AARP vs. EEOC Lawsuit Update - Still No Clarity

On Friday, March 30th, just hours before a deadline imposed by the U.S. District Court of D.C., the EEOC filed a required status update with the court stating that, at this time, it has no plans to issue new wellness regulations by a specific date as instructed by the court.

The decision by the EEOC to take no action leaves employers in limbo regarding the future of current employer wellness arrangements that are subject to existing EEOC regulations.

Read the full alert here.

Disability Claim Regulations Take Effect April 1, 2018

The Department of Labor (DOL) has recently confirmed that final disability claims procedures regulations originally issued December 19, 2016 will take effect April 1, 2018.

The rules will apply to disability related claims filed on or after that date. These regulations impose standards similar to what already applies for health plan claims rules (developed under the ACA) to any ERISA benefit determinations based on a participant's disability status. As such, they have potentially broad application to various ERISA plans.

This Compliance Alert focuses on employer sponsored disability plans.

Read the full alert here.

COBRA and State Continuation Responsibilities

ERISA fiduciary requirements mandate employers check up on their COBRA adherence procedures regularly.  COBRA is a federal law that was passed in 1985. It allows employees to keep health care coverage under their employer’s group plan for a temporary amount of time after experiencing a qualifying major life event that would result in coverage termination. ERISA fiduciary rules require group plan administrators to review the services of plan vendors, including entities that may provide them with COBRA and state continuation of coverage administrative services. 

State Continuation is very similar to COBRA but applies to businesses that employ fewer than 20 employees. State Continuation laws vary from state to state. Group clients are bound by law to regularly make sure vendors are charging reasonable fees and performing all duties competently and in the best interest of the plan. 

Click here for more information.

If you have questions about these requirements, contact Diane Campanile at or 844-LyonsHCM (844.596.6742)

Discrimination in the workplace

On average, women earn less than men in almost every occupation that has sufficient earnings data to calculate an earnings ratio for both men and women. Current studies show that discrimination in pay, hiring, or promotions continues to be a significant concern in the modern workforce.  The average out-of-court settlement for a discrimination case is about $40,000.

Please review the following example of a recent Discrimination and Retaliation case to see why it is important to make sure that your company treats all employees equally.  

What happened: 
A female employee of Total Quality Building Services, a commercial janitorial services company in the Washington DC metro area, complained she was paid a lower wage than her male counterpart for equal work. Her duties included providing various janitorial services at a worksite in Reston, VA.  It was also alleged that after the same female employee complained about the wage disparity and asked that her wages be increased, the company retaliated by assigning her additional work, subjecting her to verbal harassment, and firing her.

In a consent decree, resolving the case, the company agreed to pay $36,461 for full back pay and other damages alleged by the EEOC. In addition, the decree bans sex-based pay discrimination and retaliation, and requires the firm to distribute discrimination and retaliation prevention policies in English and Spanish, provide anti-discrimination training, retain pay data for relevant jobs, and allow monitoring by the EEOC.

Changes in 2018 HSA Contribution Limits

On March 5, 2018, the IRS released Rev. Proc. 2018-18, addressing a variety of changes to tax rates and inflation-adjusted thresholds in accordance with the Tax Cuts and Jobs Act passed late in 2017.

Under the new tax legislation, the methodology for determining adjustments to limits for things such as contributions to health flexible spending accounts (FSAs) and health savings accounts (HSAs) is tied to a "chained CPI," probably resulting in slower upward adjustments over time.

Although the IRS guidance does not affect health FSA contribution limits for 2018, HSA contribution limits for family coverage were reduced by $50.00 for 2018.

Read the full alert here.

5 Common HIPAA Mistakes to Avoid

HIPAA (Health Insurance Portability and Accountability Act) was signed into law 22 years ago. HIPAA continues to be misunderstood and misapplied by many, including health care industry professionals who strive for HIPAA compliance. Here are the top 5 of the most frequent, and frustrating, HIPAA misperceptions seen during 2017:

1. “If I’m using or disclosing protected health information (PHI) for health care operations purposes, I don’t need a Business Associate Agreement."

Answer: HIPAA allows PHI to be used or disclosed for treatment, payment and health care operations purposes, but the term “health care operations” is defined to include specific activities of the covered entity performing them. However, if the covered entity (or business associate) is looking to a third party to perform activities that involve the use or disclosure of PHI, a Business Associate Agreement is needed.

2. “I don’t need to worry about HIPAA if I’m only disclosing a patient’s/member’s telephone number, since that’s not PHI.”

Answer: If the data disclosed was ever PHI, it’s still PHI (unless it has been de-identified in accordance with 45 C.F.R. 164.514). 

3. “When a doctor leaves a practice, she can take her patients’ medical records with her.”

Answer: In most cases, the practice entity transmits health information in electronic form in connection with a HIPAA transaction and acts as the covered entity health care provider responsible for HIPAA compliance. A patient can access his or her records and direct that they be sent to the departing physician and if the patient shows up in the departing doctor’s new office, the practice can share the patient’s PHI under the “treatment” exception. If the practice wants the departing doctor to maintain the records of patients she treated while part of the practice, it can enter a records custodian agreement and Business Associate Agreement with the departing doctor.

4. “I can disclose PHI under the “sales exception” to anyone involved in due diligence related to the sale of my health care practice/facility without getting a Business Associate Agreement.”

Answer: HIPAA prohibits the sale of PHI but excluded from this prohibition is the definition of health care operations. This includes the “sale, transfer, merger, or consolidation of all or part of the covered entity with another covered entity, or an entity that following such activity will become a covered entity and due diligence related to such activity.” Attorneys, consultants, banks, brokers and even potential buyers should consider whether they are acting as business associates, and careful buyers and sellers may want to require Business Associate Agreements with those accessing PHI.

5. “If I’m treating an overdose victim [or other unconscious or incapacitated person], I can’t share his/her PHI with family members or caregivers.”

Answer: HIPAA allows the disclosure of PHI information in these circumstances: (1) where the patient is unconscious or incapacitated and the provider believes sharing information with family and close friends involved in the patient’s care is in the best interests of the patient; and (2) where the provider believes that sharing information will prevent or lessen a serious and imminent threat to the patient’s health or safety. HIPAA permits providers to exercise discretion in crisis situations.

For more information, please click here.

Tax Reporting Requirements

It is important to mark these upcoming dates on your calendar. The deadlines for employer and health insurance provider related to health coverage information reporting requirements are just around the corner. 

  • February 28: Paper copies of forms 1094 B & C are due to the IRS
  • April 2: Forms 1094 B & C are due to the IRS (if filing electronically)
  • March 2: Forms 1095 B & C are due to covered individuals
  • April 17: Tax Day

With these dates quickly approaching, the Internal Revenue Service (IRS) has released several pieces of guidance to help advisers and consumers with any tax issues that may come up that relate to health insurance coverage.

The IRS has updated its frequently asked questions document about employer reporting to help applicable large employers with their information reporting requirements and completion of Forms 1094 and 1095 C. The IRS has released Publication 974 to help inform individuals and advisers with health insurance premium tax credit issues, which provides detailed answers about how the tax credit works, including how it may interact with Qualified Small Employer Health Reimbursement Accounts (QSEHRAs). 

The IRS also released a document outlining the best practices relative to the individual shared responsibility requirement (individual mandate).  The individual mandate is still in effect for both the 2017 tax year (being reported in 2018) and for the 2018 tax year (which will be reported in the spring of 2019), so it is important to know the best way to address it both this year and next.

For more information please click here.

Maryland Healthy Working Families Act

On January 12, the Maryland General Assembly passed the Maryland Healthy Working Families Act. Also known as House Bill 1 (Maryland Healthy Working Families Act) requires employers to provide covered employees with paid sick and safe leave effective February 11, 2018.  

  • Employers with 15 or more employees must provide paid sick leave.
  • Employers with 14 or fewer employees must provide sick leave, but it may be unpaid.

The Act does not apply to workers who:

  • are under the age of 18,
  • regularly work fewer than 12 hours per week,
  • are independent contractors,
  • work in the agricultural sector on an agricultural operation, or
  • work on an as-needed basis in the health or human services industry.

Special rules apply to tipped employees in the restaurant industry.

For eligible employees, the employer must provide paid leave allowing the employees to care for the physical or mental health of the employee or a family member, take maternity or paternity leave or obtain relief in response to domestic or sexual assault of the employee or a family member. 

Employees can carry over up to 40 hours of paid leave a year.

For more information please click here


DOL Civil & Criminal Penalties Increased

On January 2, 2018, the Department of Labor (DOL) entered into the Federal Registry and issued a final rule that increases the civil monetary penalties for a wide range of benefits-related violations that may be imposed on employers under various federal laws. In 2015, legislation enacted the Federal Civil Penalties Inflation Adjustment Act which requires annual adjustments to certain penalty amounts by January 15 of each year. The new 2018 adjustments are effective for penalties assessed after January 2, 2018, with respect to violations occurring after November 2, 2015.

Here are a few of the key penalty increases:

  • IRS Form 5500
    The maximum penalty for failing to file Form 5500 increases from $2,097 to $2,140 per day that the Form 5500 is late. This form must be filed annually for most ERISA plans. 
  • Group Health Plans
    The maximum penalty for failing to provide the summary of benefits and coverage (SBC) required under health care reform increases from $1,105 to $1,128 per failure.
  • GINA
    Violations of the Genetic Information Nondiscrimination Act (GINA), such as establishing eligibility rules based on genetic information or requesting genetic information for underwriting purposes, may result in penalties of $114 per participant per day, up from $112. 
  • Employer CHIP Notice
    Failures relating to disclosures regarding the availability of Medicaid or children’s health insurance program (CHIP) assistance.
  • FLSA Requirements
    Violations of the FLSA's minimum wage or overtime pay requirements are subject to penalty increases from $1925 up to $1,964 per violation.
  • FMLA Posting
    Violations of the FMLA's posting requirement are subject to a penalty not to exceed $169 for each separate offense. This is an increase from the former penalty of $166. It is important to remember that covered employers must post this general notice even if no employees are eligible for FMLA leave.

Adjustments have also been made to other benefits-related penalties, including those for failure to provide certain information requested by the DOL and for certain defined benefit plan compliance failures.

It is important for employers to become familiar with the new penalty amounts and review their benefits plan administration, pay practices and safety protocols to ensure compliance with federal requirements.  

Read the entire final rule which features additional penalty adjustments that became effective on January 2, 2018.