On June 30, 2014, the U.S. Supreme Court issued its ruling in two related cases challenging the Affordable Care Act's (ACA) contraceptive coverage mandate. In these cases, three closely held for-profit corporations-- Hobby Lobby Stores, Mardel and Conestoga Wood Specialties-- argued that they should not be required to comply with the contraceptive mandate because covering certain types of contraceptives under their health plans violates their sincere religious beliefs.
In these cases, the Supreme Court was asked to decide whether a for-profit business organized as a corporation has the right to "exercise" religious beliefs under the Religious Freedom Restoration Act (RFFA) and, if so, to what extent is it protected from government interference. In a 5:4 ruling, the Supreme Court held that: • The RFRA applies to the closely held corporations; and • The contraceptive mandate violates the RFRA because there are less restrictive ways for the federal government to ensure that all women have cost-free access to FDA approved contraceptives.
ACA's Required Contraceptive Coverage
The ACA requires non-grandfathered health plans to comply with certain preventive care guidelines or women, effective for plan years beginning on or after August 1, 2012. These guidelines, which were issued by the Department of Health and Human Services (HHS), require non-grandfathered health plans to cover women's preventive health services, including contraceptive methods, without charging a co-payment, a deductible or coinsurance. Under the guidelines, plans must cover all FDA-approved contraceptives methods, sterilization procedures and patient education and counseling for all women with reproductive capacity. The owners of Hobby Lobby Stores, Mardel and Conestoga Wood Specialties objected to providing health coverage for four types of contraceptives that are inconsistent with their sincere Christian religious beliefs, that life begins at conception.
Under the ACA, employers with group health plans that violate the contraceptive mandate may be subject to an excise tax of $100 per individual per day of noncompliance.
Impact of Ruling on Contraceptive Coverage Mandate
The Supreme Court's ruling creates a narrow exception to the ACA's contraceptive mandate for closely held businesses that object to providing coverage for certain types of contraceptives based on their sincere religious beliefs. For all other for-profit employers, the contraceptive coverage mandate will continue to apply. HHS will likely issue guidance in the future to address how the Court’s ruling should be implemented.
In addition, the Court cautioned that its decision only applies to the ACA’s contraceptive mandate. Other insurance coverage requirements, such as immunizations, may be supported by different interests (for example, the need to combat the spread of infectious diseases) and may involve different arguments about the least restrictive means of providing them.
The Court also warned that its decision does not provide a shield for employers that try to cloak illegal discrimination (for example, discrimination in hiring on the basis of race) as a religious practice to escape legal sanction. According to the Court, the federal government has a compelling interest in providing an equal opportunity to participate in the workforce without regard to race, and prohibitions on racial discrimination are precisely tailored to achieve that critical goal.
Family and Medical Leave Act
Notice of Proposed Rulemaking to Revise the Definition of “Spouse” Under the FMLA
The Family and Medical Leave Act (FMLA) entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons. The FMLA also includes certain military family leave provisions.
The Department of Labor has published a Notice of Proposed Rulemaking (NPRM) to revise the definition of spouse under the FMLA in light of the United States Supreme Court’s decision in United States v. Windsor, which found section 3 of the Defense of Marriage Act (DOMA) to be unconstitutional.
Major Features of the NPRM
The Department is proposing to move from a “state of residence’ rule to a rule based on where the marriage was entered into (often referred to as “place of celebration”.
The proposed definition of spouse expressly references the inclusion of same-sex marriages in addition to common law marriages, and will encompass same-sex marriages entered into abroad that could have been entered into in at least one State.
The Department proposes to define spouse as follows:
Spouse, as defined in the statute, means a husband or wife. For purposes of this definition, a husband or wife refers to the other person with whom an individual entered into marriage as defined or recognized under State law for purposes of marriage in the State in which the marriage was entered into or, in the case of a marriage entered into outside of any State, if the marriage is valid in the place where entered into and could have been entered into in at least one State. This definition includes an individual in a same-sex or common law marriage that either (1) was entered into in a State that recognizes such marriages or, (2) if entered into out-side of any State, is valid in the place where entered into and could have been entered into in at least one State.
The NPRM published on June 27, 2014 (79 FR 36445) in the Federal Register and interested parties were invited to submit written comments on the proposed rule at www.regulations.gov. Comments must be received on or before August 11, 2014.
Source: The DOL
Non-Union Truckers Brace for New NLRB Rules
Allowing “Ambush” Union Elections
The National Labor Relations Board (NLRB) is in the final step of issuing contentious, labor-friendly regulations that would create sweeping changes to the way the union organizing elections are held.
Non-union trucking companies, such as FedEx and others, say that these regulations would amount to what they’re calling “Ambush Election Rules.” If adopted, the rules would:
? Reduce the time from petition to election day from the current target time of 42 days to as few as 19 days or less.
? Require employers to divulge much more personal information about voters such as personal phone numbers and e-mail addresses.
? Require employers to make important decisions about who should be able to vote in elections in very short periods of time.
? Remove the right of parties to challenge decisions about who is eligible to vote until after the election is held.
These so-called “quickie” elections are seen as biased against employers, who would have much less time to fight back against union organizing efforts through employee education.
The proposal is backed by three of the five NLRB board members, including Chairman Mark Gaston Pearce. The proposal is angering so many businesses that a coalition of 141 businesses groups, including the American Trucking Associations (ATA), has been formed to oppose or at least delay it. The proposal has drawn in excess of 75,000 public comments filed at the agency.
“These are modest, common sense changes that preserve due process and strengthen the secret ballot process,” said Teamsters President James Hoffa in the union’s comments. “They update election methods so they are compatible with today’s technology.
Representing the pro-business viewpoint, ATA General Counsel Prasad Sharma said in his comments: “The board’s proposed rule represents a results-oriented tipping of the balance of employer and employee interests in favor of the unions that contravenes the direction set forth by Congress in the National Labor Relations Act and that addresses too sweepingly an alleged problem in an area where the board has consistently met its targets.”
Currently, unionized truckers—mainly belonging to the Teamsters—amount to about 5 percent of the 700,000 employees at the trucking companies registered at the Department of Transportation. That figure is down from around 90 percent prior to the Motor Carrier Act of 1980 that economically deregulated the industry.
Originally proposed in 2011, the NLRB rules in question were reintroduced earlier this year. They’re designed to reduce the amount of time between when a union-organizing petition is filed and when an actual vote takes place.
One of the key components of the new rule is timing. Previously, the old rules relating to conducting union organizing elections said an election should be held within a 42-day window from when the petition is filed to when the election is held.
The new rule speeds up that process. It says: “The regional (NLRB) director shall schedule the election for the earliest day practicable consistent with these rules.” Non-union truckers say this is unfair, and makes it virtually impossible for carriers to fight back against union organizing efforts.
“In my opinion, these rules are all about keeping employees from getting accurate information,” said Doug Topolski, a labor and employment attorney with Ogletree Deakins, a law firm in Washington, D.C.
Reminder: PCORI Fees due July 31
The Affordable Care Act (ACA) requires health insurance issuers and sponsors of self-insured plans to pay Patient-Centered Outcomes Research Institute fees (PCORI fees). The fees are reported and paid annually using IRS Form 720 (Quarterly Federal Excise Tax Return).
PCOR fees are due by July 31, 2014, for plan years ending in 2013. the IRS provided instructions for filing form 720 which include information on reporting and paying the PCORI fees.
OVERVIEW OF PCORI FEES
The ACA created the Patient-Centered Outcomes Research Institute to help patients, clinicians, payers and the public make informed health decisions by advancing comparative effectiveness research. The Institute’s research is funded, in part, through fees paid by health insurance issuers and self-insured health plan sponsors. These fees are widely known as PCORI fees, although they also may be called PCOR fees or comparative effectiveness research (CER) fees.
The PCORI fees apply for plan years ending on or after Oct. 1, 2012, but do not apply for plan years on or after Oct. 1, 2019. For calendar year plans, the fees will be effective for the 2012 through 2018 plan years. Issuers and plan sponsors will be required to pay the PCORI feels annually on IRS Form 720 by July 31 of each year. It will generally cover plan years that end during the preceding calendar year. Thus, the deadline for filing Form 720 is July 31, 2014, for plan years ending in 2013.
REPORTING ON PCORI FEES ON FORM 720
Using Part II, Number 133 of Form 720, issuers and plan sponsors will be required to report the average number of lives covered under the plan separately for specified health insurance policies and applicable self-insured health plans. That number is multiplied by the applicable rate for that tax year, as follows:
? $1for plan years ending before Oct. 1, 2013 (that is, 2012 for calendar year plans).
? $2 for plan years ending on or after Oct. 1, 2013, and before Oct. 1, 2014.
? For plan years ending on or after Oct. 1, 2014, the rate will increase for inflation.
The fees for specified health insurance policies and applicable self-insured health plans are then combined to equal the total tax owed.
Issuers or plan sponsors that file Form 720 only to report the PCORI fee will not need to file Form 720 for the first, third or fourth quarter of the year. Issuers or plan sponsors that file Form 720 to report quarterly excise tax liability for the first, third or fourth quarter of the year (for example, to report the foreign insurance tax) should not make an entry on the line for PCORI tax on those filings.
Reminder: PCORI Fees due July 31
Reminder: Form 5500 Filings are Due July 31, 2014 for Self-Funded
Calendar Year Plans
with 100 or more participants.