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EEOC Weighs in on the Impact of the ADA and GINA On Employer-Sponsored Wellness Programs

Regulations Compliance Puzzle PiecesOn Monday, May 16 the Equal Employment Opportunity Commission (“EEOC”) issued two final regulations providing guidance on how employer-sponsored wellness programs work with the general antidiscrimination requirements of Title I of the Americans with Disabilities Act (“ADA”) and Title II of the Genetic Information Nondiscrimination Act of 2008 (“GINA”). These rules were published in the May 17th Federal Register.

This blog post is designed to provide background information on wellness programs and the antidiscrimination protections of the ADA and GINA, to highlight the final regulations and note two action items relating to smoking cessation programs and tiered health plan benefit or cost-sharing structures.

What is a Wellness Program?

The term “wellness program” generally refers to programs intended to promote health and disease prevention and

Changes to the Fair Labor Standards Act May Affect Employee Benefits

200270748-001The United States Department of Labor recently issued a Final Rule updating the Fair Labor Standards Act (the “FLSA”) that includes an increase in the standard salary level and that will take effect December 1, 2016. Under the FLSA, certain employees may be exempted from overtime pay for working more than 40 hours per week if their job duties primarily involve executive, administrative, or professional duties and their salary is equal to or greater than the required salary levels.

Among other changes made by the Final Rule, the threshold salary levels have been dramatically increased and will continue to be automatically updated every three years in the future. Prior to the Final Rule, the standard salary level was $455/week or $23,660/year.  As of December 1, 2016, the standard salary

New IRS Memo Confirms Tax Treatment of Wellness Programs & Incentives

Wellness Word CloudIn a recently released IRS Chief Counsel Memo, the IRS confirmed that wellness incentives are generally taxable. The memo also, indirectly, confirmed the tax treatment of wellness programs more generally.

As to the incentives, the IRS held that a cash payment to employees for participating in a wellness program is taxable to the employees. The memo did not deal with incentives paid to dependents, but we presume those would be taxable to the applicable employee as well.  The IRS did say that certain in-kind fringe benefits (like a tee shirt) might be so de minimis as to be exempt as fringe benefits.  Confirming the IRS’s long-standing position, however, cash does not qualify for this exception and is taxable.

This tax treatment also applies to premium reimbursements if

Exceptional Plan Governance: Beat Back the Coming Litigation Onslaught

Gavel and ScalesIt was bound to happen. For several years, the plaintiffs’ bar has sued fiduciaries of large 401(k) plans asserting breach of their duties under ERISA by failing to exercise requisite prudence in permitting excessive administrative and investment fees.  It may be that the plaintiffs’ bar has come close to exhausting the low-hanging lineup of potential large plan defendants, and, if a recent case is any indication, the small and medium-sized plan fiduciaries are the next target.  See, Damberg v. LaMettry’s Collision Inc., et al. The allegations in this class action case parallel those that have been successful in the large plan fee dispute cases. Now that the lid is off, small and medium sized plan fiduciaries should be forewarned of the need to employ solid plan governance

EEOC Takes Aim at Erroneous Application of ADA “Safe Harbor” to Wellness Programs

Challenges AheadIn its preamble to the final regulations under the Americans with Disabilities Act (“ADA”) published May 17, 2016, which will be the topic of an upcoming blog post, the Equal Employment Opportunity Commission (“EEOC”) once again reiterated its disagreement with the district courts’ application of the bona fide plan safe harbor to the wellness programs in Seff v. Broward County and EEOC v. Flambeau, Inc. (discussed in a prior post).

Seff and Flambeau

In both Seff and Flambeau, plaintiffs brought suit arguing that the wellness programs violated the ADA’s prohibition on mandatory medical examinations and inquiries. Both courts disagreed and held that the wellness programs fell under the safe harbor provision, which in pertinent part state that an insurer or any entity that

The DOL’s New FMLA Poster – Does It Impact Your FMLA Policy?

The DOL’s New FMLA Poster – Does It Impact Your FMLA Policy?

June 1, 2016

Authored by: Christy Phanthavong and Chris Rylands

By now, you’re likely aware (and if you’re not, you should be) that, in April, the U.S. Department of Labor (“DOL”)issued a new “Employee Rights Under The Family And Medical Leave Act” poster, to replace the prior poster on this subject.

The DOL has made clear that the old poster (revised Feb. 2013) is still sufficient – until further notice – to meet the posting requirement under the FMLA regulations. Thus, you’ve probably already given some thought as to whether and when to proceed with updating your posters.

As you consider this step, however, have you also considered whether the new poster impacts your policy?

The FMLA regulations provide that, if an FMLA-covered employer has any FMLA-eligible employees, and if the employer has a written policy on the subject of leave/benefits, then the employer must ensure that its policy contains the same information that is in

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