by admin | Jul 3, 2018 | ACA, Benefit Management, Compliance, Group Benefit Plans
On June 19, 2018, the U.S. Department of Labor released its Final Rule regarding Association Health Plans (AHPs). AHPs are not new, but they have not been widely available in the past and, in some cases, they have not been successful. The Final Rule is designed to make AHPs available to a greater number of small businesses as an alternative to standard ACA-compliant small group insurance policies.
This article answers common questions about AHPs under the current rules (which groups can continue to use) and the new rules.
Is group medical insurance the same for small and large employers?
Yes and no. Federal law imposes certain basic requirements on all group medical plans, regardless of the employer’s size. For instance, plans cannot exclude pre-existing conditions nor impose annual or lifetime dollar limits on basic benefits. If the plan is insured, it also is subject to the insurance laws of the state in which the policy is issued.
Small group policies, which are sold to employers with up to 50 or 100 employees, depending on the state, are subject to additional requirements. These policies must cover 10 categories of essential health benefits (EHBs), including hospitalization, maternity care, mental health and substance abuse treatment, and prescription drugs. (Some states allow certain grandfathered or grandmothered policy exceptions.) For most small employers, their options for group medical insurance are limited to small group policies that comply with the full scope of ACA requirements. On the other hand, the policies are subject to guaranteed issue and adjusted community rating rules, so carriers cannot refuse to insure a small employer nor use any past claims experience in setting rates.
Large group policies, which can only be sold to groups with at least 50 or 100 employees, depending on the state, are not required to cover all EHBs. Carriers have more flexibility in designing coverage options and developing premium rates in the large group market. This means larger employers have more options to choose from and may be able to purchase coverage at a lower cost than would apply to a small group policy. Note, however, that there is no guaranteed issue protection, so carriers can accept or reject each employer’s application or use the employer’s past claims experience in setting rates.
Lastly, self-funded plans are subject to the ACA and other federal laws, but generally are exempt from state laws. They typically are not feasible for small employers, however, due to the financial risk of uninsured programs.
What is an Association Health Plan (AHP)?
Group insurance covers the employees of an employer (or an employee organization such as a labor union). An AHP, as the name implies, covers the members of an association. Unrelated employers can obtain coverage for their employees through an AHP provided the employers form a bona fide association. Traditionally, this has meant that the employers had to have a “commonality of interest” and their primary interest had to be something other than an interest in providing benefits. For this reason, AHPs generally have been limited to associations formed by employers in the same trade, industry, or profession.
The Final Rule makes AHPs available to a wider range of businesses by expanding the meaning of “commonality of interest.” Once the Final Rule takes effect, an association may be formed by employers that are:
- In the same trade, industry, or profession, regardless of location; or
- In the same principal place of business; i.e., in the same state or in the same multi-state metropolitan area.
Under the new rules, the employer’s primary interest in associating may be benefits coverage, although they still will need to have at least one other substantial business purpose other than benefits. This is a key difference from the current rules.
When does the new Final Rule take effect?
The Final Rule expanding the definition of an association for purposes of an AHP will take effect on staggered dates:
- For fully insured AHPs: September 1, 2018
- For self-funded AHPs:
- If in existence on or before June 19, 2018: January 1, 2019
- If created after June 19, 2018: April 1, 2019
As noted, the new rules do not replace existing rules. Employers and associations may continue to follow the existing rules (which generally limit AHPs to employers in the same trade, industry, or profession). The new rules merely expand the opportunities for AHPs, such as making them available to employers in the same state or metropolitan area even if they are in different industries.
Are AHPs limited to employers with employees? What about sole proprietors?
Currently, sole proprietors, such as mom-and-pop shops without any W-2 employees, purchase medical insurance in the individual market. Individual policies often cost more than group policies or AHPs. The new rules will expand the availability of AHPs to include sole proprietors who work a minimum number of hours (so-called working owners).
What about state laws? Will AHPs be available nationwide?
Insurance products, including AHPs, are regulated by state law. Under both the existing and new rules, AHPs are multiple employer welfare arrangements (MEWAs). State laws on MEWAs are quite complicated. In some states, MEWAs are prohibited. In others, insured MEWAs are allowed but self-funded plans are prohibited. The laws vary from state to state, so different carriers will make different decisions about whether they want to design and market AHPs in various jurisdictions around the country.
A number of states are very concerned about AHPs and may prohibit them in their states or impose strict requirements to ensure they will provide reliable and effective coverage. Other states will view AHPs as cost-effective alternatives to ACA-compliant policies for small employers and look to encourage their expansion.
What’s next?
There is no clear answer to what’s next. Over the coming months, carriers across the country likely will review the reasons they have or have not offered AHPs in the past, and whether they want to consider new approaches in the future. Along with economic and market issues to consider, carriers also must consider the state insurance laws in different jurisdictions. At the same time, many state legislatures and insurance commissioners will be reviewing their existing rules and whether they want to promote or expand the availability of AHPs in their area.
Oh … and the lawsuits. Yes, that also is what’s next. As of this writing, attorneys general in different states are planning to join together in challenging the federal government’s Final Rule on AHPs. Their stated concern is that effective regulation is required to ensure that plans provide adequate coverage.
ThinkHR will continue to monitor developments in this area.
by Kathleen A. Berger
Originally posted on thinkhr.com
by admin | Jun 27, 2018 | Compliance, Human Resources
NLRB: Guidance on Handbook Rules Post-Boeing
On June 8, 2018, National Labor Relations Board (NLRB) General Counsel, Peter B. Robb, released a memorandum (GC 18-04) providing guidance to regional offices under the NLRB’s decision in Boeing. Per Boeing, the NLRB evaluates facially neutral handbook policies and work rules by a balancing test of impact versus justification. Specifically, the potential impact of an employer’s (workplace and handbook) policies and work rules on employees NLRA-protected rights versus the employer’s legitimate justifications for maintaining the policy or rule.
This balancing test was broken down into the following three categories:
- Category 1: Rules that are generally lawful to maintain.
- Category 2: Rules warranting individualized scrutiny.
- Category 3: Rules that are unlawful to maintain.
In the memo, the general counsel provided in-depth guidance, along with application, of the three categories of rules for regional offices to use when investigating and processing cases. For example, regional offices were directed as follows:
- Ambiguities in work rules are no longer interpreted against the drafter (employer), and generalized provisions should not be interpreted as banning all activity that could conceivably be included.
- Well-established standards regarding certain kinds of work rules where the NLRB has already struck a balance between employee rights and employer business interests remain in place.
- The application of a facially neutral rule against employees engaged in protected concerted activity is still unlawful and a neutral handbook rule does not render protected activity unprotected.
Basically, the guidance provides insight as to how the holding in Boeing will be applied to workplace policies, rules, and company handbooks going forward.
Originally Published By ThinkHR.com
by admin | May 18, 2018 | Compliance, Human Resources
Gary Wheeler, partner at Constangy, Brooks, Smith & Prophete, LLP, a well-respected national employment law firm and legal partner to ThinkHR, explains five mistakes he sees frequently in his clients’ employee handbooks.
It’s too long, inconsistent, or redundant.
Like with your house, when you live with an employee handbook for a while, you collect things and it gets cluttered. Your handbook gets longer and runs the risk of having internal inconsistencies. Once or twice a year, it’s a good idea to give it a thorough review to remove inconsistent or redundant policies, plus make it shorter and more readable. If you want people to follow the rules, it’s important to have them be clear and accessible.
It reads more like an operations manual.
An overly-detailed handbook becomes too much of a procedures manual. For example, it’s important to state that complaints of harassment will be responded to with a prompt and thorough investigation. But the policy should avoid giving too much detail, such as the number of days to expect each step of the investigation to take. Ultimately, if the employer needs to be flexible and deviate from unnecessary details in the handbook, this can be used against them.
Another area that often gets too detailed is the progressive discipline policy. If an employer has a collective bargaining unit, there are reasons these details may need to be given. But sometimes nonunion employers will have progressive disciplinary policies in their handbooks that don’t allow them to maintain flexibility in handling employee behavior or performance issues.
It sounds too overbearing or paternalistic.
Some handbooks include policies that, as written, sound more intrusive and paternalistic than they really are in operation. For example, a financial services company had a policy that required employees to handle their finances in a responsible manner, which sounds intrusive. However, the policy was truly only concerned with financial accounts they had through the employer. The policy wasn’t ultimately harmful in that case, but it required further explanation to make it clear the employer wasn’t concerned with what the employees were doing with their personal lives. Carefully tailored language can help avoid a perception of the employer being overbearing or paternalistic.
It’s missing information that affects enforcement.
Another mistake is including language that, while acceptable, isn’t the best training tool for supervisors because it omits certain nuances. For example, an attendance policy may state a specific number of absences that are unacceptable during a certain timeframe. If the policy fails to state that absences covered by FMLA or local sick leave rules don’t count against employees, you can end up having a well-meaning supervisor discipline an employee for absences that should have been allowed.
It doesn’t identify the right contact people.
One of the things I see frequently is employers missing the opportunity to specify who their company’s “first responders” are. These are the company representatives who will receive reports of anything from alleged misconduct to medical leave.
Employers should be selecting these people appropriately and training them about their role. For example, a person who receives reports of absences should understand when FMLA or local leave laws might come into play. A person who may receive reports of harassment should be trained to determine whether it’s a general grievance best handled by an immediate superior or if it will need a more formal investigation.
However, the handbook will be more durable if you mention the reporting person by title and not name. Be sure the titles used in the handbook match the titles that actually exist in your organization; for example, don’t tell someone to report misconduct to the HR director if you don’t have an HR director.
Get it All
Evaluate your employee handbook using our free Employee Handbook Self-Audit. If it’s time to update or replace your handbook, trust the ThinkHR Multi-State Handbook Builder, which now includes premium features including the ability to customize it for every state you operate in and to translate it into Spanish. Learn more by attending a demo webinar on May 22 or 24.
Originally Published thinkhr.com
by admin | Apr 27, 2018 | Benefit Management, Compliance
“Here’s an update on EEO-1 reporting by Cara Crotty, partner with leading national labor and employment law firm (and ThinkHR strategic employment law partner) Constangy, Brooks, Smith & Prophete, LLP.”
The new deadline is June 1, but only for this year.
The Equal Employment Opportunity Commission
announced that it has extended the deadline to submit 2017 EEO-1 report data. The deadline, which was March 31, 2018, will now be June 1, 2018. Although the EEOC provided no explanation, anecdotal reports indicate that the agency was slow to respond to requests for technical assistance, such as adding or removing establishments due to acquisitions and mergers.
Regardless of the reason, employers who were not able to meet the March 31 deadline have a short reprieve to submit their 2017 EEO-1 report data. The extension applies to 2018 only. Next year’s deadline will be March 31, 2019.
Originally Published By
ThinkHR.com
by admin | Feb 28, 2018 | Compliance, Human Resources
Employer Response to Immigration Inspection Notice
In January 2018, the California Department of Labor Standards and Enforcement (DLSE) released its pre-inspection notice, Notice to Employee — Labor Code section 90.2.
Effective January 1, 2018, and except as otherwise required by federal law, California employers must provide notice to current employees of any inspection of I-9 Employment Eligibility Verification forms or other employment records conducted by an immigration agency. This notice is completed by posting the DLSE’s Notice to Employee — Labor Code section 90.2 in the language the employer normally uses to communicate employment-related information to the employee within 72 hours of receiving notice of the inspection.
A copy of the Notice of Inspection of I-9 Employment Eligibility Verification forms, and any accompanying documents, must be posted or given to employees with the DLSE notice.
Originally Published By ThinkHR.com
by admin | Feb 16, 2018 | Compliance, Human Resources, IRS
IRS Releases Publication 15 and W-4 Withholding Guidance for 2018
On January 31, 2018, the federal Internal Revenue Service (IRS) released Publication 15 — Introductory Material, which includes the following:
- 2018 federal income tax withholding tables.
- Exempt Form W-4.
- New information on:
- Withholding allowance.
- Withholding on supplemental wages.
- Backup withholding.
- Moving expense reimbursement.
- Social Security and Medicare tax for 2018.
- Disaster tax relief.
Read Publication 15 and further details here.
EEOC Penalty Increases for Failure to Post Required Notices
On January 18, 2018, the U.S. Equal Employment Opportunity Commission (EEOC) released a final rule increasing the penalty amount from $534 to $545 for violations of Title VII of the Civil Rights Act (Title VII), the Americans with Disabilities Act (ADA), and the Genetic Information Nondiscrimination Act (GINA) notice posting requirements.
The final rule is effective February 20, 2018.
Originally Published By ThinkHR.com
