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Government Affairs Bulletin-- June 2017

Tags:  (2017 Jun 12th - 10:48am)

Health Care – The House of Representatives passed the American Health Care Act (HR 1682) by a four-vote margin – 217 – 213. The Congressional Budget Office estimates that the bill would result in 14 million people losing their health insurance next year and over the next decade, a total of 23 million people would lose their health insurance. Major provisions include:
  • Replacing the income-based subsidies with a refundable tax credit that is tiered by age
  • Eliminating the employer mandate by making the penalty $0 as of 2016
  • Eliminating the individual mandate by making the penalty $0 as of 2016 but imposing a 30% premium surcharge on premiums for individuals who go more than 2 months without coverage
  • Allowing states to apply for waivers to establish their own essential health benefit requirements
  • Retaining the wellness program structure contained in the Affordable Care Act
  • Allowing states to apply for waivers that allow health status underwriting for those who don’t maintain continuous coverage
  • Increasing the age rating ratio to allow insurers to charge elderly customers up to 5 times what they charge young adults
  • Discontinuing the Medicaid expansion in 2020 and restructuring Medicaid federal financing into a per capita model

 

The Senate needs to consider the bill next and is expected to modify it. If a bill is passed by the Senate, the differences between the Senate and House bills will need to be reconciled.

 

FLSA Overtime Regulations Litigation – The appeal to the US Court of Appeals for the 5th Circuit of the District Court’s preliminary injunction preventing implementation of the revised overtime regulations on 12/1/16 is still pending. The 5th Circuit had given the Department of Labor until May 1st to decide how it wants to handle the appeal. The 5th Circuit granted another extension until June 30th. In his confirmation hearings, Secretary of Labor Alexander Acosta expressed support for a possible increase in the salary basis threshold, although he was critical of the proposed doubling of the threshold that was included in the regulations that were enjoined.

 

Court Decisions/Legislation on Sexual Orientation Discrimination – In April, the 7th Circuit Court of Appeals ruled in the case of Hively v. Ivy Tech Community College that Title VII of the Civil Rights Act of 1964 prohibits discrimination based of sexual orientation. This is the first appellate court to reach this conclusion. Recently, the 2nd Circuit in the case of Christiansen v. Omincron Group and the 11th Circuit in the case of Evans v. Georgia Regional Hospital ruled that sexual orientation discrimination is not covered by Title VII. The 2nd Circuit has granted a full court review of its decision. There is now a split among the judicial circuits on this issue may it more likely that the Supreme Court would accept an appeal of a case that raises this issue. Legislation (HR 2282/S 1006) titled the Equality Act has been introduced by Democrats. The bill would add sexual orientation and gender identity to the protected classed covered by Title VII. There are 46 Senate cosponsors and 195 House cosponsors, with only one Republican joining the bill.

 

FLSA Regular Rate Supreme Court Case Petition -  The Supreme Court decided that it will not review the 9th Circuit’s decision in the case of City of San Gabriel v. Flores. IPMA-HR had joined an amicus brief in support of the City’s petition for review. In this case, the 9th Circuit ruled that unspent funds paid to employees as part of a flexible benefit program should be included in the regular rate calculation for determining FLSA overtime. Since about 40-50% of the monthly amount provided was cashed out to employees, the plan was not a bonda fide plan resulting in the entire amount having to be included in the regular rate.

 

ACA Cost Sharing Reduction Litigation – The Affordable Care Act provides insurance companies with cost sharing reductions to lower the out-of-pocket expenses for low income enrollees. House Republicans sued the Obama Administration claiming that since Congress did not appropriate the funds for the cost sharing reductions, they could not be paid to the insurance companies. The District Court agreed, resulting in an appeal by the Obama Administration. The District of Columbia Circuit court gave the Trump Administration until May 22nd to decide how it wants to proceed with the appeal and has granted another extension until August 22nd. A group of Democratic attorney generals filed a motion to intervene in the case arguing that the Trump Administration is not appropriately defending the law. This motion is pending.

 

Paid Parental Leave – Included in the President’s budget is a proposal for up to 6 weeks of paid parental leave effective in 2020. The cost would be fully offset by a package of reforms to the state unemployment insurance system. The leave would be available to new parents including those who adopt. Legislation (S 337/HR 947) has been introduced by congressional Democrats and would provide family and medical leave insurance benefits for up to 60 days. The bill includes a formula for determining the monthly benefit as well as minimum and maximum amounts. The bill would establish the Federal Family and Medical Leave Insurance Trust Fund that would be funded through a tax on individuals and employers.

Withdrawal of Wage and Hour Administrator Interpretations – The Labor Department announced that it was withdrawing two interpretations that were issued by the Wage and Hour Administrator in 2015 and 2016. The 2015 interpretation titled Application of the FLSA’s Suffer or Permit Standard in the Identification of Employees who are Misclassified as Independent Contractors emphasized that the term “employee” is broadly defined under the FLSA and therefore genuine independent contractor status should be the exception, not the rule. The 2016 interpretation on joint employment under the FLSA noted that where a joint employment relationship is found, all joint employers of a worker are liable for compliance with FLSA requirements. These interpretations were perceived as narrowing the definition of an independent contractor and expanding the definition of joint employment. Addressing the misclassification of employees as independent contractors was a priority of the Labor Department during the Obama Administration.

Age Discrimination in Employment Act – The Age Discrimination in Employment Act turns 50 this year. To mark this anniversary, the Equal Employment Opportunity Commission (EEOC) held a hearing on June 14th titled “The ADEA @ 50 – More Relevant Than Ever,” to explore the state of age discrimination in America today and the challenges it poses for the future. Additional information about the hearing is available at www.eeoc.gov.