Businesses using non-employee workers should heed the recently announced expansion of the Internal Revenue Service (IRS) Voluntary Classification VCS Program (VCS Program) as yet another warning to clean up their worker classification practices and defenses for all workers performing services for the business in any non-employee capacity. 

Relying upon misclassifications of workers as nonemployed service providers presents many financial, legal and operational risks for businesses.  When businesses treat workers as nonemployees who render services in such a way that makes the worker likely to qualify as a common law employee, the business runs the risk of overlooking or underestimating the costs and liabilities of employing those workers.  The enforcement records of the U.S. Department of Labor Wage & Hour Division contains a lengthy and ever-lengthening record of businesses subjected to expensive backpay and penalty awards because the business failed to pay minimum wage or overtime to workers determined to qualify as common law employees entitled to minimum wage and overtime under the Fair Labor Standards Act.  See, e.g.,  Employers Should Tighten Worker Classification Practices As Obama Administration Moves To Stamp Out Misclassification Abuses; $1 Million + FLSA Overtime Settlement Shows Employers Should Tighten On-Call, Other Wage & Hour Practices;  Employer Charged With Misclassifying  & Underpaying Workers To Pay $754,578 FLSA Back Pay Settlement. 

Originally announced on September 22, 2011 in Announcement 2011-64,  the VCS Program as modified by Announcement 2012-45 continues to offer businesses a carrot to reclassify as employees workers misclassified for payroll tax purposes as independent contractors, leased employees or other non-employee workers backed by the enforcement stick of the IRS’ promise to zealously impose penalties and interest against employers caught wrongfully misclassifying workers.  While the IRS’s VCS Program and stepped up audits of worker classification provide a strong incentive for business to address their worker classification risks, the IRS is only one of many agencies on the alert for worker misclassification exposures.  Worker misclassification also impacts wage and hour, safety, immigration, worker’s compensation, employee benefits, negligence and a host of other obligations. 

All of these exposures carry potentially costly compensation, interest, and civil and in some cases even criminal penalty exposures for the businesses and their leaders.  Consequently, businesses should act prudently and promptly to identify and address all of these risks and move forward holistically to manage their misclassification exposures.

Agencies charged with enforcement of these other laws as well as private plaintiffs also are on the alert for and pursing businesses for aggressive misclassification of workers in these other exposure areas.   Since most businesses uniformly classify workers as either employees or non-employees for most purposes,  business leaders must understand and manage the full scope of their businesses’ misclassification exposures when charting and implementing their strategy in response to the VCS Program or another voluntary compliance program, responding to an audit or other agency action, addressing a private plaintiff suit or conducting other risk management and compliance activities impacting or affected by worker classification concerns. 

VCS Program Offers  Limited Worker Misclassification Exposure Relief

Worker misclassification impacts a broad range of tax and non-tax legal obligations and risks well beyond income tax withholding, payroll and other employment tax liability and reporting and disclosure. A worker classification challenge or necessity determination in one area inherently prompts the need to address the worker reclassification and attendant risks in other areas.

Typically, in addition to treating a worker as a non-employee for tax purposes, a business also will treat the worker as a non-employee for immigration law eligibility to work, wage and hour, employment discrimination, employee benefits, fringe benefits, worker’s compensation, workplace safety, tort liability and insurance and other purposes.

Health Care Reform To Increase Worker Classification Risks

Businesses can look forward to these risks rising in 2014, when the “pay or play” employer shared responsibility, health plan non-discrimination, default enrollment and other new rules take effect under the Patient Protection & Affordable Care Act (ACA).  Given these new ACA requirements and the government’s need to get as many workers covered as employees to make them work, as well as existing laws, IRS and other agencies are expanding staffing and stepping up enforcement against businesses that misclassify workers.

Whether and how ACA’s “pay-or-play” employer shared responsibility payment, default enrollment, insured health plan non-discrimination and other federal health plan rules apply to a business’ health plan requires a correct understanding of what workers considered employed by the business and how these workers are counted and classified for purposes of ACA and other federal health plan mandates.  

ACA and other federal health plan rules decide what rules apply to which businesses or health plans based on the number of employees a business is considered to employ, their hours worked, their seasonal or other status, and other relevant classification as determined by the applicable rule.  The ACA and other rules vary in the relevant number of employees that trigger applicability of the rule and how businesses must count workers to decide when a particular rule applies.  Consequently, trying to predict the employer shared responsibility payment, if any under Internal Revenue Code (Code) Section 4980H or model the burden or cost of any other federal health benefit mandates requires each business know who counts and how to classify workers for each of these rules.  Most of these rules start with a “common law” definition of employee then apply rules to add or ignore various workers.  Because most federal health plan rules also take into account “commonly controlled” and “affiliated” businesses’ employees when determining rule coverage, businesses also may need to know that information for other related or commonly owned businesses.  

For instance, when a business along with all commonly controlled or affiliated employers, if any, employ a combined workforce of 50 or more “full-time” and “full-time equivalent employees” (Large Employer) does not offer “affordable,” “minimum essential coverage” to every full-time employee and his dependents under a legally compliant health plan that provides “minimum essential value” within the meaning of ACA after 2013, the business generally should expect to pay a shared responsibility payment under Code Section 4980H for each month after 2013 that any “full-time” employee  receives a tax subsidy or credit for enrolling in one of ACA’s health care exchanges.  The amount of this required shared responsibility payment will be calculated under Code Section 4980H based on the plan design and coverage the employer health plan offers and the required employee contribution for employee only coverage.

If the business intends to continue to offer health coverage, it similarly will need to accurately understand which workers count as its employees for purposes of determining who gets coverage and the consequences to the business for those workers that qualify as full-time, common law employees not offered coverage.

In either case, ACA uses the common law employee test as the basis for classification of workers both to determine what businesses have sufficient full-time employees to become covered under these rules, the payment, if any, required under Code Section 4980H’s new employer shared responsibility payment requirements, as well as the workers entitled to benefit from these rules under employer sponsored health plans.  Accordingly, These the already significant legal and financial consequences for employers that misclassify workers will rise significantly when ACA gets fully implemented beginning in 2014.

Consider VCP Program Relief In Context Of Other Worker Classification Risks

As part of a broader effort to get businesses properly to classify and fulfill tax and other responsibilities to workers, the IRS is offering certain qualifying businesses an opportunity to resolve payroll liabilities arising from past worker misclassifications under the VCS Program. The VCS Program settlement opportunity emerged in 2011 as worker misclassification amid rising scrutiny and enforcement by the IRS and other agencies against businesses for misclassification related violations of the Code, wage and hour, safety, discrimination, immigration and various other laws.

Touted by the IRS as providing “greater certainty for employers, workers and the government,” the VCS Program offers businesses that meet the eligibility criteria for the program the option to resolve past payroll tax liability for the misclassified workers by paying a settlement payment of just over one percent of the wages paid to the reclassified workers for the past year and by meeting other program criteria. When a business meets the VCS Program requirements, the IRS promises not to conduct a payroll tax audit or assess interest or penalties against the business for unpaid payroll taxes for the previously misclassified workers covered by the VCS Program.  For more detail, see New IRS Voluntary IRS Settlement Program Offers New Option For Resolving Payroll Tax Risks Of Misclassification But Employers Also Must Manage Other Legal Risks; Medical Resident Stipend Ruling Shows Health Care, Other Employers Should Review Payroll Practices; Employment Tax Takes Center Stage as IRS Begins National Research Project , Executive Compensation Audits.

The IRS hoped the threat of much larger liability if the IRS catches their misclassification in an audit would induce businesses to settle their exposure and come into compliance by participating in the VCS Program. 

Part of the low participation stemmed from restrictions incorporated into the VCS Program.  Not all businesses with misclassified workers qualified to use the program.  The original criteria to enter the VCS Program established in 2011 required that a business:

• Be treating the workers as nonemployees;
• Consistently have treated the workers in the past as nonemployees;
• To have filed all required Forms 1099 for amounts paid to the workers;
• Not currently be under IRS audit;
• Not be under audit by the Department of Labor or a state agency on the classification of these workers or contesting the classification of the workers in court; and
• To agree to extend the statute of limitations on their payroll tax liabilities from three to six years.

After only about 1000 employers used the VCS Program to voluntarily resolve their payroll tax liability for misclassified workers, the IRS modified the program in hopes of making participation more attractive to businesses in Announcement 2012-45.  As modified by Announcement 2012-45, employers under IRS audit, other than an employment tax audit, now qualify for the VCS Program. Announcement 2012-45 also eliminates the requirement that employers agree to extend their statute of limitations on payroll tax liability from three to six years.   

A business that meets these adjusted criteria for participation now follows the following steps to enter the VCS Program:

• Files the Form 8952, Application for Voluntary Classification Settlement Program, at least 60 days before the business plans to begin treating the workers as employees;
• Adjusts its worker classification practices prospectively with respect to the previously misclassified workers;
• Pays the required settlement fee; and
• Properly classifies workers going forward. 

While these changes may make participation in the VCS Program more attractive to some employers, many employers may view use of the VCS Program as too risky because of uncertainties about the proper classification of certain workers in light of the highly fact specific nature of the determination, as well as concerns about the effect that use of the VCS Program might have on the businesses non-tax misclassification exposures for workers that would be reclassified under the VCS Program.

Uncertainties Complication Worker Classification Risk Management

One of the biggest challenges to getting businesses to change their worker classifications is getting the businesses to accept the notion that long-standing worker classification practices in fact might not be defensible. 

Although existing precedent and regulatory guidance makes clear that certain long-standing worker classification practices of many businesses would not hold up if scrutinized, business leaders understandably often discount the risk because these classifications historically have continued with little or no challenge in the past.

Even when business leaders recognize that changing enforcement patterns merit reconsideration of historical worker classification practices, they may be reluctant to reclassify the workers. 

The common law employment test applied to decide if a worker is an employee for payroll, income tax, employee benefit plan and other purposes under the Code often relies on a subjective, highly fact-specific analysis of the particular circumstances of the worker.  Employment status typically is presumed under the common law test for purposes of the Code and most other laws.  This means that the business, rather than the IRS or other agency, generally bears the burden of proving the correctness of its classification of a worker as a non-employee for purposes of these determinations. 

Given the business typically bears the burden of proving a worker is not an employee, a business receiving services from workers performing services in a capacity other than as a employee should ensure that the position in structural form and operation will withstand scrutiny under the common law and other applicable tests and retain the necessary evidence to support this characterization in anticipation of a potential future audit or other challenge.

Since the business can expect to bear the burden of proving the appropriateness of a nonemployee characterization, businesses also should exercise special care to avoid relying upon overly optimistic assessment of the facts and circumstances when assessing the defensibility of their characterization of the position. 

When the factual evidence creates significant questions about the defensibility of a worker’s classification as a non-employee, an employing business generally should consider reclassifying or restructuring the position to be more defensible pursuant to a process designed to mitigate or resolve risks of the prior classification.  Often, it also may be desirable for the business to incorporate certain contractual, compensation and other safeguards into the worker relationship, both to support the nonemployee characterization and to minimize future reclassification challenges and exposures.

Consider Importance of Attorney-Client Privilege As Risk Management Tool

Because of the broad reaching and potentially significant liability exposures arising from misclassification, business leaders generally should work to ensure that their risk analysis and decision-making discussion is conducted in a way that positions these discussions for protection under attorney-client privilege and attorney work product privilege.

The availability of the attorney-client and other evidentiary privilege to help shield the investigation and associated decision-making is particularly important because of the potentially significant civil and even criminal liability exposures that often arise from worker misclassification under various relevant laws. 

The interwoven nature of the tax and non-tax risks merits particular awareness by business leaders of the need to use care in deciding the outside advisors and consultants that will help in the evaluation of the risks and structuring of solutions.  With the VCS Program and other tax exposures in the limelight, businesses can expect that their accounting and other consultant advisors will recommend and even offer to lead the review.  While appropriately structured involvement by these non-legal consultants can be a valuable tool, the blended nature of the misclassification exposures means that the evidentiary privileges that accountants often assert to help shield their tax related discussions from discovery in certain federal tax prosecutions are likely to provide inadequate protection against discovery given the broad non-tax related exposures inherent in the misclassification problem.  For this reason, business leaders are urged to require that any audits and other activities by these non-legal consultants to evaluate or mitigate these exposures be engaged and conducted whenever possible within attorney-client privilege to protect and promote the ability to assert evidentiary protections against disclosure and discovery of sensitive discussions. Accordingly, while businesses definitely should incorporate appropriate tax advisors into the evaluation process, most businesses before commencing meaningful discussions with or engaging assessments by their accounting firm or other non-attorney tax advisor will want to engage counsel and coordinate  their accounting and other non-attorney tax advisors” involvement and activities through qualified legal counsel to protect and maximize the ability to conduct the analysis of their risks and options within the protection of attorney-client privilege.

For Help With These Or Other Matters

If you need help reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices to respond to emerging health plan regulations, monitoring or commenting on these rules, defending your health plan or its administration, or other health or employee benefit, human resources or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters. 

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend staffing and employment, medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  She has worked with management, spoken and published extensively on both worker classification and health benefit planning, adminstration and defense.

A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials on regulatory, investigatory or enforcement concerns.   This involvement includes extensive advocacy and input on Section 530 and other worker classification rules and reforms, health and other employee benefit and other workforce regulatory and compliance matters.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested in exploring other Solutions Law Press, Inc. ™ tools, products, training and other resources here.

Other Helpful Resources & Other Information

If you found these updates of interest, you also be interested in one or more of the following other recent articles published in this electronic Solutions Law publications available for review here including:

• Sequester Will Cut ACA Small Businesses Health Care Tax Credits
• Premier Insurance Services Pays $120,000 In Back Wages, Damages, Penalties Because Commission-Only Comp Violated Minimum Wage, Overtime Laws
• OSHA Citation Of Michigan VA Reminder To Manage Workplace Safety
• Labor Department Targeting Businesses Violating Overtime, Other Wage & Hour Laws
• Wal-Mart Settlement Shows ADA Risks When Considering Employee Return To Work Accommodation Requests & Inquiries
• HHS Releases Final Rule on Health Insurance Market, Rate Review, Pre-Existing Conditions & Other ACA Market Reform Rules
• FTC, HIPAA Rules Require Health Plans & Employers Strengthen Data Security on Mobile Devices and Applications
• 3/13 JCEB Teleconference Explores Foreign Transferees: Outbound, Inbound, Equity And Treaty Issues
• Stamer Talks on “What the Wind Blew In: Coping with Health Care Reform: 2013 and Beyond” May 2 At 24th Annual RPTE Spring Symposia In Washington, D.C.
• IRS Will Begin Accepting Returns Claiming Education Credits By Mid-February
• IRS Shares Procedures Employers Use To Claim Increased Monthly Transit Benefit Exclusion Allowed By Administrative Taxpayer Relief Act
• Employers ACA Health Reforms Prohibit Using HRAs To Pay Individual Medical Policy Premiums & Impact Other HRA Arrangements
• ADA May Require Food Allergy Accommodation By Employers, Schools & Businesses
• Employer Deadline To Give ACA Notice of Exchange Coverage Options Delayed
• Texas Champion Bank Settlement of Charges of Illegal Lending Discrimination Reminder To Business To Tighten Business Practices
• Food Allergies May Be Disabilities Requiring Accommodation Under The ADA
• 2013 Tax Code Inflation Adjustments Announced
• Drop In Company Stock Value Held By Benefit Plans Puts Plans, Company, Management & Fiduciaries At Risk
• OCR Publishes Long-Anticipated Omnibus Restatement of HIPAA Privacy, Security, Breach Notification & Enforcement Rules
• OCR Gives HIPAA Guidance On Safety Disclosures
• IRS Offers New Simplified Option For Businesses Claiming Home Office Deductions For Home-Based Business Owners & Workers
• IRS Announces Cost of Living & American Taxpayer Relief Act Income Tax Adjustments
• Tax-Related ID Theft Growing Problem For IRS, Taxpayers
• Tax Saver’s Credit Helps Low & Moderate Income Workers Save For Retirement; Possible Tool To Help Boost Their Participation In Employer Plans
• Self-Insured Health Plan Sponsors, Health Insurers Brace To Pay New ACA-Imposed Fees
• 1st OCR Small HIPAA Breach Settlement Shows Plans, Other Covered Entities At Risk From Small Breach Reports Too
• Labor Department Targeting Businesses Violating Overtime, Other Wage & Hour Laws
• Company President, Officer Can’t Use Bankruptcy To Avoid Liability For Using Plan Money For Company Operations
• Peter Madoff 10 Sentence For Defrauding ERISA Plans Reminder Manage Plan Investment Responsibilities
• $1.25M NLRB Backpay Order Highlights Risks of Mismanaging Union Risks In Health Care & Others M&A Deals
• As EEOC Steps Up ADA Accommodation Enforcement, New DOD Apple App, Other Resources Released
• $1.5 M HIPAA Security Breach Resolution Agreement Shows Looming HIPAA Risks
• ARRA, Other Government Contractors Face Growing Enforcement & Audit Risks
• Disability Exposures Big US Business Risk; New DOD App Helps ID Resources
• Obama Administration Continues War On Management Despite NLRB’s Temporary Setback In Suit Against Arizona Secret Ballot Law
• Companies, Officers, Directors, Fiduciaries & Vendors Urged To Confirm ERISA Credentials & Bonding For Internal Staff, Plan Fiduciaries, Vendors Dealing With Benefits
• Labor Risks Rising For Employers Despite NLRB Loss Of Arizona Secret Ballot Challenge
• USI Advisors Will Pay $1.27 Million To Settle Charges It Violated ERISA Fee Disclosure Requirements
• Wal-Mart Settlement Shows ADA Risks When Considering Employee Return To Work Accommodation Requests & Inquiries
• Employer Pays $475,000 To Settle ADA Discrimination Lawsuit Challenging Medical Fitness Testing For EMTs, Firefighters & Other Public Safety Worker’s
• Employers & Plan Fiduciaries Reminded To Confirm Credentials & Bonding For Internal Staff, Plan Fiduciaries & Vendors Dealing With Benefits
• EBSA Updates Guidance On Fee Disclosure Requirements For 401(k) Plan Brokerage Window Arrangements
• Federal Mandate That Employer Health Plans Must Cover 100% Of Contraceptive, Other Women’s Health Services With No Cost Sharing Now Effective
• Use NIH & Other Free Government Resources To Help Round Out Wellness Programs

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail by creating or updating your profile at here.

For important information about this communication click here. THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2013 Cynthia Marcotte Stamer, P.C.  Non-Exclusive License To Republish Granted To Solutions Law Press, Inc.  All Other Rights Reserved.

Since the Supreme Court’s June 28, 2012 National Federation of Independent Business v. Sebelius health care reform ruling upholding the “pay or play” mandates of the Patient Protection & Affordable Care Act (ACA), most business leaders, plan fiduciaries, health insurers, administrators of employment-based group health plans have accepted the need to prepare for health care reform changes taking effect in 2014.  

Unfortunately, delays in the release of anticipated regulatory guidance, the development and implementation of federal and state exchanges and other regulatory and market reforms have made it difficult for many businesses to understand their obligations, options, and their associated costs. 

Most business and industry leaders report frustration with the continuing lack of clarity and uncertainty about rules and costs.  Meanwhile, sequester just made life (and costs) worse for many small employers whose current 2013 health plan budget depends upon plans to benefit from he Small Business Health Care Tax Credit (SBHCTC) enacted as part of ACA. 

Despite these continuing uncertainties and challenges, the impending January 1, 2014 deadline for compliance doesn’t allow most businesses the luxury for waiting for clarification.  To complete the necessary arrangements, businesses unfortunately must decide the direction they plan to take and start working to implement their choice despite these existing uncertainties while managing their existing health benefit programs and costs through 2013.

Small Employers Relying On Health Plan Tax Credit Should Adjust Budgets In Response To Sequester Cut

For small employers and tax-exempt employers counting on the Small Business Health Care Tax Credit (SBHCTC) enacted as part of ACA to afford health care coverage for their employees, health benefit planning needs to begin with determining and dealing with any new problems that an almost 9% cut in the 2013 SBHCTC tax credit triggered by sequester may have on the amount of the credit for the current 2013 tax year.

ACA added the SBHCTC to the Internal Revenue Code (Code) to help and encourage qualifying small businesses to provide health coverage for their employees.  For tax years 2010 through 2013, the maximum credit is 35 percent for a qualifying small business employer and 25 percent for small tax-exempt employers such as charities. See IRS 3 Simple Steps Publication for help estimating the credit. An enhanced version of the credit is scheduled to increase the tax credit rate to 50 percent and 35 percent, respectively in 2014.

Many small businesses are unaware that sequester automatically cut their 2013 SBHCTC tax credit.   Under the sequester requirements of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, certain automatic budget cuts went into effect on March 1, 2013. These required cuts include an 8.7% reduction to the refundable part of the SBHCTC for otherwise qualifying small employers under Code Section 45R. As a result, qualifying employers counting on the SBHCTC credit to pay for employee health coverage need to know that this credit effectively is reduced by 8.7% percent. The sequestration reduction rate will apply until the end of the fiscal year on September 30, 2013 or intervening Congressional action, at which time the sequestration rate is subject to change.

Health Care Reform Coping Steps For All Businesses

While the sequester SBHCTC cut uniquely affects small businesses employing 25 or fewer workers, almost all businesses regardless of size are struggling to cope with the challenges of health care reform. The following steps may be helpful for many businesses working to chart a path for moving forward amid these uncertainties:

1.  Know Your Workforce & Proper Worker Classifications For Purposes of Health Plan Rules

Whether and how ACA’s “pay-or-play” employer shared responsibility payment, default enrollment, insured health plan non-discrimination and other federal health plan rules apply to your company’s health plan requires a correct understanding of what workers considered employed by your business and how these workers are counted and classified for purposes of ACA and other federal health plan mandates is the first step to projecting the potential costs and liabilities of your business under Code Section 4980H. 

ACA and other federal health plan rules decide what rules apply to which businesses or health plans based on the number of employees a business is considered to employ, their hours worked, their seasonal or other status, and other relevant classification as determined by the applicable rule.  The ACA and other rules vary in the relevant number of employees that trigger applicability of the rule and how businesses must count workers to decide when a particular rule applies.

Trying to predict the employer shared responsibility payment, if any under Code Section 4980H or model the burden or cost of any other federal health benefit mandate requires each business know who counts and how to classify workers for each of these rules.  Most of these rules start with a “common law” definition of employee then apply rules to add or ignore various workers.  Because most federal health plan rules also take into account “commonly controlled” and “affiliated” businesses’ employees when determining rule coverage, businesses also may need to know that information for other related or commonly owned businesses.  

2.  Make Rough Cost Projection To Preliminarily Decide Whether To “Pay” or “Play”

Under ACA, each business retains the option not to offer any health coverage for any employee or employee groups provided the business can tolerate the resulting consequences.  When a business along with all commonly controlled or affiliated employers, if any, employ a combined workforce of 50 or more “full-time” and “full-time equivalent employees” (Large Employer) does not offer “affordable,” “minimum essential coverage” to every full-time employee and his dependents under a legally compliant health plan that provides “minimum essential value” within the meaning of ACA after 2013, the business generally should expect to pay a shared responsibility payment under Code Section 4980H for each month after 2013 that any “full-time” employee  receives a tax subsidy or credit for enrolling in one of ACA’s health care exchanges.  The amount of this required shared responsibility payment will be calculated under Code Section 4980H based on the plan design and coverage the employer health plan offers and the required employee contribution for employee only coverage. Consequently, most businesses should project the relative cost to their business of paying the shared responsibility payment under Code Section 4980H against the cost of providing coverage to decide if it makes sense to even consider continuing to offer health coverage.

While not yet final, recently proposed Internal Revenue Service (IRS) regulations that would implement Code Section 4980H (4980H Regulations) provide a fairly good roadmap for business leaders to use to project their likely shared responsibility payment if the business assumes that the cost of offering coverage to avoid paying the shared responsibility payment will not be less than its existing health plan costs.  Starting with this assumption, the 4980H Regulations provide some roadmap that the business can use to project its likely shared responsibility payment if the business fails to offer health coverage under a plan offering minimum essential coverage to each full-time employee and their dependents.  Using this assumption, a businesses also can get a rough comparison of the projected cost difference per full-time employee if the offers a plan providing minimum essential coverage to all full-time employees and their dependents with minimum essential value that turns out to be “unaffordable” to some of these employees under ACA.   

While refinement of the data in the time and other employment records might help a business refine these estimates, the preliminary projections made using existing data and these assumptions generally will help a business decide if it wants to go ahead under the assumption it will pay or play.  If the business plans only to pay the shared responsibility payment, its efforts should focus on collecting and retaining the data needed to prove compliance and minimize its liability by planning its workforce and taking advantage of any safe harbor or other elections available to it under the 4980H Regulations for counting and classifying its workers. 

3. If Business Decides To Offer Health Coverage After 2013, Decide Plan Design

If the business intends to continue to offer health coverage, the business also needs to decide the plan coverage and terms of that plan.  In all cases, any health coverage offered generally must be designed so the business prudently can afford to pay benefit and administration costs of the plan and also meet all applicable mandates.  The mandates applicable to the plan generally are based on the size of the employer as determined by the applicable federal rules. 

Within these parameters, the business generally has the following choices:

• Offer health plan that provides minimum essential coverage with minimum essential value to all full-time employees, but pay a shared responsibility payment for full-time employees electing exchange coverage whose employee only contribution would be considered “unaffordable” under ACA because it exceeds 9.5% of their wages;
• Offer health plan that provides minimum essential coverage with minimum essential value to all full-time employees, and subside the cost of coverage for any low-paid workers as necessary to prevent that coverage from being unaffordable for any worker;
• Offer a health plan providing minimum essential coverage to some but not all full-time employees and pay the shared responsibility payment calculated under Code Section 4980H(b) for any full-time employee that elects coverage under the exchange to whom the plan is either unaffordable or doesn’t offer minimum essential coverage; or
• Some combination of these options, designed to meet the other federal health plan rules applicable for health plans offered by businesses employing that number of workers.

When making these decisions, uncertainty about the cost of coverage, the income of the workers, and which low-income employees, if any, actually will choose to enroll in the health plan versus choose to get coverage from the exchange creates some uncertainty to the predictions.  As guidance continues to emerge, however, the modeling of these issues becomes increasingly more reliable.  In the meantime, businesses that plan to continue to offer coverage must make their best guess to project costs and design their health programs while keeping a careful eye on the emerging guidance and market cost data.

4.  Understand The Cast Of Characters & What Hat(s) (Including You) They Wear

Employers and their management rely upon many vendors and advisors and assumptions when making plan design and risk management decisions.  Many times, employer and members of their management unknowingly assume significant risk because of misperceptions about these allocations of duties and operational and legal accountability.   Business and plan leaders need a correct understanding of these roles and responsibilities to understand the risks and to what extent they can rely upon a vendor or advisor to properly design and administer a health plan or carry out related obligations, what risks cannot be delegated, and how to manage these risks.

Under the Employee Retirement Income Security Act (ERISA), any party that exercises discretion or control over health plan administration, funds or certain other matters generally is considered a plan “fiduciary.” Fiduciaries generally are personally liable for prudently and appropriately administering their health plan related responsibilities prudently in accordance with ERISA and other applicable laws and the plan terms.  Knowing who is acting as a fiduciary and understanding those duties and liabilities and how to manage these risks significantly affects the exposure that an employer or member of its management risks as a result of an employer’s sponsorship in a group health plan or other employee benefit program.  Also, knowing what duties come first and how to prove that the fiduciary did the right thing is key to managing risks when an individual who has fiduciary responsibilities under ERISA also is responsible for carrying out other management duties of the sponsoring employer, a vendor or elsewhere that carries duties or interests that conflict with his health plan related fiduciary duties.

The plan sponsor or members of its leadership, a service provider or members of their staff generally may be a fiduciary for purposes of ERISA if it either is named as the fiduciary, it functionally exercises the discretion to be considered a fiduciary, or it otherwise has discretionary power over plan administration or other fiduciary matters.  Many plan sponsors and their management unwittingly take on liability that they assume rests with an insurer or service provider because the company or members of its management are named as the plan administrator or named fiduciary with regard to duties that the company has hired an insurer or service provider to provide or allowed that service provider to disclaim fiduciary or discretionary status with regard to those responsibilities.  Management also can have fiduciary exposure based on their authority for selecting plan fiduciaries and vendors. 

Also, by not knowing who the fiduciaries are, plans and their fiduciaries often fail to confirm the eligibility of some parties serving as fiduciaries, to arrange for bonding of service providers or fiduciaries as required to comply with Title I of ERISA.  Failing to properly understand when the plan sponsor, member of its management or another party is or could be a fiduciary can create unnecessary and unexpected risks and lead to reliance upon vendors who provide advice but leave the employer or a management member holding the bag for resulting liability.

A correct understanding of the risks and who bears them is critical to understand the risks, opportunities to mitigate risk through effective contracting or other outsourcing, when outsourcing does not effectively transfer risks, where to invest resources for contract, plan or process review and changes or other risk management, and where to expect costs and risks and implement processes and procedures to deal with risks that cannot be outsourced or managed.

5.  Know What Rules Apply To Your Plan, The Sponsoring Employer, The Plan Its Fiduciaries & Plan Vendors & How This Impacts You & Your Group Health Plan

The requirements for health plans and the resulting liabilities have undergone continuous changes.   ACA adds to an already extensive list of complicated federal rules about health plans and their administration.   ACA, the Code, ERISA, the Social Security Act, the Privacy, Security, and Administrative Simplification and Breach Notification rules of the Health Insurance Portability & Accountability Act (HIPAA) and various other federal laws also impose certain health plan related obligations and liabilities on health plan fiduciaries, their employer or other health plan sponsors and other parties.  These ever-expanding requirements increasingly impose civil or criminal sanctions, excise tax or other liability on plan administrators or other parties for failing to maintain legally compliant plans, file required reports, give required notifications or meet other requirements.  In many instances, this includes a requirement to know and self-report violations of some of these federal rules. 

Beyond these exposures, employers who sponsor group health plans that violate certain federal group health plan mandates have a duty to self-report certain regulatory plan failures and pay excise taxes where such failures are not corrected in a timely fashion once discovered, or are due to willful neglect. Code Section 6039D imposes excise taxes for failure to comply with health care continuation (COBRA) , health plan portability (HIPAA), genetic nondiscrimination (GINA), mental health parity (MHPAEA) , minimum hospital stays for newborns and mothers (Newborns’ and Mothers’ Health Protection Act), coverage of dependent students on medically necessary leaves of absence (Michelle’s Law), health savings account (HSA) and Archer medical savings account (Archer MSA) contribution comparability and various other federal requirements incorporated into the Internal Revenue Code.   

Since 2010, IRS regulations have required employers sponsoring group health plans not complying with mandates covered by Internal Revenue Code Section 6039D to self-report violations and pay related excise taxes.  Under these regulations, the sponsoring employer (or in some cases, the insurer, HMO or third-party administrator) must report health plan compliance failures annually on IRS Form 8928 (“Return of Certain Excise Taxes Under Chapter 43 of the Internal Revenue Code”).  Beyond any specific liability under ERISA or the particular law for such violations, the potential excise tax liability that can result under these provisions can be significant.  For example, COBRA, HIPAA, and GINA violations typically carry excise tax liability of $100 per day per individual affected. Compliance with applicable federal group health plan mandates is critical to avoid these excise taxes as well as other federal group health plan liabilities.

6.   Update Health Plan Documents, SPDs & Other Communications, Administrative Forms & Procedures, Contracts & Processes To Meet Requirements & Manage Exposures

Along with knowing what rules apply, timely updating written plan documents, communications and administration forms, administrative practices, contracts and other health plan related materials processes and procedures has never been more critical. 

A tightly written plan document and other plan communications have never been more important.  Federal law generally requires that health plan be established, maintained and administered in accordance with legally complaint, written plan documents and impose a growing list of standards and requirements governing the design and administration of these programs. In addition to the existing and impending ACA mandates, ERISA, the Code , the Social Security Act, federal eligibility and coverage continuation mandates of laws like the Consolidated Omnibus Budget Reconciliation Act (COBRA), the Uniformed Services Employment and Reemployment Rights Act (USERRA), the Health Insurance Portability & Accountability Act, the Family & Medical Leave Act, the Genetic Information and Nondiscrimination Act (GINA), Michelle’s Law, mental health parity and other laws regulate the eligibility, coverage, administration and other design features of employment-based health plans and their administration.    ACA and other laws also require that employers, health plan administrators and fiduciaries protect the privacy of data, as well as comply with claims and appeals, communication, fiduciary responsibility, bonding, record keeping, reporting and other requirements.

Failing to update documents, communications, administrative forms and processes and other materials and practices can unleash a host of exposures. ERISA requires that all material plan terms be in a written plan document.  Many other federal health plan mandates require that this plan document include certain specific provisions.  Beyond these mandated terms, the ability to uphold and enforce plan terms often can be hurt or hindered by the tightness or sloppiness of the plan language. 

Among other things, noncompliant plan documents, communications and practices can trigger unanticipated costs and liabilities by undermining the ability to administer plan terms and conditions.  They also may expose the plan, plan fiduciaries and others to lawsuits, administrative enforcement and sanctions and other enforcement liabilities. 

For this purpose of deciding what and how much to do, it is critical to keep in mind the devil is in the details.  Not only must the documentation meet all technical mandates, the language, its clarity and specificity, and getting the plan document to match the actual processes that will be used to administer the plan and ensuring that the plan documents and processes match the summary plan description, summary of benefits and coverage, administrative forms and documentation and other plan communications and documentation in a legally compliant way significantly impacts the defensibility of the plan terms and the expense that the plan, its sponsor and fiduciaries can expect to incur to defend it.

7.  Clean Up Claims and Appeals, SPDs & Other Practices To Enhance Defensibility

Proper health plan claims and appeals plan and summary plan description language, procedures, processing, notification and documentation is critical to maintain defensible claims and appeals decisions required to enforce plan terms and manage claims denial related liabilities and defense costs.  Noncompliance with these requirements may prevent health plans from defending their claims or appeals denials, expose the plan administrator and plan fiduciaries involved or responsible for these activities to penalties, prompt unnecessary lawsuits, Labor Department enforcement or both; and drive up plan administration costs.

Unfortunately, most group health plans, their insurers and administrators need to substantially strengthen their plan documentation; handling; timeliness; notifications and other claims denials; and other claims and other appeals processes and documentation to meet existing regulations and otherwise strengthen their defensibility. 

Among other things, existing court decisions document that many plans existing plan documents, summary plan descriptions and explanations of benefits, claims and appeals investigations and documentation and notifications often need improvement to meet the basic plan document, summary plan description and reasonable claims rules of the plan document, summary plan description, fiduciary responsibility, reasonable claims and appeals procedures of ERISA and its implementing regulations.  Court precedent shows that inadequate drafting of these provisions, as well as specific provisions coverage and benefit provisions frequently undermines the defensibility of claims and appeals determinations. In addition to requiring that claims be processed and paid prudently in accordance with the terms of written plan documents, ERISA also requirements that plan fiduciaries decide and administer claims and appeals in accordance with reasonable claims procedures. 

Although the Labor Department updated its regulations implementing this reasonable claims and appeals procedure requirement more than 10 years ago, the Department of Labor updated its ERISA claims and appeals regulations to include detailed health plan claims and appeals requirements, many group health plans, their administrators and insurers still have not updated their health plans, summary plan descriptions, claims and appeals notification, and claims and appeals procedures to comply with these requirements.   

These omissions only become more significant under ACA.  The external review and other detailed additional requirements that the Affordable  Care Act dictates that group health plans not grandfathered from its provisions and its provisions holding these non-grandfathered plans strictly liable for deficiencies in their claims and appeals procedures makes the need to address inadequacies even more imperative for those non-grandfathered group health plans.  Inadequate attention to these concerns can force a plan to pay benefits for claims otherwise not covered as well as additional defense costs and penalties.

8.  Consistency Matters:  Build Good Plan, Then Follow It

Defensible health plan administration starts with the building and adopting strong, legally compliant plan terms and processes that are carefully documented and communicated in a prudent, legally compliant way.  The next key is to actually use this investment by conducting plan administration and related operations consistent with the terms and allocated responsibilities to administer the plan in a documented, legally compliant and prudent way. 

Good documentation and design on the front end should minimize ambiguities in the meaning of the plan and who is responsible for doing what when. 

With these tools in place, delays and other hiccups that result from confusion about plan terms, how they apply to a particular circumstance or who is responsible for doing what, when should be minimized and much more easily resolved by timely, appropriate action by the proper responsible party.  This facilitation of administration and its consistency can do much to enhance the defensibility of the plan and minimize other plan related risks and costs.

9.  Ensure Correct Party Carries Out Plan and Communications Plan Functions And Communications Compliant, Timely, Prudent, Provable Manner

Having the proper party perform plan related responsibilities and respond to claims and inquiries in a compliant, timely, prudent manner is another key element to managing health plan risk and promoting enforceability.  Ideally, the party appointed to act as the named fiduciary for purposes of carrying out a particular function also should conduct all plan communications regarding that function in terms that makes clear its role and negates responsibility or authority of others. 

When an employer or other plan sponsor goes to the trouble to appoint a committee, service provider or other party to serve as the named fiduciary then chooses to communicate about the plan anyway, the Supreme Court in FMC v. Halliday made clear it runs the risk that the plan related communications may be considered discretionary fiduciary conduct for which it may be liable as a functional fiduciary.  Meanwhile, these communications by nonfiduciaries also may create binding obligations upon the plan and its named fiduciaries to the extent made by a plan sponsor or conducted by a staff member or service provider performing responsibilities delegated by the plan fiduciary.

Beyond expanding the scope of potential fiduciaries, communications conducted by nonfiduciaries also tend to create defensibility for many other reasons.  For instance, allowing unauthorized parties to perform plan functions may not comport with the plan terms, and are less likely to create and keep required documentation and follow procedures necessary to promote enforceability.  Also, the communications, decisions and other actions by these nonfiduciary actors also are unlikely to qualify for discretionary review by the courts because grants of discretionary authority, if any in the written plan document to qualify the decisions of the named fiduciary for deferential review by courts typically will not extend to actions by these nonfiduciary parties.  Furthermore, the likelihood that the communication or other activity conducted will not comply with the fiduciary responsibility or other requirements governing the performance of the plan related functions is significantly increased when a plan sponsor, service provider, member of management, or other party not who has not been appointed or accepted the appointment  act as a named fiduciary undertakes to speak or act because that party very likely does not accept or fully appreciate the potential nature of its actions, the fiduciary and other legal rules applicable to the conduct, and the potential implications for the nonfiduciary actor, the plan and its fiduciaries.

10.  Clean Up Date Collection, Protection & Reporting

Existing and impending ACA and other federal mandates require that group health plans, their sponsors collect, maintain and administer is exploding. Existing eligibility mandates, for example, already require that plans have access to a broad range of personal identifying, personal health and a broad range of other sensitive information about employees and dependents who are or may be eligible for coverage under the plan.

While employers and their health plans historically have collected and retained the names, place of residence, family relationships, social security number, and other similar information about employees and their dependents, these data collection, retention and reporting requirements have and will continue to expand dramatically in response to evolving legal requirements. 

Already, health plans also from time to time need employee earnings, company ownership, employment status, family income, family, medical, military, and school leave information, divorce and child custody, enrollment in Medicare, Medicaid and other coverage and a broad range of other additional information.  Under the ACA, these data needs will explode to include a whole new range of information about total family income, availability and enrollment in other coverage, cultural and language affiliations, and many other items.   

Collecting, retaining and deploying this information will be critical to meeting existing and new plan administration and reporting requirements.  How this data collection is conducted, shared, safeguarded against misuse or other legally sensitive contact by the employer, service providers, the plan and others will be essential to mitigate exposures to federal employment and other nondiscrimination, HIPAA and other privacy, fiduciary responsibility and other legal risks and obligations. 

To the extent that payroll providers, third party administrators or other outside service providers will participate in the collection, retention, or use of this data, time also should be set aside both to conduct due diligence about their suitability, as well as to negotiate the necessary contractual arrangements and safeguards to make their involvement appropriate. 

Finally, given the highly sensitive nature of this data, employers, health plans and others that will collect and use this data will need to implement appropriate safeguards to prevent and monitor for improper use, access or disclosure and to conduct the necessary training to suitably protect this data.

11.  Monitor, Assess Implications & Provide Relevant Input to Regulators About Emerging Requirements & Interpretive Guidance Implementing 2014 Affordable Care Act & Other Mandates.

While the Supreme Court’s decision upheld as Constitutional ACA’s individual and employer shared responsibility mandates as a tax, many opportunities to impact its mandates remain.

Beyond the highly visible, continuing and often heated debates ranging in Congress and the court of public opinion on whether Congress should change its provisions, a plethora of regulatory interpretations issued or impending release by the implementing agencies, the IRS, HHS and Labor Department, and state insurance regulators will significantly impact what requirements and costs employers, insurers, individuals and governments will bear when the law takes effect.  Businesses sponsoring health plans should carefully scrutinize this regulatory guidance and provide meaningful, timely input to Congress, the regulators or both as appropriate to help influence the direction of regulatory or Congressional actions that would materially impact these burdens.

12.  Help Employees & Their Families Build Their Health Care Self-Management Skills

Whether or not your company plans to continue to sponsor employee health coverage after 2014, providing training and tools to help employees and their families strengthen their ability to understand and manage their health, health care needs and benefits can pay big dividends.  Beyond the financial costs to employees and employers of paying to care for a serious illness or injury, productivity also suffers while employees dealing with their own or a family member’s chronic or serious health care condition.  Wellness programs that encourage and support the efforts of employees and their families to stay healthy may be one valuable component of these efforts.  Beyond trying to prevent the need to cope with illness behind wellness programs, however, opportunities to realize big financial, productivity and benefit value recognition rewards also exist in the too often overlooked opportunity to provide training, education and tools that employees and their families need to better understand and self-manage care, benefits, finances and life challenges that commonly arise when dealing with their own or a family member’s illness. Providing education, tools and other resources that can help employees access, organize and effectively use health care and benefit information to manage care and the consequences of illness, their benefits and how to use them, to participate more effectively in care and care decisions, to recognize and self-manage financial, lost-time and other challenges associated with the illness not addressable or covered by health benefit programs, and other practical skills can help reduce lost time and other productivity impacts while helping employees and their families get the most out of the health care dollars spent.

13.  Pack Your Parachute-Plan Your Defense & Exist Strategies

With the parade of expense and liabilities associated with health plans, businesses sponsoring health plans and the management, service providers and others involved in their establishment, continuation, maintenance or administration are well advised to pack their survival kit and develop their exit strategies to position to soften the landing in case their health plan experiences a legal or operational disaster. 

Employers and other health plan sponsors and fiduciaries typically hire and rely upon a host of vendors and advisors to design and administer their health plans.  When selecting and hiring these service providers, health plan sponsors and fiduciaries are well-advised to investigate carefully their credentials as well as require the vendors to provide written commitments to stand behind their advice and services. 

Too often, while these service providers and advisors encourage plan sponsors and fiduciaries to allow the vendor to lead them or even handle on an ongoing basis plan administration services by touting their services, experience, expert systems and process and commitment to stand behind the customer when making the sale or encouraging reliance upon their advice when tough decisions are made, they rush to stand behind exculpatory and on-sided indemnification provisions in their service contracts to limit or avoid liability,   demand indemnification from their customer or both when things go wrong. 

While ERISA may offer some relief from certain of these exculpatory provisions under some circumstances, plan sponsors and fiduciaries should work to credential service providers and require service providers to commit to being accountable for their services by requiring contracts acknowledge all promised services and standards of quality, require vendors to commit to provide legally compliant and prudently designed and administered services that meet or exceed applicable legal requirements, to provide liability-backed indemnification or other protection for damages and costs resulting from vendor imprudence or malfeasance, to allow for contract termination if the vendor becomes unsuitable for continued use due to changing law or other circumstances and requiring the vendor to return data and other documentation critical to defend past decisions and provide for ongoing administration.  Keep documentation about advice, assurances and other relevant evidence received from vendors which could be useful in showing your company’s or plan’s efforts to make prudent efforts to provide for the proper administration of the plan.  When concerns arise, use care to investigate and redress concerns in a timely, measured fashion which both shows the prudent response to the concern and reflects sensitivity to the fiduciary and other roles and responsibilities of the employer sponsor and other parties involved.

Get Moving Now

Since many compliance deadlines already have past and the impending deadlines allow plan sponsors and fiduciaries limited time to finish arrangements, businesses, fiduciaries and their service providers need to get moving immediately to update their health plans to meet existing  and impending compliance and risk management risks under ACA and other federal laws, decisions and regulations.

Even as businesses move forward to respond to health care reform’s challenges, their leaders should continue to give input to Congress and regulators about the need to improve the rules and reduce business uncertainty and burdens.  With many regulations still in proposed or interim form and health care reform and its costs still a concern for many Congressional leaders, significant opportunity still exists to provide input to federal and state regulators on many key aspects of ACA and its relationship to other applicable laws.  Businesses and other health plan sponsors, plan fiduciaries, insurers and administrators, and other vendors must stay involved and alert.  Zealously monitor new developments and share timely input with Congress and regulators about existing and emerging rules that present concerns and other opportunities for improvement even as you position to respond to these rules before they become fully implemented.

For Help or More Information

If you need help reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices to respond to emerging health plan regulations, monitoring or commenting on these rules, defending your health plan or its administration, or other health or employee benefit, human resources or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters. 

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials on regulatory, investigatory or enforcement concerns. 

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested in exploring other Solutions Law Press, Inc. ™ tools, products, training and other resources here.

Other Helpful Resources & Other Information

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If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail by creating or updating your profile at here.

For important information about this communication click here. THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2013 Cynthia Marcotte Stamer, P.C.  Non-Exclusive License To Republish Granted To Solutions Law Press, Inc.  All Other Rights Reserved.

While most employer and union health plan sponsors, fiduciaries and administrators are bracing to cope with “pay or play” and other mandates of the Affordable Care Act in 2014, many employer and other health plan sponsors are failing to take steps necessary now to manage already accruing exposures and costs arising from mandates applicable to their health plans under the Affordable Care Act and other federal regulations and to prepare to meet upcoming responsibilities. 

Following the Supreme Court’s June 28, 2012 National Federation of Independent Business v. Sebelius ruling, most employers and insurers of employment based group health plans now are bracing to cope with radical changes in their health plan related responsibilities scheduled to take effect in 2014. 

While anticipating and preparing to cope with these future changes, health plan sponsors, fiduciaries, administrators and advisors also must act now to update and administer their group health plans timely to comply with the requirements of the Affordable Care Act and other federal rules that have, or in coming months will, take effect pending the law’s full rollout in 2014. 

For most health plans, these steps should include the following:

1. Know The Cast Of Characters & What Hat(s) (Including You) They Wear

Employers and their management rely upon many vendors and advisors and assumptions when making plan design and risk management decisions.  Many times, employer and members of their management unknowingly assume significant risk because of misperceptions about these allocations of duties and operational and legal accountability.   An accurate understanding of these roles and responsibilities is the foundation for knowing where the risks come from, who and to what extent a business or its management can rely upon a vendor or advisor to properly design and administer a health plan or carry out related obligations, what risks cannot be delegated, and how to manage these risks.

Under the Employee Retirement Income Security Act (ERISA), party or parties that exercise discretion or control over health plan administration, funds or certain other matters are generally called “fiduciaries.” Fiduciaries generally are personally liable for prudently and appropriately administering their health plan related responsibilities prudently in accordance with ERISA and other applicable laws and the plan terms.  Knowing who is acting as a fiduciary and understanding those duties and liabilities and how to manage these risks significantly affects the exposure that an employer or member of its management risks as a result of an employer’s sponsorship in a group health plan or other employee benefit program.  Also, knowing what duties come first and how to prove that the fiduciary did the right thing is key to managing risks when an individual who has fiduciary responsibilities under ERISA also has other responsibilities for managing the sponsoring employer, a vendor or elsewhere that carries duties or interests that conflict with his health plan related fiduciary duties.

The plan sponsor or members of its leadership, a service provider or members of their staff generally may be a fiduciary for purposes of ERISA if it either is named as the fiduciary, it functionally exercises the discretion to be considered a fiduciary, or it otherwise has discretionary power over plan administration or other fiduciary matters.  Many plan sponsors and their management unwittingly take on liability that they assume rests with an insurer or service provider because the company or members of its management are named as the plan administrator or named fiduciary with regard to duties that the company has hired an insurer or service provider to provide or allowed that service provider to disclaim fiduciary or discretionary status with regard to those responsibilities.  Also, by not knowing who the fiduciaries are, plans and their fiduciaries often fail to confirm the eligibility of some parties serving as fiduciaries, to arrange for bonding of service providers or fiduciaries as required to comply with Title I of ERISA.  Failing to properly understand when the plan sponsor, member of its management or another party is or could be a fiduciary can create unnecessary and unexpected risks and lead to reliance upon vendors who provide advice but leave the employer holding the bag for resulting liability.

In addition to fiduciary status, employer and other plan sponsors also need to understand the additional responsibilities and exposures that the employer bears as a plan sponsor.  Beyond contractual and fiduciary liabilities, federal law increasingly imposes excise tax or other liability for failing to maintain legally compliant plans, file required reports, provide required notifications or fulfillment of other requirements.   the Affordable Care Act, the Internal Revenue Code, the Social Security Act, the Privacy, Security, and Administrative Simplification For instance, the Health Insurance Portability & Accountability Act (HIPAA) and various other federal laws also impose certain health plan related obligations and liabilities on employer or other health plan sponsors and other parties.  The Internal Revenue Service interprets Internal Revenue Code § 6039D as obligating employers sponsoring health plans that violate these and certain other federal health plan rules to self-identify, self-report, and self-assess and pay excise and other taxes due under the Internal Revenue Code as a result of this non-compliance.   Knowing what everyone’s roles and responsibilities are is a critical first step to properly understanding and managing health plan responsibilities and related risks.

An correct understanding of the risks and who bears them is critical to understand the risks, opportunities to mitigate risk through effective contracting or other outsourcing, when outsourcing does not effectively transfer risks, where to invest resources for contract, plan or process review and modifications or other risk management, and where to expect costs and risks and implement processes and procedures to deal with risks that cannot be outsourced or managed.

2. Know What Rules Apply To Your Plan, The Sponsoring Employer, The Plan Its Fiduciaries & Plan Related  Vendors & How This Impacts You & Your Group Health Plan

The requirements and rules impacting health plans and their liabilities have undergone continuous changes.  Amid these changing requirements, health plans, their sponsors, fiduciaries, insurers, and service providers often may not have kept their knowledge, much less their plan documents, summary plan descriptions and other communications, administrative forms and procedures and other materials and practices up to date. These requirements and their compliance and risk management significance may vary depending upon whether the reviewing or regulated party is the plan, its sponsor, fiduciary, insurer or services in some other rules; how the plans are arranged and documented, the risk and indemnification allocations negotiated among the parties, the risk tolerance of the party, and other factors.  Proper understanding of these rules and their implications is critical to understand and manage the applicable risks and exposures.

3. Review & Update Health Plan Documents, SPDs & Other Communications, Administrative Forms & Procedures, Contracts & Processes To Meet Requirements & Manage Exposures

Timely updating written plan documents, communications and administration forms, administrative practices, contracts and other health plan related materials processes and procedures has never been more critical. 

Federal law generally requires that health plan be established, maintained and administered in accordance with legally complaint, written plan documents and impose a growing list of standards and requirements governing the design and administration of these programs. In addition, ERISA, the Internal Revenue Code, the Social Security Act, federal eligibility and coverage continuation mandates of laws like the Consolidated Omnibus Budget Reconciliation Act (COBRA), the Health Insurance Portability & Accountability Act, the Family & Medical Leave Act, Michelle’s Law and others require that health plan administrators or sponsors communicate plan terms and other relevant information to participants and beneficiaries.

Failing to update documents, communications, administrative forms and processes and other materials and practices can unleash a host of exposures. Among other things, noncompliant plans, communications and practices can trigger unanticipated costs and liabilities by undermining the ability to administer plan terms and conditions.  They also may expose the plan, plan fiduciaries and others to lawsuits, administrative enforcement and sanctions and other enforcement liabilities. 

Beyond these exposures, employers who sponsor group health plans that violate certain federal group health plan mandates have a duty to self-report certain regulatory plan failures and pay excise taxes where such failures are not corrected in a timely fashion once discovered, or are due to willful neglect. Internal Revenue Code Section 6039D imposes excise taxes for failure to comply with health care continuation (COBRA) , health plan portability (HIPAA), genetic nondiscrimination (GINA), mental health parity (MHPAEA) , minimum hospital stays for newborns and mothers (Newborns’ and Mothers’ Health Protection Act), coverage of dependent students on medically necessary leaves of absence (Michelle’s Law), health savings account (HSA) and Archer medical savings account (Archer MSA) contribution comparability and various other federal requirements incorporated into the Internal Revenue Code.   Since 2010, Internal Revenue Service regulations have required employers sponsoring group health plans not complying with mandates covered by Internal Revenue Code Section 6039D to self-report violations and pay related excise taxes.  Under these regulations, the sponsoring employer (or in some cases, the insurer, HMO or third-party administrator) must report health plan compliance failures annually on IRS Form 8928 (“Return of Certain Excise Taxes Under Chapter 43 of the Internal Revenue Code”).  The potential excise tax liability that can result under these provisions can be significant.  For example, COBRA, HIPAA, and GINA violations typically carry excise tax liability of $100 per day per individual affected. Compliance with applicable federal group health plan mandates is critical to avoid these excise taxes as well as other federal group health plan liabilities.

For this purpose of deciding what and how much to do, it is critical to keep in mind the devil is in the details.  Not only must the documentation meet all technical mandates, the language, its clarity and specificity, and getting the plan document to match the actual processes that will be used to administer the plan and ensuring that the plan documents and processes match the summary plan description, summary of benefits and coverage, administrative forms and documentation and other plan communications and documentation in a legally compliant manner significantly impacts the defensibility of the plan terms and the expense that the plan, its sponsor and fiduciaries can expect to incur to defend it.

4. Update & Tighten Claims and Appeals Plan & SPD Language, EOBs & Other Notifications, Processes, Contracts & Other Practices For Changing Compliance Requirements & Enhanced Defensibility

Proper health plan claims and appeals plan and summary plan description language, procedures, processing, notification and documentation is critical to maintain defensible claims and appeals decisions required to enforce plan terms and manage claims denial related liabilities and defense costs.  Noncompliance with these requirements may prevent health plans from defending their claims or appeals denials, expose the plan administrator and plan fiduciaries involved or responsible for these activities to penalties, prompt unnecessary lawsuits, Labor Department enforcement or both; and drive up plan administration costs.

Unfortunately, most group health plans, their insurers and administrators need to substantially strengthen their plan documentation; handling; timeliness; notifications and other claims denials; and other claims and other appeals processes and documentation to meet existing regulations and otherwise strengthen their defensibility.  Among other things, existing court decisions document that many plans existing plan documents, summary plan descriptions and explanations of benefits, claims and appeals investigations and documentation and notifications often need improvement to meet the basic plan document, summary plan description and reasonable claims rules of the plan document, summary plan description, fiduciary responsibility, reasonable claims and appeals procedures of ERISA and its implementing regulations.  Court precedent shows that inadequate drafting of these provisions, as well as specific provisions coverage and benefit provisions frequently undermines the defensibility of claims and appeals determinations. In addition to requiring that claims be processed and paid prudently in accordance with the terms of written plan documents, ERISA also requirements that plan fiduciaries decide and administer claims and appeals in accordance with reasonable claims procedures.  Although the Labor Department updated its regulations implementing this reasonable claims and appeals procedure requirement more than 10 years ago, the Department of Labor updated its ERISA claims and appeals regulations to include detailed health plan claims and appeals requirements, many group health plans, their administrators and insurers still have not updated their health plans, summary plan descriptions, claims and appeals notification, and claims and appeals procedures to comply with these requirements.   The external review and other detailed additional requirements that the Affordable  Care Act dictates that group health plans not grandfathered from its provisions and its provisions holding these non-grandfathered plans strictly liable for deficiencies in their claims and appeals procedures makes the need to address inadequacies even more imperative for those non-grandfathered group health plans.  Inadequate attention to these concerns can force a plan to pay benefits for claims otherwise not covered as well as additional defense costs and penalties.

5. Consistency Matters:  Build Good Plan Design, Documentation & Processes, Then Follow Them.

Defensible health plan administration starts with the building and adopting strong, legally compliant plan terms and processes that are carefully documented and communicated in a prudent, legally compliant manner.  The next key is to actually use this investment by conducting plan administration and related operations consistent with the terms and allocated responsibilities to administer the plan in a documented, legally compliant and prudent manner.  Good documentation and design on the front end should minimize ambiguities in the meaning of the plan and who is responsible for doing what when.  With these tools in place, delays and other hiccups that result from confusion about plan terms, how they apply to a particular circumstance or who is responsible for doing what, when should be minimized and much more easily resolved by timely, appropriate action by the proper responsible party.  This facilitation of administration and its consistency can do much to enhance the defensibility of the plan and minimize other plan related risks and costs.

6. Ensure Correct Party Carefully Communicates About Coverage and Claims in Compliant, Timely, Prudent, Provable Manner

Having the proper party respond to claims and inquiries in a compliant, timely, prudent manner is another key element to managing health plan risk and promoting enforceability.   Ideally, the party appointed to act as the named fiduciary for purposes of carrying out a particular function also should conduct all plan communications regarding that function in terms that makes clear its role and negates responsibility or authority of others.  When an employer or other plan sponsor goes to the trouble to appoint a committee, service provider or other party to serve as the named fiduciary then chooses to communicate about the plan anyway, the Supreme Court in FMC v. Halliday made clear it runs the risk that the plan related communications may be considered discretionary fiduciary conduct for which it may be liable as a functional fiduciary.  Meanwhile, these communications by non-fiduciaries also may create binding obligations upon the plan and its named fiduciaries to the extent made by a plan sponsor or conducted by a staff member or service provider performing responsibilities delegated by the plan fiduciary. Beyond expanding the scope of potential fiduciaries, communications conducted by nonfiduciaries also tend to create defensibility for many other reasons.  For instance, allowing unauthorized parties to perform plan functions may not comport with the plan terms, and are less likely to create and preserve required documentation and follow procedures necessary to promote enforceability.  Also, the communications, decisions and other actions by these nonfiduciary actors also are unlikely to qualify for discretionary review by the courts because grants of discretionary authority, if any in the written plan document to qualify the decisions of the named fiduciary for deferential review by courts typically will not extend to actions by these nonfiduciary parties.  Furthermore, the likelihood that the communication or other activity conducted will not comply with the fiduciary responsibility or other requirements governing the performance of the plan related functions is significantly increased when a plan sponsor, service provider, member of management, or other party not who has not been appointed or accepted the appointment  act as a named fiduciary undertakes to speak or act because that party very likely does not accept or fully appreciate the potential nature of its actions, the fiduciary and other legal rules applicable to the conduct, and the potential implications for the nonfiduciary actor, the plan and its fiduciaries.

7. Design and Implement Updated, Properly Secured Payroll, Enrollment, Eligibility and Other Data Collection Features To Meet New Requirements and Prepare For Added Affordable Care Act Data Gathering and Reporting Requirements.

Existing and impending Affordable Care Act mandates require that group health plans, their sponsors collect, maintain and administer is exploding. Existing eligibility mandates, for example, already require that plans have access to a broad range of personal indentifying, personal health and a broad range of other sensitive information about employees and dependents who are or may be eligible for coverage under the plan. While employers and their health plans historically have collected and retained the names, place of residence, family relationships, social security number, and other similar information about employees and their dependents, these data collection, retention and reporting requirements have and will continued to expand dramatically in response to evolving legal requirements.  Already, health plans also from time to time need employee earnings, company ownership, employment status, family income, family, medical, military, and school leave information, divorce and child custody, enrollment in Medicare, Medicaid and other coverage and a broad range of other additional information.  Under the Affordable Care Act, these data needs will explode to include a whole new range of information about total family income, availability and enrollment in other coverage, cultural and language affiliations, and many other items.   Collecting, retaining and deploying this information will be critical to meeting existing and new plan administration and reporting requirements.  How this data collection is conducted, shared, safeguarded against misuse or other legally sensitive contact by the employer, service providers, the plan and others will be essential to mitigate exposures to federal employment and other nondiscrimination, HIPAA and other privacy, fiduciary responsibility and other legal risks and obligations.  To the extent that payroll providers, third party administrators or other outside service providers will participate in the collection, retention, or use of this data, time also should be set aside both to conduct due diligence about their suitability, as well as to negotiate the necessary contractual arrangements and safeguards to make their involvement appropriate.  Finally, given the highly sensitive nature of this data, employers, health plans and others that will collect and use this data will need to implement appropriate safeguards to prevent and monitor for improper use, access or disclosure and to conduct the necessary training to suitably protect this data.

8. Monitor, Assess Implications & Provide Relevant Input to Regulators About Emerging Requirements & Interpretive Guidance Implementing 2014 Affordable Care Act & Other Mandates.

While the Supreme Court’s decision upholds the constitutionality of the Affordable Care Act’s individual mandates, many opportunities to impact its mandates remain. Beyond the highly visible, continuing and often heated debates ranging in Congress and the court of public opinion concerning whether Congress should modify or repeal its provisions, a plethora of regulatory interpretations issued or impending release by the implementing agencies, the Internal Revenue Service, Department of Health & Human Services, Department of Labor and state insurance regulators will significantly impact what requirements and costs employers, insurers, individuals and governments will bear when the law takes effect.  Businesses sponsoring health plans should carefully scrutinize this regulatory guidance and provide meaningful, timely input to Congress, the regulators or both as appropriate to help influence the direction of regulatory or Congressional actions that would materially impact these burdens.

9. Help Employees & Their Families Build Their Health Care Coping Skills With Training & Supportive Tools

Whether or not your company plans to continue to sponsor employee health coverage after 2014, providing training and tools to help employees and their families strengthen their ability to understand and manage their health, health care needs and benefits can pay big dividends.  Beyond the financial costs to employees and employers of paying to care for a serious illness or injury, productivity also suffers while employees dealing with their own or a family member’s chronic or serious health care condition.  Wellness programs that encourage and support the efforts of employees and their families to stay healthy may be one valuable component of these efforts.  Beyond trying to prevent the need to cope with illness behind wellness programs, however, opportunities to realize big financial, productivity and benefit value recognition rewards also exist in the too often overlooked opportunity to provide training, education and tools that employees and their families need to better understand and self-manage care, benefits, finances and life challenges that commonly arise when dealing with their own or a family member’s illness. Providing education, tools and other resources that can help employees access, organize and effectively use health care and benefit information to manage care and the consequences of illness, their benefits and how to use them, to participate more effectively in care and care decisions, to recognize and self-manage financial, lost-time and other challenges associated with the illness not addressable or covered by health benefit programs, and other practical skills can help reduce lost time and other productivity impacts while helping employees and their families get the most out of the health care dollars spent.

10. Pack Your Parachute & Locate The Nearest Exit Doors

With the parade of expense and liabilities associated with health plans, businesses sponsoring health plans and the management, service providers and others involved in their establishment, continuation, maintenance or administration are well advised to pack their survival kit and develop their exit strategies to position to soften the landing in case their health plan experiences a legal or operational disaster. 

Employers and other health plan sponsors and fiduciaries typically hire and rely upon a host of vendors and advisors to design and administer their health plans.  When selecting and hiring these service providers, health plan sponsors and fiduciaries are well-advised to investigate carefully their credentials as well as require the vendors to provide written commitments to stand behind their advice and services.  Too often, while these service providers and advisors encourage plan sponsors and fiduciaries to allow the vendor to lead them or even handle on an ongoing basis plan administration services by touting their services, experience, expert systems and process and commitment to stand behind the customer when making the sale or encouraging reliance upon their advice when tough decisions are made, they rush to stand behind exculpatory and on-sided indemnification provisions in their service contracts to limit or avoid liability,   demand indemnification from their customer or both when things go wrong.  While ERISA may offer some relief from certain of these exculpatory provisions under some circumstances, plan sponsors and fiduciaries should work to credential service providers and require service providers to commit to being accountable for their services by requiring contracts acknowledge all promised services and standards of quality, require vendors to commit to provide legally compliant and prudently designed and administered services that meet or exceed applicable legal requirements, to provide liability-backed indemnification or other protection for damages and costs resulting from vendor imprudence or malfeasance, to allow for contract termination if the vendor becomes unsuitable for continued use due to changing law or other circumstances and requiring the vendor to return data and other documentation critical to defend past decisions and provide for ongoing administration.  Keep documentation about advice, assurances and other relevant evidence received from vendors which could be useful in showing your company’s or plan’s efforts to make prudent efforts to provide for the proper administration of the plan.  When concerns arise, use care to investigate and redress concerns in a timely, measured fashion which both shows the prudent response to the concern and reflects sensitivity to the fiduciary and other roles and responsibilities of the employer sponsor and other parties involved.

11. Get Moving Now On Your Compliance & Risk Management Issues. 

Since many compliance deadlines already have past and the impending deadlines allow plan sponsors and fiduciaries limited time to finish arrangements, businesses, fiduciaries and their service providers need to get moving immediately to update their health plans to meet existing  and impending compliance and risk management risks under the Affordable Care Act and other federal laws, decisions and regulations.

12. Monitor, Assess Implications & Provide Relevant Input to Regulators About Emerging Requirements & Interpretive Guidance Implementing 2014 Affordable Care Act & Other Mandates.

While the Supreme Court upheld the individual mandate, employer and other health plan sponsors, Congress continues to debate changes to the Affordable Care Act and other federal health plan rules.  Meanwhile, significant opportunity still exists to provide input to federal and state regulators on many key aspects of the Affordable Care Act and its relationship to other applicable laws even as court challenges to contraceptive coverage and other specific requirements are emerging.  Businesses and other health plan sponsors, plan fiduciaries, insurers and administrators, and other vendors must stay involved and alert.  Zealously monitor new developments and share timely input with Congress and regulators about existing and emerging rules that present concerns and other opportunities for improvement even as you position to respond to these rules before they become fully implemented.

For Help or More Information

If you need help reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices to respond to emerging health plan regulations, monitoring or commenting on these rules, defending your health plan or its administration, or other health  or employee benefit, human resources or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters. 

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns. 

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and registerto receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

• Record $2.3 Million+ H-2A Backpay Order Plus Civil Money Penalty Reminds Businesses Employing Foreign Workers To Manage Compliance
• Stamer Speaks 11/15 About Things Plan Committees Must Do Differently In 2012 At SWBA Meeting
• Supreme Court Decision Puts Health Plans Under Fire To Complete ACA-Required Summary of Benefits & Communications & Other Health Plan Updates
• $27M+ Settlement Highlights Fiduciary Risks Plan Sponsors & Fiduciaries Risk If Plan Vendors, Compensation Improperly Set
• 7/24 “Health Plan Update” Workshop Kicks Off 2012 Health Plan-U Coping With Health Care Reform Workshop Series
• Coping With Health Care Reform: 2012 Health Plan Update Workshop July 24, 2012: Register Now!
• OCR Hits Alaska Medicaid For $1.7M+ For HIPAA Security Breach
• Model Language May Aid Section 83(b) Elections Even As Executive & Other Special Compensation Carry Growing Liability Traps
• IRS To Offer Help For U.S. Citizens Overseas With Foreign Retirement Plans, Dual Citizenship Tax Issues
• New EEOC State Discrimination Charge Data Helpful Employer Risk Assessment Tool Discrimination Exposures Grow
• Obama’s Reaffirms Commitment Prosecute Disability Discrimination To Mark Omlstead Anniversary
• IRS Changing Individual Taxpayer ID Number Application Requirements
• Insurer Group Health Inc. To Refund $500,00+ & Change Claims Practices To Settle NY AG Charges It Wrongfully Denied Coverage
• NLRB Moves To Promote Non-Union Employee Use of Collective Action Rights By Launching Webpage
• Making Wellness Work On A Shoestring Budget

For important information concerning this communication click here. THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2012 Cynthia Marcotte Stamer, P.C.  Non-Exclusive License To Republish Granted To Solutions Law Press, Inc.  All Other Rights Reserved.