HR Best practices:

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Employer Services Presentation

• HR Best practices
• From HIRING TO FIRING AND EVERYTHING IN BETWEEN
• David W. thomas, esq. Daryl russell

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• Topics for today
• ARRA update
• Employee Termination and Leave Issues
• Updating your Employer Handbook
• Creditable Coverage Requirements for Employers
• Good Hiring Tips

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American Recovery Reinvestment Act (ARRA)

• COBRA subsidy extended through February 28, 2010
• Extension may have created a notice requirement
  for any previously terminated employees that they
  are eligible for six more months of reduced-cost
  coverage
• http//www.dol.gov/ebsa/newsroom/fsCOBRApremiumred
  uction.html
• Also created a few notification headaches for
  COBRA covered employers
• Made almost no changes for continuation-coverage
  employers

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ARRA update COBRA extension

• Individuals whose COBRA subsidy period expired
  prior to Dec. 17, 2009 are eligible to
  retroactively reinstate their COBRA coverage at
  the reduced premiums.
• To retroactively reinstate and continue their
  coverage they must pay the 35 of their premium
  costs by the later of (i) February 17, 2010 or
  (ii) 30 days after the notice of the extension is
  provided by their plan administrator.
• The same refund and credit rules under ARRA apply
  to any assistance-eligible individual whose
  subsidy expired in November and who has since
  paid the full COBRA premium.

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ARRA Update COBRA extension

• Need to make sure that your health plan
  administrators act promptly and send an updated
  notice describing the new subsidy rules to all
  individuals who were assistance-eligible
  individuals as of October 31, 2009, or who have
  been terminated from employment on or after
  October 31, 2009.

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ARRA Update COBRA extension

• Additionally, the DOD Act requires that a special
  notice be sent to those assistance-eligible
  individuals who either dropped COBRA or paid the
  full premium for it when their nine-month subsidy
  ended, explaining that they are now eligible
  either to reinstate their coverage retroactively
  at the subsidized rate or to receive a credit or
  refund if they paid more than the DOD Act would
  have required.

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Employee Termination and Leave Issues

• Health Care continuation coverage
  COBRA/Virginia state law requirements
• FMLA (large employers)
• Unemployment taxation (very briefly)
• At-Will Employment and employees of a protected
  class

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COBRA subsidy The Basics

• Workers can qualify for a 65 subsidy for their
  COBRA health insurance premiums.
• Worker must have involuntarily separated.
• Lawyer-speak for laid-off or fired
• Employee must have been terminated on or before
  Feb. 28, 2010.
• Clears up confusion under previous law regarding
  termination versus eligibility for coverage.

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COBRA Subsidy Eligibility

• Employee must have been terminated between Sept.
  1, 2008 and Feb. 28, 2010.
• Income limits phase out
• Individuals 125K to 145K
• Couples 250K to 290K
• If you anticipate that might apply (due to
  severance), obtain a waiver.
• If employee becomes ineligible, IRS will
  recapture
• Only applies to 15 months of coverage!

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COBRA subsidy How it works

• Eligible former employees may continue to pay
  premiums as before, only at 35 of the total.
  They may also choose to take out an individual
  policy under an insurer of their choice.
• Employer pays 65 of the premium.
• Even if premiums are sent to a third-party
  administrator.
• Employer claims a credit for those payments on
  Form 941 Employers Quarterly Federal Tax
  Return (or similar).
• Subsidy is treated as a credit toward payroll tax
  liability.
• Counted at the time the former employees premium
  payment is received.

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COBRA Subsidy To Do List

• Update COBRA materials (or ensure plan
  administrator has done so).
• Notice to previously terminated employees of
  additional 6 months of coverage
• If you offer multiple plans, determine whether to
  permit individuals to elect a different plan once
  they COBRA.
• Review severance policies and severance
  agreements to revisit the issue of any employer
  COBRA premium contributions.
• Develop process and procedures for the
  administration of the COBRA subsidy.

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FMLA

• Applies to companies with 50 employees in a 75
  mile radius who have worked 20 or more workweeks
  in the current or previous calendar year.
• Only applies to employees who have worked for you
  for the previous 12 months
• Includes paid and unpaid leave
• AND 1250 hours in the previous 12 months

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FMLA

• Must grant a total of 12 work weeks of unpaid
  leave
• for the birth and care of a newborn child of the
  employee
• for placement with the employee of a son or
  daughter for adoption or foster care
• to care for a spouse, son, daughter, or parent
  with a serious health condition
• to take medical leave when the employee is unable
  to work because of a serious health condition or
  
• for qualifying exigencies arising out of the fact
  that the employees spouse, son, daughter, or
  parent is on active duty or call to active duty
  status as a member of the National Guard or
  Reserves in support of a contingency operation.
• 12 weeks does not have to be consecutive!

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Changes to FMLA

• Primarily apply to notice requirements
• Employee must provide 30-days advance notice
  where foreseeable and practicable.
• Or as soon as foreseeable/practicable
• Employee must provide sufficient information
  for employer to determine if FMLA applies

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FMLA

• Employer must post approved notice of FMLA
  rights.
• Failure to do so is subject to fine
• Must also include notice in employee handbooks or
  through other written guidance.
• Employer must affirmatively notify employee that
  leave designated as FMLA leave.
• http//www.dol.gov/esa/whd/fmla/finalrule/whdfs28.
  pdf

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Unemployment Benefits

• Some experts are predicting a 10-fold increase in
  the state unemployment tax
• As a result, more employers are contesting claims
  for benefits
• 30 days of employment
• Fired for cause

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At-Will Employment Doctrine

• Virginia law provides for a presumption of
  at-will employment
• This means that absent some affirmative act,
  usually in writing, an employee would bear the
  burden of proving an employment contract for some
  definite length.
• An at-will employee can be fired for any lawful
  reason, or no reason at all.
• But cant be fired for a bad (unlawful) reason.
• Number one bad reason -- discrimination

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At-Will Employment Doctrine

• Avoid creating any inference that employees will
  only be terminated for just cause
• Common ways to waive at-will presumption
• Statements made during hiring or at reviews
• Just dont promise them continued employment
• Statements in the offer letter
• Your salary for the next year will be
• Statements in the employee handbook

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Updating Your Employee Handbook

• Should you have an employee handbook?
• With very few exceptions, the answer is yes, but
  only if you follow the written policies
• Just depends on how extensive it should be
• Some necessary policies
• Equal Employment / Non-discrimination policy
• Sexual Harassment policy
• COBRA / FMLA policy (where appropriate)
• Workplace Safety and Prevention of Violence
• Workplace Monitoring Policy
• Leave policy

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Updating your Employee Handbook

• Equal Employment / Nondiscrimination Policy
• Posting is required in the workplace
• First thing EEOC will do in the event of an
  investigation is ask for the company policy on
  nondiscrimination
• Sexual Harassment
• Must both lay out policy AND inform employees of
  how to report harassment
• If policy is published and employees informed,
  company can rely on non-reporting as a defense to
  knowledge of superiors
• Must address both quid pro quo and hostile work
  environment
• Must assure employees of no retaliation for
  good-faith report

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Updating your Employee Handbook

• COBRA policy
• Employers required to give notice to all new
  employees of COBRA benefits
• FMLA policy
• Employers required to notify workers of rights
  under FMLA
• Workplace Safety
• Lay out zero tolerance for workplace violence
• Require prompt reporting and ensure no
  retaliation for good faith report

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Updating your Employee Handbook

• Workplace Monitoring Policy
• Can only monitor if work-related or with consent
• Can cover telephones and computers
• Policy should allow employer monitoring, but make
  clear that company is not obligated to monitor
• Emphasize that company computers and telephones
  are property of the company
• Leave policies
• Sick leave
• Unpaid leave (medical or otherwise)
• PTO

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Updating your Employee Handbook

• Number 1 issue Waiving at-will employment based
  on your handbook
• continued employment is contingent upon
  compliance with company policies.
• employees can be terminated for just cause
• How to avoid waiving at-will presumption
• Disclaimer of contract rights or affirmation of
  at-will status
• Use of merger clause (supersedes prior policies
  oral or written)
• Acknowledgement of receipt with at-will language
• Reservation of rights to change policy at will
• Do not sign the handbook

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Creditable Coverage Requirements

• What is creditable coverage?
• Provides drug coverage that is at least as good
  as Medicare Part D program
• Allows employees to sign-up for Medicare Part D
  coverage later if they maintain creditable
  coverage in the meantime
• How do you determine if coverage is creditable
• If the actuarial value of the coverage equals or
  exceeds the actuarial value of standard
  prescription drug coverage under Medicare Part D
• In general, the actuarial equivalence test
  measures whether the expected amount of paid
  claims under the entity's prescription drug
  coverage is at least as much as the expected
  amount of paid claims under the standard Part D
  benefit.

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Creditable Coverage Requirements

• A prescription drug plan is deemed to be
  creditable if it
• Provides coverage for brand and generic
  prescriptions
• Provides reasonable access to retail providers
• The plan is designed to pay on average at least
  60 of participants prescription drug expenses
  and
• The plan has no more than a250 deductible per
  year, has no annual benefit maximum or a maximum
  annual benefit payable by the plan of at least
  25,000 and has no less than a 1,000,000
  lifetime combined benefit maximum.

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Creditable Coverage Requirements

• Employer Requirements
• An entity is required to provide a disclosure to
  CMS through completion of the Disclosure to CMS
  Form (Form CMS-10198) posted on the CMS
  Creditable Coverage Web Page athttp//www.cms.hhs.
  gov/CreditableCoverage/45_CCDisclosureForm.aspTop
  OfPage.
• For plan years that end in 2007 and beyond, the
  Disclosure to CMS Form must be provided within 60
  days after the beginning date of the plan year
  for which the entity is providing the Disclosure
  to CMS Form
• Within 30 days after the termination of the
  prescription drug plan and Within 30 days after
  any change in the creditable coverage status of
  the prescription drug plan.
• Disclose to all Medicare eligible individuals
  with prescription drug coverage under the plan
  whether such coverage is "creditable."

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Good Hiring Tips

• Be very careful of doing Internet research
• There is some information you dont want to have
• Review Facebook and MySpace at your own risk
• You dont want to know how old someone is or
  their sexual orientation
• Depending on how you access their page, could
  open yourself up to an invasion of privacy claim

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Good Hiring Tips

• During the interview, think about the information
  you are soliciting
• Do you want to know when they graduated from high
  school?
• Do you want to know if they are married? The name
  of their spouse?
• How much they weigh?
• Background and credit checks
• Be aware of FCRA requirements if you consider any
  information gained from a background check

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• Davids practice is comprised primarily of
  employment law and commercial litigation. His
  experience includes employee benefits and
  compensation, employment discrimination,
  commercial litigation, employment law,
  construction law and criminal defense. A native
  of Virginia, David attended Thomas Jefferson High
  School for Science and Technology in Alexandria
  before matriculating to Swarthmore College and
  the University of Virginia Law School. During law
  school, David worked for the Greene County
  Commonwealth's Attorney's office, where he
  prosecuted a broad range of criminal cases.
• Following graduation, David clerked for the Hon.
  Danny C. Reeves in federal district court in
  Kentucky, where he was exposed to a broad range
  of federal litigation as well as appellate
  litigation before the Sixth Circuit. David then
  moved to Washington, D.C. to practice with a
  large national firm based out of Palo Alto,
  California, representing technology companies in
  commercial, securities and antitrust litigation.
  David then moved to a regional litigation firm,
  where he practiced in the area of products
  liability before getting the opportunity to
  return to Charlottesville.
• Education
• Swarthmore College (B.A., magna cum laude, 2002)
• University of Virginia School of Law (J.D.,
  2005)
• Professional Activities
• Admitted in Virginia and the District of
  Columbia
• Admitted to practice before the United States
  Fourth Circuit Court of Appeals and the
• United States District Courts for the Eastern
  and Western Districts of Virginia
• Virginia State Bar, Children and the Law
  Committee, Young Lawyers Division
• Charlottesville-Albemarle Bar Association,
  SecretaryTreasurer 2009-10
• Thomas Jefferson American Inn of Court
• Legal Aid Justice Center Unemployment Panel
• Community Activities
• Albemarle County Service Authority, Board of
  Directors 2010-
• Leadership Charlottesville, Class of 2010

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Bankers Insurance LLC
Bankers Insurance Client Portal

• Employee Handbook Template
• Looking for quick answers to tough COBRA, HIPAA,
  FMLA and Section 125 questions? Our client
  portal has resources to help!
• When you need to resource information fast, you
  have instant access to a library of downloadable
  health, wellness, HR and compliance articles.
  Walt Lyons or your Account Manger can help you
  access them.

COBRA Administration

• Turn Key Administration through Flexible Benefit
  Administrators
• Free to Bankers Insurance Clients
• Partnership with Flexible Benefit Administrators
  allows us to provide access to cost effective
  Section 125 plans (FSAs and POP Plans), HRAs,
  and HSAs.

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Addenda

• Sample Creditable Coverage Notice
• ARRA Continuation Coverage Notice
• 90-Day Term Notice