HR Alerts For May 2017
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Healthcare Reform Update
The House of Representatives took the first affirmative step towards repeal and replacement of the Affordable Care Act (ACA) today. After a failed attempt to pass legislation earlier this year, the House gathered the needed votes to pass the American Health Care Act (AHCA) by a narrow 217-213 margin on May 4. However, given that this is only the first preliminary step in a longer process, and given that the AHCA would probably be substantially revised before final implementation, employers should take no immediate actions in response to this development.
Summary Of House Legislation
The main focus of the House’s legislation is on the individual insurance market, but some of these changes would impact employer plans if finalized. The following are key changes that would take effect if the House version of the AHCA went into effect:
- The current prohibition on pre-existing condition exclusions would be able to be eliminated in states that request a waiver;
- Medicaid expansion would be repealed;
- Income-based exchange subsidies would be replaced with age-based tax credits;
- The difference between insurance costs for a younger person and an older person could increase;
- Essential health benefits in insurance plans could be eliminated if a state requests a waiver; and
- The individual mandate penalty would be eliminated.
While these items would not directly change the coverage offered by an employer’s group health plan, they could impact the market in which many employers shop for health insurance coverage.
The notable change for employers would be the repeal of the employer mandate, which requires employers to choose either offering coverage or face the risk of paying a penalty. The elimination of the employer mandate would allow employers to be more flexible when deciding on which employees would be offered coverage. In addition, if this version of the ACHA passes, Health Savings Accounts and Flexible Spending Accounts limits would increase.
At this point, the House bill must be sent to the Senate for consideration. This process will likely lead to revisions by the Senate, and if the ACHA emerges from that legislative chamber successfully, a second vote by the House of Representatives would be required for passage.
Because the future of a Senate vote is uncertain, and because we cannot yet predict what the final version might look like, employers should make no changes to their current compliance strategy until legislation has passed both houses of Congress and is signed by the president.
Sexual Orientation Protected in Employment, According to Seventh Circuit Court of Appeal
On April 4th, the Seventh Circuit Court of Appeals became the first federal Appellate Court to rule that under Title VII of the Civil Rights Act of 1964, sex includes sexual orientation. The Court’s ruling creates law only in Indiana, Illinois, and Wisconsin.
Every other Circuit Court of Appeals, except for the Ninth Circuit, has ruled that the term sex in Title VII does not include sexual orientation; these rulings were issued between 1979 and 2012. Federal Courts of Appeal often try to align their rulings with the decisions of the other Circuits. However, the Seventh Circuit decided that it was time to take a fresh look at this question in light of the Supreme Court’s 2015 decision in Obergefell (legalizing same-sex marriage) and the general shift in societal norms.
The fact that the federal Courts of Appeal have issued conflicting decisions means that the question is more likely to be picked up by the Supreme Court should other litigants appeal their cases to the highest level. The defendants in this case, Hively v. Ivy Tech Community College, have said they will not appeal.
Illinois and Wisconsin already have state laws that create employment protections based on sexual orientation, so there are no action items for employers in those states. Employers in Indiana, however, should ensure that their policies and practices do not allow for discrimination based on sexual orientation.
Federal Appeals Court Rules in Favor of Employee Terminated for Obscene Facebook Posts About His Employer
In late April, a federal Appeals Court once again ruled in favor of an employee who fired off a string of obscenities aimed at his employer on Facebook. The Court found that the employee’s termination was wrongful because his rant constituted “concerted activity” under the National Labor Relations Act. This has been a murky and changing area of law, but the Court’s latest decision sheds some light on it.
It has always been the case that griping about low pay, bad hours, or mean managers in the physical presence of a co-worker would qualify as “concerted activity” and be protected by the NLRA. (Reminder: the NLRA protects employees in both unionized and non-unionized environments.) However, the extent to which these protections apply to online or social media has been a moving legal target.
Because of the ambiguity, and the overall employee-friendliness of the NLRB over the last several years, we have been advising clients to be extremely careful about disciplining employees for anything work-related they say on social media.
The Court hinged its decision on the following:
- The subject matter of the post explicitly protested mistreatment by management, which the employee felt he had experienced just before posting, and called for unionization. (Do not assume discussion of unions is essential for protection.)
- The company regularly tolerated profanity in the workplace, and management used similarly foul language when speaking to employees. No one had ever been sanctioned, much less fired, for profanity.
- The location of the employee’s comments – an online forum not in the presence of customers, where he was “friends” with co-workers – is a key medium of communication among employees and a now-common tool for organization.
Employers may find it useful to consider the same issues when determining how, or if, to respond to an employee post. Was the post a response to events or treatment in the workplace? Was the language and tone of the post in line with the language and tone used by employees and managers at work? Was it likely that the post would reach other employees?
Perhaps most importantly, the third consideration of the Court – that social media is now a common tool for workplace organizing – drives home the point that posts like this are inevitable. Employers should expect that social media spaces will receive the same level of protection as conversations around the water cooler, union leaflets, and speech on the picket line.