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The U.S. Departments of Health and Human Services, Labor, and Treasury, and the Office of Personnel Management have issued “Requirements Related to Surprise Billing; Part I,” an interim final rule to implement the No Surprises Act passed late last year as part of the Consolidated Appropriations Act, 2021. The No Surprises Act, which generally becomes effective January 1, 2022, minimizes the amounts that participants in a group health plan must pay for medical care received from physicians or other healthcare providers who are, unknown to the participant, outside of the plan’s network; this is referred to as “surprise billing.” In addition, the No Surprises Act limits situations in which out-of-network providers can bill directly for amounts not paid for by the group health plan; this is referred to as “balance billing.”
The rule implements portions of the No Surprises Act by placing restrictions on group health plans, as well as health insurance issuers, physicians, and other healthcare providers. The rule requires plans to treat certain services from out-of-network providers and facilities as in-network in applying cost-sharing, such as deductibles and co-insurance. Thus, the participant will have the same out-of-pockets costs for such services regardless of whether the facility or provider has a contract with the plan. Similarly, the rule forbids out-of-network providers from billing participants for amounts in excess of the participant’s in-network cost-sharing responsibility, subject to the participant’s ability to waive this protection in some situations.
Specifically, among other provisions, the rule implements certain consumer protection provisions of the No Surprises Act as follows:
The issuance of the rule is accompanied by fact sheets for health plans and issuers, as well as consumers. The Department of Labor has also issued instructions and a model notice that plans and issuers could use to meet requirements to make certain information publicly available, post on a public website, and include in each explanation of benefits.
The rule will take effect for healthcare providers and facilities on January 1, 2022. For group health plans, health insurance issuers, and Federal Employees Health Benefits Program carriers, the provisions will take effect for plan, policy, or contract years beginning on or after January 1, 2022. Comments on the rule are due within 60 days after the rule is published in the Federal Register. It is likely that this rule will generate significant comments. The rule may also change in response to those comments.
Employers of healthcare providers will soon be required to provide paid sick leave and partially paid family leave to a broader category of employees, and all employers subject to the law now have clarification on a number of other obligations, thanks to a revised set of regulations released by the Labor Department late Friday afternoon. After a federal court judge recently knocked down the agency’s first attempt to provide employers with practical direction in complying with the Families First Coronavirus Act (FFCRA), the Labor Department issued a second set of rules on September 11 that in some instances revise and in other instances clarify employer compliance duties. Here are the key changes and clarifications, which are slated to go into effect on September 16, that employers need to know about:
Last week the Department of Health and Human Services, DOL and the IRS extended deadlines for multiple items related to health plan administration. We don’t expect a huge influx of issues from the changes. However, you should be aware so you don’t inadvertently misinform your employees.
There were changes made regarding COBRA premium payments and election timeframes but since we have addressed those in a previous post, we won’t address it here. COBRA administration is outsourced and those impacted are no longer employees so you can direct their questions to your COBRA administrator or to our office. We’ll also skip the changes made to claims and appeals as that won’t apply to everyone. That leaves the changes to your benefit program.
As you are aware, most of the carriers have reduced or even eliminated the minimum number of hours a previously full-time employee must work to be covered by your plan. Meaning, we can offer coverage to furloughed employees or those that have otherwise reduced hours to below the full-time requirements.
In addition, the agencies, have decided to disregard the Outbreak Period (the time period between March 1st and at least 60 days after the announced end of the COVID 19 National Emergency) when establishing a deadline to request enrollment in coverage for certain qualifying events. Meaning, the agencies, added a “pause” to the time frame required for employees to notify you about special enrollment periods, such as marriage or birth of a child. We are not able to determine the exact end date of the Outbreak Period yet as that is based on an end to the National Emergency (and that had yet to be determined).
For our examples, we’ll assume the COVID 19 National Emergency ends for the country on June 30th. This would make the Outbreak Period March 1st to August 29th (60 days following June 30).
Example 1 – Sally has a baby on March 3rd. Normally, she would have 30 days to notify us that she would like to add the baby. However, you are being instructed to disregard the Outbreak Period, therefore she has until September 28th (30 days from the end of the Outbreak Period) to let us know her desire to add her child.
Example 2 – Tom gets married June 1st. He will have until September 28th to let us know if he intends to enroll his spouse.
Under these examples, the dependents would be enrolled back to their original eligibility date and the employee would owe those back premiums. I don’t expect this to become a big issue, however, depending on the employees circumstances it could. The drawback to employers, other than the inconvenience, is this could have an impact on the group claims. Normally Tom and Sally would only have 30 days to enroll their dependents. With the extensions, employees have information about any issues or medical expenditures that have already happened along the way. Carriers will be responsible to back up, enroll the dependent, and pay any claims incurred.
Please let us know of any questions you have.
The Family and Medical Leave Act (FMLA) forms expire June 30—not on their original expiration date of May 31—but experts believe they aren’t likely to change when they’re replaced with new forms.
Employers who customize their own forms aren’t too concerned with the imminent replacement of the current forms, but employment law attorneys disagree on how much the DOL forms might be tweaked.
The FMLA forms are used to certify that an employee is eligible to take FMLA leave and to notify him or her of leave rights under the law. The forms expire under the Paperwork Reduction Act of 1995, which requires the Department of Labor (DOL) to submit its forms at least every three years to the Office of Management and Budget (OMB) for approval, so the OMB can ensure processes aren’t too bureaucratic.
The DOL is renewing the current FMLA forms on a month-to-month basis until it replaces them with new forms. But the new forms may be virtually identical to the current ones with just a different expiration date.
In 2015, the DOL made a few minor tweaks to the FMLA forms so they would conform with the Genetic Information Nondiscrimination Act.
There have not been substantive changes to FMLA or its regulations in the past three years that would require changing any of the information provided or sought on the current forms, noted Tina Bengs, an attorney with Ogletree Deakins. So it is likely that the new forms, once issued, will be approved for the maximum three-year period.
Customization of Forms
Some employers customize the DOL-recommended forms for their own use, observed Steven Bernstein, an attorney with Fisher Phillips. For example, some employers are covered by state and federal FMLAs and adjust the federal forms to reflect state law requirements. Others make minor changes, such as referring to workers as “associates” rather than “employees.”
On occasion, employers incorporate reference to their accrued leave policies, while others adopt robust language disclaiming liability under the FMLA, he said.
He cautioned, however, that an employer can be held liable for using a form that harms the employee by misleading him or her about FMLA rights, and recommended that any changes be reviewed by an outside expert to ensure that added language does not inadvertently conflict with the FMLA.
Monica Velazquez, an attorney with Clark Hill, prefers customized forms so that employers aren’t handing workers documents with the DOL logo. The logo makes the forms look more official than they are, she said, and emphasizes that their use is optional.
It is recommended if you are going to create customized FMLA forms to copy and paste the information from the DOL form into the employer’s own form. If the employer plans to use its own language, use plain English and bullet points, she said. Keep things as direct as possible.
For example, instead of an open-ended question about the employee’s treatment schedule, a customized FMLA form might ask the doctor to choose a frequency of treatment—every week, month or year—and circle the response. This would reduce the challenge of reading doctors’ often illegible handwriting. Less space for handwritten information also would reduce the chances of doctors’ filling certification forms with confusing medical lingo.
Many employers put the information about health conditions at the top of the medical certification forms, as it’s the first piece of information the employer wants—what ails the employee or family member—so the employer has a better sense of whether the employee is covered by the FMLA.
The current DOL forms are:
Rules Will Not Take Effect On December 1; Future Thereafter Uncertain
In a dramatic last-minute development, a federal judge in Texas on Tuesday (11/22/16) blocked the U.S. Department of Labor’s (DOL) overtime rule from taking effect on December 1. The judge issued a preliminary injunction preventing the rules from being implemented on a nationwide basis.
The fate of the overtime rules is now uncertain. The Trump administration will take over the DOL in less than two months’ time, and the incoming administration has repeatedly indicated that it wants to eliminate unnecessary regulations hampering the business community. Unless an appeals court reverses course in the next several weeks and breathes new life into the rules, it is quite possible that the rules will be further delayed, completely overhauled, or altogether scrapped once President Trump takes office.
Almost immediately, an outcry sprung from the business community, especially those advocating on behalf of small businesses. By doubling the existing salary threshold, the DOL’s actions would likely reduce the proportion of exempt workers sharply while increasing the compensation of many who will remain exempt, rather than engaging in the fundamentally definition process called for under the FLSA. As many pointed out, manipulating exemption requirements to “give employees a raise” has never been an authorized or legitimate pursuit.
Moreover, publishing what amounts to an automatic “update” to the minimum salary threshold is something that has never before happened in the more-than-75-year history of the FLSA exemptions. This departs from the prior DOL practice of engaging in what should instead ultimately be a qualitative evaluation that would take into account a variety of considerations.
The challengers argued that the DOL did not properly carry out its responsibility under the FLSA to define these exemptions, failing to take into account the duties of white-collar workers as the best indicator for whether threshold increases were needed. The plaintiffs also argued that the automatic indexing mechanism which would ratchet up the salary levels every three years was improper because it would ignore current economic conditions or the effect on public and private resources.
The judge recognized that, for 75 years, the salary levels that served as part of the DOL’s overtime exemption test acted as a floor and not a ceiling. He said during last week’s oral argument the new rule’s proposed salary jump was “a much more drastic change.” During that argument, in fact, he pointed out that the proposed substantial increase in the salary threshold could lead to inconsistent treatment of workers who each fulfill white collar duties but are paid differently. An example is a convenience store manager who clearly acts as an executive and who is paid a salary annualizing to only $47,000 a year, for example, would be treated differently than a similarly situated manager who is paid a salary equating to $47,500 a year.
Assuming that the injunction survives the remainder of President Obama’s term, it is difficult to predict what President Trump will do with the rules once in the White House. Perhaps President Trump will direct his DOL to commence a new rulemaking process, subject to notice and comment, with the goals of setting lower thresholds for the salary requirement and eliminating the three-year update, among other changes. How long and what form such a process would take, and what could or would be done in the meantime, are currently unpredictable.
At the same time, a series of measures have been introduced in Congress hoping to prevent or stall the rules changes. While one of the proposed legislative changes would scrap the increases altogether, another proposed change would delay implementation for a period of time to provide a longer period of preparation. Still, another would push the date that the full increase would take effect to 2019, introducing more forgiving gradual increases on an annual basis for the next three years.
The fate of these measures is similarly uncertain at present. Even if any of these measures were fast-tracked, approved by Congress, and signed by President Obama before he leaves office, it is unclear whether they would ever take effect given the nature of the current litigation.
If you had been waiting until December 1 to implement the changes, you have the option of putting any alterations on ice and awaiting a final determination on the fate of the rules. If you do so, you might consider communicating to your workforce that the expected changes are going to be delayed given today’s court ruling, and let them know that you will continue to monitor the situation and make adjustments when and if appropriate.
We will track these developments and provide updates as issued.
The Department of Justice released two new employee posters effective 8/1/16. Be sure to check your current postings and replace as needed. You can access the new posters below:
Please contact our office if you have any questions.
The U.S Labor Department (USDOL) has finally released the anxiously awaited revised regulations affecting certain kinds of employees who may be treated as exempt from the federal Fair Labor Standards Act’s (FLSA) overtime and minimum-wage requirements. These will be published officially on May 23, 2016.
If you currently consider any of your employees to be exempt “white collar” employees, you might have to make some sweeping changes.
These rules will become effective on December 1, 2016, which is considerably later than had been thought. Unless this is postponed somehow, you must do by this time what is necessary to continue to rely upon one or more of these exemptions (or another exemption) as to each affected employee, or you must forgo exempt status as to any employee who no longer satisfies all of the requirements.
Essentially, USDOL is doubling the current salary threshold. This is likely intended to both reduce the proportion of exempt workers sharply while increasing the compensation of many who will remain exempt, rather than engaging in the fundamentally definition process called for under the FLSA. Manipulating exemption requirements to “give employees a raise” has never been an authorized or legitimate pursuit.
For the first time in the exemptions’ more-than-75-year history, USDOL will publish what amounts to an automatic “update” to the minimum salary threshold. This departs from the prior USDOL practice of engaging in what should instead ultimately be a qualitative evaluation that also takes into account a variety of non-numerical considerations.
USDOL did not change any of the exemptions’ requirements as they relate to the kinds or amounts of work necessary to sustain exempt status (commonly known as the “duties test”). Of course, USDOL had asked for comments directed to whether there should be a strict more-than-50% requirement for exempt work. The agency apparently decided that this was not necessary in light of the fact that “the number of workers for whom employers must apply the duties test is reduced” by virtue of the salary increase alone.
Right now, you should be:
USDOL has provided extensive commentary explaining its rationale for the revised provisions. We are continuing to study the final regulations and accompanying discussion carefully and will provide updates/changes as published.
In late April, the Department of Labor (DOL) announced that it soon will issue a new general FMLA Notice that can be used interchangeably with their current FMLA posting. In issuing this new directive, they also unveiled a new guide to help employers navigate and administer the FMLA.
Here’s the scoop:
Under the FMLA, an FMLA-covered employer must post a copy of the General FMLA Notice in each location where it has any employees (even if there are no FMLA-eligible employees at that location). According to the FMLA rules, the notice must be posted “prominently where it can be readily seen by employees and applicants for employment.”
The DOL has announced that it will release a new General FMLA Notice for employers to post in their workplaces. According to the DOL, the new poster won’t necessarily include a whole bunch of new information. Rather, the information in the notice will be reorganized so that it’s more reader friendly.
The DOL’s Branch Chief for FMLA, Helen Applewhaite, confirmed that employers would be allowed to post either the current poster or the new version. In other words, employers will not be required to change the current poster.
In 2012, the DOL issued a guide to employees to help them navigate their rights under the FMLA. Several years later, DOL now has issued a companion guide for employers. According to the DOL, the Employer’s Guide to the Family and Medical Leave Act (pdf) is designed to “provide essential information about the FMLA, including information about employers’ obligations under the law and the options available to employers in administering leave under the FMLA.”
The new guide was unveiled by the DOL at an annual FMLA/ADA Compliance conference sponsored by the Disability Management Employer Coalition (DMEC). Generally speaking, the new guide covers FMLA administration from beginning to end, and it follows a typical leave process — from leave request through medical certification and return to work.
While the guide helps explain the FMLA regulations in a user-friendly manner, the guide primarily is meant to answer common questions about the FMLA, so it leaves unanswered leave issues that continue to frustrate employers in their administration of the FMLA. However, the guide is likely to have some benefit to employers when administering the FMLA. For instance, the guide:
After more than 15 months of waiting, the U.S. Department of Labor has issued a Notice of Proposed Rulemaking (“NPRM”) announcing the Department’s intention to shrink dramatically the pool of employees who qualify for exempt status under the Fair Labor Standards Act.
The 295-page NPRM, released June 30, contains a few specific changes to existing DOL regulations: more than doubling the salary threshold for the executive, administrative, and professional exemptions from $455 a week currently to $921 a week (with a plan to increase that number to $970 a week in the final version of the regulation), as well as raising the pay thresholds for certain other exemptions, and building in room for future annual increases. More ominously, the Department invites comment on a host of other issues. This opens the door to many further significant revisions to the regulations in a Final Rule after the Department reviews the public’s comments to the NPRM.
On March 13, 2014, President Obama directed the Secretary of Labor to modernize and streamline the existing overtime regulations for exempt executive, administrative, and professional employees. He said the compensation paid to these employees has not kept pace with America’s economy since the Department last revised regulations in 2004. The President noted that the minimum annual salary level for these exempt classifications under the 2004 regulations is $23,660, which is below the poverty line for a family of four.
Since the President issued his memo, the Department has held meetings with a variety of stakeholders, including employers, workers, trade associations, and other advocates. The Department has raised questions about how the current regulations work and how they can be improved. The discussions have focused on the compensation levels for the exempt classifications as well as the duties required to qualify for exempt status.
The NPRM expressed the Department’s intention to increase the salary threshold for the white-collar exemptions from $455 a week (or $23,660 a year) to $921 a week ($47,892 a year), which the Department expects to revise to $970 a week ($50,440 a year in 2016) when it issues its Final Rule. Under this single change to the regulations, it is estimated that 4.6 million currently exempt employees would lose their exemption right away, with another 500,000 to 1 million currently exempt employees losing exempt status over the next 10 years as a result of the automatic increases to the salary threshold.
The NPRM acknowledges that roughly 25% of all employees currently exempt and subject to the salary basis requirement will be rendered non-exempt under the proposed regs. The Department recognizes that employers are likely to reduce the working hours of currently exempt employees reclassified as a result of these regulations, and that the reduction in hours will probably lead to lower overall pay for these employees.
Related changes in the regs include increasing the annual compensation threshold for exempt highly compensated employees from the present level of $100,000 to a proposed $122,148, as well as raising the exemption threshold for the motion picture producing industry from the present $695 a week to a proposed $1,404 a week for employees compensated on a day-rate basis.
Perhaps not surprisingly, given the likely impact of the proposal, almost all of the NPRM is devoted to economic analysis and justification for the steep increase in the salary thresholds. Nevertheless, the NPRM touches on some other topics as well. The Department states that it is considering, and invites comment on, a wide range of topics, including:
What Comes Next?
The proposed regulations are subject to a 30-day public comment period. Now is the time for any employer or trade association dissatisfied with the proposed regulatory text, or concerned about changes the Department is weighing for inclusion in a Final Rule, to submit comments. The Department has put the regulated public on notice: it is considering sweeping changes to the regulations not described specifically in the proposed regulatory text, such as altering the duties tests for exempt status. Employers may not have another opportunity to comment on the content of a Final Rule.
Following the public comment period, the Department will issue a Final Rule that may add, change, delete, or affirm the regulatory text of the proposal. The Office of Management and Budget will review the Final Rule before publication. This process is likely to take at least six to eight months. A Final Rule is not expected before 2016.