This post was contributed by Anthony D. Dick, Esq., an Associate and a member of McNees Wallace & Nurick LLC’s Labor and Employment Practice Group in Columbus, Ohio.

The number of retaliation-based charges of discrimination filed with the Equal Employment Opportunity Commission (the “EEOC") has doubled from approximately 18,000 to 36,000 in the last

Independent contractor arrangements have come under fire lately from both state and federal governments. Pennsylvania recently went a step further, enacting legislation governing independent contractor arrangements in the construction industry. On October 13, 2010, the Construction Workplace Misclassification Act (the “Act”) was signed into law. The Act provides criteria for classifying independent contractors within the construction industry and

This post was contributed by Eric N. Athey, Esq., a Member in McNees Wallace & Nurick LLC’s Labor and Employment Law Practice Group.

As 2011 approaches, perhaps the biggest compliance issue for employers under the Patient Protection and Affordable Care Act ("PPACA") is whether it is advisable to retain "grandfathered" status for their health

This post was contributed by Eric N. Athey, Esq., a Member in McNees Wallace & Nurick LLC’s Labor and Employment Law Practice Group.

Our June 17, 2010 posting discussed the interim regulations on "grandfathered" health plan status under the Patient Protection and Affordable Care Act ("PPACA") and the benefits of maintaining that status.  Grandfathered plans are

This post was contributed by Eric N. Athey, Esq., a Member in McNees Wallace & Nurick LLC’s Labor and Employment Law Practice Group, and Stephen R. Kern, Esq., a Member in the Employee Benefits Practice Group.

Many of the requirements in the Patient Protection and Affordable Care Act ("PPACA") will have little meaning until federal agencies issue regulations that clarify the statutory language.  The Department of Health and Human Services, Department of Labor and Internal Revenue Service are all charged with issuing regulations to implement the Act.  Since May, these agencies have issued a steady stream of interim regulations regarding a number of the Act’s requirements.  Most recently, on June 22, 2010, the agencies jointly issued interim regulations to implement what have been referred to as the "Patient’s Bill of Rights" provisions of PPACA.  The following provisions will take effect in plan years beginning on or after September 23, 2010.

Preexisting Condition Exclusions 
PPACA prohibits a group health plan from imposing any preexisting condition exclusion ("PCE") on any individual under the age of 19. The age limit is eliminated for plan years beginning on or after January 1, 2014. In the interim, HIPAA’s current PCE rules apply. The interim regulations accept the HIPAA definition of a preexisting condition as a health condition or illness that was present before an individual’s effective date of coverage in the health plan, regardless of whether any medical advice was recommended or received before that date. A PCE is any limitation or exclusion of benefits (including a denial of coverage) that applies to an individual due to the individual’s health status before the effective date of coverage under the health plan. A benefit limitation or exclusion is not a PCE, however, if it applies regardless of when the condition arose relative to the effective date of coverage. 

Continue Reading Health Care Reform Update: Interim Regulations Issued for “Patient’s Bill of Rights” Requirements

The Internal Revenue Service ("IRS") recently released a revised Form 941, the Employer’s Quarterly Federal Tax Return, and related instructions to guide eligible employers in claiming the payroll tax exemption offered under the Hiring Incentives to Restore Employment ("HIRE") Act (H.R. 2847). The HIRE Act offers a tax exemption from having to pay the

This post was contributed by Eric N. Athey, Esq., a Member in McNees Wallace & Nurick LLC’s Labor and Employment Law Practice Group.

The Patient Protection and Affordable Care Act ("PPACA" or the "Act") is by far the most wide-reaching new law governing employee benefits since the Employee Retirement Income Security Act ("ERISA") was passed in 1974. During the legislative process that led to passage of the sweeping health care reform legislation, it was proposed that plans already in existence on the date of passage be "grandfathered," or exempted, from the Act’s requirements. The concept of "grandfathering" is included in the Act; however, grandfathered plans are only exempt from some of the Act’s requirements. This article briefly discusses the meaning and advantages of grandfathered status and the recent interim federal regulations governing the maintenance of grandfathered status.

What is a grandfathered plan under PPACA?
A grandfathered plan is a health plan that was in existence on the date PPACA was passed – March 23, 2010. Under recently issued interim federal regulations, a plan must have "continuously covered someone since March 23, 2010" in order to be grandfathered.

What are the benefits to an employer of having a grandfathered health plan?

  1. Grandfathered plans are exempt from some, but not all, of PPACA’s requirements. For example, grandfathered plans are exempt from:  the Act’s mandate for plans to offer certain free preventive health services;
  2. The extension of rules prohibiting discrimination in favor of highly compensated employees to insured plans;
  3. The establishment of an external review process for benefit claim appeals;
  4. The prohibition against pre-authorization requirements for OB/GYN and emergency services;
  5. New Department of Health and Human Services ("HHS") reporting requirements regarding plan efforts to improve participant health, safety and wellness;
  6. New HHS reporting requirements regarding claim payment policies, enrollment/disenrollment, claim denials and cost sharing; and
  7. Certain cost-sharing restrictions. In addition, grandfathered plans have delayed compliance deadlines for several of the Act’s requirements (e.g., restrictions on annual benefit limits). 

Is it possible to lose grandfathered plan status?

Although a health plan can avoid having to comply with a number of PPACA requirements by maintaining grandfathered status, that status can be lost.  On June 11, 2010, the Internal Revenue Service, HHS and the Department of Labor jointly issued "interim final rules" outlining the ways in which a grandfathered plan can lose its status.  These regulations are extremely restrictive and are likely to trigger significant "pushback" from the employer community.  It is entirely possible that the interim rules will be overhauled before being issued in final form.  However, for present purposes, the interim rules are the only formal guidance available on this point.

Continue Reading The Advantages of Having “Grandfathered” Health Plan Status Under PPACA (And How to Lose That Status)

On March 18, 2010, President Barack Obama signed into law the Hiring Incentives to Restore Employment ("HIRE") Act (H.R. 2847).  The HIRE Act amends the Internal Revenue Code ("IRC") to provide certain tax incentives for employers to hire unemployed workers.  Specifically, the HIRE Act creates two new tax benefits for eligible employers: a payroll tax exemption for certain new hires, and a tax credit for retaining the qualified new hires. 

First, the HIRE Act provides eligible employers with a payroll tax exemption for qualified employees hired between February 3, 2010, and January 11, 2011.  This tax benefit is an exemption from having to pay the employer’s 6.2% share of social security tax on the wages paid to the qualified employee from March 19, 2010, through December 31, 2010.  Employers may claim this tax exemption on their quarterly tax returns, starting with the second quarter of 2010. 

Second, the HIRE Act also provides eligible employers with a business tax credit for each qualified employee that is retained for at least one year, or 52 consecutive weeks.  The employer may claim a credit of up to 6.2% of the wages paid to the retained employee over the one-year period, or a maximum of $1,000 per qualified employee, on its 2011 tax return. 

Continue Reading HIRE Act Provides Employers with Tax Incentives for Hiring and Retaining Qualified Employees

On February 18, 2010, the Equal Employment Opportunity Commission (EEOC) published a Notice of Proposed Rulemaking (NPRM) addressing the meaning of the “reasonable factors other than age” defense under the Age Discrimination in Employment Act (ADEA). The ADEA prohibits employers from discriminating against employees or job applicants based upon their age, but protects only those employees or applicants who are 40 years or older. In addition, the ADEA provides employers with statutory defenses, which include provisions for a “bona fide occupational qualification" defense and a “reasonable factors other than age” defense.

The “reasonable factors other than age” (RFOA) defense precludes liability for actions otherwise prohibited under the ADEA so long as the employment decision is based upon reasonable factors other than age. The EEOC’s NPRM takes into consideration two relatively recent United States Supreme Court cases, Smith v. City of Jackson and Meacham v. Knolls Atomic Power Laboratories, which each evaluated disparate impact claims under the ADEA. Disparate impact claims involve the allegation that an employer’s practice, although neutral on its face, has a discriminatory impact on a protected class – under the ADEA, workers aged 40 years or more. 

Specifically, and with the Supreme Court’s Smith and Meacham holdings in mind, the EEOC proposes to revise the federal regulations to illustrate that under the RFOA defense, the evaluation of an employer’s practice “turns on the facts and circumstances of each particular situation and whether the employer acted prudently in light of those facts.” Thus, the EEOC’s proposed approach attempts to balance employers’ rights to make reasonable business decisions with the ADEA’s goal of protecting older workers from facially neutral employment practices that disparately impact their employment. In addition, the proposed amendments provide guidance as to the factors that will be considered in evaluating an employer’s facially neutral practice under the ADEA.

Continue Reading EEOC Issues Proposed Regulations Defining Employers’ Affirmative Defense Under ADEA