HOT TOPICS IN HR AND BENEFITS ADMINISTRATION

HOT TOPICS IN HEALTH BENEFITS Health Reform: The U.S. Supreme Court Decision HIPAA Privacy Self-insured Plans 2

HEALTH REFORM Brief Overview of the U.S. Supreme Court Decision in National Federation of Independent Business et al. v. Sebelius, No National Federation of Independent Business et al. v. Sebelius Upheld June 28 in a 5-4 decision by the U.S. Supreme Court. Court concluded that the individual mandate is a tax. The individual mandate was partly deemed unconstitutional. 3

HEALTH REFORM, CONTINUED Brief Overview of the U.S. Supreme Court Decision Source: HR Compliance eXpert, Thompson Publishing Group 4

HEALTH REFORM, CONTINUED Repeal Efforts in Congress Continue Repeal vote coming up in U.S. House of Representatives. Vote is symbolic only because not enough votes to get it out of the Senate. 5

HEALTH REFORM, CONTINUED What Reform Issues Must Employers Address In the Near Term? Summary of Benefits and Coverage Reporting Health Coverage on Forms W-2 Determining Whether Coverage Is Minimum-Value Written Notice of an Exchange 6

HEALTH REFORM, CONTINUED What Reform Issues Must Employers Address In the Near Term? Source: HR Compliance eXpert, Thompson Publishing Group 7

HEALTH REFORM, CONTINUED More Government Rules Expected Some rules were issued in interim final and/or proposed stages, which means final rules can be expected. In addition, new rules are coming on many other reform issues. 8

HEALTH REFORM, CONTINUED More Government Rules Expected Source: HR Compliance eXpert, Thompson Publishing Group 9

HIPAA PRIVACY Seeing More HHS Enforcement Final HITECH act rules are coming SOON. HHS sees need for strong HIPAA privacy policies. Employers need to consider self-audits to ensure compliance. 10

HIPAA PRIVACY, CONTINUED Source: HR Compliance eXpert, Thompson Publishing Group 11

SELF-INSURED PLANS Data show that most large employer groups offer at least one self-funded health plan. A recent survey shows that more small employers (3-199 workers) are moving to self-funding. Self-funding proponents are concerned about more regulation of self-funding based on federal government and state action. 12

SOCIAL MEDIA Overview of Social Media Policy Considerations You hear a lot about its use in recruitment and hiring, but dont forget legal liability. Source: HR Compliance eXpert, Thompson Publishing Group 13

SOCIAL MEDIA, CONTINUED Overview of National Labor Relations Board Efforts The National Labor Relations Board is scrutinizing employer social media policies. Source: HR Compliance eXpert, Thompson Publishing Group 14

HEALTH FSA AND CAFETERIA PLAN ADMINISTRATION Administration of health flexible spending accounts and cafeteria plans is always complicated. An employer can offer a wide range of benefits through such plans, and those benefits themselves can be challenging to administer within the rules the government sets. This can be tricky! 15

HEALTH FSA AND CAFETERIA PLAN ADMINISTRATION, CONTINUED Health Reform Law The Supreme Court just upheld the health care law. Three of the most important consequences for health FSAs involve: The $2,500 annual limit on FSA contributions kicks in on Jan. 1, Dependent coverage through age 26. Limited reimbursements for over-the-counter medications. 16

HEALTH FSA AND CAFETERIA PLAN ADMINISTRATION, CONTINUED What Is Covered? Code Section 125 explains out what benefits can and cannot be offered, or made available, through a cafeteria plan. Source: HR Compliance eXpert, Thompson Publishing Group 17

HEALTH FSA AND CAFETERIA PLAN ADMINISTRATION, CONTINUED What Is Covered? What expenses funds from a health FSAs can cover is another matter than often creates confusion. The IRS has said which expenses are and are not covered, but largely on a case-by case basis. Here are two broad principles to keep in mind: Health FSAs cover many, but not all expenses. Some expenditures involve shades of grey. To the right is a partial list of popular expenses that may or may not be reimbursable. Source: HR Compliance eXpert, Thompson Publishing Group 18

HEALTH FSA AND CAFETERIA PLAN ADMINISTRATION, CONTINUED Change of Election Whether and for what reasons an employee can change his or her cafeteria plan elections seems straightforward, but can be troublesome. Under the current rules, a mid-year change in cafeteria plan elections can be made for several reasons. 19

WAGE-AND-HOUR REQUIREMENTS Fair Labor Standards Act: Its important to know the rules. Computation of regular rate and overtime compensation Exempt Versus Nonexempt Source: HR Compliance eXpert, Thompson Publishing Group 20

WAGE-AND-HOUR REQUIREMENTS, CONTINUED DOL Enforcement Initiatives Whether an employee is exempt from federal wage and hour laws has been a turbulent area of the FLSA this year. DOL has been issuing proposals and holding hearings regarding exempt jobs. DOL also cracking down on employee misclassification. 21

WAGE-AND-HOUR REQUIREMENTS, CONTINUED DOL Enforcement Initiatives Source: HR Compliance eXpert, Thompson Publishing Group 22

WAGE-AND-HOUR REQUIREMENTS, CONTINUED In the Courts The U.S. Supreme Court decision in Christopher v. SmithKline Beecham Corp. (No ) regarding pharmaceutical sales representatives and the FLSAs outside sales exemption. 7th Circuit clarifies scope of donning and doffing time in rejecting FLSA class action. Other court activity of interest. 23

WAGE-AND-HOUR REQUIREMENTS, CONTINUED In the Courts Source: HR Compliance eXpert, Thompson Publishing Group 24

LEAVE AND DISABILITY ISSUES Employers, HR professionals and benefits administrators certainly have their work cut out for them in navigating the complex web of regulations governing leave and how an employer must accommodate employees that have a disability. This is a critically important matter at any time. Following two areas highlight the complexities of meeting the requirements of regulations governing leave and disability: intermittent leave under the Family and Medical Leave Act and reasonable accommodation under the Americans with Disabilities Act. 25

LEAVE AND DISABILITY ISSUES, CONTINUED Intermittent Leave An employee may take intermittent leave when medically necessary. Leave may be taken in the smallest time periods offered for any other kind of leave. The U.S. Department of Labor issued a proposal early in 2012 that would change the rules governing intermittent leave. The proposed rule is intended to protect employees FMLA leave. Employers concerned proposed rules would increase fraudulent use of FMLA leave and make it harder for employers to make sure they are adequately staffed. 26

LEAVE AND DISABILITY ISSUES, CONTINUED Intermittent Leave Source: HR Compliance eXpert, Thompson Publishing Group 27

LEAVE AND DISABILITY ISSUES, CONTINUED Reasonable Accommodation No employer needs to accommodate a complete inability to perform an essential function, but no employee can be kept from working if those functions could be performed or the necessary results can be achieved with accommodation. 28

LEAVE AND DISABILITY ISSUES, CONTINUED Reasonable Accommodation What exactly constitutes a reasonable accommodation? Under ADA, an employer must take reasonable steps to accommodate an employee who has a disability or who returns to work after having suffered an injury that has resulted in a disability. But how to do this can be a confusing grey area. The U.S. 7th Circuit Court of Appeals ruling in EEOC v. United Airlines is an illustration of the complexities surrounding reasonable accommodation. 29

LEAVE AND DISABILITY ISSUES, CONTINUED Reasonable Accommodation Source: HR Compliance eXpert, Thompson Publishing Group 30

RETIREMENT PLANS Employers and plan administrators face many challenges regarding their retirement plans. In a tough economic climate, how funds in a plan are invested and managed is a major concern. And the government is setting tougher standards and rules for what information must be provided to participants and the government itself. 31

RETIREMENT PLANS, CONTINUED The IRS and U.S. Department of Labor are constantly fine- tuning the regulations governing defined benefit (pension) and defined contribution (mostly 401(k)) plans. Three of the major areas of concern for plan administrators and plan sponsors include the following: The definition of fiduciary Fulfilling fiduciary duties Fee disclosure 32

RETIREMENT PLANS, CONTINUED What a Fiduciary Does ERISA sets five basic duties for a fiduciary: to act solely in the interest of participants and beneficiaries; to act for the exclusive purpose of providing benefits and paying the reasonable expenses of the plan; to conduct the duties with the care, skill, prudence, and diligence of a knowledgeable plan fiduciary; to diversify plan investments, unless clearly imprudent to do so; and to comply with the provisions of the plan, unless the plan conflicts with the law. 33

RETIREMENT PLANS, CONTINUED Fulfilling Fiduciary Duties Why is the role of serving as a fiduciary so important?: A fiduciary has the exclusive authority and discretion to manage the operation and administration of a plan. A fiduciary can be held personally liable for breaches of fiduciary duty. Plan participants funds, and your employer, are affected by your decisions! 34

RETIREMENT PLANS, CONTINUED Fees The fees entailed in administering a retirement plan directly affect not only an employer but also its retirement plan participants and beneficiaries. Fees have come into sharper focus for a variety of reasons, such as the economy, litigation and demands from plan participants and the government for greater transparency. 35

RETIREMENT PLANS, CONTINUED Fees Source: HR Compliance eXpert, Thompson Publishing Group 36

RETIREMENT PLANS, CONTINUED Fees Final regulations on fee disclosure. Final regulations on participant investment disclosures. 37

Thank you

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