Michelle Capezza's Recent Articles from LexMonitor

NLRB Acting General Counsel Issues Follow-Up Report on Social Media Cases

mcapezza@ebglaw.com (Michelle Capezza) — Fri, 09 Mar 2012 21:10:20 GMT

by Steven M. Swirsky and Michael F. McGahan

On January 25, 2012, the National Labor Relations Board's ("NLRB") Acting General Counsel ("AGC") Lafe Solomon issued a second report on unfair labor practice cases involving social media issues. We discussed his earlier report in our Act Now Advisory of October 4, 2011.

The new report covers an additional 14 cases, all of which fall into the same two categories as the cases discussed in the earlier report, namely: (1) termination of employees resulting from statements made in social media forums about their working conditions or their employers; and/or (2) claims that an employer's social media policy violates the National Labor Relations Act (the "Act") because its prohibitions may "chill" employees in the exercise of their rights under the Act to engage in concerted activity for their mutual aid and protection. Again, the report emphasizes that the Act's provisions apply to workplaces where the employees are not represented by a union and where there is no union activity, as well as to unionized employees. Read the full advisory online: http://www.ebglaw.com/showclientadvisory.aspx?Show=15805

Final Extensions Provided for Retirement Plan Fee Disclosures and PPACA Summary of Benefits Coverage

mcapezza@ebglaw.com (Michelle Capezza) — Thu, 16 Feb 2012 18:48:19 GMT

On February 2, 2012, the U.S. Department of Labor (“DOL”) issued final regulations under Section 408(b)(2) of ERISA. As a result, there is a new due date of July 1, 2012 by which certain service providers must make compensation disclosures to responsible plan fiduciaries of defined benefit and defined contribution plans (such as pension and 401(k) plans). This provides an extension of the April 1, 2012 due date issued under prior guidance. The regulations set forth the types of information that must be disclosed so that the plan fiduciaries can assess the reasonableness of the compensation paid for necessary services and identify potential conflicts of interest in order to avoid a prohibited transaction with respect to the arrangement (and penalties which would result). Plan fiduciaries should be in contact with their service providers to obtain these disclosures as soon as possible. Time will be needed to analyze the information received, and to ensure that existing contracts/arrangements are reasonable. Disclosures are also required reasonably in advance of the dates contracts/arrangements are entered into, renewed or extended. This extension also further extends the due date for the participant-level disclosures that plan fiduciaries of participant-directed individual account plans such as the 401(k) plan are required to make to participants under Section 404(a) of ERISA so that the participants have the information they need to sufficiently manage their individual accounts. The new due date for these disclosures is no later than August 30, 2012 (which was May 31, 2012 under prior guidance) and the issuance of the first quarterly participant statements to include required information is now November 14, 2012.

On February 9, 2012, the DOL, and the U.S. Departments of Treasury and Health and Human Services issued the final regulations regarding the Summary of Benefits Coverage and the uniform glossary for group health plans under the Patient Protection and Affordable Care Act. The requirements to provide a Summary of Benefits Coverage, notice of modification, and uniform glossary apply for disclosures to participants and beneficiaries who enroll or re-enroll in group health coverage through an open enrollment period (including re-enrollees and late enrollees) beginning on the first day of the first open enrollment period that begins on or after September 23, 2012. For disclosures to participants and beneficiaries who enroll in group health plan coverage other than through an open enrollment period (including individuals who are newly eligible for coverage and special enrollees), the requirements apply beginning on the first day of the first plan year that begins on or after September 23, 2012. The requirements under these rules are also applicable to health insurance issuers beginning on September 23, 2012. These regulations set forth numerous guidelines concerning the contents, format, language, and other parameters of the Summary of Benefits Coverage, the uniform glossary, and notices of modifications. Failure to comply with these rules can include penalties and excise taxes under ERISA and the Code.

Plan sponsors and fiduciaries should ensure that they have a process in place to review and prepare for the respective disclosures and related tasks.

FTC Warns That Background Searches via Mobile App May Violate the Fair Credit Reporting Act

mcapezza@ebglaw.com (Michelle Capezza) — Thu, 16 Feb 2012 16:00:06 GMT

by Jeffrey M. Landes, Susan Gross Sholinsky, Steven M. Swirsky, and Jennifer A. Goldman

On January 25, 2012, the Federal Trade Commission ("FTC") sent warning letters to three companies that market, in total, six mobile phone applications ("Apps") that provide users with background check reports. In the warning letters, the FTC states that the Apps may violate the Fair Credit Reporting Act ("FCRA"). According to a press release issued by the FTC on February 7, 2012, the FTC cautioned the Apps' marketers that, if they have reason to believe that the background reports provided will be used for employment screening, housing, credit, or other similar purposes, both the users of the Apps and the marketers of the Apps must comply with the FCRA.

Read the full advisory online at http://www.ebglaw.com/showclientadvisory.aspx?Show=15744

Epstein Becker Green Launches First-of-Its-Kind App: Wage & Hour Guide for Employers

mcapezza@ebglaw.com (Michelle Capezza) — Tue, 14 Feb 2012 19:03:18 GMT

We are pleased to announce that Epstein Becker Green’s first app - Wage & Hour Guide for Employers - is now available for download in the App Store on iTunes, for both iPhones and iPads. You can find this complimentary app by searching for “Wage Hour” or accessing the following http://itunes.apple.com/us/app/wage-hour-guide/id500292238?mt=8&ls=1.

The Wage & Hour Guide app enables employers to access up-to-date federal wage and hour guidelines as well as various state guidelines, which can differ by jurisdiction. In addition, users can obtain insights and commentary about the latest wage and hour developments and issues by accessing this blog directly through the app. To provide the best user experience possible, the app provides users with the ability to download the guide to their iPhone or iPad for reference anywhere at any time – with or without an Internet connection, all at no cost.

Epstein Becker Green Is Pleased to Announce a New Blog Focused on Health Employment and Labor Law

mcapezza@ebglaw.com (Michelle Capezza) — Thu, 12 Jan 2012 21:18:18 GMT

The Health Employment and Labor (HEAL) blog will include updates about timely issues related to labor and employment issues that affect health care and life sciences companies.

The HEAL blog is an idea that stems from the Epstein Becker Green’s Health Employment and Labor Group, which combines the strengths of the Firm’s two founding national practices – Health Care and Life Sciences and Labor and Employment. EBG attorneys have a deep knowledge of both the labor and employment field and wanted to create a blog that would quickly inform and educate employers about the challenges and opportunities facing the U.S. health care and life sciences industry. The blog will provide human resources professionals, managers, and business owners in the health care and life sciences space with information they need to understand, interpret, comply, and implement the laws and regulations that affect them.

The authors of the blog are attorneys in Epstein Becker Green’s Labor and Employment and Health Care and Life Sciences practices: Jay P. Krupin, Lynn Shapiro Snyder, Kerry M. Parker, Robert Berg, Gretchen Harders, Kara Maciel, Kathleen Peterson, Evan Rosen, Pamela Tyner, and Kathleen Williams.

Visit the Health Employment and Labor Blog at www.healthemploymentandlabor.com.

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PPACA-"Cert. Worthy"

mcapezza@ebglaw.com (Michelle Capezza) — Tue, 10 Jan 2012 16:34:00 GMT

In accordance with the briefing schedule issued last December, initial briefs have been filed with the U.S. Supreme Court for its judicial review of certain issues under the Patient Protection and Affordable Care Act of 2010 (“PPACA”). The issues to be reviewed by the Court include whether (i) the minimum coverage provisions under PPACA and individual mandate to buy health insurance is a valid exercise of Congress’ power under Article I of the U.S. Constitution, (ii) the Anti-Injunction Act will prevent a ruling from the Court until such time as a tax is actually collected under PPACA, (iii) the individual mandate, if found unconstitutional, is severable from PPACA so that the law’s other provisions can be upheld, and (iv) Medicaid expansion is constitutional.

In its Brief for Petitioners (Department of Health and Human Services et al. v. State of Florida et al.) concerning the constitutionality of the minimum coverage provision and individual mandate under PPACA, the Obama Administration argues that the minimum coverage provision is within Congress’ power to enact because it is a “necessary component of a broader scheme of interstate economic regulation”. Further, “within that scheme, the provision itself regulates economic conduct with a substantial effect on interstate commerce, namely the way in which individuals finance their participation in the health care market”. The Brief argues that a “point-of-sale” requirement would not have been a feasible alternative in light of the realities of insurance needing to be purchased in advance and the legal duty for emergency care to be provided regardless of ability to pay. In addition, the Brief argues that Congress’ taxing power also provides support to uphold the minimum coverage provision since the practical operation of the minimum coverage provision is as a tax law where non-exempt federal income taxpayers will have increased tax liability for months in which they fail to maintain minimum coverage for themselves or their dependents. Respondents arguments are due to be filed on or before February 6, 2012.

The U.S. Supreme Court will hear arguments on these issues in March over a three-day period commencing March 26^th. Before reaching the minimum coverage and individual mandate debate, the Court will need to determine if the Anti-Injunction Act will prevent a ruling until 2014 when the provisions actually take effect and a tax is imposed. It is anticipated that if this hurdle can be surmounted, the Court may issue an Opinion on the constitutional issues this June. Undoubtedly, this will be an important decision to watch.

Extension of Due Date for Summary of Benefits Coverage under PPACA

mcapezza@ebglaw.com (Michelle Capezza) — Mon, 28 Nov 2011 21:35:34 GMT

On November 17, 2011, the Departments of Labor, Treasury and Health and Human Services issued a set of Frequently Asked Questions About Affordable Care Act Implementation (Part VII) and Mental Health Parity Implementation. In FAQ 1, the Departments noted that they received many comments on the proposed regulations concerning the requirement to provide group health plan participants and beneficiaries with a summary of benefits coverage that accurately describes the benefits and coverage available under the plan and a uniform glossary of terms (“SBC”). The FAQs provide that the Departments intend to issue, as soon as possible, final regulations that address these comments and other feedback on the proposed regulations and requirements. The Departments stated that until final regulations are issued and applicable, plans and issuers are not required to comply with the SBC requirements. Although the FAQs do not provide information regarding when the final regulations will be issued, they do state that “it is anticipated that the Departments’ final regulations, once issued, will include an applicability date that gives group health plans and health insurance issuers sufficient time to comply”. Thus, it appears that there will not be a March 23, 2012 effective date for compliance with the SBC requirements. However, the issuance of the final regulations and the applicability date will need to be monitored. It would be advisable to continue preparations for compliance with the SBC requirements under current guidance (i.e., gathering and organizing necessary information) and then make any necessary modifications once the final regulations are issued during a final review prior to implementation.

Get Ready for the Summary of Benefits Coverage under PPACA

mcapezza@ebglaw.com (Michelle Capezza) — Thu, 22 Sep 2011 14:48:46 GMT

On March 23, 2012, another requirement under the Patient Protection and Affordable Care Act (the “Act”) will be effective-the requirement to provide group health plan participants and beneficiaries with a summary of benefits coverage that accurately describes the benefits and coverage available under the plan and a uniform glossary of terms (“SBC”). These requirements were incorporated under the Internal Revenue Code and ERISA (in addition to existing summary plan description requirements). Under currently proposed regulations, health insurance issuers will also be required to provide this type of information to group health plan sponsors at the time of application or request for information regarding coverage within seven days of the request (including an obligation to update such information should it change); this information must also be provided upon renewal (30 days in advance of a new policy year in a case of an automatic renewal).

It is important for plan sponsors of group health plans (both insured and self-insured) to become familiar with these requirements as the effective date will soon be here. Some of the key elements of the SBC are as follows. The SBC must address each benefit package offered and be provided with application materials for enrollment or no later than the time of enrollment (with additional rules for special enrollment periods) and no later than 7 days following a request. If the health insurance issuer offering the coverage provides a complete, timely SBC to the plan’s participants and beneficiaries, the plan’s requirement to provide the SBC will be satisfied. The SBC must include such information as uniform definitions of insurance and medical terms, description of coverage (as well as cost-sharing information, exceptions and limitations on coverage), continuation of coverage and renewability provisions, examples of coverage/cost for common scenarios (e.g., pregnancy, chronic conditions), premiums and various other statements and contact information. A statement must also be included regarding whether the plan provides minimum essential coverage-although this requirement will be effective January 1, 2014 to coordinate with other requirements under the Act.

Under the proposed regulations, the SBC may not exceed four double-sided pages in length, and may not include print smaller than 12-point font. Where 10% of a county is literate only in the same non-English language, interpretive services and written translations of the SBC must be available to those participants and beneficiaries. Plans and issuers subject to ERISA or the Code may provide the SBC electronically if the rules under the Department of Labor’s electronic disclosure safe harbor are met. Any state laws that impose on health insurance issuers requirements that are stricter than those imposed by the Act will not be superseded. The proposed regulations also clarify that material modifications to plans or coverage terms that are not reflected in the SBC must be communicated no later than 60 days prior to their effective date.

There are still many unanswered questions with regard to the SBC such as whether the SBC can be provided as part of a summary plan description (e.g., after a cover page or table of contents) as well as certain timing requirements for providing the SBC (such as providing it along with other plan materials during open enrollment), the terms that should be included in the glossary, and the coverage example scenarios. The comment period on the proposed regulations will close on October 21, 2011. It is anticipated that following the close of the comment period, final guidance will be issued with sufficient time to prepare for the March 23, 2012 effective date. Failure to adhere to these rules results in penalties: $1000 penalty for any willful failure to provide this information including a separate fine for each individual or entity for whom there is a failure to provide an SBC (with more guidance concerning the enforcement of these penalties against group health plans to be issued by the Department of Labor), as well as potential $100 per day per individual excise taxes (which will need to be reported on an IRS Form 8928). It is important to start preparing for these requirements now, and coordinating efforts with plan service providers and insurers to properly organize and present this information to participants and beneficiaries.

Proposed Regulations Released Relating to Health Insurance Premium Tax Credits under Affordable Care Act while Eleventh Circuit Finds Individual Mandate Unconstitutional

mcapezza@ebglaw.com (Michelle Capezza) — Fri, 12 Aug 2011 22:29:45 GMT

On August 12, 2011, the Departments of Treasury and Health and Human Services released Proposed Regulations to provide guidance to individuals who enroll in qualified health plans through State-based Exchanges, as envisioned under the Affordable Care Act, and to provide guidance to Exchanges that make qualified health plans available to individuals and employers. The Exchanges will be one-stop marketplaces where consumers can buy private health insurance plans. The premium tax credit is designed to help individuals and families with incomes between 100% and 400% of the federal poverty level (approximately $22,350 to $89,400 for a family of four in 2011) afford health insurance where they are not otherwise eligible for other coverage such as Medicare, Medicaid or affordable employer-sponsored coverage (i.e., the employee only premium exceeds 9.5% of household income or fails to cover 60% of total allowed costs). These Proposed Regulations provide that the credit may be advanced by the Department of Treasury directly to the insurance company. Under related employer mandate rules, applicable large employers will be liable for excise taxes effective in 2014 if they have any full-time employees that are certified to receive a premium tax credit or cost-sharing reduction in connection with enrollment in health insurance through a State Exchange and either the employer fails to offer to its full-time employees (and their dependents) the opportunity to enroll in an employer sponsored plan that provides “minimum essential coverage” or offers such a plan that is unaffordable. The Proposed Regulations relating to the premium tax credits indicate that it is anticipated that future guidance will provide a safe harbor permitting employers to base the affordability calculation on wages they pay their employees rather than on a household income basis.

While coordination of efforts appear to be underway as they pertain to the employer mandate and individual mandate under the health reform law, the U.S. Court of Appeals for the Eleventh Circuit also issued a decision on August 12, 2011 ruling that the individual mandate under the Affordable Care Act is unconstitutional. The Court opined that the individual mandate requires Americans to buy an expensive product from a private insurance company from birth to death and that Congress cannot mandate such purchases. However, there is now a split in the appeals courts as the U.S. Court of Appeals for the Sixth Circuit has found that the individual mandate is constitutional.

It remains to be seen whether a ruling from the U.S. Supreme Court as to the constitutionality of the individual mandate will be issued prior to 2014 and the impact it will have on the role of the Exchanges and employer mandate taxes. This issue will need to be followed closely in order to properly plan and maintain employer-provided health coverage.

The Technology Team Remembers Lola Miranda Hale

mcapezza@ebglaw.com (Michelle Capezza) — Mon, 08 Aug 2011 15:09:23 GMT

It is with great sadness that we announce the passing on August 4, 2011 of our esteemed colleague, Team member and friend, Lola Miranda Hale. A 1968 graduate of Fordham University School of Law, Lola was an excellent corporate and securities lawyer, an Illinois Super Lawyer and recently named to Who’s Who Legal Illinois. An active leader in many organizations, an avid published writer, and national public speaker, Lola made complicated issues easy to understand and was an asset to all with whom she worked. Lola was an original, and among the founding members of our Technology Team. We will miss her greatly.

Department of Labor's EBSA Provides Extension to Applicability Dates for Retirement Plan Fee Disclosures

mcapezza@ebglaw.com (Michelle Capezza) — Mon, 18 Jul 2011 20:36:16 GMT

On July 13, 2011, the U.S. Department of Labor’s Employee Benefits Security Administration issued a final regulation under ERISA to extend and align the applicability dates for retirement plan fee disclosure rules (i.e., the service provider fee and conflicts of interest disclosures to plan fiduciaries as well as the participant-level fee disclosures). The service provider disclosures may now be provided no later than April 1, 2012 (an extension from January 1, 2012 as indicated in prior guidance). There may also be additional guidance before the end of this year as to what those disclosures must include but the Department of Labor has indicated that any changes to last year’s interim final regulations pertaining to these disclosures should not require additional compliance time or another extension. In addition, the new guidance provides that the initial participant-level fee disclosures can be provided after the effective date of the service provider disclosures (no later than May 31, 2012 for a calendar year plan). This provides an extra month to comply with these rules. Further, the initial quarterly statements can now be provided by August 14, 2012 (an extension of three months from the last issued guidance). These extensions will hopefully afford plan sponsors and administrators the requisite additional time for compliance with and coordination of responsibilities with respect to these two requirements.

It is worth repeating that plan sponsors and fiduciaries of 401(k) plans and pension plans will need to evaluate the reasonableness of the service provider fee disclosures that they will receive and be prepared to terminate contracts/arrangements with service providers that do not comply with the rules. In addition, fiduciaries of 401(k) plans will need to be prepared to organize and distribute the participant-level fee disclosures in accordance with the requirements of those rules.

Department of Labor's EBSA Proposes Extension to Align Applicability Dates for Retirement Plan Fee Disclosures

mcapezza@ebglaw.com (Michelle Capezza) — Thu, 02 Jun 2011 15:27:47 GMT

Last year, two significant sets of regulations were issued that will affect qualified plan fiduciary responsibility and administration. Last July, interim final regulations were issued requiring retirement plan service providers to disclose detailed information regarding their fees and potential conflicts of interest to plan fiduciaries. These service provider disclosures were scheduled to apply to plan contracts and arrangements for services on or after July 16, 2011. Since those regulations were issued, there has been much discussion surrounding compliance with these rules, including whether a summary format of information might be necessary to help plan sponsors understand and know what to do with the financial information that will be disclosed by plan service providers. The Department then announced earlier this year that it would extend the compliance deadline to January 1, 2012, but this wasn’t yet official. In addition, participant-level fee disclosure regulations were issued on October 20, 2010 to be effective for plan years on or after November 1, 2011 with a 60-day transition period. These rules would require plan administrator’s of 401(k) plans, for example, to disclose certain plan and fee information to participants who direct their investments. On June 1, 2011, the Department proposed making the January 1, 2012 extension of the service provider disclosures compliance date official, as well as extending the time a calendar year 401k plan has to furnish the initial participant-level fee disclosures to no later than April 30, 2012 (and up to May 15, 2012 with regard to quarterly statements) in order to provided additional time for compliance and coordination of the two efforts.

It is important to be mindful of these requirements and the upcoming due dates. Plan sponsors and fiduciaries of 401(k) plans and pension plans will need to evaluate the reasonableness of the service provider fee disclosures that they will receive and be prepared to terminate contracts/arrangements with service providers that do not comply with the rules. In addition, fiduciaries of 401(k) plans will need to be prepared to organize and distribute the participant-level fee disclosures in accordance with the requirements of those rules. To the extent there are comments on these proposed effective dates, the Department of Labor is currently soliciting comments on these proposals to extend the effective date of the rules mentioned above. Comments can be submitted on or before June 15, 2011 and can be submitted electronically to e-ORI@dol.gov.

Government Seeks Comments on Employer Mandate Related Issues Under Health Reform

mcapezza@ebglaw.com (Michelle Capezza) — Thu, 05 May 2011 20:05:10 GMT

As part of the process of planning for implementation of health reform pursuant to the Affordable Care Act, the Department of Treasury, the Department of Labor and the Department of Health and Human Services are working together to develop a series of regulations and administrative guidance. One aspect of the Affordable Care Act provides that employers with 50 or more full-time employees will be considered “applicable large employers” subject to an employer mandate tax effective in 2014. Under these rules, such large employers will be liable for excise taxes if they have any full-time employees that are certified to receive a premium tax credit or cost-sharing reduction in connection with enrollment in health insurance through a State Exchange and either the employer fails to offer to its full-time employees (and their dependents) the opportunity to enroll in an employer sponsored plan that provides “minimum essential coverage” or offers such a plan that is unaffordable. These taxes will be assessed monthly and may be 1/12^th of $2000 per full time employee (not counting the first 30 full time employees) in the case where no employer plan is offered. Where a plan is offered but it is unaffordable (as determined under the rules), the tax scheme will be lesser of 1/12 of $3,000 times the number of employees receiving a premium tax credit or 1/12 of $2,000 times the number of full time employees (not counting the first 30 employees in the calculation). The definition of full-time employee is critical in determining whether and, if so, to what extent an employer may incur these free-rider liabilities.

With respect to the employer mandate, the IRS has recently published Notice 2011-36, and seeks comments by June 17, 2011 with respect to potential approaches that may be set forth in future proposed regulations concerning various issues such as who is a full-time employee and possible exceptions for offering coverage to certain categories of workers. For example, the Affordable Care Act provides that a full-time employee in any month is an employee who is employed on average at least 30 hours of service per week (and equivalencies are used to determine hours of service of employees who are not full-time). However, a number of approaches and definitions will be proposed to address these rules. Notice 2011-36 includes possible methods for determining whether an employer is an applicable large employer (and application of controlled group rules), rules to determine an employee’s full time status and hours of service (including for hourly and non-hourly employees). Treasury and IRS are also considering proposing alternatives to a month-by-month determination of full-time employee status such as a look-back/stability period safe harbor to determine whether the employee averaged at least 30 hours of service per week or at least 130 hours of service per month. The Notice also seeks comments on the interpretation of the 90 day limitation on waiting periods for health plans and how it should be calculated, as well as the interplay of those rules with the employer mandate.

As today’s technology companies grow and compete for top talent, employer-provided benefits such as health coverage will require increased attention. Proper planning and compliance efforts will be required, and growing companies will want to be mindful of how their workforce is structured as they approach large employer thresholds. Now is the time to submit comments to the IRS in order to help shape the regulations that will impact these employer excise taxes related to health plans.