Most employers know that the real costs from employee benefits come from unhealthy choices by employees. Premiums are just one indicator of the “health” of the group, but there are other soft costs that add up to large expenditures of capital. Low productivity and staffing issues can also be major cost drivers for the employer. Here are a few tips that you can share with your staff, or better yet, build into a custom Employee Wellness Program:
Get the Nutrition Facts
As you and your family strive to eat healthier, you should be aware of what is in the food you consume. The best way to know what is in the food products you buy is to read the nutrition facts on food labels.
The following information on labels will help you understand how much is in a portion and how this compares to recommended intake:
- Serving size – The serving size lists the recommended amount to be eaten by a single person. The rest of the nutrition facts are based on this amount.
- Calories and calories from fat – Especially important if you’re trying to lose or maintain weight, these numbers tell you how many calories are in each serving and where they’re coming from.
- Percent daily values – Based on the recommended consumption of 2,000 calories a day, this value indicates how the food product compares to recommended amounts.
When reading ingredients on a product label, keep in mind that ingredients are listed in descending order: ingredients with the greatest amount will be listed first, followed by ingredients used in lesser amounts.
FDA Bans Artificial Trans Fats by 2018
The Food and Drug Administration (FDA) has announced that artificial trans fats are no longer Generally Recognized as Safe (GRAS) and is requiring that they be phased out of the food supply by 2018.
While trans-fat does occur naturally in some meat and dairy products, many processed foods, such as crackers, coffee creamer and margarine, contain artificial trans fats. Artificial trans fats are created in partially hydrogenated oils (PHO)’s, which are oils that have been infused with hydrogen. This process keeps the oils solid at room temperature, and is used to maintain flavor and increase the shelf life of processed foods. Intake of trans fat has been shown to cause various health problems, including high cholesterol and coronary heart disease.
Strengthen Your Core with Plank Exercises
Core muscles are one of the most active muscle groups in the body. Whether you are typing, putting on your shoes, vacuuming or playing basketball, you are engaging your core muscles in some capacity. Because you use core muscles for so many activities, it is important to keep them strong and flexible. There are several specific benefits to maintaining a healthy core:
- Strong back muscles. Many people suffer from debilitating low-back pain. A strong core can relieve the lower back from extra strain and pressure.
- Improved balance and stability. A strong core stabilizes your whole body, increasing your range of motion and decreasing your risk of falling.
- Good posture. Often overlooked, posture is an important factor in overall health. By standing tall, your core muscles can minimize wear on the spine and allow you to breathe more deeply.
Core fitness should be factored into any exercise plan. The plank pose is a popular and effective exercise that is great no matter what your fitness goals are.
To try the plank, get into a pushup position. Bend your elbows so your forearms are resting on the floor directly underneath your shoulders. Focus on creating a straight line with your body from head to toe, and try to hold the pose for as long as you can (if this is too challenging at first, you can try bending your knees). Many people struggle to hold a plank pose for 30 seconds on their first attempt, but, with regular practice, you should be able to hold the position for longer intervals. A good goal if you’re just getting started is to work up to a two-minute plank.
Once you are able to hold this position for two minutes, you can move on to more advanced versions of the plank pose, such as lifting an arm or leg, or resting your forearms on an exercise ball.
Contact us today for more information on how to drive down costs by increasing your employee’s connection to wellness.
On July 15, 2015, the U.S. Department of Labor (DOL) issued an administrative interpretation to clarify how to determine whether a worker is an employee or an independent contractor.
Employee misclassification is a growing concern for the DOL. An increasing number of U.S. workplaces are restructuring their business organizations, creating a higher risk of misclassifying employees as independent contractors.
Employer misclassification has a direct impact on employee eligibility for benefits, legal protections (such as minimum wage and overtime rights) and taxation.
Worker Classification Tests
Several tests exist to determine whether a worker is an employee or an independent contractor. The most common tests include the common law or agency test, the economic realities test, the hybrid test and the IRS test.
Traditionally, the DOL has favored using the six-factor economic realities test because this test seeks to determine whether a worker is economically dependent on his or her employer or whether the worker is in business for him- or herself. The DOL’s rationale is that if the worker is economically dependent on the employer, the worker should be classified as an employee and protected by employment laws, including the Fair Labor Standards Act (FLSA) and the Family and Medical Leave Act (FMLA).
The Economic Realities Test
The six factors for the economic realities test are:
- Whether the worker’s job is an integral part of the employer’s business;
- Whether the worker’s managerial skill affects his or her opportunity for profit or loss;
- Whether the worker’s and the employer’s investments are comparable;
- Whether the work performed requires special skills and initiative;
- Whether the relationship between the worker and the employer is permanent or indefinite; and
- An analysis of the nature and degree of the employer’s control over the worker.
In the administrative interpretation, the DOL emphasized repeatedly that no one factor is determinative and that the factors should not be applied in a mechanical fashion. Rather, the DOL encourages employers to use the six factors as a guide in their efforts to classify workers correctly.
The DOL further explains that the six factors should be interpreted within the context of the FLSA’s definition of employment. The FLSA defines “to employ” as to suffer or permit someone to work. The DOL explains that this broad definition of employment was “specifically designed to ensure as broad of a scope of statutory coverage as possible.” This “suffer or permit” standard prevents employers from using agents to evade labor and employment responsibilities. According to the DOL, under the economic realities test, most workers will be considered employees subject to the FLSA.
An Integral Part of the Employer’s Business
A worker that performs activities that are an integral part of the employer’s business is more likely to be dependent on the employer, and, therefore, should be classified as an employee.
The administrative interpretation states that the courts have found the “integral” factor to be compelling even when the activity in question is just one component of the business or is performed by hundreds or thousands of other workers. For example, the DOL states, “a worker answering calls at a call center along with hundreds of others is performing work that is integral to the call center’s business, even if that work is the same as, and interchangeable with, many others’ work.”
The DOL also mentioned that work can be integral to an employers’ business even if it is performed away from the employer’s premises, at the worker’s home or even on the premises of the employers’ customers.
The focus of this factor is whether the worker’s managerial skill can affect his or her opportunity for profit or loss. To determine profit or loss opportunities, employers should look beyond the job at hand and determine whether the worker’s skills can lead to additional business from other parties or reduce the opportunities for future work.
When evaluating this factor, employers should consider a worker’s decision to hire others, purchase materials and equipment, advertise, rent space and manage timetables.
The DOL specifically mentions that a worker’s ability to work more hours and the amount of work available from the employer have “nothing to do with the worker’s managerial skills and do little to separate employees from independent contractors.” This is because both are likely to earn more if they work more and if there is more work available.
To determine whether the employer and worker investments are comparable, employers should look at the nature and the extent of the investments.
An independent contractor should make some investment and undertake at least some risk of loss if he or she is in business for him- or herself. The investment should support a business beyond any particular job. These types of investments include furthering the business’ capacity to expand, reducing business cost structure and extending the reach of the independent contractor’s market.
However, a worker’s investments should not be considered in isolation. They should be compared to the employer’s investment. If the worker’s investment is relatively minor, the employer and the worker may not be on the same footing and the worker may be economically dependent on the employer.
Finally, investing in tools and equipment is not an automatic indication of significant investment or that the worker is an independent contractor. This type of investment must be compared to the worker’s investment in his or her overall business and to the employer’s investment in the project and perhaps in its overall activities.
Special Skills and Initiative
A worker’s skills and initiative can be an indicator of economic independence. However, when considering a worker’s skill, employers should consider the worker’s business skills, judgement and initiative, rather than his or her technical skills, which are often required to perform the work. Special skills and initiative are indicators of economic independence when the worker can use them in an independent way, such as demonstrating business-like initiative.
The DOL provides the following illustrative examples:
|A highly skilled carpenter provides carpentry services for a construction firm; however, such skills are not exercised in an independent manner. For example, the carpenter does not make any independent judgments at the job site beyond the work that he is doing for that job; he does not determine the sequence of work, order additional materials, or think about bidding the next job, but rather is told what work to perform where. In this scenario, the carpenter, although highly-skilled technically, is not demonstrating the skill and initiative of an independent contractor (such as managerial and business skills). He is simply providing his skilled labor.|
|In contrast, a highly skilled carpenter who provides a specialized service for a variety of area construction companies, for example, custom, handcrafted cabinets that are made-to-order, may be demonstrating the skill and initiative of an independent contractor if the carpenter markets his services, determines when to order materials and the quantity of materials to order, and determines which orders to fill.|
Permanent or Indefinite Employment
Employment that is permanent or indefinite in character suggests that the worker is an employee. Most independent contractors will avoid permanent or indefinite work relationships and are usually hired to work until a job or a project is complete (even if this takes several months or years). Moreover, once a job or project is complete, the independent contractor does not necessarily continue to provide his or her services to the employer.
Employers should consider a worker’s reasons for intermittent, seasonal, permanent or indefinite employment. Neither working for others nor having multiple sources of income transforms a worker into an independent contractor. The key is to determine “whether the lack of permanence or indefiniteness is due to operational characteristics intrinsic to the industry (such as employers that hire part-time workers or use staffing agencies) or the worker’s own business initiative.”
For seasonal employment, the proper test to determine permanency is whether the employees worked for the entire operative period of a particular season, not whether the worker returns from season to season.
Nature and Degree of Employer Control
An independent contractor controls meaningful aspects of the work he or she performs. This type of control should lead objective observers to conclude that the worker is conducting his or her own business.
Control over meaningful aspects of the work may extend beyond controlling working hours and could include work schedules, dress code and task prioritization.
The DOL asserts that this control cannot be theoretical and explains that what counts is not what the worker could have done, but what the worker actually does.
Finally, the DOL warns that the control factor should not “play an oversized role” and dwarf other factors in the economic realities test when determining whether a worker is an employee or an independent contractor.
Please contact us for additional information on appropriate worker classification. We provide Solutions for Business. Solutions….that Work!
Provided by CIBC of Illinois, Inc.
On June 30, 2015, the U.S. Department of Labor (DOL) issued a proposed rule to modify the “white collar exemptions” provided by the Fair Labor Standards Act (FLSA). The white collar exemptions are minimum wage and overtime exception rules for executive, administrative, professional, outside sales and computer employees.
Specifically, the proposed rule seeks to:
- Increase the salary requirements for employees to be considered exempt;
- Implement automatic salary requirement updates; and
- Receive feedback on whether modifying the duties test is necessary at this time.
The DOL estimates that, if implemented, the proposed rule would extend overtime protections to approximately 5 million workers who are currently exempt under the white collar rules and would clarify overtime compensation eligibility for another 6 million white collar workers.
The DOL has invited the general public to comment on the proposed rule. Comments can be submitted electronically or via regular mail. All comments must be submitted or postmarked by Aug. 29, 2015.
Why Is the DOL Issuing a Proposed Rule?
On March 13, 2014, President Barack Obama directed the DOL to simplify and modernize the regulations that protect “white collar” workers under the FLSA.
The Administration’s concern is that current white collar exemption requirements are outdated, since the salary threshold has been changed only twice in the last 40 years. Fewer workers are eligible for overtime now than in the past due to inflation.
White Collar Exemptions
To qualify for the white collar exemption, an employee must meet a salary basis test, a salary level test and a duties test.
- The salary basis test is used to make sure the employee is paid a predetermined and fixed salary that is not subject to reduction due to variations in the quality or quantity of work.
- The salary level test is used to ensure that the employee meets a minimum specified amount to qualify for the exemption.
- The duties test requires that the employee’s job duties conform to executive, administrative or professional duties, as defined by law.
Higher Salary Requirements
The proposed rule would increase the current minimum salary level of $455 per week ($23,660 per year) to $921 per week or ($47,892 per year). The proposed new salary level represents the 40th percentile of wages earned by workers across the United States in 2013. Projected data for 2016 would set these numbers to $970 per week and $50,440 per year.
The proposed rule would also increase the $100,000 salary level for highly compensated individuals to $122,148 per year—the 90th percentile of wages earned by workers in 2013.
The DOL is also considering special salary tests for employees in American Samoa and workers in the motion picture industry.
The DOL has stated that these updates are necessary to accurately represent the intent of minimum wage and overtime exemptions, which have not been updated since 2004.
Automatic Salary Requirement Updates
If implemented, the proposed rule will automatically update minimum salary level requirements for the white collar exemptions every year. Implementing automatic annual updates would prevent salary level requirements that lag behind current wage payment trends.
In the proposed rule, the DOL explains that it is considering tying minimum salary requirements to:
- Fixed percentiles of wages paid (40th percentile for weekly wage and 90th percentile for highly compensated individuals); or
- Inflation, as measured by the consumer price index.
Calculating Employee Wages
The proposed rule also states that the DOL is considering allowing an employer to apply nondiscretionary bonuses and incentive payments towards a portion of an employee’s standard salary level.
The proposed rule explains that including these bonuses would more accurately represent an employee’s earnings and would provide a better assessment of whether a white collar exemption should apply.
Public Comments on Duties Test
The proposed rule does not include specific suggestions to modify the white collar exemption duties test.
However, the DOL is considering whether updating this test is also necessary. To this end, the DOL is inviting public comments on whether the duties test is working as intended. The DOL has included several questions in the proposed rule for commenters to consider.
Impact on Employers
If implemented, the proposed rule would require employers to re-determine the exemption status of employees, update and adapt overtime policies, notify employees of policy changes and adjust their payroll systems.
These measures could trigger significant costs. For example, employers may be required to pay overtime wages to previously exempt employees or incur ongoing managerial costs because they would need to monitor more closely the work of employees they didn’t have to monitor before.
On the other hand, the DOL is predicting that higher salary level requirements for white collar exemptions will simplify the process of employee classification because employers would not be required to perform a duties test for employees below the updated salary requirements. This simplification could result in fewer lawsuits and lower litigation costs for employers.
As always, contact us today for a full analysis of your exposure to this new regulation, and for Custom CIBC Solutions to help mitigate your associated costs.
What Employers Should Know
The Supreme Court’s decision impacts the legality of same-sex marriages throughout the country. By ruling that state laws prohibiting same-sex marriage are unconstitutional, the Supreme Court has effectively legalized same-sex marriage in all 50 states. Same-sex couples will be allowed to marry in any state, and will be entitled to the all the rights, benefits and obligations given to opposite-sex spouses under both federal and state law.
Also, due to the Supreme Court’s ruling, employers will generally be required to treat employees in same-sex marriages the same as employees in opposite-sex marriages for many federal and state law purposes.
Many federal laws have already been interpreted to include both same-sex and opposite-sex marriages due to the Supreme Court’s decision on DOMA. The Supreme Court’s most recent ruling will expand these legal rights and protections to additional couples.
Also, many state law leave rights for legally married spouses should extend to employees with same-sex spouses. Same-sex married couples should also be subject to the same state tax rules as opposite-sex married couples. State insurance laws may require employers with insured health plans to offer equal health plan coverage to opposite-sex and same-sex couples.
The Supreme Court did not consider whether federal nondiscrimination laws should be expanded to protect workers from discrimination based on sexual orientation or gender identity. However, a number of states have laws that prohibit such workplace discrimination. Employers should keep any applicable laws in mind when providing any rights or benefits to employees.
Call us today for a full analysis. It’s up to you to make sure you and your business are compliant with the law, both Federally and within your particular State….and we can help!
Supreme Court Rules on Abercrombie Religious Discrimination Case
On June 1, 2015, the U.S. Supreme Court ruled against Abercrombie & Fitch in a high-profile religious discrimination case. The Supreme Court ruled in favor of a Muslim woman who was denied employment with Abercrombie due to wearing a headscarf, or hijab, in violation of the company’s “look policy.”
The Supreme Court held that to prove a violation of federal law, an applicant must only show that the need for a religious accommodation was a motivating factor in the employer’s decision. Whether the employer had actual knowledge of the need for an accommodation is irrelevant. An employer may not make an applicant’s religious practice—confirmed or otherwise—a factor in employment decisions.
Samantha Elauf, a practicing Muslim woman, was determined to be eligible for employment at Abercrombie after her first interview. The assistant store manager asked upper management whether Elauf’s headscarf, which she thought may be for religious reasons, conflicted with Abercrombie’s policy against caps. The assistant store manager was told not to hire Elauf because her headscarf would violate Abercrombie’s “look policy.” The Equal Employment Opportunity Commission (EEOC) sued on Elauf’s behalf, claiming violation of Title VII of the Civil Rights Act.
The question presented to the Supreme Court was whether the prohibition on discrimination under Title VII applies only when an applicant has informed the employer of the need for an accommodation. The Supreme Court disagreed with the Court of Appeals, holding that an applicant does not need to prove an employer had actual knowledge of a need for a religious accommodation. Rather, a job applicant can prove discrimination if he or she can show the need for accommodation was a motivating factor in the employer’s decision.
The Supreme Court’s decision confirms current practice for many employers. However, the ruling establishes a lower standard to prove discrimination. Employers should not base hiring decisions on an assumption that an applicant may require some form of accommodation. You should also consider whether you can accommodate applicant requests without undue hardship.
DID YOU KNOW?
The Family and Medical Leave Act (FMLA) certification forms expired Feb. 28, 2015. Since that date, the Department of Labor (DOL) extended the expiration date of the forms by 30 days while the revised FMLA forms were under review with the Office of Management and Budget (OMB).
The DOL has now posted new model FMLA medical certifications and notices with an expiration date of May 31, 2018. The new forms are identical to the previous forms. However, the new medical certifications include instructions not to provide genetic information in accordance with the Genetic Information Nondiscrimination Act (GINA).
DOL Sends Proposed FLSA Regulations to OMB
In March 2014, President Barack Obama directed the Secretary of Labor, Thomas Perez, to revise the overtime pay provisions of the Fair Labor Standards Act (FLSA) to increase the number of workers who are eligible for overtime pay.
Over a year later, the DOL has sent proposed regulations that aim to “modernize and streamline the existing overtime regulations for executive, administrative, and professional employees” to the OMB for review. After the review, the proposed regulations will be made available to the public for comment.
The proposed regulations may affect the number of employees at your company who are eligible for overtime pay. In addition to staying up to date on the proposed regulations, you should assess your current workforce to prepare for possible changes.
For example, complete an audit to make sure your organization’s job descriptions are current and accurately reflect the duties and required skills of each position. This will be a powerful tool when navigating the proposed regulations.
Health savings accounts (HSAs) are a great way to save money and efficiently pay for medical expenses. HSAs are tax-advantaged savings accounts that accompany high deductible health plans (HDHPs).
While HSAs are a helpful approach to paying for medical care, the fact that they combine both insurance and tax regulations make them a unique type of benefit with a fairly involved set of requirements. There can be confusion over how HSAs are administered, especially concerning unusual scenarios. The following questions address situations that HSA owners may find themselves in, but are not a typical part of standard HSA information.
What if I want to deposit the maximum annual contribution at once?
This is allowable. While HSAs are typically deducted from your paycheck and deposited every pay period, you may opt for a one-time payment provided that:
Your contribution does not exceed the HSA limit when added to an employer contribution. HSA limits apply to the overall account contribution, and not to each person or entity depositing money into the account. For this reason, you may need to calculate the yearly employer contribution before determining your personal maximum contribution.
You are eligible to contribute to an HSA for the entire year. If you obtained HSA eligibility after Jan. 1, your maximum contribution limit decreases by one-twelfth for every month you are not eligible. You can only make a contribution for the months you’re eligible. There is an exception to this rule for individuals who are eligible to contribute to an HSA on Dec. 1 of a calendar year. They are allowed to contribute an amount equal to the annual HSA contribution amount provided they remained covered by the HSA for at least a 12-month period after contributing.
What if my spouse or family member wants to make contributions to my HSA?
Family members may make contributions on behalf of other family members, provided:
The total contribution put forth by you, your family member and your employer does not exceed the annual contribution limit (with only a single exception for the additional catch-up contribution if the account holder is at least 55 years old).
What if I want to use an HSA to pay for my dependent’s medical care?
This is generally allowable, as qualified medical expenses include unreimbursed medical expenses of the owner, his or her spouse or dependents.
What if I use my HSA for a nonqualified medical expense?
Nonqualified withdrawals from your HSA are considered taxable income. The money you spend would be added to your gross income and taxed, and would also be subject to a 20 percent penalty. An exception to this rule is if you are age 65 or older, you are totally and permanently disabled, or you make the withdrawal after you die.
What if I want to use my HSA to pay my premiums?
This would not be considered a qualified medical expense and would be subject to taxes and penalties.
What if I want to use my HSA to pay for long-term care insurance?
This is allowable. HSA distributions used to pay for long-term care insurance premiums qualify as tax-free, penalty-free distributions. However, there is an annual limit to the amount you may contribute toward this expense, which is adjusted by the IRS every year.
What if I want to close my account?
Unless any of the previous exceptions have been met, the funds remaining in the account would be subject to taxes and penalties if withdrawn for reasons other than a qualified medical expense.
What if I want to invest the funds in my HSA?
You can invest the funds in bank accounts, money markets, mutual funds and stocks, if that is something your HSA servicer allows. Any earnings made on the investments would not count toward your annual contribution limit. You may not invest in collectibles, art, automobiles or real estate.
What if I leave my employer?
Your HSA belongs to you regardless of your employment. If you change jobs, or stop working altogether, you can keep your total HSA balance, including all employer contributions. You can continue spending the account balance on qualified medical expenses free of taxes or penalties.
However, you will not be able to make further contributions to your account, unless you remain enrolled in a HDHP. If you lose your HDHP, all contributions to an HSA must be suspended until you are back on an HSA-compliant HDHP plan.
What if I change my health coverage to a plan that doesn’t allow an HSA?
You will have to stop making contributions to your HSA, but you will be free to spend the account balance with the same tax-free benefits, provided they go toward qualified medical expenses. You could also hold on to the balance and any investments until age 65, at which point the money would be available to you with no taxes or penalties.
For more information on these or other HSA scenarios, contact CIBC of Illinois, Inc. today.
Agencies Plan to Issue Final Rules for SBC Requirements
On March 31, 2015, the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments) issued Frequently Asked Questions (FAQ) announcing their intention to issue final regulations for the Affordable Care Act’s (ACA) summary of benefits and coverage (SBC) and uniform glossary requirement. These regulations will finalize the proposed regulations from Dec. 22, 2014.
The ACA requires these disclosure tools—the SBC and uniform glossary—to help consumers compare available coverage options. The requirement to provide them applies to both grandfathered and non-grandfathered plans.
Health plan issuers must provide the SBC to applicants and enrollees free of charge. The SBC is a concise document that provides simple and consistent information about health plan benefits and coverage.
The final regulations are expected to be released in the near future and will apply for plan years beginning on or after Jan. 1, 2016 (including open enrollment periods in fall of 2015 for coverage beginning on or after Jan. 1, 2016).
The updated template and related documents, including sample language and instructions, for the SBC and uniform glossary will not be issued until January 2016. The updated template will then apply for plan years beginning on or after Jan. 1, 2017. Until further guidance is issued, the previously updated template provided on the DOL’s website on April 23, 2014, continues to be authorized.
The March 31 FAQ guidance leaves a lot of uncertainty for employers in regard to their SBC documents. The changes included in the final regulations may require health plans to update their SBC documents before the new template is released.
The forthcoming final regulations may address this issue. In some cases, the Departments have provided temporary enforcement safe harbors when guidance is not issued sufficiently in advance of an effective date. However, at this time, no safe harbors or other relief has been provided on this issue.
Plan Offerings Now Diverging by Group Size
A new trend of health plan offerings has emerged over the past few years. Group size appears to be a determining factor in whether employers are offering more generous health plans or working on implementing more cost-sharing strategies for health benefits.
Large organizations—with more than 500 lives—tend to offer generous health plans, likely in an effort to use their benefits packages as recruiting and retention tools in a market that is becoming increasingly fierce.
Smaller groups are cutting back on benefits and using cost-sharing efforts with employees. This trend of leaner benefits with smaller groups is likely an effort to bring down expenses associated with rising health care costs and other costs related to the ACA.
For more information on how your benefits offerings compare to other employers, contact CIBC of Illinois, Inc. for benchmarking information.
DID YOU KNOW?
On May 4, 2015, the Internal Revenue Service (IRS) released Revenue Procedure 2015-30 to announce the inflation-adjusted limits for health savings accounts (HSAs) for calendar year 2016.
The following limits apply for 2016:
- The HSA contribution limit is $3,350 for self-only and $6,750 for family.
- The minimum deductible for high deductible health plans (HDHPs) is $1,300 for self-only and $2,600 for family.
- The maximum out-of-pocket for HDHPs is $6,550 for self-only and $13,100 for family.
Over four million babies are born in the United States every year, and the U.S. Centers for Disease Control and Prevention (CDC) recommends vaccination against 16 vaccine preventable diseases. Unfortunately, not all parents ensure their children are properly immunized.
Keeping Kids Healthy
Before vaccinations became widely available, diseases like measles, mumps and whooping cough were common in childhood, leaving thousands of children blind, deaf, brain-damaged or even dead. Today, vaccines have almost completely wiped out these major diseases.
What Is a Vaccination?
A vaccination (or an immunization) contains an imitation virus, typically a live but weakened virus, or an inactive bacteria virus, that is administered to protect against serious diseases. This virus causes the body to produce antibodies, special agents of the immune system that attack harmful elements inside the body. While fighting the imitation virus, the antibodies learn to recognize the real virus so they can attack it when the body is exposed to it. Researchers have found that live virus vaccinations seem to provide longer immunity than inactive ones.
Vaccinations are usually administered in one of two ways: orally or by injection. Doctors have found that vaccines administered orally tend to have a higher chance of side effects and allergic reactions than injected vaccines.
Possible Side Effects
Overall, vaccines are safe to administer and typically only cause minor side effects. According to the Food and Drug Administration (FDA), the risk of effects related to actually contracting a disease is much more dangerous than the risk of having a serious reaction to a vaccination. However, there have been a few cases of major reactions in small children, such as:
- Extremely high fever—A rectal temperature reading of 105 degrees or more
- Inconsolable crying—More than three hours of crying without stopping, or an abnormal cry
- Convulsions—Full-body shaking, twitching or jerking in response to a high fever
- Severe allergic reactions—Swelling in the mouth and throat, wheezing, breathing difficulties, dizziness, paleness or limpness.
Should your child suffer from any of the above symptoms after receiving his or her vaccinations, call your doctor immediately.
Although today in the United States epidemics of infectious diseases are rare, bacteria and viruses that cause many diseases still exist. These bacteria and viruses may affect people who are not protected by vaccines. Vaccinations are necessary because they can prevent repeated epidemics of infectious diseases.
Do I Need to Vaccinate?
Experts recommend that all children be routinely vaccinated. Most children in the United States are currently vaccinated as recommended, helping control infectious diseases that were common and deadly in the past.
Scientists, doctors and other health care professionals extensively test vaccines to make sure they are safe and effective before putting them on the market. In the United States, the FDA reviews all the test results to decide if it will approve a vaccine for use.
When Should I Vaccinate?
Newborns are immune to many diseases because of antibodies they have acquired from their mothers while in the womb. These antibodies only last from about a month to a year after birth, so it is best to vaccinate children when they are babies. However, you should still have your children vaccinated, even if you do not do it when they are babies or when they are very young—it is better for them to be vaccinated late than not at all.
By vaccinating your children when recommended, you will have to worry less about them becoming infected or infecting others, especially once they begin attending school, which increases their risk.
Vaccinations are covered by most insurance programs, but because of their importance they are available even to those without insurance. If you are not insured and cannot afford your child’s vaccinations, contact your city, county or state health department. They can help you find a place to have your child immunized where it will be inexpensive or even free.
If you are unsure when you should take your child in for vaccinations, call your health care provider for information and vaccination schedules. More information is also available at: Centers for Disease Control and Prevention (CDC) National Immunization Hotline, 800-232-2522 or www.cdc.gov/vaccines.
On April 16, 2015, the U.S. Equal Employment Opportunity Commission (EEOC) released a proposed rule that describes how the Americans with Disabilities Act (ADA) applies to employee wellness programs that include questions about employees’ health or medical examinations. Although the ADA limits when employers may inquire about employees’ health or require them to undergo medical examinations, these inquiries and exams are permitted if they are part of a voluntary wellness program.
The long-awaited proposed rule would provide much needed guidance for employers on how to structure employee wellness programs without violating the ADA. Most importantly, the proposed rule addresses the amount of incentives that may be offered under employee wellness programs that are part of group health plans. This amount is generally consistent with HIPAA’s limits on wellness program incentives, although the proposed rule does not fully incorporate HIPAA’s increased incentive limit for tobacco cessation programs.
Implications for Employers
The EEOC is seeking comments on the proposed rule and may make revisions to its guidance before it is finalized. While employers are not required to comply with the proposed rule before it is finalized, they may choose to do so. According to the EEOC, it is unlikely that a court or the EEOC would find an ADA violation where an employer complied with the proposed guidance until a final rule is issued.
Many employers offer workplace wellness programs as a way to help control health care costs, encourage healthier lifestyles and prevent disease.
Employers may offer participatory wellness programs, which do not require individuals to meet a health-related standard in order to obtain an incentive. Participatory wellness programs include, for example, subsidized fitness club memberships, reimbursement of smoking cessation classes (without regard to whether the employee quits smoking) or rewards for completing a health risk assessment (HRA) without any further action required by the employee with respect to the health issues identified by the HRA.
Employers may also offer health-contingent wellness programs, which require individuals to satisfy a standard related to a health factor in order to obtain an incentive. For example, health-contingent wellness programs may require participants to participate in exercise programs, remain tobacco-free or attain certain results on biometric screenings (for example, low cholesterol, blood glucose and blood pressure levels) to obtain an incentive.
Wellness program incentives can be framed as rewards or penalties and often take the form of prizes, cash, or a reduction or increase in health care premiums or cost-sharing.
Legal Concerns for Wellness Programs
Employee wellness programs must be carefully designed to comply with the ADA and other federal laws that prohibit discrimination based on race, color, sex (including pregnancy), national origin, religion, compensation, age or genetic information.
Additionally, wellness programs that are part of group health plans must be designed to comply with HIPAA’s nondiscrimination requirements, as amended by the Affordable Care Act (ACA). Under HIPAA, health-contingent wellness programs are required to follow certain standards related to nondiscrimination, including a standard that limits the amount of incentives that can be offered. The maximum reward under HIPAA for health-contingent wellness programs is 30 percent of the cost of health coverage (or 50 percent for programs designed to prevent or reduce tobacco use).
The ADA prohibits employers with 15 or more employees from discriminating against individuals with disabilities. Under the ADA, an employer may make disability-related inquiries and require medical examinations after employment begins only if they are job-related and consistent with business necessity. However, these inquiries and exams are permitted if they are part of a voluntary wellness program.
Neither the ADA nor prior EEOC guidance addressed the extent to which incentives affected the voluntary nature of a wellness program. Recently, the EEOC filed well-publicized lawsuits against a number of employers, alleging that their wellness programs violated the ADA and other federal fair employment laws. In response, Congress called on the EEOC to issue guidance on wellness programs and introduced legislation, the Preserving Employee Wellness Program Act, to provide more certainty for employers regarding wellness programs.
The EEOC’s proposed rule would establish the following parameters for permissible wellness program designs under the ADA.
- Reasonable Design: A wellness program must be reasonably designed to promote health or prevent disease. A program that collects information on an HRA to provide feedback to employees about their health risks, or that uses aggregate information from HRAs to design programs aimed at particular medical conditions is reasonably designed. A program that collects information without providing feedback to employees or without using the information to design specific health programs is not reasonably designed.
- Voluntary: Wellness programs must be voluntary. Employees may not be required to participate in a wellness program, may not be denied health insurance or given reduced health benefits if they do not participate, and may not be disciplined for not participating. Employers also may not interfere with the ADA rights of employees who do not want to participate in wellness programs, and may not coerce, intimidate or threaten employees to get them to participate or achieve certain health outcomes.
- Employee Notice: For wellness programs that are part of group health plans, employers must provide employees with a notice that describes what medical information will be collected as part of the wellness program, who will receive it, how the information will be used and how it will be kept confidential.
- Limited Incentives: For wellness programs that are part of group health plans, employers may offer limited incentives for employees to participate in the programs or to achieve certain health outcomes. Consistent with HIPAA, the amount of the incentive that may be offered for an employee to participate or to achieve health outcomes may not exceed 30 percent of the total cost of employee-only coverage. For example, if the total cost of coverage paid by both the employer and employee for self-only coverage is $5,000, the maximum incentive for an employee under that plan is $1,500.
This incentive limit only applies to wellness programs that include disability-related inquiries or medical examinations. According to the EEOC, a smoking cessation program that merely asks employees whether they use tobacco (or whether they stopped using tobacco upon completion of the program) is not a wellness program that includes disability-related inquiries or medical examinations. Thus, the EEOC’s proposed guidance would allow an employer to offer incentives as high as 50 percent of the cost of employee coverage for that smoking cessation program, consistent with HIPAA’s requirements. However, an incentive tied to a biometric screening or medical examination that tests for the presence of tobacco would be limited to 30 percent under the proposed rule.
- Confidentiality: Medical information obtained as part of a wellness program must be kept confidential. Generally, employers may only receive medical information in aggregate form that does not disclose, and is not reasonably likely to disclose, the identity of specific employees.
Wellness programs that are part of a group health plan may generally comply with their obligation to keep medical information confidential by complying with the HIPAA Privacy Rule. Employers that are not HIPAA covered entities may generally comply with the ADA by signing a certification, as provided for by HIPAA regulations, that they will not use or disclose individually identifiable medical information for employment purposes and abiding by that certification.
Practices such as training individuals in the handling of confidential medical information, encryption of information in electronic form, and prompt reporting of breaches in confidentiality can help assure employees that their medical information is being handled properly.
- Reasonable Accommodations: Employers must provide reasonable accommodations that enable employees with disabilities to participate and to earn whatever incentives the employer offers. For example, an employer that offers an incentive for employees to attend a nutrition class must, absent undue hardship, provide a sign language interpreter for a deaf employee who needs one to participate in the class. An employer also may need to provide materials related to a wellness program in alternate format, such as large print or Braille, for someone with vision impairment. An employee may need to provide an alternative to a blood test if an employee’s disability would make drawing blood dangerous.
ACA Update: Summary of Benefits and Coverage and Uniform Glossary Details Remain Fuzzy, FAQ Released
The Affordable Care Act (ACA) created new disclosure tools—the summary of benefits and coverage (SBC) and uniform glossary—to help consumers compare coverage options available to them. Generally, group health plans and health insurance issuers are required to provide the SBC and uniform glossary free of charge. This disclosure requirement applies to both grandfathered and non-grandfathered plans.
On March 31, 2015, the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments) issued a Frequently Asked Question (FAQ) announcing their intention to issue final regulations on the SBC requirement in the near future. The final regulations are expected to apply for plan years beginning on or after Jan. 1, 2016 (including open enrollment periods in fall of 2015 for coverage beginning on or after Jan. 1, 2016).
However, according to this FAQ, the new template, instructions and uniform glossary will not be finalized until January 2016, and will apply for plan years beginning on or after Jan. 1, 2017 (including open enrollment periods in fall of 2016 for coverage beginning on or after Jan. 1, 2017).
Overview of the SBC Requirement
The ACA requires health plans and health insurance issuers to provide an SBC to applicants and enrollees, free of charge. The SBC is a concise document that provides simple and consistent information about health plan benefits and coverage.
The SBC requirement became effective for participants and beneficiaries who enroll or re-enroll through an open enrollment period beginning with the first open enrollment period starting on or after Sept. 23, 2012. For participants and beneficiaries who enroll other than through an open enrollment period (such as newly eligible or special enrollees), SBCs were required to be provided beginning with the first plan year starting on or after Sept. 23, 2012.
The DOL has provided a template for the SBC and Uniform Glossary documents along with instructions and sample language for completing the template, available on the DOL’s website. On April 23, 2013, the SBC template was updated for the second year of applicability to incorporate ACA changes that become effective in later years. Until further guidance is issued, these documents continue to be authorized.
On Dec. 22, 2014, the Departments released proposed regulations on the SBC requirement, which would revise the SBC template, instruction guides and uniform glossary. At that time, the Departments expected that the new requirements for the SBC and uniform glossary would apply to coverage that begins on or after Sept. 1, 2015. The draft-updated template, instructions and supplementary materials are available on the DOL’s website under the heading “Templates, Instructions, and Related Materials—Proposed (SBCs On or after 9/15/15).”
The SBC and Uniform Glossary must be provided in a culturally and linguistically appropriate manner. Translated versions of the template and glossary are available through the Centers for Consumer Information and Insurance Oversight (CCIIO) website.
To the extent a plan’s terms do not reasonably correspond to the template and instructions, the template should be completed in a manner that is as consistent with the instructions as reasonably as possible, while still accurately reflecting the plan’s terms. In addition, the DOL notes that ACA implementation will be marked by an emphasis on assisting (rather than imposing penalties on) plans and issuers that are working diligently and in good faith to understand and comply with the new law.
Thus, during the first and second years of applicability, penalties will not be imposed on plans and issuers that are working diligently and in good faith to comply with the new requirements. This enforcement relief will continue to apply until further guidance is issued.
Overview of the FAQ Guidance
In the FAQ issued on March 31, 2015, the Departments stated that they intend to issue final regulations in the near future. These regulations would finalize proposed changes in the proposed regulations from Dec. 22, 2014, which were proposed to apply beginning Sept. 1, 2015.
However, the FAQ notes that the final rules are expected to apply in connection with:
- Coverage that would renew or begin on the first day of the first plan year (or policy year, in the individual market) that begins on or after Jan. 1, 2016; or
- Open enrollment periods that occur in the fall of 2015 for coverage beginning on or after Jan. 1, 2016.
Despite this effective date, the new template, instructions and uniform glossary are not expected to be finalized until January 2016. According to the Departments, this delay is necessary to allow for consumer testing and offer an opportunity for the public to provide further input before finalizing revisions to the SBC template and associated documents.
The revised template and associated documents will apply to:
- Coverage that would renew or begin on the first day of the first plan year (or policy year, in the individual market) that begins on or after Jan. 1, 2017; or
- Open enrollment periods that occur in the fall of 2016 for coverage beginning on or after Jan. 1, 2017.
Impact on Employers
This FAQ guidance leaves a lot of uncertainty for employers with regard to their SBC documents. The changes included in the final regulations may require health plans to update their SBC documents before the new template is released.
The forthcoming final regulations may address this issue. In some cases, the Departments have provided temporary enforcement safe harbors when guidance is not issued sufficiently in advance of an effective date. However, at this time, no safe harbors or other relief has been provided on this issue.
For clarification of this information, or to be kept up to date with any and all parts of the Affordable Care Act, contact CIBC today.