Patient Protection and Affordable Care Act:
Employers’ Guide to Immediate HR Issues
Presented by Denise Cline and Alex Maultsby
Smith Moore Leatherwood LLP
Denise.Cline@smithmoorelaw.com
Two Hannover Square, Suite 2800
434 Fayetteville Street, Raleigh, NC 27601
T: 919.755.8734
F: 919.755.8800
Alex.Maultsby@smithmoorelaw.com
300 N. Greene Street, Suite 1400
Greensboro, NC 27401
T: 336.378.5331
F. 336.378-5400
To ask a question during the presentation, click the Q&A menu at the top of this
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© 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED.
Presentation Will Cover
• Immediate Coverage Requirements
• Notification Requirements
• Changes in Fair Labor Standards
Act: Nursing Mother
Accommodations
• New Whistleblower Protections
• Nursing Facility Disclosures
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Immediate Coverage Requirements
September 23, 2010 Trigger Date for All Plans
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No lifetime benefit caps
Restrictions on annual limits (essential health benefits)
Dependent coverages expanded
No exclusions for children’s pre-existing conditions
Tougher rescission laws
Limits on reimbursement accounts
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Immediate Coverage Requirements
The Grandfather Issue—Why does it matter?
• What can defeat grandfathered status:
– Reduced benefits
– Increased costs
– Lower employer contributions
– Less favorable annual limits
– Self-funded to fully insured
• Is it worth it?
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Immediate Coverage Requirements
So, if NOT grandfathered:
• Dependent coverage through age 26, even if other
coverage is available
• No annual limits on essential benefits
• No co-pays for certain preventive care costs
• Cover emergency care regardless of provider
• No pre-authorization requirements for OB/GYN and
emergency services
• Anti-discrimination rules apply
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Notification Requirements
• Beginning in 2011,
large employers must
report whether they will
offer employees the
opportunity to enroll in
minimum essential
coverage under
employer sponsored
plan.
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2011 Required Notifications
• Length of applicable waiting periods for coverage
• Lowest cost option in each enrollment category under
the plan
• Employer’s share of the total allowed cost option in each
category
• Number and names of full time employees receiving
coverage
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Notifications Required in 2012
• Beginning in 2012, employers
must disclose the value of
employees’ health insurance
benefits on annual W-2.
• Covers tax year 2011, so
tracking begins soon.
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By March 31, 2013, Employers Must
Notify Employees . . .
• About state health insurance exchanges
• Whether the employer’s plan meets the minimum
coverage requirements
• How to access information about applying for premium
subsidies under the exchange-based coverage
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Breastfeeding Protections
• Section 2407 amends Section 7 of
the Fair Labor Standards Act by
requiring that employers provide
nursing mothers with reasonable
lactation breaks.
• Presumed to be effective
immediately
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Who’s Entitled to Breaks?
• Although some states required breaks before, neither
federal nor NC law required breaks for adult workers
prior to PPACA.
• PPACA now amends Section 7 of FLSA .
• Applies to non-exempt employees, not exempt
employees
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What About Exempt Employees?
• Employers may provide similar breaks for exempt
employees.
• If provided, employers should not deduct break time
from compensation for exempt employers.
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Small Employer Exemption
• Employers with fewer than 50 employees are exempt
from the statute’s requirements if doing so would impose
an “undue hardship.”
• Undue hardship is analyzed by weighing the significant
difficulty or expense against the “size, financial
resources, nature, or structure of the employers’
business.”
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© 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED.
What’s Required?
• Section 2407 requires employers to provide nursing
mothers with a reasonable break time “each time such
employee has need to express the milk.”
• Employees are entitled to these breaks for one year from
the child’s birth.
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What’s Reasonable?
• PPACA provides no specific limit on length of breaks.
• No limit on the number of breaks allowed
• Note: Employers cannot regulate either the frequency or
timing of these breaks.
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Paid or Unpaid?
• If lactation break is taken during work time, no
compensation for work time is required.
• That is, unless state law dictates otherwise as in Ala,
CA,CO, CN, GA, IL, IN, ME, MN, MT, NM, NY, OK, OR,
RI, TN, or VT
• If it’s more protective, state law will govern.
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© 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED.
Do Breaks Count as “Time
Worked?”
• Although prior law did not require
breaks, if provided, regulations
specified that breaks of 5 to 20
minutes should be counted as
time worked.
• Similarly, lunch breaks if shorter
than 30 minutes, were counted
as time worked.
• No regulations on lactation
breaks yet
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Location, Location…
• Under § 2407, employers must
provide a “private place”
shielded from view and free
from intrusion.
• Private location is not defined,
but it cannot be a bathroom.
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State or Federal Law?
• Follow the most protective.
• Use care if you have multistate locations.
• Employees should receive copies of revised break
policies in advance.
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What Your Policy Should Provide
• Establish entitlement to lactation (or any other) breaks.
• Specify how lactation break time is treated in terms of
pay and time worked.
• Set forth procedure for requesting and documenting
time.
• Set forth commitment to provide private, non-bathroom
place for lactation breaks (and follow up).
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© 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED.
Penalties
• Not clear what if any penalties result from failure to abide
by requirement
• Existing state law may provide for money damages, but
since lactation breaks are not required to be
compensated, not clear if money damages are
recoverable for violation of federal law.
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© 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED.
Interesting Issues
• Can you temporarily transfer a nursing mother?
• Does time taken for multiple daily nursing breaks count
towards 40 hour work week?
• What about accessibility and other issues such as
mothers who cannot express milk easily or at all?
• What happens when there are multiple nursing mothers
in a single workplace?
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Whistleblower Protection
• Section 1558 of the
PPACA prohibits
retaliation against
employees who provide
information that the
employee believes to
be a violation of
PPACA, Title I.
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Whistleblower Protections Include:
• Retaliation protection added to the Fair Labor Standards
Act
• Abuse reporting protections for federally funded nursing
facility employees
• Mandatory implementation of standard complaint
process for nursing home residents and representatives
• Expansion of rights under False Claims Act
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Whistleblower Protection is Broad
Protection is available for employees who
provide or who are “about to” provide an
employer, the federal government or a
state attorney general with information
about violations of Title I.
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What’s in Title I?
• Title I includes a broad range of provisions on
quality improvements in health care, significant
changes in health insurance coverage,
availability, and affordability.
• Title I includes the most significant changes in
insurance coverage requirements for employers
and individuals.
• Title I also includes state exchange
requirements.
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© 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED.
Whistleblower Protections Favor
Employees
• Burden of proof under Section 1558 favors employees.
• Employee must show that the complainant’s activity was
a contributing factor to the employer’s adverse action.
• Employees must file a complaint with OSHA within 180
days or the retaliatory action.
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Protections for Patient Abuse
• Section 6703(b)(3) of PPACA requires that long term
care facilities receiving more than $10,000 in federal
funding must provide notification of reporting obligations.
• Notification should inform employees, etc., that they
must report to Dept of Health and Human Services any
reasonable suspicion of a crime against a resident or
person receiving care.
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Who Must Be Notified?
• Officers
• Managers
• Employees
• Contractors
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Transparency Reports
• Owners of nursing
facilities are affected
by Subtitle B of Title
VI, entitled Nursing
Home Transparency
and Improvement.
• At the federal level
more disclosure
about ownership
and governance will
be required.
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What Must be Disclosed?
• Section 6101 requires disclosure of the following “disclosable
parties.”
– Identity of members of the governing body, their title and period
of service
– Identity of officers, directors, partners trustees, etc., their titles,
and period of service
– Managing employees
• Any “additional disclosable party” must disclose its “organizational
structure” and its relationship to the facility and each other.
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Who Are “Additional Disclosable
Parties?”
• Each person or entity that exercised operational,
financial or managerial control
• Each person or entity that provides financial or cash
management
• Entities that lease or sublease real property to the facility
• Entities that own more than 5% of the value of the real
property
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© 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED.
Additional Disclosable Parties
• Persons or entities that provide
management or administrative
services, management of clinical
consulting services
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© 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED.
Definition of “Organizational
Structure”
• For corporation, officers, directors and shareholders who own more
than 5%
• For limited liability companies, members and managers, including %
ownership
• For general partnerships, the partners
• For limited partnerships, general partners and limited partners with
more than 10% interest
• For a trust, the trustees
• For individuals, contact information
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Screening Procedures
• HHS must establish procedures for screening all
providers for level of risk for fraud, waste and abuse.
• Providers must also pay $500 if selected for screening.
• Screening will include licensure and background checks,
fingerprinting, on-site visits and database checks.
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Possible Effects of Additional
Reporting Requirements
• Longer time to enroll in programs
• Reluctant disclosable entities
• Public access to ownership information may affect
litigation
• False certifications may result in liability under federal
False Claims Act
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Standard Complaint Process for
Nursing Facility Residents
• Section 6105 amends the
Social Security Act by requiring
states to make available to
residents of nursing facilities
standard federal complaint
forms.
• This section also requires
states to establish a complaint
resolution process to track
complaints and prevent
retaliation.
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© 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED.
PPACA and Other HR Laws
PPACA may intersect with other HR related laws and
requirements such as:
• Americans with Disabilities Act Amendment Act
(ADAAA)--expanded coverage of dependents and those
with preexisting conditions may lead to more claims of
discrimination
• COBRA issues----does PPACA eliminate or expand
COBRA coverage for employees or dependents?
• Discrimination issues---phase-in of mandatory coverage
may lead to discrimination claims based on required
future coverage
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© 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED.
What You Know May Hurt You…
• Greater coverage can result in more health related
information for employers to handle, secure and dispose
• Access to more information may result in inadvertent
violations of HIPAA, Genetic Information
Nondiscrimination Act (GINA)
• As always, watch out for general discrimination issues,
including pregnancy, gender, genetic, ethnic and age
discrimination
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© 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED.
How Human Resources
Professionals Can Prepare
• Create policies for lactation and other breaks
• Work with health insurance providers on immediate
changes required for plans
• Create notification language and calendar deadlines for
employee notification requirements
• Keep updated on regulations as issued
• Train supervisors and others on whistleblower issues
• Implement system and form for nursing home notification
and transparency requirements
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© 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED.
Questions
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© 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED.