Obamacare Summary of Benefits and Coverage FAQs

The Department of Labor last Friday released further guidance on how employers which sponsor healthcare plans are to comply with the requirement under Obamacare to provide a “summary of benefits and coverage” or SBC for open enrollment periods which begin on or after September 23, 2012.  The guidance is in the form of 14 questions and answers.  (Click here to see this Q & A).  These questions and answers supplement final DOL regulations which were released on February 14, 2012 (see  Federal Register Final Rules for EBSA for 2012  at dol.gov) and a set of 24 questions and answers which were released on March 19, 2012 (Click here to see this Q & A).  Please contact us if you wish to discuss these questions and answers in specific or the requirement to provide an SBC in general.

Additional DOL Guidance on Participant-Level Disclosures

Late yesterday the DOL released further guidance on how to comply with the DOL’s participant-level disclosure regulations.  There is a link to these regulations in our Employee Benefit Plan Alert dated February 28, 2012, which is on our Taylor English website. Click here to view  The new guidance issued yesterday is in the form of 38 questions and answers and is set forth in Field Assistance Bulletin 2012-02.  Click here to view  The compliance deadline for the participant-level disclosures is August 30, 2012.  Finally, the DOL has issued fiduciary disclosure regulations, and the compliance deadline for these disclosures is July 1, 2012.  DOL representatives report that further guidance on how to comply with these fiduciary disclosure regulations will be released shortly.

Workplace Bullies: How Employers Can Detect and Prevent Workplace Bullying Before It Escalates to Violence

Bullying in the workplace is a real epidemic in our society.  Courts and legislatures are steadily working to expand employer liability for bullying that occurs on the job.  Thus, employers must begin to take bullying as seriously as more traditional forms of harassment, because of the consequences – from both a safety and liability perspective – are as severe.  This article examines the negative personal and organizational effects of bullying bosses, how to spot an abusive supervisor, and the steps to prevent vertical bullying.  Finally, the article explores a possible upside for employers to the increasing attention on bullying:  earlier detection and prevention of workplace violence.

Click here to read the article.

Co-authored by Amy Loggins, Joseph M. English and Alison M. Ballard, ACC Docket, Association of Corporate Counsel, Vol. 30, No. 3, April 2012

Reprinted with permission from the Association of Corporate Counsel, © 2012. All Rights Reserved. www.acc.com.

Tax to Fund the Patient-Centered Outcomes Research Trust Fund

The Internal Revenue Service on April 12 released a 61 page proposed regulation on the tax on group health plans which will fund Obamacare’s Patient-Centered Outcomes Research Trust Fund.   The insurance company pays the tax for an “insured” group health plan, and the plan sponsor pays the tax for a “self-insured” group health plan.  However, the proposed regulation clearly suggests that a group health plan will be treated as an “insured” group health plan only if 100% of the plan’s benefits are provided under an insurance policy.  Thus a plan sponsor appears to be responsible for the tax unless 100% of the plan’s benefits are provided under an insurance policy.  The tax for calendar year plans for 2012 is $1 times the average number of covered “lives” under the plan, and the tax for 2012 will be due no later than July 31, 2013. The tax will double for 2013 and then go up some more each year while the tax is in effect so the tax might be more than a rounding error down the road.  Click here to read a copy of the proposed regulation. Please contact Don Kohla or Jan Marsh for additional information.

Crowdfunding Under the JOBS Act: The Bottom Line Impact on Private Equity Issuers and Market Intermediaries

On April 5, 2012, President Obama signed the Jumpstart Our Business Startups Act (the “JOBS Act”), H.R. 3606, into law calling it “a potential game-changer” for startup companies.  President Obama signed the JOBS Act just over a week after it was passed by Congress with strong bipartisan support. The stated purpose of the JOBS Act is to “increase American job creation and economic growth by improving access to the public capital markets for emerging growth companies.”

The JOBS Act contains several provisions that open new doors for both public and private emerging companies.  However, Title III of the Jobs Act, named the “Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure Act of 2012,” or the CROWDFUND Act, has by far generated the most discussion and debate in the context of the private equity marketplace.   The CROWDFUND Act has been added as new Section 4(6) of the Securities Act of 1933, as amended (the “Securities Act”).

The concept of “crowdfunding” – or raising money privately from a large pool of individuals – is not a new one.  For example, a charitable organization soliciting donations from the public at large, oftentimes in small dollar increments, falls within the guise of crowdfunding.  Additionally, private companies previously have been permitted to engage in crowdfunding activities pursuant to existing exemptions under federal securities laws, e.g., Regulation D promulgated under the Securities Act, as long as all other conditions of such exemptions are met.  Title III of the new JOBS Act codifies “crowdfunding” as a separate exemption for private securities offerings and provides parameters for issuers and market intermediaries that obviate the need to comply with other conditions of exemptions such as Regulation D.

Click here to read more

Motion to Dismiss Granted in $7.5 million Case

Greg Schultz and Deborah Livesay recently succeeded in obtaining the dismissal of two foreign limited liability companies organized and located in the country of Belize from a lawsuit filed in the Superior Court of Cobb County, Georgia, wherein the plaintiff alleged that these companies, her former investment advisor, and a host of shell corporations had committed fraud and violated RICO and the Georgia Securities Act.  The plaintiff sought to recover $7.5 million on the theory that that her former investment advisor, who had been convicted on criminal charges of racketeering and securities violations, had conspired with these companies to defraud her out of approximately $2.5 million through fraudulent investment schemes associated with certain properties located in Belize.  The court rejected plaintiff’s claims as they related to the Belize companies and dismissed them pursuant to O.C.G.A. § 9-11-5(b).  The plaintiff has appealed the ruling.

Employee Benefit Plan Alert

The DOL, the IRS and HHS were active in the first two weeks of February. For example,

HIGH PRIORITY: Final Fee Disclosure Regulations for Service Providers

The DOL released its final fee disclosure regulations for service providers. There are teeth in these regulations which can bite a plan fiduciary as well as a service provider. Please note that

1. The text of the final regulations can be found at http://www.dol.gov/ebsa/pdf/2012-02262-PI1.pdf.

2. The effective date for the final regulations is July 1, 2012.

3. The DOL also issued a fact sheet on the final regulations which can be found at http://www.dol.gov/ebsa/newsroom/fs408b2finalreg.html.

4. A plan fiduciary is subject to the prohibited transaction provisions of ERISA if a service provider fails to provide the required disclosures and the plan fiduciary fails to timely so notify the DOL. The DOL has posted a model notice for a plan fiduciary to use for this purpose at http://www.dol.gov/ebsa/regs/feedisclosurefailurenotice.html.

5. The July 1, 2012 effective date for these final regulations means that the deadline for a plan fiduciary making the related participant fee disclosures will be August 30, 2012.

HIGH PRIORITY: Group Health Plan Disclosure Rules

The IRS, the DOL and HHS issued final group health plan disclosure rules under Obama Care which apply to self-insured as well as insured group health plans. These final rules are effective for plans years which begin on and after September 23, 2012. This effective date is intended to make the rules applicable to the up-coming open enrollment periods for 2013. The “plan sponsor” is responsible for compliance with these rules for a self-insured plan, and the insurance company is responsible for compliance for an insured plan. The related disclosure rules and guidance document can be found at www.ofr.gov/OFRUpload/OFRData/2012-03228_PI.pdf and www.ofr.gov/OFRUPload/OFRData/2012-03230_PI.pdf.

LOWER PRIORITY: Obama Care FAQs

The IRS has published FAQs on auto-enrollment, employer shared responsibility and waiting periods under OBAMA Care. The priority factor here is based on the deadline for commenting on the FAQs, which is April 9, 2012. THE FAQs can be found at www.irs.gov/pub/irs-drop/n-12-17.pdf.

LOW PRIORITY: Longevity Annuity Contracts

Looking down the road the Treasury Department and the IRS published a package consisting of two revenue rulings and two proposed regulations which collective are intended to pave the way for participants in defined contribution plans to purchase annuity contracts, particularly what are called “longevity annuity contracts”. A “longevity annuity contract” is an annuity contract under which payments start at an advanced age (say age 85, if the participant survives to that age), the purchase price for the participant is less than the price for a contract where payments start at retirement (say age 65) and which provide for payments for a participant’s life after he or she reaches that advanced age (again, say age 85). This package already has sparked a debate over the appropriate disclosure for these kinds of insurance company products. The components of the package can be found at:

www.ofr.gov/OFRUpload/OFRData/2012-02341_PI.pdf

www.ofr.gov/(S(e1ihraj41k5tmy1xb1i1tne4))/OFRUpload/OFRData/2012-02340_PI.pdf

www.irs.gov/pub/irs-drop/rr-12-03.pdf

www.irs.gov/pub/irs-drop/rr-12-04.pdf

Court Rules Buyers and Sellers of Residential Real Estate Can Sue FMLS and Brokerage Firms Under RESPA to Recover Undisclosed Fees and Kickbacks

In the potential class action of Heather Q. Bolinger, et al v. First Multiple Listing Service, Inc., et al. (2:10-cv-00211-RWS), the U.S. District Court for the Northern District of Georgia ruled on January 18, 2012 that buyers and sellers of residential real estate can sue FMLS (the dominant MLS in Georgia) and member brokerage firms under RESPA to recover undisclosed fees and kickbacks. The court decided that Plaintiffs can recover damages if, as they allege, brokers and agents refer consumers to FMLS and pay FMLS unearned hidden settlement fees from real estate commissions or if FMLS pays kickbacks to productive brokers. Plaintiffs will be seeking relief on behalf of all purchasers and sellers of residential real estate in Georgia during at least the 4 years preceding the filing date of the lawsuit. Taylor English Duma, LLP represents the Plaintiffs along with Pope, McGlamry, Kilpatrick, Morrison & Norwood, LLP and The Sterbcow Law Group, LLC. For more information about the case, go to www.fmlsclassaction.com

Taylor English Named One of Atlanta Business Chronicle’s 2011 Best Places To Work.

Atlanta- September 22, 2011- Atlanta law firm Taylor English Duma LLP was recognized as one of the Atlanta Business Chronicle’s Best Places to Work at the seventh-annual awards event at the Atlanta Marriott Marquis on September 16th.

The Atlanta Business Chronicle describes this year’s Best Places to Work Awards as being particularly timely given that, “there’s almost no topic of greater public interest in America these days than jobs.” 100 Atlanta employers were ranked in three categories: large employer, medium sized employer and small employer. Taylor English (which has over 140 attorneys and employees) was awarded this honor in the medium-sized employer category, which recognizes companies and organizations in the metro Atlanta area with 101 to 500 employees.

“Creating a more vibrant and rewarding workplace was one of our primary goals when we launched the firm nearly 7 years ago”, says Marc Taylor, one of the firm’s founders. “This is a something that we will share collectively with our attorneys, employees and clients”.

“This award is a tremendous honor”, says Taylor English managing partner Al Hill, “especially since it’s based solely on employee surveys. At Taylor English we’re committed to offering our employees an alternative to the traditional law firm model that encourages an entrepreneurial spirit, so it’s reassuring that, as we continue to steadily grow, our colleagues agree that the firm is purpose-built for them and the needs of their clients. We are thrilled with the award, and we already have out sights set on next year.”

Earlier this year, Taylor English was also was also recognized by the Atlanta Journal-Constitution as one of Atlanta’s Top Work Places for 2011.

The Atlanta Business Chronicle partnered with Quantum Workplace to survey metro Atlanta employers to determine the top 100 Atlanta’s Best Places To Work. This year readers nominated nearly 500 companies and organizations, and Quantum surveyed employees from participating companies and organizations.

Mandatory Labor Posters Now Available

The National Labor Relations Board has been busy lately issuing pro-union decisions and regulations.  The Board recently issued regulations requiring virtually all private-sector employers to post a notice informing employees of their rights under the National Labor Relations Act, including the right to form and organize unions.  The notice, combined with rules that would require quicker elections and allow smaller voting units, substantially tilts the organizing balance in favor of the unions. 
The NLRB poster is now available to be downloaded from the NLRB’s web site:
“Download Poster”. It can be printed in color or  black-and-white on 11”x17” paper, or on two 8×11 inch pages that are taped together; smaller versions of the poster are not acceptable.  The deadline for posting is November 14, 2011. 
Federal contractors that already post a similar Department of Labor-required notice are not required to post this new notice.  On the other hand, employers that customarily post personnel rules and policies on line or electronically, are required to post this notice in the same manner (in addition to the physical posting).  Moreover, the notice must be posted in English and other languages if at least 20% of the employees are not proficient in English and speak the other language.  The NLRB has committed to publishing posters in several different languages, although those are apparently not yet available.
Failure to post the notice may be treated as an independent unfair labor practice under the National Labor Relations Act, and might in some cases be considered evidence of unlawful motive in an unfair labor practice case.  In addition, the failure to post may support a claim that the usual six month statute of limitations for filing an unfair labor practice charge should be extended in cases involving other alleged violations of the Act.
Employers are justifiably concerned that the new notice and other recent NLRB actions encourage union organizing activity and make them more vulnerable to organizing drives.  While legal action might block implementation of some NLRB efforts, the best way for an employer to protect against organizing activity is to prevent it.  Employers are stepping up supervisor training programs design to help management quickly recognize and lawfully respond to organizing efforts.  Properly trained supervisors and managers are without a doubt the best defense to a union organizing drive.  Contact your Taylor English attorney if we can assist you with your training efforts, or if you would like additional information.

Joseph Bryan is a member of Taylor English’s Employment, Labor and Immigration practice group. He has represented employers in connection with a wide variety of labor law disputes, including collective bargaining negotiations, unfair labor practice proceedings, union organizing drives, decertification proceedings, arbitration hearings and litigation involving National Labor Relations Act issues.