Stoel Rives Presents Webinar On Employer Group Health Plans After U.S. Supreme Court Decision Upholding "Obamacare"

As everyone who was not on Mars this summer knows, the U.S. Supreme Court issued a surprising and historic decision upholding key provisions of President Obama's Affordable Care Act ("ACA").  To help employers navigate the requirements of the law now that it has the stamp of approval of the Supreme Court, and to provide other updates on developments in federal health care reform, members of the Stoel Rives employee benefit and employment groups have been touring the region with a 90-minute presentation entitled "Health Care Reform After the Supreme Court’s Decision: Group Health Plan Update 2012."  The seminars were presented by Stoel Rives attorneys Howard Bye-Torre, Melanie Curtice, Bethany Bacci, Steve Woodland, Matthew Durham, Carolyn Walker, James Dale, Renae Saade, and Tony DeCristoforo in Portland, Seattle, Salt Lake City, Boise, and Anchorage during September and October.

Shameless Plug Alert!  Webinar Presentation on October 25, 2012

If you missed the show when it came to your town or are just interested in learning about this complex and evolving area of employee benefits law, there is one more opportunity to attend the seminar via a webinar which will be conducted on Thursday, October 25 at noon, Pacific Time. To RSVP for the webinar and get instructions for attending, please click here.

What's Covered

The seminars reviewed the Supreme Court decision upholding the constitutionality of the Affordable Care Act (ACA), and also some of the ACA's impacts which have already been felt by group health plans and employers, such as the requirement to cover children through age 26.  Regulatory developments planned for 2013 are also discussed, including:

  • the requirement to report the cost of health care coverage on W-2s;
  • the new disclosure document required by the ACA, the Summary of Benefits and Coverage (SBCs);
  • required 100% coverage for FDA-approved contraceptive methods for women; and
  • the reduction to $2,500 of the maximum amount that an employee can contribute to a health care flexible spending account. 

The seminars also discussed the new two federal fees on group health plans for 2013-2018, the Patient-Centered Outcomes Research Institute fee and the transitional reinsurance program fee. The seminars concluded with a discussion of the ACA requirements for 2014, including

  • the mandate for individuals to have health insurance coverage;
  • employer pay-or-play penalties, including new IRS guidance on the definition of “full-time” employees for purposes of the penalties;
  • recent IRS guidance on the 90-day maximum waiting period for health plans. 

We look forward to seeing you online for the webinar on October 25.

 

 

EEOC's Multifaceted Effort To Aggressively Target Employer Policies Potentially Having "Disparate Impact"

As many of you know, the Equal Employment Opportunity Commission (EEOC) has been on an aggressive tear of late on a broad range of issues.  In addition to upping its investigations of charges of individual “disparate treatment” discrimination, it is undertaking a number of new initiatives that show a renewed focus on facially neutral employer policies that may have a (frequently unintentional) “disparate impact” on protected classes of employees.  Because of the EEOC’s renewed interest in disparate impact, it is prudent for employers to be thoroughly reviewing and auditing their policies and practices to ensure they are not having an unintentional disparate impact on protected categories of employees.  

Below is a quick run-down of the EEOC’s recent efforts on this front.  These and other topics were covered recently in a Stoel Rives Labor & Employment Breakfast Briefing: "Back to School with ‘Hot Topics’ In Employment Law,” by Stoel Rives attorneys Brenda Baumgart and Ryan Gibson, on Sept. 11, 2012 in Portland, OR.

EEOC 2012-16 Strategic Enforcement Plan Targets “Systemic” And Other Forms of Disparate Impact Discrimination
On September 4, 2012, the EEOC issued an updated version of its Strategic Enforcement Plan (“SEP”) for 2012-2016, in which it highlighted its enforcement priorities now and in the coming years.  In addition to highlighting education and outreach efforts, the SEP shows a strong focus on disparate impact concerns, including:

  1. Preventing “Systemic” Discrimination. The EEOC is targeting general practices, handbooks, online applications and similar policies that may have disparate impacts on protected classes of employees such as racial minorities, older workers, or disabled employees.  Examples identified by the EEOC include “exclusionary policies and practices, the channeling/steering of individuals into specific jobs due to their status in a particular group, restrictive application processes, and the use of screening tools (e.g., pre-employment tests, background screens, date of birth screens in online applications) that adversely impact groups protected under the law.”
  2. Protecting “vulnerable workers.”  The EEOC’s efforts here are focused on immigrant, migrant, or seasonal employees who, due to language or other barriers may be unaware of rights or are reluctant to pursue them.  Again, the EEOC is focusing largely on systemic, disparate impact concerns, such as job segregation, pay disparities, and the unintended impact of English fluency requirements for particular jobs where language skills may not really be necessary.
  3. “Emerging issues.”  A decade ago, the EEOC identified discrimination against Muslim and Arabic employees in the wake of the 9/11 attacks as an “emerging issue” in employment law.  Now, EEOC has identified a number of new “emerging issues” where it has shifted its efforts.  Those include enforcement of the 2009 amendments to the ADA (ADAAA) and related regulations, and  the EEOC's recently recognized protections for gay or transgendered employees under Title VII.  They also include another “disparate impact” concern:  accommodation issues specific to pregnant employees who may be forced to take unpaid leave in lieu of (paid) accommodations—such as temporary job restructuring, reduced schedule, temporary job transfers, or light duty assignments—offered to non-pregnant employees with similar short-term health restrictions.
  4. Preserving Access to the Legal System.  The EEOC is prioritizing investigation of retaliation charges,  because they account for over 37% of all charges filed (the most common type), and because the EEOC believes retaliation amounts to a denial of justice by discouraging employees from exercising their rights.  The EEOC also will focus on what it views as other “systemic” barriers to justice, including “overly broad waivers” and settlement agreements with releases that may unfairly discourage employees from exercising rights or pursuing claims.

EEOC Pilot Project To Directly Audit Employer Pay Practices Under Equal Pay Act
In mid-2012, the EEOC began a pilot program in three district offices (Phoenix, Chicago, and New York) pursuant to its authority to enforce the Equal Pay Act (“EPA”), a 1963 statute that prohibits paying female employees differently for the same work done by male employees.  While gender-based pay discrepancies are also prohibited under Title VII, the EPA specifically empowers the EEOC to conduct “Directed Investigations,” or audits, of employer pay practices to search for gender-based pay disparities, without having to wait for a charge to be filed as is often required for it to investigate alleged Title VII violations.  This has been characterized as a fairly “radical” departure for how the EEOC conducts enforcement, and it is.  While the EEOC has provided few details about how the program will work, at the very least it may simply call or show up at an employer’s doorstep and request policies and information related to pay practices.  If it finds that your pay practices may show a gender-based disparate impact, it may decide to take further enforcement action.

Yikes!  These audits could essentially subject employers to a form of wage and hour class action against the EEOC.  And who knows what else the EEOC may find as a result of its audit, including potential evidence of other “systemic” problems it may wish to investigate further. 

Employers, especially in the regions where the pilot project has begun, are well advised to conduct internal audits of their pay practices to identify and remedy any unexplainable gender-based pay disparities that could be unlawful under the EPA.  Practical pointer:  it’s often a good idea to involve your in-house or outside counsel in these internal audits to maximize the chance that any (potentially bad) findings are resolved and the process for doing so is protected by the attorney client privilege. 

EEOC Guidance Limits Employer Use of Criminal Background Checks
A few months ago, the EEOC issued its long-awaited “Enforcement Guidance” document on when using criminal background checks can be unlawful under Title VII.  The guidance will likely require many employers to revise their hiring policies and requirements that rely heavily on criminal background checks to screen applicants. 

The EEOC’s focus here is, again, the “disparate impact” that facially neutral policies may have on particular protected classes.  With criminal background checks, the implicated protected class is usually race, particularly black and Hispanic men, who studies have shown are statistically and disproportionately more likely to have a criminal record than members of other races.  While the EEOC recognizes that using criminal background screens are appropriate for some jobs, excessive use can have a disproportionate impact on members of certain race groups.

Under the new guidance, blanket policies barring employment because of any criminal conviction will be heavily disfavored.  Instead, the EEOC directs employers to adopt “targeted screens” for particular types of jobs, and also conduct an “individualized assessment” for each applicant affected by a screen.  In developing a targeted screen, the employer is to consider the actual requirements of each job and justify why convictions for specific types of offenses should bar employment in that job.  Although the guidance offers few specifics, as an example it is probably appropriate to screen applicants for jobs working with children for child abuse or molestation convictions, for recent drunk or reckless driving convictions in jobs requiring operating vehicles, or for theft or embezzlement convictions in accounting positions or jobs requiring handling large amounts of cash.

In performing the individualized assessment, the employer is to look at the type, severity, date, and number of prior convictions, and any extenuating circumstances such as rehabilitation efforts or post-conviction work history, to determine whether an employee with a conviction could nevertheless be hired.  Under this approach, an employer may have a difficult time justifying not hiring an applicant for a computer programming job who has worked successfully for a decade simply because he was convicted for being drunk and disorderly at a college frat party in the 1990s.  Conversely, an employer may be more justified in denying employment to someone more recently convicted of violently assaulting a coworker, who violated parole, and had been fired from his last job after a short time for insubordination.

The EEOC’s new guidance is technically not a fundamental departure—the EEOC first articulated its position on criminal background checks in the 1980s, and courts have long held that the use of criminal history screens (or any facially neutral policy, for that matter) can be discriminatory under a disparate impact standard.  But, consistent with its renewed focus on “systemic” discrimination, the EEOC now appears to take a stronger stand that employer policies that broadly rely on using criminal history to screen out applicants will be presumed to be discriminatory, and that employers have the burden to show the screen is justified. 

Employers that use criminal history to screen applicants should review such policies, with a particular eye toward identifying any “blanket” screens (e.g., we don’t hire anyone with any criminal conviction ever).  It may be prudent to then develop detailed written policies implementing the targeted screen and individualized assessment approach promulgated by the EEOC.  Employers should also begin training managers and recruiters on the new standards.

In conclusion, it is important for employers to be aware of these areas of concern to the EEOC, and review policies or practices for potential "systemic" or "disparate impact" effects.  And we will also be closely following any other new initiatives the EEOC may consider in the future.