Thursday, November 19, 2020

Nevermind the GOP, Hospitals Set to Be Biggest Opposition to Biden's Desire to Reduce Medicare's Age to 60 Years

From California Healthline:  

Of his many plans to expand insurance coverage, President-elect Joe Biden’s simplest strategy is lowering the eligibility age for Medicare from 65 to 60.

But the plan is sure to face long odds, even if the Democrats can snag control of the Senate in January by winning two runoff elections in Georgia.

Republicans, who fought the creation of Medicare in the 1960s and typically oppose expanding government entitlement programs, are not the biggest obstacle. Instead, the nation’s hospitals, a powerful political force, are poised to derail any effort. Hospitals fear adding millions of people to Medicare will cost them billions of dollars in revenue.

“Hospitals certainly are not going to be happy with it,” said Jonathan Oberlander, professor of health policy and management at the University of North Carolina-Chapel Hill.

Medicare reimbursement rates for patients admitted to hospitals average half what commercial or employer-sponsored insurance plans pay.

“It will be a huge lift [in Congress] as the realities of lower Medicare reimbursement rates will activate some powerful interests against this,” said Josh Archambault, a senior fellow with the conservative Foundation for Government Accountability.

Biden, who turns 78 this month, said his plan will help Americans who retire early and those who are unemployed or can’t find jobs with health benefits.

“It reflects the reality that, even after the current crisis ends, older Americans are likely to find it difficult to secure jobs,” Biden wrote in April.

Lowering the Medicare eligibility age is popular. About 85% of Democrats and 69% of Republicans favor allowing those as young as 50 to buy into Medicare, according to a KFF tracking poll from January 2019. (KHN is an editorially independent program of KFF.)

Although opposition from the hospital industry is expected to be fierce, that is not the only obstacle to Biden’s plan. ...

Emphasis added. Full story.   


Friday, October 30, 2020

Three CalPERS Healthplans Are in a 'Death Spiral.’ Prices About to Skyrocket

 This is from the Sacramento Bee:  

Three of the best health plans California state workers and retirees can buy are speeding toward collapse, according to CalPERS insurance experts. ...

PERSCare, a broad-network PPO that covers about 93,000 people, will cost $1,112 per month next year for a single state worker. Projections show the plan would cost $1,841 per month by 2026.

Anthem Traditional HMO, with about 18,000 policyholders, will cost $1,200 per month next year. It would cost $2,202 by 2026 without changes, according to the projections.

Blue Shield Access+, a broad-network HMO covering about 89,000 people, would jump from $939 to $1,302 per month.

State workers don’t pay those totals. They pay a portion spelled out in union agreements. For the 2021 plans, the state is contributing $607 to $645 per month for most workers. Workers are responsible for the rest. SEIU Local 1000 members and state attorneys receive another $260 per month.

CalPERS is the second largest purchaser of health insurance after the federal government. 

2021 Benefit Plan Limits


Wednesday, September 23, 2020

U.S. Supreme Court Will Hear Challenge to PPACA on November 10th With or Without a New Justice - On Armstrong and Getty

   "But without an individual mandate, the law cannot fiscally balance."  
    - Okay Boomer.

In March 2020, the United States Supreme Court agreed to hear a legal challenge to the Patient Protection and Affordable Care Act (PPACA). The case involved is Texas v. Azar, a lawsuit challenging the constitutionality of PPACA after earlier elimination of the law's individual mandate - the portion of the law requiring all Americans to have health insurance or pay a tax penalty for failing to maintain such coverage.

PPACA Litigation

18 states filed Texas v. Azar after the elimination of PPACA's individual mandate.  In December 2017, Congress passed the Tax Cuts and Jobs Act, which effectively eliminated the individual mandate penalty, effective January 1, 2019, by making the tax penalty for a violation of that mandate $0. 

In December 2019, a federal appeals court ruled in the case that the individual mandate is unconstitutional and directed the lower court to determine whether the rest of PPACA can remain in place.  Specifically the federal appeals court held that, "the individual mandate is unconstitutional because it can no longer be read as a tax" since the Tax Cuts and Jobs Act reduced the individual mandate penalty to $0.  Once the tax was federally prescribed to be $0, the appeals court held that there is no longer any such "tax."  In 2012 PPACA was saved at the Supreme Court when the Obama Administration successfully argued that the individual mandate was valid as a tax and that the mandate was essential to the very essence of the law.  All people (healthy or ill) must be compelled to purchase health insurance, the argument went, if the law were to have any hope of remaining under its original $1 trillion price tag.

This latest argument by PPACA's opponents picks up on that thread by pointing out that if the individual mandate was absolutely essential to the law (as held by the Supreme Court in 2012) then the law now must be dead since there is no more individual mandate after congress reduced the individual mandate tax penalty to zero. 

The Supreme Court previously denied a request from the U.S. House of Representatives and several Democratic-controlled states to review the case on an expedited basis. The Supreme Court has now agreed to hear the case on its regular schedule, based on the argument that the lower court rulings create uncertainty about PPACA’s future. Oral arguments are scheduled for November 10, 2020 and a decision will be issued in the late spring or early summer of 2021.

This is the third time the Supreme Court has reviewed PPACA’s constitutionality. In addition to the 2012 case, in 2015, the Supreme Court upheld the constitutionality of PPACA’s health insurance Exchange subsidies.

Impact on PPACA

While this legal challenge is pending, all existing PPACA provisions will continue to be applicable and enforced. This challenge does not impact Exchange enrollment, PPACA’s employer shared responsibility (pay or play) penalties and related reporting requirements, or any other applicable PPACA requirement.

Supreme Court Vacancy

On Sept. 18, 2020, U.S. Supreme Court Justice Ruth Bader Ginsburg passed away at the age of 87. Whether the Court vacancy created by Justice Ginsburg’s death should be filled prior to the November election is the media's controversy de jour.  

Under federal law, the President is responsible for nominating a new Supreme Court Justice and the nominee must be confirmed by the U.S. Senate.

President Donald Trump indicates that he plans to nominate a woman to fill the vacancy on Saturday September 26th, and the Senate plans to hold a vote on the nomination. However, a number of Democrats in Congress believe that the nomination process should not take place until after the November election.  

Long Term Impact in the States 

If confirmed before the election, a new Supreme Court Justice could greatly impact the outcome of Texas v. Azar. It is widely expected that President Trump’s nominee will have a more conservative viewpoint and would be more likely to invalidate PPACA. In contrast, a Supreme Court Justice nominated by Joe Biden would be more likely to uphold the law.  

Until a nominee is confirmed, the practical impact of this decision remains to be seen. As a result, employers will want to closely monitor developments related to the Supreme Court nomination, keeping in mind that many states have already passed legislation mirroring PPACA.  

California, for example, has passed all of the statutes necessary to mandate employer sponsored coverage, individuals maintaining coverage, prohibitions against pre-existing condition limits, and an insurance exchange.  Much of the funding for PPACA, however, comes from the federal government.  So a repeal of PPACA would create a whole new plethora of nightmares for states that wish to continue insurance exchanges with subsidies.  Massachusetts, New Jersey, the District of Columbia and Vermont have all enacted individual mandates at the state level.   

Who Wins? 

There are compelling arguments on either side.  In a purely legal sense, the law's opponents have the better argument.  As stated earlier, this argument underscores that PPACA is only alive today because the Obama Administration argued and the Supreme Court agreed in 2012 that the individual mandate was absolutely essential to the law to PPACA's core operation.  To wit, without the mandate, only sick folks will buy coverage, premiums will spiral out of control and the insurance systems undergirding PPACA will crumble.  Now that the mandate is dead, the argument goes, the law must also die as contemplated by PPACA supporters and the Supreme Court's prior ruling.

PPACA as passed was projected by the CBO to come in at just under $1 trillion.  However, immediately after passage, federal administrative agencies began creating exceptions to PPACA's individual mandate.  This was done at the behest of PPACA's supporters in congress and the White House because those politicians realized it was going to be unbelievably unpopular to been seen as the party fining people who could not afford health insurance.  At peak political cynicism, there were 32 different "exemptions" to the individual mandate meaning that anyone with a reasonable degree of intelligence could exempt themselves from the mandate.  In fact, as it turned out, the mandate only ended up applying to two percent of Americans.  I've written about this here and here.

The better practical argument lies with PPACA's proponents.  And oddly enough it is exactly their political cynicism and America's complete fiscal dysfunction that supports this notion.  In the early stages of 2012, many honestly believed that the individual mandate was essential to PPACA's functional existence.  The whole concept of insurance is that we all buy it because some of us will really need it.  If we only allowed those who truly need it to purchase it and then compel insurers to sell it to them we end up with the disastrous phenomenon of adverse selection, whereby, the persons who insurers most want to sell to are the last ones to show up to purchase and vice versa. 

From 2012 to 2015 something else happened.  Federal bureaucrats sitting in administrative agencies like HHS, the IRS and CMS crafted these 30+ exemptions to the individual mandate.  At peak lunacy, we had exemptions that eliminated your need to buy health insurance if you received a shutoff notice from a utility company in the last six months (not that your power was actually shut off, just that you received a warning).  There was also an exemption in the early years that allowed you to opt out of PPACA's mandate if you tried to log into and the site was not functional.  And my favorite exemption of all was that you didn't have to buy insurance if you "felt" that it was too expensive for you and you had better options elsewhere.   Ah, the "feelings" exemption - a rigorous legal test if there ever was one. 

All throughout this time, there have been reinsurance mechanisms built into PPACA.  Without getting too wonky with insurance terminology this basically means that if the risk moving into PPACA's Exchanges ends up being worse than insurers anticipated, the federal government steps in and shares in those losses.  A cynic might call these "baked in bailouts."  And these very payments have come under scrutiny as well - but we'll save that for another day.

Beyond these reinsurance payments from taxpayers to insurers, insurance companies are also given fairly liberal leeway to set premiums as high as necessary in order to cover future bad risk.  And since 80% of PPACA Exchange buyers are making that "purchase" with taxpayer subsidies, the "buyers" don't care all that much about premium anyway.

So, in a practical sense, why do you need a mandate to make this program fiscally feasible if the federal government is ultimately going to make insurers whole and pay any form of required bloated premiums to keep the system afloat?  Therefore we now end up with a PPACA whose 10-year price tag looks more like $2 trillion as opposed to its original $1 trillion.  Eleven years ago, when PPACA was born, taxpayers and politicians at least pretended to care about a trillion dollar price tag.  That was seen as an incomprehensible sum of money.  Now, in the midst of a global pandemic and the worst economic depression in 100 years the $2 trillion of healthcare reform looks like a pittance.  Today, half of our country argues for Medicare-for-All at a thirty trillion dollar price tag.  And our Treasury Department in conjunction with the federal reserve digitally create and spread out $6 to $9 trillion in pandemic bailouts in the blink of an eye with a few strokes on their keyboards. 

So when we circle back to these arguments for and against the validity of the law, those arguing that PPACA must fall because without the individual mandate the law could balloon to twice as much as originally contemplated appear antiquated and well outside of the nation's spendthrift zeitgeist.  In a practical sense, we never had an individual mandate.  It was an IQ test that 98% of Americans passed with flying colors.  And while some thought it may have been necessary for PPACA's function in 2012, 2013-2020 have proven that it is clearly not necessary - all we have to do is throw another trillion at the problem.  And then maybe another trillion.  Chump change in the fiscal imprudence of today's politician.

Perhaps on November 10th when Justice Thomas points out that PPACA will have no chance of sustaining itself at its original projected price tag without an individual mandate, Justice Kagan will, under her breath, utter, "okay boomer."

Thursday, September 17, 2020

California Exempts Additional Occupations from Independent Contractor Classification Test (AB 5)

On Sept. 4, 2020, California amended the list of occupations exempted from using the state’s employee classification test, also known as “the ABC test” (AB 5). When the ABC test is not required, including when an exemption applies, employers may need to revert to previous methods to determine whether a worker is an employee or an independent contractor.

Modified List of Exempt Occupations

The amendments modified the business-to-business, referral agency and freelance writer exemptions. The amendments also added the following new exemptions (see full text for details):
  • Recording artists, songwriters, lyricists, composers and related occupations;
  • Musicians (for single-engagement live performance event);
  • Individual performance artists;
  • Licensed landscape architects;
  • Freelance translators;
  • Registered professional foresters;
  • Home inspectors and persons who provide underwriting inspections, premium audits, risk management or loss-control work for the insurance industry;
  • Manufactured housing salespersons;
  • Persons engaged in conducting international and cultural exchange visitor programs;
  • Competition judges with specialized skill sets;
  • Digital content aggregators who serve as licensing intermediaries for digital content;
  • Specialized performers hired to teach a master class for no more than one week; and
  • Feedback aggregators.
For companies like Uber, Lyft and DoorDash, Californians will vote on the issue this fall in Proposition 22.  
Establishes different criteria for determining whether app-based transportation (rideshare) and delivery drivers are “employees” or “independent contractors.” Independent contractors are not entitled to certain state-law protections afforded employees—including minimum wage, overtime, unemployment insurance, and workers’ compensation. Instead, companies with independent-contractor drivers will be required to provide specified alternative benefits, including: minimum compensation and healthcare subsidies based on engaged driving time, vehicle insurance, safety training, and sexual harassment policies. Restricts local regulation of app-based drivers; criminalizes impersonation of such drivers; requires background checks. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local governments: Increase in state personal income tax revenue of an unknown amount. 

Should Self-Interest Have A Role In Health Care? - Short History of How We Got Where We Are In U.S. Healthcare

From Dr. John Goodman, writing at Forbes:   
By the mid-1980s it was clear to almost everyone that something was amiss. Costs were not only rising at an unaffordable rate, they were getting increasingly out of line with what other countries were paying. So, the concerns of the doctors were pushed aside and, much to the doctors’ future regret, public policy began to encourage the emergence of for-profit hospitals, for-profit clinics and for-profit insurance plans. 
Unlike the stodgy non-profits, which tended to be wasteful and inefficient, the new entities competed aggressively. They literally changed the entire nature of their industries in a short amount of time. 
And that produced a new set of problems. 
Remember, year after year, decade after decade, we suppressed normal market forces in health care. So much so that no one ever sees a real price for anything. No doctor. No patient. No employer. No employee. 
When people face artificial prices that are significantly different from real prices, they invariably face perverse incentives. And aggressive competition in the face of perverse incentives can produce outcomes that are even more perverse.

Wednesday, September 16, 2020

COVID-19 Supplemental Paid Sick Leave Expanded in California

On September 9, 2020, California Governor Gavin Newsom signed legislation (AB 1867) codifying Executive Order N-51-20 which:
  • Mandates that a food employee working in any food facility must be permitted to wash their hands every 30 minutes as needed; and
  • Makes the COVID-19 food sector supplemental paid sick leave effective until December 31, 2020, or when any federal extension of the Emergency Paid Sick Leave Act (EPSLA) established by the Families First Coronavirus Response Act (FFCRA) expires, whichever occurs later.
The law also creates a new entitlement to COVID-19 supplemental paid sick leave for persons employed as health care providers or emergency responders. This new entitlement is also effective until December 31, 2020, or when any extension of the EPSLA expires, whichever occurs later. 

According to the Governor’s message, the law closes the gaps between paid sick days provided in federal law and the Governor's Executive Order. The law now includes employers with over 500 employees as well as all employers of first responders and health care employees who opted not to offer coverage under federal law. 

The Labor Commissioner can cite workplaces for a lack of paid sick days under the expanded law.

Monday, September 7, 2020

Why the Federal Government Has Given Us Harmful Dietary Guidelines - Lessons from Thomas Jefferson to Today

Whether your name was Keys in nutrition or Keynes in economics, your contribution to 20th century education and science has left us with more than five decades of horrendous consequences.  This is from Terence Kealey writing at Cato:  
Although by 1955, within two years of originally proposing it, Keys had abandoned the dietary cholesterol hypothesis, for another 60 years the federal government continued to warn against consuming cholesterol-rich foods. It was only in 2015 that its Dietary Guidelines Advisory Committee classified high-cholesterol foods such as eggs, shrimp, and lobster as safe to eat: “cholesterol is not a nutrient of concern for overconsumption.” 
This 60-year delay shows how asymmetrical the official science of nutrition can be: a federal agency can label a foodstuff dangerous based on a suggestion, yet demand the most rigorous proof before reversing its advice. The Harvard professor of epidemiology and nutrition Walter Willett, commenting on the asymmetry in a related area of government nutrition advice, described it as “Scandalous. They say ‘You really need a high level of proof to change the recommendations,’ which is ironic, because they never had a high level of proof to set them.” ... 
Governments may be institutionally incapable of providing disinterested advice for at least four reasons. First, the scientists themselves may be divided, and by choosing one argument over another, the government may be making a mistake. Second, by abusing the precautionary principle, the government may be biasing its advice away from objectivity to risk‐​avoidance long before all the actual risks have been calculated. Third, because of public pressure, it may offer premature advice. And fourth, its advice will be distorted by lobbying.
Full article

Saturday, August 22, 2020

California Statewide Wildfire Resources

August 2020

Prepare for Wildfire
Be prepared for when wildfire strikes with Ready, Set, Go!
Learn more

Post-Wildfire Recovery
After a wildfire many dangers remain. Those returning home should be aware of their surroundings and go through the returning home checklist. Other concerns after a wildfire are the increased rate of erosion and flooding in California.
Read More 

California Department of Forestry and Fire Protection (CAL FIRE)
Track wildfires and see updates about spread and containment.
Read More

California Department of Social Services
Contains information on disaster recovery assistance that you may be eligible for if affected by wildfires.
Read More

Additional Web Resources
American Red Cross of Central California

Friday, August 7, 2020

Benefit & Compliance News: Employer COVID Liability Waivers, Medicare Insolvent by 2022? & Much More

Templates and Tools
Compliance Updates

Administering COBRA Notices in a COVID-19 World of Extended Deadlines - “A key component of the guidance is the application of a “tolling” concept. Here’s how it works: All group health plans must disregard the “outbreak period” for purposes of determining certain deadlines. The defined “outbreak period” runs from March 1, 2020, until 60 days after the COVID-19 national emergency ends (or such other date as the federal agencies announce).”

Side by Side Comparison: Electronic Disclosure Rules for Pension & Welfare Plans - “Below is a side-by-side general comparison to help plan administrators keep track of when each method may be used, and what requirements must be met.”

With COVID-19 Resurgent, Employers Confront Privacy and Information Security Issues When Testing Employees for COVID-19 - "The Equal Employment Opportunity Commission (EEOC) has issued guidance stating that mandatory testing of employees for COVID-19 falls within an exception to the Americans with Disabilities Act’s (ADA) general prohibition against mandatory medical examinations of employees. While lawful under the ADA, testing presents serious privacy and information security risks for employers. We describe in this article the common concerns raised at each stage of the testing process, from deciding whom to test to handling the test results. For each stage, we describe practical steps employers can take to help address these concerns."

Do We Have More Time to Furnish ERISA Group Health Plan Notices and Disclosures During the COVID-19 Emergency? - “Federal agencies have offered relief from the regular timeframes for furnishing a variety of required group health plan notices and disclosures during the COVID-19 emergency. Here are highlights...”

Vaccinate or Terminate – Mandatory Vaccination As Workplace Policy - "some individuals may be medically unable to be vaccinated or they may have sincere religious objections – both of which grounds may provide a legal basis upon which to refuse vaccination. As a result, private employers considering making COVID-19 vaccination a gatekeeping employment condition should proceed with caution."

Employers Require COVID Liability Waivers as Conflict Mounts Over Workplace Safety - As employers in California and across the country ask employees to return to the workplace, many have considered and some are requiring employees to sign similar waivers, employment lawyers say. And many employees, mostly lower-wage and minority workers in essential jobs, are calling lawyers to complain about the waivers. 'These are illegal agreements that are totally unfair to workers,' said Christian Schreiber, a San Francisco lawyer who represents Aguilar and other employees. The California State Legislature last year passed a law, AB-51, prohibiting employers from requiring employees or job applicants to sign away their right to pursue legal claims or benefits under state law. The law, which also prohibits firing any employee for refusing to sign, is being challenged in court by business groups."

Benefit News

Don’t Count on Lower Premiums Despite Pandemic-Driven Boon for Insurers - "The consensus among industry experts is that COVID-19 has generated little pressure for rate rises, and health plans should err on the side of moderation. But some fear that many insurers will hold onto the reserves they’ve built up, citing the possibility of widespread vaccinations and concerns that the care forgone in 2020 could rebound with a vengeance next year."

Tech companies are offering parents additional benefits as COVID-19 threatens schools’ return - Instead of ping-pong tables or free-flowing alcohol, tech companies are now offering help with parenting, which could be particularly useful as many children begin the school year from home as coronavirus cases continue to rise. Some of the biggest tech companies are offering additional paid time off, are paying for backup child care, or both.

Another Problem on the Health Horizon: Medicare Is Running Out of Money - "Given even a conservative estimate of how many workers and businesses would not be contributing payroll taxes that finance Part A spending, he said, the trust fund could become insolvent as early as 2022 or 2023."

Half Of U.S. Hospitals In The Red By Year’s End Without More Federal Support - "51% of America’s hospitals will have negative margins by the end of the year without additional federal support. Under an optimistic scenario, hospitals’ median margin would be -1%. Under a less optimistic one, that margin could sink to -11%."

Health and Wellness

COVID Stress Syndrome: What It Is and Why It Matters - "Pandemics are unlike other disasters. COVID-19 is shaping up to be unlike prior coronavirus infections impacting multiple organ systems. In particular, the virus crosses the blood-brain barrier, resulting in myriad neuropsychiatric problems ranging from depression and anxiety to psychotic reactions to delirium and cerebrovascular accidents (strokes) to chronic executive dysfunction."

Friday, July 24, 2020

Benefit News Clips - New PPACA Affordability, Updated Coronavirus Compliance & More

July 22, 2020 – McGriff
Excerpt: “For plan years beginning in 2021, employer-sponsored coverage will be considered affordable if the employee’s required contribution for self-only coverage does not exceed…”

July 20, 2020 – McGriff
Excerpt: “The DOL’s new guidance on COVID-19 and the FLSA addresses topics such as teleworking and compensable time, maintaining employees’ exempt and non-exempt status, and hazard pay…In addition to substituting “COVID-19” for “influenza” in many places, the new guidance on COVID-19 and the FMLA adds questions on whether a telemedicine appointment can establish a serious medical condition under the statute…”

July 22, 2020 – McGriff
Excerpt: “As a result of the final rule, issuers can now offer STLDI policies that last up to 12 months.”
July 23, 2020 – The U.S. Department of Health and Human Services
Excerpt: “As a result of the continued consequences of Coronavirus Disease 2019 (COVID-19) pandemic, on this date and after consultation with public health officials as necessary, I, Alex M. Azar II, Secretary of Health and Human Services, pursuant to the authority vested in me under section 319 of the Public Health Service Act, do hereby renew, effective July 25, 2020, my January 31, 2020, determination that I previously renewed on April 21, 2020, that a public health emergency exists and has existed since January 27, 2020, nationwide.”

July 23, 2020 – Politico
Excerpt: “The Trump administration has renewed the public health emergency for the coronavirus, ensuring that critical resources to fight the pandemic can continue while much of the country battles rising caseloads.”

July 23, 2020 – Thomson Reuters
Excerpt: “This IRS information letter does not break new ground or include any surprises. However, it is a useful reminder that employers wishing to take advantage of the cafeteria plan relief that the IRS has provided in response to the COVID-19 health crisis must amend their plans to do so.”

July 23, 2020 – The Hill
Excerpt: “They had hoped to release the bills on Thursday, but indicated that could slide to Monday as they finalize the text and both sides sign off on final language.”

July 23, 2020 – Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
Excerpt: “This is the guidance upon which employers rely in determining when employees are safe to return to work after being sick with or testing positive for COVID-19. Significantly, the CDC changed the criteria to require that a person be fever-free for 24 hours versus the previous requirement of being fever-free for 72 hours.”

July 22, 2020 – Jackson Walker
Excerpt: “For working parents, what the schools decide may determine whether they need to take leave from work if their children remain at home.”

July 22, 2020 – The U.S. Centers for Disease Control and Prevention
Excerpt: “The following print-only materials are developed to support COVID-19 recommendations. All materials are free for download.”

July 21, 2020 – Littler Mendelson P.C.
Excerpt: “The recently issued guidance makes clear, for example, that where an employee was eligible for extended FMLA leave, and used four weeks of leave before being furloughed, they are entitled upon their return to work to the remaining eight weeks of leave (if it is still needed because a child’s school or place of child care is closed). Put more simply…”

July 21, 2020 – Fisher Phillips LLP 
Excerpt: “The Department of Labor just provided employers a sign that it might be open to altering the Family and Medical Leave Act regulations and guidance, perhaps resolving some of the more difficult aspects of the law that cause the most administrative and implementation headaches.”

July 20, 2020 – Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
Excerpt: “The IRS guidance clarifies that FFCRA qualifying leave wages paid to employees must be added to the sum of wages reported in Boxes 1, 3 (as applicable), and 5 of Form W-2. Additionally, employers must separately report three categories of leave wages in Box 14 (or on a separate statement), labeling them using the model or similar language, as specified below.”

July 20, 2020 – The U.S. Department of Labor
Excerpt: “Today’s guidance is the latest addition to compliance assistance materials the WHD has published. These materials include a Fact Sheet for Employees, a Fact Sheet for Employers and a Questions and Answers resource about paid sick and expanded family and medical leave under the FFCRA. WHD has also produced two guidance posters, one for federal workers and one for all other employees, that fulfill notice requirements for employers obligated to inform employees of their FFCRA rights; Questions and Answers about posting requirements; and simple Quick Benefits Tips to determine how much paid leave the FFCRA allows workers to take.”

July 20, 2020 – The U.S. Department of Labor
New questions added 94-97. Excerpt: “I am concerned about his returning to work too soon and potentially exposing my other staff to COVID-19. May I require him to telework or take leave until he has tested negative for COVID-19?”

Wednesday, July 22, 2020

CDC Guidance for COVID-19, Tests, and Discontinuing Home Isolation

On July 20, 2020 the U.S. Center for Disease Control (CDC) announced:
  • A test-based strategy is no longer recommended to determine when to discontinue home isolation, except in certain circumstances.
  • Symptom-based criteria were modified as follows:
    • Changed from “at least 72 hours” to “at least 24 hours” have passed since last fever without the use of fever-reducing medications.
    • Changed from “improvement in respiratory symptoms” to “improvement in symptoms” to address expanding list of symptoms associated with COVID-19.
  • For patients with severe illness, duration of isolation for up to 20 days after symptom onset may be warranted.
  • For persons who never develop symptoms, isolation and other precautions can be discontinued 10 days after the date of their first positive (RT-PCR) test for COVID-19 (SARS-CoV-2 RNA).
The CDC also provides, and regularly updates, the following resources:
  • A summary of current evidence and rationale for ending isolation and precautions for persons with COVID-19 using a symptom-based strategy; and
  • A website for businesses and workplaces to plan, prepare, and respond to COVID-19.

Sunday, June 28, 2020

Federal Judge Upholds HHS’ Hospital Transparency Rule as U.S. Healthcare Moves One Step Closer Real Price Disclosure

Judge Rejects Argument That Patients Will Be "Confused" & "Frustrated" by Having Access to Real Price of Care

On June 23, 2020, a Federal District Judge ruled in favor of the Trump administration’s final rule requiring hospitals to disclose the "secret" negotiated prices they are paid by insurers. The rule was released on Nov. 15, 2019 (after being originally proposed in March of 2019), and is set to take effect Jan. 1, 2021.

In December 2019, the American Hospital Association (AHA) filed a lawsuit attempting to block the rule’s implementation, stating that a requirement to disclose negotiated prices violated their First Amendment rights.  The AHA further contended that, "the Rule is unjustified because the publication of hundreds of prices will 'confuse' patients and 'frustrate . . . [their] decisionmaking.' Pls.’ Mot. at 27. They further contend that the regulation is unduly burdensome." Civil Action No. 1:19-cv-03619 (CJN), page 33.

Does anyone else find it peculiar that it is not too burdensome to negotiate thousands of different reimbursements from tens of different carriers every couple of years and memorialize those understandings in hundreds of pages of contracts - but it is too burdensome to publish those prices to the public?   The Court ruled that it was within the Department of Health and Human Services’ (HHS) scope to require the disclosure of these negotiated rates, rejecting the AHA’s claims.

What is in the Final Rule?

Hospitals will be required to provide easily accessible billing information to patients. This means having all standard charges available online and in one single data file that can be “read by other computer systems,” according to a Centers for Medicare & Medicaid Services (CMS) press release.  Current federal rules and regulations mandate that hospitals make their retail or "chargemaster" rates available to the public.  But these rates are entirely fictional and capricious.  As the court noted, in this decision on page 16, "chargemaster rates are rarely demanded for payment—again, chargemaster rates are paid for only about 10% of hospital patients, making them anything but the 'standard' price demanded for a hospital’s services."

The charges listed would include “the gross charges, payer-specific negotiated charges, the amount the hospital is willing to accept in cash from a patient, and the minimum and maximum negotiated charges,” according to the initial press release about the final rule.  As part of the final rule, CMS was granted more authority over enforcement. Specifically, the department has greater capability to audit hospitals and issue fines of $300 per day to those who are noncompliant.

This rule, more than any other we've seen in the modern era of American healthcare, actually has the potential to rein in costs.  In the end, Obamacare expanded healthcare access, but it did nothing to rein in costs.  In fact, on the whole, it increased costs by adding bureaucracy, mandatory benefits (even for those who didn't want them) and decreasing consumerism by increasing government payment.  This regulation would actually do more to unleash free-market consumerism in healthcare than any other federal law or regulation since the creation of the Health Savings Account in 2003. 

Next Steps

The rule won’t be effective until Jan. 1, 2021. In that time, hospitals will be working to make the applicable data available online. The AHA is almost certain to appeal the ruling, which could delay the rule’s effective date.

I fully expect the ultimate implementation of this rule to supercharge the use of Referenced Based Pricing, Health Savings Accounts and Individual Coverage Health Reimbursement Accounts, largely explained in my recent article here.  The bottom line is that American healthcare will continue to escalate at two to three times the general inflation rate and become less accessible for greater numbers of people until we minimize the economic impacts of third-party-payment, shine a light on real pricing and place consumers in greater control of healthcare expenditures.  This regulation is a powerful first step in healing an incredibly ill system. 

We will continue to monitor developments and provide updates as necessary.  I sat with Armstrong and Getty in March of 2019 to discuss the initial formulation of this regulation and its potential impact on U.S. healthcare.  That entire post is here and the audio is below.

Wednesday, June 24, 2020

Coronavirus Mental Health and Stress Resources for Employees

In response to the COVID-19 outbreak and subsequent fallout, the following federal resources are available to share with your employees:
  • The Centers for Disease Control and Prevention’s Coping with Stress page provides information about handling the stress of an outbreak, reactions, caring for yourself and your community, who is at a higher risk, and coming out of quarantine.
  • The U.S. Department of Health & Human Services (HHS) offers the following resources:
    • COVID-19 Behavioral Health Resources lists a collection of resources created by federal agencies and their partners to help healthcare providers, caregivers, and the general population prepare for and manage the negative behavioral effects that can accompany a public health emergency.
    • Mental Health and Coping links to resources and advice to help individuals cope and to support their mental and behavioral health during the COVID-19 pandemic. Many of these resources are available in multiple languages.
  • The HHS Substance Abuse and Mental Health Services Administration (SAMHSA) COVID-19 resources page links to resources to help individuals, providers, communities, and states across the country deal with mental health challenges related to the COVID-19 pandemic.
  • The Centers for Medicare & Medicaid Services (CMS) COVID-19 Partner Toolkit links to CMS and HHS materials on COVID-19.
  • The National Council for Behavioral Health’s Resources for COVID-19 provides links to resources for managing mental health during COVID-19 as well as tax, loan, and leave information for employers and employees.
  • The National Association of State Mental Health Program Directors COVID-19 Resource Links page provides federal government COVID-19 compliance resource links, state health department links, and more.
Additionally, the New Jersey Association of Mental Health and Addiction Agencies provides a Federal Resources for COVID-19 page with a wide variety of related material and the ThinkHR with Mammoth blog addresses, “How to support the Mental Health pf Your Employees During COVID-19.”

Tuesday, June 16, 2020

New OSHA COVID-19 Guidance for Reopening

On June 15, 2020, the Occupational Safety and Health Administration (OSHA) released a bulletin reminding employers that safety is a priority within both COVID-19 and common workplace hazards. In all phases of reopening, employers must plan for potential hazards related to COVID-19 and from routine workplace processes. Employee stress, fatigue, and distractions may be increased by the pandemic and must be considered when employers develop their employee return-to-work plan. OSHA advises that employers re-evaluate their return-to-work plans, with employee safety and health as a priority, before trying to increase production or tasks in an effort to catch-up on downtime.

As part of their reopening plans, OSHA recommends employers provide workers with safety and health training reviews and address maintenance issues deferred during a shutdown. Employers should also revisit and update standard operating procedures and remember that exposures to hazards may increase during shutdown and start-up periods. It is important for employers to review and address process safety issues – including stagnant or expired chemicals – as part of their reopening effort. Employers must also remember that retaliating against workers for raising concerns about safety and health conditions is prohibited.

OSHA provides COVID-19-related guidance to help employers develop policies and procedures that address the following issues:
OSHA’s guidance for employers also includes frequently asked questions related to COVID-19 in the workplace such as worksite testing, temperature checks and health screenings, and the need for personal protective equipment. This guidance accompanies the U.S. Department of Labor and U.S. Department of Health and Human Services’ previously developed Guidance on Preparing Workplaces for COVID-19.

Read more about COVID-19 on OSHA’s website

Thursday, June 11, 2020

New EEOC & OSHA COVID-19 Updates Covering the ADA and Cloth Face Coverings

The EEOC updated it’s What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws - Covering:
  • Employees are not entitled to an accommodation under the Americans with Disabilities Act to avoid exposing a family member who is at higher risk of severe illness from COVID-19 due to an underlying medical condition. 
Although the ADA prohibits discrimination based on association with an individual with a disability, that protection is limited to disparate treatment or harassment. The ADA does not require that an employer accommodate an employee without a disability based on the disability-related needs of a family member or other person with whom she is associated. 
For example, an employee without a disability is not entitled under the ADA to telework as an accommodation in order to protect a family member with a disability from potential COVID-19 exposure. 
  • Steps an employer can take if an employee entering the worksite requests an alternative method of screening due to a medical condition.
This is a request for reasonable accommodation, and an employer should proceed as it would for any other request for accommodation under the ADA or the Rehabilitation Act. If the requested change is easy to provide and inexpensive, the employer might voluntarily choose to make it available to anyone who asks, without going through an interactive process. Alternatively, if the disability is not obvious or already known, an employer may ask the employee for information to establish that the condition is a disability and what specific limitations require an accommodation. If necessary, an employer also may request medical documentation to support the employee’s request, and then determine if that accommodation or an alternative effective accommodation can be provided, absent undue hardship. 
Similarly, if an employee requested an alternative method of screening as a religious accommodation, the employer should determine if accommodation is available under Title VII.
  • Employees age 65 and over are at higher risk for a severe case of COVID-19 if they contract the virus subsequently the CDC has encouraged employers to offer maximum flexibilities to this group. Employers must be mindful that employees over age 65 have protections under the federal employment discrimination laws and are prohibited from involuntarily excluding an individual from the workplace based on his or her being 65 or older, even if the employer acted for benevolent reasons such as protecting the employee due to higher risk of severe illness from COVID-19.
  • Employers may not exclude an employee from the workplace involuntarily due to pregnancy.
  • A right to accommodation based on pregnancy continues during the pandemic.
There are two federal employment discrimination laws that may trigger accommodation for employees based on pregnancy.
First, pregnancy-related medical conditions may themselves be disabilities under the ADA, even though pregnancy itself is not an ADA disability. If an employee makes a request for reasonable accommodation due to a pregnancy-related medical condition, the employer must consider it under the usual ADA rules. 
Second, Title VII as amended by the Pregnancy Discrimination Act specifically requires that women affected by pregnancy, childbirth, and related medical conditions be treated the same as others who are similar in their ability or inability to work. This means that a pregnant employee may be entitled to job modifications, including telework, changes to work schedules or assignments, and leave to the extent provided for other employees who are similar in their ability or inability to work. Employers should ensure that supervisors, managers, and human resources personnel know how to handle such requests to avoid disparate treatment in violation of Title VII.
OSHA, COVID-19, and Cloth Face Coverings - On June 10, 2020, OSHA released frequently asked questions and answers related to COVID-19 and cloth face coverings addressing:
  • The key differences between cloth face coverings, surgical masks, and respirators.
  • That OSHA’s PPE standards do not require employers to provide cloth face coverings because they are not considered personal protective equipment (PPE) and are not intended to be used when workers need PPE for protection against exposure to occupational hazards.
  • OSHA’s recommendation that employers encourage workers to wear face coverings at work for source control purposes. Face coverings are intended to prevent wearers who have COVID-19 without knowing it (i.e., those who are asymptomatic or pre-symptomatic) from spreading potentially infectious respiratory droplets to others (this is source control).
  • Cloth face coverings do not substitute for social distancing measures.
  • Surgical masks or cloth face coverings are not acceptable respiratory protection in the construction industry when respirators are needed but not available due to the pandemic.

Monday, June 8, 2020

Updates to the Paycheck Protection Act Making it More Flexible

Late last week, the President signed legislation (H.R. 7010) enacting the Paycheck Protection Program Flexibility Act (PPPFA) which amends the CARES Act’s Payroll Protection Program (PPP). Here is a brief summary of the changes enacted by the new law: 
  • The timeframe in which borrowers must spend the PPP funds is expanded to 24 weeks (as opposed to 8 weeks) or December 31, 2020, whichever is earlier. This is effective immediately and applicable to all loans as if the language was part of the original CARES Act.
  • The date when workers must be rehired is extended from June 30th to to December 31, 2020.
  • The PPPFA softened rehiring requirements by adding a loan forgiveness exemption based on employee availability from February 15 through December 31, 2020. During this time, loan forgiveness will be determined without regard to a proportional reduction in the number of full-time equivalent employees if the borrower can document in good faith that:
    • They are unable to rehire former employees on February 15, 2020 and are also unable to hire similarly qualified employees for unfilled positions by December 31, 2020; or
    • They are unable to return to their pre-COVID-19 level of business activity (prior to February 15, 2020) because of federal safety and health requirements (issued from March 1, 2020 through December 31, 2020) for sanitation, social distancing, or any other worker or customer COVID-19-related safety requirement.
  • Businesses now have 5 years to repay a loan and the first payment will be deferred for six months after a forgiveness determination. This is only applicable to loans made on or after June 5, 2020.
  • The allocation of funds that must be used for payroll is modified requiring borrowers to spend 60% of the loan on payroll. 40% can be used for other expenses (the prior allocation was 75% payroll / 25% other).
  • Employers may delay paying employer payroll taxes for Social Security through December 31, 2020. 
The Small Business Association and Treasury Department are expected to release detailed guidance on these udpates.

Source: US H.R. 7010

Thursday, June 4, 2020

These States Maximize Your Business & Entrepreneurial Opportunity in a Post-COVID World of Social Unrest

American businesses teeter on the precipice of an onslaught of COVID-19 related lawsuits. The return-to-work decision is a difficult one in every aspect. But the question of employer liability for employees or customers who claim to have contracted the virus in the workplace is about to make things considerably more precarious.

Freedom loving people have always focused on taxation, regulatory burden, state debt and an unencumbered Second Amendment when analyzing whether it is time to move their business or just take their talent to a more appreciative state. The exodus from high tax, legislatively stifling states to states offering more liberty accelerated in recent years as documented regularly by ZeroHedge:
Historically, I used the below metric to show clients, family and friends which locations are likely to present them with the best business, employment and homeownership opportunities.

This then results in these final rankings: 

2020, however, requires the addition of a few more considerations as we now see the potential for crippling business lawsuits due to the coronavirus and widespread social unrest.

Overview of the Employer Liability Rules in Play

In general, workers injured in the workplace will receive compensation and benefits under the applicable state’s workers’ compensation laws. Benefits are provided irrespective of fault and are generally the exclusive remedy for workplace injuries, illnesses, or fatalities. Nearly all workers in the United States are covered by workers’ compensation.

The system is sometimes referred to as a grand bargain between employers and workers. It developed early in the 20th century in response to dissatisfaction with the tort system as a method of compensating workers for workplace injuries, illnesses, or deaths. Under this grand bargain, workers receive guaranteed, no-fault benefits for injuries, illnesses, and deaths, but forfeit their rights to sue their employers absent some form of willful, extremely reckless or grossly negligent employer behavior. Employers receive protection from lawsuits but must provide benefits regardless of fault.

COVID-19 now has states, employers and the federal government scrambling to come to grips with how the resulting illnesses and deaths will impact employer tort liability and workers’ compensation laws. Beyond the worker impact of COVID-19, businesses must further consider tort suits brought by customers and venders who claim that the business failed to act as a reasonably prudent business in the same or similar circumstances and that failure resulted in a COVID-19 infection. This legal upheaval is no small matter, no matter how it is approached. As stated by The Hill:
One U.S. law firm suggested coronavirus litigation could be “the new asbestos,” referring to a wave of personal injury litigation in the 1970s and '80s related to the carcinogenic material that was once commonly used in building construction.

“If you just let it all go now, it would be a disaster,” said David Rivkin, a partner at Baker Hostetler, who supports Congress granting businesses temporary immunity. “It would be a tsunami of lawsuits. Hundreds have already been filed.”

Therefore, as we review the list of states presenting entrepreneurs and businesses with the best opportunity to thrive, it makes sense to take an early look at how states plan to handle business liability for COVID-19 as well as the states most (and least) likely to have destructive riots and looting.   
States Seeking to Shield Business from Onerous Lawsuits  

“Bless this immunity.” - Tool, Fear Inoculum

From The Hill:
Many states have granted some form of liability immunity to health care workers and facilities. Utah and North Carolina have gone the furthest, passing laws that offer the strongest immunities yet for a range of industries as stay-at-home orders and business closures are eased.

In Utah, Gov. Gary Herbert (R) signed legislation earlier this month that makes all businesses and individuals immune from litigation based on others’ exposure to coronavirus on their property, with exceptions for things like willful misconduct. Oklahoma lawmakers have sent similar legislation to its governor.

North Carolina’s law is narrower than Utah’s and applies to “essential businesses” as defined in the state’s emergency declaration, but still offers more protection than other states.

At least six states — Alabama, Illinois, Louisiana, Ohio, South Carolina and Wyoming — have introduced legislation that would also shield more than just health care workers and facilities, according to the National Conference of State Legislatures (NCSL).
Alabama Governor Kay Ivey signed a proclamation that provides liability protections for businesses, healthcare providers, and other covered entities during the COVID-19 pandemic. I provides that businesses are not liable for a person’s death, injury, or property damage that results from an act or omission related to COVID-19, in any way, unless clear and convincing evidence otherwise proves that the harm was caused by the entity’s wanton, reckless, willful, or intentional misconduct.

The proclamation also creates a standard of care, which requires entities to reasonably attempt to comply with applicable public health guidance in response to COVID-19; and protects businesses from liability for damages from mental anguish, emotional distress, or for punitive damages.

States Making Things Worse for Employers

All that I'm to do
Calculating steps away from you” – Tool, Fear Inoculum

As David Lindsay and Erinn Rigney wrote at the National Law Review:
Perhaps the most significant pronouncement was by California Governor Gavin Newsom, who issued an executive order on 6 May 2020 that establishes a rebuttable presumption in workers’ compensation claims, presuming that covered workers who are diagnosed with COVID-19 contracted the illness at work, without the employee having to provide any further proof. Although this presumption is rebuttable—meaning that an employer can provide evidence to refute the presumption, it is likely to be a high burden for employers to meet, especially given the wide variety of ways COVID-19 can be transmitted. Further, California extended the presumption to any worker who reported to work outside of the home at the direction of their employer and received a positive test or physician diagnosis, a far broader category of workers than most other states. Therefore, in California, most eligible workers’ claims relating to on-the-job COVID-19 exposure likely will be covered by workers’ compensation.  
Riots Destroying Your Investment

On the good news front, auto, homeowners, and business insurance policies generally include coverage for property losses caused by riots and civil commotions. Standard business property insurance policies provide coverage for the structure of the building as well as the contents inside. Furthermore, Business Interruption (BI) coverage generally does reimburse losses when a covered peril forces a business to temporarily close its doors and pays employees, venders, rent and electric bills.

Nevertheless, this coverage is far from an inoculum against the perils of social unrest. Sixty percent of businesses with less than 100 employees do not even have (BI) coverage. For those that do, the lost income is calculated on a 12-month, look-back assessment of a business’ income prior to the date of loss. This means a business that has been shut or operating at a limited capacity due to COVID-19 will receive a reduced payout for any business income claims due to the recent rioting and looting.

Furthermore, no business owner wants to deal with the cleanup, claim process and resultant escalation in premiums after the fallout of such social unrest. So, as we consider the freest and most economically viable states for relocation, it makes sense to also factor in that state’s proclivity for social unrest and rioting. The below map was created at 11:30 AM PST on May 31, 2020 in the midst of the protests and social unrest resulting from the horrific alleged murder of George Floyd at the hands of former Minneapolis police officer Derek Chauvin. As of the time of this post, Derek Chauvin has been charged with 2nd degree murder in Minnesota.

Interactive US Map of Active Protests and Riots as of 11:30 AM PST on May 31, 2020.

As you can see from this map, some of the freest and most desirable states for business and employment also happen to be some of the least likely places that a business will confront rioters and looting. Montana, Idaho, Wyoming and the Dakotas form a 5-state zone remarkably free from social unrest and property damage.

Best States in 2020-2021 

Before 2020, businesses and entrepreneurs were leaving deep blue states for greener pastures in less encumbered jurisdictions. The pandemic, social unrest and devastating economic collapse coupled with the fact that so many more people are learning they can effectively do their job remotely through video-conferencing platforms will only accelerate this trend. Additionally, some states now seek to encourage the reopening of business by shielding employers from an onslaught of lawsuits due to complains that employees and customers could have contracted COVID-19 in the workplace. Conversely states like California seek to pin that responsibility on employers by creating a presumption that an employee’s sickness resulted from the workplace.

Utah, North Carolina, Wyoming and Alabama’s bold leadership in this regard elevate those states status for consideration in the new, post-pandemic workplace. In Utah and Oklahoma’s cases, you could argue that it might move them up into the top 10. While Alabama and North Carolina’s efforts are good for business, they are not enough to overcome those states’ weaker performance in other economic indices.

Choice of jurisdiction matters. As we move through ever-increasing tumultuous times, that choice becomes that much more important. California, New York, New Jersey and Illinois have co-opted individual liberties, saddled their people with an unsustainable debt, regularly punish the job creators and entrepreneurs while also being the most likely states to encounter social unrest. Meanwhile, South Dakota, Wyoming, Idaho, New Hampshire and Tennessee reward hard work, creativity and honor constitutional freedoms. Keep that in mind as you vote with the location your homes and businesses.