Employers are in uncharted territory with the COVID-19 pandemic, which has created complicated employment issues that continue to evolve by the hour. Join Kelley Drye’s Labor and Employment co-chairs Barbara Hoey and Mark Konkel and senior associate Diana Hamar as they share practical advice for
As federal, state and local governments continue to develop their responses to the COVID-19 outbreak, employers may find themselves in uncharted territory as to how to deal with emerging employee issues.
There are three overriding rules that all employers should remember:
Below are some general answers to questions our clients have been asking. However, please be aware that this is a very fact-specific and complex topic; COVID-19 related employment issues are evolving by the hour. Employers are cautioned to stay abreast of federal, state, and local government advisories, and to consult legal counsel before making employment decisions or changing policy.
With the arrival of 2019 novel coronavirus (“COVID-19”) to the United States, employers should begin thinking about strategies to mitigate business interruptions, ensure employee safety, and avoid unnecessary litigation.
Know Your Resources
Employers should continue to monitor reliable guidance provided by the U.S. Centers for Disease Control and Prevention (“CDC”) and local public health agencies. Understanding how COVID-19 is transmitted and what steps can be taken to protect diagnosed or exposed employees is essential to dispelling employee fears. Employers can educate employees on prevention and symptoms and should be prepared to answer employee concerns regarding workplace safety. The following are guides which may be helpful to employers:
Several jurisdictions have recently adopted laws requiring individuals to purchase health coverage or pay a state tax penalty. Employers employing residents in a covered jurisdiction now need to facilitate compliance by reporting health coverage information to local governmental authorities. The following is a brief summary of the new health coverage reporting requirements.
Under the Affordable Care Act’s (the “ACA”) individual mandate, beginning in 2014, individuals were required to either purchase minimum essential coverage (“MEC”) or pay a federal tax penalty for failing to maintain such coverage. MEC generally includes employer-sponsored group health plan coverage. The Tax Cuts and Jobs Act of 2017 effectively eliminated the individual mandate by reducing the penalty to zero starting in 2019. In response, however, California, the District of Columbia, New Jersey, Rhode Island and Vermont (“Adopting Jurisdictions”) have each adopted their own versions of the ACA’s individual mandate.
Note that Massachusetts had already adopted an individual mandate requirement in 2006, well before the ACA became law. This Advisory does not address coverage reporting requirements under Massachusetts law.
The Departments of Labor, Health and Human Services and Treasury recently issued joint final regulations expanding the availability of health reimbursement arrangements (“HRAs”) by introducing two new types of HRAs – Individual Coverage HRAs and Excepted Benefit HRAs. The following is a brief overview of the requirements employers must satisfy in order to offer HRA coverage to their employees, and employees’ dependents, under one of these new arrangements.
Background
HRAs constitute group health plans that are subject to various Affordable Care Act (“ACA”) rules. The ACA rules include prohibitions on capping or requiring cost-sharing for certain benefits (the “Market Reforms”).
Under prior guidance, in order to comply with or avoid the Market Reforms, HRAs generally had to be integrated with other qualifying group health plan coverage or limit the scope of reimbursable expenses to benefits excepted from compliance (e.g., limited scope dental or vision coverage). The new regulations make it easier for employers to offer HRA coverage by providing two new options that do not require integration with a group health plan or limiting the scope of reimbursable expenses.
Continue Reading Employers Have New Ways to Offer Health Reimbursement Arrangements
Last week, the Chicago City Council passed the Chicago Fair Workweek Ordinance (“the Ordinance”), which requires employers to give workers early notice of their schedules or face penalties if they change shifts without sufficient notice. For employers, this may present an administrative challenge, but employers should be prepared to address this national trend. New York City, Philadelphia, Seattle, San Francisco, Oregon, and the District of Columbia have already enacted laws to protect worker schedules and limit employer discretion in adjusting employee schedules. Mayor Lightfoot is expected to formally sign the bill and it will subsequently be effective July 1, 2020. The highlights follow:
Who’s Covered?
On July 17, 2019, the Treasury Department and the IRS issued Notice 2019-45 to expand the types of preventive care services and benefits that can be provided to individuals under high deductible health plans (“HDHPs”) before reaching a minimum deductible and without preventing such individuals’ participation in health savings accounts (“HSA”). The additional preventive care services and benefits relate to medical care that helps maintain the health of individuals with chronic conditions.
As background – to be eligible for an HSA, an individual must be covered by a HDHP. Generally, a HDHP cannot provide benefits for any year until the minimum applicable deductible for that year is satisfied. However, there is a statutory safe harbor that permits HDHPs to provide “preventive care” without a minimum deductible. New Notice 2019-45 sets forth a list of 14 medical services and benefits for the treatment of specified chronic conditions (including diabetes, hypertension, and heart disease, among others) that, effective July 17, 2019, can be provided by a HDHP under the preventive-care safe harbor without a minimum deductible.
While most of us rarely think about rubella – a largely forgotten disease that should have disappeared with the “MMR” vaccine¹ – it was the focus of a recent Eighth Circuit decision this month. If you are asking yourself how this largely forgotten illness has anything to do with employment, we will tell you: because for Janice Hustvet, it resulted in the termination of her 15-year position with a healthcare employer.
In Janice Hustvet v. Allina Health System, Case No. 17-2963, decided on December 7, 2018, the Eighth Circuit held that the employer had legitimately terminated Ms. Hustvet when she refused the MMR vaccine and failed to complete a respirator evaluation.
Ms. Hustvet was an “Independent Living Skills Specialist” at the Courage Center. In that role, she worked with individual clients, all of whom were treated as having “compromised” or “fragile” immune systems. In 2013, the Courage Center merged with the Allina Health System, a large healthcare system.
Following the merger, in March of 2013, the Courage Center announced to its employees that they would become employees of Allina and would have to undergo pre-employment screening, including a “pre-placement health assessment screen.” That health assessment screen included “tracking for immunity to certain communicable diseases” and a Respirator Medical Evaluation (“RME”).
Continue Reading Healthcare Employer Off the Hook In A Rubella Vaccine Case
Medical marijuana occupies a gray space within the United States. Marijuana is an illegal drug under federal law and is included on the Drug Enforcement Administrations’ Schedule I, along with heroin and LSD. The drugs on this schedule are considered to have “no currently accepted medical use and a high potential for abuse.” In spite of the federal prohibition, thirty states have passed some form of legislation allowing for the medical use of marijuana.
This conflict between state and federal law may cause employers confusion—especially in states with expansive disability protections. For example, the New Jersey Law Against Discrimination (“NJLAD”) which provides extensive protections for individuals with disabilities. The New Jersey Compassionate Use Medical Marijuana Act (“NJCUMMA”) supplements the NJLAD by stipulating that employees using marijuana for a medicinal purpose are considered to have a disability and such use is protected. These protections, of course, do not force employers to allow employees to use marijuana at work but do pose a dilemma when it comes to workplace drug testing. Many companies require employees to pass drug tests for federally prohibited narcotics. However, the NJLAD requires employers to provide reasonable accommodations to disabled individuals. Since the NJCUMMA classifies medical marijuana users as disabled, is a drug test a violation of their accommodations?
Continue Reading Altered State: Navigating the Haze Around Medical Marijuana in the Workplace
This Advisory supplements our previous advisories dated December 2016, December 2015 (as supplemented in January 2016), October 2014, October 2013, November 2012, November 2011, and October 2010, addressing certain requirements of the Affordable Care Act (“ACA”). Below is a summary of recent developments impacting some of those requirements.
Cadillac Tax
The budget deal recently struck by Democrats and Republicans further delays, until 2022, the Cadillac Tax. As you recall, the tax, designed to impose a 40 percent tax on the cost of employer-sponsored health coverage over a threshold amount (e.g., $10,200 for individual coverage and $27,500 for family coverage, indexed to the CPI), was originally scheduled to go into effect in 2018. President Obama then signed into a law a two-year delay. That law further provided that the Cadillac Tax (if imposed) will be deductible. While bipartisan support exists for repealing the Cadillac Tax, there is no consensus on how to replace the lost revenue. As a result, employers should continue reviewing their health plans to assess whether future changes to avoid the tax may be required.
Continue Reading Health Care Reform–Cadillac Tax and Other Updates
