New York Labor and Employment Law Report : New York Employment Lawyer & Attorney : Bond Schoeneck & King Law Firm : NY Labor Relations, Employee Benefits

On December 22, 2010, the Departments of Labor, Health and Human Services, and Treasury (collectively, the "Departments") issued their fifth set of answers to several frequently asked questions ("FAQs") about the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act ("PPACA"). The FAQs also address the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 ("MHPAEA") and the Health Insurance Portability and Accountability Act of 1996 ("HIPAA") nondiscrimination rules for wellness programs. The FAQs are described below.

The Patient Protection and Affordable Care Act

The PPACA encompasses many different approaches to reducing the number of Americans with little or no health insurance coverage. The legislation includes mandates on employers, individuals, and providers, amendments to the Internal Revenue Code, and many other changes.

Cost Control for Preventive Care Benefits

The PPACA generally requires that group health plans cover recommended, in-network preventive services without any employee cost sharing. The Departments issued interim final regulations on July 14, 2010 addressing the requirement, but there have been lingering issues about a plan's ability to control costs. The FAQs confirm that the PPACA allows plans to steer enrollees toward more cost-efficient service providers through value-based insurance designs ("VBID"). The FAQs provide an example of a permissible VBID. The PPACA would allow a group health plan to have no copayment for preventive services performed at an in-network ambulatory surgery center, but have a $250 copayment for the same services performed at an in-network outpatient hospital, because the outpatient hospital is a higher-value setting. The Departments add that further guidance is forthcoming.
 

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Miriam Regalado and her fiancée Eric Thompson worked for North American Stainless (NAS). Regalado filed a sex discrimination charge against NAS with the EEOC. Three weeks later, NAS fired Thompson. Those were the facts presented to the United States Supreme Court when it unanimously decided on January 24, that Thompson could bring a Title VII retaliation claim against NAS even though Thompson never engaged in Title VII protected activity. The Supreme Court’s holding in the case, Thompson v. North American Stainless, LP, effectively broadens the scope of Title VII’s anti-retaliation provisions to protect individuals who have a significant association with or relation to employees who have engaged in protected conduct.

Of course, Title VII makes it illegal for an employer to “discriminate” against an employee who files a charge with the EEOC. But Thompson never filed a charge, Regalado did. The Court surmounted this difficulty by finding that Title VII’s anti-retaliation provision should be construed to prohibit a broad range of employer conduct – a range of conduct much broader than actions which affect the terms and conditions of employment of the employee who filed the charge. Quoting from its decision in Burlington N. & S.F.R. Co. v. White, 548 U.S. 53 (2006), the Court reiterated that “discrimination” under the anti-retaliation provision includes any employer action that “well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.” The Court then concluded logically that “a reasonable worker might be dissuaded from engaging in protected activity if she knew that her fiancée would be fired.” The Court acknowledged that its decision might create difficulty in determining precisely which types of relationships will be sufficient to conclude that retaliation against the third party would dissuade the individual who engaged in protected activity, but declined to provided a bright line rule. It stated that firing a close family member will “almost always” meet the standard, and retaliating against a “mere acquaintance” will almost never meet it, but declined to provide further guidance.
 

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We have previously posted on the early retirement incentive for employees represented by collective bargaining units affiliated with the New York State United Teachers (“NYSUT”) who belong to either the New York State Employee Retirement System or the New York State Teachers Retirement System (“TRS”), are at least 55 years of age, and have attained at least 25 years of creditable service (“55/25 Legislation”). The 55/25 legislation allows eligible employees to retire without the reduction in retirement benefits that would normally apply to retirement system members who are on Tiers 2, 3, or 4 who do not have 30 years of service.  The legislation recently survived another court challenge to its constitutionality.

Two days after the 55/25 Legislation was signed into law, the Empire State Supervisors and Administrators Association (“ESSAA”), a union that represents primarily administrators and supervisors in public school districts, and one of its local unions, challenged the 55/25 Legislation in court. The ESSAA contended that the statute violates its members’ rights to equal protection and freedom of association under the United States and New York State Constitutions, by limiting eligibility only to individuals who are employed in positions represented by collective bargaining units affiliated with NYSUT.
 

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The New York State Department of Labor’s Hospitality Industry Wage Order, which is intended to combine and replace the Wage Orders formerly applicable to the Restaurant Industry and Hotel Industry, became effective on January 1, 2011. The Department of Labor has issued a notice to employers that it will exercise discretion with regard to enforcement until February 28, 2011, in order to allow employers sufficient time to come into compliance, but expects that employees covered by the Wage Order will be paid any additional wages owed to them by March 1, 2011 or the next regularly scheduled pay day after March 1, 2011. The additional wages must be computed retroactively to January 1, 2011. Employers covered by the Wage Order are required to post a notice to employees regarding the implementation period and their right to retroactive payment of wages.

The Wage Order makes several changes to the rules governing the payment of wages to employees in restaurants and hotels. Some of the significant changes are described below.
 

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Last month we posted on the EEOC’s GINA regulations and discussed the inadvertent disclosure exception and family medical history. This post follows up by discussing the impact of the regulations on FMLA certifications and by providing some recommended affirmative steps employers should take now.

As we discussed last month, the regulations recognize that employers may inadvertently obtain genetic information when they request that health care providers complete certification forms to support a leave under the Family and Medical Leave Act (“FMLA”) or an accommodation under the Americans with Disabilities Act (“ADA”). The regulations, however, create a “safe harbor” for employers who use the following language when requesting medical information to certify an employee’s own serious health condition under the FMLA:
 

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Sensibly, the EEOC does not make any effort to conceal its enforcement “playbook.” To the contrary, it publishes an annual Performance and Accountability Report so that employers and other stakeholders will have a better understanding of how the agency has used, and intends to use, its financial and human resources. The 2010 Performance and Accountability Report, released in mid-November 2010, contains the EEOC’s assessment of its performance as the federal agency with the broadest responsibility for enforcing the civil rights laws. Based on information contained in the report, a few general observations about the direction of the Agency can be made.

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The use of credit histories in the hiring process is coming under increased scrutiny by the Equal Employment Opportunity Commission. On December 21, 2010, the EEOC filed suit against Kaplan Higher Education, alleging that Kaplan’s use of credit history as a selection device is discriminatory because it screens out a disproportionate number of black applicants. The suit seeks injunctive relief barring Kaplan from using credit histories, as well as lost wages, benefits and offers of employment for applicants who were not hired due to the practice.

The lawsuit is not surprising given the EEOC’s earlier attention to this issue. In October 2010, the EEOC held a public hearing on the topic to explore whether the practice is discriminatory. Critics of the practice describe it as a “Catch-22” for applicants: you cannot establish good credit unless you have a good paying job, but you cannot get hired if you have poor credit. The EEOC is concerned that minority groups typically have poorer credit, and therefore the practice has a disparate impact on those groups. There is also a question of whether credit histories have any real predictive value when it comes to employment.
 

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