Governmental Affairs
 
Governmental Affairs Director Contact:
Janelle Camesano
Human Resource Manager
Harper International
(e) jcamesano@harperintl.com
(p) (716) 684-7400
 
Governmental Affairs Mission
BNHRA Governmental Affairs partners with SHRM Governmental Affairs program to anticipate and address regulations and legislation that could change the way human resource professionals perform their jobs. BNHRA collaborates with NYS SHRM and SHRM to advance the human resource profession in the area of government affairs. BNHRA provides an opportunity for local chapter members to assist in shaping regulation and legislation as the subject matter experts in employment relations in Western New York.
 
What's New In Governmental Affairs: May 2014
 

The White House Tackles Pay Inequality:

On April 8th President Obama amended an executive to prohibit federal contractors from penalizing employees who wish to discuss their compensation.

The new rule states “the contractor will not discharge or in any other manner discriminate against any employee or applicant for employment because such employee or applicant has inquired about, discussed or disclosed the compensation of the employee or applicant or another employee or applicant.”

In addition to the executive order, the White House also signed a Presidential Memorandum directing the Department of Labor to establish guidelines requiring federal contractors to submit aggregate compensation data to the DOL, including a breakdown of wages paid by race and gender.  The DOL would use this data to ensure equity and compliance.

The White House notes that despite making up half the workforce and being the primary breadwinner in 4 of ten households, “today, women still make only 77 cents to every man’s dollar, and the pay gap is even wider for women of color. Over her lifetime, the average American woman can expect to lose hundreds of thousands of dollars to the earnings gap, a significant blow to both women and their families.”

Critics of the frequently cited gender wage-gap statistic note that it does not adjust for other variables such as occupation and years of experience. For more information, see the following article from SHRM:

http://www.shrm.org/LegalIssues/FederalResources/Pages/No-gag-order-contractors-pay.aspx

 

IRS Issues Guidance on Retirement Plans and Same Sex Spouses:

On April 4th the IRS issued Notice 2014-19 which laid out guidelines for the treatment of same-sex spouses under qualified retirement plans.

Notice 2014-19 requires qualified retirement plans to recognize the same-sex spouse of a participant as of June 26, 2013, for purposes of:

  • Providing survivor benefits.
  • Obtaining spousal consent.
  • Making required minimum distributions.
  • Accepting qualified domestic relations orders (QDROs).
  • Issuing hardship withdrawals.
  • Carrying out other retirement plan administrative functions.

It is important for employers to note that they are not obligated to retroactively recognize same-sex spouses prior to June 26th 2013.

http://www.shrm.org/hrdisciplines/benefits/Articles/Pages/Retirement-Plans-Spouses.aspx

 

IRS Issues Guidance on FSA Administration

The IRS issued guidance to address 1) the interplay between HSAs and FSAs that contain only funds carried forward from the previous year and 2) provisions for improper FSA payments.

Memorandum 201413005 confirms that an employee may not contribute to an HSA if he/she holds a general-purpose FSA account, even if that account only holds funds carried over from the previous year.   This has been an open question since the IRS announced the new FSA carryover rules last fall.  The memorandum further clarified that an employer may allow the employee to hold both – if the funds carried over are put into a limited purpose (for dental or vision only, for example) FSA.   Alternatively, an employer can allow the employee to choose not to carry over unused funds in an FSA if they plan to elect a high deductible plan with an HSA in the subsequent year.

Memorandum 201413006 outlines recourse for employers when employees make improper FSA payments.  The memorandum stipulates that the recourse is the same as that for unsubstantiated payments. The following steps may be taken:

  • Demanding payment
  • Withholding amounts from the employee's pay, to the extent permitted under applicable law
  • Offsetting the amount owed by the employee against other health FSA payments

http://www.shrm.org/hrdisciplines/benefits/Articles/Pages/Health-FSA-Guidance.aspx

 

 

Health Care Reform
 

Waiting Period Restrictions Begin in 2014:

All group health plans with plan years beginning on January 1st, or during 2014 cannot have a maximum benefit waiting period longer than 90 days. Note that this requirement applies only to health plans, not to “expected benefits”, which include stand-alone, limited-scope plans such as dental and vision, for which employees make a separate election and contribution.

http://www.shrm.org/LegalIssues/FederalResources/Pages/PPACA-waiting-period.aspx

Exchange Notices due by October 1st
 

NEW - No Fine Related to Not Providing Exchange Notice

On September 11th, the DOL announced that there would not be a penalty for employers who fail to distribute the Health Care Exchange Notice, which is due by October 1st. However, most law firms and consultants advise companies to release the notice anyway, despite the lack of penalty.
 
The Exchange Notice (or Notice to Employees of Coverage Options), is a requirement of health care reform under PPACA. All employers who are subject to the FLSA must provide a written notice to each of their employees (regardless of FT/PT status or plan participation) and to all new hires at the time of hiring informing employee about three areas relating to the exchanges:
 
� The existence of the exchanges and a description of the services provided, and how employees can contact the exchange to request assistance

� If the employer plan’s share of total allowed costs of benefits is less than 60% of such costs, employees may be eligible for a premium tax credit if they purchase a qualified health plan through an exchange

� If employees purchase a qualified health plan through the exchange they may lose the employer contribution to any health benefits plan the employer offers.

 
The DOL posted easy to fill in templates which can be downloaded and used for distribution:
 
 
 
A Summary of Benefits Coverage is a mandatory document required under the Affordable Care Act.
 
Employers must provide employees with a summary of benefits and coverage (SBC), along with a uniform glossary of terms used in the SBC. These documents must be included with enrollment materials. In many cases, insurance carriers will create and provide the SBC, but if yours does not a template is available on the Centers for Medicare and Medicaid Services webpage:
 
 
The uniform glossary is available by scrolling further down the page.
 
SBCs are required to be distributed annually, during the enrollment period. Please note that this requirement was in place last year, however SHRM has reported that many companies do not seem to be complying.
 
 
Employer Pay or Play Provision of Affordable Care Act Delayed:
 
In early July the Obama administration announced a one year delay (until January 1st 2015) in the PPACA mandate that employers with 50 or more FT employees provide health care coverage to their full time employees, or risk facing stiff penalties. In simple terms, employers will not face penalties (until 2015) for employers who receive tax credits to purchase coverage through an exchange. This provision of the law is called the pay or play, or shared responsibility provision.
 
Mark J. Mazur, the assistant secretary for tax policy at the U.S. Treasury Department, said the mandate's delay is intended to "provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees." He added: "During this 2014 transition period we strongly encourage employers to maintain or expand health coverage. Also, our actions today do not affect employees’ access to the premium tax credits available under the ACA (nor any other provision of the ACA)."
It is important for employers to note that the while the potential for fees has been delayed, most provisions of PPACA remain, including the following:
 

� New requirements for individual and group health plans, such as a ban on annual limitations for essential health benefits, 90 day limit on eligibility waiting periods, out of pocket limit maximums, elimination of pre-existing condition exclusions, and coverage of clinical trials.

� Preventatives care provisions, including contraceptive services for women with no cost sharing.

� The Exchange Notice requirement (by October 1 private employers must provide notice about the exchange to all employees)

 
For more information, please see the following article from SHRM:
 
 

Final Regulations Released Regarding Wellness Program Non-Discrimination Rules under PPACA:

On May 29th the Departments of Labor, Health and Human Services, and the Treasury issued final regulations to implement non-discrimination requirements for wellness programs.

 
� The regulations clarify rules outlined in previous proposed regulations, and are designed to ensure that all participants in wellness programs can receive the full reward or incentive regardless of any health standards
� The regulations deal mostly with employment wellness programs that require the satisfaction of a health outcome (for example, quitting smoking, achieving a certain BMI/cholesterol level, etc); The non-discrimination regulations do not apply to participatory wellness programs (whereby to earn the reward an individual must only partake in activities, not obtain a certain result).

� The regulations increase the permissible reward (effective for plan years beginning on and after January 1 2014) from 20% of the cost of employee only coverage to 30% of the cost of employee only coverage

� For wellness programs designed to prevent or reduce tobacco use, the permissible reward will rise to 50% of employee only coverage

 
Please see the following from SHRM for details regarding calculating the permissible reward and other facts relating to the non-discrimination requirements:
 
 
May:DOL Issues Guidance for Exchange Notice; Also Issues New COBRA Model Election Notice
 
The COBRA Model Exchange Notice (for covered employers and employees) describes a terminated employee’s right to continue coverage and how to make an election. The Department of Labor has revised its Model Election Notice to inform qualified beneficiaries of coverage options available through government run exchanges, which are scheduled to launch in October of this year. The revised model notice is available on the DOL’s COBRA webpage
 
The Exchange Notice (or Notice to Employees of Coverage Options), is a requirement of health care reform under PPACA . All employers who are subject to the FLSA must provide a written notice to each of their employees (regardless of FT/PT status or plan participation) and to all new hires at the time of hiring informing employee about three areas relating to the exchanges:
 
� The existence of the exchanges and a description of the services provided, and how employees can contact the exchange to request assistance
 
� If the employer plan’s share of total allowed costs of benefits is less than 60% of such costs, employees may be eligible for a premium tax credit if they purchase a qualified health plan through an exchange
 
� If employees purchase a qualified health plan through the exchange they may lose the employer contribution to any health benefits plan the employer offers.
 
 
 
HHS Issues Proposed Rule Delaying Competitive Options for Small Businesses:
 
The Department of HHS issued a proposed rule that would delay (by one year) the SHOP (Small Business Health Options Program) provision of health care reform on state exchanges. SHOP is designed to allow small businesses ( ) to offer multiple plans/different carriers to their employees, while still receiving only one bill. Under the proposed new rule, the SHOP provision will only offer one plan for small businesses during the first year, instead of many competing options.

A final ruling is expected shortly; check back for updates.

 
 
Final Rule Issued on Essential Health Benefits and Plan Value:

On February 20th the Department of Health and Human Services finalized standards under PPACA that define essential health benefits and actuarial plan value. These standards apply to state insurance exchanges and health insurance issuers. Non grandfathered plans in the individual and small group markets are required to meet standards in ten different essential health benefits categories. The majority of standards pertain to areas already covered by most health plans, but others include items such as rehabilitative services and pediatric dental care. The HHS also published final calculators to determine actuarial value of plans and to determine if large employer g plans meet the minimum value requirement of the shared responsibility provisions.

 
There are minimal changes from the proposed regulations issued in November. The following two articles provide more details:
 
 
 
Employer Shared Responsibility Provisions of Health Care Reform
One of the hottest legislative/HR issues of this year promises to be health care reform. With deadlines looming, many of us
are eagerly waiting guidance on several provisions of the new law. On December 28th the IRS issued proposed regulations/guidance regarding the pay or play provisions (also known as the employer shared responsibility provisions) of the federal health care reform law.

Additionally, the IRS posted a question and answer page to address concerns. The Service stated that in the absence of confirmed regulations, the proposed regulations should be used as guidelines moving forward, and that the final guidelines will not be applied retroactively.

 
Guidance includes:
 
� The definition of “large” in terms of the PPACA provision that “large” employersprovide affordable health care coverage to employees. The proposed rule has a comment period that ends on March 18, 2013
 
� How to define “affordability” and “minimum value” under the act
 
The full text of the proposed regulations, the Q and A page, and a summary from SHRM can be found by visiting the following pages:
 
 
 

 

 

 
Resources:
 
New York State’s Benefit Exchange website:
 
SHRM interactive timeline:

http://www2.shrm.org/revised_timeline/timeline.html

 
SHRM resources page: