Employment Law - Health Benefits

Front 1

ERISA

Back 1

- this is the primary federal law related to employee benefits
- enacted mainly to combat abuses in the administration and investment of private pensions
- Applies to other employer sponsored/employer provided benefits
- Does not require employers to provide pensions/other benefits, however if they do provide them there are certain minimum standards that need to be satisfied.

Front 2

ERISA Covered plan types

Back 2

1) Pension plans
2) Welfare benefit plans

Front 3

Welfare Benefit Plans

Back 3

broadly defined and include:
- medical, surgical, or hospital care of benefits;
- benefits in the event of sickness, accident, disability, death or unemployment;
- vacation benefits;
- apprenticeship or training programs;
- day care centers;
- scholarship funds;
- prepaid legal services, and
- other benefits

Front 4

§510 of ERISA (discrimination)

Back 4

prohibits the discharge of an employee to prevent benefit accrual and discrimination against any beneficiary for:
1) asserting their rights under ERISA or
2) retaliating against an employee for exercising their rights under the statute.

Front 5

§510 of ERISA (discrimination) - Showing

Back 5

must show the employer acted with the intent to deprive the employee of health benefits.
Genearally requires:
1) Discharge shortly after notifying employer of disease
2) Failure to follow normal termination procedures
3) Incentive to avoid high medical costs

Front 6

Title VII Health Benefit Claim (def)

Back 6

- Used when discriminated against using benefits.

Front 7

Title VII Health Benefit Claim Burdens (3)

Back 7

1. Plaintiff has burden to show prima facie case
2. Burden shifts to the employer to show a legitimate non-discriminatory reason
3. Burden shifts to plaintiff to show proof of pretext – this is very hard do to show because you can usually find a legitimate reason to let the person go.

Front 8

Title VII Health Benefit Claim - Prima Facie Case

Back 8

Disparate treatment:
• Employee was denied benefits that were afforded to other employees of a different class (pregnancy, marital status, gender, race, etc.)

Disparate Impact:
• Employee must show that the policy/practice was more burdensome in its application to one class of employees over another.

Front 9

§510 of ERISA (discrimination) - Outsourcing

Back 9

- The employer’s sole motivation must be to avoid paying for employees’ ERISA benefit plans.
- VERY HARD for employees to be successful with outsourcing claims (under §510) because it is relatively easy for employers to articulate a legitimate, nondiscriminatory reason for outsourcing.
- These claims are analyzed under the McDonnell Douglas Framework

Front 10

ERISA Preemption

Back 10

- Gives BROAD preemption of “any and all state laws insofar as they may now or hereafter relate to any employee benefit plan”

Front 11

ERISA Preemption Exceptions (3)

Back 11

1. State laws that regulate insurance, banking, or securities
2. Generally applicable criminal laws
3. Qualified domestic relations orders

Front 12

COBRA (applies to)

Back 12

- Employers with 20 or more employees who offer health benefits
- Closely related corporations with the same ownership may be considered as a single employer

Front 13

COBRA (Requires) (4)

Back 13

Covered employers to
1) offer continued coverage to
2) former employees and qualified beneficiaries (including children born or adopted during the period of COBRA coverage).
3) When there is a qualifying event
4) Give notice

Front 14

COBRA (term)

Back 14

- must provide coverage for 18-36 months or until coverage begins under another plan.

Front 15

COBRA (term) HIPPA Expansion

Back 15

1) The 18 month min coverage is extended to 19 months if:
- at the time of the qualifying event, the beneficiary (employee or qualified beneficiary) was disabled.
- Also available if they become disabled within the first 60 days of the COBRA coverage
2) COBRA coverage may be terminated before 18 months if the qualified beneficiary becomes covered under another group health plan with no preexisting condition limitation or exclusion.

Front 16

COBRA (qualifying event)

Back 16

Triggers COBRA obligations and includes:
- Termination: For any reason other than “gross misconduct.” Term not defined in statute, but it does extend to a criminal assault off of the job (Zickafoose).
- Reduction of hours

Front 17

COBRA (offered coverage)

Back 17

- must be identical to the coverage available to the beneficiary immediately before the qualifying event
- Employer may not deny COBRA continuation coverage under its health plan to an otherwise eligible beneficiary because he was covered under his wife’s plan at the time he elected COBRA coverage (Geissal v. Moore Med. Corp.)

Front 18

COBRA (notice)

Back 18

A plan adiministrator must notify ANY QUALIFIED BENEFICIARY of their right to continue health insurance up to 18 months after a qualifying event

Front 19

COBRA (notice) Burden

Back 19

the burden of notice falls on the plan administrator not the qualified beneficiary

Front 20

COBRA (notice) Requirements

Back 20

Satisfied if:
o Post office clerk verifies that notice was received and mailed (Hearst)
o Notice mailed to the address supplied by the employee on the benefits enrollment form
Not satisfied if:
o Notice letter generated (not sufficient if this is the sole evidence of notice satisfaction)

Front 21

HIPPA (Applies to)

Back 21

1) Employer based group health care plans (ERISA qualified,
2) self-insured, employee welfare plans) and
3) commercially issued employment based group health insurance.

Front 22

HIPPA (Effects) (2)

Back 22

1) Curtails use of exclusions to preexisting conditions
2) Privacy Rule

Front 23

HIPPA Preexisting Condition Exclusion

Back 23

- Insurers and employers may apply a one-time, maximum 12-month exclusion for illnesses that were diagnosed prior to enrollment, but individuals must be given credit for time they were not covered under the plan.
- Someone who changes jobs is eligible immediately for health care benefits
- NO EXCLUSONS for pregnancy, newborns, or adopted children
- No exclusions for genetic predispositions

Front 24

HIPPA Preexisting Condition Denial (4)

Back 24

Prohibits group health plans and health insurers connected with group health plans from using an individual’s health history or risk factors in denying eligibility or setting individual premiums
- No discrimination based on health status in their eligibility or premium contributions
- Individuals cannot be charged higher premiums than others who are “similarly situated” e.g. full-time/part-time status or geographic location
- IF an insurer issues group health plans to small employer market they must accept all applying small employers and all eligible employees.
- No discrimination because of an individual’s participation in risky activities (such as motorcycling or skiing) but MAY exclude coverage for conditions resulting from risky activities

Front 25

HIPPA Privacy

Back 25

Regulates the electronic transfer of health claims information.

Applies to: Three classes of entities
• Health providers
• Health plans
• Health clearinghouses

Employers: Are not covered but since the benefir plans are, they are required to build a “fire wall” between employee health benefit information and other employment records.

Front 26

Family Medical Leave Act (FMLA)

Back 26

Employees get up to 12 weeks of unpaid leave in a 12 month period for childbirth, adoption, or serious health condition of the employee or some relative of the employee IF the employee is the one providing the care

Front 27

FMLA Reqs (2+)

Back 27

1) Employee is providing the care
2) Worked for 12 months and more than 1250 hours: Employee is a full or 75% timer.

- Caveat: Employer can make you take your paid benefit time first

Front 28

FMLA Effect (2)

Back 28

Employee gets
1) Up to 12 weeks unpaid leave in a 12 month period
2) Employee gets exact or comparable job when they come back

Front 29

FMLA Penalties (2)

Back 29

1) Lost wages plus liquidated damages (usually double)
2) Attorney’s fees.

Front 30

Patient Protection and Affordable Health Care Act of 2010 (PPACA)

Back 30

Puts requirements on Employers, individuals and the state to have minimum health insurance coverage.

Front 31

PPACA Employer responsibilities

Back 31

Employers are not required to provide coverage
- however, beginning in 2014m certain large employers that do not offer essential health benefits that is affordable to their employees will be penalized.

Front 32

PPACA Employer responsibilities - Penalty

Back 32

$2000 for each year (or $166.67 for each month) multiplied by the number of full-time employees
- the first 30 employees do not count towards the penalty

Front 33

PPACA Employer responsibilities - Essential Health Benefits

Back 33

includes:
- Ambulatory patient services;
- Emergency services;
- Hospitalization;
- Maternity and newborn care
- Mental health and substance use disorder services, including behavioral health treatment
- Prescription drugs
- Rehabilitative and habilitative services and devices;
- Laboratory services;
- Preventative wellness services and chronic disease management; and
- Pediatric services

Front 34

PPACA Employer responsibilities - Affordable

Back 34

Premium of the plan must
1) cost less than 9.5% of the employee’s household income and
2) must provide a minimum value of at least 60% of the coverage.

Front 35

PPACA Employer responsibilities - Automatic Enrollment

Back 35

Larger employers (those with more than 200-full time employees) who offer group health plans must
1) automatically enroll new full-time employees in a health benefits plan (and to continue enrollment of current employees)

Notice: Must give notice to the employees of the automatic enrollment with the option to op out. If employees do not want coverage they must affirmatively opt out of the program

Front 36

PPACA Employer responsibilities - Free Choice Vouchers

Back 36

Employers that offer benefits to qualified employees must offer a “free choice voucher” that can be used to purchase a qualified health plan on the state health exchange in lieu of receiving coverage through the employer-sponsored plan.

Front 37

PPACA Employer responsibilities - Lifetime and Annual Limits

Back 37

Beginning in 2014 prohibited all together.

Front 38

PPACA Employer responsibilities - Rescissions

Back 38

Can't recind coverage for enrollees once they are covered.

Unless the current enrollee has
1) committed fraud or
2) made an intentional misrep of material fact as prohibited by the terms of the plan or coverage.

Front 39

PPACA Employer responsibilities - Exemption

Back 39

1) Large employers
2) with seasonal workers and

1) large employers
2) with over 50-full time workers for 120 days or less out of the calendar year, and
3) the employees in excess of the 50 employees during that 120-day period are seasonal workers

Front 40

PPACA Individual responsibilities

Back 40

indvls will be required to maintain minimal essential health care coverage.

Front 41

PPACA Individual responsibilities - Penalty

Back 41

Could be either percentage of household income or flat $ amount.

Front 42

PPACA Individual responsibilities - Exceptions (4)

Back 42

1) Those who object to health care coverage on religious grounds
2) Those not lawfully present in the United States
3) Those who are incarcerated
4) Low income individuals who cannot afford coverage

Front 43

PPACA Individual responsibilities - Low income individuals who cannot afford coverage Exception (4)

Back 43

1) Individuals whose required contribution for coverage would exceed 8% of household income for the taxable year, and
2) individuals whose income is less than 100% of the federal poverty line,
3) members of Indian tribes, and
4) individuals who suffer hardship

Front 44

PPACA State Responsibilities

Back 44

Must establish State Health Exchange