Health & Welfare Plans Newsletter

July 15, 2015

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[Guidance Overview]

Revisions to Paid Sick Leave Law Now in Effect in California
The new legislation does not go far enough ... [in clarifying several] significant requirements of the law, including whether the 30-day work requirement for eligibility applies to 30 actual work days or a 30-day period of calendar days. The language of the law strongly indicates that the requirement is referring to actual work days ... However, the California Labor Commissioner, without citing any legal or legislative basis for the interpretation, has informally suggested that the 30-day requirement should to be interpreted as calendar days." (Ogletree Deakins)


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[Guidance Overview]

Clean-Up Legislation for California's Paid Sick Leave Law Goes into Effect
"In addition to the standard 1 hour of paid sick leave for every 30 hours worked accrual method, AB 304 now adds two additional alternative accrual methods under Labor Code section 246(b)(3)-(4) to allow alternative accrual methods that are not necessarily tied to hours worked, but yet accrued on a regular basis ... AB 304 amended Labor Code section 246(k) to clarify how an employer will calculate the rate of pay for paid sick leave provided to nonexempt and overtime exempt employees. For nonexempt employees, Section 246(k) was amended to now provide two methods to choose from in calculating paid sick time[.]" (Liebert Cassidy Whitmore)

Connecticut Takes Next Steps Toward Implementing Paid Family and Medical Leave
"Connecticut has moved one step closer to implementing statewide paid family and medical leave for employees. However, details about funding and the extent of coverage that any ultimately adopted measures would provide remain to be seen.... The bill requires the Labor Commissioner to contract with a consultant by no later than October 1, 2015 to create an implementation plan, ... The consultant will also be required to perform an actuarial analysis of the level of employee contributions that would be necessary to ensure a sustainable and fully funded program." (Proskauer's Law and the Workplace)

Eight Ways to Stop Intermittent FMLA Abuse
"The key is having a clear, FMLA-compliant strategy in place to ensure workers won't be able to commit intermittent leave abuse.... [1] Take action early.... [2] Check for accommodations.... [3] Use leave of absence request forms.... [4] Enforce company call-in policies and procedures.... [5] Use certifications/recertifications to your advantage.... [6] Act on your suspicions.... [7] Dock their pay.... [8] Make 'em use paid time first." (HR Benefits Alert)

Exactly When May Employers Cut Off Medical Coverage to Adult Dependent Children?
"Small employers are not subject to penalties under PPACA's adult coverage mandate if they do not offer dependent coverage at all, or terminate dependent coverage on the child's 26th birthday; but large employers that are subject to the employer mandate are subject to penalties if they do not offer dependent coverage to the children of their full-time employees through the entire month in which the dependent attains age 26." (Benefit Revolution)

Tenth Circuit Upholds HHS Procedures for Opting Out of Contraceptive Coverage
"[The Court] found that the nuns could opt out of a requirement to provide contraceptive coverage under an 'accommodation' devised by the administration. The rule does not impose a 'substantial burden' on the nuns' free exercise of religion, the court said. Four other federal appeals courts -- in the District of Columbia, Philadelphia, Chicago and New Orleans -- have issued similar decisions upholding the accommodation ... The court rejected the Little Sisters' assertion that this arrangement imposed a substantial burden in violation of the Religious Freedom Restoration Act of 1993." [ Little Sisters of the Poor v. Sebelius , No. 13-1540 (10th Cir. July 14, 2015)] (The New York Times; subscription may be required)

The ACA Contraceptive Coverage Controversy, Made Simple
"Almost no observer of this legal saga expects [the recently-issued final regulations ] to be the end of the matter. The main reason for that skepticism is that the rules do keep the religious institutions in the mix: they have to do something to get the protection they want.... That is basically a legal as well as a theological and moral argument, and, in its legal form, is a claim under the federal Religious Freedom Restoration Act that the institutions' lawyers have been using in the court cases. They had remarkable success in the federal trial courts -- the district courts -- where they won more than eighty percent of the time. But, when the cases have reached the federal appeals court level in the wake of the Supreme Court's Hobby Lobby ruling , the institutions' objections have been turned aside each time, so far." (SCOTUSblog)

Nonprofit Obamacare Insurers Have Lower Premiums Than For-Profit Insurers in Most Counties That Use Healthcare.gov
"[N]onprofit insurers offered the lowest silver plan premiums in 1,072 of the 1,841 counties where both nonprofit and for-profit insurers offered silver plans, a 58% to 42% advantage over for-profit insurers.... The least expensive platinum plan premiums from nonprofit insurers were over 11% lower than the least expensive platinum plan premiums from for-profit insurers." (HealthPocket)

Benefits in General; Executive Compensation

[Official Guidance]

Text of FLSA Administrator's Interpretation 2015-1: Application of the FLSA's 'Suffer or Permit' Standard in the Identification of Employees Who Are Misclassified as Independent Contractors (PDF)
"The FLSA's definition of employ as 'to suffer or permit to work' and the later-developed 'economic realities' test provide a broader scope of employment than the common law control test.... A worker who is economically dependent on an employer is suffered or permitted to work by the employer. Thus, applying the economic realities test in view of the expansive definition of 'employ' under the Act, most workers are employees under the FLSA ... When determining whether a worker is an employee or independent contractor, the application of the economic realities factors should be guided by the FLSA's statutory directive that the scope of the employment relationship is very broad. This Administrator's Interpretation then addresses each of the factors, providing citations to case law and examples." (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])

Text of U.S. Solicitor General Brief to Supreme Court on Tracing Requirement for ERISA Benefit Overpayments (PDF)
"Permitting a fiduciary to enforce an equitable lien only against identified third-party recovery funds in the defendant's possession is consistent with ERISA's design. To be sure, in some cases, the beneficiary's disposition of the funds will prevent the fiduciary from recovering the reimbursement to which it is entitled. But that possibility has been clear since Great-West, and Congress has not acted to override this Court's construction of Section 502(a)(3) in reimbursement cases." [ Nat. Elevator Indus. Health Benefit Plan v. Montanile , No. 14-11678 (11th Cir. Nov. 25, 2014; cert. pet. granted Mar. 30, 2015)] (Office of the Solicitor, U.S. Department of Labor)

Press Releases

Final Judgment Entered After Three-Year Legal Battle on Behalf of Michigan and Iowa-Based Pension Plans Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Fiduciary Investment Advisors Expands Consulting Team Fiduciary Investment Advisors, LLC [FIA]

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