Federal Employment Law Update – June 2016
EEOC Releases Sample Notice for Employers Offering Wellness Programs
On June 16, 2016, the Equal Employment Opportunity Commission (EEOC) released a sample notice to assist employers who have wellness programs in complying with their obligations under recently issued Americans with Disabilities Act (ADA) regulations. The EEOC has also released a brief Q&A document describing the notice requirement and how to use the sample notice.
Under recently issued ADA regulations, employer wellness programs that ask employees about their medical conditions or that ask employees to take medical examinations (such as tests to detect high blood pressure, high cholesterol, or diabetes) must ensure that these programs are reasonably designed to promote health and prevent disease, that they are voluntary, and that employee medical information is kept confidential.
Limited financial and other incentives are permitted as part of voluntary wellness programs under the rule. However, employers may not require employees to participate in a wellness program; may not deny or limit their health coverage for non-participation; may not retaliate against or interfere with any employee who does not want to participate; and may not coerce, threaten, intimidate, or harass anyone into participating.
The regulations also require that employers provide employees with a notice describing what information will be collected as part of the wellness program, who will receive it, how it will be used, and how it will be kept confidential. If the wellness program provides the notice, the employer must still ensure that its employees receive it.
OFCCP Releases Updated Sex Discrimination Regulations for Federal Contractors
On June 15, 2016, the Office of Federal Contract Compliance Programs (OFCCP) issued a New Final Rule that sets forth the requirements that covered contractors must meet under the provisions of Executive Order 11246 prohibiting sex discrimination in employment. This final rule updates sex discrimination guidelines from 1970 with new regulations that align with current law and address the realities of today’s workplaces. The final rule deals with a variety of sex-based barriers to equal employment and fair pay, including compensation discrimination, sexual harassment, hostile work environments, failure to provide workplace accommodations for pregnant workers, and gender identity and family caregiving discrimination.
The Final Rule goes into effect on August 15, 2016.
IRS, DOL, and HHS Issue Proposed Expatriate Health Plan Regulations
On June 10, 2016, the Departments of the Treasury, Labor, and Health and Human Services issued proposed regulations on the rules for expatriate health plans, expatriate health plan issuers, and qualified expatriates under the Expatriate Health Coverage Clarification Act of 2014 (EHCCA). The regulations are proposed to be applicable for plan years (or, in the individual market, policy years) beginning on or after January 1, 2017. Issuers, employers, administrators, and individuals are permitted to rely on these proposed regulations pending the applicability date of final regulations.
The EHCCA provides that the Affordable Care Act (ACA) generally does not apply to expatriate health plans, employers with respect to expatriate health plans (but solely in their capacity as plan sponsors of expatriate health plans), and expatriate health insurance issuers with respect to coverage offered by such issuers under expatriate health plans. The proposed regulations follow the EHCCA by providing that the ACA market reforms do not apply to an expatriate health plan, an employer solely in its capacity as plan sponsor of an expatriate health plan, and an expatriate health insurance issuer with respect to coverage under an expatriate health plan. The $500,000 limit under Internal Revenue Code § 162(m)(6) on the allowable deduction for remuneration attributable to services performed by certain individuals for a covered health insurance provider does not apply to an expatriate health insurance issuer with respect to premiums received for coverage under an expatriate health plan. Furthermore, the Patient-Centered Outcomes Research Trust Fund fee under IRC §§ 4375 and 4376 does not apply to expatriate health plans.
Under the proposed regulations, an expatriate health plan is a plan offered to qualified expatriates and that satisfies certain requirements. Substantially all primary enrollees in the expatriate health plan must be qualified expatriates. A plan satisfies the “substantially all” enrollment requirement if, on the first day of the plan year, less than 5 percent of the primary enrollees (or less than five primary enrollees if greater) are not qualified expatriates (effectively a 95 percent threshold).
An expatriate health plan must provide coverage for inpatient hospital services, outpatient facility services, physician services, and emergency services. Coverage for such services must be available in certain countries depending on the type of qualified expatriates covered by the plan. Substantially all of the benefits provided under an expatriate health plan must be benefits that are not excepted benefits.
The plan sponsor must reasonably believe that benefits provided by the plan satisfy the minimum value requirements. A plan sponsor may rely on the reasonable representations of the issuer or administrator regarding whether benefits offered by the group health plan or issuer satisfy the minimum value requirements unless the plan sponsor knows or has reason to know that the benefits fail to satisfy the minimum value requirements.
In the case of an expatriate health plan that provides dependent coverage of children, the proposed regulations provide that such coverage must be available until the individual attains age 26, unless the individual is the child of a child receiving dependent coverage. Additionally, the plan or coverage must offer reimbursements for items or services in the local currency in eight or more countries.
The proposed regulations limit the ability of a group health plan or group health insurance issuer to impose pre-existing condition exclusions, including a requirement that the period of any pre-existing condition exclusion be reduced by the length of any period of creditable coverage the individual had without a 63-day break in coverage.
The departments request comments on the assumptions used to evaluate the economic impact of these proposed regulations, including specific data and information on the number of expatriate health plans. Comments are due on or before August 10, 2016.
Read the Proposed Regulations
EEOC Increasing Title VII, ADA, GINA Notice Posting Penalties
On June 2, 2016, the Equal Employment Opportunity Commission (EEOC) issued a final rule, Adjusting the Penalty for Violation of Notice Posting Requirements, raising the penalty for violations of the notice posting requirements in Title VII of the Civil Rights Act, the Americans with Disabilities Act (ADA), and the Genetic Information Nondiscrimination Act (GINA) from $210 to $525.
The increase is a result of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, which requires each federal agency, not later than July 1, 2016, and not later than January 15 of every year thereafter, to issue regulations adjusting for inflation the maximum civil penalty that may be imposed pursuant to each agency’s statutes.
The final rule goes into effect on July 5, 2016.
Read the Final Rule
EEOC Releases Proposed Guidance on National Origin Discrimination for Public Review
On June 2, 2016, the Equal Employment Opportunity Commission (EEOC) released, for a 30-day public input period, proposed enforcement guidance addressing national origin discrimination under Title VII of the Civil Rights Act of 1964.
Title VII protects job applicants and employees from discrimination based on their race, color, religion, sex, or national origin, as well as retaliation because a person complained about discrimination or participated in an employment discrimination investigation or lawsuit. Title VII prohibits employer actions that treat people unfavorably because of their national origin, including because they are from a particular country or part of the world, because of ethnicity, or because they appear to be of a certain ethnic background.
The EEOC’s enforcement guidance documents express official agency policy and explain how the laws and regulations apply to specific workplace situations. The proposed enforcement guidance addresses important issues, including job segregation, human trafficking, and intersectional discrimination.
The 30-day input period ends on July 1, 2016. After reviewing the public input received, the EEOC will consider appropriate revisions to the draft guidance before finalizing it. A final guidance would replace the existing Compliance Manual on National Origin Discrimination that was issued in December 2002.
Read the Proposed Enforcement Guidance