Monday, June 6, 2022

Compliance and Benefit Updates, June 6, 2022

Compliance Updates

The California Supreme Court unanimously ruled that an employee’s meal and rest period "premium pay is subject to the same wage statement and final pay requirements as other wages earned by employees. 

  • Employers must pay all wages, accrued vacation earned and other premium pay immediately upon termination.
  • Employers cannot withhold final paychecks to induce employees to return tools or equipment, pay back money owed or turn in forms or reports.
  • Final paychecks or deposits must be delivered at the time of termination. Employers should be conscious of possible delays caused by delivery or deposit."

FDA: Pharmacists and wholesalers can import drugs from Canada - "Pharmacists and drug wholesalers can import prescription medicines from Canada for up to two years as part of state programs aimed at bringing down drug costs, according to final FDA guidance released Thursday.

  • Why it matters: With President Biden's drug pricing agenda still stalled, the FDA is further clarifying how states could take advantage of lower drug costs abroad without the need to limit prices in the U.S.
  • Background: Both the Biden and Trump administrations embraced limited importation to bring down health costs, though experts view the policy as having limited impact."

Newsom Signs Compromise Law Raising The Limit On Medical Malpractice Damages - "California’s $250,000 limit on damages for pain and suffering caused by medical malpractice, a ceiling enacted by lawmakers in 1975 at the insistence of doctors and insurers, will be lifted next year. Gov Gavin Newsom signed compromise legislation Monday, sponsored by consumer advocates and supported by medical groups, that will not remove all limits on malpractice damages but will raise them to account for some of the inflation in the past 47 years. Under AB35 by Assembly Majority Leader Eloise G√≥mez Reyes, D-Colton (San Bernardino County), the new limits for noneconomic damages in 2023 will be $350,000 for nonfatal medical malpractice by a physician and $500,000 for malpractice causing death. The maximum will rise gradually over the next decade, to $750,000 for non-death cases and $1 million for fatal cases, and increase by 2% a year thereafter for inflation."

Pandemic Fatigue Dooms California’s Excessive Covid Vaccine Mandate Aspirations - "In January, progressive California Democrats vowed to adopt the toughest covid vaccine requirements in the country. Their proposals would have required most Californians to get the shots to go to school or work — without allowing exemptions to get out of them. Months later, the lawmakers pulled their bills before the first votes. One major vaccine proposal survives but faces an uphill battle. It would allow children ages 12 to 17 to get a covid-19 vaccine without parental permission. At least 10 other states permit some minors to do this. Democrats blamed the failure of their vaccine mandates on the changing nature and perception of the pandemic. They said the measures became unnecessary as case rates declined earlier this year and the public became less focused on the pandemic. Besides, they argued, the state isn’t vaccinating enough children, so requiring the shots for attendance would shut too many kids out of school."

Benefit News

HR managers are more burned out than ever. Who is supporting them? "Ninety-eight percent of HR professionals have felt burned out at work in the last six months, according to a recent survey conducted by workplace communication app Workvivo, and nearly 4 in 5 are open to leaving their jobs. ... HR teams and managers should work in tandem to share and clearly outline any mental health benefits their company offers"

Will the Pandemic’s Missing Workers Ever Return to the Labor Force? "Looking at those who have exited the labor force and are not retired:

  • 23 percent said that available jobs are not in their field of work interest.
  • 17 percent said they haven't been able to find a job that pays enough.
  • 9 percent said they have chosen to learn new work skills or want to pursue a different career path.
  • 27 percent said that if their savings ran out or ran low, it would motivate them to return."


Employers Pay 224% Of Medicare Prices For Hospital Services - Employer-sponsored health plans paid on average 224% of what Medicare paid to hospitals for the same services at the same facilities, according to a new study from RAND Corporation. The report covers billing for hospital inpatient and outpatient services in 2020. The study said that there were significant variances in prices across states or geographic areas and added that the difference in cost seemed to be linked to hospital market share rather than hospitals’ share of Medicare and Medicaid patients.

  • The researchers found that in Hawaii, Arkansas, and Washington, relative prices were under 175% of Medicare.
  • Other in states, such as Florida, West Virginia, and South Carolina, relative prices were at or above 310% of Medicare.
  • Prices for COVID-19 hospitalization were similar to prices for overall inpatient admissions and averaged 241% of what was paid for Medicare patients.

Note from Craig: This is why I wrote that "America Will Dramatically Change the Way It Provides Health Care by 2030." This trend cannot continue. The federal government controls prices by arbitrarily slashing what it will pay for services in Medicare and Medicaid. This forces hospitals to inflate what they charge for all services to private employer plans. Hence, the tax subsidy is really a cost shift to employers that far exceeds anything any of us pay in FICA. In short:

  1. Companies that are large enough (over 300 employees) will self-fund and reference base price their plans. Why pay 224% of Medicare when you can pay 140% and have 97% of your claims sail through without pushback. This saves an employer 20% to 30% on healthcare in the first year alone.
  2. Smaller companies will be forced into some sort of defined contribution scheme where the employee is punished for the year over year 6% to 9% increases. Perhaps, as I wrote in the above article this will be done mainly through individual HRAs.
  3. Lastly, I believe we'll end up with some sort of Medicaid (not Medicare, that is too expensive) safety net for all who are not fortunate enough to end up in numbers one or two above.

Ninth Circuit Rules That a Temporary Impairment Can Qualify as a “Disability” Under the ADA - "The U.S. Court of Appeals for the Ninth Circuit, the federal appellate court with jurisdiction over much of the western United States (including Washington, Oregon, California and Idaho), ruled last week that an employee’s temporary impairment can qualify as a disability under the Americans with Disabilities Act (“ADA”). The Ninth Circuit’s decision resolves an important question under federal disability law and could signal a significant change in how employers are required to address employees’ short-term medical limitations.


In Shields v. Credit One Bank N.A., plaintiff Shields was employed by Credit One Bank ('Bank') as a human resources generalist. Shields underwent biopsy surgery. The biopsy revealed that Shields did not have cancer, but she had a number of post-surgery limitations (e.g., unable to use her right arm to lift, pull, push, type, write, tie her own shoes or use a hair dryer), and these limitations indisputably precluded Shields from performing the essential functions of her position. The Bank put Shields on a short-term leave of absence, but when she was not ready to return to work after two months the Bank terminated her employment. Shields’ lawsuit alleges the Bank violated the ADA by terminating her rather than offering her a reasonable accommodation, specifically, extending her leave of absence to allow her additional recuperation time. The Bank defended on the grounds that Shields did not have a disability under the ADA because her post-surgery limitations, while significant, were not sufficiently 'permanent or long-term' to meet the law’s requirements. The District Court agreed and dismissed Shields’ claim. The Ninth Circuit reversed. Under the ADA, a disability is defined in relevant part as 'a physical or mental impairment that substantially limits one or more major life activities,' without any reference to how long the 'substantial[] limit[]' might last."

Health & Wellness

The caregiver crisis: How employers can support workers in this new reality - "America faces a caregiving crisis. Whether it’s caring for an aging parent, a sick spouse or a child, more than 50 million Americans are unpaid caregivers for family members and loved ones. Tens of millions of those caregivers are also balancing work with caregiving responsibilities. And while caregiving is a rewarding experience, recent data show that 71% of family caregivers with full-time jobs suffer from mental health challenges and more than half of caregivers say they are too burned out to do their job well. It’s no wonder so many family caregivers are thinking about leaving their jobs."

Half-cup of blueberries a day could keep dementia away, scientists say - "An apple a day may keep the doctor away, but a new study finds blueberries may be better for your brain. Researchers from the University of Cincinnati have found that a half-cup of blueberries can keep middle-aged adults from developing dementia as they get older. Moreover, the study finds adding the fruit to your diet lowers insulin levels and improves metabolic function — making it easier to burn fat for energy."