Professional Service Agreement

Week in Review

March 30, 2015

Commission sends long-awaited proposed wellness-program rule for approval
The EEOC is sending a long-awaited proposed rule on the interplay between employee wellness programs and the ADA and Affordable Care Act (ACA) to the Office of Management and Budget (OMB) for clearance. The Commission approved the proposed rule on March 20 in a bipartisan vote. Employers have been anxiously awaiting further guidance on how to structure such programs in a manner that will not run afoul of federal anti-discrimination laws, particularly with regard to the ADA.

Monetary incentives are crucial for drawing workers into wellness programs

Financial incentives appear to be a crucial factor in bringing unhealthy workers into workplace wellness programs, according to a new analysis by the nonpartisan Employee Benefit Research Institute (EBRI). After looking at first-time participants who completed a health risk assessment (HRA) or biometric screening in the two or three years after financial incentives were offered to workers to participate, the results "...paint a vivid picture of who responds to wellness-program financial incentives. They indicate incentives have a strong impact at bringing in the kind of people who really need the program," according to Paul Fronstin, director of EBRI's Health Research and Education Program, and co-author of the report.

Rescinded promotion of pregnant employee triggers EEOC lawsuit

The EEOC has filed a lawsuit against Receivable Management, Inc., dba Kramer and Associates, asserting that the Hackensack, New Jersey, debt collections firm violated Title VII law by rescinding an offer to promote an employee because she was pregnant. The employee was offered a promotion to a managerial position, according to a March 23 agency release. The company allegedly rescinded the offer after the employee told her supervisor that she was pregnant. The company told her she needed to focus on her health and that her maternity leave would coincide with tax season, the company's busiest time of the year, the EEOC said.

IFA will appeal to stop Seattle from enforcing minimum wage law against franchisees
International Franchise Association (IFA), the world's largest organization representing franchise owners, will appeal a recent federal court decision that allows the City of Seattle to enforce its 2014 minimum wage law against small franchised businesses, the association announced on March 20. In 2014, the City of Seattle increased the minimum hourly wage from $9.47 to $15. The increase goes into effect April 1, 2015, with a faster phase-in over three years applicable to large businesses-defined as those with 500 or more employees nationwide-and a slower phase-in over seven years applicable to small businesses. Seattle's franchisees-who own 1,700 franchise locations and employ 19,000 workers-were considered large businesses based on their franchise networks collectively having more than 500 employees nationwide. Thus, they were held subject to the faster, three-year phase-in schedule. On March 18, the federal district court in Seattle denied IFA's motion for preliminary injunction, finding that it was unlikely that the IFA would prevail on the merits of its claims against the City. The IFA and five Seattle franchisees gave notice that they will appeal the decision to the United States Court of Appeals for the Ninth Circuit.

Employers turning to alternative health care plans for more affordable coverage, SHRM reports
Some employers are reducing employee hours for part-time workers as a result of the Affordable Care Act (ACA), a new Society for Human Resource Management (SHRM) survey on health care reform found. Seventy-two percent of U.S. organizations have not considered reducing employee hours for part-time workers as a result of the ACA mandate that employees working 30 hours a week be offered health care coverage, according to the Health Care Reform Survey — 2015 Update. But 14 percent of organizations already have reduced hours for part-timers, and another 6 percent plan to do so. The survey also found that 91 percent of organizations have not considered reducing employee hours for full-time employees, and 90 percent said they have not considered reducing the overall number of employees as a result of the ACA employer mandate.
The survey also shows:
• Fifty-four percent of employers require employees to work 30 hours a week to be eligible for coverage, an increase from 44 percent in 2014 and 39 percent in 2013. But 26 percent of organizations require employees to work more than 30 hours a week to be eligible.
• Two-thirds of organizations (66 percent) believed their organization offered the same level of health care benefits as before the ACA was enacted.
• About three-quarters (77 percent) of respondents said that their health care coverage costs increased from 2014 to 2015, and 6 percent saw a decrease.
• About three out of five organizations have made changes to their health care coverage in the last year.
• More than one-half (53 percent) said they would not be affected by an excise tax on high-cost benefits that takes effect in 2018 or are taking action to avoid the tax.
The survey polled more than 740 randomly selected HR professionals with a title of manager or above or who work with benefits or compensation. Source: Society for Human Resource Management.