Figuring out the Rubrik’s Cube of compliance

Comedian George Carlin created a wonderful routine of kids trying to stump their priest. “Hey Father, can God make a rock so big that not even he can lift it? Gotcha there, Father.” That paradox always comes to mind when listening to experts trying to explain the Affordable Care Act (ACA) and employee leave management under state and federal law. That’s why Clark Insurance and KMA Human Resources Consulting co-sponsored a briefing for nearly 100 employers about the ACA and leave management.

“If A and C are present, but not B, then you need to do X but not Y…” You get the point; it’s a Rubrik’s Cube of compliance. But adhering to the myriad of rules and regulations governing employment is no game. Missing or misunderstanding the rules can result in penalties large and small.

Our briefing featured Chris Stevenson, an attorney with Drummond Woodsum and the tag-team of Tara Marquis and Lynne Gawtry of KMA Human Resources Consulting presented a PowerPoint of the challenges of employer obligations.

Stevenson’s remarks centered on the “pay-or-play” aspects of the ACA for employers with more than 50 full-time-equivalent (FTE) employees. Beginning this year, larger employers in Maine and across the country will face stiff financial penalties if they fail to offer affordable health plans to all their employees. It does not mean they have to pay for the insurance; affordable coverage simply needs to be offered under the company plan.

There also are conditions under which employers may be exempt when calculating FTEs such as short term or seasonal workers. Determining who’s in and who’s out can make a huge difference in your obligations.

In addition, in 2018 employees with “Cadillac” plans will be subject to taxes for the value above what is considered reasonable. For many unionized employees whose wages are lower in exchange for higher health benefits, the new tax will likely set off a round of spirited contract negotiations that either include higher wages to cover the taxes or cuts in benefits.

On the employee leave front, consider this real life scenario:

• 1.The employee is pregnant with first child – due February 14th .
• 2.She came to HR in August 2014 regarding a health condition due to her pregnancy – her doctor restricted her work to a reduced work schedule and admin work only, yet she was not an administrative employee.
• 3.She exhausted her mandated Maine Family Medical Leave Act (MeFMLA) time and her short term disability benefits in December 2014 prior to the birth of her child. Unfortunately for her, the employer didn’t offer long term disability insurance.
• 4.She then requested to work full time outside of her doctor’s restrictions.
• 5.Not anticipating a complicated pregnancy, she declined COBRA coverage before the baby was born and she had no other insurance options.

Through this confluence of circumstances, the employer needed to comply with MeFMLA, the Americans with Disabilities Act, and the Pregnancy Discrimination Act. It takes skill and know-how to navigate the rules for the benefit of both the employee and employer. For example, the employer can offer intermittent leave to accommodate an employee for a reduced work schedule, doctors appointments, physical therapy, etc. By simply tracking and accumulating hours over the course of the year, the employee and employer may be able to get what they need most – flexibility and productivity.

Marquis also stressed the importance of clear procedures. As soon as an employer-employee relationship is begun, the employer needs to

• Establish roles (employee, supervisor, HR)
• Define a point of contact for the employee (HR)
• Have a process that you follow and always be consistent
• Clarify and communicate the process to the employee such as
• Notification requirements to request leave
• Documentation (medical, military, jury summons, etc.)
• Approval/Denial of Leaves
• Pay/Benefit Administration
• Return to Work Process (restrictions/fitness for duty)

For employers and employees, it is essential to document, document, document. By creating an accurate paper trail, everyone concerned will have a record to which they can refer should a conflict arise.

Though few small businesses can afford to have a full-time human resources professional on staff, engaging folks like KMA can help employers to remain current and compliant with ever-changing regulations.

In addition, it is essential that your insurance program include employment practices liability insurance (EPLI). Perhaps the greatest benefit of EPLI is coverage for defense costs when a conflict arises. Often, the cost of legal representation can equal or exceed the actual damages or fines being sought. Gratefully, such disputes do not occur frequently but when they do, it is an expensive road to travel.