Monthly Archives: January 2015

January 29, 2015

Idaho Lawmakers Reject Bill to Amend the Idaho Human Rights Act

Howland_PBy Pam Howland

In a historic vote, following three days of hearings before the House State Affairs Committee, the Idaho legislature voted this morning to hold a proposed bill in committee that would amend the Idaho Human Rights Act to make gender identity and sexual orientation protected classes.  By doing so, the legislature essentially killed the bill.  The 13 to 4 vote followed emotionally-charged testimony from 190 speakers, the majority of whom spoke in favor of the bill. 

The legislature declined the opportunity to remove uncertainty that has clouded Idaho employment law and has created uncertainty in recent years for Idaho employers.  Idaho employers will thus, in 2015, continue to operate under state laws that recognize gay marriage, but that do not protect individuals based on gender identity and sexual orientation.  Employers will likewise have to continue to square these laws with numerous city ordinances that ban discrimination on the basis of gender identity and sexual orientation and that create criminal penalties for employers who violate them.  Although it is possible the Senate could take up a similar bill, it is unlikely the Senate would conduct hearings on this issue and it appears, for now, that Idaho employers will have to wait another year for potential changes to the Idaho Human Rights Act that would reconcile Idaho state laws and local ordinances.

January 23, 2015

Five Reasons to Train Your Supervisors in the New Year

Howland_PBy Pam Howland

While employers are quick to train their office managers and human resource personnel on key employment law concepts, they frequently overlook the importance of training those on the front line—their supervisors—on employment law basics.  This mistake can expose your business to liability and can hamstring your ability to terminate poor performers.  Consider five other reasons to train your supervisors in the new year. 

1. Supervisors need to know enough to flag problems.

Chances are, your human resource professionals know the law and the protocols your business has in place so they can ensure they are followed.  Your supervisors, however, may not.  If they don’t, they may not have the knowledge they need to alert your in‑house human resource experts.  For example, imagine an employee with a recently‑diagnosed medical problem—potentially a disability—struggling to perform the essential functions of their job.  If this employee requests assistance from their supervisor, the supervisor may not know enough to identify this request as a potential ADA accommodation and may not flag your human resource professionals.  This could expose your business to an ADA claim if the request is improperly handled.  Simple training on the ADA could avoid such a scenario.

2. Training can be a defense in a harassment case.

The United States Supreme Court feels so strongly about supervisor training that it has ruled that an employer may assert certain defenses in harassment cases if it takes the time to train its supervisors on the law.  Supervisor training ensures your business could take advantage of this defense, if the need ever arises.

 

3. A disgruntled former employee faces an easier burden of proof if it brings a lawsuit based on the misconduct of a supervisor.

The law presumes that your supervisors should know better than to harass your employees.  Accordingly, if a current or former employee claims that a supervisor harassed them, they face an easier burden of proof than if they bring a claim based on the misconduct of a co‑worker without supervisory duties.  Training your supervisors on what to do (and what not to do) reduces the chance that they will do something that exposes your business to liability.

4. Supervisor documentation is essential.

Every savvy human resource professional knows that good documentation, such as progressive discipline documenting performance problems, or emails related to coaching and development, can provide a defense in a discrimination case.  However, a supervisor who does not understand the importance of written documentation may bypass the time it takes to complete written documents.  Many a discrimination case was based entirely on a lack of written documentation, and training can help your supervisors understand why their documents are essential.

5. The law is changing and your policies may be, too.

The law is constantly changing and evolving and while human resource professionals may be able to keep up, it is unreasonable to think that your supervisors will do the same.  For example, many cities throughout Idaho passed local ordinances banning discrimination on the basis of gender identity and/or sexual orientation in 2013.  Even if your supervisors were trained on the law three years ago, they may not know these laws exist and the impact they may have on your workplace.  Likewise, your internal policies and/or handbook provisions may have changed to reflect new law.  Your supervisors cannot enforce policies they are not aware of.  Training ensures that everyone at your business is on the same page and is up to date on the law.

CONCLUSION

In 2015, employers seeking to avoid the time, inconvenience and potential liability associated with employment claims such as those for wrongful termination, harassment, discrimination and retaliation, will train their supervisors on the law and any related changes in internal policies.  The fix is easy and can usually be accomplished with a minimal investment of time—usually a one‑hour training session can cover the essentials.  For more information, contact Pam Howland at phowland@hollandhart.com.

January 14, 2015

How a Health Benefit Can Be a Wolf in Sheep’s Clothing

by Bret Busacker and Bret Clark

Group health plans provided by employers to employees are subject to 40 years of federal regulation from ERISA, to COBRA, to HIPAA, to ACA. What many employers don’t realize is that the definition of group health plan is not limited to traditional major medical plans. These federal laws generally apply to any arrangement sponsored by an employer that directly or indirectly provides health-related benefits to employees.

In an effort to control health insurance costs, we have observed employers looking at unique ways to provide their employees with medical benefits outside of the standard group health plan structure. However, employers should be aware that virtually any arrangement that provides employees with medical benefits is subject to the often burdensome federal laws that regulate employer provided medical benefits.

Employers may be surprised to know that the arrangements described below are generally subject to a variety of restrictive federal benefits laws.

Account-Based Arrangements

Some employers (including many small businesses) would like to assist employees in purchasing health insurance but because of cost, risk and other factors cannot sponsor a traditional major medical plan. In the past, some of these employers provided employees an allowance that employees could use to purchase individual health insurance (in some cases, on a pre-tax basis). These types of arrangements are especially attractive now that the healthcare exchanges under the ACA have been established (where employees can sometimes get subsidized health insurance).

However, the ACA prohibits an employer from establishing an arrangement through which employees may purchase health insurance on an ACA exchange. Even employer-sponsored arrangements that help employees purchase non-exchange individual health insurance policies may run afoul of federal benefits laws. Employers may increase an employee’s taxable wages to help the employee purchase health insurance, but if the increase is conditioned on the employee purchasing health insurance, the arrangement may become subject to federal benefits laws.

Employers may continue to use traditional account-based arrangements to supplement employer-provided health insurance, such a Health Flexible Spending Account, Health Reimbursement Arrangement, or Health Savings Account. However, employers should examine closely any arrangement that permits (or requires) employees to purchase individual health insurance.

Discount Arrangements

We have also encountered employers that provide discounts to employees for medical services. These programs generally involve employers that are healthcare providers. They generally provide employee discounts or allowances that may be used for in-house healthcare services. These programs can also involve discounts negotiated between an employer and a third-party healthcare provider.

Because these employer-sponsored arrangements provide health-related benefits to employees, they are generally group health plans subject to federal regulation, including the ACA. To the extent such a program is offered to employees who are not concurrently enrolled in the employer’s group health plan, the programs must separately satisfy ERISA, COBRA, HIPAA and the ACA.

It some cases, these programs violate the ACA because they do not satisfy the ACA prohibition on annual and life-time limits, among other requirements. In other cases, it may be possible to structure these arrangements to comply with the ACA, but employers should be aware that the notice, disclosure and plan document requirements generally applicable to group health plans also apply to these arrangements.

Skinny Plans

Under the ACA, certain large employers must offer health coverage to their full-time employees or pay a penalty. The coverage must pay 60% or more of a participant’s healthcare expenses, determined on an actuarial basis (referred to as “minimum value”).

Employers and service providers have closely analyzed plan structures to determine how to minimize the cost of a plan and still provide minimum value. Service providers discovered that a plan may be structured to exclude in-patient hospitalization and/or physician services and still satisfy the minimum value requirement. Such plans are known as Skinny Plans.

Many employers found that excluding in-patient hospitalization and/or physician services significantly reduced the cost of coverage, and took significant steps to implement Skinny Plans for 2015. However, once the IRS became aware of this practice, it moved very quickly to prohibit it, and left many employers that were planning on offering Skinny Plans scrambling to find alternative coverage.

Skinny Plans are clearly group health plans and are designed to satisfy applicable federal regulations. However, they highlight the risk an employer takes on in exploring non-traditional coverage in this highly regulated area.

Conclusion

Employers and service providers have become creative in structuring benefit plans in order to minimize costs. In some cases, employers inadvertently provide benefits that do not fully comply with applicable requirements. In other cases, employers push the boundaries of current guidance and risk the IRS invalidating the arrangement with subsequent guidance. In either case, the employer may face significant penalties for noncompliance with applicable law. Accordingly, employers should ensure that their non-traditional health benefit arrangements fully comply with applicable federal requirements.

Bret Busacker and Bret Clark are attorneys in Holland & Hart’s Boise office, where they provide legal services to the firm’s employee-benefits and executive-compensation clients. Bret Busacker can be reached at bfbusacker@hollandhart.com; Bret Clark can be reached at sbclark@hollandhart.com