Patient Protection and Affordable Care Act: Employers’ Guide to Immediate HR Issues

1. Patient Protection and Affordable Care Act: Employers’ Guide to Immediate HR Issues Presented by Denise Cline and Alex Maultsby Smith Moore Leatherwood LLP Denise.Cline@smithmoorelaw.com Alex.Maultsby@smithmoorelaw.com Two Hannover Square, Suite 2800 300 N. Greene Street, Suite 1400 434 Fayetteville Street, Raleigh, NC 27601 Greensboro, NC 27401 T: 919.755.8734 T: 336.378.5331 F: 919.755.8800 F. 336.378-5400 To ask a question during the presentation, click the Q&A menu at the top of this window, type your question in the Q&A text box, and then click “Ask.” After you click Ask, the button name will change to “Edit.” Questions will be queued and most will be answered at the end of the meeting as time allows.

2. Presentation Will Cover • Immediate Coverage Requirements • Notification Requirements • Changes in Fair Labor Standards Act: Nursing Mother Accommodations • New Whistleblower Protections • Nursing Facility Disclosures

3. Immediate Coverage Requirements September 23, 2010 Trigger Date for All Plans • No lifetime benefit caps • Restrictions on annual limits (essential health benefits) • Dependent coverages expanded • No exclusions for children’s pre-existing conditions • Tougher rescission laws • Limits on reimbursement accounts

4. Immediate Coverage Requirements The Grandfather Issue—Why does it matter? • What can defeat grandfathered status: • Reduced benefits • Increased costs • Lower employer contributions • Less favorable annual limits • Self-funded to fully insured • Is it worth it?

5. Immediate Coverage Requirements So, if NOT grandfathered: • Dependent coverage through age 26, even if other coverage is available • No annual limits on essential benefits • No co-pays for certain preventive care costs • Cover emergency care regardless of provider • No pre-authorization requirements for OB/GYN and emergency services • Anti-discrimination rules apply

6. Notification Requirements • Beginning in 2011, large employers must report whether they will offer employees the opportunity to enroll in minimum essential coverage under employer sponsored plan.

7. 2011 Required Notifications • Length of applicable waiting periods for coverage • Lowest cost option in each enrollment category under the plan • Employer’s share of the total allowed cost option in each category • Number and names of full time employees receiving coverage

8. Notifications Required in 2012 • Beginning in 2012, employers must disclose the value of employees’ health insurance benefits on annual W-2. • Covers tax year 2011, so tracking begins soon.

9. By March 31, 2013, Employers Must Notify Employees . . . • About state health insurance exchanges • Whether the employer’s plan meets the minimum coverage requirements • How to access information about applying for premium subsidies under the exchange-based coverage

10. Breastfeeding Protections • Section 2407 amends Section 7 of the Fair Labor Standards Act by requiring that employers provide nursing mothers with reasonable lactation breaks. • Presumed to be effective immediately

11. Who’s Entitled to Breaks? • Although some states required breaks before, neither federal nor NC law required breaks for adult workers prior to PPACA. • PPACA now amends Section 7 of FLSA . • Applies to non-exempt employees, not exempt employees

12. What About Exempt Employees? • Employers may provide similar breaks for exempt employees. • If provided, employers should not deduct break time from compensation for exempt employers.

13. Small Employer Exemption • Employers with fewer than 50 employees are exempt from the statute’s requirements ifdoing so would impose an “undue hardship.” • Undue hardship is analyzed by weighing the significant difficulty or expense against the “size, financial resources, nature, or structure of the employers’ business.”

14. What’s Required? • Section 2407 requires employers to provide nursing mothers with a reasonable break time “each time such employee has need to express the milk.” • Employees are entitled to these breaks for one year from the child’s birth.

15. What’s Reasonable? • PPACA provides no specific limit on length of breaks. • No limit on the number of breaks allowed • Note: Employers cannot regulate either the frequency or timing of these breaks.

16. Paid or Unpaid? • If lactation break is taken during work time, no compensation for work time is required. • That is, unless state law dictates otherwise as in Ala, CA,CO, CN, GA, IL, IN, ME, MN, MT, NM, NY, OK, OR, RI, TN, or VT • If it’s more protective, state law will govern.

17. Do Breaks Count as “Time Worked?” • Although prior law did not require breaks, if provided, regulations specified that breaks of 5 to 20 minutes should be counted as time worked. • Similarly, lunch breaks if shorter than 30 minutes, were counted as time worked. • No regulations on lactation breaks yet

18. Location, Location… • Under § 2407, employers must provide a “private place” shielded from view and free from intrusion. • Private location is not defined, but it cannot be a bathroom.

19. State or Federal Law? • Follow the most protective. • Use care if you have multistate locations. • Employees should receive copies of revised break policies in advance.

20. What Your Policy Should Provide • Establish entitlement to lactation (or any other) breaks. • Specify how lactation break time is treated in terms of pay and time worked. • Set forth procedure for requesting and documenting time. • Set forth commitment to provide private, non-bathroom place for lactation breaks (and follow up).

21. Penalties • Not clear what if any penalties result from failure to abide by requirement • Existing state law may provide for money damages, but since lactation breaks are not required to be compensated, not clear if money damages are recoverable for violation of federal law.

22. Interesting Issues • Can you temporarily transfer a nursing mother? • Does time taken for multiple daily nursing breaks count towards 40 hour work week? • What about accessibility and other issues such as mothers who cannot express milk easily or at all? • What happens when there are multiple nursing mothers in a single workplace?

23. Whistleblower Protection • Section 1558 of the PPACA prohibits retaliation against employees who provide information that the employee believes to be a violation of PPACA, Title I.

24. Whistleblower Protections Include: • Retaliation protection added to the Fair Labor Standards Act • Abuse reporting protections for federally funded nursing facility employees • Mandatory implementation of standard complaint process for nursing home residents and representatives • Expansion of rights under False Claims Act

25. Whistleblower Protection is Broad Protection is available for employees who provide or who are “about to” provide an employer, the federal government or a state attorney general with information about violations of Title I.

26. What’s in Title I? • Title I includes a broad range of provisions on quality improvements in health care, significant changes in health insurance coverage, availability, and affordability. • Title I includes the most significant changes in insurance coverage requirements for employers and individuals. • Title I also includes state exchange requirements.

27. Whistleblower Protections Favor Employees • Burden of proof under Section 1558 favors employees. • Employee must show that the complainant’s activity was a contributing factor to the employer’s adverse action. • Employees must file a complaint with OSHA within 180 days or the retaliatory action.

28. Protections for Patient Abuse • Section 6703(b)(3) of PPACA requires that long term care facilities receiving more than $10,000 in federal funding must provide notification of reporting obligations. • Notification should inform employees, etc., that they must report to Dept of Health and Human Services any reasonable suspicion of a crime against a resident or person receiving care.

29. Who Must Be Notified? • Officers • Managers • Employees • Contractors

30. Transparency Reports • Owners of nursing facilities are affected by Subtitle B of Title VI, entitled Nursing Home Transparency and Improvement. • At the federal level more disclosure about ownership and governance will be required.

31. What Must be Disclosed? • Section 6101 requires disclosure of the following “disclosable parties.” • Identity of members of the governing body, their title and period of service • Identity of officers, directors, partners trustees, etc., their titles, and period of service • Managing employees • Any “additional disclosable party” must disclose its “organizational structure” and its relationship to the facility and each other.

32. Who Are “Additional Disclosable Parties?” • Each person or entity that exercised operational, financial or managerial control • Each person or entity that provides financial or cash management • Entities that lease or sublease real property to the facility • Entities that own more than 5% of the value of the real property

33. Additional Disclosable Parties • Persons or entities that provide management or administrative services, management of clinical consulting services

34. Definition of “Organizational Structure” • For corporation, officers, directors and shareholders who own more than 5% • For limited liability companies, members and managers, including % ownership • For general partnerships, the partners • For limited partnerships, general partners and limited partners with more than 10% interest • For a trust, the trustees • For individuals, contact information

35. Screening Procedures • HHS must establish procedures for screening all providers for level of risk for fraud, waste and abuse. • Providers must also pay $500 if selected for screening. • Screening will include licensure and background checks, fingerprinting, on-site visits and database checks.

36. Possible Effects of Additional Reporting Requirements • Longer time to enroll in programs • Reluctant disclosable entities • Public access to ownership information may affect litigation • False certifications may result in liability under federal False Claims Act

37. Standard Complaint Process for Nursing Facility Residents • Section 6105 amends the Social Security Act by requiring states to make available to residents of nursing facilities standard federal complaint forms. • This section also requires states to establish a complaint resolution process to track complaints and prevent retaliation.

38. PPACA and Other HR Laws PPACA may intersect with other HR related laws and requirements such as: • Americans with Disabilities Act Amendment Act (ADAAA)--expanded coverage of dependents and those with preexisting conditions may lead to more claims of discrimination • COBRA issues----does PPACA eliminate or expand COBRA coverage for employees or dependents? • Discrimination issues---phase-in of mandatory coverage may lead to discrimination claims based on required future coverage

39. What You Know May Hurt You… • Greater coverage can result in more health related information for employers to handle, secure and dispose • Access to more information may result in inadvertent violations of HIPAA, Genetic Information Nondiscrimination Act (GINA) • As always, watch out for general discrimination issues, including pregnancy, gender, genetic, ethnic and age discrimination

40. How Human Resources Professionals Can Prepare • Create policies for lactation and other breaks • Work with health insurance providers on immediate changes required for plans • Create notification language and calendar deadlines for employee notification requirements • Keep updated on regulations as issued • Train supervisors and others on whistleblower issues • Implement system and form for nursing home notification and transparency requirements

41. Questions