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Friday, March 26, 2010

How the Health Care Overhaul will Affect Business
















Re-Print: Opelika-Auburn News
Sunday, March 28, 2010


Alabama@Work
By: Tommy Eden, Attorney

The Patient Protection and Affordable Care Act has now been reconciled by Friday's House vote, with President Barack Obama set for a final signature on Tuesday. Below is how we anticipate the final measure may affect every Alabama employer:

Final Rush: In the rush to pass the bill, the House failed to include children under the immediate elimination of pre-existing conditions. The bill will not protect children with pre-existing health conditions from being denied health coverage until 2014. There will probably be a later fix to solve this problem. But right now, 2014 is the date for eliminating pre-existing condition restrictions for children.

“Pay-or-Play” Penalty: The following employer mandates apply in 2014:
• Employers with more than 50 employees will be required to offer health care coverage to employees or pay a penalty;
• The penalty for failure to provide coverage (applicable if at least one full-time employee receives government-subsidized Exchange coverage) is $2,000 per full-time employee (works at least 30 hours a week) in excess of 30 employees;
• Even if the employer does offer coverage, the employer still must pay an annual penalty if at least one full-time employee receives the government-subsidized coverage (complicated formula requires an actuary to compute);
• This penalty is equal to the lesser of: (a) $3,000 multiplied by the number of full-time employees who receive the premium tax credit, and (b) $750 multiplied by the number of the employer’s full-time employees; and in addition,
• Employers must provide a “free choice voucher” to each employee who: (a) has income below 400% of the federal poverty level, (b) would otherwise have to pay more than 8% of the premium for employer coverage, and (c) enrolls in a plan in the Exchange.
• All new insurance plans sold must exempt preventative care and screenings from deductibles.
• The new health care bill will set up a long-term care insurance program. Individuals who pay premiums into this system for at least five years will become eligible to receive support with daily living assistance.
• The fine on withdrawing funds from a Health Savings Account for non-medical expenses will increase by 5 to 10 percent.
• Employers will also need to start including the cost of health care on employee’s W-2 forms.

Elimination of Deduction for Prescription-Drug Subsidy for Retired Workers: Since 2006, companies have received a 28% federal subsidy, up to $1,330 per retiree, tax-free, to help pay for prescription-drug coverage. Until now, companies could deduct the subsidy from their taxes, essentially getting a second benefit from the money. Under the new law, effective in 2013, companies will no longer be able to deduct the subsidy, but it remains tax-free. The approximately 3,500 companies that have taken advantage of this tax subsidy will have to absorb the cost of its elimination or terminate prescription-drug coverage for retired employers, forcing them into Medicare Part D or Medicaid. The change in the law is expected to affect primarily industrial companies with retirees represented by collective bargaining pacts, whose benefits are more difficult for companies to cut. Companies will continue to receive the tax-free subsidy based on their retirees' contributions, but won't be able to deduct the amounts.

Small Employer Tax Credit: Employers with no more than 25 employees and less than $50,000 in average wages will be eligible for a tax credit for employer-provided health coverage up to 35% of the employer’s contribution if the employer contributes at least 50% of the premium. Beginning 2013 and continuing through 2015, a tax credit of up to 50% of an eligible small employer’s contribution for health coverage purchased through the “Exchange.”

Flexible Spending Plan Restrictions: Tax-free reimbursements (e.g., from health flexible spending accounts, health reimbursement accounts, and health savings accounts) will be prohibited for over-the-counter-drugs beginning in 2011. Annual pre-tax contributions to health flexible spending accounts will be capped at $2,500 beginning 2013.

Mandatory Coverage
Health Plans must within 6 months of passage:
• treat children up to age 26 as eligible dependents, and
• may not impose lifetime limits on the dollar value of coverage for children.

Beginning 2014 Health Plans must:
• may not impose annual limits on the dollar value of all coverage;
• start setting maximum out-of-pocket costs for participants;
• may not impose pre-existing condition exclusions on children; and
• must meet certain minimum benefit standards.

Waiting Period Eliminated: Waiting periods for health plan eligibility cannot exceed 90 days beginning 2014.

Highly Compensated Employees: Insured group health plans may not discriminate in favor of highly compensated employees, as has previously been the requirement for self- funded plans. After 2012 the deductibility of executive compensation for health insurance companies is limited to $500,000.

Increased Tax Withholding: The Medicare portion of the FICA tax increases to 2.35% (from 1.45%) for earnings over $200,000 for individuals (the threshold is $250,000 for couples) beginning 2013.

Cadillac Plans: Employers must pay a 40% excise tax on single coverage, to the extent the value is in excess of $8,500, and family coverage with a value in excess of $23,000 (with higher thresholds for certain “high-risk” occupations) beginning with 2018.

Enrollment is Automatic: Employers with more than 200 employees must automatically enroll its employees in the employer’s group health plan beginning in 2013. However, an employee may “opt-out” of the employer’s group health plan coverage and either obtain other coverage or pay the individual penalty. Virtually everyone must have by 2014 at least a minimum level of coverage or pay an individual tax penalty for failing to do so phased in over three years, and will be the greater of $695 per individual per year, up to a maximum of $2,085 per family per year, or 2.5% of household income.

Retiree Health Care: Reimburse employers for 80% of the cost of retiree health benefits in excess of $15,000 (up to $90,000) provided to retirees between the ages of 55 and 6l until 2014.
Common Sense Counsel: count the cost for your business and cast your vote in November for relief. Until then, every Alabama employer should update the benefit sections of their handbooks and ask your health care plan administrator for an explanation of how this law will effect your company.

Tommy Eden is a Lee County native, an attorney with the local office of Constangy, Brooks & Smith, LLP and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com

Friday, March 19, 2010

DOT Alcohol Testing Update: NHTSA Updates the Conforming Products List for Evidential Breath Testing Devices


















Alabama @ Work
By Tommy Eden

On March 11, 2010, the National Highway Traffic Safety Administration (NHTSA) published a notice in the Federal Register that updates the Conforming Products List (CPL) of instruments that conform to the model specifications for Evidential Breath Testing Devices. The major changes to the udpated Conforming Products List include four new instruments and an update to the mobility status of one existing instrument.
The following four instruments were added to the CPL:
- Alcotest 7510 [manufactured by Draeger Safety Inc., Irving, Texas]
- Alco-Sensor V [manufactured by Intoximeters, Inc. St. Louis, Missouri]
- Evidenzer [manufactured by Nanopuls AB, Uppsala, Sweden]
- Mark V Alcovisor [manufactured by PAS International, Fredericksburg, Virginia]
The following instrument's mobility status was updated to include 'mobile':

- Alcotest 9510 [manufactured by Draeger Safety, Inc., Irving, Texas]
View the udpated Conforming Products List at http://www.dot.gov/ost/dapc/testingpubs/20071217_CPL_EBT.pdf

Common Sense Counsel: Only those instruments listed on the Conforming Products List without an asterisk (*) are authorized for use in confirmation testing in the DOT alcohol testing program pursuant to 49 CFR Part 40.231. Use of any other testing device for DOT mandated testing would be a DOT violation and subject an employer to fines of up to $10,000. It is wise to also use this list for non-DOT testing as well since in Alabama UC & WC disqualifications are tied to DOT testing standards. An updated DOT and non-DOT Drug Free Workplace policy is also critical in light and recent changes. Also, keep in mind that non-DOT Alcohol Workplace testing is classified as a medical test under the ADA and should only be conducted based upon reasonable suspicion, or only after have the issue thoroughly researched by an attorney experienced in this field of law.


Tommy Eden is a Lee County native, an attorney with the local office of Constangy, Brooks & Smith, LLP and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com

Monday, March 15, 2010

EXPLANATION OF MOST FREQUENT UC DISQUALIFICATIONS IN ALABAMA















Compliments of: Sam Maloney, Field Deputy, State of Alabama Dept of Industrial Relations Unemployment Compensation Division

SECTION 25-4-77(a)(3): NOT ABLE OR AVAILABLE FOR WORK.
Disqualified for the period indicated. In the case of an indefinite disqualification where the claimant remains disqualified until able and/or available, and reapplies for his/her job, the employer will be notified. No employer charges unless and until claimant receives benefits.

SECTION 25-4-78(2): VOLUNTARILY LEFT WITHOUT GOOD CAUSE CONNECTED WITH WORK. Claimant is disqualified until he/she returns to insured or other acceptable work and earns 10 x WBA (Item 7) and has been separated from such employment under non-disqualifying conditions. No portion of benefits paid shall be charged to the employer’s tax rate account. Exception: Left because of illness or disability, including pregnancy, and complied with leave policy or, if no policy, notified employer of disability and sought reemployment when again able. No disqualification and employer
charged.

SECTION 25-4-78(3)a: DISCHARGED FOR DISHONEST OR CRIMINAL ACT, SABOTAGE, ACT ENDANGERING SAFETY OF OTHERS AND CERTAIN DRUG-RELATED OFFENSES. Must be in connection with work. Disqualified until reenters employment and earns wages equal to 10 x WBA (Item 7) and separates from subsequent employment for a non-disqualifying reason. For the purposes of the experience rating provisions of Section 25-4-54, no portion of benefits paid shall be charged to the employer’s tax rate account. The claimant shall not be paid benefits based
on wages paid for the period of employment when the disqualifying event occurred.

SECTION 25-4-78(3)b: DISCHARGED FOR MISCONDUCT CONNECTED WITH WORK OTHER THAN ACTS MENTIONED IN Sec. 78(3)a after previous warning. Same effect as Sec. 78(2). SECTION 25-4-78(3)c: DISCHARGED FOR MISCONDUCT CONNECTED WITH WORK OTHER THAN ACTS MENTIONED IN Sec. 78(3)a OR Sec. 78(3)b: Disqualified for the week in which discharged and the next 3 to 7 weeks. Reduces maximum benefits by number of weeks disqualified x weekly benefit amount. Relieves tax rate employer of ½ of benefit charges for benefits paid subsequent to period of disqualification.

SECTION 25-4-78(3)d: SUSPENDED AS A DISCIPLINARY MEASURE CONNECTED WITH WORK, OR FOR MISCONDUCT CONNECTED WITH WORK.
Disqualified for the week or weeks (not to exceed four weeks) in which, or for which suspended. Does not relieve employer of charges for benefits subsequent to period of disqualification.

SECTION 25-4-78(4): SEPARATED DUE TO REVOCATION OF NECESSARY LICENSE, PERMIT OR SURETY.
Disqualified until secures other work or license, permit or surety is restored and offers to return to work. Does not relieve employer of charges for benefits subsequent to period of disqualification.

SECTION 25-4-78(5): FAILURE WITHOUT GOOD CAUSE TO ACCEPT SUITABLE WORK. Disqualified 1 to 10 weeks from date of failure to accept work. Does not relieve employer of charges for benefits subsequent to period of disqualification.

Click below to: Attend Alabama Unemployment Compensation Bootcamp and learn how Alabama employers can win and the tools you will need!

http://www.alabamaatwork.com/2013/06/getting-started-to-win-alabama.html

10 WAYS ALABAMA BUSINESSES CAN PROTECT THEIR EXPERIENCE RATING















(Keeping your Unemployment Taxes low)

Compliments of: Sam Maloney, Field Deputy, State of Alabama Dept. of Industrial Relations Unemployment Compensation Division

1. Keep adequate records and retain them for a minimum of five years.

2. Answer every request for separation information within six work days from the mailing date of the request.

NOTE: In responding to a request for separation information concerning a former employee, you should not use general terms such as insubordination violation of company policy, absenteeism, or simply quit. If known, state the reason the claimant quit. If the claimant was discharged, provide specific details concerning the final incident that resulted in the separation. For example, if the discharge was due to absenteeism, state when he was last absent, why he was absent, and if he properly reported the absence. Explain rules or policies violated or how the claimant was insubordinate. List dates and reasons for prior warnings. You should furnish us with the reason(s) for separation promptly on this form and, if necessary, a separate sheet of paper. Prompt submittal of the facts is necessary for a good determination and could also protect your experience rating account. The facts you furnish will be used in the determination of eligibility and you will receive a notice of the administrative decision. Employers who have elected reimbursement in lieu of contributions must, under provision of the Law, reimburse the agency for all payments made based on wages they paid to the claimant. (See Privileged information: AL Code 25-4-116)

3. Notify the Department in writing at the time you discharge an employee for a dishonest or criminal act, sabotage, an act endangering the safety of others, use of illegal drugs, refusal to take a drug test, or altering a drug test.

4. Respond within 15 days to a Notice of Potential Charge to Your Tax Rating Account, if the employee left under potentially disqualifying circumstances or continues to work for you.

5. Appeal determinations on claims believed to be incorrect within 15 calendar days from the mailing date of the notice.

6. When it is necessary to lay off employees, rehire them as soon as possible in order to minimize benefit costs.

7. Verify your Statement of Experience Rating Charges.

8. Check your Tax Rate.

9. File all reports and pay all taxes when due.

10. Fully participate in the Department’s New Hire Program.

COBRA Continuation Coverage Assistance under ARRA














Alabama at Work
By Tommy Eden, Attorney

The American Recovery and Reinvestment Act of 2009 (ARRA), as amended on March 2, 2010 by the Temporary Extension Act of 2010, provides for premium reductions for health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly called COBRA. Eligible individuals pay only 35 percent of their COBRA premiums and the remaining 65 percent is reimbursed to the coverage provider through a tax credit. To qualify, individuals must experience a COBRA qualifying event that is the involuntary termination of a covered employee's employment. The involuntary termination must generally occur during the period that began September 1, 2008 and ends on March 31, 2010. (An involuntary termination of employment that occurs on or after March 2, 2010 but by March 31, 2010 and follows a qualifying event that was a reduction of hours that occurred at any time from September 1, 2008 through March 31, 2010 is also a qualifying event for purposes of ARRA.) The premium reduction applies to periods of health coverage that began on or after February 17, 2009 and lasts for up to 15 months.

Common Sense Counsel: The Department of Labor's Employee Benefits Security Administration has posted on the COBRA web page an updated COBRA Premium Reduction fact sheet and updated forms reflecting the Temporary Extension Act of 2010. The updated fact sheet is available at http://www.dol.gov/ebsa/cobra.html
Make sure you are using the right forms to avoid costly penalties of $110 a day for non-compliance.


Tommy Eden is a Lee County native, an attorney with the local office of Constangy, Brooks & Smith, LLP and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com

Monday, March 1, 2010

DOT Publishes 3 Drug and Alcohol Program Final Rules










Alabama @ Work
By Tommy Eden

On Thursday February 25, 2010 the DOT published three Drug and Alcohol Program Final Rules as follows:

1. One rule adopts in total an Interim Final Rule authorizing employers to disclose to State commercial driver licensing (CDL) authorities the drug and alcohol violations of employees who hold CDLs and operate commercial motor vehicles (CMVs), when a State law requires such reporting. This rule also permits third-party administrators (TPAs) to provide the same information to State CDL licensing authorities where State law requires the TPAs to do so for owner-operator CMV drivers with CDLs. It represents no change to the current regulations.

You can find this rule at: http://edocket.access.gpo.gov/2010/pdf/2010-3729.pdf

2. A second rule updates two important DOT forms - the U.S. DOT Alcohol Testing Form (ATF) and the Management Information System (MIS) Data Collection Form:

• While use of the new ATF is authorized immediately, its use is required by August 1, 2010.

• The new MIS form is authorized for use in 2011 to report calendar year 2010 MIS data.

You can find this rule at: http://edocket.access.gpo.gov/2010/pdf/2010-3731.pdf.

3. The third regulation adopts in total an earlier Interim Final Rule's procedures for using an alcohol screening device. Therefore, it represents no change to our current regulations.

You can find this rule at: http://edocket.access.gpo.gov/2010/pdf/2010-3730.pdf

Common Sense Counsel: There have been many changes in the DOT regulations over the past 2 years and more to come in April 2010 with a change in cutoff level and the addition of ecstasy to the testing panel. Now is a good time to audit you entire DOT training and compliance program.


Tommy Eden is a Lee County native, an attorney with the local office of Constangy, Brooks & Smith, LLP and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com

Unites States Supreme Court Limits Forum Shopping



















Alabama@Work
By Tommy Eden, Attorney

In Hertz Corporation v. Melinda Friend (United States Supreme Court February 24, 2010) the high court, in a rare unanimous decision, settled 51 years of splits in the federal circuits and held that a corporation's "principal place of business" for purposes of federal jurisdiction is its "nerve center," typically where its headquarters is located. Case at http://www.supremecourtus.gov/opinions/09pdf/08-1107.pdf

The decision will determine the legal battlefields on which employment class action and other litigation involving multistate corporations will be fought. Most corporations see federal courts as the friendlier forum, while plaintiff’s attorneys typically see state courts as more sympathetic to their causes.

Justice Steven Breyer writing for the Court noted, "Our test nonetheless points courts in a single direction, towards the center of overall direction, control and coordination. Our approach provides a sensible test that is relatively easier to apply, not a test that will, in all instances, automatically generate a result."

The case arises from a lawsuit brought by two Hertz employees, the car rental company, in California who sought damages and relief for themselves and a potential class of California citizens for violations of that state's wage-and-hour laws. The case was originally filed in state court but then removed by Hertz to federal district court pursuant to the U.S. Class Action Fairness Act.

The 9th U.S. Circuit Court of Appeals had used the "substantial predominance" of activities test; including facilities, employees and revenue. The 9th Circuit had held that Hertz's principal place of business was California, even though the company is incorporated in Delaware and has its headquarters in New Jersey. This ruling vacated the 9th U.S. Circuit Court of Appeals decision, the most often reversed circuit in the country.

The federal diversity statute states that a corporation is a citizen of its state of incorporation and of the state where it had its "principal place of business," but until this ruling that second category was never clarified by the high court.

Common Sense Counsel this case is one of the most highly significant cases to come out of the United States Supreme Court this term for Alabama employers. If you are subject to litigation out of state, and your headquarters are located in the State of Alabama, or Alabama is your State of incorporation, then you are advised to have your attorney look closely at this decision to see whether a request for change of venue is appropriate, or whether dismissal should be sought. Any litigation your company is currently involved in out-of-state should be carefully examined as well.


Tommy Eden is a Lee County native, an attorney with the local office of Constangy, Brooks & Smith, LLP and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com