Whats Everybody Talking About A Discussion Of Current Issues Regarding Employee Rights And Benefits

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Whats Everybody Talking About?A Discussion Of
Current Issues Regarding Employee Rights And
Benefits

• Lisa M. Spiegler, Esq.
• Franczek Sullivan P.C.

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Agenda

• Overview Of New COBRA Regulations
• Checklist of HIPAA Privacy Rule Requirements
• Trends In Flexible Spending Accounts
• New Guidance On Allocation Of Plan Expenses
• Ensuring Compliance With The ADA and FMLA And
  Relationship To HIPAA

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Everybodys Talking AboutNew COBRA Regulations

• New regulations issued by Department of Labor
  first guidance from DOL since 1986!
• Regulations address content and timing of notices
  under COBRA

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Initial COBRA Notice

• Provided to participants why they first become
  covered by health plan
• Must be given to qualified individuals within 90
  days after coverage begins
• Plans can satisfy notice requirement by including
  information is SPD or separate Notice
• Regulations contain model Initial Notice (safe
  harbor)
• Can use electronic OR in-hand delivery to
  participant, but must mail to participants
  covered family members (one notice per household
  is ok)

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Employers Notice To Plan Administrator

• No significant changes in new regulations
• COBRA requires employers to notify Plan
  Administrator no later than 30 days after date of
  qualifying event (e.g., termination, reduction of
  hours, death, Medicare-enrollment, bankruptcy)

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Qualified Beneficiarys Notice of Qualifying
Event

• Qualified beneficiaries are responsible for
  notifying Plan Administrator of certain
  qualifying events divorce/legal separation, loss
  of dependent status or second qualifying event
  during COBRA period
• Notice must be provided within 60 days of
  occurrence (unless employer is more generous) or
  loss of coverage, if later
• Reasonable procedures required (in SPD or
  separate form)
• Substantial compliance OK
• Notice must be provided within 60 days of a
  disability determination (extending COBRA from 18
  months to 29 months)
• Notice must be provided within 30 days of a
  determination by SSA that individual is no longer
  disabled

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COBRA Election Notice

• Regulations require detailed election notice,
  including
• Available plan options
• Premium payments
• Consequences of failure to elect COBRA
• Disability extension
• Regulations contain model notice (safe harbor)
• Must be provided within 14 days after receipt of
  notice of qualifying event, unless employer is
  Plan Administrator, in which case must be
  provided within 44 days

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New COBRA Notices

• Plan Administrator now required to notify
  participant within 14 days if individual is not
  eligible for COBRA
• Plans to notify participants as soon as
  administratively practicable when coverage is
  terminated earlier than full period

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Everybodys Talking AboutHIPAA Privacy Rules
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HIPAA Compliance Checklist

• Appoint a privacy officer
• Identify covered entities and business associates
• Identify PHI used by covered entity
• Review legal contracts with business associates
• Implement safeguards to protect PHI

• Adopt privacy policy
• Create notice of privacy policy
• Adopt procedures for obtaining authorization,
  tracking use of PHI, complaints, etc.
• For health plans, amend plan to certify that PHI
  will be protected pursuant to HIPAA
• Train employees

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Everybodys Talking About Flexible Spending
Accounts
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Health Plan Debit Cards

• In Revenue Ruling 2003-43, the IRS approved the
  use of debit or credit card systems in place of
  paper reimbursement arrangements.

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Health Plan Debit Cards

• What Is Required?
• Issued upon enrollment in FSA
• Certification that will be used only for eligible
  expenses
• Reaffirmation of certification when card used
• Retain receipts
• Balance on card equals maximum coverage under FSA
• Use limited to authorized providers
• Must substantiate expenses
• Correction methods

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Expansion Of Reimbursable Expenses

• Flexible spending accounts can now be used to
  pay for the following expenses
• Over-the-counter drugs
• Crutches, bandages and other equipment and
  supplies
• Diagnostic devices such as blood sugar test kits
• Cost of breast reconstruction and LASIK surgeries

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Everybodys Talking About Allocation Of Plan
Expenses
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Allocation of Plan Expenses

• Recent DOL bulletin represents shift in position
  regarding allocation of expenses in defined
  contribution plans
• ERISA does not address allocation plan sponsor
  has considerable discretion
• Plan documents should specify method of
  allocation. If not, general fiduciary rules
  apply.
• Pro rata allocation is OK
• Per capita method is OK for fixed administrative
  expenses
• QDRO expenses may be imposed on
  participant/alternate payee

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Everybodys Talking AboutThe ADA and FMLA
A Roadmap For Compliance
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Do we have adequate medical information about the
employee?
Step One
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Under the ADA, when can we obtain medical
information about an employee?

• General rule is that the request for information
  must be job-related and consistent with business
  necessity
• Two scenarios
• Employers reasonable belief employees ability
  to perform job functions is impaired
• Employee requests an accommodation

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What medical information may we obtain?

• Information must relate to the specific condition
  
• Information that describes the nature, severity
  and duration of the employees impairment, and
  the activities the impairment limits
• Information that substantiates why an
  accommodation is necessary

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What information may we obtain if an employee
requests FMLA leave?

• If the leave is because of the employees or
  family members serious health condition, you may
  require certification from the health care
  provider of the medical necessity of the leave
  and its expected duration.

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Did the employee incur a work-related injury? Is
the employee entitled to workers compensation?

• The danger of retaliation

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Is the employee protected by the ADA?
Step Two

• Does the employee have a physical or mental
  impairment?
• Does the impairment substantially limit one or
  more major life activity?
• Is the employee qualified to perform the
  essential functions of the job with or without
  reasonable accommodation?

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Have we engaged in an interactive process with
the employee about reasonable accommodations?

• Has the employee requested an accommodation?
• Have we investigated possibilities and rejected
  them or offered alternatives?
• Have we given the employee reasons for rejection
  and provided an opportunity for response?

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What accommodations, if any, must we make for the
employee?

• The purpose of accommodation is to enable the
  employee to perform the essential functions of
  the job
• Cost is rarely a defense
• Violation of a collective bargaining agreement is
  a defense, if the Union refuses to bargain

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What accommodations, if any, must we make for the
employee?

• Common accommodations include
• unpaid leave
• eliminate peripheral job functions
• modification of physical surroundings or
  equipment
• reduced work hours
• transfer to a vacant position

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What kinds of leave must be provided to the
employee?
Step Three

• Is the employee eligible for FMLA?
• Does the employee have a disability?
• Does the employer have policies providing for
  additional leave?

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Is it permissible to discipline an employee
despite his/her medical condition?

• Disability is not a shield against discipline
• Legitimate, explainable reason for discipline
• Consistency with employers policies

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Have we taken appropriate precautions to protect
employees confidentiality?
Step Four

• Medical records must be kept secure
• Disclosure of medical information must be made
  only on a need-to-know basis
• Remember HIPAA requirements!

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ANY QUESTIONS?