Friday, May 29, 2020

Benefit News Clips, Week Ending May 29th

Majority of employers help with cost of COBRA coverage for furloughed employees
May 28, 2020 – Wolters Kluwer (one-time registration may be required)
Excerpt: “Due to the COVID-19 pandemic, employers have made changes to their workforce, according to a recent report from the International Foundation of Employee Benefit Plans (IFEBP). The Employee Benefits in a COVID-19 World: April 2020 Survey Report found that 31 percent have temporarily furloughed workers, 29 percent have reduced worker hours, and 21 percent have laid off workers.”

School’s Out For Summer: Unavailability Of Child Care And The FFCRA
May 26, 2020 – Fisher Phillips LLP
Excerpt: “In response to Question 93 in its FFCRA Questions and Answers, the USDOL recently clarified that employees may not take paid leave to care for children because school is closed for the summer. However, the USDOL further advised that employees may be eligible to take leave if their child’s care provider during the summer — including a camp or other program in which the employee’s child is enrolled — is closed or unavailable due to a COVID-19 related reason.”

When You Can be Around Others After You Had or Likely Had COVID-19
May 24, 2020 – The U.S. Centers for Disease Control and Prevention
Excerpt: “I think or know I had COVID-19, and I had symptoms. You can be with others after…I tested positive for COVID-19 but had no symptoms. If you continue to have no symptoms, you can be with others after…”

FFCRA FAQ: Must an Employee Enroll their Child in a Summer Program as a Precondition to Taking FFCRA Leave if the Program is Cancelled?
May 22, 2020 – Littler Mendelson P.C.
Excerpt: “But I also am worried FAQ #93 is a trap for employers. It seems pretty clear that many of your employees will be able to show that…”

COVID-19 Return to Work: Wage & Hour Claims for Loss of Exempt Classification
May 21, 2020 – World at Work
Excerpt: “Under the FLSA, exempt employees must be paid their entire salary for the week even if the employer has them work less than a full week. Therefore, simply paying an exempt employee a pro-rated reduced salary is not permissible. Rather, employers must implement proportional salary reductions in advance and provide employees with notice of the change.”

Tenth Circuit Upholds Health Plan's Denial of Surrogacy Expenses
May 21, 2020 – Thomson Reuters
Excerpt: “Despite being informed in 2011 by the plan's claims administrator that the plan did not cover surrogate maternity, the participant acted as a surrogate in 2013 and 2015. The plan covered the participant's pregnancy expenses for the 2013 surrogacy, apparently because it was unaware that the participant was acting as a surrogate.”

COBRA in the Time of COVID-19
May 20, 2020 – Foley & Lardner LLP
Excerpt: “COBRA compliance requires extra attention right now. There has been a wave of litigation surrounding COBRA election notices. Regulatory agencies have extended certain COBRA deadlines due to the COVID-19 pandemic. And the Department of Labor recently released new COBRA model notices. Now, more than ever, employers need to take COBRA seriously and ensure that they are prepared to address these issues.”

Wednesday, May 27, 2020

Updated Employee Leave Requirements for Coronavirus in California, Nevada & Oregon

In response to COVID-19, states have passed new laws and issued new regulations and guidance about employee leave taken for reasons related to the coronavirus. These provisions are in addition to the federal Emergency Paid Sick Leave and Emergency Family and Medical Leave Expansion requirements passed in March.  States, cities and counties are updating these rules and regulations often, so make sure to check back with the relevant links below to see what changes may have been made.   


The California Labor Commissioner has issued FAQs on employee leave options, compensation and salary in the context of COVID-19. In addition, Governor Newsom issued an executive order requiring large employers to provide up to 80 hours of paid leave for food sector workers for certain COVID-19-related reasons. Covered workers include farm workers, grocery workers and food delivery workers, among others. The measure was intended to provide paid leave for employees not covered by FFCRA’s paid leave provisions. Click here for more information.

  • Los Angeles—Mayor Eric Garcetti has issued a public order, effective April 10, 2020, requiring up to 80 hours of supplemental paid sick leave for certain workers for specified COVID-19-related reasons. The order applies to private employers with 500 or more employees within the city of Los Angeles, or 2,000 or more employees within the United States. The order includes employer and employee exemptions, and pay caps apply. The city has issued rules to implement the order.
  • Los Angeles County—Under an urgency ordinance, employees in unincorporated areas of Los Angeles County are entitled to 80 hours of supplemental paid sick leave for specific COVID-19-related reasons, retroactive to March 31, 2020. Part-time employees receive paid sick leave equal to their average two weeks’ pay. Pay is capped at $511 per day and $5,110 total. 
The ordinance applies to employers with 500 or more employees nationally, but employers covered by the FFCRA or the state order requiring paid leave for food sector employees are exempt. Employees who are emergency responders or health care providers, as defined in the ordinance, are not entitled to the leave.
  • San Francisco—As of April 17, 2020, the San Francisco Public Health Emergency Leave Ordinance requires employers with 500 or more employees worldwide to provide their San Francisco employees with up to 80 hours of emergency paid sick leave for certain coronavirus-related purposes. Click here for FAQs from the city on the new law.
The city of San Francisco has also passed the Workers and Families First Program, providing $10 million to businesses with employees in San Francisco to provide five days of sick leave beyond employers’ existing policies. The additional sick leave is available only to employees who have exhausted their currently available sick leave, have exhausted or are not eligible for federal or state supplemental sick leave, and whose employer agrees to extend sick leave beyond current benefits. The city has released an employer guide on the program.

The city has also published guidance on San Francisco Paid Sick Leave and the coronavirus.
  • San Jose—San Jose has passed a paid sick leave ordinance, effective April 8 – Dec. 31, 2020, in response to the COVID-19 crisis. The ordinance is meant to fill the gaps left by the FFCRA, and it requires employers to provide eligible employees with up to 80 hours of paid sick leave for specified COVID-19 related reasons. The city has issued FAQs on the ordinance.
Nevada ­­­

The Nevada Labor Commissioner’s Office has issued guidance on employees’ use of leave for COVID-19 purposes under the state’s new paid leave law. According to the guidance, employees may elect to use available paid leave or other applicable leave while out on a mandatory government quarantine, but employers may not require that employees use the leave for this purpose.


The Oregon Bureau of Labor and Industries issued a temporary rule clarifying that Oregon family leave covers an employee’s absence to care for his or her child whose school or place of care has been closed in conjunction with a statewide public health emergency declared by a public health official.

Oregon has also issued guidance on the use of sick time (which may also be used for public health school closures) in the context of COVID-19.  

This post is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.  

New Study Underscores Importance of Physical Activity in the Avoidance of Dementia

This study has been accepted for publication and undergone full peer review.  "Factors independently associated with the risk of developing dementia included increasing age, diabetes and lack of physical exercise."  

Summary of Results:  
  • Diabetes increased the risk of dementia by 51%.  
  • Compared to no physical exercise, engaging in 3 days a week of physical exercise reduced the risk of dementia by 37%.   
  • Compared to no physical exercise, engaging in 5 day sa week of physical exercise reduced the risk of dementia by 59%. 

Sunday, May 24, 2020

Employee Health Screening Apps are Coming - Proceed with Caution

COVID-19 and the resultant business and economic freeze may very well prove to be the largest global event occurring in any of our lifetimes.  The loss of lives, livelihoods, businesses and long term effects on mental health and culture are far from complete, yet already devastating.  Now, employers grapple with the most significant decision they are likely to ever make: when to come back to work and how.

Many employers will be lured into the siren song of safety above all else and succumb to a balancing act that tips heavily in favor of control and surveillance over individual liberty.  I fully understand the impetus.  Employers find themselves in a tricky Catch-22.  They must do that which is reasonable to protect the health and safety of their workers without trampling on employee privacy, health or liberty. 

As the attorneys at Ropes & Gray LLP point out, "[e]mployers looking to introduce these apps may point to their duty under the Occupational Safety and Health Act (“OSHA”) to furnish to workers 'employment and a place of employment, which are free from recognized hazards that are causing or are likely to cause death or serious physical harm.'"  But as Americans, we have far more individual liberty protection than people in the Asian countries that are months ahead of us and have already implemented sever state, local and employer controls.  For example, "China has already introduced virtual health checks, contact tracing and digital QR codes to limit the movement of people. Antibody test results could easily be integrated into this system."

Beyond any employer's legal analysis (which is undoubtedly important) the cultural differences in the United States should oblige employers to proceed with more than a modicum of caution.  We have a vast network of federal, state, local and employment laws and regulations protecting our individual liberties.  What's more is that inherent and deep love for liberty embedded in our Constitution and our core as a people.  American was founded on the concept that liberty outweighs security.  As Benjamin Franklin wrote famously in the Pennsylvania Assembly's 1755 reply to the Governor
Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.
Ropes & Gray nicely summarized these points as such:  
Because of contact-tracing apps’ intrusive nature and the laws discussed above, employer-required or employer-implemented electronic contact tracing could be viewed as overreaching. These concerns would be heightened for an employer seeking to implement a blanket requirement that all employees must install and use the app, or seeking to gather and use COVID-19 data of employees when they are off duty. As such, any employer-implemented program should be carefully designed, reviewed, and vetted. In general, consent-based approaches will be easier to implement, particularly if the consent, even if opt-out, is prominent and comprehensive notice of how the information will be used is provided. ...

Finally, public fear of government and corporate mass surveillance is well established. As such, employers may encounter considerable resistance if they require (or even strongly encourage) installation of these apps on employees’ personal smart phones, which have large amounts of personal data and are already subject to heightened legal protections.
Behemoth corporations are now lining up to create such apps.  Google, Apple, Microsoft and UnitedHealth are all working on projects to gather up as much as possible about your employees' health and report some of that data back to you.  And while none of these companies have discussed going quite this far, Natalie Kofler & Fran├žoise Baylis writing at Nature asked us to:  
Imagine a world where your ability to get a job, housing or a loan depends on passing a blood test. You are confined to your home and locked out of society if you lack certain antibodies.

It has happened before. For most of the nineteenth century, immunity to yellow fever divided people in New Orleans, Louisiana, between the ‘acclimated’ who had survived yellow fever and the ‘unacclimated’, who had not had the disease1. Lack of immunity dictated whom people could marry, where they could work, and, for those forced into slavery, how much they were worth. Presumed immunity concentrated political and economic power in the hands of the wealthy elite, and was weaponized to justify white supremacy.

Something similar could be our dystopian future if governments introduce ‘immunity passports’ in efforts to reverse the economic catastrophe of the COVID-19 pandemic. The idea is that such certificates would be issued to those who have recovered and tested positive for antibodies to SARS-CoV-2 — the coronavirus that causes the disease. Authorities would lift restrictions on those who are presumed to have immunity, allowing them to return to work, to socialize and to travel. This idea has so many flaws that it is hard to know where to begin.
Kofler and Baylis went on to list ten reasons they think immunity passports are a bad idea.  And while they are looking at a different legal and moral question (government immunity passports vs. employer health tracking apps) note how many of these reasons apply to employers as well: 
  1. COVID-19 immunity is a mystery
  2. Serological tests are unreliable
  3. The volume of testing needed is unfeasible
  4. Too few survivors to boost the economy
  5. Monitoring erodes privacy
  6. Marginalized groups will face more scrutiny
  7. Unfair access
  8. Societal stratification
  9. New forms of discrimination
  10. Threats to public health
On the purely legal front, here is how Ropes & Gray came down on the most prevalent question I've heard from employers:  
Can I require my employees to download a contact-tracing app as a condition of continued employment?

In general, private employers likely could lawfully mandate that employees utilize a contact-tracing app, provided that the mandatory program is administered in a manner that is no more intrusive than necessary to meet the legitimate business concern. The permissibility of a contact-tracing app may vary based on differing employment settings, the employer’s business necessity for employee proximity, and whether the employer can implement less intrusive measures to provide a safe environment. For instance, a professional services firm, where the vast majority of employees can (or do) work remotely and thus present no immediate danger to anyone else in the workplace, may have difficulty showing the app is a business necessity and not more intrusive than necessary. On the other hand, an industrial meat-processing plant that requires in-person presence and where the nature of the work prevents social distancing within the plant may readily make the required showing, but note that the app may not be effective if these employees do not keep their smart phones on their person during the work day and, instead, store them in a locker off the factory floor.

Further, employers must ensure that the app is used in a non-discriminatory manner and that any medical or other personal information the employer obtains is stored confidentially and separate from employees’ personnel files. Employers would likely be required to cover the costs associated with the apps or the acquisition of smart phones to run the apps for employees who do not already own smart phones. Employers should seek to obtain consent from employees that authorizes the employer to obtain, use, and disclose to public health officials employee health information and geolocation data, as well as installation of the software for contact assessment and tracing.

Public employers may also mandate use of a contact-tracing app. However, in addition to satisfying the requirements noted above, they must consider the equal protection and due process implications. In particular, with respect to due process, public employers likely must ensure that there is a post-determination appeal process for anyone who has been denied access to the workplace as a result of being identified as COVID-19 positive or at risk based on his/her geolocation contacts. Voluntary employee participation programs may be more defensible from a privacy law perspective, but will require widespread adoption for public health effectiveness.
What about an app that relies solely on an individual's own self-reported COVID-19 diagnosis or symptoms?  This approach definitely helps to alleviate the legal and ethical burdens an employer will face in the process, but the application can only operate as reliable as the integrity of the individual inputting the data.  So while this may help an employer feel that it is doing that which is reasonable to protect other employees, it really might just be engaging in a form or modern-day, corona-security virtue signaling.   

Employers must also consider the inevitable data leaks and hacks that will arise from these third party apps.  The resultant HIPAA violations, credit monitoring, cleanup and public relations nightmare that will follow will be no small matter.  It never is after any sort of employer or third-party leak or hack.  In fact, many employers are surprised to learn that an employee's medical record is worth more to hackers than their credit card
Security experts say cyber criminals are increasingly targeting the $3 trillion U.S. healthcare industry, which has many companies still reliant on aging computer systems that do not use the latest security features.

“As attackers discover new methods to make money, the healthcare industry is becoming a much riper target because of the ability to sell large batches of personal data for profit,” said Dave Kennedy, an expert on healthcare security and CEO of TrustedSEC LLC. “Hospitals have low security, so it’s relatively easy for these hackers to get a large amount of personal data for medical fraud.” ...

The data for sale includes names, birth dates, policy numbers, diagnosis codes and billing information. Fraudsters use this data to create fake IDs to buy medical equipment or drugs that can be resold, or they combine a patient number with a false provider number and file made-up claims with insurers, according to experts who have investigated cyber attacks on healthcare organizations.  
Medical identity theft is often not immediately identified by a patient or their provider, giving criminals years to milk such credentials. That makes medical data more valuable than credit cards, which tend to be quickly canceled by banks once fraud is detected.
Stolen health credentials can go for $10 each, about 10 or 20 times the value of a U.S. credit card number, according to Don Jackson, director of threat intelligence at PhishLabs, a cyber crime protection company. He obtained the data by monitoring underground exchanges where hackers sell the information.
What about the strategic storage and use of your data?  Did you happen to notice that one of the giant corporations listed earlier in this post is also a massive, nationwide health insurer?  For that entity, every bit of granular data it can extract about your employees allows it to increase your premium as well as its shareholders' profits.  Employer health plans should always follow one simple rule in health data management - never, under any circumstance, disclose more about employee health status than absolutely necessary under the law.  I generally take this rule one step further as a broker and attorney working in the field.  I never, under any circumstances, want to obtain or possess any health or private information than is absolutely necessary under the law.  Possessing or knowing that data, or, allowing it to be held in more places than necessary simply open up the employer to more liability and headaches than necessary.  

Employers will be presented with countless advertisements and arguments for installing some form of health-tracking application as we consider how to return to the workplace.  And I know that many of these arguments will be good ones.  I just fear that the counterbalancing arguments in favor of liberty, privacy and lawful data protection will be outweighed in this process as there won't be any gigantic multinational corporations lined up to profit from the sale of common sense, individual liberty and employee privacy. 

Saturday, May 23, 2020

Managing COVID-19 Risks in the Workplace (Webinar)

DOL Final Rule: Overtime and Fluctuating Workweek

Earlier this week, the U.S. Department of Labor (DOL) announced a final rule allowing employers to pay bonuses, premium payments, or other additional pay, such as commissions and hazard pay using the fluctuating workweek method of compensation. For overtime purposes, these supplemental payments must be included in the calculation of the regular rate unless they are excludable under the federal Fair Labor Standards Act (§§ 7(e)(1) – (8)). Currently, this fluctuating workweek method may not be used by employers who compensate their employees with bonuses or other incentive-based pay.

The Fair Labor Standards Act (FLSA) requires that employers pay their nonexempt employees overtime of at least one and one-half times their regular rate for all hours worked over 40 in a workweek. The regular rate is computed for each workweek and is all remuneration for employment, with some exclusions, divided by the number of hours worked. The regular rate is determined by dividing the total pay in any workweek by the total number of hours actually worked.

Fluctuating Workweek Method

The fluctuating workweek method allows employers to calculate overtime pay for nonexempt employees who are paid a set salary for hours that fluctuate each week.  An employer may use this method to compute overtime compensation when:
  • The employee’s work hours fluctuate from week to week;
  • The employee receives a fixed salary that does not vary with the number of hours they work in the workweek, whether few or many;
  • The amount of the employee’s fixed salary is enough to pay them at least the applicable minimum wage for every hour they worked in workweeks when they worked the most hours;
  • The employee and the employer have a clear and mutual understanding that the employee’s fixed salary is compensation (apart from overtime premiums and any bonuses, premium payments, commissions, hazard pay, or other additional pay of any kind not excludable from the regular rate under FLSA §§ 7(e)(l) – (8) for the total hours worked each workweek regardless of the number of hours; and
  • The employee receives overtime pay, in addition to their fixed salary and any bonuses, premium payments, commissions, hazard pay, and additional pay of any kind, for all overtime hours worked at no less than one-half the employee’s regular rate of pay for that workweek.
Since the salary is fixed, an employee’s regular rate will vary from week to week and is determined by dividing the amount of the salary and any non-excludable additional pay received each workweek by the number of hours worked in the workweek.

Payment for overtime hours, at no less than one-half of this rate, is compliant because these hours have already been compensated at the straight time rate (by payment of the fixed salary and non-excludable additional pay). Payment of any bonuses, premium payments, commissions, hazard pay, and additional pay of any kind is compatible with the fluctuating workweek method of overtime payment, and such payments must be included in the calculation of the regular rate unless excludable under § 7(e)(1) through (8).
Scenario and Example

The DOL provides the following scenario and example to demonstrate overtime and a fluctuating workweek:
Scenario: An employee whose hours of work do not customarily follow a regular schedule but vary from week to week, whose work hours never exceed 50 hours in a workweek, and whose salary of $600 a week is paid with the understanding that it constitutes the employee’s compensation (apart from overtime premiums and any bonuses, premium payments, commissions, hazard pay, or other additional pay of any kind not excludable from the regular rate under §§ 7(e)(1) – (8)) for all hours worked in the workweek.
Example: If during the course of four weeks this employee receives no additional compensation and works 37.5, 44, 50, and 48 hours, the regular rate of pay in each of these weeks is $16, $13.64, $12, and $12.50, respectively. Since the employee has already received straight time compensation for all hours worked in these weeks, only additional half-time pay is due for overtime hours. For the first week the employee is owed $600 (fixed salary of $600, with no overtime hours); for the second week $627.28 (fixed salary of $600, and 4 hours of overtime pay at one-half times the regular rate of $13.64 for a total overtime payment of $27.28); for the third week $660 (fixed salary of $600, and 10 hours of overtime pay at one-half times the regular rate of $12 for a total overtime payment of $60); for the fourth week $650 (fixed salary of $600, and 8 overtime hours at one-half times the regular rate of $12.50 for a total overtime payment of $50).
The DOL included a disclaimer that this final rule was submitted to the Office of the Federal Register (OFR) for publication, and is currently pending placement upon public inspection at the OFR and publication in the Federal Register. The current version of the final rule may vary from the published version if minor technical or formatting changes are made during the OFR review process. Importantly, only the version published in the Federal Register is the official final rule.

The final rule is effective 60 days after final publication.

Read the announcement and final rule.  

Friday, May 22, 2020

California's In Trouble: 340,000 Public Employees With $100,000+ Paychecks Cost Taxpayers $45 Billion

From ZeroHedge:
Despite California’s $54 billion budget deficit and $1 trillion unfunded pension liability, there are 340,390 government employees bringing home six-figure salary and pension checks. Recently, though, Gov. Gavin Newsom asked U.S. taxpayers for a bailout.
The governor wrote a letter to Congress requesting $1 trillion in coronavirus 50-state aid. Then, House Speaker Nancy Pelosi obliged by adding $500 billion for the states into the HEROES Act – the bill passed and now awaits action in the Senate.
Here, in part, is why California is asking for taxpayers help.  

Our auditors at found truck drivers in San Francisco making $159,000 per year; lifeguards in LA County costing taxpayers $365,000; nurses at UCSF making up to $501,000; the UCLA athletic director earning $1.8 million; and 1,420 city employees out-earning all 50 state governors ($202,000). 
Using our new interactive mapping tool, quickly review (by ZIP code) the 340,390 California public employees and retirees who earn more than $100,000 and cost taxpayers $45 billion (FY2018-9). Just click a pin and scroll down to see the results rendered in the chart beneath the map. 
Here are a few examples of what you’ll uncover:
  • 109,627 teachers and school administrators – including the CEO of Summit Everest charter schools Diane Tavenner ($450,115); and superintendents Michael Lin ($443,875) at Corona-Norco Unified; Polly Bove ($395,257) at Fremont Union High; Christopher Hoffman ($351,885) at Elk Grove Unified; and Al Mijares ($348,276) at the Orange County Dept. of Education.
  • 66,403 college and university employees – including the athletic director at UCLA, Daniel Guerrero ($1.8 million), who is retiring amid criticisms that his teams lost too frequently. The school’s football coach, Charles (Chip) Kelly ($3.3 million), compiled a 7-17 record during his first two years and is the most highly compensated public employee in the state. Furthermore, there are 11,310 college and university employees making more than $200,000.
  • 62,204 State of California employees – including a nurse, Ito Chikako, at the University of California, who made $501,391 – paid through the state system. David Winsor Sirkin, Sr. Psychiatrist at Correctional & Rehabilitative Services, made $409,399. Corrections paid two dentists $385,596 last year. The chief regulator at barbering & cosmetology made $124,296.
  • 45,718 city and town employees – including 1,420 municipal administrators and employees who out-earned the California governor – the highest paid state governor ($202,000). Highly compensated city managers included Deanna Santana (Santa Clara – $396,158); Paul Arevalo (West Hollywood — $353,603); Fredrick Cole (Santa Monica – $342,780); David Ready (Palm Springs – $340,149); Edward Shikada (Palo Alto – $329,080); and Scott Ochoa (Ontario – $328,500).
Reaching out to all governments mentioned, Santa Clara responded saying that their city is complex and they compete for talent in Silicon Valley. Palm Springs responded by saying the city manager is cutting his pay by 20-percent to $288,579. 
In 2017, we found that 44 lifeguards in Los Angeles County cost taxpayers between $200,000 and $365,000. Today, it’s worse with salaries comprising only about half the total cost when including overtime, extra pay and benefits. 
In total, $45 billion in cash compensation flows to local and state government workers across California earning six figures. Our auditors did not include the cost of benefits. 
We also haven’t included the payroll costs of at least 28,000 federal employees making $100,000+ within the executive agencies based in California. ...

Looking More Like COVID-19 Will Reduce Employer Medical Claims in 2020

From SHRM:    
The coronavirus may end up lowering health care costs for self-insured employers this year, as medical treatment for noninfected patients declines during the pandemic, according to new reports. Health care actuaries who in April predicted a spike in group health plan costs now have reservations about those earlier forecasts, and they are uncertain about the outlook for plan premiums in 2021. ... 
COVID-19 could reduce employer health care costs for self-insured employers by as much as 4 percent in 2020, according to a May study ... that analyzed estimates of infection levels in the U.S. In April, a similar study conducted ... projected that costs for large employers could rise by as much as 7 percent due to COVID-19 testing and treatment, echoing forecasts by other consultancies and health industry groups. 
In a self-funded (or self-insured) group health plan, the employer assumes the financial risk of paying for employees' health care claims under the cost-sharing terms of the plan. ... 
Looking ahead to 2021, 'additional financial risks come from the potential adverse consequences from missed wellness visits, immunizations and services that otherwise would have been delivered,' [one expert] said. 'It is not unreasonable to assume that we'll see an increase in case complexity due to these missed services, and though the extent is debatable, it will likely be dependent on how long people continue to avoid care.' ...

Thursday, May 21, 2020

Accommodating At-risk Employees Under the ADA Amid a Global Pandemic

The Americans with Disabilities Act (ADA) requires employers to provide reasonable accommodations to employees who need it. These accommodations can be straightforward and may include installing a wheelchair ramp, adding text-to-voice software on a computer or making some alterations to the height of a desk. When employers are fortunate, the accommodation needed for an employee to perform their job is fairly obvious. 

But what happens when the return to work potentially prevents employees from safely accomplishing their work? For employees who have a greater risk of contracting the coronavirus disease COVID-19, this is could be grim. 

This post compiles some guidance from the Equal Employment Opportunity Commission (EEOC) to help employers during the coronavirus pandemic. The guidance focuses on ADA accommodations as they pertain to “at-risk” employees. 

Question 1: What does an employee need to do in order to request reasonable accommodation from their employer because they one of the medical conditions that the CDC says may put them at higher risk for severe illness from COVID-19?
Answer 1: An employee—or a third party, such as an employee’s doctor—must let the employer know that she needs a change for a reason related to a medical condition (here, the underlying condition). Individuals may request accommodation in conversation or in writing. While the employee (or third party) does not need to use the term “reasonable accommodation” or reference the ADA, she may do so.

The employee or her representative should communicate that she has a medical condition that necessitates a change to meet a medical need. After receiving a request, the employer may ask questions or seek medical documentation to help decide if the individual has a disability and if there is a reasonable accommodation, barring undue hardship, that can be provided.
Question 2: The CDC identifies a number of medical conditions that might place individuals at “higher risk for severe illness” if they get COVID-19. An employer knows that an employee has one of these conditions and is concerned that his health will be jeopardized upon returning to the workplace, but the employee has not requested accommodation. How does the ADA apply to this situation?
Answer 2: First, if the employee does not request a reasonable accommodation, the ADA does not mandate that the employer take action.

If the employer is concerned about the employee’s health being jeopardized upon returning to the workplace, the ADA does not allow the employer to exclude the employee—or take any other adverse action—solely because the employee has a disability that the CDC identifies as potentially placing him at “higher risk for severe illness” if he gets COVID-19. Under the ADA, such action is not allowed unless the employee’s disability poses a “direct threat” to his health that cannot be eliminated or reduced by reasonable accommodation.

The ADA direct threat requirement is a high standard. As an affirmative defense, direct threat requires an employer to show that the individual has a disability that poses a “significant risk of substantial harm” to his own health under 29 C.F.R. section 1630.2(r). A direct threat assessment cannot be based solely on the condition being on the CDC’s list; the determination must be an individualized assessment based on a reasonable medical judgment about this employee’s—not the disability in general—using the most current medical knowledge and/or on the best available objective evidence. The ADA regulation requires an employer to consider the duration of the risk, the nature and severity of the potential harm, the likelihood that the potential harm will occur and the imminence of the potential harm. Analysis of these factors will likely include considerations based on the severity of the pandemic in a particular area, the employee’s own health (for example, whether the employee’s disability is well-controlled) and his particular job duties. A determination of direct threat also would include the likelihood that an individual will be exposed to the coronavirus at the worksite. Measures that an employer may be taking in general to protect all workers, such as mandatory social distancing, also would be relevant.

Even if an employer determines that an employee’s disability poses a direct threat to his own health, the employer still cannot exclude the employee from the workplace—or take any other adverse action—unless there is no way to provide a reasonable accommodation (absent undue hardship). The ADA regulations require an employer to consider whether there are reasonable accommodations that would eliminate or reduce the risk so that it would be safe for the employee to return to the workplace while still permitting performance of essential functions. This can involve an interactive process with the employee. If there are not accommodations that permit this, then an employer must consider accommodations such as telework, leave or reassignment (perhaps to a different job in a place where it may be safer for the employee to work or that permits telework). An employer may only bar an employee from the workplace if, after going through all these steps, the facts support the conclusion that the employee poses a significant risk of substantial harm to himself that cannot be reduced or eliminated by reasonable accommodation. 
Question 3: What are examples of accommodation that, absent undue hardship, may eliminate (or reduce to an acceptable level) a direct threat to self?
Answer 3Accommodations may include additional or enhanced protective gowns, masks, gloves or other gear beyond what the employer may generally provide to employees returning to its workplace. Accommodations also may include additional or enhanced protective measures, for example, erecting a barrier that provides separation between an employee with a disability and co-workers/the public or increasing the space between an employee with a disability and others. Another possible reasonable accommodation may be elimination or substitution of particular “marginal” functions (less critical or incidental job duties as distinguished from the “essential” functions of a particular position). In addition, accommodations may include temporary modification of work schedules (if that decreases contact with co-workers and/or the public when on duty or commuting) or moving the location of where one performs work (for example, moving a person to the end of a production line rather than in the middle of it if that provides more social distancing).

These are only a few ideas. Identifying an effective accommodation depends, among other things, on an employee’s job duties and the design of the workspace. An employer and employee should discuss possible ideas; the Job Accommodation Network ( also may be able to assist in helping identify possible accommodations. As with all discussions of reasonable accommodation during this pandemic, employers and employees are encouraged to be creative and flexible.

Wednesday, May 20, 2020

HSA/HDHP Limits Increase for 2021

On May 20, 2020, the IRS released Revenue Procedure 2020-32 to provide the inflation-adjusted limits for health savings accounts (HSAs) and high deductible health plans (HDHPs) for 2021. The IRS is required to publish these limits by June 1 of each year. 

These limits include:
  • The maximum HSA contribution limit;
  • The minimum deductible amount for HDHPs; and
  • The maximum out-of-pocket expense limit for HDHPs.
These limits vary based on whether an individual has self-only or family coverage under an HDHP.

Eligible individuals with self-only HDHP coverage will be able to contribute $3,600 to their HSAs for 2021, up from $3,550 for 2020. Eligible individuals with family HDHP coverage will be able to contribute $7,200 to their HSAs for 2021, up from $7,100 for 2020. Individuals who are age 55 or older are permitted to make an additional $1,000 “catch-up” contribution to their HSAs.  

The minimum deductible amount for HDHPs remains the same for 2021 plan years ($1,400 for self-only coverage and $2,800 for family coverage). However, the HDHP maximum out-of-pocket expense limit increases to $7,000 for self-only coverage and $14,000 for family coverage.

The following chart shows the HSA and HDHP limits for 2021 as compared to 2020. It also includes the catch-up contribution limit that applies to HSA-eligible individuals who are age 55 or older, which is not adjusted for inflation and stays the same from year to year.


Tuesday, May 19, 2020

Midweek Compliance & Benefit Updates | COVID-19, Workplace Reopening & How a Med Group CEO Deals with Surprise Medical Bills

Templates and Tools
Compliance Updates
Question: Some of our employees have said they don't feel safe returning to work. Can we just permanently replace them? We recommend extreme caution when deciding to replace an employee who refuses to work because of concerns about COVID-19. Generally, employees do not have a right to refuse to work based only on a generalized fear of becoming ill if their fear is not based on objective evidence of possible exposure. However, under the current circumstances, where COVID-19 continues to be a threat across the country, we think it would be difficult to show that employees have no reason to fear coming in to work... read our full answer here. And for another view on this topic see SHRM's summary in the next story-

Fear of Coronavirus Isn’t Covered by FFCRA - "If an employee chooses to self-quarantine out of fear, the worker would not be entitled to FFCRA benefits, even if the employer permits the employee to self-quarantine ... An employee who is experiencing COVID‑19 symptoms is entitled to leave under the FFCRA only if the employee seeks a medical diagnosis or if a health care provider directs or advises the employee to stay home."
Legislative Watch, New California Bill Would Mandate Up to 10 Days of Bereavement Leave - "Assembly Bill (AB) 2999 was introduced to mandate bereavement leave as a new form of protective leave in California. The bill would require employers in California to provide employees with “up to 10 business days of unpaid bereavement leave,” and to refrain from interfering with or restraining employees from taking such leave. The days of leave would not need to be consecutive; however, the leave must be completed within three months following the death of a spouse, child, parent, sibling, grandparent, grandchild, or domestic partner. Under the current draft, AB 2999 would apply to all employers, regardless of size."
QuestionWill a borrower’s PPP loan forgiveness amount (pursuant to section 1106 of the CARES Act and SBA’s implementing rules and guidance) be reduced if the borrower laid off an employee, offered to rehire the same employee, but the employee declined the offer?
Answer: No. As an exercise of the Administrator’s and the Secretary’s authority under Section
1106(d)(6) of the CARES Act to prescribe regulations granting de minimis exemptions from the Act’s limits on loan forgiveness, SBA and Treasury intend to issue an interim final rule excluding laid-off employees whom the borrower offered to rehire (for the same salary/wages and same number of hours) from the CARES Act’s loan forgiveness reduction calculation. The interim final rule will specify that, to qualify for this exception, the borrower must have made a good faith, written offer of rehire, and the employee’s rejection of that offer must be documented by the borrower. Employees and employers should be aware that employees who reject offers of reemployment may forfeit eligibility for continued unemployment compensation. For more information, visit

California Expands Workers’ Compensation Eligibility for COVID-19 - California Gov. Gavin Newsom issued Executive Order N-62-20, declaring that a COVID-19-related illness of an employee shall be presumed to have occurred in the place of the employment for purposes of awarding workers’ compensation benefits, but only if specific requirements are satisfied. The order eases employee access to workers’ compensation benefits by shifting the burden of proof to employers who, in order to avoid a claim, must prove employees did not contract COVID-19 at work. 
Benefit News
Here is How Medical Group Presidents Deal with Surprise Out of Network Emergency Room Bills - "When Stacey Richter’s husband recently landed in a New Jersey emergency room, fearing a heart attack, she had an additional reason for alarm: a potential big bill from the hospital if the E.R. wasn’t in his insurer’s network.

So she took an unusual step. Instead of simply signing the hospital’s financial and treatment consent form, Ms. Richter first crossed out sections calling for her to pay whatever amount the hospital charged. She wrote in her own payment rate of a 'maximum of two times' what the federal government would pay under Medicare, which is in the ballpark, experts said, of what hospitals might consider an acceptable rate.

'And then I signed it, took a picture of it and handed it back to them,' said Ms. Richter, co-president of the consultancy Aventria Health Group. scholars question the premise that hospitals’ financial consent forms are themselves valid contracts. That’s because contract law requires 'mutual assent,' which Barak Richman, who studies contract law and teaches at Duke University Law School, said patients can’t really give because they are seldom told the true price of care upfront, before signing....
'If patients alter the wording with their own terms — so long as they agree to pay what is considered a reasonable amount — then judges may also look to that added language,' said Mr. Richman."

At Least for a While, It Pays Better to Be Unemployed (MAP) - Massachusetts generous unemployment policies combined with the stimulus means all workers making under $73,996 would receive more a week unemployed than they do from working. Many of these salaries outstrip the state's median income, meaning the majority of workers would receive more from an unemployment check than a paycheck.

Top 1% of Spenders Account for 22% of Health Care Expenses - "15 percent of the U.S. civilian noninstitutionalized population had no health care expenditures in 2016, and only 5 percent of the population accounted for half of health care spending. This includes all sources of payment for medical care, including private insurance payments, Medicare, Medicaid, out-of-pocket spending, and other sources....The bottom 50 percent accounted for only 2.8 percent of total health care expenditures. Persons in this group spent less than $971 during the year."
Coronavirus will be the largest loss on record for insurers, Lloyd’s of London says - The British insurance and reinsurance market projected that its own Covid-19 casualty and property (C&P) claims could reach up to $4.3 billion as at June 30, and warned that this could rise further if the pandemic continues for another quarter. In a broader economic assessment report on the impact of Covid-19 for the non-life insurance industry, Lloyd’s estimated that the 2020 underwriting losses covered by the industry will hit $107 billion.

How a single insurance company came to dominate Gavin Newsom’s COVID-19 testing team - "As Gov. Gavin Newsom navigates one of his most vexing problems during the pandemic, supplying the state with enough tests for COVID-19, he has relied heavily on a single company: insurance giant Blue Shield of California, a generous campaign contributor and supporter. Nearly half of the leadership positions on Newsom’s high-priority task force on coronavirus testing are filled with Blue Shield executives. Its CEO, Paul Markovich, is the co-lead, alongside the assistant director of the state Department of Public Health. All told, employees of the insurance company make up 22 percent of the 68-position team."
Health & Wellness

(Finally some good news!) Covid Patients Testing Positive After Recovery Aren’t Infectious, Study Shows - "Researchers are finding evidence that patients who test positive for the coronavirus after recovering aren’t capable of transmitting the infection, and could have the antibodies that prevent them from falling sick again. Scientists from the Korean Centers for Disease Control and Prevention studied 285 Covid-19 survivors who had tested positive for the coronavirus after their illness had apparently resolved, as indicated by a previous negative test result. The so-called re-positive patients weren’t found to have spread any lingering infection, and virus samples collected from them couldn’t be grown in culture, indicating the patients were shedding non-infectious or dead virus particles."
A Doctor's Diary From a COVID ICU (A Mayo Clinic doctor heads to New York for a week on the front lines) - "I arrived last night to find that two of my patients had died during the day. It was expected. My night wasn’t going to get much better from there.

In my first 30 minutes, I had four patients abruptly decompensate and nearly code (where we do chest compressions, give powerful meds, and potentially shock the heart with electricity—“clear!”). I had a team of six so everyone took a patient and I pinballed from one patient to the next, assessing, directing, and working the problems. Codes can actually be quite nice because they are (usually) very formulaic and you work your way through an algorithm. Not so just before a code. In the moments before a code you have a window to alter the care and prevent a code from happening, but the clock is ticking. In my case I had four clocks. Fortunately, the team stepped up; unfortunately, we had some limited resources and we were just getting settled into the night.

One patient threw a massive blood clot into his lungs and we had to push very strong drugs to break it up. Another patient had the opposite—she was bleeding out from her lungs and we had to administer drugs down her breathing tube and through her IV to stop the bleeding."
'Weird as hell’: The Covid-19 Patients Who Have Symptoms for Months - "Days later, he found himself fighting a raging infection. It’s one he likens to being 'abused by somebody' or clubbed over the head with a cricket bat. 'The symptoms were weird as hell,' he says. They included loss of smell, heaviness, malaise, tight chest and racing heart. At one point Garner thought he was about to die. He tried to Google 'fulminating myocarditis' but was too unwell to navigate the screen....He had a muggy head, upset stomach, tinnitus, pins and needles, breathlessness, dizziness and arthritis in the hands. Each time Garner thought he was getting better the illness roared back. It was a sort of virus snakes and ladders. 'It’s deeply frustrating. A lot of people start doubting themselves,' he says."  

Friday, May 15, 2020

Benefit & Employer COVID-19 Updates Week Ending May 16th

May 12, 2020 – McGriff Insurance Services
Excerpt: “On May 12, 2020, the IRS released Notice 2020-29, which provides temporary flexibility for mid-year election changes under a Section 125 cafeteria plan during calendar year 2020. The changes are designed to allow employers to respond to changes in employee needs as a result of the COVID-19 pandemic. This guidance relates to mid-year elections for self-insured and fully insured employer-sponsored health coverage, health flexible spending arrangements (health FSAs) and dependent care assistance programs (DCAPs).”

May 12, 2020 – McGriff Insurance Services
Excerpt: “On May 12, 2020, the IRS announced more options with respect to unused amounts in health flexible spending accounts (FSAs) and dependent care assistance programs (DCAPs). These options allow employers to permit…”
May 14, 2020 – Fisher & Phillips
Excerpt: “One long week after the U.S. Treasury announced that it was extending the Paycheck Protection Program Loan “safe harbor” deadline to May 14, the U.S. Treasury announced this morning that borrowers whose loan amount (combined with the loan amount of any affiliates) is less than $2 million is automatically deemed to have made the certification in good faith…Late in the day on May 13, the Treasury Department once again extended the repayment date of the safe harbor from May 14 to May 18 to give borrowers an opportunity to review and consider this announcement.”

May 14, 2020 – Littler Mendelson P.C.
Excerpt: “Some jurisdictions also require employers to screen the health of employees, often as they begin a shift. These health screening steps, including temperature checks, may become more common as states begin to reopen their economies.”

May 14, 2020 – Thomson Reuters
Excerpt: “However, IRS Notice 2020-29 (see our Checkpoint article) provides increased flexibility regarding midyear elections during calendar year 2020. The notice states that plans may be amended to allow several types of prospective cafeteria plan election changes during 2020, including an election to prospectively decrease a participant’s health FSA contribution amount.”

May 13, 2020 – Vorys, Sater, Seymour and Pease LLP
Excerpt: “Under the 2021 Final Rule, a self-funded group health plan has the flexibility to determine whether to include or exclude the amount of drug manufacturer copay coupons regardless of whether a medically appropriate generic equivalent is available. An insured group health plan may also have to comply with any applicable state laws regarding copay coupons…Unless new guidance is issued by the IRS changing its current position that discounts must be disregarded in determining whether a HDHP deductible has been met, it appears that sponsors of HSA-compatible HDHPs must adopt a copay accumulator program in order to preserve participants’ eligibility to make or receive health savings account (HSA) contributions.”

May 13, 2020 – Findley 
Excerpt: “Employers that are partly or completely prohibited from operating during the shutdowns caused by the coronavirus pandemic but who continue to fund employee health care coverage, may be able to take up to a $10,000 tax credit for each employee, regardless of whether they are paying wages to those employees.”

May 13, 2020 – Spencer Fane LLP
Excerpt: “Employers should carefully consider whether to adopt some, all or none of the changes permitted under Notice 2020-29, and whether to impose additional conditions or limitations on a participant’s ability to make mid-year election changes or to have additional time to spend unused amounts in their FSAs.”

May 12, 2020 – Graydon Head & Ritchey LLP
Excerpt: “Several weeks ago, the IRS and DOL issued a joint Final Rule extending a number of deadlines, including COBRA and HIPAA special enrollment deadlines. As part of this relief, a group health plan is required to ignore the period of time from March 1st until 60 days following the end of the national emergency when calculating a participant’s special enrollment window or COBRA qualifying event notice. However, the prior relief did not provide any guidance as it related to mid-year changes under a Section 125/Cafeteria plan. Today the IRS issued a different type of relief for Section 125 plans…Unlike the Final Rule issued last month, this relief is COMPLETELY OPTIONAL.”

May 12, 2020 – Littler Mendelson P.C.
Excerpt: “As expected, the proposal—the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act—includes a number of labor and employment provisions of great significance to employers, including expansion of prior laws, and new proposals aimed at providing relief to workers during the public health emergency. Senate Republicans have yet to unveil their proposal, although their leadership has indicated that providing employers with protection from liability related to COVID-19 lawsuits will be highest on their list of priorities.”

May 7, 2020 – Ice Miller
Excerpt: “To assist employers and public retirement systems with the myriad of changes, we have catalogued the provisions of the FFCRA and CARES Act that impact employer-sponsored retirement plans, health plans, and other benefits in a table format.”

Thursday, May 14, 2020

HR Advisory | New OE Tools, Obesity & COVID-19

I hope everyone's been having a positive and productive week. There is no shortage of activity on many fronts right now from conflicting opinions at the federal level on the biological impact of returning to work, to the proposed 4th phase of governmental assistance. Let’s not forget of course, the varying approaches and stages to re-opening that not only differ by state, but in many cases, differ within a state. It’s enough to make your head spin! Placer county, for example, now permits restaurants to open for dine-in service, but they must comply with this very detailed 12-page list of guidelines. Our world has definitely changed. Despite all of this “noise”, we have some great information that will allow you to stay up to speed on the dizzying amount of activity. 


Our Benefits Administration and Technology practices have teamed up to develop a Brainshark video on Open Enrollment Considerations Due to Covid-19. If you have not yet seen or used Brainshark, this is an added solution we can employ this year and it is proving to be an outstanding addition to socially distant OEs. This video presentation focuses on three important areas:
  1. Best practices for collecting and managing accurate employee contact information (and why now, this is more critical than ever)
  2. Benefits Communication Best Practices
  3. Benefits Enrollment Considerations
Our Wellness Practice has released a Wellness Advisory entitled Obesity: America’s Covid-19 Achilles Heel. This comprehensive Advisory highlights that obesity is a significant risk factor for severe Covid-19 complications, why obesity impacts the severity, and most importantly, steps Employers can take to help employees.

Proposed Legislation

Pandemic anxiety keeping you up at night? Perhaps we can help with some light nighttime reading – here are 1,815 pages of legislative text of the “Heroes Act” totaling $3 trillion (with a ‘t’!) for the next round of COVID relief proposed today by Speaker Nancy Pelosi and other top Democrats in the House.

Want the cheat sheet? Here is the 90-page summary, and if that is too much for you, here is a solid Bloomberg analysis. Headlines for the employee benefits market include:

  • Fully funded private employer insurance premiums for laid-off or furloughed workers between March and next January; and
  • Codification of free insurer coverage for COVID patients with no out-of-pocket expenses.

Employers, though, won’t like the bill’s expansion of COBRA benefits for workers through next January—an administrative nightmare for the employers with a retroactive open enrollment window. Kate Jensen, our benefits-law expert at Steptoe & Johnson, notes that even if employers are made whole financially with tax credits, “they could be overwhelmed trying to administer this thing on very short notice.” Hard to keep up with former employees if they don’t want to be kept up with.

We are not engaged in the practice of law, and the foregoing is not intended as legal advice nor is it intended to replace any legal opinion from counsel. We recommend that you consult with your attorney or tax advisor regarding any issues contained herein. The foregoing is not intended or written to be used, and cannot be used, for the purpose of avoiding tax-related penalties.