Washington D.C. Employment Law Update : Washington D.C. Employment Lawyer & Attorney : Littler Mendelson Law Firm : Virginia, Tyson's Corner

On Wednesday, the Senate passed by a 62 to 36 margin the Tax Extender Act of 2009 (H.R. 4213), legislation that would extend until Dec. 31, 2010 the 65% premium COBRA subsidies and emergency unemployment insurance benefits, both programs that are set to expire in the coming weeks. The bill also extends several other tax credit initiatives, and includes pension funding relief measures. On Tuesday, the Senate voted 66-34 to limit debate on this bill, which was introduced by Sen. Max Baucus (D-MT) as an amendment (S. Amdt. 3336) in the nature of a substitute to the tax extender bill the House of Representatives passed in December.

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On Tuesday, the Senate voted to end debate on a $150 billion bill that would extend premium COBRA subsidies and emergency unemployment insurance benefits through December 31, 2010, as well as continue certain programs aimed at providing pension-funding relief. Sen. Max Baucus (D-MT) introduced the American Workers, State and Business Relief Act of 2010 (pdf) as an amendment (S. Amt. 3336) in the nature of a substitute to the Tax Extender Act of 2009 (H.R. 4213).  The tax extender bill has been serving as the vehicle to provide extensions to these and other expiring tax credit programs. The premium COBRA subsidy and emergency unemployment benefits were recently given one-month extensions through the Temporary Extension Act of 2010, signed into law on March 2.

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Telling Congress to “finish its work,” President Obama on Wednesday urged both chambers to schedule a vote on final health care overhaul legislation in the coming weeks. While Obama did not outline a specific roadmap for reform, it is widely believed that the plan for going forward involves first having the House of Representatives vote on the Patient Protection and Affordable Care Act (H.R. 3590), the bill the Senate approved in December, and then passing via budget reconciliation a package of changes to that bill reflected in the estimated $950 billion proposal Obama unveiled on February 22.  While Obama did not specifically mention reconciliation, he seemed to sanction this approach, stating that a health care reform bill: “deserves the same kind of up-or-down vote that was cast on welfare reform, the Children's Health Insurance Program, COBRA health coverage for the unemployed and both Bush tax cuts – all of which had to pass Congress with nothing more than a simple majority.” The controversial budget reconciliation process requires a simple majority vote, but is subject to strict limitations about what matters can be included in a reconciliation bill.

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On Tuesday, President Obama signed the Temporary Extension Act of 2010 (H.R. 4691), a bill that will extend the 65 percent premium COBRA subsidy through March 31, 2010, and unemployment assistance benefits through April 5, 2010. The Senate passed this bill by a vote of 78-19 after Sen. Jim Bunning (R-KY) – who objected to how the measure would be funded – abandoned his efforts to block it. The House of Representatives approved this emergency spending measure by voice vote last Thursday.  Both benefits had expired on February 28.

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On February 25, 2010, the White House hosted the much-anticipated bipartisan health care summit. As expected, no final legislation or agreement about how to proceed with health care reform emerged from the 7 ½ hour meeting. Democrats took the position that they would not start from scratch, and Republicans claimed they would not support the proposals that have already been put forth. The disagreements, however, may have given Democrats the public justification they need to proceed with reconciliation as a means to push forward with reform. President Obama stated:

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In advance of Thursday’s much-publicized White House bi-partisan health care summit, President Obama today released his version of health reform.  The estimated $950 billion plan contains many elements from the Senate-approved Patient Protection and Affordable Care Act (H.R. 3590), including the requirement that most Americans obtain health insurance coverage, the creation of a health insurance exchange, penalties on large employers that fail to provide affordable health insurance, the imposition of an excise tax on high-cost “Cadillac” insurance plans, and the lack of a public insurance option included in the more expansive Affordable Health Care for America Act (H.R. 3962), health care legislation that the House cleared in November. Obama’s plan also includes popular elements contained in both bills, such as the ban on preexisting condition exclusions and certain lifetime and annual coverage limits in health insurance plans. The President’s proposal attempts to bridge the gap between the stalled Senate and House bills, which contain significant changes from employer-sponsored health care.

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A reported deal has been reached between the White House and union leaders regarding the proposed 40 percent excise tax on high cost (“Cadillac”) healthcare plans for inclusion in the final healthcare overhaul bill. This tax – first appearing in the Senate version of the legislation – is favored by President Obama, but has been heavily criticized by both House Democrats and organized labor.

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Staff members of the three House committees (Ways and Means, Education and Labor, and Energy and Commerce) involved in crafting the healthcare overhaul bill have put together an 11-page document (pdf) highlighting the similarities and differences between the House and Senate bills. The Senate’s Patient Protection and Affordable Care Act (H.R. 3590) and the House of Representative’s Affordable Health Care for America Act (H.R. 3962) contain some crucial differences that are currently being ironed out in informal talks as opposed to formal conference committee. Resolving the differences this way avoids any anticipated procedural delays in the Senate.

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The American Benefits Council (“the Council”), an advocacy organization for voluntary private employer-sponsored benefit programs, has released a document outlining its recommendations to Congress for crafting the final healthcare bill. Lawmakers are in the process of merging the provisions of the Senate’s Patient Protection and Affordable Care Act (H.R. 3590) and the House of Representative’s Affordable Health Care for America Act (H.R. 3962) to create a unified bill. The bills contain many crucial differences, especially with respect to the provisions regulating employer-sponsored coverage and responsibilities. The Council’s recommendations document – Priority Employer Issues for Consideration of House and Senate Health Care Reform Legislation (pdf) – sets forth a number of suggestions related to health coverage and tax issues that would be affected by both versions of healthcare overhaul legislation.

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The Department of Labor’s Employee Benefits Security Administration (EBSA) has released a fact sheet explaining how the Defense Department’s 2010 appropriations bill (“2010 DOD Act”) extends the Consolidated Omnibus Budget Reconciliation Act (COBRA) premium reduction provided by the American Recovery and Reinvestment Act (“ARRA” or “Economic Stimulus”). In general, the 2010 DOD Act extended the COBRA premium reduction eligibility period for two months until February 28, 2010 and increased the maximum period for receiving the subsidy for an additional six months (from nine to 15 months).  Among other things, the fact sheet outlines who is now eligible for the premium reduction, the new period of coverage, and notice requirements plan administrators must provide in light of the extension. The fact sheet explains that plan administrators are now required to provide notice about the changes made to the COBRA premium reduction provisions to individuals who have already been provided a COBRA election notice, unless the election notice included the updated premium reduction information. These notices must be given to assistance eligible individuals by February 17, 2010. Individuals who have been terminated on or after October 31, 2009 and will lose health coverage must be provided this notice “within the normal timeframes for providing continuation coverage notices.” Those who had reached the end of the reduced premium period before the legislation extended it to15 months must be provided this notice within 60 days of the last day they were eligible to receive COBRA premium assistance under the old rules.

Photo credit:  Andriy Solovyov

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This morning, the Senate voted 60-39 along party lines to approve the Patient Protection and Affordable Care Act (H.R. 3590), the Senate’s healthcare overhaul bill. On Monday, the Senate voted to end debate on the package of amendments to the bill known as the “manager’s amendment,” enabling the amended legislation to be voted on before the Senate recessed for the holidays.

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Early Monday morning, the Senate voted 60-40 to end debate on Senate Majority Leader Harry Reid’s (D-Nev.) complete set of amendments, known as the “manager’s amendment”, (pdf) to the latest version of the Senate healthcare bill, the Patient Protection and Affordable Care Act (H.R. 3590) (pdf). The party-line vote paves the way for Senate passage of the healthcare bill on Christmas Eve. This version of the healthcare overhaul bill includes an employer penalty for failing to offer coverage, tax credits for small employers that do, and a number of plan restrictions on the health insurance industry.

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On Monday, three nursing associations officially merged to form the largest labor union for medical professionals in this country. The new National Nurses United (NNU) combines the members and financial resources from the California Nurses Association, the United American Nurses, and the Massachusetts Nurses Union. With an estimated 150,000 members, this new union will be able to wield a significant amount of influence over the medical industry and healthcare reform efforts.

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The DOL’s Employee Benefits Security Administration (EBSA) has posted on its website new guidance regarding the COBRA health insurance premium subsidy granted by the American Recovery and Reinvestment Act of 2009 (“ARRA” or “Economic Stimulus”). Under ARRA’s COBRA provisions, the government provides certain qualifying unemployed workers with a 65 percent subsidy of their health insurance premiums for up to nine months. Those individuals who first became eligible to receive this subsidy will begin to lose their coverage starting this month.

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The Congressional Budget Office (CBO) yesterday released a report: An Analysis of Health Insurance Premiums Under the Patient Protection and Affordable Care Act (pdf) that focuses on the impact the Senate healthcare bill would have on health insurance premiums. Specifically, the analysis examined the average effects of the Patient Protection and Affordable Care Act (H.R. 3590), as proposed by Senator Reid (D-Nev.), on premiums in 2016 for coverage purchased individually, coverage purchased by small employers, and coverage provided by large employers.

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On Wednesday, Senate Majority Leader Harry Reid (D-Nev.) released a long-awaited version of healthcare overhaul legislation that he intends to submit to the Senate floor. Offered in the form of a substitute bill, the Patient Protection and Affordable Care Act (pdf) is a compromise between two other Senate measures, the America’s Healthy Future Act (S. 1796), which cleared the Senate Finance Committee in October, and the Affordable Health Choices Act (S. 1679), a bill passed by the Senate Health, Education, Labor and Pensions (HELP) Committee this summer. The House passed its own healthcare bill, the Affordable Health Care for America Act (H.R. 3962), earlier this month.

Some key components of this 2,074-page bill include a mandate for most legal residents to obtain health insurance, the establishment of health insurance “exchanges” through which certain individuals and families could receive federal subsidies to help them purchase health insurance on their own, an excise tax on insurance plans with relatively high premiums, regulations of the insurance industry itself, and monetary penalties for large employers that do not offer health benefits.

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Last week Sens. Sherrod Brown (D-Ohio) and Robert Casey (D-Pa.) introduced the COBRA Subsidy Extension and Enhancement Act of 2009 (S. 2730), a bill that would enhance the COBRA continuation health coverage subsidy program created by the American Recovery and Reinvestment Act of 2009 (“ARRA” or “Economic Stimulus”). Under the current program, the government provides certain qualifying unemployed workers with a 65 percent subsidy of their health insurance premiums for up to nine months. Individuals who first became eligible to take advantage of this temporary COBRA assistance in March 2009 will lose their coverage beginning in December 2009. The COBRA Subsidy Extension and Enhancement Act would extend this deadline, as well as increase the amount of the subsidy and the number of individuals who would be able to take advantage of this program.

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During a November 10 Senate subcommittee hearing on the H1N1 influenza virus (“swine flu”) and paid sick leave, Senator Chris Dodd (D-Conn.) announced that he plans to introduce a bill that would entitle most employees to take up to 7 days of paid sick leave to deal with the H1N1 or seasonal flu. According to a press release, under the terms of this bill workers would be entitled to the paid leave for their own flu-like symptoms, medical diagnosis or preventive care, to care for a sick child, or to care for a child whose school or child care facility has been closed due to the spread of flu. The decision to take this leave would be left to the employee’s discretion, although the Department of Labor could issue regulations requiring medical certification. If signed into law, the provisions of this bill would take effect 15 days after enactment, and sunset after 2 years.

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On Saturday, the House of Representatives passed the Affordable Health Care for America Act (H.R. 3962) by a vote of 220-215. Rep. Anh “Joseph” Cao (R-La.) was the only Republican House member to vote in favor of this healthcare overhaul legislation, while 39 House Democrats dissented.

Among other things, this nearly 2,000-page bill requires most individuals to purchase health insurance, and most large employers to either offer their employees health insurance or contribute funds (in the form of an 8 percent payroll tax) on their behalf to help subsidize the coverage they would instead obtain through health insurance exchanges. Smaller employers would either be subject to a smaller annual payroll tax, or be exempt from this “pay or play” requirement entirely. The bill also creates a public health insurance option that would be available within the exchange. Additionally, almost all employer-sponsored health plans would be required to meet essential benefit package requirements beginning in 2018. This legislation also imposes a number of restrictions on insurance providers. For example, this bill would prohibit preexisting condition exclusions in health insurance plans, lifetime limitations on benefits, and the practice of charging higher health insurance rates based on factors such as gender or health status.

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The Department of Health and Human Services (HHS) has published interim final rules that conform the enforcement regulations of the Health Insurance Portability and Accountability Act (HIPAA) to those made by the Health Information Technology for Economic and Clinical Health Act (the HITECH Act) regarding the electronic transmission of health information. Signed into law as part of the American Recovery and Reinvestment Act of 2009 (ARRA or ”Economic Stimulus”), the HITECH Act, among other things, modified the HHS Secretary’s authority to impose civil monetary penalties for violations of HIPAA rules occurring after Feb. 18, 2009. These HITECH Act revisions significantly increase the penalty amounts the Secretary may impose for such violations.

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The Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) have issued a preliminary analysis (pdf) of the Affordable Health Care for America Act (H.R. 3962), the new healthcare overhaul bill introduced on October 29, 2009. The CBO estimates that under this bill, approximately six million additional people would obtain health insurance coverage from their employers by the year 2019. In addition, the CBO estimated that by 2019, roughly 21 million people would purchase their own coverage through the new insurance “exchanges” created by the bill.

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Rep. Joe Sestak (D-Pa.) has introduced a bill that would extend by six months the maximum COBRA continuation coverage period for individuals who were involuntarily terminated between April 1, 2009 and December 31, 2009, and amend the American Reinvestment and Recovery Act of 2009 (ARRA or “Economic Stimulus”) by extending the eligibility and maximum assistance periods for the 65 percent COBRA premium assistance available under ARRA. According to a press release, the Extended COBRA Continuation Protection Act of 2009 (H.R. 3930) would extend COBRA benefits in three ways. First, the bill would extend from 9 to 15 months the total allowable time an unemployed worker can receive COBRA premium assistance. Second, the bill extends this assistance to individuals who are involuntarily terminated between January 1 and June 30, 2010. Third, it would extend eligibility for traditional COBRA coverage an additional 6 months, from 18 to 24 months, for individuals terminated at the beginning of the economic recession in 2008. No extended COBRA premium assistance or extended COBRA benefits would extend beyond December 31, 2010.

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Last Thursday, Rep. Nathan Deal (R-GA) introduced two healthcare-related bills applicable to employers. The Improved Employee Access to Health Insurance Act of 2009 (H.R. 3821) would prevent states from enacting any law that prevents an employer from instituting an auto-enrollment process for employee health insurance coverage, so long as the participant or beneficiary has the option to decline coverage.

The second bill introduced by Rep. Deal (H.R. 3822) would allow employers that do not offer health benefits to provide tax-free defined contributions and administrative assistance to employees who opt to buy health insurance coverage on their own. The offer of assistance and tax-free contributions would not be considered a group health plan for Employee Retirement Income Security Act (ERISA) or the Public Health Service Act purposes.

The Improved Employee Access to Health Insurance Act has been referred to the House Committee on Education and Labor. H.R. 3822 has also been referred to this committee, as well as to the House Committees on Energy and Commerce and Ways and Means.
 

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In a closely-watched vote, the Senate Finance Committee approved by a 14 to 9 margin the America’s Healthy Future Act (pdf), a healthcare overhaul bill drafted by committee chairman Max Baucus (D-Mont.). Sen. Olympia Snowe (R-Maine) was the only Republican committee member to cross party lines and vote in favor of the measure. The committee’s final draft of this bill was released on October 2 after weeks of contentious markup by committee members. Now that this bill has been approved, Senators Baucus, majority leader Harry Reid (D-Nev.), and Christopher Dodd (D-Conn.) face the daunting task of combining the provisions of this bill with the Affordable Health Choices Act (S. 1679) (pdf), the healthcare reform bill that has already cleared the Senate Health, Education, Labor and Pensions (HELP) Committee. Among other differences between the two bills, the former contains neither a public health insurance option nor stringent employer mandates, while the latter does.

Meanwhile, the House of Representatives, whose version of the healthcare bill – America's Affordable Health Choices Act (H.R. 3200) – cleared the House Ways and Means, Education and Labor, and Energy and Commerce Committees in July, is reportedly working to meld the proposals from each of these committees to draft a bill that can be brought to the House floor for a vote. Edits to the bill from the House Ways and Means Committee can be found here; those from the House Education and Labor Committee can be found here; and those from the House Energy and Commerce Committee can be found here.

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The Department of Labor (DOL), Internal Revenue Service (IRS), and the Centers for Medicare and Medicaid (CMS) have published in the Federal Register interim final rules (pdf) governing Sections 101 through 103 of Title I of the Genetic Information Nondiscrimination Act of 2008 (GINA). Title I of GINA amended the Employee Retirement Income Security Act of 1974 (ERISA), the Public Health Service Act (PHS Act), the Internal Revenue Code of 1986 (Code), and the Social Security Act (SSA) to prohibit discrimination in health coverage based on genetic information. Sections 101-103 contain provisions banning discrimination based on genetic information in health insurance coverage and group health plans. The EEOC has not yet issued final rules interpreting Title II of GINA, which prohibits discrimination in employment based on genetic information, and limits the acquisition and disclosure by employers and other entities of such information.

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The Senate Finance Committee, after two weeks of much-publicized markup, has released its final version of healthcare reform legislation. Introduced by Sen. Max Baucus (D-Mont.) on September 16, America’s Healthy Future Act (pdf) has been considered the most conservative of the healthcare overhaul bills, as it contains neither a public health insurance option nor an employer mandate requiring the provision of health benefits. The bill does, however, impose on employers certain obligations. Specifically, the latest version of the bill would require the following:

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The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) (P.L. 110-343) (pdf) and Michelle’s Law (P.L. 110-381) (pdf), two laws that impact employer-sponsored group health plans, will take effect for plan years beginning on or after October 3, 2009 and October 9, 2009, respectively.  Calendar year plans have until January 1, 2010 to comply with both laws. 

The MHPAEA requires private group health benefit plans that provide mental health and/or substance use disorder benefits to offer them on a basis equivalent to the medical and surgical benefits provided.  In order to ensure coverage parity, the act imposes several plan design requirements upon group health benefit plans that offer mental health and/or substance use disorder benefits. The bill exempts certain small group health benefit plans and those that would incur a particular level of increased costs for all benefits due to compliance with the parity rule. These exemptions are specific and narrow.

Michelle’s Law similarly imposes certain coverage requirements on group health benefit plans. In essence, this law extends the health plan benefits coverage to a dependent child who is over the age of 18 and enrolled in college and would otherwise lose coverage in the event a medically necessary leave of absence would cause the child to lose full-time student status.

For more information on these laws, see Littler’s ASAPs: Equal Mental Health and Substance Use Benefits Realized by Russell D. Chapman and Andrea Jackson; and Michelle's Law Extends Group Health Benefit Plan Eligibility for Dependent Students on a Medically Necessary Leave of Absence by Steven J. Friedman and Andrea Jackson.

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After much fanfare, Senator Max Baucus (D-Mont.), Chairman of the Senate Finance Committee, yesterday officially released the America’s Healthy Future Act (pdf) for his committee’s consideration. Although designed to appeal to conservatives in comparison to the House’s Affordable Health Choices Act (H.R. 3200) and a similar measure approved by the Senate Health, Education, Labor and Pensions (HELP) committee, it is uncertain whether Baucus’s bill will draw any Republican support, and enough to reach the 60 votes needed to avoid a filibuster.

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When Congress resumes next week, consideration of the Employee Free Choice Act (EFCA) will likely be pushed aside in favor of healthcare reform. According to an article in the Las Vegas Review-Journal, Senate Majority Leader Harry Reid (D-Nev.) told members of the Las Vegas Chamber of Commerce that senators “have too many other things on our plate” to take up the controversial “card check” bill anytime soon.

As reported in The Hill’s Blog Briefing Room, a few days earlier AFL-CIO Secretary-Treasurer Richard Trumka similarly acknowledged that any deliberation on the divisive bill would not take place until after health reform is dealt with. During a web chat on the blog firedoglake, Trumka claimed that the “President/and [Rahm] Emanuel have both said they dont [sic] intend to bring Employee Free Choice Act up until Health Insurance Reform is done. Which gives us an additional reason to do Health Insurance Reform now!”

While no surprise, these statements are significant in that they are among the first public acknowledgements by supporters that consideration of EFCA will be delayed. However, given President Obama’s upcoming speech at the September AFL-CIO convention, further developments are possible.

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Senator Roland Burris (D-IL) has introduced a bill that would extend temporarily the 18-month period of healthcare continuation coverage required by the Consolidated Omnibus Budget Reconciliation Act (COBRA). The COBRA Coverage Extension Act of 2009 (S. 1488) would provide up to 24 months of continuation coverage under group health plans required under COBRA, the law that amended the Employee Retirement Income Security Act (ERISA), the Internal Revenue Code and the Public Health Service Act to provide continuation of group health coverage for certain qualifying former employees, retirees, spouses, former spouses and dependent children. Specifically, S. 1488 would entitle any individual who is eligible for and has elected continuation coverage under COBRA as of the date of this bill’s enactment, and whose coverage would end before 12 calendar months had elapsed from the date of enactment due to an 18-month continuation limitation, to continue coverage until a full 12 months had passed after the date of enactment, or 24 months after the date of the qualifying COBRA event, whichever is earlier. This bill has been referred to the Senate Committee on Health, Education, Labor, and Pensions.

This bill joins another recent measure aimed at extending COBRA continuation coverage. The House’s much-publicized healthcare bill, America's Affordable Health Choices Act of 2009 (H.R. 3200), includes an amendment that would extend COBRA coverage until the individual becomes covered under another employer’s group health plan or under a health insurance exchange plan, the latter of which would be created under the bill itself. The extension would not apply to certain medical flexible spending arrangements. Offered by Rep. Susan Davis (D-CA), this amendment was approved by voice vote by the House Committee on Education and Labor on July 17. Given the development of the health insurance exchange system would not be established until the year 2013 at the earliest, it is conceivable that if this bill were to pass, COBRA continuation coverage could be extended for years. This healthcare bill has been approved by both the House Committees on Education and Labor, and Ways and Means.

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Chairmen of the House Committees on Education and Labor, Ways and Means, and Energy and Commerce finally unveiled the House Democrats’ massive 1,018 healthcare reform bill on Tuesday. The much-anticipated America’s Affordable Health Choices Act (H.R. 3200) (pdf) was introduced following a number of delays caused, in part, by concern over many of the bill’s more controversial provisions, such as the public health insurance option and employer mandates. These contentious provisions remain in the final bill, albeit with some greater leeway for small employers.

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Rep. Paul Hodes (D-NH) this week introduced the Small Business Health Care Affordability Act of 2009 (H.R. 3115), a bill that would provide small businesses and their employees with tax credits for health insurance coverage. According to the terms of this legislation, employers with 50 or fewer employees would be entitled to a an annual tax credit of up to $1,000 per employee for providing individual health insurance coverage, and up to $2,250 annually for providing family coverage. The plan would also provide healthcare premium assistance for small business employees and their dependents.

This legislation has been referred to the House Committee on Ways and Means. If enacted, the provisions of this bill would apply to taxable years beginning after December 31, 2009.

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On Friday, House Democrats unveiled an 852-page rough draft of a healthcare reform bill prepared by members of the House Ways and Means, Energy and Commerce, and Education and Labor Committees. A copy of the full bill and summaries of its various components can be found here.

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Last week both the House and Senate released details about their respective healthcare plans. The Senate Committee on Health, Education, Labor, and Pensions (HELP) recently unveiled a draft of its massive and contentious healthcare bill.  A press release announcing the publication of the Affordable Health Choices Act and copy of the draft bill can be found here. (pdf)  A brief summary of the legislation can be found here. (pdf)  Although the over 600-page bill is still a work in progress, some key provisions will no doubt stir intense debate in the coming weeks. Notably, the bill would change the regulation of private health insurance plans. For example, the bill would ban preexisting condition exclusions, and prohibit discrimination and premium variance based on health status, medical condition (physical and mental), claims experience, medical history, genetic information, gender, and disability, among other factors. The proposal also includes different options for establishing a public health plan, and permits dependents to stay on their parents’ plans until age 26.

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Senator Russ Feingold (D-Wisc.) has reintroduced the Promoting Health Care Purchasing Cooperatives Act (S. 1165), a bill that would authorize the Secretary of Health and Human Services (HHS) to award grants to certain groups of employers to develop health care purchasing cooperatives. The legislation includes a grant application process for both self-insured and small businesses.

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The Department of Labor’s (DOL) Administrative Review Board (ARB) has upheld an administrative law judge’s (ALJ) finding that three hospitals that receive payments from a Health Maintenance Organization (HMO) for providing medical services to U.S. Government employees are covered federal subcontractors that must comply with the equal employment opportunity and affirmative action obligations imposed by the Office of Federal Contract Compliance Programs (OFCCP).

The three hospitals at issue in OFCCP v. UPMC Braddock had HMO contracts with the University of Pittsburgh Medical Center (UPMC) health plan to provide medical products and services to federal employees. The UPMC health plan, in turn, had contracted with the U.S. Office of Personnel Management (OPM) to provide such medical coverage. The three hospitals, therefore, did not directly contract with the OPM.

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A couple of bills introduced in recent weeks would have significant impact on the health care industry. A bill introduced last week by Rep. John Conyers (D-MI) would require the establishment of a safe patient handling and injury prevention standard for direct-care registered nurses and other health care workers. The Nurse and Health Care Worker Protection Act of 2009 (H.R. 2381) would order the Secretary of Labor to propose a standard under the Occupational Safety and Health (OSH) Act within one year of the bill’s enactment. The final standard – which would, among other things, eliminate manual lifting of patients through the use of assistive patient handling equipment and other mechanical devices – would be issued within two years of this date.

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Last week the Small Business Health Options Program (SHOP Act) (H.R. 2360) was reintroduced by Rep. Ron Kind (D-WI). This bill has bipartisan support, with 25 co-sponsors. In essence, this legislation would amend the Public Health Service Act to create state or nationwide health insurance purchasing pools for small businesses and the self-employed. A small business for purposes of this bill would be one with fewer than 100 employees who work an average of at least 35 hours per week. Self-employed individuals covered by this act must earn at least $5,000 in net earnings or not less than $15,000 in gross earnings from self-employment in the preceding taxable year.

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A number of federal agencies including the Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA) are requesting information in advance of a future rulemaking on group health plans. Specifically, the EBSA’s Request for Information (RFI) seeks input on questions related to the mental health parity provisions made by the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). The RFI was published in the April 28, 2009 edition of the Federal Register.

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Legislation providing employers with various incentives for promoting employee health may receive serious consideration now that Congress is contemplating major healthcare reform. A recent article published in The New York Times claims that proposals such as the Healthy Workforce Act (H.R. 1897, S. 803), which would provide employers with a tax credit for 50 percent of the costs incurred in implementing “effective and comprehensive” employee wellness programs, could be incorporated into broader healthcare reform. The article also claims Congress may loosen legal restrictions to enable employers to use monetary rewards or penalties to encourage healthy lifestyles.

While many employers currently offer some form of wellness plan or benefits, doing so must be done with care. As the NYT article emphasizes, employers need to be mindful of tax, labor, and insurance laws when implementing such incentive programs. Paid gym memberships, for example, may count as an employee’s taxable income. Moreover, employers must take care not to discriminate on the basis of an employee’s health status or medical history. Critics also argue that the carrot and stick approach to promoting employee wellness may constitute a form of lifestyle discrimination, and could amount to an invasion of privacy. The proposals floating around Congress seek to remove some of these legal landmines to make it easier for employers to establish wellness programs. Given that one of President Obama’s eight principles for health legislation is that it must “invest in prevention and wellness,” such proposals are likely to receive attention in the coming months.  For additional employment law issues associated with wellness initiatives, see Littler’s Report Employer Mandated Wellness Initiatives: The Continuum from Voluntary to Mandatory Plans.

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