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

The Department of Labor has withdrawn its proposed rule defining “welfare benefit plan” under the Employee Retirement Income Security Act (ERISA). The rule, which intended to address the impact of state health care plans on ERISA-covered welfare plans, had been proposed before the Patient Protection and Affordable Care Act (“Affordable Care Act”) was signed into law on March 23, 2010. In light of the Affordable Care Act’s enactment, the DOL intends to review “whether and to what extent further regulation in this area is necessary or appropriate in light of a national health care reform program.”

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This week, Rep. Linda Sanchez (D-CA) introduced legislation that would extend the federal minimum wage and overtime protections of the Fair Labor Standards Act (FLSA) to most home care workers, improve federal and state data collection and oversight with respect to the direct care workforce, and create a grant program to help states recruit and train direct care workers. Specifically, the Direct Care Workforce Empowerment Act (H.R. 5902) would limit the “companionship services” FLSA exemption to those who work 20 or fewer hours per week.

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The U.S. Department of Health and Human Services (HHS) published on July 14, 2010, a voluminous Notice of Proposed Rulemaking (NPRM), containing dozens of proposed amendments to three sets of Health Insurance Portability and Accountability Act of 1996 (HIPAA) regulations: the Privacy Rule; the Security Rule; and the Enforcement Rule. The proposed amendments are directed principally at implementing the Health Information Technology for Economic and Clinical Health Act (HITECH Act), which amended HIPAA and went into effect on February 17, 2010. A careful review of the NPRM for its impact on employers who sponsor HIPAA-covered plans reveals that, if the proposed changes were adopted, employers would be required to revise their business associate agreements, their HIPAA notice of privacy practices, and their policies for responding to access requests. The NPRM also provides employers with a roadmap for avoiding civil monetary penalties. To learn more about the NPRM and its implications for employers, please continue reading Littler's ASAP, What Do Employers with HIPAA-Covered Health Plans Really Need to Know About Recently Proposed Revisions to HIPAA Regulations?, by Philip L. Gordon.

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On Friday, President Obama signed into law the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act (H.R. 3962), (pdf) legislation commonly known as the “doc fix” bill. This measure reverses a 21 percent payment cut for doctors in Medicare and TRICARE, updates the physician payment formula through November 30, 2010, and provides temporary, targeted funding relief for single employer and multiemployer pension plans that suffered significant losses in asset value due to the 2008 financial downturn. On Thursday, the House of Representatives overwhelmingly approved this measure by a 417-1 vote. The Senate cleared this bill last week after the larger tax extender bill failed to gain sufficient support.

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On Friday, the Senate unanimously approved the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act, (pdf) a bill that reverses a 21 percent payment cut for doctors in Medicare and TRICARE, updates the physician payment formula through November 30, 2010, and provides temporary funding relief for single- and multi-employer pension plans that suffered significant losses in 2008. With respect to the pension relief provisions, according to a summary, (pdf) employers that elect the relief would be required to make additional contributions to the plan if they pay compensation to any employee in excess of $1 million, pay extraordinary dividends, or engage in extraordinary stock buybacks during the first part of the relief period. Additional relief would be available to certain plans sponsored by charitable organizations. The legislation now needs approval by the House.

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The federal government and nurses unions have recently increased their focus on nurse-to-patient ratios and providing nurses – and nurses’ unions – with greater influence on nurse staffing levels. Earlier this month a federal agency used its website to advocate increasing hospital nurse-to-patient ratios. Nurses unions also have been rallying, striking, and marching on Washington to push for nurse-staffing legislation and provisions in collective bargaining agreements. Concurrent with these efforts, legislation was introduced in both the House and Senate this week that would require Medicare-participating hospitals to establish staffing plans for nursing services, provide certain whistleblower protections for employees and patients, and subject employers in violation of the bill to monetary penalties.  Continue reading this entry at Littler's Healthcare Employment Counsel blog.

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Employers have anxiously awaited the release of the interim final rules (pdf) relating to “grandfathered” health care plans under the Patient Protection and Affordable Care Act (PPACA). The regulations have garnered a significant amount of controversy in the past couple of days, as a leaked draft version indicated that more than half of employer-sponsored plans would not qualify for the grandfathered status. Under PPACA, health plans that were implemented before the Act was signed into law on March 23rd are exempt from many, but not all, of the law's consumer protections. The regulations seek to clarify how plans may qualify for and/or lose the grandfathered status.  Continue reading this entry at Littler's Healthcare Employment Counsel blog. 

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As a result of the NLRB’s June 3, 2010 decision (pdf) refusing to review a regional director’s ruling that the interns and residents at St. Barnabas Hospital in the Bronx, New York, are employees, the ballots they cast in a union election on June 18, 2009 will shortly be counted. The results of the vote will determine whether the hospital’s interns and residents will be joining the Service Employees International Union (SEIU). The central issue presented by the election petition filed by an SEIU local in 2009 was whether the hospital’s interns and residents were “employees” with the right to organize, or students not covered by the National Labor Relations Act (NLRA).  Continue reading this entry at Littler's Healthcare Employment Counsel blog. 

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On Thursday, House Ways and Means Committee Chairman Sander Levin (D-MI) and Senate Finance Committee Chairman Max Baucus (D-MT) introduced a summary of the American Jobs and Closing Tax Loopholes Act, (pdf) joint legislation that, among other things, extends emergency unemployment benefits and COBRA credits through the end of 2010, and provides pension funding relief for single- and multi-employer pension plans. The legislation will be introduced as a House Amendment to the American Workers, State, and Business Relief Act of 2010 (H.R. 4213), which the Senate passed in March as an amendment to the original Tax Extenders Act of 2009 that cleared the House in December.

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The Department of Labor has issued interim final regulations (pdf) implementing the dependent coverage provisions of the Patient Protection and Affordable Care Act, as amended by the Healthcare and Education Reconciliation Act (PPACA) (the dependent coverage provisions are contained in ERISA section 715).

The new regulations provide that effective for plan years beginning on or after September 23, 2010 (effective date), any group health plan or group health insurance issuer (plan), which provides coverage to dependent children must make coverage available to dependent children until they have attained the age of 26. The regulation confirms that the last required coverage date is the day before the child's 26th birthday.  Continue reading this entry at Littler's Healthcare Employment Counsel blog.

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On Tuesday, the Senate Subcommittee on Employment and Workplace Safety held a hearing to assess the need for safe patient handling and lifting standards. A number of panel members testified that health care workers experience a relatively excessive rate of musculoskeletal injuries due to manual patient handling and called for legislation and regulation to provide a “floor” for minimally acceptable working conditions. Legislation has already been introduced in both congressional chambers to accomplish this end. The Nurse and Health Care Worker Protection Act (S. 1788, H.R. 2381) was introduced in the Senate by Sen. Al Franken (D-MN) in October 2009, and in the House of Representatives by Rep. John Conyers (D-MI) last May.  Continue reading this entry at Littler’s Healthcare Employment Counsel blog.

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The Employee Benefits Security Administration (EBSA) is set to publish a notice (pdf) in the Federal Register announcing the availability of model COBRA notices that group health plans and other entities are required to provide to individuals eligible for the premium reductions and additional health care coverage election periods provided by the American Recovery and Reinvestment Act (ARRA), and extended for the third time by the Continuing Extension Act (CEA) of 2010. The CEA extends through May 31, 2010, the 65 % premium COBRA subsidy for eligible individuals who are involuntarily terminated from employment. In addition, the CEA provides retroactive eligibility for individuals who lost their jobs after the prior COBRA subsidy expired on March 31, 2010.

The EBSA has created a webpage that contains links to an updated Model Updated General Notice, Model Notice of New Election Period, Model Supplemental Information Notice, Model Notice of Extended Election Period, and a Model Updated Alternative Notice, in addition to instructions on which notice to provide and to whom.

Longer COBRA extensions are included in the American Workers, State, and Business Relief Act of 2010 (H.R. 4213), which the Senate passed in March. House and Senate negotiators are working to resolve differences so that both Chambers can approve final legislation before Memorial Day.

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The newly enacted Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively known as “PPACA”), has set in motion significant changes to this country’s health care system. Many of these changes have and will impose new responsibilities on employers, insurers, benefits administrators, and the health professional community in general. Navigating the legislation and understanding the obligations the new health care law has created is made more difficult by the fact that many of these requirements are to be phased in over the next eight years.

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The Occupational Safety and Health Administration (OSHA) is seeking information and comment (pdf) on occupational exposure to infectious agents in health care and health care-related settings in order to determine whether it will take further regulatory action to limit the spread of occupationally acquired infectious diseases. According to a summary of this request published in the Federal Register, OSHA is interested in strategies that are being used in work settings where health care is provided (e.g., hospitals, outpatient clinics, clinics in schools and correctional facilities) and health care-related settings (e.g., laboratories that handle potentially infectious biological materials, medical examiner offices and mortuaries) to mitigate the risk of occupationally acquired infectious diseases. To that end, the agency seeks to collect “information and data on the facilities and the tasks potentially exposing workers to this risk; successful employee infection control programs; control methodologies being utilized (including engineering, work practice, and administrative controls and personal protective equipment); medical surveillance programs; and training.”

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The U.S. Department of Health and Human Services (HHS) has issued interim final regulations (pdf) to implement the provisions of the Early Retiree Reinsurance Program (ERRP), the temporary cost assistance program instituted as part of the Patient Protection and Affordable Care Act (PPACA). The ERRP provides $5 billion in temporary financial help for employer plans that continue to provide health coverage to “early retirees,” defined as individuals age 55 and older who are neither active employees nor eligible for Medicare, plus their spouses, surviving spouses and dependents. Under the ERRP, the Secretary will reimburse plans for certain claims between $15,000 and $90,000 (with those amounts being indexed for plan years starting on or after October 1, 2011). Funds will be available until the earlier of January 1, 2014 or until the $5 billion is depleted. These plans can receive reimbursement for a portion of medical, surgical, hospital, and prescription drug costs.  Continue reading about this development at Littler's Healthcare Employment Counsel blog.

Photo credit:  Andriy Solovyov

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The IRS has published notice 2010-38, providing guidance as to the application of the new rules permitting favorable tax treatment of health benefits provided to children of covered employees. The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, signed into law on March 23 and 30, 2010 (the "PPACA") requires that group health plans and health insurance issuers provide coverage for children of covered until the child reaches age 26. The coverage requirement of the PPACA is effective for the first plan year beginning on or after September 23, 2010, but the new law effectively permits plans and issuers to provide coverage under the new rules, by providing for favorable tax treatment of coverage and health reimbursements for children under age 27, effective as of March 30, 2010.  Continue reading about this development at Littler's Healthcare Employment Counsel blog.

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The Department of Health and Human Services (HHS) has announced the creation of the Office of Consumer Information and Insurance Oversight, a new division that will provide “leadership for implementing the provisions of the health reform bill that address private health insurance.” A notice (pdf) published in the Federal Register identifies the components of this new division and a brief description of the main responsibilities of each office within the division.  Continue reading this entry on Littler's Healthcare Employment Counsel blog. 

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Update: This entry has been updated to reflect that the bill was signed into law.

Late Thursday night, President Obama signed into law legislation that provides another temporary extension of emergency unemployment insurance (UI) benefits and the 65% premium COBRA subsidy, both of which lapsed over the recent legislative recess.  Hours earlier, the Senate voted 59-38 to pass the Continuing Extension Act of 2010 (H.R. 4851) with an amendment (S. Amt. 3721) (pdf) in the nature of a substitute bill introduced by Sen. Max Baucus (D-MT), which will extend UI benefits through June 2, 2010, and premium COBRA assistance through May 31, 2010. The original bill – which cleared the House by voice vote on March 17 but stalled in the Senate over how the measure would be paid for – provided for extensions of these benefit programs through May 5 and April 30, respectively.  Shortly after Thursday's Senate vote, the House approved the bill by a 289-112 margin. 

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While the most recent change to the Fair Labor Standards Act (FLSA) and the attention it may receive might seem small in comparison to Health Care Reform, the FLSA Amendment is significant. The Amendment, which now provides break time to nursing mothers, imposes a new requirement under the FLSA.

Currently, the FLSA does not require employers to provide rest breaks or meal periods to employees. Generally, rest break requirements are the subject of state regulation, and various states do require such breaks. Until this amendment, if rest breaks were not required by state law, then whether they were provided was a matter of agreement between the employer and employee. The amendment to the FLSA, 29 U.S.C. section 207(r)(1), changes that. The amendment will require all employers subject to the FLSA to provide rest breaks to mothers who wish to express breast milk.

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Last week, Sen. Barbara Boxer (D-CA) introduced legislation that would permit many same-sex spouses or domestic partners to take advantage of COBRA continuation health coverage if their partner loses a job. The Equal Access to COBRA Act of 2010 (S. 3182) would change federal law to allow equal access to COBRA coverage for all individuals who are covered by an employer’s health plan, and would apply to domestic partners as they are defined by that plan. As COBRA law currently stands, continuation coverage does not apply to domestic partners or same-sex spouses, even if the employee who was let go worked at a company that offered health coverage to domestic partners. The provisions of this bill would apply only to companies that already offer health coverage to domestic partners and their children. Domestic partners would also be able to take advantage of the premium COBRA subsidies provided by the American Recovery and Reinvestment Act of 2009.

This bill has been referred to the Senate Committee on Health, Education, Labor and Pensions. 

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As expected, on Tuesday President Obama Signed into law the Health Care and Education Reconciliation Act of 2010 (H.R. 4872), more commonly known as the “reconciliation bill” that makes changes to the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148), the sweeping health care overhaul legislation Obama signed on March 23. The House approved this bill for the second time on March 25 by a vote of 220-207. The House had initially cleared the bill on March 21, but needed to take up the measure once again after two minor changes were made in the Senate, which also passed the bill on March 25.

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The new health care reform legislation has dramatic implications for all employers. For employers with existing collective bargaining agreements, there are unique considerations, both in the short and long-term. While full implementation of the law is still years away, employers should begin evaluating and preparing for its impact on collective bargaining agreements today.

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Despite last-ditch efforts, the Senate failed to approve the Continuing Extension Act of 2010 (H.R. 4851) before the two-week legislative recess. This bill would have extended the 65 percent premium COBRA subsidy another month, until April 30, 2010, and emergency unemployment insurance benefits until May 5, 2010. Both measures – which were already given one-month extensions by means of the Temporary Extension Act of 2010 (H.R. 4691), are set to expire while Congress is out of session. On March 17, the House cleared the measure by voice vote. The bill stalled in the Senate after Sen. Tom Coburn (R-OK) objected to the fact that the cost of the bill was not fully offset. It is expected that when the Senate reconvenes on April 12, consideration of the temporary extension bill will be the first order of business, and that the provisions of the bill, if approved, would be retroactive.

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After a marathon of all-night Congressional proceedings, the Senate voted 56-43 on Thursday in favor of a slightly amended Health Care and Education Reconciliation Act of 2010 (H.R. 4872), otherwise known as the reconciliation bill containing “fixes” to the recently enacted Patient Protection and Affordable Care Act (P.L. 111-148). The Senate’s consideration of the reconciliation bill hit a snag early Thursday when Republican Senators opposed to the bill were successful in identifying two provisions involving the student loan portion of the measure that do not adhere to the “Byrd Rule,” which prevents the inclusion of provisions in a budget reconciliation bill that lack a budgetary impact. Since the provisions were deleted, the bill will need to return to the House for yet another vote. It is expected that the House will approve the amended version later today, and President Obama will quickly sign it into law. Taken together, the two health care overhaul bills will make significant changes to this country’s health care system, and present new obligations for employers.

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On Tuesday morning, President Obama signed into law the Patient Protection and Affordable Care Act (H.R. 3590), the health care overhaul bill that cleared the House of Representatives by a slim margin on Sunday. The Senate will now begin consideration of the Health Care and Education Affordability Reconciliation Act of 2010 (H.R. 4872), the bill that contains “fixes” to the Patient Protection and Affordable Care Act. Both measures will face intense scrutiny in the coming days.

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In a historic series of votes held on Sunday, the House of Representatives passed both the Senate-approved Patient Protection and Affordable Care Act (H.R. 3590), (pdf) and the Health Care and Education Affordability Reconciliation Act of 2010 (H.R. 4872), (pdf) otherwise known as the reconciliation package of “fixes” to the Senate bill. The legislation, which is expected to provide health insurance to an additional 32 million people, would create state-based health insurance exchanges through which eligible individuals and businesses can purchase health insurance. The legislation would also provide federal government subsidies to help lower-income individuals purchase insurance.

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On Monday, the Employee Benefits Security Administration (EBSA) will publish in the Federal Register an announcement (pdf) that updated model COBRA notices that group health plans and other entities are required to provide to individuals eligible for the premium reductions and additional health care coverage election periods provided by the recently-enacted Temporary Extension Act (TEA) of 2010 are available at the EBSA’s COBRA website. TEA extended until March 31, 2010 the eligibility period for the 65 percent COBRA premium reduction provided by the American Recovery and Reinvestment Act (ARRA). ARRA, as revised, mandates that certain health plan providers send assistance eligible individuals notices about their ability to take advantage of the continued health coverage. The EBSA provides links to a Model Updated General Notice, Model Notice of New Election Period, Model Supplemental Information Notice, Model Notice of Extended Election Period, and a Model Updated Alternative Notice, in addition to instructions on which notice to provide and to whom.

This week, the House passed a bill extending the COBRA subsidy an additional month until April 30, 2010. Congress is also considering longer-term extensions of the program. 

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On Thursday, the House of Representatives released the amended Health Care and Education Affordability Reconciliation Act of 2010 (H.R. 4872), (pdf) the reconciliation bill that contains “fixes” to the Senate-approved Patient Protection and Affordable Care Act (H.R. 3590).  Earlier in the day, the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) released their preliminary cost estimate (pdf) of the total health care package, thus triggering the 72-hour waiting period before a vote can be held.

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On March 17, the House of Representatives passed by voice vote the Continuing Extension Act of 2010 (H.R. 4851), legislation that would extend the 65 percent premium COBRA subsidy another month until April 30, 2010, and the emergency unemployment insurance benefits until May 5, 2010. On March 2, President Obama signed into law the Temporary Extension Act of 2010 (H.R. 4691), a bill that extended the COBRA subsidy until March 31, 2010, and emergency unemployment insurance benefits until April 5, 2010. The Senate has already passed the American Workers, State, and Business Relief Act of 2010 (H.R. 4213), a more comprehensive bill that includes provisions continuing both benefits programs through the end of this year. Although it is expected the House will ultimately pass this measure, a vote may not come until after these programs have expired, thus creating the need for another extender bill.

The Senate is expected to take up this measure shortly.

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This week, the House of Representatives will embark on what is widely believed to be the final sprint to health care reform. The House Budget Committee is scheduled to begin markup of a reconciliation bill (pdf) on Monday afternoon.  This 2,309-page bill – the Reconciliation Act of 2010 – is expected to be the vehicle for changes to the Senate-passed health care bill, the Patient Protection and Affordable Care Act (H.R. 3590), negotiated between the White House and House and Senate Democrats. The reconciliation bill also includes changes to the federal student lending program that would switch the program to direct federal loans.

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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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