Although reporting the cost of coverage will be optional with respect to 2011, the IRS continues to stress that the amounts reportable are not taxable. That is, the new reporting requirement is intended to be informational only and provide employees with greater transparency into overall health care costs. The new reporting requirement is one of the tax provisions mandated by the Affordable Care Act.

On April 22, the Employee Misclassification Prevention Act (EMPA) was introduced in the United States Congress as an amendment to the Fair Labor Standards Act (FLSA). If it becomes law, the EMPA will impose federal criminal penalties upon employers who categorize workers as independent contractors when they should be treated as employees.

The bill (1) subjects employers to potential penalties of up to $5,000 per employee; (2) imposes additional record-keeping and notice requirements on employers; and (3) makes misclassification of employees a federal labor law violation.

An earlier version of the EMPA was presented in 2008 but never made it to debate in Congress. This time, the bill is expected to receive greater attention and support, given that President Obama was a co-sponsor of the earlier version, and Obama’s administration has significantly increased funding for investigation and enforcement of worker misclassification. For example, in November 2009, the IRS announced the Employment Tax National Research Project designed to audit 6,000 businesses, including a focus on worker misclassification.

The EMPA does not prohibit the use of independent contractors when those workers are properly classified as such. It is focused on stopping those situations in which workers who should be treated as employees are instead classified as independent contractors.

The government’s interest in stopping misclassification rests on the fact that employers do not withhold payroll taxes, pay unemployment or workers compensation premiums, or make Social Security and Medicare contributions, which diverts funds that would otherwise be collected by the employer and forwarded to governmental authorities.

Whether an individual is an employee or an independent contractor depends on many factors set forth in tests by the IRS, the U.S. Department of Labor, and the courts.

For a more in-depth discussion of the factors that must be considered when classifying your workers, see Garlo Ward’s video link to Managing Employees During Economic Recovery, Parts 1 and 2, available at the firm’s website.

Currently, DADS does not plan on phasing in this shift, instead, DADS intends to ochestrate a mass move in June of 2010. DADS will hold a training for MRAs and providers in the spring before the change.

The MRA will conduct enrollment and keep up with the PDP (person directed plan). The requirement for an interdiscplinary team has been removed and now a service team consisting of the individual, LAR, and service coordinator (provider rep optional) will work together. The IPC will continue to be implemented by the provider. The requirements and role of the service coordinators still need to be defined with specifity. Accordingly, look for the draft rule proposal to be published in the Texas Register.

In sum, an employer’s health care plan that provides mental health or addiction disorder benefits must provide parity in both financial requirements (e.g., deductibles, copayments, coinsurance and out-of-pocket expenses) and treatment. Mental health benefits must be no more restricted than other covered medical benefits. There can be no separate cost-sharing or network requirements or scope and duration limitations that apply only to mental health benefits.

MPHA also contains several disclosure requirements, including providing the reason for denial of benefits upon the request of a plan participant or beneficiary.

There are two exemptions available to plan sponsors:

1. Smaller employers with 50 or fewer employees are generally exempt from MHPA requirements; and

2. There are one-year exemptions available if the increased cost of complying with MHPA exceeds certain percentages. But this exemption has very specific requirements, including extensive documentation of the financial impact and consent to agency inspection of the plan’s relevant benefits records for up to six years after exemption certification.

The DOL, along with the Treasury and the Department of Health and Human Services, has been charged with issuing guidelines and interpretative rules within one year of MHPA’s enactment. Regardless of whether or not the DOL meets this deadline, however, covered plans must comply with MHPA in the plan year beginning after the one-year anniversary of MHPA’s enactment. For most plans, this means the effective date begins on January 1, 2010.

So what should you do now? Contact your employment or benefits attorney to implement a compliant plan that fits your operations and budget before enforcement begins next year. Non-compliance carries significant penalties, and the IRS may continue to impose an excise tax on any plan for failure to comply with MHPA’s requirements. Moreover, you can anticipate that the DOL will issue more detailed procedures and requirements in its anticipated rules.

Military Caregiver Leave for Up To 26 Workweeks. An eligible employee who is the spouse, son, daughter, parent, or next of kin of a covered servicemember with a serious injury or illness may take job-protected FMLA leave to provide care to the servicemember. Specifically, an eligible employee is entitled to take up to 26 workweeks of leave during a “single 12- month period” to care for a seriously injured or ill covered servicemember. The “single 12- month period” begins on the first day the eligible employee takes military caregiver leave and ends 12 months after that date, regardless of the method used by the employer to determine the employee’s 12 workweeks of leave entitlement for other FMLA-qualifying reasons. Note that this military caregiver leave extends to those seriously injured or ill members of both the Regular Armed Forces and the National Guard or Reserves (a distinction you’ll see under the second type of leave, “qualifying exigency leave”). A “serious injury or illness” is an injury or illness incurred by a covered servicemember in the line of duty on active duty that may render the servicemember medically unfit to perform the duties of the member’s office, grade, rank, or rating.

Qualifying Exigency Leave for Up To 12 Weeks. This second type of new military family leave may be taken for any qualifying exigency arising out of the fact that a covered military member is on active duty or call to active duty status. The Department’s new regulations include a broad list of activities that are considered qualifying exigencies and will permit eligible employees who are family members of a covered military member to take FMLA leave to address the most common issues that arise when a covered military member is deployed, such as attending military-sponsored functions, making appropriate financial and legal arrangements, and arranging for alternative childcare. In contrast to the Military Caregiver Leave, however, this Leave covers only employees who are eligible family members of the National Guard or Reserves who is under a call or order to active duty (or has been notified of an impending call or order to active duty) in support of a contingency operation.

The Department of Labor has published guides and FAQs related to these new military family leave provisions and can be found on the Department of Labor’s new FMLA Website at www.dol.gov/esa/whd/fmla/finalrule.htm.

Should you have any questions or need the new DOL form specific to these Military Family Leave changes, please call your legal counsel.

If you’ve been cited for violation, take the time to verify if your actually breaking a “rule.”

In sum, GINA prohibits health insurance companies from using genetic information to set premiums or determine enrollment eligibility. Employers, with very few exceptions, cannot use genetic information in hiring, firing or promotion decisions and must maintain any genetic information strictly confidential in compliance with the ADA (medical records) and HIPAA. As for enforcement, procedures and damages –– think ADA. In other words, private employers with fifteen or more employees are subject to GINA. The Equal Employment Opportunity Commission (EEOC) will be charged with investigating complaints, and the procedure and remedies are mostly identical to other federal anti-discrimination laws.

The law will go into effect in November 2009, by which time the Department of Labor is supposed to have enacted its regulations for GINA.

What in the World Do I Care About Genetics? While genetic testing for employment purposes is not regularly used by most of our clients, most do require post-offer medical examinations and verification of absences and FMLA time. Studies cited in support of GINA show that nearly two-thirds of major U.S. companies require medical examinations of new hires, of which 14% conduct tests for susceptibility to workplace hazards, among other things. The federal government for several years has prohibited the federal government from requiring genetic testing or from considering a person’s genetic information in hiring or promotion decisions. Plus, there are labs actively marketing to employers in connection with disability and workers’ compensations claims. GINA significantly proscribes the use of any testing with a genetic component.

Does Texas Have a Similar State Law? Well, yes, Virginia…it does! Texas is one of 31 states (according to National Human Genome Research Institute) that have already adopted laws regarding genetic discrimination in the workplace. Texas’ law has been in effect since 1997. Parallel to GINA, Texas law:

• Provides for protection against discrimination by employers with 15 or more employees, employment agencies, or labor unions based on information about an individual’s genetic characteristics or on the refusal of an individual to take a genetic test or submit a family health history.

• Provides a civil penalty if a person improperly discloses genetic information.

• Employers must keep genetic testing confidential unless an individual specifically authorizes release of such information, or unless they are required to release information pursuant to a court order, or otherwise required by law.

What Difference Will This Make If I Don’t Require Genetic Testing? Like any other anti-discrimination law, employers will want to have a clear written policy as well as procedures prohibiting conduct in violations of GINA as well as educate workers on what is not prohibited by the Act.

Does GINA Affect Our Employee Wellness Program? Yes. Under both HIPAA and, now, GINA, employers may use both personal health and genetic information as part of a qualified wellness program. Wellness programs generally reward participants for reaching a desired health outcome … giving up smoking or losing weight, for example, or carrying out a specified exercise regime. You can see the U.S. Department of Labor’s new rules for creating workplace wellness programs that comply with existing HIPAA law (no doubt soon to be amended to include GINA).

To prevent employers from practicing “back door discrimination,” a wellness plan must meet very specific requirements. Check with your legal counsel regarding wellness programs to keep your plan “legally healthy.”

Little Known Fact: Per the National Human Genome Research Institute, everyone probably has at least six genetic mutations placing them at greater risk for some disease. Although these mutations do not necessarily mean that a disease will develop, researchers said, that the person is more likely to get the disease than someone without the genetic mutation.

The House voted 414-1 for GINA last Thursday, a week after the legislation passed the Senate on a 95-0 vote. The only member of Congress to vote against the bill was Rep. Ron Paul, R-Texas. Click here to read the complete text of GINA.

CIS also revised its “Handbook for Employers” last month, which explains the new I-9 process in detail and includes questions and answers on filling out the form, examples of the acceptable documents, and a copy of the Form I-9. To verify that you have the correct version, the new form is identified in the lower right hand corner as “Form I-9 (Rev. 06/05/07) N.”

Private employers with 100 or more employees, as well as federal contractors with 50 or more employees and a contract of $50,000 or more are required to submit annual EEO-1 reports to the Joint Reporting Committee (JRC), a committee of the EEOC and the Office of Federal Contract Compliance Programs (OFCCP). These reports track employee data by race, ethnicity, sex, and job classification. The EEOC uses the data to support enforcement of federal anti-discrimination laws and to analyze employment patterns. The OFCCP uses the information to target employers for compliance evaluations. The EEO-1 must be filed each year by September 30th.

Summarized below are the changes made to the EEO-1 form and reporting requirements.

Previously, you had to collect information on five EEO-1 race/ethnicity categories: Hispanic, White, Black, Asian or Pacific Islander, and American Indian or Alaskan Native. The new changes increase the categories to seven: Hispanic or Latino, White, Black or African-American, Native Hawaiian or Other Pacific Islander, Asian, American Indian or Alaska Native, and Two or More Races. In order to yield more accurate data about Hispanics or Latinos the EEOC has adopted the “two-question format” which requires employees, when self-identifying their race, to first report their Hispanic or Latino status and then report the race or races they consider themselves to be. The EEOC will require employers to report the number of employees who identify themselves as “two or more races,” but will not require reporting of the specific races.

The EEOC also changed the EEO-1 job categories. The new categories continue to be skill-based rather than industry-based, but the Officials and Managers category has been split into two subcategories: Executive/Senior Level Officials and Managers and First/Mid-Level Officials and Managers. The EEOC believes the subcategories will allow for more detailed assessment of female and minority involvement at different levels.

Residing in the highest levels of organizations, these Executive/Senior Level Officials and Managers plan, direct or coordinate activities with the support of subordinate executives and staff managers. In larger organizations, they include those individuals within two reporting levels of the CEO, whose responsibilities require frequent interaction with the CEO. Examples of these kinds of managers are: chief executive officers; chief operating officers; presidents or executive vice presidents of functional areas or operating groups; chief marketing officers; chief legal officers; and managing partners.

First/Mid Level Officials and Managers receive direction from the Executive/Senior Level Management and typically lead major business units. They implement policies, programs and directives of Executive/Senior Level Management through subordinate managers and within the parameters set by Executive/Senior Level Management. Examples of these kinds of managers are: vice presidents and directors; regional or divisional controllers; treasurers; and human resource, information systems, marketing and operational managers. The First/Mid Level Officials and Managers subcategory also includes those who report directly to middle managers. Examples of these kinds of managers are: first-line managers; team managers; unit managers; operations and production managers; call center or customer service managers; technical support managers; and branch or product managers.

In addition, the old Office and Clerical category has been changed to Administrative Support Workers, and current references to skilled, unskilled, or semi-skilled work have been dropped. The Laborers category is now Laborers and Helpers.

The revisions also change the information gathering process. In the past, the EEOC directed you to obtain the racial and ethnic information by visual surveys of the workforce or from post-employment records. The new revisions instruct you to ask employees to self-identify and only rely on the old method as a back up when self-identification is not possible.

In order to complete the new EEO-1 form, you will ultimately need to re-survey your workforce to gather the necessary data. However, for the EEO-1 report due on September 30, 2007, employers are only required to use the new EEO-1 form. Reporting employers are not required to re-survey their workforce for the 2007 report. This means that in 2007, you may fill out the new form with only the limited race data collected in accordance with the old EEO-1 form. Note that the regulations require that employers make their count within the three months prior to the September 30th reporting deadline.

The EEOC has provided helpful information on the new EEO-1 Report on its Web site at http://www.eeoc.gov/eeo1/index.html, including a discussion of the revisions to the EEO-1 form and how to implement the new racial and ethnic categories.

We can help you develop an employee survey form that elicits the proper EEO-1 information. Please do not hesitate to call if you have any questions about the new EEO-1 requirements or need assistance revising your EEO-1 form.