a plan fiduciary or to another employee, provided the person receives no fee or other compensation, direct or indirect, in connection with the advice beyond the employee’s normal compensation for work performed for the employer.

This exclusion also covers communications between employees, such as human resources department staff who communicate to other employees about the plan and its distribution options, as long as they meet certain conditions (that is, they are not registered or licensed advisors under securities or insurance laws and only receive their normal compensation for work performed for the employer).

The DOL’s final rule also includes some broad exemptions that are intended to provide fiduciary advisors with flexibility to continue many common fee and compensation practices, as long as certain protections are in place to ensure that their advice is in their clients’ best interest.

More Information

The DOL’s webpage on the final rule includes links to the final rule and related prohibited transaction exemptions. It also includes links to frequently asked questions on the final rule and fact sheets that describe the final rule’s requirements.

OSHA Signals Intention to Delay Electronic Reporting - June 2017

The Occupational Safety and Health Administration’s (OSHA) electronic reporting rule requires certain establishments to report information electronically from their OSHA Forms 300, 300A and 301. The rule also requires OSHA to create a website that can be used to submit the required information. Under the rule, the first reports are due by July 1, 2017.

However, on a recent update to its recordkeeping webpage, OSHA indicated it will not be ready to receive electronic workplace injury and illness reports by the established deadline. No new reporting deadline has been adopted yet.


OSHA has not officially delayed the July 1, 2017, deadline, but its website will not be ready to receive electronic reports from employers by this time.

Affected establishments should continue to record and report workplace injuries as required by law and should monitor these developments to learn whether a new reporting deadline will be adopted.

Strategic Benefit Planning - May 2017

Competitive employee benefits packages are essential for attracting and retaining quality employees, but continuing to offer them can be tough with the rising cost of health care squeezing an already tight budget. Cutting benefits may seem like a necessary reality for some companies, but could have serious long-term consequences.

Retaining employees throughout these rocky economic times is vital so that your company remains competitive and positioned favorably in its industry when the economy rebounds. One remedy could be implementing a strategic benefit plan, which will help you find ways to contain or even cut costs while still offering competitive benefits.

What is a strategic benefit plan?

A strategic benefit plan is a three-to-five-year plan crafted by you and your CMR Risk & Insurance Services, Inc. representative that outlines goals, strategies and action plans in regards to your employee benefits program. In creating the plan, you and your broker will strategically analyze ways to contain costs through various plan improvements. This approach is a methodical and logical long-term approach to benefit planning, as opposed to making decisions year to year, and will provide a thought-out road map for your future benefits.

What are the benefits of implementing one?

At the company level, creating a strategic benefit plan will help greatly with internal budget planning and can also be incorporated into your corporate strategic plan. This will bring HR and employee benefits into larger strategic conversations and ensure that a competitive benefits package continues to be available.

Employees will also see the benefit from a strategic benefit plan in many ways. First of all, by finding ways to cut and contain costs for the company, the employee will likely reap some of the savings as well. In addition, this type of plan will provide assurance for employees worried about their benefits. Next to job security, employees worry most about their benefits and compensation, namely that they could be reduced or cut at any time.

Studies have shown that workplace morale is strongly linked to the quality of employee benefits, so reassuring employees that their benefits will continue is a beneficial move for companies. The strategic benefits plan can include an employee communication initiative, which will keep employees informed and assured on the future status of their benefits package.

Facts About the Flu - April 2017

The flu is an infection of the respiratory tract caused by the influenza virus. It usually causes mild to severe illness, but sometimes it can cause fatal complications.

Flu Symptoms

A person who has the flu often feels some or all of these symptoms:

  • Fever and/or chills
  • Headache
  • Fatigue
  • Cough and/or sore throat
  • Nasal congestion
  • Muscle or body aches
  • Stomach ailments such as nausea, vomiting and diarrhea (more common in children than adults)

How the Flu is Spread

The flu spreads primarily when someone coughs, sneezes or talks, allowing the virus to become airborne and then infect other people. It can also spread if a healthy individual touches a surface that was previously touched by an infected person, and then the healthy individual touches his or her own mouth, eyes or nose. People are typically contagious from the day before symptoms start until seven days after symptoms appear.

The timing of the flu virus is very unpredictable and can vary from season to season. Flu activity most commonly peaks in the United States between December and February; however, seasonal flu activity can begin as early as October and continue as late as May.

If You Get the Flu

If you contract the flu, it is important to take good care of yourself. The Centers for Disease Control and Prevention (CDC) recommends the following:

  • Stay home from work! It’s your best chance for recovery, and you will avoid spreading the disease to others.
  • Get sufficient sleep.
  • Drink plenty of fluids.
  • Take over-the-counter (OTC) medications appropriate for your symptoms.
  • Most people do not need medical care, but consult your doctor if you are concerned. Also, seek immediate medical attention if you have any of the warning signs discussed on the next page.


Serious complications can arise from the flu, including bacterial pneumonia, ear infections, sinus infections, dehydration and worsening of chronic medical conditions. This is why it is crucial to prevent contracting the virus in the first place.

These simple steps should be taken in order to avoid the flu:

  • Get a yearly flu vaccine. It is the most important step in protecting against the virus. Flu vaccines are needed on a yearly basis because the body’s immune response to a vaccination declines over time and because flu viruses are constantly mutating.
  • Take preventive actions. Cover your mouth when you sneeze or cough. Try to avoid close contact with sick people and avoid touching your eyes, nose and mouth. Wash your hands often or use alcohol-based hand sanitizer.
  • Take antiviral drugs if your doctor recommends them. These are prescription drugs that fight the flu by keeping the viruses from reproducing in your body.
  • Maintain a healthy immune system by eating healthy food, exercising, getting adequate sleep, controlling your stress level and avoiding smoking.

Emergency Situations

Occasionally, the flu can cause serious medical complications. It is important to seek immediate medical treatment if someone with the flu displays any of these signs.

In children, emergency warning signs include:

  • Fast breathing (or difficulty breathing)
  • Bluish skin color
  • Not drinking enough fluids
  • Not waking up or interacting with people
  • Being so irritable the child does not want to be touched
  • Flu-like symptoms improve, but then return with a fever and a worse cough
  • Fever with a rash 

In adults, emergency warning signs are:

  • Difficulty breathing or shortness of breath
  • Pain or pressure in the chest or abdomen
  • Sudden dizziness
  • Confusion
  • Severe or persistent vomiting
  • Flu-like symptoms that improve, but then return with a fever and a worse cough

Flu Vaccination

The CDC recommends yearly flu shots for all individuals over six months of age. Vaccination is especially important for people who are at high risk for serious flu complications, such as young children, pregnant women, people with chronic medical conditions and people 65 years and older. While there are many different flu viruses, the seasonal flu vaccine is designed to protect against the main flu viruses that research suggests will cause the greatest spread of illness during the upcoming flu season; however, it is still possible to become ill from a strain of influenza not included in the vaccine. Even so, antibodies from a vaccination of one flu virus can sometimes provide protection against different but related viruses, and all recipients of a flu vaccine will be protected from the two main A-strains of flu, which are generally considered the most dangerous.

There are several flu vaccine options, which will greatly expand flu shot choices for people who would otherwise be ineligible to receive a vaccination. The offerings include a four-strain vaccine and nasal spray; a high-dose three-strain flu shot; two egg-free versions; and a shot that does not go beneath the skin.

All vaccines protect against both Type A strains of influenza (H1N1 and H3N2), as well as a Type B strain. The four-strain, or quadrivalent, vaccine protects against both strains of Type B as well as the Type A strains. It has been difficult in the past to predict which B strain would become dominant in a given season, so the quadrivalent vaccine protects against both.

Additionally, a high-dose flu shot containing four times the usual dosage is offered to older adults and other people with weakened immune systems as a way of boosting their bodies’ responses to the virus.

Finally, people with an aversion to needles can choose to receive a “microneedle” version of the vaccine that is applied to the skin instead of the arm muscle.

Different flu shots are approved for people of different ages; there are even flu shots that are approved for use in people as young as six months of age. For many vaccine recipients, more than one type or brand of vaccine may be appropriate. Where more than one type of vaccine is appropriate and available, no preferential recommendation is made by the CDC for use of any influenza vaccine product over another. If you have questions about which vaccine is best for you, talk to your doctor or another health care provider.

Contrary to popular belief, you cannot contract the flu from the flu vaccine—but sometimes side effects mimic those of the flu, such as a headache, low fever and/or nasal congestion. However, these will only persist for a maximum of 24 hours.

These people should NOT get a flu vaccine without first consulting their physician:

  • Those who have had a severe reaction or have developed Guillain-Barre syndrome within six weeks of getting an influenza vaccination; and
  • Children under six months of age.

Benefit Plans: Tax Considerations - March 2017

Employee benefits can be complex to administer, particularly in terms of taxation. It is important to understand the tax implications for both the employer and employee. This article will explain the general considerations related to the taxation of employee benefits.

Employer Tax Implications

Employers can usually deduct amounts that they spend on employee benefits as a trade or business expense when filing taxes. In order to be deductible as a trade or business expense, the expense must meet the following criteria:

- It is an ordinary and necessary expense of the employer’s trade or business.

  • The IRS defines “ordinary” as common and accepted in your trade or business. A “necessary” expense is one that is helpful and appropriate for your business; it need not be indispensable to be considered necessary.

- The expense must be paid or incurred during the tax year in which it is deducted.

  • This depends on whether your company uses a cash method or accrual method of accounting. If using a cash method, the expense is deductible in the year it is paid. If accrual method is used, the expense is deductible in the year it is incurred.

- The expense must be connected with the trade or business conducted by the taxpayer (employer).

  • This requirement simply differentiates a business with a primary purpose of achieving income or profit from a sporadic hobby or activity that happens to make money.

It is also important to remember for noncash benefits that the employer may deduct only the cost of the benefit (though the value of the benefit must be included in the employee’s gross income).

Employee Tax Implications

The employer is also responsible for determining if various benefits should be included in the employees’ gross income for tax purposes. Generally, a benefit must be included in the employee’s taxable income unless specifically excluded by the IRS. Many employee benefits are expressly excluded from gross income by the IRS, including health insurance, life insurance (up to a limit), education assistance, flexible spending accounts, child care expenses, legal assistance and more. Visit www.irs.gov for a complete list. In addition, some benefits are tax-deferred until the employee receives the benefit, such as qualified retirement benefits.

For benefits that are taxable, you must answer the following questions to determine the appropriate tax treatment of that particular benefit:

  • Who is subject to the tax? Even if the benefit applies to someone else (like educational expenses for a child or a benefit for a spouse), the employee is generally the one who should be taxed.
  • When is the benefit taxable? Generally, the benefit counts as income when the benefit is actually received. One exception is the “constructive receipt” of a benefit (when the employee is legally entitled to a benefit, even if it is not in his or her possession). One example is funds in an account that are available to the employee at any time; these would be taxed once they become available, even if the employee hasn’t spent them.
  • How much of the benefit is taxed? For noncash benefits, the value of the benefit is more important than the actual cost to the employer. The value of a benefit is determined by the “fair market value,” not including any amount that the employee had to contribute or any amount specifically excluded by a provision of the law. Fair market value is the amount a hypothetical person would pay an objective third-party for that particular benefit.

Benefits that are not included in taxable income are also likely excludable from Social Security, Medicare and unemployment insurance taxes. The employer, however, does need to consider any special rules, such as nondiscrimination rules, to be met for certain employees. Also, some benefits only allow a certain portion to be non-taxable; the employer should be aware of any limits.

How Repealing the ACA could affect Employer Sponsored Health Plans - February 2017


Since the Affordable Care Act (ACA) was enacted in 2010, employers and health insurance issuers have had to make numerous changes to employer-sponsored group health plans offered to employees. If the ACA is repealed, many plan terms may no longer be required. These changes may be beneficial for employers, but could be confusing or, in some cases, unwelcome for employees.

The ultimate impact of repealing the ACA will depend on the specific details of the repeal, and any replacement, that is enacted. While steps have been made toward repeal, it is unclear what impact those steps may have or what an ACA replacement will look like.


The initial steps, including an executive order issued by President Donald Trump, have no immediate impact on the ACA. No ACA provisions or requirements have been eliminated or delayed at this time. However, employers should be aware of potential changes to their plans if the ACA is repealed.

Impact on Employer-sponsored Plans

Listed below are a number of ACA provisions that have a significant impact on employer-sponsored group health plans. Additional requirements apply to plans in the small group market, such as premium rating restrictions and the requirement to offer an essential health benefits package. Although it is unclear which, if any, of these provisions will be affected in the future (and to what degree), it is helpful for employers to be aware of the potential impact on their employer-sponsored coverage.

Prohibition on Lifetime and Annual Limits

The ACA prohibits health plans from imposing lifetime and annual limits on the dollar value of essential health benefits. “Essential health benefits” are a core set of items and services intended to reflect the scope of benefits covered by a typical employer. The ACA’s lifetime and annual limit restrictions ensure that coverage for essential health benefits may not be cut off once an enrollee reaches a certain dollar amount for a year or over his or her lifetime. However, plans may impose annual limits on specific covered benefits that are not essential health benefits.

Out-of-pocket Maximum Limit

Under the ACA, non-grandfathered group health plans are subject to an annual limit on total enrollee cost-sharing for essential health benefits, known as an out-of-pocket maximum. For the 2017 plan year, out-of-pocket expenses may not exceed $7,150 for self-only coverage and $14,300 for family coverage. Once an enrollee reaches the out-of-pocket maximum for the year, he or she is not responsible for additional cost-sharing for essential health benefits for the remainder of the year.

Waiting Period Limit

The ACA prohibits group health plans and group health insurance issuers from applying any waiting period that exceeds 90 days. A “waiting period” is the period of time that must pass before coverage for an employee or dependent who is otherwise eligible to enroll in the plan becomes effective. This waiting period limit does not require an employer to offer coverage to any particular employee or class of employees, including part-time employees. It only prevents an otherwise eligible employee (or dependent) from having to wait more than 90 days before coverage under a group health plan becomes effective.

Prohibition on Pre-existing Condition Exclusions

Under the ACA, group health plans and health insurance issuers may not impose pre-existing condition exclusions on any covered individual, regardless of the individual’s age. A pre-existing condition exclusion is a limitation or exclusion of benefits related to a condition based on the fact that the condition was present before the individual’s date of enrollment in the employer’s plan. The prohibition on pre-existing condition exclusions is particularly helpful for individuals who lose employer-sponsored coverage (for example, due to a job loss or change), to ensure that coverage cannot be denied for an existing health condition once the individual enrolls in a new health plan.

Dependent Coverage to Age 26

The ACA requires group health plans and health insurance issuers that provide dependent coverage to children on their parents’ plans to make coverage available until the adult child reaches age 26. This provision does not require plans and issuers to offer dependent coverage at all. It only requires plans that otherwise offer dependent coverage to make that coverage available until the adult child reaches age 26. This requirement is intended to ensure that young adults have health insurance coverage until they can transition to their own health plan.

Preventive Care Coverage Requirement

The ACA requires non-grandfathered health plans to cover certain preventive health services (including additional preventive health services for women) without imposing cost-sharing requirements for the services. In general, this means that plans are required to cover services such as immunizations, annual checkups, and regular health and cancer screenings without charging a copayment or applying an annual deductible. For women, the ACA also requires coverage of additional services, such as well-women visits and contraceptives.

Prohibition on Rescissions

The ACA prohibits group health plans and health insurance issuers from rescinding coverage for covered individuals, except in the case of fraud or intentional misrepresentation of a material fact. A “rescission” is a cancellation or discontinuance of coverage that has a retroactive effect (such as one that treats a policy as void from the time of enrollment). When a coverage rescission occurs, the insurance company is no longer responsible for medical care claims that they had previously accepted and paid.

Patient Protections

The ACA imposes the following three “patient protection” requirements on group health plans related to the choice of a health care professional and requirements relating to benefits for emergency services:

  • Plans and issuers that require designation of a participating primary care provider must permit each participant, beneficiary and enrollee to designate any available participating primary care provider (including a pediatrician for children).
  • Plans and issuers that provide obstetrical/gynecological (OB/GYN) care and require a designation of a participating primary care provider may not require preauthorization or referral for OB/GYN care.
  • Plans and issuers that provide hospital emergency room benefits must provide those benefits without requiring prior authorization, and without regard to whether the provider is an in-network provider.

The Process for Repeal

The steps that have already been taken to begin the process of repealing the ACA include a budget resolution and an executive order. However, there are certain legal and practical limitations on what can be accomplished through budget reconciliation and executive orders.

Budget Reconciliation Process

On Jan. 13, 2017, the U.S. Congress passed a budget resolution for fiscal year 2017 that will be used to draft legislation to repeal certain ACA provisions. This budget resolution is a nonbinding spending blueprint that is used to create federal budget legislation through a process called “reconciliation.” House and Senate committees targeted Jan. 27, 2017, to draft a budget reconciliation bill following the budget resolution, but recognized that the process will likely take longer. Once drafted, a reconciliation bill can be passed by both houses with a simple majority vote.

However, a full repeal of the ACA cannot be accomplished through the budget reconciliation process. A budget reconciliation bill can only address ACA provisions that directly relate to budgetary issues—specifically, federal spending and taxation. A full ACA repeal must be introduced as a separate bill that would require 60 votes in the Senate to pass.

Executive Order

On Jan. 20, 2017, President Trump signed an executive order directing federal agencies to waive, delay or grant exemptions from ACA requirements that may impose a financial burden. The executive order on the ACA is a broad policy directive that gives federal agencies authority to eliminate or fail to enforce any number of ACA requirements, as permitted by law. It does not include specific guidance regarding any particular ACA requirement or provision, and does not change any existing regulations. An executive order cannot, itself, repeal the ACA or any ACA provisions.

Until the new heads of federal agencies are in place, it is difficult to know how the ACA will be impacted. As a result, the executive order’s specific impact will remain largely unclear until the new administration is fully in place and can begin implementing these changes. In any case, the immediate impact of the executive order will likely be small, since it will take time to implement policies, regulations and other subregulatory guidance to carry out the directives. In addition, health insurance policies for 2017 are already in place, and state law, in many cases, prohibits significant changes from being made midyear.

New Law Allows Stand-alone HRAs for Small Employers - December 2016


On Dec. 13, 2016, the 21st Century Cures Act (Act) was signed into law. The Act allows small employers that do not maintain group health plans to establish stand-alone health reimbursement arrangements (HRAs), effective for plan years beginning on or after Jan. 1, 2017. This new type of HRA is called a “qualified small employer HRA.”

Due to the Affordable Care Act (ACA), most stand-alone HRAs have been prohibited since 2014. This new law creates a special exception for small employers that are not subject to the ACA’s employer shared responsibility rules. Instead of offering a group health plan, small businesses may use a qualified small employer HRA to reimburse employees’ out-of-pocket medical expenses, including their premiums for individual health insurance coverage, on a tax-free basis.


Small employers that do not sponsor group health plans may want to consider implementing a qualified small employer HRA to help their employees pay for out-of-pocket medical expenses. Because there are specific design requirements for these HRAs, including a maximum benefit limit and an employee notice, small businesses should work with their advisors to make sure their HRAs are compliant.

ACA Reforms

HRAs are employer-funded arrangements that reimburse employees for certain medical care expenses on a tax-free basis, up to a maximum dollar amount for a coverage period. The ACA includes market reforms that limit the availability of HRAs, beginning in 2014. Under these reforms, most stand-alone HRAs have been prohibited. A stand-alone HRA is an HRA that is not offered in conjunction with a group health plan.

However, the Act creates an exception to this prohibition for qualified small employer HRAs. 

Qualified Small Employer HRA

Eligible Employers

To be eligible to offer a qualified small employer HRA, an employer must meet the following two requirements:

  1. The employer is not an applicable large employer (ALE) that is subject to the ACA’s employer shared responsibility rules. In general, this means that the employer must have fewer than 50 full-time employees, including full-time equivalents
  2. The employer does not maintain a group health plan for any of its employees.

HRA Design Requirements

Like all HRAs, a qualified small employer HRA must be funded solely by the employer. Employees cannot make their own contributions to an HRA, either directly or indirectly through salary reduction contributions. In addition, the following requirements apply to qualified small employer HRAs:

Employee Notice

An employer funding a qualified small employer HRA for any year must provide a written notice to each eligible employee. This notice must be provided within 90 days of the beginning of the year. For employees who become eligible to participate in the HRA during the year, the notice must be provided by the date on which the employee becomes eligible to participate.

The notice must include the following information:

  • The employee’s maximum benefit under the HRA for the year;
  • A statement that, if the employee is applying for advance payment of the premium assistance tax credit, the employee should provide the Exchange with information about the HRA’s maximum benefit; and
  • A statement that, if the employee is not covered under minimum essential coverage for any month, the employee may be subject to a penalty under the ACA’s individual mandate and reimbursements under the HRA may be includible in gross income.

If an employer fails to provide this notice for a reason other than reasonable cause, the employer may be subject to a penalty of $50 per employee for each failure, up to a maximum annual penalty of $2,500 for all notice failures during the year.

Monitoring PTO Amounts - November 2016

Many companies are now offering paid time off (PTO) as opposed to traditional vacation and sick day policies. With a PTO policy, employees can draw from their allotted bank of hours for a variety of reasons, including vacation, doctor’s appointments or needing a day off for personal reasons. To accrue this bank of hours, employers (usually HR) either credit the year’s PTO allotment at the beginning of the year or deposit PTO hours each pay period.

However, HR’s involvement generally stops at distributing hours to employees. For a PTO policy to be beneficial to both employees and employers, in most cases, HR should monitor PTO usage and set PTO amounts.

Know Your Organization

The need for PTO monitoring is entirely dependent upon your organization. If your organization does not have clear guidelines for PTO usage, you may need to take a more hands-on approach to monitoring employees’ PTO. For example, you could require employees to give at least one week’s notice before using PTO unless he or she is sick or there is an emergency in order to reduce the risk of employees taking advantage of PTO.

If your organization has already established clear directives for employees to follow when using PTO and your company culture is designed to embrace PTO policies, you may not have to do much work monitoring PTO usage.

Asking “Why” and Denying PTO

It is up to your company to decide whether or not you should require your employees to explain what they’re using their PTO for. Generally, employees can use their PTO however they want to. As a result, many managers don’t feel comfortable asking “why” when an employee submits a PTO request. However, it sometimes makes sense to do so.

For example, if an employee asks off during a particularly busy time and his or her absence will be significant, it makes sense to ask what they are doing with their time off, and then, depending on their answer, ask them if they could move it to either before or after the busy time at work.

Keep in mind that asking why too frequently or consistently denying employees’ PTO requests may become problematic. PTO boosts employee morale and productivity and is an attractive retention tool—denying PTO requests often or appearing too intrusive may discourage employees from using this benefit at all. While it is up to your company to create a policy on asking questions about and denying PTO requests, it is generally better to avoid doing either frequently.

Area of Concern: Using or Saving All Accrued PTO

If your organization distributes an entire year’s worth of PTO at the beginning of the year, you should be on the lookout for employees who use up all of their PTO early in the year or save it all until December. If employees use all of their PTO early in the year, they will have no safety net for illness, injury or emergency days later on in the year. On the flipside, if your company allows PTO to be rolled over to the next plan year, you might end up with an employee who has an extensive amount of unused PTO and decides to take a five-week vacation. If your company does not allow rollovers or caps rollovers to a certain amount of hours, an employee who does not use any PTO will lose all or a large portion of it at year’s end.

To prevent this from happening, you, as the HR professional, need to be on the lookout for PTO misuse and speak with employees when you notice it happening. Though it is ultimately the employees’ choice on how they choose to use their PTO, notifying them of the potential impact of their choices may be enough to remedy the issue.

Be Clear on Philosophy

According to a study from Project: Time Off—a U.S. Travel Association initiative to transform American attitudes and behaviors around time off—management’s mixed messages surrounding vacation time contributed to 658 million unused vacation days in 2015. Mixed messages include denying PTO requests too frequently or making employees feel guilty for taking time off from work.

As previously mentioned, PTO is a valuable tool that can lead to less burnout and improve employee morale, productivity and retention. If you want your employees to reap the benefits of PTO, don’t discourage them from using it by confusing the issue with mixed messages.


HR should keep track of PTO amounts to avoid issues and make the company’s PTO philosophy clear to employees in order for it to be beneficial to both employees and employers.

Fair Employee Compensation - October 2016

Providing nondiscriminatory, fair employee compensation is a top concern for employers across the country. Because HR specializes in areas like recruiting and compensation packages, they are in the best position to determine appropriate compensation plans, make acceptable initial salary offers, establish guidelines for merit increases, suggest pay audits, and, if necessary, help the company phase in compensation change.

Designing Compensation Plans

Having a well-designed compensation plan that ensures equity should be a high priority for all employers. Yet, a compensation plan should not be focused on the salary for a position. Compensation plans can, and typically do, include things like commissions, bonuses or merit pay, stock options and a comprehensive benefits package to complement a base salary.

Compensation will typically be perceived as fair if it is designed with a system of components including job descriptions, job analyses and evaluations, and pay structures. Ensuring that these elements are included when determining compensation plans is essential to maintaining internal and external equity.

•             Internal equity refers to employees’ perception of their pay in comparison to their co-workers.

•             External equity refers to employees’ perception of your company’s pay in comparison to the pay of similar positions at other companies.

 Job Descriptions

Defining and documenting the responsibilities, requirements, duties, conditions, environment and other applicable aspects of a job is an important element of a compensation system. Having well-written job descriptions can help you set the parameters for fair salary offers and ranges and help you appropriately group jobs. Additionally, it can help streamline the recruiting process and ensure compliance with federal laws like the Americans with Disabilities Act (ADA) and the Fair Labor Standards Act (FLSA), as well as applicable state and local legislation.

Job Analyses and Evaluations

Analyzing and evaluating job elements like safety risks, job stress, work schedule, autonomy and level of supervision are factors that play into determining fair levels of compensation. Often, this task involves comparing your company’s positions and evaluations with industry market data and adjusting both the position itself, ranking levels of each position (entry level, intermediate, senior) and pay grades, as necessary.

Pay Structures

After deciding how many different levels (if any) of each position your company wants to have, you must determine pricing and salary structures for each. Be sure to set a minimum and maximum percent spread for each salary range and pay grade.

It’s important to look at market trends for salary ranges of each level and align them with company pay philosophy; or, in other words, decide if you want to pay your employees at, below or above market salary trends. Take your company’s industry and geographic location into account when drawing comparisons and adjust accordingly.

Making an Appropriate Salary Offer

Perceived pay fairness begins with a new hire’s initial salary offer. The offer should be placed within the current workforce’s population and within market trends to maintain internal and external equity, respectively. HR should document if salary negotiation occurs or if any unique issues occur for future reference, if needed.

Be mindful of the perceived market value of a specific position, but also remember that it’s not all about the monetary offer. Company culture and benefits offerings play a role in an employee’s perception of whether or not they are being paid fairly for their work.

Establishing Guidelines for Merit Increases

Merit increases, also known as merit bonuses, are a great way to reward employees, but without set guidelines, there is no real way to ensure that these incentives are being awarded fairly. It may be beneficial to develop a standardized, objective method for evaluating employees.

Consider the following suggestions when establishing and implementing merit increase procedures:

•             Emphasize to managers which accomplishments and behaviors will warrant a reward.

•             Offer performance-management training for all managers to ensure all managers are capable of conducting performance reviews to your company’s standards.

•             Remain transparent with employees about how your company’s bonus structure works.

•             Provide opportunities for employee feedback.

•             Review your merit increase program regularly.

Suggesting Pay Audits

As previously mentioned, because HR deals with employee compensation directly, they are in the best position to bring up the topic of—and, in some cases, to conduct—a pay audit. HR will be instrumental in gathering the necessary paperwork for a legal counsel to conduct a pay audit and will likely be responsible for explaining differences in pay among employees based on the job descriptions, which exacerbates the importance of having proper job descriptions written for each position at your company.

If a pay audit is needed at your company and your company uses legal counsel to conduct the audit, remember to discuss the terms of attorney-client privilege with them so that you do not put your company at risk of losing it.

Phasing in Compensation Change

If a pay audit reveals that compensation changes need to be made in order to comply with fair employee compensation legislation, HR will be responsible for helping implement them. A large part of their role will involve communicating these changes to employees and managing any issues that may arise following these changes.

Taking a thoughtful approach is often the best way to phase in compensation changes for both the employer and the employee.

The Importance of Fair Compensation

If your company’s employee compensation is fair, it can be a useful tool to help you recruit and retain talent, increase employee morale and reward or encourage high performance. Employees are coming to expect fair compensation as well. If your company does not offer compensation that is deemed “fair” by potential and current employees or state and federal governments, it may find itself in trouble in the near future.

It is in your company’s best interest to ensure you abide by federal and local fair pay regulations. Be proactive and look at your employee compensation data today.

Employment Decisions and the Fair Credit Reporting Act - September 2016

As an employer, you obviously want to make careful, educated hiring and promotion decisions. One resource you may use in making those choices is a consumer report. Basing employment decisions on information found in a consumer report is legally acceptable, as long as you comply with the Fair Credit Reporting Act (FCRA).

The FCRA is designed primarily to protect the privacy of consumer report information and to guarantee that the information supplied by consumer reporting agencies is as accurate as possible. Employers who use consumer reports must ensure that individuals are aware that consumer reports may be used for employment purposes and agree to such use, and individuals are notified promptly if information in a consumer report may result in a negative employment decision.

Consumer Reports

A consumer report contains information about an individual’s personal and credit characteristics, character, general reputation and lifestyle. To be covered by the FCRA, a report must be prepared by a legitimate consumer reporting agency (CRA). Employers often do background checks on applicants and get consumer reports during their employment. Some employers only want an applicant's or employee's credit payment records; others want driving records and criminal histories.

For sensitive positions, it's not unusual for employers to order investigative consumer reports—reports that include interviews with an applicant's or employee's friends, neighbors and associates. Credit background, references, past employment, social security, work habits, education, drug testing, judgments and liens, sex offender lists, criminal backgrounds, driving records, and military records are all consumer reports if they are obtained from a CRA. 

Applicants are often asked to give references. Whether verifying such references is covered by the FCRA depends on who does the verification. A reference verified by the employer is not covered by the Act; a reference verified by an employment or reference checking agency (or other CRA) is covered. Section 603(o) of the FCRA provides special procedures for reference checking; otherwise, checking references may constitute an investigative consumer report subject to additional FCRA requirements.

Written Notice and Authorization

Before you can get a consumer report for employment purposes, you must notify the individual in writing—in a document consisting solely of this notice—that a report may be used.

Employers also must get the person's written authorization before requesting from the consumer reporting agency.

Note that special authorizations apply to California, Minnesota and Oklahoma residents. If you are requesting medical information, the individual’s authorization must specifically state his or her consent to release such information.

When requesting a credit report from a consumer reporting agency, you must certify that you will inform the individual of his or her rights under the FCRA and agree not to use the information in violation of state or federal employment laws.

Adverse Action Requirements

When you receive a credit report from a CRA, you are not required to release the report to the employee unless the report prompts you to make an "adverse action"—denying a job application, reassigning or terminating an employee, denying a promotion or access to company benefits, or other discipline. Before you take the adverse action, you must first give the individual a disclosure that includes a copy of the individual's consumer report and a copy of "A Summary of Your Rights Under the Fair Credit Reporting Act"—a document prescribed by the Federal Trade Commission. The CRA that furnishes the individual's report will give you the summary of consumer rights.

After you've taken an adverse action, employers must give the individual notice—orally, in writing or electronically—that the action has been taken in an adverse action notice. The notice must contain the name, address and phone number of the CRA that supplied the report; a statement that the CRA that supplied the report did not make the decision to take the adverse action and cannot give specific reasons for it; and a notice of the individual's right to dispute the accuracy or completeness of any information the agency furnished, as well as his or her right to an additional free consumer report from the agency upon request within 60 days.

An individual can request a copy of his or her credit report from the consumer reporting agency within 60 days of any adverse employment action based on the report at no cost. An individual can dispute the information if they disagree with the report. Employers should notify individuals of their rights to dispute the information contained in the credit report. CRAs must reinvestigate the accuracy of the disputed information within 30 days of the dispute without cost to the individual. If an applicant or employee notifies the employer that he or she is challenging information in the report, the employer should not make a final decision on the employment status of the applicant or employee until after that person has had a reasonable opportunity to address the information contained in the report. Employers must also make sure that they properly dispose of all “consumer information” obtained from consumer reports. See www.business.ftc.gov/documents/alt152-disposing-consumer-report-information-rule-tells-how for more information on disposal procedures.

Applying the FCRA Regulations

Here is guidance on how to apply these regulations to a few example employment decisions:

o You advertise vacancies for a position and receive 100 applications. You want credit reports on each applicant because you plan to eliminate those with poor credit histories. What are your obligations?
  • You can get credit reports—one type of consumer report—if you notify each applicant in writing that a credit report may be requested and if you receive the applicant's written consent. Before you reject an applicant based on credit report information, you must make a pre-adverse action disclosure that includes a copy of the credit report and the summary of consumer rights under the FCRA. Once you've rejected an applicant, you must provide an adverse action notice if credit report information affected your decision.
o You are considering a number of your employees for a major promotion. You want to check their consumer reports to ensure that only responsible individuals are considered for the position. What are your obligations?
  • You cannot get consumer reports unless the employees have been notified that reports may be obtained and have given their written permission. If the employees gave you written permission in the past, you need only make sure that the employees receive or have received a "separate document" notice that reports may be obtained during the course of their employment—no more notice or permission is required. If your employees have not received notice or given you permission, you must notify the employees and get their written permission before you get their reports. In each case where information in the report influences your decision to deny promotion, you must provide the employee with a pre-adverse action disclosure. The employee also must receive an adverse action notice once you have selected another individual for the job.
o A job applicant gives you the okay to get a consumer report. Although the credit history is poor and that's a negative factor, the applicant's lack of relevant experience carries more weight in your decision not to hire. What's your responsibility?
  • In any case where information in a consumer report is a factor in your decision—even if the report information is not a major consideration—you must follow the procedures mandated by the FCRA. In this case, you would be required to provide the applicant a pre-adverse action disclosure before you reject his or her application. When you formally reject the applicant, you would be required to provide an adverse action notice.

Compliance is in Your Best Interest

There are legal consequences for employers who fail to get an applicant’s permission before requesting a consumer report or who fail to provide pre-adverse action disclosures and adverse action notices to unsuccessful job applicants. The FCRA allows individuals to sue employers for damages in federal court. A person who successfully sues is entitled to recover court costs and reasonable legal fees. The law also allows individuals to seek punitive damages for deliberate violations. In addition, the Federal Trade Commission, other federal agencies and individual states may sue employers for noncompliance and obtain civil penalties.

Article adapted from the Federal Trade Commission’s Using Consumer Reports: What Employers Need to Know 

Should Employees Be Allowed to Play Fantasy Sports at Work? - August 2016

Fantasy sports have exploded in popularity over the past decade, with one of the most prevalent being fantasy football. Fantasy sports allow individuals to draft virtual teams of professional players and compete against other players in their leagues.

More than 56 million Americans play fantasy football—37 million of which are employed full time. Studies estimate that fantasy football costs more than $16 billion in lost productivity each year. This figure assumes that players spend one hour a week at work managing their teams over the course of the 17-week football season.

Benefits of Fantasy Sports

While many employers may be concerned about these statistics, there are many benefits that can be achieved by allowing employees to play fantasy sports in moderation at work:

  • Increase employee morale—Fantasy sports can be a great way for co-workers to bond in the break room or at the water cooler. Even if your company does not have its own office league, employees can discuss their performance in other leagues with their colleagues.
  • Promote interdepartmental collaboration—Creating an office fantasy league can help people from others departments get to know each other. In order to promote participation, consider making entry to the league free so a wider group of employees will participate.
  • Increase productivity in the long run—Research has shown that short breaks throughout the day can boost creativity and increase productivity in the long run. Allowing your employees to manage their fantasy teams in moderation during work may boost your company’s bottom line.

Risks of Fantasy Sports

Despite these benefits, there are some risks that employers should be aware of when considering whether to allow fantasy sports in the workplace, including:

Allegations of discrimination—Creating an office fantasy sports league could open the door to future lawsuits. While more women are beginning to play fantasy sports, the majority of players are male. Female employees who are 

  • mocked for not playing may bring claims alleging a hostile workplace. In addition, those who choose not to play for religious reasons could also bring a discrimination suit if they feel excluded or ridiculed.
  • Gambling risks—Office leagues that require an entry fee may violate state and local gambling laws. Some states make an exemption for “social gambling,” but often place limits on how much money can be awarded. If you have employees playing in offices in different states, this could also pose a legal risk. Recently, some states have taken action against fantasy sports companies like DraftKings and FanDuel, so it is important to keep an eye on future legislative changes and respond accordingly.

Best Practices for Fantasy Sports in the Workplace

Follow the tips below to prepare your business for fantasy football season:

  • Create a clear policy outlining what kind of gambling is allowed in the workplace and include it in your employee handbook.
  • Require employees to ask HR for approval before setting up a fantasy sports league in the office.
  • If you choose to set up a league, explain to employees early on that this does not give them permission to neglect their work. Outline the extent to which employees can manage their fantasy teams during work and if they can use company property (work laptops, email, etc.).
  • Train supervisors to identify any possible issues of exclusion relating to fantasy sports in order to avoid issues down the road.

For more information on how to manage office distractions and improve productivity, contact CMR Risk & Insurance Services, Inc. today.

Examining Narrow Provider Networks - July 2016

In recent years, narrow networks have gained popularity. Narrow networks are health plans that offer their subscribers a limited choice in health care providers. Health plans contract with a small group of doctors, specialists and hospitals, and those entities are then considered in-network.

Because all plan participants are directed toward certain facilities and physicians, these providers can then reduce the cost for each visit and service—operating under the idea of “buying in bulk.” This, in turn, results in lower premiums for the consumer and cost savings for insurers.

Why are narrow networks becoming more popular?

Narrow networks have been around long before the Affordable Care Act (ACA). In fact, 23 percent of employer-sponsored health plans offered narrow networks in 2012. However, their popularity has accelerated since the ACA was signed into law and the Health Insurance Marketplace was created.

Since insurers can no longer compete to cover the healthiest group of individuals or raise deductibles past the ACA’s limits, some have turned to narrow networks as a way to manage expenses. According to a study by McKinsey & Co., a consulting firm, 70 percent of the plans sold on the Marketplace in 2014 featured a limited network. Premiums for those plans were 17 percent cheaper than those with wider networks. In this study, narrow networks were considered those that had at least 30 percent of the 20 largest hospitals in the region not participating in the plan.

Benefits of Narrow Networks

As outlined above, lower premiums are one of the major benefits of narrow networks. The following are other potential benefits:

  • Lower Costs—There is huge variation in health care prices in the United States. A hip surgery at one hospital can cost $8,000, but at another hospital in the area it may cost $15,000. By narrowing networks and only signing contracts with select providers, employers can direct employees to providers in the $8,000 range and reduce expenses.
  • Improve the care relationship—Narrow networks allow doctors to get to know their patients better. These doctors may all use the same electronic medical record system—allowing for the quick sharing of important medical information among health care providers. This can enhance care coordination and improve outcomes.
  • Greater consumer awareness—As health care consumerism continues to grow, narrow networks offer individuals the opportunity to take control of their health care. It allows employees to better understand and budget for their health care expenses.

Disadvantages of Narrow Networks

Despite these benefits, many people have concerns about narrow networks and their long-term success. Below are a few disadvantages of offering plans with a narrow network:

  • Inadequate access—Narrow networks have been criticized for being too restrictive. For instance, some employees may have been going to the same primary care doctor for years, but all of a sudden, they have to change doctors and find a new in-network provider. In addition, some narrow networks exclude children’s hospitals and cancer treatment centers due to their high costs, which may cause employee dissatisfaction.
  • Surprise out-of-network bills—Despite their efforts to lower costs, oftentimes individuals in narrow network plans are left with surprise out-of-network bills. This can be due to a multitude of reasons, such as out-of-date provider directories or patients getting inaccurate information about a doctor’s in-network status when making an appointment or scheduling a surgery. Furthermore, many hospitals contract out for emergency physicians, radiologists and anesthesiologists. So while a hospital may be in-network, the doctors performing a certain surgery may not be, resulting in huge out-of-network bills that can blindside your employees.
  • Similarity to health maintenance organizations (HMOs)—Some experts have compared narrow network plans to HMOs, which resulted in employee backlash in the 1990s. While HMOs are still around, they have fallen in popularity due to their perceived care limitations. Some experts believe that narrow network plans will follow a similar course.
  • Rural care—Narrow networks may not be as effective in rural areas. Oftentimes there are not enough in-network providers, resulting in long wait times or employees having to drive a long way to see an in-network doctor. For instance, Montana’s insurance commissioner urged insurers to sell plans that included at least 80 percent of providers in its state, since the 30 percent federal standard could result in patients having to travel 400 miles away for in-network care.
  • Legal issues—While state and local laws on narrow networks vary and remain vague, the potential for future legal repercussions remains. Several hospitals are suing insurers over allegations of being wrongly excluded from their state’s marketplace. In addition, some states are considering legislation regarding limiting surprise out-of-network bills and network restrictions.

What to Consider

If you’re thinking about switching to a narrow network, communication and education will be key. The challenge is to overcome the perception that a narrow network means less access to care and lower quality services. Instead, you must stress that it is a way to empower employees and improve care management. One way to do this is to highlight providers in your network who are high-performers or who have won distinguished awards.

In addition, educating your employees about network restrictions is imperative. Provider directories must be kept up to date, and employees should have an easy and convenient way to access this information. Transparency about access and costs is key, since failing to provide accurate information could result in surprise out-of-network bills. Employees that are stressed about their health and finances are more likely to miss work, be less productive and make mistakes on the job.

For more information about managing your health care costs, contact [B_Officialname] today. 

The Importance of Sleep - June 2016

As employees struggle to balance work, family and social obligations, one thing that is often neglected is sleep. The Centers for Disease Control and Prevention (CDC) recommends that adults get seven to eight hours of sleep on average; however, most Americans fail to meet this recommendation.

According to a study from Virgin Pulse, 76 percent of employees reported feeling tired most days of the week. Fatigue and exhaustion can be a serious problem for your business. Fatigued employees are less likely to be productive and focused on the job. This lack of focus can lead to more mistakes, procrastination and a negative work environment.

Increased Health Care Costs

Fatigue can also lead to increased medical costs. Exhausted employees are more likely to miss work and incur medical costs for conditions related to high blood pressure, cholesterol and stress. In addition, fatigued employees are more likely to have an accident at work, which can lead to more workers’ compensation claims.

Individuals with undiagnosed or poorly managed sleep disorders can also take a toll on your company’s bottom line. A study from Harvard Medical School found that one employee with insomnia results in 11 lost days of productivity each year—costing the U.S. economy $63.2 billion a year. Other common sleep disorders include sleep apnea and restless leg syndrome, both of which can interfere with employees’ ability to go to work well-rested.

5 Solutions for Promoting Sleep at Your Company

Below are five strategies to help employees get a better night’s sleep.

  1. Allowing flexible scheduling—Flexible scheduling requires employees to be available within core hours during the day (for example, from 10 a.m. to 2 p.m.), but allows them to vary their start and end times. This allows employees to better manage their work, family and personal obligations, and find more time for sleep in their daily routines.
  2. Allowing telecommuting—Allowing employees to work remotely can be a great way to promote a healthier sleep cycle. If your company is located in a city, this may be especially valuable, as employees will likely have longer and more stressful commutes. Instead of spending 30 minutes in the car, employees can spend this extra time sleeping so they are refreshed when they begin their day.
  3. Installing nap rooms—Several high-profile companies like Google, Zappos and Ben & Jerrys have installed nap rooms in their offices in recent years. Studies have shown that taking a short nap can boost creativity, improve alertness and enhance performance. Not only can nap rooms reduce on-the-job fatigue, but they can be a valuable recruitment and retention tool.
  4. Hiring temporary help during high workloads—High workloads can stress out employees and make them feel like they should stay later at the office. While output may increase, employees are much more likely to make costly mistakes when they are overworked and tired. If workloads are high, consider hiring temporary employees to alleviate stress and make workloads more manageable.
  5. Offering screening and education—Consider offering screening for sleep disorders at your health fair or as part of your workplace wellness program. In addition, consider providing educational articles about the importance of sleep and how employees can improve their sleep. By identifying those who may be at risk of having a sleeping disorder and providing education, you can help reduce employee fatigue.

In Summary

The strategies above may not be conducive to every office. When evaluating these options, it is important to evaluate your workplace environment and the needs of your employees. Consider surveying employees about their current workloads and sleep habits to see what strategies may resonate most with your employees. Ask employees to rank or provide input on how valuable they would find telecommuting, flexible scheduling and nap room options.

In addition, when installing nap rooms or implementing telecommuting and remote work programs, make sure to have clear policies in place to prevent abuse or misuse. Monitoring these programs will be key to ensuring they produce a healthy return on investment.

For more information on workplace wellness, contact [B_Officialname] today.




DOL Issues New Overtime Payment Rules - May 2016


On May 18, 2016, the U.S. Department of Labor (DOL) announced a final rule regarding overtime wage payment qualifications for the “white collar exemptions” under the Fair Labor Standards Act (FLSA).

The final rule increases the salary an employee must be paid in order to qualify for a white collar exemption. The required salary level is increased to $47,476 per year and will be automatically updated every three years. The final rule does not modify the duties test employees must meet to qualify for a white collar exemption.

Employers will need to comply with this rule by Dec. 1, 2016.


  • Employers must become familiar with the new rule and identify which employees will be affected. Employers should reclassify employees as exempt or non-exempt, as necessary, by Dec. 1, 2016.
  • Employers should also consider communicating any work schedule changes to affected employees before the date mentioned above.
  • Finally, employers should evaluate whether implementing new timekeeping practices and training for managers and supervisors on the new requirements is necessary.

FLSA White Collar Exemptions

The FLSA establishes minimum and overtime wage payment protections for most workers in the United States. However, the FLSA also offers a range of minimum wage and overtime exemptions for certain workers. The white collar exemptions are minimum wage and overtime pay exemptions available to certain administrative, professional, outside sales, computer and highly compensated employees.

To qualify for the white collar exemption, an employee must meet a salary basis test, a salary level test and a duties test. An employee must meet all three tests in order to be exempt from FLSA minimum wage or overtime pay requirements.

  • The salary basis test is used to make sure the employee is paid a predetermined and fixed salary that is not subject to reduction due to variations in the quality or quantity of work.
  • The salary level test is used to ensure that the employee meets a minimum specified amount to qualify for the exemption. This salary threshold provides employers with an objective and efficient way to determine whether an employee qualifies for a white collar exemption.
  • The duties test requires that the employee’s job duties conform to executive, administrative or professional duties, as defined by law. This analysis requires a more thorough evaluation of whether an employee can be classified in one of the categories mentioned above (administrative, professional, outside sales, computer and highly compensated employee)

Higher Salary Threshold Requirement

The final rule increases the minimum salary level of $455 per week ($23,660 per year) to $913 per week or $47,476 per year. The new salary level represents the 40th percentile of wages earned by workers in the lowest-wage census region in the United States (currently the South) for a full-year worker.

The final rule also increases the $100,000 salary level for highly compensated individuals to $134,004 per year—the 90th percentile of wages earned by full-time workers across the entire United States.

These higher salary levels will be updated every three years to maintain the salary level at their corresponding 40th or 90th percentiles. The first automatic rate update is expected by Jan. 1, 2020. The DOL will publish updated rates in the Federal Register and on the Wage and Hour Division’s website at least 150 days before their effective date.

Calculating Employee Wages

Administrative, Executive and Professional Employees

The final rule will allow, for the first time, non-discretionary bonuses and incentive payments (including commissions) to be used to satisfy up to 10 percent of an employee’s standard salary level. This may include the payment of non-discretionary incentive bonuses tied to productivity and profitability. Non-discretionary bonuses and incentive payments may be used if they are paid on a quarterly basis, but more frequent payments are acceptable. However, the DOL will allow employers to make some “catch-up payments.”

The DOL will also allow employers to use significantly large bonuses toward 10 percent of the required salary amount.

Highly Compensated Employees

Under the final rule, highly compensated employees qualify for an overtime exception if they meet the new salary level of $134,004 per year. However these individuals must receive at least the full standard salary amount each pay period (i.e., $913 per week, $1,826 bi-weekly or $3,956.33 per month) on a salary or fee basis (not counting non-discretionary bonuses and incentive payments).

The remainder of a highly compensated employee’s wages may be calculated by including the full amount of non-discretionary bonuses and incentive payments (including commissions).

Impact on Employers

Given the significant increase in the salary level requirement, employers will need to increase employee salaries, or re-classify certain employees as either exempt or non-exempt, solely based on their salary level. The DOL estimates that this final rule extends overtime protections to approximately 4.2 million workers who are currently exempt under the white collar rules and clarifies overtime compensation eligibility for another 5.7 million white collar workers and 3.2 million salaried blue collar workers whose entitlement to overtime pay will no longer rely on the application of the duties test.

In addition, because of the short implementation deadline, employers should not delay becoming familiar with the new requirements and implementing any necessary changes into their timekeeping and payroll systems. Employers should also determine whether additional training on modifications is necessary for their managers and supervisors.

Finally, employers should also consider communicating with employees to inform them of how their wages, hours of work and timekeeping practices will be affected.

Enforcement and Compliance

Employers that fail to comply with the final rule may be subject to a variety of overtime wage payment enforcement mechanisms, including the ones listed below.

  • Private employee lawsuits: These lawsuits can be initiated by employees either individually or through collective action to recover back pay, interest, attorneys’ fees and court costs.
  • Administrative injunctions: These injunctions may include a prohibition on the shipment of goods in interstate commerce if the goods were produced in violation of the FLSA (including overtime wage payment provisions).
  • Civil fines for willful and repeated violations (up to $1,100 per violation).
  • Criminal charges for willful violations (up to $10,000 in fines, imprisonment for up to six months or both).

More Information

Please contact CMR Risk & Insurance Services, Inc. for more information on the FLSA and other wage and hour laws.



Ony 18, 2016, the U.S. Department of Labor (DOL) announced a final rule regarding overtime wage payment qualifications for the “white collar exemptions” under the Fair Labor Standards Act (FLSA).

The final rule increases the salary an employee must be paid in order to qualify for a white collar exemption. The required salary level is increased to $47,476 per year and will be automatically updated every three years. The final rule does not modify the duties test employees must meet to qualify for a white collar exemption.

Employers will need to comply with this rule by Dec. 1, 2016.


§  Employers must become familiar with the new rule and identify which employees will be affected. Employers should reclassify employees as exempt or non-exempt, as necessary, by Dec. 1, 2016.

§  Employers should also consider communicating any work schedule changes to affected employees before the date mentioned above.

§  Finally, employers should evaluate whether implementing new timekeeping practices and training for managers and supervisors on the new requirements is necessary.

FLSA White Collar Exemptions

The FLSA establishes minimum and overtime wage payment protections for most workers in the United States. However, the FLSA also offers a range of minimum wage and overtime exemptions for certain workers. The white collar exemptions are minimum wage and overtime pay exemptions available to certain administrative, professional, outside sales, computer and highly compensated employees.

To qualify for the white collar exemption, an employee must meet a salary basis test, a salary level test and a duties test. An employee must meet all three tests in order to be exempt from FLSA minimum wage or overtime pay requirements.

§  The salary basis test is used to make sure the employee is paid a predetermined and fixed salary that is not subject to reduction due to variations in the quality or quantity of work.


§  The salary level test is used to ensure that the employee meets a minimum specified amount to qualify for the exemption. This salary threshold provides employers with an objective and efficient way to determine whether an employee qualifies for a white collar exemption.


§  The duties test requires that the employee’s job duties conform to executive, administrative or professional duties, as defined by law. This analysis requires a more thorough evaluation of whether an employee can be classified in one of the categories mentioned above (administrative, professional, outside sales, computer and highly compensated employee)


Higher Salary Threshold Requirement

The final rule increases the minimum salary level of $455 per week ($23,660 per year) to $913 per week or $47,476 per year. The new salary level represents the 40th percentile of wages earned by workers in the lowest-wage census region in the United States (currently the South) for a full-year worker.

The final rule also increases the $100,000 salary level for highly compensated individuals to $134,004 per year—the 90th percentile of wages earned by full-time workers across the entire United States.

These higher salary levels will be updated every three years to maintain the salary level at their corresponding 40th or 90th percentiles. The first automatic rate update is expected by Jan. 1, 2020. The DOL will publish updated rates in the Federal Register and on the Wage and Hour Division’s website at least 150 days before their effective date.

Calculating Employee Wages

Administrative, Executive and Professional Employees

The final rule will allow, for the first time, non-discretionary bonuses and incentive payments (including commissions) to be used to satisfy up to 10 percent of an employee’s standard salary level. This may include the payment of non-discretionary incentive bonuses tied to productivity and profitability. Non-discretionary bonuses and incentive payments may be used if they are paid on a quarterly basis, but more frequent payments are acceptable. However, the DOL will allow employers to make some “catch-up payments.”

The DOL will also allow employers to use significantly large bonuses toward 10 percent of the required salary amount.

Highly Compensated Employees

Under the final rule, highly compensated employees qualify for an overtime exception if they meet the new salary level of $134,004 per year. However these individuals must receive at least the full standard salary amount each pay period (i.e., $913 per week, $1,826 bi-weekly or $3,956.33 per month) on a salary or fee basis (not counting non-discretionary bonuses and incentive payments).

The remainder of a highly compensated employee’s wages may be calculated by including the full amount of non-discretionary bonuses and incentive payments (including commissions).

Impact on Employers

Given the significant increase in the salary level requirement, employers will need to increase employee salaries, or re-classify certain employees as either exempt or non-exempt, solely based on their salary level. The DOL estimates that this final rule extends overtime protections to approximately 4.2 million workers who are currently exempt under the white collar rules and clarifies overtime compensation eligibility for another 5.7 million white collar workers and 3.2 million salaried blue collar workers whose entitlement to overtime pay will no longer rely on the application of the duties test.

In addition, because of the short implementation deadline, employers should not delay becoming familiar with the new requirements and implementing any necessary changes into their timekeeping and payroll systems. Employers should also determine whether additional training on modifications is necessary for their managers and supervisors.

Finally, employers should also consider communicating with employees to inform them of how their wages, hours of work and timekeeping practices will be affected.

Enforcement and Compliance

Employers that fail to comply with the final rule may be subject to a variety of overtime wage payment enforcement mechanisms, including the ones listed below.

§  Private employee lawsuits: These lawsuits can be initiated by employees either individually or through collective action to recover back pay, interest, attorneys’ fees and court costs.

§  Administrative injunctions: These injunctions may include a prohibition on the shipment of goods in interstate commerce if the goods were produced in violation of the FLSA (including overtime wage payment provisions).

§  Civil fines for willful and repeated violations (up to $1,100 per violation).

§  Criminal charges for willful violations (up to $10,000 in fines, imprisonment for up to six months or both).

More Information

Please contact CMR Risk & Insurance Services, Inc. for more information on the FLSA and other wage and hour laws.








On May 18, 2016, the U.S. Department of Labor (DOL) announced a final rule regarding overtime wage payment qualifications for the “white collar exemptions” under the Fair Labor Standards Act (FLSA).

The final rule increases the salary an employee must be paid in order to qualify for a white collar exemption. The required salary level is increased to $47,476 per year and will be automatically updated every three years. The final rule does not modify the duties test employees must meet to qualify for a white collar exemption.

Employers will need to comply with this rule by Dec. 1, 2016.


  • Employers must become familiar with the new rule and identify which employees will be affected. Employers should reclassify employees as exempt or non-exempt, as necessary, by Dec. 1, 2016.
  • Employers should also consider communicating any work schedule changes to affected employees before the date mentioned above.
  • Finally, employers should evaluate whether implementing new timekeeping practices and training for managers and supervisors on the new requirements is necessary.

FLSA White Collar Exemptions

The FLSA establishes minimum and overtime wage payment protections for most workers in the United States. However, the FLSA also offers a range of minimum wage and overtime exemptions for certain workers. The white collar exemptions are minimum wage and overtime pay exemptions available to certain administrative, professional, outside sales, computer and highly compensated employees.

To qualify for the white collar exemption, an employee must meet a salary basis test, a salary level test and a duties test. An employee must meet all three tests in order to be exempt from FLSA minimum wage or overtime pay requirements.

  • The salary basis test is used to make sure the employee is paid a predetermined and fixed salary that is not subject to reduction due to variations in the quality or quantity of work.


  • The salary level test is used to ensure that the employee meets a minimum specified amount to qualify for the exemption. This salary threshold provides employers with an objective and efficient way to determine whether an employee qualifies for a white collar exemption.


  • The duties test requires that the employee’s job duties conform to executive, administrative or professional duties, as defined by law. This analysis requires a more thorough evaluation of whether an employee can be classified in one of the categories mentioned above (administrative, professional, outside sales, computer and highly compensated employee)


Higher Salary Threshold Requirement

The final rule increases the minimum salary level of $455 per week ($23,660 per year) to $913 per week or $47,476 per year. The new salary level represents the 40th percentile of wages earned by workers in the lowest-wage census region in the United States (currently the South) for a full-year worker.

The final rule also increases the $100,000 salary level for highly compensated individuals to $134,004 per year—the 90th percentile of wages earned by full-time workers across the entire United States.

These higher salary levels will be updated every three years to maintain the salary level at their corresponding 40th or 90th percentiles. The first automatic rate update is expected by Jan. 1, 2020. The DOL will publish updated rates in the Federal Register and on the Wage and Hour Division’s website at least 150 days before their effective date.

Calculating Employee Wages

Administrative, Executive and Professional Employees

The final rule will allow, for the first time, non-discretionary bonuses and incentive payments (including commissions) to be used to satisfy up to 10 percent of an employee’s standard salary level. This may include the payment of non-discretionary incentive bonuses tied to productivity and profitability. Non-discretionary bonuses and incentive payments may be used if they are paid on a quarterly basis, but more frequent payments are acceptable. However, the DOL will allow employers to make some “catch-up payments.”

The DOL will also allow employers to use significantly large bonuses toward 10 percent of the required salary amount.

Highly Compensated Employees

Under the final rule, highly compensated employees qualify for an overtime exception if they meet the new salary level of $134,004 per year. However these individuals must receive at least the full standard salary amount each pay period (i.e., $913 per week, $1,826 bi-weekly or $3,956.33 per month) on a salary or fee basis (not counting non-discretionary bonuses and incentive payments).

The remainder of a highly compensated employee’s wages may be calculated by including the full amount of non-discretionary bonuses and incentive payments (including commissions).

Impact on Employers

Given the significant increase in the salary level requirement, employers will need to increase employee salaries, or re-classify certain employees as either exempt or non-exempt, solely based on their salary level. The DOL estimates that this final rule extends overtime protections to approximately 4.2 million workers who are currently exempt under the white collar rules and clarifies overtime compensation eligibility for another 5.7 million white collar workers and 3.2 million salaried blue collar workers whose entitlement to overtime pay will no longer rely on the application of the duties test.

In addition, because of the short implementation deadline, employers should not delay becoming familiar with the new requirements and implementing any necessary changes into their timekeeping and payroll systems. Employers should also determine whether additional training on modifications is necessary for their managers and supervisors.

Finally, employers should also consider communicating with employees to inform them of how their wages, hours of work and timekeeping practices will be affected.

Enforcement and Compliance

Employers that fail to comply with the final rule may be subject to a variety of overtime wage payment enforcement mechanisms, including the ones listed below.

  • Private employee lawsuits: These lawsuits can be initiated by employees either individually or through collective action to recover back pay, interest, attorneys’ fees and court costs.
  • Administrative injunctions: These injunctions may include a prohibition on the shipment of goods in interstate commerce if the goods were produced in violation of the FLSA (including overtime wage payment provisions).
  • Civil fines for willful and repeated violations (up to $1,100 per violation).
  • Criminal charges for willful violations (up to $10,000 in fines, imprisonment for up to six months or both).

More Information

Please contact CMR Risk & Insurance Services, Inc. for more information on the FLSA and other wage and hour laws.







Overview of Proposed Changes to FLSA White Collar Exemption Rules - April 2016

On June 30, 2015, the U.S. Department of Labor (DOL) released a proposed rule that would overhaul overtime wage payment in the United States. The new rule would more than double the salary threshold that employees must meet to qualify for overtime wage payment exemption—a change that could affect 11 million workers across the United States.

What is changing?

The FLSA requires that eligible employees be paid time and a half for all hours worked over 40 hours in a workweek. However, overtime rules do not apply to certain “white collar” workers, like executive, administrative, professional, outside sales, computer employees and some highly compensated individuals—these are known as the white collar exemptions.

Currently, the salary threshold (salary level test) for overtime pay eligibility under the white collar exemptions is $23,660 a year or $455 per week. The proposed rule would more than double the salary threshold to $50,440 per year or $970 a week. It would also increase the $100,000 salary level for highly compensated individuals to $122,148 per year—the 90th percentile of wages earned by workers in 2013. This figure is expected to increase by the time the final rule is implemented.

How will this affect employers?

The proposed rule has been controversial because, if implemented, it would require employers to review employees’ exempt status, update overtime policies, notify employees of changes and adjust payroll systems. According to the Obama administration, the new rule could cost employers between $240 million and $255 million per year. Business leaders, though, believe the costs could be even higher.

Preparation Strategies

Given the potential impact of this rule, it is important to start preparing now for potential changes to overtime regulations. The following are some strategies employers can adopt:

  • Conduct an internal audit. It is estimated that more than 50 percent of all employer groups have misclassified their employees under the FLSA, although many do not realize it. An audit can help identify misclassifications and determine who will be eligible for overtime if the proposed rule is implemented.
  • Give raises to employees who are close to the salary threshold. For instance, if an employee makes $49,000 a year and regularly works overtime, you could bump up the employee’s pay to $51,000 to avoid incurring overtime expenses.
  • Develop more stringent overtime pay policies. Consider sending employees home after exactly eight hours, so you do not have to pay overtime costs. This policy can help encourage a healthier work-life balance among employees; however, output may decrease as a result.
  • Reduce or cut benefits to make up for increased payroll expenses. While this method will protect your bottom line, it may decrease employee morale, lower productivity and result in higher turnover.


A final rule is expected by July 2016. The last time the FLSA overtime requirements were updated was in the 2004, and the DOL gave employers 120 days to comply. This time, employers may only have 30 to 60 days to make necessary changes (depending on the time between the release of the final rule and its effective date).

While it is possible that the 2016 elections could change some aspects of the new rule, it is highly likely that overtime pay changes will be implemented in some fashion. If employers fail to respond to overtime changes, they can face various penalties prescribed by the FLSA, including lawsuits, criminal charges, fines and restrictions in commerce.

For more information on how the new white collar exemptions will affect your business and what you can do to minimize overtime pay, contact [B_Officialname] today.

Preventive Care - March 2016

Once an underused component of the health care world that benefits both employees’ health and employers’ health care spending, preventive care is now a mandatory part of any health benefits package.


Preventive care consists of measures taken to prevent diseases, rather than curing them or treating their symptoms.


There is significant research demonstrating that increased use of effective preventive services will result in less suffering from ailments that could have been prevented had they been detected and treated early on. Preventive care is often more cost-effective than treating diseases once symptoms appear. Some care services even save more money than it costs to implement them.


Under the Affordable Care Act (ACA), private insurers—except for plans that have been grandfathered—are required to cover certain preventive services without any cost to the patient. Medical services such as immunizations, screening tests, medications and any other services that would prevent disease, injury and premature death fall under the umbrella of preventive care.


Preventive care should be incorporated into employer-sponsored health plans to lessen the cost and number of future medical claims by helping employees and their families stay healthy, while also complying with the provisions of the ACA.


Preventive Care for Adults


The following types of preventive care are available to all adults within specified age ranges or risk groups.


Abdominal aortic aneurysm screening: A one‐time screening for abdominal aortic aneurysm by ultrasonography in men ages 65 to 75 who have ever smoked


Alcohol misuse screening and counseling: A risk assessment available for all adults and voluntary counseling for those who are found to have a substance abuse problem


Many do not realize that their alcohol use is excessive and contributes to other health and lifestyle problems.


Aspirin use: Counseling on the use of aspirin for men ages 45 to 79 and women ages 55 to 79, when the potential benefit due to a reduction in myocardial infarctions outweighs the potential harm due to an increase in gastrointestinal hemorrhage


Blood pressure screening: Routine measurements of adult blood pressure and treatment with anti-hypertension medication to prevent cardiovascular disease


Hypertension and related complications account for $100 billion in medical costs every year, yet only 1 in 3 people with hypertension actually controls it.


Cholesterol screening: Screenings for lipid disorders in men over 35 and women over 45, and treatment with lipid-lowering medications to prevent cardiovascular disease


One out of 4 adults with high cholesterol will suffer a heart attack, and 1 in 3 adults will die from coronary heart disease. Screening to detect high cholesterol is effective in identifying those who need medication to control cholesterol levels.


Colorectal cancer screening: Screenings for colorectal cancer using fecal occult blood testing, sigmoidoscopy or colonoscopy, beginning at age 50 and continuing until age 75


The risks and benefits of these screening methods vary. About 19,000 diagnoses could be prevented annually if people get screened, yet only one-third of adults actually have regular screenings.


Depression screenings: Screenings for depression when staff-assisted depression care supports are in place to ensure accurate diagnosis and effective treatment and follow-up


Diabetes screening: Screening for Type 2 diabetes in asymptomatic adults with sustained blood pressure greater than 135/80 mmHg (either treated or untreated)


Diet counseling: Intensive behavioral dietary counseling for adult patients with hyperlipidemia and other known risk factors for cardiovascular and diet‐related chronic disease. Intensive counseling can be delivered by primary care clinicians or by referral to other specialists, such as nutritionists or dietitians.


HIV screenings: Screenings for everyone ages 15 to 65 and other ages at increased risk


Obesity screening and counseling: Screening for all adults; clinicians should offer or refer patients with a body mass index (BMI) of 30 or higher to intensive, multi-component behavioral interventions


Sexually transmitted infection (STI) prevention counseling: Counseling for adults at higher risk


Syphilis screening: Screenings for adults at greater risk


Tobacco use screening: Screenings for adults at higher risk; tobacco users may receive intervention and cessation support


A comprehensive, effective smoking cessation program usually costs less than 50 cents per member per month, or less than $6 per member per year. You can save an average of $210 on yearly health care costs for each smoker who quits.


Vaccinations: Shots for hepatitis A, hepatitis B, herpes zoster, human papillomavirus (HPV), influenza, measles, mumps, rubella, meningitis, pneumococcal disease, tetanus, diphtheria, pertussis and varicella; doses, recommended ages and populations vary


Preventive Care for Women


In addition to the services listed above, the ACA also mandates coverage for the following preventive services for adult women as part of all non-grandfathered health plans.


Anemia screening: Screenings for iron deficiency in pregnant women


Breast cancer genetic test counseling (BRCA): Screenings designed to identify women with increased risk of developing breast cancer due to family history. Women with positive screening results should receive genetic counseling and, if indicated after counseling, BRCA testing.


Breast cancer mammography screening: Mammograms for women age 40 or over every one to two years, with or without clinical breast examination


Breast cancer chemoprevention: Discussions with clinicians about benefits, risks and adverse effects of chemoprevention for women at high risk of developing breast cancer


Breastfeeding support and counseling: Guidance from trained providers and access to breastfeeding supplies for pregnant and nursing women


Cervical cancer screening: Screenings for cervical cancer in women ages 21 to 65 with a Pap smear every three years; for women who want to lengthen the screening interval, screenings with a combination of Pap smear and HPV testing every five years, for women ages 30 to 65


Chlamydia infection screening: Screenings for chlamydial infection in all sexually active nonpregnant young women age 24 years and younger and for older nonpregnant women who are at increased risk


Contraception: U.S. Food and Drug Administration-approved contraceptive methods, sterilization procedures, and patient education and counseling, as prescribed by a health care provider for women with reproductive capacity. It does not include abortifacient drugs. This does not apply to health plans sponsored by certain exempt “religious employers.”


Domestic and interpersonal violence screening and counseling: Screenings for women of childbearing age for intimate partner violence, such as domestic violence, and provision of or referral to intervention services


Folic acid supplements: A supplement for women who are pregnant or planning to become pregnant


Gestational diabetes screening: Screenings for women 24 to 28 weeks pregnant and those at high risk of developing gestational diabetes


Gonorrhea screening: Screenings for all sexually active women, including those who are pregnant, for gonorrhea infection if they are at increased risk


Hepatitis B screening: Screenings for pregnant women at first prenatal visit


Human papillomavirus (HPV) DNA test: Screenings every three years for women with normal Pap smear results who are 30 or older; for women who want to lengthen the screening interval, screenings with a combination of Pap smear and HPV testing every five years for women ages 30 to 65


Osteoporosis screening: Screenings for women at high risk of developing osteoporosis starting at age 60, and for all women beginning at age 65


RH incompatibility screening: Testing for pregnant women at their first doctor visit after becoming pregnant and again at 24 to 28 weeks


Urinary tract or other infection screening: Screenings for pregnant women


Well-woman visits: Annual visits for adult women to obtain the recommended preventive services, including preconception and prenatal care


Preventive Care for Children


Most health plans must also cover a set of preventive health services for children. These services must be provided at no cost to beneficiaries if they are requested from and delivered by an in-network provider.


Autism screening: Behavioral screenings for children at 18 to 24 months


Behavioral assessments: Screenings for children at the following ages: 0 to 11 months, 1 to 4 years, 5 to 10 years, 11 to 14 years and 15 to 17 years


Blood pressure screening: Testing for children at the following ages: 0 to 11 months, 1 to 4 years, 5 to 10 years, 11 to 14 years and 15 to 17 years


Cervical dysplasia screening: Testing for sexually active females


Depression screening: Assessments for adolescents


Developmental screening: Learning assessments for children under age 3


Dyslipidemia screening: Testing for children at higher risk of lipid disorders at the following ages: 1 to 4 years, 5 to 10 years, 11 to 14 years and 15 to 17 years


Fluoride chemoprevention supplements: Supplements for children without fluoride in their water source


Gonorrhea preventive medication: Medication for newborns to prevent conjunctivitis caused by gonorrheal bacteria


Hearing screening: Screenings for all newborns


Height, weight and body mass index: Measurements for children at the following ages: 0 to 11 months, 1 to 4 years, 5 to 10 years, 11 to 14 years and 15 to 17 years


Hematocrit or hemoglobin screening: Testing for anemia for all children


HIV screening: Testing for high-risk adolescents


Hypothyroidism screening: Testing for underactive thyroid for newborns


Iron supplements: Supplements for children ages 6 to 12 months at risk for anemia


Lead screening: Testing for children at risk of exposure


Obesity screening and counseling: Screening for children beginning at age 6, and referral to comprehensive, intensive behavioral interventions to promote improvement in weight status


Oral health risk assessment: Screening for young children ages 0 to 11 months, 1 to 4 years and 5 to 10 years


Phenylketonuria (PKU) screening: Testing for this genetic disorder in newborns


STI prevention counseling and screening: Screening for high-risk adolescents


Tuberculin testing: Screening for children at higher risk of tuberculosis at the following ages: 0 to 11 months, 1 to 4 years, 5 to 10 years, 11 to 14 years and 15 to 17 years


Vaccinations: Shots for diphtheria, tetanus, pertussis, Haemophilus influenzae type B, hepatitis A, hepatitis B, HPV, polio, flu, measles, mumps, rubella, meningitis, pneumococcal disease, rotavirus and varicella; doses, recommended ages and recommended populations vary


Vision screening: Screenings for all children


In addition to mandated no-cost preventive care, there are other existing preventive services that may be included by an insurer as part of a health group plan. These include things like adult vision and hearing screenings and vitamin and mineral supplements. Check with your insurer to see if additional preventive services are available for your plan’s recipients.


Maximizing Your Health Plan


How can you take advantage of the cost-saving potential of some of these preventive care services? Here are some ways that you can maximize your health care investment:


• Educate your employees on the preventive care services that your health plan offers, their potential risk factors and the benefits of preventive medicine.


• Find ways to make preventive care more convenient for your employees by working with nearby clinics, developing an on-site clinic or hosting a mobile van for vaccinations and screenings.


• Educate your employees on preventable health conditions. Your CMR Risk & Insurance Services, Inc. representative can provide you with payroll stuffers, flyers and postings to help educate your employees.

Once an underused component of the health care world that benefits both employees’ health and employers’ health care spending, preventive care is now a mandatory part of any health benefits package.


Preventive care consists of measures taken to prevent diseases, rather than curing them or treating their symptoms.


There is significant research demonstrating that increased use of effective preventive services will result in less suffering from ailments that could have been prevented had they been detected and treated early on. Preventive care is often more cost-effective than treating diseases once symptoms appear. Some care services even save more money than it costs to implement them.


Under the Affordable Care Act (ACA), private insurers—except for plans that have been grandfathered—are required to cover certain preventive services without any cost to the patient. Medical services such as immunizations, screening tests, medications and any other services that would prevent disease, injury and premature death fall under the umbrella of preventive care.


Preventive care should be incorporated into employer-sponsored health plans to lessen the cost and number of future medical claims by helping employees and their families stay healthy, while also complying with the provisions of the ACA.

Initiatives for Stress Management - February 2016

Stress is a leading contributor to many health problems, and the workplace can often be a major source of stress. Lowering stress can lower the risk of medical conditions and can help employees feel better on a day-to-day basis. You can implement various activities to help reduce employee stress, which can improve health and morale—and productivity.

Managing Workplace Stress

  • As an employer, you can take several steps to ensure that the workplace is not contributing unduly to employees’ stress levels.
  • Make sure that workloads are appropriate.
  • Have managers meet regularly with employees to facilitate communication.
  • Address negative and illegal actions in the workplace immediately—do not tolerate bullying, discrimination or any other similar behaviors.
  • Recognize and celebrate employees’ successes. This contributes to morale and decreases stress levels.

Activities to Relieve Employee Stress

Aside from addressing job-related issues, you can implement a variety of activities and initiatives to help reduce stress. Some suggestions include the following:

  • Corporate chair massages once per week, bi-weekly or monthly. It is quite common for massage therapists to travel to local businesses, offering 15-minute (or shorter) chair massages for a reduced rate to employees. Typically the massage therapist sets up a chair in a quiet area, and the employees pay for the massage out of their own pockets—usually costing around $15. A short massage can equate to a whopping 85 percent reduction in stress, according to studies, and this is often at no cost to the employer.
  • Provide a designated space where employees can sit quietly and use meditation or prayer to alleviate their stress.
  • Offer exercise classes—exercise is a great way to relieve and even prevent stress. Offer a variety of class times (before and after work, during lunch, etc.), as well as various types of classes—such as yoga and kickboxing.
  • Provide employees with the education and tools to manage time and tasks, to cope with daily stressors and to prevent stress from damaging their health. You can present a stress management class or provide educational materials.
  • Host a comedy day—you can’t worry and laugh at the same time! Bring in a stand-up comedian, show old black-and-white comedies or hold a contest for the funniest home videos or jokes.
  • Print your company logo or a funny joke on stress-relieving squeeze balls and give them to employees, or use them as inexpensive prizes for wellness contest winners and participants.
  • Increase the number of paid vacation or personal days that you give to employees, and encourage employees to take the vacation days available to them each year.

Stress can originate at home or in the workplace. Avoid adding to employee stress with inefficient and frustrating policies or overwhelming workloads, and use the above suggestions to cultivate a positive and supportive workplace culture.

Educating Employees on Voluntary Benefits - January 2016

Offering voluntary benefits is a great way to enhance your benefits package, differentiate from competitors and increase employee satisfaction—all with little impact on your budget. But while employers may choose to offer numerous types of voluntary benefits that can deliver convenience and value for employees, many employees do not understand the advantages of these voluntary benefit options or are unclear how they work. Educate your employees on the advantages of these voluntary benefits so that you both reap the rewards.

 Demonstrate the Value

When compared to employer-sponsored benefits, many employees may fail to see the value of voluntary benefits that they must personally finance. For example, one perk to voluntary benefits is that purchasing insurance through an employer group is often cheaper than buying individually, yet research shows that few employees are aware of this. When promoting your voluntary benefit options, discuss the benefits of having coverage, the risks of going without, and emphasize the convenience and value of purchasing through the company and paying through payroll deductions. 

Coverage Education

It is important that employees fully understand their policy so that a misunderstanding does not lead to resentment toward the employer. For instance, if a consumer does not completely understand the nuances of property-casualty insurance and believes herself to be covered, it will come as a shock and possibly with misdirected frustration in the event of a major loss.

When offering any benefit option, employer-paid or voluntary, you should be sure your employees understand exactly how the coverage works. Here are a few ways to make sure your employees are sufficiently educated about their benefits:

  • Invite current employees to the monthly or quarterly benefits meetings provided for newly hired individuals.
  • Many voluntary benefits providers are willing to send a representative to discuss their coverage with employees.
  • While most benefits administrators don’t have time to meet individually with employees, consider scheduling small-group meetings with a few employees who have questions.
  • Enhance your existing benefits communication program with social media. Social media provides a convenient and effective way to reach out to your employees with educational information, tips and reminders

Employer Advantage

In addition to boosting participation in your voluntary benefits programs, providing this meaningful education can position you as a valuable source of knowledge and strengthen employee satisfaction and loyalty to your company.

Talk to your CMR Risk & Insurance Services, Inc. representative to learn more about available social media and employee benefit communication resources.


Offering voluntary benefits is a great way to enhance your benefits package, differentiate from competitors and increase employee satisfaction—all with little impact on your budget.  ________________________________________________________________________________________________________________________________________________________________________________________               

Premium Only Plans Overview - December 2015

A premium only plan (POP) is the most basic and most popular type of Section 125 plan, which are often referred to as “cafeteria plans.” While there are different types of Section 125 plans, each provides employers and employees with the chance to save money by reducing their tax liabilities.

A POP plan allows employees to pay their portion of insurance premiums with pre-tax dollars. Benefits that are typically offered within a POP plan include health, dental, vision, accidental death and dismemberment, short- and long-term disability, and group life insurance up to $50,000.

POP Benefits

With a POP plan, employees have the option of choosing an amount of pre-tax salary that will be withheld from their wages for insurance premiums. Depending on the amount they elect, employees can save up to up to 40 percent on their payroll deductions due to savings on Medicare, Social Security and unemployment taxes (depending on the state). As a result, employees have more money to take home each pay period.

For employers, POP plans can decrease company payroll expenses and federal and state tax liabilities. For every dollar an employee contributes into a POP, employers save 7.65 percent on FICA taxes—a substantial financial savings. In addition, employee morale may improve since their take-home paychecks are larger.

POP Disadvantages

While POPs can save costs, it is important to be aware of the potential disadvantages of these plans for both employees and employers.

• Since a POP plan decreases an employee’s taxable income, it may also reduce other benefits, like Social Security, that are calculated using an employee’s income.

• Employers are responsible for the implementation and maintenance costs associated with a POP plan.

  • Often, the tax savings gained covers most or all of the cost of the plan administration. Still, administering a POP plan is another responsibility for already busy HR professionals.
  • While POPs can offer tax savings to employees, they do not offer the same advantages of flexible spending accounts (FSAs), which allow employees to use FSA funds for qualified medical expenses in order to help offset their out-of-pocket costs. Employees may find POP plans to be less comprehensive than FSAs or other health care account options potentially offered at other companies.

POP Administration

Employees are only eligible to enroll in POPs during your annual open enrollment period, within a specified date for new hires or after a qualifying event (marriage, birth of a child, etc.). Employers are required to provide participants with a summary plan description (SPD) that explains the plan’s benefits, claims review procedure and participants’ rights.

In addition, employers offering a POP should perform nondiscrimination testing annually to make sure the benefit plan does not discriminate in favor of certain highly compensated or key employees. A POP test is deemed to satisfy the Section 125 plan nondiscrimination requirements if it passes an eligibility test. All tests should be kept on file in case of an audit.

If you are interested in setting up a POP or want more information, contact CMR Risk & Insurance Services, Inc. today.


What Happens if an Employee Misses Open Enrollment? - November 2015

Open enrollment can be an extremely stressful and overwhelming time for both you and your employees. It is typically the only time during the year in which employees can make changes to their benefits choices, such as adding or dropping coverage, adding or dropping dependents, or enrolling in benefits for the first time.

For an employee, missing this vital deadline can mean losing coverage, or being unable to change benefits elections, which can have a significant financial impact on the employee. For you, when employees miss this deadline, it can result in additional administrative burdens and unhappy or unproductive employees.

In order to prevent these issues, it is important to understand what it means when an employee misses open enrollment and how it can affect your business—before it actually happens. Communicating potential consequences to employees will encourage them to take the open enrollment deadline more seriously. 

What Am I Legally Required To Do?

Legally, employers are not required to do anything for employees who have missed the open enrollment deadline. In fact, the terms of your benefits plans may prohibit you from making exceptions for employees who do not make benefits elections within a certain time period, such as before the new plan year begins.

The only exception to these terms is if an employee qualifies for a special enrollment period (SEP). Employees who experience qualifying life-changing events (such as getting married, divorced or legally separated, having or adopting a child, or moving to a new residence or work location that affects benefits eligibility) are eligible to enroll in or make changes to their benefits elections outside of the open enrollment period. It is in your best interest to create simple and comprehensive policies and procedures so that you are prepared in the event of a SEP. If you are concerned about complying with the technicalities of SEPs, contact your representative at CMR Risk & Insurance Services, Inc. to learn more.

Employers that are applicable large employers (ALEs) under the Affordable Care Act (ACA) may have additional concerns. These employers must offer affordable, minimum essential coverage to their full-time employees or potentially face the employer shared responsibility penalty. You will not be subject to this penalty if you have offered appropriate coverage to employees, regardless of whether they enrolled in coverage.

In order to ensure that their businesses will not face any penalties, many ALEs should document that coverage has been offered.  By requiring employees to sign either an acknowledgement of benefits form for those who opt in to coverage, or a waiver of coverage form for those who opt out or miss the deadline to enroll in employer-based benefits packages, you will create a uniform policy. If you are concerned about complying with ACA stipulations, contact your representative at CMR Risk & Insurance Services, Inc. to acquire both of these forms to distribute to your employees. 

How Can I Help Employees with Open Enrollment?

In order to ensure that your employees are able to make the most out of the open enrollment period and the benefits your company provides, you should take an active role during open enrollment. Consider implementing the following strategies:

Opportunities for Education

Offering adequate benefits education to your employees prior to and during the open enrollment period can help alleviate much of the confusion that they may face. The first step in achieving this is to provide as much information as possible in many different forms, such as flyers, posters, emails and videos. Additional education can come in the form of personal worksite consultations, one-on-one appointments with HR representatives, seminars, webinars and self-paced e-learning modules.  Utilizing as many forms of communication as possible will enable you to reach more employees.

Asking for Feedback

Every employee has his or her own preferences when it comes to receiving important information. It can be beneficial to ask your employees if they like the way information is being provided to them, if they would prefer information to be distributed in different ways, or if they have any questions that have yet to be answered. Surveying your employees will help you clarify their benefits options and the open enrollment process, and it can demonstrate that you are willing to set aside time to help answer employee questions—potentially reducing the number of employees that miss open enrollment.

Make Time for Employees Who Missed Open Enrollment

If an employee misses open enrollment, he or she may understandably be panicked and unhappy. In order to offset any decrease in morale, it is important that you provide opportunities for the employee to meet with HR or to attend informational meetings that discuss his or her options to obtain coverage for the next year. At this point, there is not much more that you can do for him or her unless he or she qualifies for an SEP. The most beneficial ways in which you can help the employee is by offering additional opportunities for education and by asking for feedback regarding the process so that you can work to prevent this from happening again in the future.

Although many of these suggestions are not legal requirements, it is in your best interest to take these steps in order to protect your business and its productivity. Demonstrating to your employees that their needs are important to you will instill high employee morale, and ensuring that you have done all that you were required to do in regards to ACA regulations will protect your business in the event that an employee misses the open enrollment deadline.  _______________________________________________________________________________________________________________________________________________________________________________

COBRA Administration Outsourcing - October 2015

The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal law that provides for the temporary extension of employer-sponsored group health coverage for employees and their family members (qualified beneficiaries) in certain situations. COBRA coverage is available when qualifying events occur, such as termination of employment or divorce. 

Due to the complexities of the law and potentially serious consequences for mistakes or violations, many employers outsource COBRA administration to a third-party administrator (TPA).

Reasons to Outsource COBRA Administration
COBRA’s complex rules and requirements, mandatory notices and multiple deadlines can be difficult to follow and administer, whether you are a large company and have many qualifying events to keep track of, or you are a small organization that rarely has to deal with COBRA. 

Here’s why many companies outsource COBRA administration and why you might consider finding a TPA to handle your COBRA obligations:

It’s complicated. COBRA typically applies to employers with 20 or more employees, although how that number of employees is defined can be complicated if you have fluctuations of employee numbers throughout the year or numerous part-time employees. 

If your company is subject to COBRA, understanding and keeping track of the various requirements can be difficult. You will need to correctly administer things like required notices, election and payment deadlines, late and partial payments, different coverage periods, changes to plan options, address changes and terminations of coverage.  

It can be costly. Both the Internal Revenue Service (IRS) and U.S. Department of Labor (DOL) oversee COBRA-related laws. Both the IRS and DOL can levy fines and taxes, including fines of $110 per day just for the failure to properly issue COBRA notices and requested documents. The risk of missing a deadline for a notice or disclosure is high, especially if you don’t deal with COBRA frequently. In addition, you run the risk of individuals suing you for COBRA mistakes. Employers that do not administer COBRA coverage correctly can also be held responsible for paying individual health claims for qualified beneficiaries. 

Due to the various complexities and steep fines and taxes for noncompliance, many employers outsource COBRA administration to a third-party administrator.

It’s time-consuming. The knowledge and expertise needed to properly administer COBRA requires extensive training. Combined with the time expended by internal HR employees to actually administer COBRA, the amount of training necessary is often disproportionate to the number of qualifying events. COBRA administration can be stressful and time-consuming, and dealing with COBRA in-house is often an inefficient use of HR’s time and resources. 

On the other hand, if your company experiences high employee turnover or numerous qualifying events, you could be overwhelmed by the amount of work required by COBRA, taking away valuable time from other essential duties.

Due to the complexity of COBRA, the high risk of fines, taxes and lawsuits, and the inefficient use of HR’s time and effort, COBRA administration is a prime candidate for outsourcing.    

Considerations When Choosing a COBRA Administrator

If you do choose to outsource COBRA administration to a TPA, you will want to consider a few qualities as you choose a TPA. 

Compliance expertise. COBRA compliance depends on the prompt implementation of federal guidelines and regulations that stipulate what needs to be done and when it must be completed. Check that your TPA is well-respected for its expertise, follows written procedures and includes independent monitoring to ensure full compliance with COBRA regulations. 

Technological advancement. Generally, you will want to find an organization that is well-equipped with technology to handle on-time electronic delivery of all the required notices and letters. A good technological system will streamline the COBRA compliance process and provide proof that all deadlines were met. In addition, the system should be secure and encrypted to protect the privacy of information.

Customer service competence. Assessing the TPA’s level of customer service is also important. Having a good TPA can protect your company from having to deal with disgruntled ex-employees. Also, good customer service from your TPA will reduce the incidence of employee complaints about how COBRA is being handled. 

Legal accountability. Another important consideration is the indemnification protections provided in the contract. Although a TPA will never be able to take on all legal risk of COBRA administration, it should stipulate in the contract that the TPA takes financial responsibility for its own mistakes. Of course, if you fail to notify them when an employee is terminated or reports another qualifying event, you will be responsible for the COBRA noncompliance, but a good TPA will relieve you of at least some of the risks associated with COBRA.

Logistics of COBRA Outsourcing

After you have decided to outsource COBRA administration and have chosen a TPA, you will enter into a contract with them. As mentioned above, it is extremely important to review the indemnification process and make sure that your company is protected from the TPA’s mistakes. After all, this is probably one of the main reasons you are outsourcing COBRA administration—to cut down on the financial risk resulting from any mistakes. 

Although many TPAs are similarly priced, there are often two choices for how you can pay fees. Typically, you will either pay a flat fee per qualifying event or a monthly fee per eligible employee. Companies with low turnover will likely prefer the fee per qualifying event, whereas you might choose the monthly fee per eligible employee if you have high turnover or want to predict your COBRA administration-related spending more closely.

 When outsourcing COBRA administration, you will also need to designate someone to serve as a liaison between your company and the TPA. This person will ensure that all qualifying events are communicated to the TPA, will field any complaints about the TPA from COBRA-qualified employees, and will address any other concerns or communication regarding COBRA administration.  __________________________________________________________________________________________________________________________________________________________________________

Initiatives for Heart Health - September 2015

Heart disease—which includes strokes and other cardiovascular diseases—is a pervasive problem in the United States. In fact, more than 12 million people visit their physicians each year for heart disease-related reasons. Individuals who are diagnosed with heart disease may suffer from these symptoms:

  • Fatigue
  • Stress, anxiety and depression
  • The inability or difficulty to focus

Of those who are diagnosed with heart disease, nearly 600,000 die each year—roughly 1 out of 4. Treatment and the indirect costs related to heart disease—such as missed days of work—add up to nearly $313 billion each year. Fortunately, there are activities and programs that your business can promote to encourage heart health and wellness in your employees.

Activities and Programs

Improving heart health can be as simple as regular exercise (like taking a daily walk) and eating heart-healthy foods. However, finding the motivation for these activities can be challenging. Here are three programs and activities you can implement to help your employees make healthier decisions.

  • Create opportunities at your business for your employees to participate in physical activities and good nutrition by:
    • Promoting healthy alternatives in cafeterias and vending machines. You can achieve this by contacting your food distributor and requesting healthier options—such as nuts, fresh and dried fruits, whole grains, and fewer microwavable meals.
    • Encouraging some type of exercise. Your company does not need a gym or designated walking trails to help your employees stay healthy. Instead, you can encourage them to take a walk around the building during their breaks. By walking at least 6,000 steps every day, your employees can improve their health.
    • Placing signs by elevators that encourage people to use the stairs. By taking the stairs each day, your employees can cut their risk of heart attacks in half. 
  • Consider supporting your employees’ healthy choices by providing or reimbursing them for gym memberships. Your business may be unable to install a gym or walking trails near your office, so providing a discount for gym memberships may a good alternative.
  • Educate your employees on steps they can take to boost their heart health. You can do this by providing health risk assessments, medical screening and effective follow-up education and counseling. This may help employees better control their blood pressure, cholesterol and blood sugar levels, and it could help them quit smoking.

Healthier Employees Are More Productive Employees

Heart disease contributes to absences from work, poor performance and even death. By motivating and empowering your employees to make smart health and wellness decisions, you can keep your health care costs low while also increasing productivity. Simple and straightforward initiatives, such as providing healthier vending machine options and health education, can make an impressive impact.


Fad Diets: What’s all the Hype About? - August 2015

Learn to Recognize Fad Diets:

By the time you read this, there may already be a new best-selling fad diet book out on the market. Fad diets come and go, but can generally be defined as a weight-loss plan or aid that promises dramatic results. Generally, diets or diet products can be considered fad if they fit any of the criteria below:

Claiming to help you lose weight very quickly, more than 1-2 pounds per week.

Promising you will lose weight and keep it off without giving up fatty foods or starting an exercise program.

Basing their claims only on “before and after” photos.

Offering testimonies from clients or “experts” in weight loss, science or nutrition who are usually being paid to promote the diet plan.

Drawing simple solutions from complex medical research.

Limiting food choices and not encouraging you to get balanced nutrition by eating a variety of foods.

Requiring you to spend a lot of money on such things as seminars, pills or prepackaged meals in order for the plan to work. 

The following pages explain and compare some of the most popular diet programs available today. With so many available, understanding which may be the right fit for you can be overwhelming. Contact a health care professional before drastically changing your diet, exercise or weight-loss plan.  


The Atkins Diet Overview:

Atkins provides a series of dietary phases. The first phase is called the "Induction" Phase and it’s during these 14 days dieters are to follow detailed instructions exactly. The point of this phase is to kick-start the body into lipolysis/ketosis, during which the metabolism can be switched to one that primarily burns fat for energy. 

During Phase Two, the diet becomes less restrictive and more appetizing mainly by increasing the allowable vegetables and raising carbohydrate levels. When dieters approach their weight goal, they establish their "critical carbohydrate level" for maintenance, which is the highest number of grams of carbohydrates per day they can eat, without beginning to gain back their lost weight. 

Eating options for Atkins dieters places no limit on the amount of saturated-fat-laden products, such as meat, cheese, eggs, butter and oils consumed each day. Large amounts of these foods are advocated and encouraged, without the need to count calories or exercise. 

A limited amount of carbohydrates can be introduced in Phase Two, but Atkins dieters should still deter from eating bread, potatoes, pasta and sweets. Fruit and dairy are also extremely limited.


The South Beach Diet Overview:

South Beach is described as “neither low-fat nor low-carbohydrate,” but rather a method that teaches dieters to rely on the “right” carbohydrates and the “right” fats. 

Similar to Atkins, this plan is divided into phases. Phase One lasts 14 days and is the most restrictive by completely eliminating fruit, bread, rice, potatoes, pasta, sugar, alcohol, fast food and baked goods from the diet. Its goal is to promote eating three meals a day so that dieters aren't left feeling hungry and cravings for starches and sweets are eliminated. Phase Two allows gradual reintroductions of foods like pasta, bread, fruit and cereal, although dieters can't eat them all at once or in excess. Phase Two lasts until dieters reach their weight-loss goal and are ready to move into Phase Three, which is all about maintenance, and is considered more of a "way of life," than a phase. 

Eating options for South Beach dieters include avoiding highly processed carbohydrates found in baked goods, breads, snacks and soft drinks, as well as being cautioned against low-fat prepared foods, which only replaces fats with carbohydrates. To compensate for the overall cut in carbohydrates, South Beach dieters are allowed ample fats and animal proteins in meals such as chicken, turkey and fish, along with nuts, milk, cheeses and yogurt.

Also similar to Atkins, exercise and calorie counting are not required to lose weight with the South Beach diet. 


The Cabbage Soup Diet Overview:

The Cabbage Soup Diet has many variations, but they all basically involve eating endless amounts of cabbage soup that are supplemented by the occasional fruit or vegetable. The Cabbage Soup Diet is not sustainable and should not be followed for more than a week at a time, but tends to entice people because of its guarantee that the dieter will lose 10 pounds in one week. 

Here’s one form of the Cabbage Soup Diet, day by day:

  • Day 1: Eat as much fruit as you want (except bananas) and as much cabbage soup as you want. To drink, have unsweetened teas, cranberry juice or water.
  • Day 2: Eat as many fresh, raw or cooked vegetables as you want (aim for leafy, green veggies and avoid dry beans, peas and corn) and as much cabbage soup as you want. For dinner, also eat a large baked potato with butter. Do not eat fruit.
  • Day 3: Eat all the cabbage soup, fruits and vegetables you want, but do not eat a baked potato.
  • Day 4: Eat up to eight bananas and drink as much skim milk as you want. Also have as much cabbage soup as you want.
  • Day 5: Eat 10 to 20 ounces of beef and up to six fresh tomatoes. Drink at least six to eight glasses of water, and eat cabbage soup at least once.
  • Day 6: Eat as much beef and vegetables as you want, but no baked potato. Eat cabbage soup at least once.
  • Day 7: Eat as much brown rice, unsweetened fruit juices and vegetables as you want, and eat cabbage soup at least once.

While there are many variations of this diet, the diet itself is not customized for each person. Regardless of your weight-loss goals, your body type or even your starting weight, each person’s diet plan looks the same. While good for shedding a few extra pounds quickly, this diet is not a long-term plan. 

Dr. Phil Diet – The Shape Up! Plan Overview:

The Shape Up! Plan is characterized as a balanced approach to weight management, consisting of high fiber foods—including complex carbohydrates, whole grains, fruits and vegetables—balanced with lean protein and healthy fats.

The plan emphasizes seven key points:

  1. Right thinking for self-control
  2. Healing feelings, the key to emotional control
  3. No-fail environment
  4. Mastery over food and impulse eating
  5. High-response cost, high-yield nutrition
  6. Intentional exercise
  7. Your circle of support

A main principle of this plan is the “high-response cost, high-yield foods” concept. According to Dr. Phil, this means that a sunflower seed is a more ideal food because several steps must be taken before calories are actually ingested whereas a bean burrito with sour cream is easily eaten with minimal effort. 

The plan urges dieters to watch their portion sizes, load up on foods that are high in nutrients and fiber, and choose foods that take some work to consume such as broccoli, shelled peanuts and fish. Also, Shape Up! recommends and encourages vigorous exercise for 20 minutes, at least three times a week. 

No food is forbidden, but fast food and food that is easily consumed should be avoided or significantly reduced. In addition, the plan recommends keeping troublesome foods, such as cookies and potato chips, off the shopping list and replaced by veggies and other healthy snacks.  


Resources available:

For more information on these fad diets and more, refer to the recommended links below: 

The American Dietetic Association (ADA): www.eatright.org/Public  

With nearly 70,000 members, the American Dietetic Association is the nation’s largest organization of food and nutrition professionals promoting optimal nutrition, health and well-being.


The USDA’s My Plate: www.choosemyplate.gov 

The Center for Nutrition Policy and Promotion, an organization of the U.S. Department of Agriculture, was established in 1994 to improve the nutrition and well-being of Americans.


The American Heart Association (AHA): www.americanheart.org 

The American Heart Association is a national voluntary health agency whose mission is: "Building healthier lives, free of cardiovascular diseases and stroke." This website also has plenty of tips for healthy eating habits.




Tracking the Hours Worked for Your Exempt Employees - July 2015

The exempt verses non-exempt employee classification issue continues as a common area of confusion among employers. Often, many employers who are unfamiliar with the nuances of the issue also face practical challenges, including when and how totrack hours for exempt employees.

To be classified as exempt, the employee's job generally must satisfy both a salary basis test and a duties basis test. Exempt employees generally must be paid on a salary basis, meaning they must be paid a fixed salary each week. The U.S. Department of Labor (DOL) enforces regulations that define the salary basis requirement to satisfy the exempt status tests.  Exempt, Administrative, Executive, and Professional employees must be paid a predetermined amount each pay period that is at least the minimum weekly salary required by the regulations. The current federal minimum is $455 per week; however some states require a higher minimum weekly salary to satisfy this test. The amount paid may not be reduced because of a variation in the quality or quantity of the work performed.

Non-exemptemployees are typically paid on an hourly basis and entitled to overtime compensation. According to the federal Fair Labor Standards Act (FLSA), employers are required to track the hours worked and meal periods for non exemptemployees. This requirement ensures that such employees earn at least minimum wage plus overtime compensation for any hours worked above 40 in a work week (and in some states, for any hours worked above eight in a workday).

However, nothing in the law prohibits an employer from keeping track of an exempt employee's hours. Some valid reasons for tracking exempt employee hours can still be compelling. For example, an employer may opt to track an exempt employee's hours for purposes of client billing, Family Medical Leave Act(FMLA), 401(k), hours-based benefits calculations, attendance, paid time off (PTO) benefits, etc. Some employers opt to track exempt employees' hours simplyto ensure the equitable treatment of all employees regardless of classification in the company.

With a few exceptions, exempt employees must receive their full salary for any week in which they perform work without regard to the number of days or hours worked.  Accordingly, if exempt employees clock in late to work or leave early at the end of the day, the employer may not dock their pay as they may for non-exempt employees. If an employer does dock an exempt employee's wages, such a deduction may jeopardize the individual's exempt status.

Should an employer opt to track the hours of exempt employees, the company will need to be very careful with respect to how it uses this information. As explained above, the exempt employee's salary should not fluctuate based on the number of hours worked within the work week. Prorating an exempt employee's salary basedon hours worked may result in the loss of the exemption, which may be very costly for the business. The company may only take a deduction from an exempt employee's salary under limited circumstances without jeopardizing the exemp tstatus. These circumstances are listed below:

  • When anemployee is absent from work for one or more full days for personal reasons other than sickness or disability;
  • For absences of one or more full days due to sickness or disability if the deduction is made in accordance with a bona fide plan, policy or practice ofproviding compensation for salary lost due to illness;
  • To offset amounts employees receive as jury or witness fees, or for temporary militaryduty pay;
  • For penalties imposed in good faith for infractions of safety rules of major significance;
  • For unpaid disciplinary suspensions of one or more full days imposed in good faith for workplace conduct rule infractions;
  • In the employee's initial or terminal week of employment if the employee does not workthe full week, or
  • For unpaidleave taken by the employee under the federal FMLA.

While the company may opt to track the hours of exempt employees, the company must ensure that such information is not used to take deductions from their employees' regular salaries, unless such deductions comply with the relevant guidelines.

Employee Political Activity and the Workplace - June 2015

With the upcoming elections employers could likely observe a surge in political activities among their employees. Political conversations around the water cooler can easily erupt into personal confrontations with watercoolers being thrown around. Thus, employers need to be especially aware of federal and state laws regarding the ability to limit employee participation in political activities.

Addressing employment treatment with regards to political activities, the National LaborRelations Act (NLRA) provides employees with the right to engage in concerted activity. Whether or not the NLRA protects employee political activity depends partially on any identified employment concern the employee's are supporting.  For example, a political activity that directly supports a particular political issue, candidate, or party and a specific employment-related concern (i.e.Health Care Reform) may be considered protected. In general, while non-disruptive activities taking place during an employee's own time and away from the workplace are considered protected, some activities (i.e. those conducted on workplace premises) may be subject to company policy restrictions.

Some guidelines employers may consider include:

  • Political activities tied to specific employment-related matters are considered protected (i.e. "Vote for Candidate X, supporter of health care reform in the workplace.").
  • Completely political activities or support (i.e. campaign T-shirts supporting a specific candidate) is not considered protected and may be prohibited by company workplace policies.
  • Campaign materials identifying a union's name or logo generally cannot be prohibited.  However, an employer may demonstrate reasonable exceptions (i.e. employee safety in terms of qualified personal protective equipment).

Thus, ensure that your company's employee handbook policies comply with federal andstate laws involving employee political activities (i.e. voting leave).  Considering the wide range of interpretations on whether or not certain activities may be protected under the NLRA, look closely at the details of each situation before deciding to apply any disciplinary action against an employee.

Correcting a Failure to Effect Employee Deferral Elections - May 2015

An employer's failure to execute an employee's election to defer amounts to a 401(k) plan is a relatively common error. Like its cousin—mistakenly excluding an employee from a plan—the problem can be rectified by making a qualified non elective contribution (QNEC) to the plan on behalf of the employee, and as in the case of other operational problems, the error can be fixed through the Employee Plans Compliance Resolution System (EPCRS).

The problem to address is one of a missed deferral opportunity: the employee received taxable compensation instead of being able to defer amounts on a pre-tax basis and to accumulate earnings on those deferred amounts tax free until qualified distributions are taken. Let's look at two examples, neither of which entails "catch-up" contributions for employees age 50 or older, after-tax contributions, or "designated Roth" contributions. In both cases, the employees are non highly compensated employees (NHCEs).

Situation 1: Amy's elective deferral election at the start of 2006 somehow was never processed by the employer's payroll system. As a result, Amy received taxable compensation amounts that should have been contributed to the plan during the first six months of the year. The facts in this situation include: the plan'sactual deferral percentage (ADP) for NHCEs of 5 percent; Amy's election form agreeing to a deferral of 10 percent of pay; and her compensation of $20,000 for the six months that no deferrals were made.

Situation 2: Bob elected to defer 5 percent of his compensation in 2006. The plan includes bonuses in the definition of compensation that is used for an employee making elective contributions. Although Bob was able to make deferrals on his base compensation, the payroll system overlooked his bonus. The facts here entail an ADP of 3 percent; Bob's base compensation of $19,000; and his bonus of $2,000.

The Fix

As in the case of an erroneous exclusion of an employee from the plan, the remedy requires the employer to make a corrective contribution of 50 percent of the missed deferral (adjusted for earnings) on behalf of the affected employee. The employee is fully vested in those contributions, which are subject to the same withdrawal restrictions that apply to elective deferrals. However, unlike in the case of mistaken exclusions where the missed deferral amount is estimated based on the ADP for the employee category (e.g., NHCE), in both illustrative examples, the employees' election deferral amount is known. Thus, the missed deferral and the corresponding corrective contribution (50 percent of the missed deferral) are based on the participant's actual election instead of the ADP (i.e., 5 percent or 3 percent,respectively) of the NHCEs.

Before correcting for the exclusion, however,the plan must evaluate whether, in the event that the employee had made the missed deferral, it would still pass the applicable ADP test. The ADP test should be corrected according to the plan's terms before implementing any corrective contribution on behalf of the employee. In addition, the missed deferral amount should be reduced, if necessary, to ensure that the employee'selective deferrals (the sum of deferrals actually made and the missed deferrals, for which a corrective contribution may be required) comply with all other applicable plan and legal limits. Assuming that the plan passes the ADP test and that no changes must be made to the missed deferral amounts on account of plan or legal limits, the fixes for Situations 1 and 2 are determined asfollows:

Situation 1: Amy's missed deferral amount is $2,000 (i.e., 10 percent (Amy's electionpercentage) multiplied by $20,000 (her compensation earned during the period in which the employer failed to implement her election)). The amount of the corrective contribution the employer must make on Amy's behalf is $1,000 (i.e.,50 percent multiplied by Amy's $2,000 missed deferral amount).

Situation 2: Bob's missed deferral amount is $100 (i.e., 5 percent (Bob's election percentage) multiplied by $2,000 (his 2006 bonus from which elective contributions were not made even though he elected to make a contribution of 5 percent of all compensation, which included bonuses)). The corrective contribution required on behalf of Bob is $50 (i.e., 50 percent multiplied byhis $100 missed deferral).

The described correction only applies to missed deferrals. The corrective contribution also must be adjusted for earnings from the date that the elective deferrals should have been made through the date of the corrective contribution.

Making Sure It Doesn't Happen Again

Employers should establish systems that can help ensure that employees are provided the opportunity to make deferrals/after-tax contributions to the plan according to the plan's terms. They also should work to ensure that third-party plan administrators have sufficient understanding of the plan's terms to operate the plan accordingly. This is especially important if there have been plan amendments or changes to either payroll systems or administrators.

Keep in mind that despite all of your good efforts, mistakes happen. In that case ,the IRS can help you correct the problem so that you retain the benefits ofyour qualified plan.

Source: www.irs.gov – Retirement News for Employers, 2014-03-28

Interviews: What’s Illegal to Ask? - April 2015

Federal and state laws generally require employers to limit their interview questions to those that are essential for determining if aperson is qualified for the job. In general, employers should not ask aboutrace, gender, religion, marital status, national origin or age because thatinformation is irrelevant in determining if an applicant is qualified for thejob. Also, federal law expressly prohibits employers from making pre-employmentinquires about an applicant's disability.

Illegal interview questions are those that single anindividual out for reasons that are contrary to employment anti-discriminationlaws. It is not illegal to ask thesequestions in every context, but if a question has discriminatory implicationsand employment is denied based on the applicant's answer, the employer may havebroken the law. As an overall rule, employers should limit their interviewquestions to those that are job-related and should discourage applicants fromproviding unsolicited personal information.

The following are examples of illegal or inadvisablequestions and some acceptable alternatives.

1. Subject: Marital Status/Family

Illegal Questions: What is your marital status? What doesyour husband/wife do? Do you plan to have a family? How many kids do you have?How old are your children? What are your child care arrangements?

Acceptable Job-related Questions: Employers may ask whetheran applicant can meet specified work schedules or has activities or commitmentsthat may prevent him or her from meeting attendance requirements. Thesequestions must be based on a business necessity and asked of all applicants forthe position. For example—what hours can you work? Can you work on weekends andholidays? Are you willing to relocate if necessary? Are you willing to travelas needed by the job? Are you willing and able to work overtime as necessary?

2. Subject: Economic Status

Illegal Questions: Do you own a car? Do you rent or own a house? What is yourcredit rating? Have you ever declared bankruptcy? Have your wages ever beengarnished?

Acceptable Job-related Questions: Questions about thefinancial status of an applicant should be avoided, unless the information isessential to the job. For example, inquiries related to an applicant'sresidence may be permissible to determine availability for work—will you haveproblems getting to work by 8 a.m.?

3. Subject: Pregnancy

Illegal Questions: Questions relating to pregnancy andmedical history concerning pregnancy. For example—are you able to havechildren? Do you plan on having more children?

Acceptable Job-related Questions: General inquiries aboutduration of stay on a job or anticipated absences that are made to males andfemales alike.

4. Subject: Physical Health

Illegal Questions: Employers generally cannot askdisability-related questions or require medical examinations until after anapplicant has been given a conditional job offer. For example, the followinginterview questions should be avoided—do you have any health conditions? Areyou taking prescribed drugs? Have you ever been treated for a mental healthcondition? How many sick days did you take last year? Have you ever filed aworker's compensation claim?

Also, when it is obvious that an applicant has a disability(or if the applicant voluntarily discloses information about a disability),employers may not ask interview questions about the nature of severity of thedisability.

Acceptable Job-related Questions: An employer may ask anapplicant whether he or she is able to carry out all the essential functions ofthe job (with or without reasonable accommodation), if this question is askedof all applicants. Employers arepermitted to ask limited questions about reasonable accommodation if theyreasonably believe that the applicant may need accommodation because of anobvious or voluntarily disclosed disability, or where the applicant hasdisclosed a need for accommodation.

5. Subject: Name

Illegal Questions: Any inquiries about an individual's namethat would indicate marital status, birthplace, ancestry or national origin.For example—you have an unusual name, what does it mean?

Acceptable Job-related Questions: It's permissible to askwhether an applicant's work records are under another name. For example – Haveyou worked for this company under another name? By what name do your referencesknow you?

6. Subject: Gender

Illegal Questions: Any inquiry that relates to anapplicant's sex, unless it is a bona fide occupational qualification and isessential to the position. For example—Do you wish to be addressed as Mr.,Mrs., Miss or Ms.? What is your spouse's name?

Acceptable Job-related Questions: None, unless sex is a bonafide occupational qualification and is essential to the positio

7. Subject: Photographs

Illegal Questions: Requests that an applicant submit a photoat any time prior to hiring. (Photos maybe requested after hiring for identification purposes.)

Acceptable Job-related Questions: None

8. Subject: Age

Illegal Questions: Any question that tends to identifyapplicants age 40 or older. For example—how old are you? When did you graduatefrom high school or college? What is your birthday? Also, requests for a birthcertificate are illegal before employment.

Acceptable Job-related Questions: If age is a legalrequirement for a job, employers can ask applicants if they can provide proofof age if hired.

9. Subject: Education

Illegal Questions: Any question that specifically asks aboutthe nationality, racial or religious affiliation of schools attended.

Acceptable Job-related Questions: Questions related to academic,vocational or professional education of an applicant, including the names ofthe schools attended, degrees/diplomas received and courses of study. Forexample—what is the highest level of education you have completed?

10. Subject: U.S. Citizenship

Illegal Questions: Asking whether an applicant is a U.S.citizen.

Acceptable Job-related Questions: Because of potentialclaims of illegal discrimination, employers should verify eligibility to workin the U.S. after an offer to hire has been made. Applicants may be informed ofthis requirement in the application process by adding the following statementon the employment application: "In compliance with federal law, allpersons hired will be required to verify identity and eligibility to work in theU.S. and to complete the required employment eligibility verification documentform upon hire."

11. Subject: National Origin/Ancestry

Illegal Questions: What is your nationality? How did youacquire the ability to speak, read or write a foreign language? How did youacquire familiarity with a foreign country? What language is spoken in yourhome? What country are your parents from?

Acceptable Job-related Questions: What languages do youspeak, read or write fluently? This is only permissible when the inquiry isbased on a job requirement.

12. Subject: Race

Illegal Questions: Any question that directly or indirectlyrelates to an applicant's race. For example—what is your race? What is yourcomplexion?

Acceptable Job-related Questions: None

13. Subject: Religious Affiliation or Beliefs

Illegal Questions: Any question that directly or indirectlyrelates to an applicant's religious affiliation or beliefs, unless the religionis a bona fide occupational qualification for the position. For example—whatreligious holidays do you observe? What church do you attend? Also, employersshould not ask for references from religious leaders (for example, minister,rabbi, priest, imam or pastor).

Acceptable Job-related Questions: As a general rule, employersshould not ask interview questions related to religious affiliation or beliefs.Certain religious corporations, associations, educational institutions orsocieties are exempt from federal employment discrimination law when it comesto the employment of individuals based on their particular religion. In otherwords, an employer whose purpose and character is primarily religious ispermitted to lean toward hiring persons of the same religion.

14. Subject: Organizations

Illegal Questions: Which organizations, clubs, societies orlodges do you belong to?

Acceptable Job-related Questions: Which professionalorganizations do you belong to that you consider relevant to your ability toperform this position? These inquiries must only relate to the applicant'sprofessional qualifications.

15. Subject: Military

Illegal Questions: The type or condition of militarydischarge or an applicant's experience in anything other than the U.S. ArmedForces

Acceptable Job-related Questions: Inquiries concerning education,training or work experience in the U.S. Armed Forces. For example—what type oftraining or education did you receive in the military?

16. Subject: Height & Weight

Illegal Questions: Any inquiries not based on actual jobrequirements should be avoided. For example—how tall are you? How much do youweigh?

Acceptable Job-related Questions: Inquiries about theability to perform a certain job.

17. Subject: Criminal Record

Illegal Questions: Inquiries relating to arrests withoutconvictions. For example—have you ever been arrested for a crime? (The factthat a person was arrested does not mean he or she engaged in criminalconduct.)

Acceptable Job-related Questions: Inquiries about actualcriminal convictions that relate to an applicant's fitness for the position.

18. Subject: Sexual Orientation

Note: There is no federal law regarding discrimination inprivate employment based on sexual orientation or gender identity. However,many states and local governments prohibit discrimination based on sexualorientation and/or gender identity.

Illegal Questions: Any inquiries that are directly orindirectly related to sexual orientation or gender identity. For example—whatis your sexual orientation? What is your spouse's gender? Whom do you livewith? Do you identify yourself as a man or a woman?

Acceptable Job-related Questions: None

HR Training for Managers as a Key Compliance Strategy for Your Business - March 2015

The value of providing training to managers throughout the employment life cycle cannot be overlooked. Training ensures that your managers are knowledgeable about your company's workplace law obligations and skilled in delivering human resources best practices in order to become successful in their roles. Training further enables business costs to be low, employer liability to be controlled, and allows for successful organizations to emerge. Did you know that in 2010 the Equal Employment Opportunity Commission (EEOC) filed 99,992 charges against the private sector?

Managers should be trained in various discipline areas, but some may or may not apply depending upon the company's size and industry. Below are some suggested strategic and compliance training topics to assist managers in increasing effectiveness and reducing exposure.

  • Business Execution. Monitoring business goals, supervising employees, and managing organizational changes may result in improved business effectiveness.
  • Leadership. Providing ample opportunities for employees to have open communication and share a common vision, mission and goal helps with decreasing employee turnover rates.
  • Performance Management. Learning to provide evaluations that are fair, objective, and based on the organization's goals opens the door to feedback and conveys to employees they are valuable assets to the organization.
  • Diversity. Getting to know who your employees are, how to execute equal employment opportunities with non-discrimination tactics, and handling generational differences allows for increased employee satisfaction retention rates.
  • Business Crises Management. Planning, analyzing and evaluating how to handle stressful, harmful, or safety-related hazards that occur intentionally or un-intentionally (such as violence, injuries, accidents, fires, earthquakes, etc.) enables managers to take action rationally and rely on the team when needed.
  • HR Best Practices. Learning the basics about hiring, termination, harassment, business policies, employment laws, paperwork compliance, etc., sets forth better protection for managers and organizations. Often, the number and degree of EEOC complaints, OSHA violations, wage and hour penalties, or other claims are reduced when managers receive training on these topics to assist them in making informed decisions.

It is vital to understand that once training is received, managers should be able to "transfer" the training into actual real life situations and settings when an opportunity presents itself. One way managers can transfer training learned is by utilizing action plans.

Proper training can assist organizations by enhancing performance, productivity, employee satisfaction and customer service within a department. So, start training every day!

Invest with Tuition Reimbursement - February 2015

Employerscan provide tuition reimbursement as a strategic employee benefit incentive tohelp attract and develop employees to excel and grow with the business. Tuitionreimbursement typically helps employees with fees and expenses regarding courseregistration, materials, training, etc. Many perks exist when employers offertuition reimbursement:

  • Low turnover rates and stable retention rates enable savings in recruitment andhiring costs.
  • Employee loyalty, appreciation, and professional image increases.
  • New skills and knowledge acquired contribute to increased productivity.

With the time, effort, and money directed towards providing a tuition reimbursement program,employers will also want to ensure that employees who benefit from the programstay and not leave and take their newfound skills and talent to work for acompetitor. To offset this concern, many employers require employees to makecertain commitments to the company in exchange for having their tuition andrelated expenses paid. Examples include requiring the employee to:

  • Work for aminimum timeframe after the completion of the program before expenses arereimbursed.
  • Maintain aspecific grade point average (GPA) to qualify for reimbursement.
  • Repay anyfunds already paid if the employee terminates employment before completion of acourse.

Also, when planning to establish a new or revise a current tuition reimbursement program,keep the following suggestions in mind:

  • Know your budget to effectively manage costs and expenses.
  • Provide clear program guidelines on the conditions for approved tuition reimbursements.
  • Review the company's employee handbook to ensure that relevant policies (especially thoseregarding advancement opportunities) are updated in alignment.
  • Engage in on-going discussions with employees concerning their individual interests andgrowth opportunities within the company - all of which can be memorialized withan individual development action plan.

Supporting employees in their educational growth and allowing them to apply their learningon the job in ways that translate into increased productivity and profit canspeak volumes of how a company can experience a high return on its investmentin employee education.

Handling the Expanding Issue of Obesity Discrimination - January 2015

Published last October in the Journal of Occupational and Environmental Medicine, a Duke University study estimated the cost of obesity among U.S. full-time employees to be $73.1 billion. According to the study, the cost of obesity accounted for (1) employee medical expenses, (2) job productivity loss (due to health problems), and (3) work absenteeism. Facing such mounting and costly challenges, an employer can hastily make adverse employment decisions against overweight or obese employees and thus jeopardize the business with risks ofunfair discrimination claims. So, what responsibility must you as the employer exercise in order to provide a workplace free of weight-based discriminationand harassment?

Covering employers with 15 or more employees, the federal Americans with DisabilitiesAct (ADA) prevents discrimination based on a disability and requires employers to provide reasonable accommodations to a qualified employee with a disability.  In general, obesity is not covered under the ADA, but morbid obesity is.  Although no clear rule exists on whether obesity is a disability even under the recently amended (and more employee-friendly) ADA, employees have successfully made "regarded as" ADA claims.  For example, if an employer refuses to consider a job applicant due to a perceived obesity of the individual, then the failure to hire may be deemed as an act of unlawful discrimination.  Obesity-related conditions (i.e. diabetes and heart disease) may also be protected by the ADA.  Moreover, be aware of state-specific laws which mayprovide additional or more stringent.

Wheneverfaced with hiring or managing overweight employees, some employer guidelines include:

  • Establishing employee handbook policies emphasizing equal employment opportunities regardlessof personal appearances.
  • Reviewing job descriptions for any questionable weight requirements not related to theessential job functions.
  • Avoiding assumptions about which job tasks an overweight employee can not perform.
  • Working with employees on mutually agreed-upon reasonable accommodations in order forthe individual to perform the essential functions of the job.
  • Educating managers on, at minimum, the basics of the ADA and related federal and statediscrimination laws.
  • Training periodically all employees and managers on how to address inappropriate or unprofessional behavior which may lead to weight -based discrimination.

In addition, to help counter the rising costs associated with obesity in theworkplace, take a closer look at how you promote a healthy work environment.  Your company could stock vending machines with healthy snacks instead of soda and candies, implement a voluntary weight reduction program, or partner with a local fitness center to offer special employee discounts.  Maintain a healthier workplace culture over time, and your company could find the costs of employee obesity a diminishing issue that positively affects the bottom line.

5 Tips for Better Employee Plan Communication - December 2014

The Employee RetirementIncome Security Act (ERISA) is a federal law establishing minimum standards foremployee health benefit and retirement plans. While an employer is not requiredto establish a plan, ERISA does require those who establish and administerplans to meet certain standards. For example, plan administrators must provideparticipants written disclosures, such as a summary plan description (SPD) in aclear and easy to understand format about the company's employee benefit plans.

Recently, a U.S. SupremeCourt case of CIGNA Corp. v. Amara, addressed a situation to which allemployers should pay attention. CIGNA had sent their employees SPDs describinga benefit greater than what the terms of the formal plan had provided. The employerwas sued for the more generous benefit which the SPD had described, and a lowercourt had ruled in favor of the plaintiff. However, the U.S. Supreme Courtunanimously reversed the ruling and held that inaccurate or misleading SPDstatements were not subject to ERISA enforcement penalties or remedies.

The Court ruling remindsemployers to constantly consider the following five tips:

  1. SummaryPlan Descriptions. Draft and distributeSPDs that are brief and easy to read without overt contractual terms orlegalese.
  2. CommunicationsOfficer. Determine the companyrepresentative who will have authority over plan administration andcommunications.
  3. RegularReviews. Routinely verify thatplan documents are current and that communications are consistent and accuratewith the summaries and are compliant with ERISA requirements.
  4. Transparencyin Changes. Employeecommunications should fully disclose in advance any changes, especially thosethat may result in adverse circumstances (i.e. a decrease in benefits).
  5. Non-SPDs. While an SPD may include both a completedescription of the plan's terms (i.e. a Certificate of Coverage) and requiredERISA disclosure language, an insurance provider's Master Contract orCertificate of Coverage itself is not considered an SPD.

Employers can gain somereassurance that the benefits as detailed in the plan would be limited to thecontractual terms as written. At the same time, employers must ensure andregularly audit for proper and accurate communication of employee benefits. ERISAaspects including SPDs and plan documents can be very complex and confusing foremployers - big and small.

If you have anyresponsibility over your company's employee benefits program, then considerseeking assistance from an HR professional or benefits consultant for addedexpertise and guidance.

Health Care Reform: Common Acronymns - November 2014

There are a growing number of acronyms used in health care reform-related materials today. Here is a list of common acronyms and a definition for each.

ACA: TheAffordable Care Act. Used to refer to the final, amended version of the healthcare reform legislation.

CDC: TheCenters for Disease Control and Prevention.

CHIP: TheChildren's Health Insurance Program. Program that provides health insurance tolow-income children, and in some states, pregnant women who do not qualify forMedicaid but cannot afford to purchase private health insurance.

DOL: UnitedStates Department of Labor.

EBSA: EmployeeBenefits Security Administration. A division of the DOL responsible forcompliance assistance regarding benefit plans.

EPO Plan: Anexclusive provider organization plan. A managed care plan that only coversservices in the plan's network of doctors, specialists or hospitals (except inan emergency).

ERRP: TheEarly Retiree Reinsurance Program. A temporary program created under healthcare reform to provide coverage to early retirees.

FPL: Federalpoverty level. A measure of income level issued annually by HHS and used todetermine eligibility for certain programs and benefits.

FLSA: TheFederal Fair Labor Standards Act. Amended by PPACA to incorporate health carereform-specific provisions.

FSA: Flexiblespending account.

HCERA: TheHealth Care and Education Reconciliation Act of 2010. Enacted on March 30,2010, to amend and supplement PPACA.

HCR: Healthcare reform.

HDHP: Highdeductible health plan.

HHS: UnitedStates Department of Health and Human Services.

HMO: Healthmaintenance organization. A type of health insurance plan that typically limitscoverage to care from medical providers who work for or contract with the HMO.

HRA: Healthreimbursement arrangement or account.

HSA: Healthsavings account.

IRO: Anindependent review organization. An organization that performs independentexternal reviews of adverse benefit determinations.

MLR: Medicalloss ratio. Refers to the claims costs and amounts expended on health carequality improvement as a percent of total premiums. This ratio excludes taxes,fees, risk adjustments, risk corridors and reinsurance.

NAIC: TheNational Association of Insurance Commissioners.

OCIIO: TheOffice of Consumer Information and Insurance Oversight. A division of HHSresponsible for implementing many of the health care reform provisions.

OOP:Out-of-pocket limit. The maximum amount you have to pay for covered services ina plan year.

PCE:Pre-existing condition exclusion. A plan provision imposing an exclusion ofbenefits due to a pre-existing condition.

PCIP: ThePre-existing Condition Insurance Plan. A temporary high-risk insurance poolthat provided coverage to eligible individuals until 2014.

POS Plan:Point-of-service plan. A type of plan in which you pay less if you go todoctors, hospitals and other health care providers that belong to the plan'snetwork. POS plans require a referral from your primary care doctor to see aspecialist.

PPACA: ThePatient Protection and Affordable Care Act. Enacted on March 23, 2010, as theprimary health care reform law.

PPO: Preferredprovider organization. A type of health plan that contracts with medicalproviders (doctors, hospitals) to create a network of participating providers. Youpay less when using providers in the plan's network, but can use providersoutside the network for an additional cost.

QHP: Qualifiedhealth plan. A certified health plan that provides an essential health benefitspackage. Offered by a licensed health insurer.

SHOP Exchange: The Small BusinessHealth Options Program. A program that each health insurance exchange mustcreate to assist eligible small employers when enrolling their employees inqualified health plans offered in the small-group market.

Recruiting with Social Media - October 2014

Social media has a range of uses for businesses, includingrecruiting new employees. Job seekers today go beyond job boards and careerfairs to find work; many also use social media to find opportunities and getnoticed. To ensure your organization is finding the best possible talent,consider expanding your recruiting efforts to social media.


If your company is already on Twitter, you'll want to createa separate Twitter account for recruiting purposes, as you'll be targeting adifferent audience with a different message.

As with your business Twitter account, avoid simplypromoting your company and its job offerings. Instead, offer information thatwill be valuable to job seekers, such as:

  • Job-seeking tips. Use the knowledge and experience of yourrecruiting department to share helpful hints, such as basic tips, commonmistakes, interviewing best practices, etc.
  • Relevant articles or blogs. Find other material relating tojob seeking and succeeding in the hiring process, and share valuable content.
  • Meaningful retweets. Keep an eye on your own Twitter feedand retweet tips, articles and other relevant information.

In addition to sharing helpful content, mix in tweets withyour open positions and other relevant company information. You might also shareemployee reviews about your company, details about your hiring process or anyother recruiting collateral you have.

You should also be active in who you follow. Find otherrecruiters or industry experts for good material to retweet. Also followschools and career centers to establish important connections or furtherrelationships you already have. Follow local college students to encourage themto follow you back—they could become candidates for future jobs.

Consider these other helpful hints for recruiting throughTwitter:

  • Use the search feature to find people to follow or contentto retweet.
  • Ensure your content reaches a wider audience by usingappropriate hashtags in your tweets, such as #job, #jobpost, #recruiting,#hiring, #career, #jobseeker, etc.
  • Keep in mind that it's vital to be responsive with youraccount. If someone responds to a tweet or sends you a direct message with acomment or question, make sure you reply. People searching for jobs are alsoevaluating your company, so social media can shape their impression of yourbusiness.


Facebook can also be beneficial for your recruitinginitiatives because there are so many people on the site. For Facebook, youdon't necessarily need to create a separate account, as there is more opportunityto segment on your page. Plus, people who "like" your page are already fans ofyour company—perhaps they would like working for you as well. Here are sometips for integrating recruiting efforts into your company Facebook page:

  • Create a custom tab on your page called Careers or somethingsimilar, so that you can post current opportunities and other information forjob seekers.
  • Post on Facebook when you are attending a recruiting event,so job seekers know to find you there.
  • Post pictures of recruiting events or other company outings.
  • One way your Facebook page can benefit your recruitingefforts is if job seekers check out your page to learn more about your company.For this reason, you want your page to portray a positive image of your companyand culture, so keep that in mind while creating your page and posting updatesor pictures.

Another option is the Facebook Marketplace, where you canpost a job for free. Or, for more targeted results, you can use a Facebook® Ad,which is paid but also allows you to specifically target your audience bydemographic.


LinkedIn also affords multiple options for reaching andresearching job candidates. There are paid solutions such as the ability topost jobs, and there are also free resources. Start with these suggestions:

  • Make connections with anyone you know—co-workers, clients,vendors, friends and family. You never know when someone may be connected to agreat candidate for your company.
  • Join groups where you might connect with potentialcandidates. For instance, if your company hires a lot of IT consultants, lookfor a relevant group on LinkedIn and start networking.
  • You can also post job opportunities as a normal post on yourpage, for free, to alert your connections of new openings. Encourage people tocontact you if they know someone who would be a good fit.
  • Takeadvantage of LinkedIn to research potential candidates. See if anyonerecommended them, how many connections they have and how active they are intheir industry—this is valuable information you wouldn't get on a resume.


Tips for Benefit Plan Communication - September 2014

The Employee Retirement Income Security Act (ERISA) is a federal law establishing minimum standards for employee health benefit and retirement plans. While an employer is not required to establish a plan, ERISA does require those who establish and administer plans to meet certain standards. For example, plan administrators must provide participants written disclosures, such as a summary plan description (SPD) in a clear and easy to understand format about the company's employee benefit plans.

Recently, a U.S. Supreme Court case of CIGNA Corp. v. Amara, addressed a situation to which all employers should pay attention. CIGNA had sent their employees SPDs describing a benefit greater than what the terms of the formal plan had provided. The employer was sued for the more generous benefit which the SPD had described, and a lower court had ruled in favor of the plaintiff. However, the U.S. Supreme Court unanimously reversed the ruling and held that inaccurate or misleading SPD statements were not subject to ERISA enforcement penalties or remedies.

The Court ruling reminds employers to constantly consider the following five tips:

  1. Summary Plan Descriptions. Draft and distribute SPDs that are brief and easy to read without overt contractual terms or legalese.
  2. Communications Officer. Determine the company representative who will have authority over plan administration and communications.
  3. Regular Reviews. Routinely verify that plan documents are current and that communications are consistent and accurate with the summaries and are compliant with ERISA requirements.
  4. Transparency in Changes. Employee communications should fully disclose in advance any changes, especially those that may result in adverse circumstances (i.e. a decrease in benefits).
  5. Non-SPDs. While an SPD may include both a complete description of the plan's terms (i.e. a Certificate of Coverage) and required ERISA disclosure language, an insurance provider's Master Contract or Certificate of Coverage itself is not considered an SPD.

Employers can gain some reassurance that the benefits as detailed in the plan would be limited to the contractual terms as written. At the same time, employers must ensure and regularly audit for proper and accurate communication of employee benefits. ERISA aspects including SPDs and plan documents can be very complex and confusing for employers - big and small.

If you have any responsibility over your company's employee benefits program, then consider seeking assistance from an HR professional or benefits consultant for added expertise and guidance.

Q&A: Use of "Medical Marijuana" - August 2014

Q: We were conducting an interview for a position that would entail some transporting clients in passenger vans. The applicant stated that they have and use a "medical marijuana" card. How should we handle this? Should they be automatically excluded from the position? The applicant otherwise would be a good fit. Should we simply find an alternative position where they would not be driving?

A: Medical Marijuana in the workplace is an increasingly confusing area of the law.

You have two conflicting interests in this situation: 1) a position driving clients is a safety sensitive position-an accident caused by drug use that the employer could have foreseen would run the risk of a lawsuit against the employer. 2) The supreme court of California has held that state laws merely protect medical marijuana users from state prosecution, not from employment discrimination, but there is the need to not discriminate against an applicant's underlying medical condition that causes the need for the card.

Employers are allowed to maintain a drug-free workplace and continue to drug test employees-if this is your policy it should be applied consistently.  You could choose to not employ the applicant based on the results of a pre-hire test.  Alternatively, you could choose to treat the marijuana use the same as you would treat prescribed prescription drug use.  Assuming he is the most qualified candidate, you could hire him with the understanding that he will be subject to testing under the policy and that there is to be no use on company premises or that would affect his ability to drive.  (Keep in mind that testing will show use for up to 30 days so it is impossible to know if it was being used at work or not.)

Note, if you receive federal contracts you are required to prohibit the use of marijuana as a condition of participation under the Drug-Free Workplace Act of 1988.  If you are subject to Department of Transportation regulations, they also prohibit the use of medical marijuana for transportation workers in safety-sensitive jobs including pilots, school bus drivers, truck drivers, subway operators, ship captains, and transit fire-armed security, even in states where it is legal.

You would not be required to find him an alternative position.  If he is a good fit you could chose to do so. 

Wellness Programs Lower Health Care Costs And Do Much More - July 2014

Virgin Pulse's 2014 report on workplace health surveyed nearly 4,000 employees in 360 organizations about their workplace wellness programs.

The results showed overwhelming involvement, with 96 percent of employees reporting participation in their employee wellness programs to improve their health. Although physical fitness is a big draw, improving mental health is increasingly popular. In fact, 52 percent of employers offer mental health services, which represents a 14 percent increase from last year.

Health is not the only benefit, however. Eighty-seven percent of employees surveyed believe wellness programs positively impact the corporate culture.

Unfortunately, organizations may not be effective at determining the success of their programs. Almost a third are not satisfied with their method of measuring success. The study shows 48 percent fail to determine the effect their programs have on engagement or productivity.

Even so, the popularity of wellness programs in the workplace continues to make them a great way to attract and retain the best employees. Kristen Fischer "Are You Getting the Most From Your Employee Wellness Program?" www.dailyamerican.com (Jun. 6, 2014).

There are many benefits to offering employee wellness programs, but measuring those benefits can be a challenge. Most organizations look at the savings in health care costs, as this often demonstrates a clear return on investment. The Virgin Pulse survey found over 70 percent of employers reported lower health care costs as a result of wellness programs.

However, previous research also indicates a connection between wellness programs and increased employee engagement, productivity, and retention. The above survey illustrates how employees often see improvement in workplace culture from such programs.

Long-term commitment to a wellness program depends on its success. Employers looking to measure the success of their wellness programs cannot ignore how participation in the wellness programs can increase an employee's productivity and job satisfaction, and decrease absenteeism. These benefits can be significant to an organization's bottom line and should not be left out of the equation.

Employers should first outline broad goals for their program and then establish measurements for those goals. Employers can tie goals to sick leave taken or productivity, for example.

Whether your organization has a wellness program or is looking to establish one, it is never too late to start measuring success.

E-Recruiting - The New Way for finding New Employees - June 2014

Large corporations have long utilized e-recruiting strategies and tools to seek and secure top talent. As technology has evolved towards more cost-effective rates, more and more small to mid-sized employers have turned to e-recruiting as an affordable strategy to find, attract, and select job applicants for their companies' hiring needs. Nowadays, one of the more popular e-recruiting tools is social media.

Social media is an online version of media that enables real-time, dynamic dialogue among readers and viewers to participate in content development, as opposed to traditional media which delivers static content. Social media networks have started out popularly for personal interests. In recent years, numerous business applications and approaches have emerged to market and promote products and services, as well as companies themselves for employer branding and recruitment purposes. Through social media, employers can gain a wealth of information about specific job candidates.

However, before fully engaging in "social recruiting," be clear about your company's strategy. If the strategy is non-existent or weak, little accountability for results exists. Best strategic practices include:

  • Finding passive candidates. Social media can help you identify and develop relationships with top performers who are not active job-seekers yet.
  • Focusing on talent groups. Participate in groups which share information and engage in dialogue based on common industry interests and certain skilled professions or talents.
  • Facilitating education connections. Students - whether in a college or a vocational program - are highly tied to and accessible through technology such as social media.

Fully familiarize yourself with social media to help keep prospective candidates engaged throughout the recruiting process. When you finally have the real need to hire, you will already have your top candidates right at hand.


Q&A E-Cigarettes - May 2014

Q:  As an employer, what can I do to stop employees from using e-cigarettes in the office? Is there a law against this activity? 

Electronic cigarettes and other vapor products have been on the rise in the past several years. Whereas there is continued debate regarding the safety of vapor products, no federal law prohibiting the use of e-cigarettes or vapor products has been passed to date. Some municipalities have passed laws prohibiting the use of vapor products indoors or common areas. 

That said, if you would like to prohibit your employees from using vapor products or smoking e-cigarettes in the workplace, we recommend that you update your non-smoking policy to include these products and enforce the policy in a non-discriminatory and consistent manner. 

Top 5 Employee Handbook Policies to Reface - April 2014

Every business should consider providing or updating their company employee handbooks to reflect current trends that are highly relevant in today's workplace. The perception that employee handbooks are bland stacks of standard policies lead some employers to become static in routines and forget to employ creative and strategic policies that can provide important benefits to the company. Consider, at least, the following five policy areas recognized as major areas of focus for 2014:

1.  Employment Classifications. The U.S. Department of Labor (DOL) has been increasing its compliance enforcement efforts, and employers must understand how to initiate proper assessment in various areas of wage and hour laws (e.g. employee vs. independent contractor, exempt vs. non-exempt, full-time vs. part-time).

2.  Health and Safety. Another area of DOL attention involves safe and productive workplace environments. The federal Occupational Safety and Health Act (OSHA) requires covered employers to maintain a workplace that is free of hazards. Having specific policies in place is a key part of the process.

3.  Social Media. With the increasing usage of social networking sites and technological equipment (i.e. smart phones), employers should remain mindful of how their employees are using the internet and thus how they may be promoting your business and the image of the company. In addition, social media can cross barriers between confidentiality and privacy rights. So, a sound policy would be able to pinpoint the functionality and appropriate time frames that allow for social media usage during work as well as non-work hours.

4.  Telecommuting. Telecommuting can be used as an important recruitment and retention tool, and more companies are allowing more workers to work remotely more often.

5.  Benefits. Whether trying to stay on top of various health care reform laws, apply family medical leave updates, or provide vacation and sick leave time-off, it is vital for employers to ensure that their benefits-related policies remain current.

To be sure your Employee Handbook is up to speed, conduct a thorough review, at least, on an annual basis with the guidance from an HR Professional, if needed.

Can you fire someone for a Facebook posting? - March 2014

Does social networking have a dark side? Any dingbat with a Facebook page has a platform and potential to tear down your company, amongst their 'friends'. If that dingbat is an employee of yours, do you have the right to press the 'delete' button and terminate them? Maybe not, read on.

One such case recently reported in the media, has been settled. An ambulance service employee in Connecticut was terminated for posting negative comments about their supervisor on Facebook. This specific case highlights legal issues companies are faced with, when trying to handle disparagement by employees on various social media websites, including Facebook.

After a customer complaint was placed regarding the employee who worked for American Medical Response in Connecticut, the employee contacted her Teamster's Union looking for representation. The company denied her union representation and the employee went to Facebook and vented her frustration. Other coworkers, 'friends' on facebook posted comments and the employee replied.

In late 2009, approximately 3 weeks after this incident the employee was let go and the NLRB (National Labor Relations Board) issued a complaint against the employer later in 2010.  The NLRB pointed out in their press release, "under the National Labor Relations Act, employees may discuss the terms and conditions of their employment with co-workers and others." Their complaint also took aim at the company's internet use policy.

The National Labor Relations Board (NLRB) is an agency of the federal government tasked with and given the power to investigate and remedy unfair labor practices. They are also able to conduct elections for labor union representation.

The National Labor Relations Act (NLRA) is federal legislation designed to protect employee's rights to unionize and to regulate certain anti-union activity. Section 7 of the NLRA gives employees the right to engage in protected "concerted activities" relating to collective bargaining. Under this law, employees communicating with each other to address a collective concern are considered protected activity. However the NLRA does not protect conduct that is "unduly and disproportionately disruptive".

The NLRA was originally enacted in 1935 and has not been amended recently. Thus it does not specifically reference the relatively new phenomenon of online social media. As the agency in charge of enforcing NLRA, NLRB does have a general position on this topic. They take the position that "concerted activity" on social media is protected under NLRA. Employees have this right regardless of whether or not they are in a union.

There are however topics that an employer may enforce some controls over. "The following subjects may not be discussed by associates in any form of social media:

Company confidential or proprietary information Confidential or proprietary information of clients, partners, vendors and suppliers Embargoed information such as launch dates, release dates and pending reorganizations Company intellectual property such as drawings, designs, software , ideas and innovation Disparagement of company's or competitors' products, services, executive leadership, employees, strategy, and business prospects Explicit sexual references Reference to illegal drugs Obscenity or profanity Disparagement of any race, religion, gender, sexual orientation, disability or national origin."

Although American Medical Response denies any wrong doing in this case, in February 2011 they settle the case with the NLRB. The employer has agreed to revise it's overly-broad rules to ensure that they do not improperly restrict employees from discussing their wages, hours, and working conditions with co-workers and others, while not at work and that they would not discharge employees for engaging in such discussions.

Employers do have the right to restrict employee's internet and social media activity. However policies should be carefully drafted so as to avoid improper restraints on employee's right to engage in "concerted activity" under federal union law, among other state and federal laws.

For example, a social media policy that prohibited employees from discussing working conditions amongst themselves would be problematic under NLRA. Overly broad policies that attempt to prohibit any discussion relating to the employer may be interpreted by the NLRB to violate the employees' right to engage in concerted activity under the NLRA.

Policies restricting disclosure of confidential information and those prohibiting discrimination or harassment will clearly be permitted. Policies limiting malicious comments and defamation also seem appropriate.

Policies should be carefully worded, with assistance of legal counsel and it may also be appropriate to include a "savings clause" which sates that this policy will not be applied in such a way to violate state or federal law.

Barker Olmsted & Barnier, APLC
NLRB Press Release http://www.nlrb.gov/news/settlement-reached-case-involving-discharge-facebook-comments

Q&A Hippa Rules for Doctor Notes - February 2014

Q:  Are there HIPAA rules that would restrict our policy of requiring a doctor's note for an employee who has been out for a lengthy sick leave?

A:  It is not generally a violation of HIPAA to request doctor's certification of an employee's need for leave or release to return to work. In fact, it is usually an HR best practice. The Health Insurance Portability and Accountability Act protects information, including medical records that contain identifiable health information. However, this Act only applies to HIPAA covered entities (such as health care providers, health plans and health care clearinghouses) and their business associates. Even for HIPAA covered entities, there is a specific exclusion from the HIPAA Privacy Rule for health information collected in their capacity as employers.

In order to comply with the Americans with Disabilities Act (ADA), an employee's medical information must be kept in a separate file from the employee's personnel file.

When applying this practice it is recommended that you apply this policy consistently to each employee, as well as provide a reasonable amount of time to provide the company with such documentation. 


10 Tips to Help You Achieve Your New Year's Health Goals - January 2014

10 Tips to Help You Achieve Your New Year's Health Goals

1. Find Your Motivation
What is motivating you to lose weight? Do you want to look better in your clothes, feel more energetic, or simply improve your health? Get clear about what you want, and then use that to inspire you throughout your journey.  

2. Have a Plan
If you were to go on a long road trip, you wouldn't just jump in the car and go. If you did, you'd arrive hungry, tired, and fatigued. That's the same way you'd feel if you jumped into a whole new lifestyle with no planning. Before January 1st arrives, outline the changes you want to implement and decide how you'll fit them into your schedule. Keep in mind that it may be best to take steps rather than tackle everything at once.

3. Make Goals
Goals help measure progress. If you don't know where you want to end up, you won't really know how to get there. When making your goals, you need to make SMART goals:  

  • Specific
  • Measurable
  • Attainable
  • Realistic
  • Timely

For example, a SMART goal would be something like, "I will walk for 15 minutes 3 days for one week." Or, "I will prepare one new healthy recipe each week for the month of January."

4. Track What You Eat
Looking closely at what you eat is often an eye-opening experience. Use a Calorie Counter and Fitness Log to keep track of everything you put into your body. You don't have to do it for the rest of your life, but it is a great habit to start. Tracking will help you tweak your diet so that you can still enjoy foods you love without sabotaging your weight loss or healthy eating efforts.

5. Use Reliable Resources
It may be tempting to try a fad diet, but these are usually unrealistic, difficult to maintain, and sometimes even dangerous. Instead, find a reliable source of information to help you understand nutrition. The USDA offers a number of tools and resources, or you can consult a registered dietitian in your area. An RD is specially trained and can give you tips and tricks to help you achieve your specific goals.

6. Eat Breakfast Every Day
Surely you've heard that breakfast is the most important meal of the day. It is! Eat a big healthy breakfast as early as possible. It will give you more energy, lead you to make healthier choices during the day, and keep you feeling full so you eat less later on.

7. Fill Up on Vegetables
Vegetables are filled with nutrients, water, fiber, and very few calories. If you fill half of your plate with vegetables, you'll get fuller faster and cut down your calories without feeling deprived. Use herbs and spices to jazz up vegetables instead of using butter and/or salt to flavor them.

8. Exercise
In order to burn calories at a faster rate and build a healthy body, you'll need to incorporate exercise into your life. Take it slow at first, and then increase your time and/or intensity once you feel comfortable. If you haven't exercised in a while, talk to your doctor to make sure that you are healthy enough to begin an exercise plan.  

9. Take It Slow
A major mistake many people make when trying to tackle a health resolution is trying to do everything at once. This is almost always a recipe for disaster. Spend a few weeks just trying to achieve 1-2 goals at a time. When you have established new good habits, put a couple more goals on your plate. Remember: You want to make permanent changes, and these will take time to implement.

10. Be Prepared for Lapses
A lapse is when you temporarily "fall off the wagon." This is a normal part of the process; no one is perfect. It is important for you to take a moment to recognize that you got sidetracked, but don't use it as an excuse to throw in the towel. Every day is a new chance to start over, so return to your healthy lifestyle immediately.


Healthy Office Tips - December 2013

So what are some unobtrusive ways to encourage healthy workplace practices? What might be done on the small-scale, individual, micro level? What might be done on a larger, office-wise scale? Let's explore three, simple (and not so simple), basic (and more complex), and effective ways to get your workplace healthier.

Walking meetings

Ah, the mid-afternoon meeting. Is there a drearier human social activity? We've all fiddled with our smartphones through enough boring, pointless, useless meetings to last us a lifetime, but it doesn't have to be that way. You can walk and talk (and chew Stevia-sweetened gum) at the same time, can't you? So why not try it? You'll get your 10,000 steps for the day, along with your colleagues, you'll get fresh air, you'll get sun (hopefully), you'll get a change in the group dynamic that might spur creative thinking, and if the ancient tales are true, you'll be in good company: Aristotle was said to conduct his teachings as he walked the halls of the Lyceum in Athens.

Unless you're the boss, I don't expect you to instate walking meetings across the entire office and discard all standard sit-down meetings. That's not realistic. But next time you have an informal meeting with another coworker or two, suggest you go for a walk outside (or even through the confines of the building and down hallways, Aaron Sorkin-style). It might catch on.

Why your boss should care: There's reason to believe that walking meetings may be more productive that sit-down meetings, since walking has been shown to boost brain connectivity and function. Better functioning brains with better neural connectivity come up with better ideas.

Sponsored gym memberships.

Lots of employers are doing this nowadays, and it's a great thing. Gym memberships are seen as a luxury item for many household budgets, particularly in these difficult times, so an employer who includes a gym membership among the other benefits afforded to their employees is a great one.

If your boss won't sponsor you for the gym, consider assembling a group of willing and able coworkers to head on down to the gym and angle for a group rate. Once the higher-ups notice that there's a demand (and the tax breaks outlined below won't hurt), they may change their minds. And if they don't, at least you just got yourself a bunch of gym buddies.

Why your boss should care: What you might lose in gym fees (which you'll get a great package deal on, no doubt), you'll gain in savings on health care costs. Stronger, healthier, fitter employees are happier, more productive employees who are less liable to use sick days. Plus, you'll kill the other office in the annual softball game. Oh, and you can probably even get some tax write-offs  while you're at it.

Plants in the office.

Some of the benefits of being outdoors come from being close to plants, trees, and other green things. Save for most trees and a select variety of plant life scheduled by the DEA, we can bring plants into the office, where they can improve the quality of the air and make workers more productive. Even if you don't buy into the physiological underpinnings of why plants are good to be around, almost anyone would agree that plants are just nice to look at. A bare room is awful, but stick a big green plant in the corner, and you've suddenly changed the vibe of the room to be more positive and welcoming. That counts for something, doesn't it?

Start small. Adorn your cubicle/office/desk with various plants. Maybe buy a few extra to give as gifts to each "area" of the office. Hook your boss up with a fern or something. Just get people exposed to plants and the rest will follow. And if it doesn't, at least you're reaping the benefits.

Why your boss should care: Research shows that plants in the office can improve productivity, increase concentration, and make workers happier and less stressed. This effect is greatest among workers who spend more than four hours a day in front of a computer (sound familiar to anyone?)


Q&A PTO - November 2013

Q: Our organization is looking to change from providing Vacation and Sick Leave to Paid Time Off (PTO).  What steps do we need to take in order to implement this change?

A: First, you will want to ensure that your new program will be fair and equitable to your employees and that the policy is updated and distributed to your employees at least thirty days prior to enacting it.  It is also recommended that employees sign off acknowledging the updated policy.  Additionally, you will want to review how PTO will be calculated: will it be provided as a lump sum or will it accrue over the course of a year? Is the year calculated by a calendar year or is it based on each employee's anniversary? Will PTO carry over from one year to the next?  Are employees offered an option to be paid out for unused PTO at the end of a year? In addition to these items, it is imperative that you adhere to state laws as they apply to compensation for unused, accrued PTO as well as payment in lieu of using PTO.


Health Insurance Exchanges Have Arrived - October 2013

We have been hearing about them for over three years now, but  the Health Insurance Exchanges are finally here as of October 1st.  Each state now has an operational Health Insurance Exchange, which includes an individual Health Insurance "Marketplace", and a Small Business Health Options Program or "SHOP" Exchange. So what does this mean for you as a business owner?  Well, there are several ways in which Exchanges may affect you and your employees. 

Individual Health Plans - Most Americans are eligible to shop in the Health Insurance Marketplaces for individual health insurance plans.  Open enrollment begins today and runs through March 31, 2014.  So your employees may elect to log in and see the rates for plans from multiple carriers in your area for an effective date as early as January 1, 2014.  Should an employee elect to enroll in an individual plan through the Marketplace, the employee will forfeit the employer health insurance contribution that you currently offer to your workforce.  Individual coverage purchased through the Marketplace will not be deducted from an employee's paycheck; rather, the individual will be responsible for remitting payment for the coverage.   It is important to note that employer mandate penalties do not apply in 2014. Therefore, if one of your employees elects to shop in the Marketplace and receives a premium subsidy, it will in no way trigger a "play or pay" penalty for your business in 2014.  (The Employer Mandate provisions of Health Care Reform have been delayed until 2015.)

Small Group Health Plans - Small employers (generally those with less than 50 full time equivalent employees) may elect to shop in the Exchanges or "SHOPS" for group coverage.  Small employers can enroll beginning October 1, 2013 for coverage starting as soon as January 1, 2014.   Small businesses can also enroll and begin coverage any time after January 1, 2014.  As a small business owner, you may continue to use your existing licensed health insurance agent or broker when shopping in the Exchange to assist you in comparing and contrasting the price, coverage, quality and features of the available plans.  The price you pay will be the same with or without the help of an agent or broker.  There are a few important things to consider when making your decision as to whether to utilize the SHOP Exchange in your state:

  • If you plan to use SHOP, you must offer coverage to all of your full-time employees-generally those working an average of 30 or more hours per week. 
  • In many states, at least 70% of your full-time employees must enroll in your SHOP plan.
  • If you currently enjoy the small business health insurance tax credit, it is very important to note that beginning in 2014 the tax credit is available only for plans purchased through a SHOP.
  • Once you have selected a plan through a SHOP, in most states your employees will have only that one plan as an option for the benefit year.  Most state SHOP exchanges do not provide for multiple plan options for a single employer. 

You may be curious as to what types of health insurance plans are offered through the Exchange.  All health insurance plans available for purchase through the Exchanges are offered through private health insurance carriers.  There is not a government or "public" option available.  Initially, you will generally see four levels of plans offered through the Exchanges:

  • Bronze - Enrollee pays 40% of health care costs
  • Silver - Enrollee pays 30% of health care costs
  • Gold - Enrollee pays 20% of health care costs
  • Platinum - Enrollee pays 10% of health care costs

The difference among these coverage tiers rests with their "actuarial" value - in other words, how much a plan will cover before the patient must chip in for co-insurance, deductibles and co-payments.  So a platinum plan will have a higher premium, but will yield less out-of-pocket costs than a bronze plan. 

It is certainly a rapidly changing time in the health insurance world. Remember, the Exchanges are a new concept for everyone, so be sure to lean on your health insurance broker, accounting professional and Human Resources professional for compliance and strategic expertise in this evolving area.    


Social Media in the Workplace - September 2013

Social Media, the means by which individuals may post personal messages, photos and videos to the web, has exploded as a means of electronic communication.  Whereas this efficient, ever-present medium has magnified the concept of in the moment connectivity and communication, its impact on workplace policies as well as how organizations conduct business correspondence and advertising has becoming encompassing.  The challenges that businesses experience with social media usage involve maintaining policies on what employees share in this very-public, very-difficult-to-delete-medium and yet adhere to the laws under the National Labor Relations Act (NLRA) as it relates to employee rights and communication on social media websites.

In 2012, approximately 94% of all businesses with a marketing department used social media, such as Facebook, Twitter and Google+, to increase brand awareness and to communicate with over one billion users on these sites. Technology is rapidly changing the way we conduct business, and social media has become the dominant form of communication both for business and personal use. 

The business benefits of social media are numerous.  Social media, when utilized as a customer service tool allows consumers to conduct efficient research about organizations and their products and services.   Additionally, companies that incorporate inexpensive social media marketing campaigns benefit through the increase in their organization's brand awareness.

The biggest challenges and balance in dealing with social media in the workplace is differentiating between effective communications and marketing methods versus vigilant retention of an organization's security.  Complicating these matters further, the law governing social media in the workplace remains unsettled.

Few courts have addressed the legality of monitoring an employee's social media use on a company- owned communication device, such as a laptop computer, tablet or "smart phone".  Courts have been applying decades-old electronic communication laws, including the Stored Communications Act of 1986, for guidance on social media case litigation. Courts have been struggling with, and debating whether online posted messages, photographs and videos on social media sites are discoverable in court and whether this content is considered to be private and protected from disclosure.

Monitoring employees' use of social media can be challenging and frustrating.  As these websites are often hosted on outside servers not controlled by an organization, the ability and rights of the company to monitor the online social media activities is somewhat stifled. In order to minimize the legal risks associated with the use of social media in the workplace and to ensure that company-owned property is being used appropriately, employers should develop an effective and legal social media policy for their employee handbooks that encompasses clear rules as well as communicates that the organization has no intent of violating Section 7 of the NLRA in its company policy on social media. 

Although there are several concerns to balance, key points to consider when drafting a social media policy include:

  • Understand your employees' rights to use social media under the National Labor Relations Act (NLRA).The National Labor Relations Board (NLRB) says that employees have the right to discuss work conditions on social media sites without retribution from their employers. The NLRB has released a series of guiding points in how employers may proceed in regulating employee social media use. This resource provides a good starting point for the creation and administration of social media policies.
  • Focus on restricting employee behavior that is not protected under the NLRA. For example: instruct employees not to disclose trade secrets; forbid postings that contain offensive language; and instruct employees not to post harassing or disparaging comments about other employees that could lead to discrimination claims (such as comments related to sex, race, disability or religion).
  • Be prepared for discovery. Employers must anticipate that content on social media sites will be relevant in employment litigation. A social media policy should address discovery issues associated with requesting content from these sites and counsel must be prepared to discuss these issues with opposing counsel.

Though social media is an ever-evolving concept and will continue to expand its influence and presence in workplaces, employers can counter its negative impacts and encourage its advantages through thoughtful, compliant workplace policies.  To view a sample policy on social media in the workplace, please feel free to let us know.

Be a desk jockey and stretch guru - August 2013

Don't let being desk-bound get you down. Stretching at your work station eases stress and keeps your muscles from clenching up. Try these:

Upper Back
Sitting tall in your chair, stretch both arms over your head and reach for the sky. After 10 seconds, extend the right hand higher, then the left.

Let your head loll over so that your right ear nearly touches your right shoulder. Using your hand, press your head a little lower (gently, now). Hold for 10 seconds. Relax, and then repeat on the other side.

Torso Twist
Try this yoga posture to relieve tension: Sit facing forward, then turn your head to the left and your torso to the right, and hold a few seconds. Repeat 15 times, alternating sides.

Sitting up straight, try to touch your shoulder blades together. Hold, and then relax.

Hamstrings and Lower Back
You get to put your feet up for this one! To ease the hamstrings and lower back tightness, push your chair away from your desk and put your right heel up on the desk. Sit up straight, and bend forward just until you feel a gentle stretch in the back of your leg. Flex your foot for a few seconds, and then point it. Bend forward a little farther, flex your foot again, and hold for 10 seconds. Repeat on the other side.


Delay in ACA Employer Mandate: Opportunity to Regroup - July 2013

The bombshell July 2 announcement came in the form of a blog post on the U.S. Treasury Department's website, accompanied by a statement issued from the White House. The employer "shared responsibility" provision is being delayed one year, until 2015. The move was described, essentially, as a consequence of the IRS' failure to provide employers and health plans with guidance for their reporting obligations under Sections 6055 and 6056 of the Affordable Care Act (ACA).

Those sections cover the detailed information the IRS will require about the health plans offered to employees. Without guidance concerning what to report, the IRS would not have a way to measure whether or not employers are complying with their obligations under the law.

Nevertheless, the government doesn't want the delay to cause employers' efforts to comply with the reporting requirements to grind to a complete halt. "Once these rules have been issued," wrote Mark Mazur, the Treasury Department's Assistant Secretary for Tax Policy, "the Administration will work with employers, insurers, and other reporting entities to strongly encourage them to voluntarily implement this information reporting in 2014, in preparation for the full application of the provisions in 2015. Real-world testing of reporting systems in 2014 will contribute to a smoother transition to full implementation in 2015."

Mazur also promised "formal guidance describing this transition" would be issued the week of July 8 and detailed rules on reporting will be issued sometime in the summer.

Finally, a statement from the White House said the government is still moving "full speed ahead" on opening the health exchanges on time.

Note: The Obama Administration also announced that it would not require the new insurance marketplaces to verify the income and health insurance status of consumers in 2014. Instead, it would rely on what consumers report themselves until 2015, when better verification systems would be in place. 

Not All ACA 2013 Tasks Postponed

Some employers may wrongly conclude that all aspects of healthcare reform are postponed. Keep in mind that employers face other compliance requirements during or by the end of 2013. Examples include (if applicable):

  • Reducing waiting times for plan eligibility to no more than 90 days;
  • Complying with the rules for the Patient-Centered Outcomes Research Institute (PCORI) fee;
  • Notifying employees about the availability of state exchanges; and
  • Gearing up for more changes which take effect next year.

Opportunity for Course Reversal 

The delay does, however, create an opportunity for employers to reconfirm whether the play-or-pay decision strategy they mapped out for 2014 is still the best path. Chances are, nothing has changed since the original decision that would indicate the need for a new course.

This may not always be the case.

For example, suppose you decided to reduce many employees' working hours below the 30-hour coverage threshold. Suppose also, those plans became known, and you encountered a stronger-than-expected backlash. Employees told you they would rather give up health coverage than see their hours cut. Or perhaps you worry about getting a surge in orders and need to increase part-time employees to 30+ hours per week for a while, throwing a wrench in the works. This breather allows time to reconsider how to proceed.


Get Out and celebrate Great Outdoors Month! - June 2013

If there was ever a time to be encouraged to open up that door, it's now. That nudging starts at the very top with President Obama - and almost every state's governor joining him - proclaiming June as Great Outdoors Month.

But how can being outdoors enhance your health? It does in so many ways but a very big impact can be felt on your stress levels. Whether it's a wide open space, a scenic park or a view from your window, you'll view the world differently when you step into nature. So go on, take a break from your routine, and step out. It will make life's challenges less challenging.

Q&A: Taking a Second Look at Bloodshot Eyes: Random Drug Testing in the Workplace - May 2013

Q: Should employers conduct random drug screening on their employees?  Does there need to be a reason to ask an employee to submit to a drug test?  

A: Many companies, especially those whose line of business involves interacting directly with vulnerable populations,  as well as those who employ workers whose responsibilities include driving  or operating machinery and equipment, may be inclined to enforce a strict policy against the usage of drugs or alcohol during business hours. Some employers may go as far as to enact random drug screenings of their employees without any specific reason, while others may incorporate the practice of drug and alcohol screenings only when there is "reasonable suspicion" or if an employee has become injured while in the course of work duties. If an organization chooses to incorporate the practice of random drug and alcohol screening, it is recommended that the policy has been disseminated to all employees. The Employee Handbook is a great place to communicate this company practice. The company's guidelines, its stance on not tolerating drug and alcohol use during business hours, as well as the rehabilitative (if applicable)  or disciplinary consequences of being under the influence of drugs and alcohol during  work should all be clearly communicated within the employer's policy on drug and alcohol use.

Another key point is to ensure that the employer is consistent in its practices; the company should be mindful in ensuring that its practices are in line in how it treats all of its employees regarding drug and alcohol screening.  This will help prevent any discriminatory behavior on the organization's part if all employees are treated consistently with respect to the company's procedures on drug and alcohol use in the workplace.

A final note is that drug testing laws vary widely among states. Therefore, it is critical to check your state law to ensure that random, reasonable suspicion and post-accident drug testing are permitted in your state. 


Going for a Test Ride in the Workplace: Independent Contractors - April 2013

Independent Contractors have been a common addition to many organizations for years, but have increased in use over the past several years as companies have shed their staff headcount.  Independent Contractors are secured either directly and work in a 1099 capacity or they are brought into an organization via the route of a third party staffing or placement agency.
The use of Independent Contractors is cost effective for organizations as the employer is not burdened with withholding payroll taxes, making matching payroll tax contributions, or covering the cost of the employee's health and retirement benefit plans.   Additionally, this is a great opportunity to see if an Independent Contractor will fit in with the organization's culture as well as whether the individual will be successful in the role for which he or she was contracted. Independent Contractors who find success in their roles and fit in well with a company's culture hold an advantage should they be hired to become regular employees of an organization as their learning curve is substantially shorter than that of an individual who is hired into the company from the outside.  The Independent Contractor has already had an opportunity to become acquainted with the organization's industry as well with the dynamic of its employees.
Additionally, opting to allow an Independent Contractor's contract to expire if he or she is not a good fit for the organization is a simpler task than terminating a regular employee of the company. Some disadvantages, though, are that the employer has substantially less control over an Independent Contractor.  In addition, an Independent Contractor will not have the loyalty to the organization as would a regular employee. This can be problematic when employers need to strategize for succession planning and cross-training. With an Independent Contractor, employers do not have the same incentive to retain and train these workers as they would a regular employee of the organization. 
If you are a business owner or contractor who provides services to other businesses, then you are generally considered self-employed.  If you are a business owner hiring or contracting with other individuals to provide services, you must determine whether the individuals providing services are employees or Independent Contractors and ensure that the workers are categorized in line with their status. 
It is extremely important to note that the IRS does not allow all workers to be classified as Independent Contractors. The IRS has strict guidance regarding the classification of W-2 Employees verses 1099 Independent Contractors. The basic premise behind the determination is the amount of control that the company has over the worker and how the work is performed.  Another large contributing factor is how important to the work is to the company's core business. 
The IRS uses a 20-step statutory test to determine whether an individual should be classified as an employee or contractor.  This is certainly an area of the law where the IRS is increasing enforcement efforts. Therefore, it is critically important to ensure that workers are not misclassified as 1099 Independent Contractors when they should be W-2 Employees. Misclassification could result in substantial back taxes, IRS penalties, liability for workplace injuries, retroactive benefits, attorney's fees, and other monetary damages.  To see a summary of the IRS guidelines, please see the IRS Independent Contractor Checklist in the "Checklists" section under the "Essentials" tab in your HR Support Center.


Q&A: FLSA Status: Difference between Interns vs. Employees. (Hint: It's not all about who is Getting Coffee for the Boss) - March 2013

Q. What is the difference in FLSA status between employees and interns?  

A.  According to the Fair Labor Standards Act (FLSA), an employee is someone who is "suffered or permitted to work" and must be compensated under the law for the services he or she performs for an employer.  Certain interns who participate in training programs or for-profit, private sector internships may do so without receiving compensation.  In order for an assignment to be treated as an unpaid internship, all of the following criteria must be in place:

  • The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  • The internship experience is for the benefit of the intern;
  • The intern does not displace regular employees, but works under close supervision of existing staff;
  • The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  • The intern is not necessarily entitled to a job at the conclusion of the internship; and
  • The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

If all of these six conditions are met, the company may be able to classify the workers as unpaid interns. Otherwise, the employees will be entitled to at least minimum wage plus applicable overtime to remain in compliance with the FLSA.


Notice of Exchanges and Subsidies: Delayed - February 2013

A health insurance exchange is basically a virtual health insurance marketplace that is intended to create a more organized and competitive market for buying health insurance. Under the Patient Protection and Affordable Care Act (PPACA), states are encouraged, but not required to set up a state-based exchange.  However, if they fail to do so, the federal government will step in to help facilitate an exchange in the state.


With some states still weighing their options with respect to setting up certain types of health insurance exchanges, employers were beginning to worry about an important compliance deadline on the horizon. According to the original Health Care Reform Acts, effective March 1, 2013, employers of all sizes were required to provide each newly hired employee with a written notice of the existence of health insurance exchanges and potential subsidies available (Notice of Exchanges and Subsidies). This notice was subsequently required to be provided to all current employees. 


However, on January 24, 2013, the US Department of Labor (DOL) announced that it has delayed the compliance date for the delivery of this document. The delay most likely results from some uncertainty and indecision among state exchanges and anticipated information regarding the federal exchange program.  The DOL estimates that the notices (for both new hires and current employees) will be required in either late summer or early fall of this year. The DOL will publish a model notice prior to the new deadline. 


The notice must contain the following information:

  • Announcement of the exchange and an explanation of services provided through the exchange.
  • Statement of an employee's right to purchase insurance through the exchange, as well as information on how employees can contact the exchange.
  • Notification of whether or not the employer's health plan offers "minimum essential coverage" as defined by the federal law and the potential that an employee has to receive a government subsidy.
  • Notice that employees may lose the employer's contribution to health coverage if they purchase insurance through the exchange.

If your company has more than fifty full-time equivalent employees (FTEs), it is time to carefully consider how your organization intends to comply with the Employer Mandate, or if it determines that non-compliance is the best strategic option.  Whether your organization will face employer penalties depends on whether your current health plan design and employer contribution meet the minimum requirements.  Your decision in this regard may affect information contained in this notice. 


At the time of issuance of the notices, we recommend that your organization have a resource available to answer employee questions arising out of the notices.  Should you have questions regarding the Employer Mandate or this notice requirement, please reach out to your Health Plan Broker or your Human Resources Professional.


Mind Games, Research shows that keeping your mind active leads to a longer life with better mental functioning - January 2013

- Courtesty of Sharp Healthcare

A study at the Albert Einstein College of Medicine followed more than 400 participants over 20 years. It found that people who engaged in brain bending activities such as crossword puzzles, games and group discussions were less likely to develop a form of memory disorder known as vascular cognitive impairment. This broad form of memory loss is associated with changes in the circulatory system.

Take the following steps to keep your cognitive wheels turning:

  1. Play Games - Spend 15 minutes each day tackling crossword puzzles, Sudoku or logic games to improve your brain's speed and memory
  2. Learn a new skill - If completing the daily crossword is no longer a challenge for you, try building a model plane instead. You'll tap into multiple areas of the brain and challenge your memory, making new connections adn associating things in different ways
  3. Give up your routine - The more accustomed you are to doing something, the less your brain has to work. Force your brain to pick up the pace by brushing your teeth with the opposite hand, changing your route to work or doing laundry on a different day

"We are finding that keeping the brain active may build reserves of brain cells -- even generate new brain cells."

Nora Faine, M.D., M.P.H., Vice President and Chief Medical Officer of Sharp Health Plan


Investigate Employee Complaints to Avoid Liability for Employee Wrong-doing In the workplace - December 2012

There may be employee complaints regarding harassment, fraud, theft, discrimination and other misconduct. When complaints are not handled appropriately, the company may experience increased exposure to employment-related liability. In the long run, there may also be financial loss, damages, and penalties issued (from regulating agencies). Every employer should take the initiative to investigate employee complaints to ensure a non-discriminatory and safe working environment.

There are many benefits in having an investigation procedure/policy in place, including:

Employers that take the time to determine if "misconduct" did occur can pinpoint if there was a violation of governing regulations and/or company policy. If so, the employer can prepare documentation in the form of evidence in a timely manner in case a lawsuit is filed.

In investigations, employers tend to engage in mini-audits to see if policies/procedures were equitably and lawfully enforced.  This helps businesses access their vulnerabilities within specific policies and determine how violations are/should be handled.

When employers allow for open communication and create an environment that allows for employee feedback/complaints, they improve the process of internal reporting by saving time (and bringing a faster end to misconduct), versus having external agencies involved, which can consume time and money.

This practice also enhances the employer's reputation for being cooperative with the parties involved versus looking unfavorable in the eyes of others.

Employee feedback/complaints allow for managers to foster an environment that allows for growth and awareness of weaknesses to be improved. When employers take the time to investigate employee complaints, they can determine which training topics need to be available for workplace engagement purposes.

For example, if previous lawsuits or complaints involved issues regarding safety hazards, a workshop or training session about safety hazards may be initiated. 

To understand and prevent or decrease employee complaints consider:

  • Instituting an "Open Door" policy
  • Having a useful internal investigation procedure/policy in place
  • Ensuring complaints are thoroughly, carefully, and fairly investigated
  • To understand the investigation process steps, you may want to consult your internal or outsourced Expert HR Staff and/or a Legal Advisor

Often employers brush off employee issues/complaints as insignificant and do not realize doing so may cost them in the long run (especially if a regulatory agency becomes involved). Employee relations (including complaint investigations) are critical for business success and maintaining equitable/compliant workplaces and successful working relationships. 


What Are Voluntary Benefits, and Should We be Offering Them to Our Employees? - November 2012

In this day and age, we are inundated with advertising everywhere we look, Radio, TV, Internet, Billboards, Etc. so it's unlikely that most of us haven't heard the sound of the "Quack Quack" during exposure to advertising. The Company who makes those commercials claims that their coverage pays "helps pay the bills that major medical doesn't".

What are these benefits, and how do they actually relate to filling in the gaps that major medical insurance can leave? Do they really help protect the insured's out of pocket potential by lowering it, or reimbursing for out of pocket costs?

We are talking about "Voluntary Benefits" and it isn't just the Duck who offers them. Many financially strong, reputable insurance carriers offer this coverage and some do it better than others.

Some "Voluntary Benefits" Facts:

  • 100% Employee Paid (Employer Contributes Nothing)
  • Some of the Premiums can Be Deducted from the Employee, Pre-Tax
  •  Coverage can Typically be converted to an Individual Plan if the Employee Terminates

Employers "Cut" Core Benefits

The rising costs of employer-paid medical benefits, high health insurance costs, and ongoing uncertainty with health care reform are the main factors forcing companies of all sizes to cut benefits. In fact, 87 percent of employers view controlling the cost of health insurance as one of the top critical issues and challenges they face today. And, as employers try to control costs, benefits will continue to move away from employer-funded to voluntary.

The shifting benefits landscape has opened a window of opportunity for employee-paid voluntary benefits, which have become a powerful way for employers to provide affordable protection options to their employees. In fact, among employed Americans, 65 percent own at least one voluntary product - with life insurance as the most commonly owned voluntary product, followed by disability. And, more than half of those who do not own a voluntary product have never had an opportunity to buy.

Voluntary Benefit Trends

Employers seeking to cut costs while attracting and retaining employees are turning to voluntary benefits packages that will help them compete for talent and strengthen their overall benefits package. The proliferation of such voluntary benefits programs help companies keep their budgets in line while giving employees access to valuable insurance protection at more affordable rates. Additionally, companies have the security of knowing they are still offering quality benefits from companies that have already passed the review process.

Voluntary products, also known as worksite products, are positioned to fill the void for employers who want to provide a comprehensive insurance program to employees, but cannot justify the cost of the entire program. In these situations, the employer can offer employees voluntary, payroll-deducted coverages at competitive rates.

Many companies offer these voluntary products as an option to employer groups, which might consist of life, short-term disability, long-term disability, dental and employee assistance programs. These benefits are offered at affordable group prices that make it easy for employees to enroll.

Securing an Income Stream

Challenging economic conditions have forced Americans to dip into their savings to survive, leaving them vulnerable. With a number of employees living on a paycheck-to-paycheck basis, any type of disability ~ short or long term ~ can have a devastating effect on their financial well-being. And what happens if that paycheck ceases altogether with a premature death of the wage earner?

Including the ability for employees to buy-up or supplement employer-paid disability and life insurance coverages on a voluntary basis helps them obtain an amount of protection that is more personalized and appropriate for their needs.

The MetLife Employee Benefits Trends Study found that 54 percent of employees are interested in having life insurance available through the workplace even if they have to pay all of the costs themselves, and that percentage is even higher for disability coverage (58 percent). At a time when employee loyalty is dwindling, being able to help employers offer employees new benefits choices can be a step in turning that ship around.

The Year Ahead

When it comes to voluntary benefits program, the word that should be top of mind in 2013 is efficiency. Employers want comprehensive solutions aligned with controlling costs. Employees want security and safety. But perhaps above all, they want an affordable choice.

With the issue of expense shifting at the forefront in 2012, the integration of additional voluntary benefits as a strategy can help mitigate the financial concerns of employees and the financial burden on employers.

Covering a Critical Illness

Getting an early start on introducing critical illness insurance (CII) into existing voluntary benefits packages is important as benefits education is essential for employee acceptance. According to the 2010 MetLife Critical Illness Insurance Awareness Study, only 28 percent of full-time employees said that they have heard of critical illness insurance, and among those, the majority are confusing it for health insurance, disability income insurance, or a government insurance program. However, the low levels of CII literacy and ownership presents an opportunity because once CII was fully explained, 75 percent of employees who didn't own critical illness insurance or had never heard of it, found the concept appealing, with  most even willing to pay the entire premium.

Why are the percentages so high when it comes to interest once the product is explained?  It seems that many individuals are surprised to learn that their medical coverage may not address the full financial consequences of their illness, and a lump sum benefit provided by critical illness insurance can help mitigate the spike in expenses that can result from deductibles, co-insurance and uncovered expenses. Research MetLife conducted around CII found that that the average financial burden associated with recovering from cancer, a heart attack or stroke is $35,500, much of which is linked to lost income. With many employees already living paycheck to paycheck, it is not surprising that few full-time employees ~ only 16 percent of those surveyed ~ feel confident they could pay for a medical emergency.


Pay for Holiday Closures? - October 2012

When a company decides to close on Thanksgiving Day or for the entire week between Christmas and New Year's Day, is the employer required to compensate any of its employees?  Well, that depends. 

For non-exempt (overtime eligible employees), the company is generally not required to pay employees on days in which they do not perform work. As long as all non-exempt employees are notified of the closure prior to reporting to work on the holiday, no pay is required.  If the non-exempt employee has accrued vacation or PTO time, the employee may request or the employer may require that the employee use accrued vacation or PTO to cover the days of the holiday closure. 

For exempt employees who are paid on a salaried or fee basis, federal law requires the company to pay the employee his or her regular salary without interruption for business closures that extend less than one full workweek.  Failure to provide this continued compensation is likely to jeopardize the employee's exempt status. A workweek is the predefined seven-day period that the employer uses for payroll purposes.  Unless the closure extends for a full workweek, the exempt employee should experience no interruption in salary for the purpose of a holiday closure.  The employer may require the exempt employee to use accrued vacation time or PTO time to cover the closure.  However, if the exempt employee does not have sufficient accrued time to cover the holiday closure, the employer is required to ensure the exempt employee experiences no interruption in salary. 

As a benefit to workers, many companies opt to pay non-exempt employees for certain holiday closures. In fact, according to a Society for Human Resource Management (SHRM) Benefits Survey (2011), 97% of responding employers provide some type of paid holidays to their employees.  The company may set its policy in this regard, and it has a good deal of discretion regarding the payment and calculation of the holiday pay.   This may also include "shifting" the days of the recognized holiday so as to reduce the amount of vacation, PTO or unpaid time employees may experience during the holiday closure. We simply recommend creating a written policy regarding holiday pay and applying it consistently among employees.

It is also important to note that the law only requires the employer to consider actual hours worked versus hours paid when calculating overtime pay.  If the employer provides paid holidays, it is not required to count the unworked paid holiday hours towards the overtime calculation for a non-exempt employee.


New Health Insurance Document Creates an "Apples to Apples" Approach for Health Insurance Shopping - September 2012

We have a new acronym to remember in the health insurance world.  It is the SBC - the Summary of Benefits and Coverage.  The SBC is a four-page uniform template pre-filled with the important provisions of a specific health insurance plan. Basically, it is the "Cliffs Notes" version of the plan's material features.  The SBC must be accompanied by a glossary of health insurance and medical terms.

According to the US Department of Health and Human Services (HHS), "the Summary of Benefits and Coverage will enable consumers to easily understand their health coverage and determine the best health insurance options for themselves and their families."  This new document is one tool the federal government is using in an attempt to create more transparency and understanding for consumers in health insurance plans.

Through the use of the standardized format, the document is intended to provide more of an "apples to apples" comparison approach to health insurance shopping.  HHS likens the document to food nutrition fact labels required for packaged food.  Previously, employers and health care consumers relied heavily on health care providers' marketing materials when shopping and securing health insurance plans.  The new document is intended to assist the more than 180 million Americans with private health coverage in selecting and understanding their health insurance benefits.

However, the new document requirement comes with new compliance burdens for employers offering health insurance coverage under both grandfathered and non-grandfathered plans.  Beginning with your company's first open enrollment period following September 23, 2012, an SBC must be included in your company's open enrollment materials.  (If you do not provide open enrollment materials, the document must be provided at least 30 days prior to the plan's effective date.)   Also, for employees eligible to enroll during the plan year, the employer must ensure the employee receives an SBC if the enrollment date is after the plan's next annual renewal date.

Unless your health plan is self-funded, your health insurance provider is required to draft the SBC.  However, the responsibility to distribute the SBC is shared by both the health insurance company and the employer, and penalties may be assessed to either or both parties for the failure to provide the SBC when required.

Unemployment Claims: Fighting to Winning - August 2012

"You're fired!" If you have ever said that to an employee (unless you are Donald Trump and filming the reality show "The Apprentice"), you should be prepared to pay for your now former employee's unemployment claim. If an employee walks out and therefore terminates employment voluntarily, you may still be required to pay for unemployment. Confusing? You bet.

Terminations are part of the employment life-cycle. A voluntary termination results when an employee chooses to resign. An involuntary termination results when an employer fires, discharges, or lays off (due to budget, workforce reduction, or business closure issues) an employee.

If employers do involuntarily terminate, they should determine if unemployment benefit claims may apply and prepare to defend accordingly if the benefits are granted. Eligibility criteria impacts how unemployment benefits may be awarded. Some of the criteria for eligibility for unemployment benefits includes whether the terminated employee:

  • Became unemployed through no fault of his or her own (e.g. job elimination or reduction in force)
  • Earned sufficient wages with the company or during the claimant's base year
  • Is available for new work
  • Is actively seeking work

An individual may become disqualified for unemployment benefits if he or she:

  • Was fired for misconduct or a clear violation of company policy
  • Quit without good cause (e.g. walking off the job because of a disagreement with a colleague)
  • Returned back to the same job to work
  • Turned down a suitable job offer during the unemployment period
  • Participated in a strike or work stoppage caused by a labor dispute
  • Received Social Security benefits, severance pay, workers' compensation payments, state disability benefits, or a private pension
  • Made false claims or omitted information on his or her unemployment claim

In addition, the weekly benefit amount is generally determined by the total wages paid to the employee by his or her employer(s) during the "base" period. The base period typically consists of a minimum amount of work completed within the last five quarters of a calendar year prior to the initial filing for benefits and the amount of earnings during the base period.

Sometimes, employers futilely try to avoid addressing unemployment insurance claims. Now, if you know the employee was discharged through no fault of his or her own, save some time and do not appeal the claim. In other situations, it may be worthwhile to appeal a claim when the employee was terminated for issues such as misconduct, policy violations, or a general unwillingness to perform work. The benefit to employers in defending the claim may result in the employer tax rate being lowered or not increased. Your employer unemployment tax rate is directly impacted by the number of successful claims charged to your account. If you do opt to dispute an unemployment claim, ensure you have gathered all records that may influence the denial or awarding of an unemployment claim, such as performance management evaluations, disciplinary notices/letters, individual complaints, investigation information (if theft, harassment, or workplace violence was an issue), witness statements if applicable, etc. Ensure all paperwork is also ready for the state unemployment agency in a timely manner. If paperwork is delayed, there is a chance the former employee may end up winning the battle by default or forfeiture.

Employer Responsibility Under the Affordable Care Act - July 2012

The Affordable Care Act does not require businesses with less than 50 employees to provide health benefits to their workers, but larger employers face penalties starting in 2014 if they don't make affordable coverage available. This simple flowchart illustrates how those employer responsibilities work Click Here to View Flowchart

What is MLR?

The health care reform law sets guidelines for how insurers spend the premiums collected from members. Insurers must use a certain percentage of premium dollars for medical claims and programs that improve the quality of health care, and not for administrative expenses. This is known as the medical loss ratio. When the MLR is below target, insurers must issue rebates to policyholders.  Click Here for More Information on MLR Rebates


Unemployed Applicants: The New Protected Class - June 2012

In today's economic times, a competitive job force embraces workers with various knowledge, skills, abilities, education, and experience levels. Hiring managers attempt to compare and contrast these items when determining the best job candidate for a specific position. With respect to experience, many hiring managers consider long gaps in employment history on the resume or employment application to be a strike against a potential job candidate. However, due to the high levels of unemployment the country has experienced in the past few years, lawmakers are taking measures to ensure the job candidates who have experienced recent periods of unemployment are still considered viable candidates.

The Equal Employment Opportunity Commission (EEOC) is the agency that oversees discrimination in hiring practices. Some of the traditional protected classes include race, color, religion, national origin, age (40 and over), disability, military or veteran status, etc. Protected classes were developed from previous anti-discrimination laws such as the Civil Rights Act of 1964, Age Discrimination in Employment Act (ADEA), Equal Pay Act, Americans with Disabilities Act (ADA), and the Genetic Information Nondiscrimination Act (GINA).

On April 5, 2012, President Obama signed into law the JOBS Act (Jumpstart Our Business Startups) that is intended to prohibit employers from discriminating against job applicants because they are unemployed. Under the Act, it is "an unlawful employment practice" if a business with 15 or more employees refuses to hire a person "because of the individual's status as unemployed." Unselected job applicants will have the right to file a complaint with the EEOC if they are disqualified from consideration due to a recent period of unemployment. The JOBS Act contains the "Fair Employment Opportunity Act of 2011" (FEOA) that treats unemployed job applicants as a protected class under Title VII. The FEOA would make it an unlawful employment practice for an employer or employment agency that:

  • Fails or refuses to consider or hire an individual based upon his or her status as unemployed.
  • Instructs an employment agency to disqualify an unemployed individual from consideration, screening, or referral for employment.
  • Refuses to consider or refer an unemployed individual for a job opportunity.
  • Publishes advertisements which indicate that unemployed individuals are disqualified or will not be considered for employment opportunities.

Employers are encouraged to look carefully at their hiring methods (especially when viewing recent gaps in employment history) and to assess the role an applicant's unemployed status has on hiring decisions. There are several remedies that apply within the JOBS Act that include injunctive relief, reinstatement, lost wages, punitive damages, emotional distress damages, and reasonable attorney's fees and costs. Employers need to use caution when inquiring into the reasons underlying an applicant's current unemployment status. Remember, anything more than a minimal investigation into an applicant's current status (i.e. unemployed) may be considered as an influencing factor in the hiring decision. This can expose the employer to liability if the individual is not ultimately considered or hired for a position.


Small Business Health Care Tax Credit for Small Employers - May 2012

For tax years 2010 through 2013, the maximum credit is 35 percent for small business employers and 25 percent for small tax-exempt employers such as charities. An enhanced version of the credit will be effective beginning Jan. 1, 2014. Additional information about the enhanced version will be added to IRS.gov as it becomes available. In general, on Jan. 1, 2014, the rate will increase to 50 percent and 35 percent, respectively.

Here's what this means for you. If you pay $50,000 a year toward workers' health care premiums - and if you qualify for a 15 percent credit, you save ... $7,500. If you save $7,500 a year from tax year 2010 through 2013, that's total savings of $30,000. If, in 2014, you qualify for a slightly larger credit, say 20 percent, your savings go from $7,500 a year to $12,000 a year.

Even if you are a small business employer who did not owe tax during the year, you can carry the credit back or forward to other tax years. Also, since the amount of the health insurance premium payments are more than the total credit, eligible small businesses can still claim a business expense deduction for the premiums in excess of the credit. That's both a credit and a deduction for employee premium payments.

There is good news for small tax-exempt employers too. The credit is refundable, so even if you have no taxable income, you may be eligible to receive the credit as a refund so long as it does not exceed your income tax withholding and Medicare tax liability.

And finally, if you can benefit from the credit this year but forgot to claim it on your tax return there's still time to file an amended return.

Click Here if you want more examples of how the credit applies in different circumstances.

Can you claim the credit?

Now that you know how the credit can make a difference for your business, let's determine if you can claim it.

To be eligible, you must cover at least 50 percent of the cost of single (not family) health care coverage for each of your employees. You must also have fewer than 25 full-time equivalent employees (FTEs). Those employees must have average wages of less than $50,000 a year.

Let us break it down for you even more.

You are probably wondering: what IS a full-time equivalent employee. Basically, two half-time workers count as one full-timer. Here is an example, 20 half-time employees are equivalent to 10 full-time workers. That makes the number of FTEs 10 not 20.

Now let's talk about average wages. Say you pay total wages of $200,000 and have 10 FTEs. To figure average wages you divide $200,000 by 10 - the number of FTEs - and the result is your average wage. The average wage would be $20,000.

Also, the amount of the credit you receive works on a sliding scale. The smaller the business or charity, the bigger the credit. So if you have more than 10 FTEs or if the average wage is more than $25,000, the amount of the credit you receive will be less.

If you need assistance determining if your small business or tax exempt organization qualifies for the credit, try this step-by-step guide If you need assistance determining if your small business or tax exempt organization qualifies for the credit, try this Step by Step Guide

How do you claim the credit?

You must use Form 8941, Credit for Small Employer Health Insurance Premiums, to calculate the credit.

If you are a small business, include the amount as part of the general business credit on your income tax return.

If you are a tax-exempt organization, include the amount on line 44f of the Form 990-T, Exempt Organization Business Income Tax Return. You must file the Form 990-T in order to claim the credit, even if you don't ordinarily do so.

Don't forget ... if you are a small business employer you may be able to carry the credit back or forward. And if you are a tax-exempt employer, you may be eligible for a refundable credit. 


Q. Can an employer make its employees clock out for breaks of 5 minutes? - April 2012

A.  No, an employer may not require employees to clock out for breaks of five (5) minutes and be unpaid for that time because this practice violates the federal Fair Labor Standards Act (FLSA).

According to the US Department of Labor, "the FLSA does not require employees be given meal or rest breaks. However, if employers do offer short breaks (lasting about 5 to 20 minutes), federal law considers these short breaks time for which employees must be compensated. Bona fide meal periods (typically lasting at least 30 minutes), serve a different purpose than short rest or snack breaks and, thus, are generally not time for which employees must be compensated." At the same time, for documentation purposes, an employer may require employees to track (using a device or timesheet) the times employees started and ended their rest breaks. Note: Some state laws differ than the federal laws in regards to required meal/rest breaks. 

Disability Leave Mandates Employer Healthcare - November 2011

California's Pregnancy Disability Leave law has been amended by SB 299. The amended law mandates that employers provide paid healthcare for up to four months of leave. The amended law has its biggest impact on small businesses not already covered by the FMLA.

Overview of PDL

The California pregnancy disability leave law ("PDL"), found in California Government Code section 12945, is part of the California Fair Employment and Housing Act (FEHA). PDL requires employers of five or more employees to provide female employees up to four months of leave for disability due to an employee's pregnancy, childbirth or related medical conditions.

An employer must provide a leave of absence for up to four months, so long as the woman is actually disabled by pregnancy. The four month leave can be taken intermittently or on a reduced work schedule if medically advisable.

PDL does not provide time off merely because the employee is pregnant. The leave only applies when the employee is medically disabled on account of pregnancy. Moreover, PDL does not provide time off for the care of the baby. That privilege is given under the FMLA or CFRA, if the employer is covered by those statutes.

The law also requires employers to transfer pregnant employees to less strenuous or hazardous position if medically advisable and the employer can reasonably accommodate the request.

Mandated Healthcare

Effective January 1, 2012, the amended law requires the employer to pay its regular share of group healthcare during the PDL leave.

The law states that an employer must "maintain and pay for coverage for an eligible female employee who takes leave . . . for the duration of the leave, not to exceed four months over the course of a 12-month period, commencing on the date the leave . . . begins."

Where the group health plan requires an employee to contribute towards the premium, the employee must continue to do so during the leave at the same level she normally would have paid, had she not taken the leave.

Amendment Impacts Small Employers

This amendment impacts small businesses the most. The reason is that larger employers (those with 50 or more employees) were already covered by healthcare provisions in the FMLA. Under the FMLA, large employers were already required to pay for healthcare for up to 12 weeks of covered leave. The amended PDL law requires payment for four months. Accordingly, larger employers are now mandated in California to pay for an additional month of healthcare.

Employers with 50 or fewer employees were not previously required to pay for healthcare during PDL. The exception would be where they did so for employees taking other types of leave. The PDL regulations state that employers may not discriminate between employees taking pregnancy disability leaves and employees taking unpaid leaves for other temporary disabilities with respect to "health plans, employee benefit plans, including life, short-term and long-term disability or accident insurance, pension and retirement plans, and supplemental unemployment benefit plans."

Cost Recovery Permitted

The amended law permits an employer to recover from the employee the costs of healthcare in some circumstances.

The law states: "An employer may recover from the employee the premium that the employer paid as required for maintaining coverage for the employee under the group health plan if both of the following conditions occur:

(i) The employee fails to return from leave after the period of leave to which the employee is entitled has expired.

(ii) The employee's failure to return from leave is for a reason other than one of the following: (1) The employee taking leave under the Moore-Brown-Roberti Family Rights Act [California Family Rights Act / CFRA]. (2) The continuation, recurrence, or onset of a health condition that entitles the employee to leave under paragraph (1) or other circumstance beyond the control of the employee."

For example: Mary Smith becomes medically disabled on account of pregnancy and takes a four month leave under PDL. She works for a small company employing 10 employees. During that time period, the company pays 75% of the healthcare premium, and Mary pays 25%, which is the standard allocation under the plan. At the end of the four month period, Mary delivers the baby and is medically able to return to work. However, Mary voluntarily decides to stay home to care for the baby rather than return to work. The company may recover the 75% premium contribution it made for Mary during the four month leave.

On the other hand, if the company has 50 or more employees, the result could be different. In that case, the company is covered by the California Family Rights Act. On top of the four month leave for pregnancy-related medical disability, Mary is entitled to take up to 12 weeks of additional leave to care for the baby, during which time the company must continue to pay its share of healthcare.

The second exception noted above is where the employee is medically unable to return to work. If after four months of leave, Mary cannot come back to work because she continues to be medically disabled, the company would not be entitled to recover healthcare premiums from her. This exception is similar to one already found in the FMLA and CFRA.

The amended law would also prohibit an employer from recovering the premium where the employee does not return to work on account of an "other circumstance beyond the control of the employee." The law does not define what those "other circumstances" may be, and therefore employers will need to carefully consider such circumstances and seek legal advice before seeking to recover the premium cost.

Note to state employers: the amended law states: "If the employer is a state agency, the collective bargaining agreement shall govern with respect to the continued receipt by an eligible female employee of the healthcare coverage."

Next Step: Amend Policies

California employers should review and update PDL policies in their employee handbooks.

Additionally, employers need to update any notices given to employees at the time of pregnancy disability leave. The notices should include information regarding the payment of healthcare, and also notify the employee under what circumstances the employee may be required to reimburse the employer for the premium.

Additional Resources:  Read the text of SB 299

Article Courtesy of: Christopher W. Olmsted www.barkerolmsted.com

New NLRB Notice Requirement Puts Businesses Nationwide on Notice - October 2011

The National Labor Relations Board (NLRB) issued a final rule requiring most private-sector employers to notify employees of their rights under the National Labor Relations Act (NLRA). The NLRB will enforce employers to post a new NLRA notice in the workplace. The posting requirement is effective January 31, 2012

Covered Employers
The posting requirement applies to all private-sector employers (including labor unions) subject to the National Labor Relations Act. Because NLRA rights apply to union and non-union workplaces, all employers subjected to the Board's jurisdiction (aside from the US Postal Service) will be required to post the notice. In general, the NLRA covers private employers that have an impact on interstate commerce which is based much on the dollar volume of business a company generates. For example, the law covers retail or service establishments with annual gross receipts of at least $500,000, manufacturing companies that ship at least $50,000 worth of goods across state lines or purchases at least $50,000 worth of goods from out of state.

Employers Not Covered

  • Government or Union Employers. Certain employers are specifically excluded by the NLRA: federal and state offices, Federal Reserve Banks, employers subject to the Railway Labor Act, labor unions and their officers and agents (except when they are acting as employers).
  • Companies that have a municipal function. A privately-owned company with an essentially municipal function is exempted from the NLRA.
  • Religious schools. An exception here is schools that are largely secular and not pervaded by a religious purpose.
  • Agricultural, railroad and airline employers are not impacted.

In a conspicuous area where employees can easily see and read it, the NLRA notice must be posted in English. If 20 percent or more of the staff is not proficient in English and speaks a language other than English, then the employer must post the notice in that other language. However, if two or more groups comprising at least 20 percent of the staff speak different languages, then the employer must either physically post the notice in each of those languages or post the notice in the language spoken by the largest group of employees and provide a copy in the other language(s) to each of the other employees. If an employer customarily communicates workplace policies to employees in an electronic format (i.e. a company intranet), then it must electronically post the notice as well. Failure to post the notice may constitute an unfair labor practice under the NLRA.

This new poster requirement will clearly bring more attention and increase interest in union organizing. As importantly, employers should anticipate an increase in complaints from non-union employees about work rules, especially those that run contrary to any of the poster information. In preparation, employers should become familiar with the NLRA language, review their company workplace policies and procedures to make sure that they do not conflict with the NLRA provisions, and be ready to discuss the NLRA rights with their employees.

New Federal Wage and Hour Regulations Take Effect - May 2011

The Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL) underwent several new developments to be effective on May 5, 2011. The developments relate to amendments made to the federal Fair Labor Standards Act (FLSA) and the Portal to Portal Act. Based on the updated federal regulations that may be different from regulations in your state, the following illustrate some of the major provisions:

  • Tips and Wages. As long as an employee's pay (plus tips) equals or exceeds the federal or state minimum wage (whichever is higher), an employer may pay a non-exempt employee (who earns tips) less than the minimum wage and may use the individual's tips to make up any difference. In addition, an employer should notify employees of any tip credit usage, and the employees are to keep all tips received unless tip pool amounts are to be shared among those who customarily earn tips. Also, while the FLSA does not impose a maximum contribution to a valid tip pool, an employer must notify employees of any required contribution amount. (Note: The DOL raised the maximum federal tip credit from $4.42 to $5.12 per hour.)
  • Sub-minimum Wage. An employer may pay an employee (who is under 20 years of age) a sub-minimum wage of not less than $4.25 per hour for the employee's first 90 calendar days of employment.
  • Stock Options. Stock options are to be excluded from the calculation of an employee's regular rate of pay.
  • Fire Protection Activities. Regarding employees involved in fire protection activities, the amount of non-exempt work in which such an employee (considered as exempt) may participate is not limited. Regarding exempt employees engaged in law enforcement activities, however, a 20 percent limit for such work remains in effect.

More developments and updates from the WHD continue to be expected. So, in the efforts of protecting against costly compliance violations, be sure to take the time to learn about how these and other new provisions could impact your business.

The Arrival of Final ADAAA Regulations - April 2011

On March 24, 2011, the federal Equal Employment Opportunity Commission (EEOC) published its final regulations concerning the Americans with Disabilities Act Amendments Act (ADAAA) that established a broad definition of "disability." The EEOC also provided new interpretive guidance to address concerns posed when the Act which was passed in 2008.

Does the ADAAA expand the pool of qualified individuals who can file disability discrimination claims? Yes. Do the final regulations offer some relief for employers from the initially proposed regulations? Thankfully, yes.

Some highlights of the final regulations include the following:

  • ADAAA's Primary Goal. The focus remains whether or not an employer complies with its employment law obligations.
  • Major Life Activity Limitation. With the reinstatement of the "condition, manner and duration" factors in determining whether or not an employee is substantially limited in a major life activity (including "working"), an employer may compare such an employee to "most people in the general population."
  • Duration. The EEOC suggests that substantial limitations cannot be set in a rigid timeframe. A disability may be considered as one covering a long period (i.e. a few months) or one with "sufficiently severe" impairments covering only a short period (i.e. several days) of time.
  • Employer Coverage. The "regarded as" clause of what is considered a disability points to the employer's treatment of the employee versus the employer's perception of the employee's impairment. Minor and transitory claims would not be accepted under this provision.
  • Individualized Assessments. Any impairment requires an individualized assessment to determine whether or not it meets the definition of "disability."

Does the new ADAAA still make it easier for employees to file unfair discrimination claims alleging employer perceptions of them as being disabled? Unfortunately, yes. In turn, generally assume that most employees with physical (or mental) impairments are covered under state and federal disability laws. So, make sure to consistently engage in good faith efforts and be able to document your company's interactive process efforts with your affected employees, particularly in case your company is ever questioned or audited.