October is National Cybersecurity Awareness month, and the HHS Office for Civil Rights (OCR) has provided a timely reminder for HIPAA covered entities and business associates to have a written incident response plan! To learn why another policy is needed, what an incident response plan needs to include, and the reporting obligations, read the Workplace Privacy, Data Management & Security Report here.

Amendments to the Illinois Nurse Agency Licensing Act (HB 4666) aim to promote transparency and protections for healthcare workers, but, in practice, they make it more difficult for nurse staffing agencies to retain employees.

Under the new law, staffing agencies doing business in Illinois can no longer enter into covenants not-to-compete with nurses or certified nursing assistants. Similarly, nurse staffing agencies are prohibited from requiring any “buy-out” fee, placement fee, or other form of compensation if the nurse is hired by a healthcare facility. The law applies only to agreements entered into after the law’s effective date of July 1, 2022, so prior existing agreements need not be modified. Read more.

At the start of June 2022, the City of Los Angeles approved an ordinance to raise the minimum wage for certain healthcare workers at privately-owned healthcare facilities within the city. Since June, more cities have passed nearly identical ordinances. There is also a push for a California statewide healthcare minimum wage. However, no formal bill has been proposed and the current legislative session ends on August 31st. For more information, see this post at our California Workplace Law Blog.

While people may be familiar with many of the rules relating to the admission of service animals into public venues, do the same rules apply when a patient or visitor seeks to enter a hospital, medical office, or other healthcare facility accompanied by a service animal?

Most healthcare facilities, particularly hospitals, have “no pets” policies that forbid patients and visitors from bringing animals into the facility. Given the requisite sterile environment at healthcare facilities and the ongoing treatment of patients with varying degrees of medical ailments, one might easily presume that a different standard and different requirements apply to the admission of service animals. Generally speaking, however, a hospital must allow disabled patients and visitors to be accompanied by their service animals just like other places of public accommodation. This includes allowing service animals access to patient rooms and anywhere else in the facility where the public and patients are allowed to go. Service animals must even be permitted to accompany their handlers in an ambulance unless it would interfere with the ability to treat the patient effectively. Notably, a healthcare facility cannot exclude service animal access on the grounds that staff can provide the same services. If a patient is admitted to a hospital but unable to care for their service animal, the hospital is required to permit a family member or friend to come to the hospital to provide care for the service animal so that the handler and service animal are not separated. Under limited circumstances, the healthcare facility can place the service animal in a boarding facility until the patient is released, but must first give the patient the opportunity to make alternate arrangements for the service animal’s care.

Even within this framework, there are limits on what types of animals must be permitted. For public access purposes, a service animal is limited to a dog or miniature horse that is trained to perform a task or take a specific action when needed to assist the disabled individual. A person who has epilepsy, for example, may have a dog that is trained to alert at the onset of a seizure and to keep its handler safe during the seizure. Emotional support, therapy, comfort, or companion animals are not considered to be service animals under the ADA, unless they have been trained to perform a specific job or task for a disabled person. The handler cannot be required to provide any sort of registration or certification documentation to establish that the animal is a “service animal,” but the healthcare facility may ask the handler two questions:

  1. Is the dog (or miniature horse) a service animal required because of a disability?
  2. What work or task has the animal been trained to perform?

Some state or local laws and ordinances may extend coverage for public access purposes to emotional support animals under certain circumstances. Those laws should be considered before denying access to healthcare facilities by patients and visitors with service animals.

Please contact the Jackson Lewis attorney with whom you usually work or a member of our Healthcare or Disability, Leave and Health Management groups if you have questions or need additional guidance.

The onset of the COVID-19 pandemic was sudden and devastating, and even as the threat levels subside, the fallout endures. To be sure, the healthcare industry has long been on the forefront of battling the threat to public health posed by COVID-19. While there has been a broad and varied governmental response to the multitude of concerns arising out of COVID-19, a significant component of that has been the enactment and enforcement of laws and rules governing workplace safety—and nowhere more so than in healthcare facilities.

Of course, the healthcare environment has naturally been subjected to the most stringent requirements, including mandatory vaccines and personal protective equipment (PPE). The safety-driven concerns in turn served as a catalyst for legislative and other governmental action to institute protections from retaliation to those who expose unsafe practices, i.e., “whistleblowers.”

At the federal level, OSHA has not only stepped-up enforcement of workplace safety concerns, but it has taken a prominent role in protecting workers against retaliation. In fact, OSHA recently released guidelines on how to file a Section 11(c) complaint for retaliation against employees who report COVID cases or health concerns to their employers. There has been a substantial increase in the number of whistleblower complaints to OSHA arising out of alleged pandemic safety-related violations. Not to be left out, the U.S. Attorney has set up its own hotline specifically for COVID-related claims.

In the context of state law, some states had existing whistleblower protections for healthcare workers reporting certain health or safety violations, including civil remedies. Many cases are working their way through the courts. One example is in California, where a court held that a former healthcare employee could proceed with a claim after she objected to being assigned to assess patients entering a senior living center when she had been exposed to COVID-19 (and was later terminated). Clark v. Calson Mgmt., LLC, Case No. BCV-20-101901 (Cal. Super. Ct. Sept. 8, 2020).

Despite existing whistleblower protections and increased OSHA federal regulatory enforcement, legislative efforts to enact protections at the state level have gained momentum. Indeed, there has been a particular focus on healthcare. Last year, New York Labor Law Sec. 741 was amended and broadened to provide further protections for health care workers who speak out against what they believe to be “improper quality of workplace safety” for employees or patient care to the media or within their company. Colorado passed a similar law. Various other states, including Maine, Arizona, Minnesota, Washington, and others are contemplating similar legislation. Under the New York statutory scheme, a whistleblower must initially bring the unsafe activity, policy or practice to a supervisor’s attention and allow a reasonable opportunity for correction. But, if retaliation ensues, violations can be costly.

As protections proliferate and enforcement intensifies, it is more important than ever for healthcare employers to ensure that proper safety protocols are followed, reports of unsafe conditions are taken seriously, and key personnel are highly trained. If you need more information or have questions, please contact the Jackson Lewis attorney with whom you regularly work, or any member of our Healthcare group.

The American Society for Health Care Human Resources Administration (ASHHRA) recently held an incredibly useful conference bringing together healthcare human resources leaders from around the country. Here are four key takeaways from that gathering of thought leaders.

  1. Employee Engagement Impacts Patient Care and Revenue

While this may seem self-evident to those on the front lines, there also is data to back this up. At a time when revenue is increasingly tied to patient satisfaction and quality metrics, strong employee engagement is not only the right thing to do, it is a financial imperative. Take for example one speaker’s reference to a Press Ganey study, which he explained showed a 1 percent change in employee morale equals a 2 percent change in the patient experience. Consider this connection between patient experience and revenue: a Harvard Business Review study found “a five-point increase in hospital rating is associated with a 1 percent increase in profit margin.” HR leaders are well-positioned to make the case for strong employee engagement programs.

  1. Innovative Recruiting and Staffing Alternatives are a Must Have

Speakers at the conference discussed many of the recruiting tools covered in this recent Healthcare Workplace Update post.  There were two other areas of interest on this front. First, the increasing use of predictive data analytics in recruiting. This is an investment that may yield significant dividends by reducing turnover or at least making it more predictable. Another topic was creating an internal staffing agency. This approach can reduce agency costs while retaining nurses and other professionals by meeting their desire to travel and work at different facilities.

  1. Plan for More Active Regulators

Speakers addressed the likelihood that regulators would be more active in the healthcare field than they have been in recent years. With new Equal Employment Opportunity Commission (EEOC) commissioners appointed by President Biden, the EEOC likely will publish more guidance on anti-discrimination laws and focus more on alleged systemic violations of those laws. On the accreditation front, The Joint Commission and other accreditors are adopting new survey approaches to measure compliance with the CMS COVID-19 vaccine rule. Finally, OSHA is in the midst of a “highly focused” inspection initiative aimed at hospitals, skilled nursing facilities, and assisted living facilities that treat or handle COVID-19 patients and have been previously cited or inspected for COVID-19 concerns that will continue until June 9. HR leaders can take a leading role in helping their organizations prepare for these new regulatory challenges.

  1. If You Don’t Engage Employees, Labor Unions Will

While union membership is at a record low in the U.S., several factors make today’s workplace fertile ground for union organizing. First, according to a study by McKinsey, “the top three factors employees cited as reasons for quitting were that they didn’t feel valued by their organizations (54 percent) or their managers (52 percent) or because they didn’t feel a sense of belonging at work (51 percent).” Second, according to a Gallup poll approval of labor unions is the highest it has been since 1965, with 68% having a favorable view of unions. That figure jumps to 77 percent among people ages 18-34 and 70 percent for college graduates. All these factors make clear that healthcare employers who want to be union-free need to invest in creating a culture where employees feel valued by their organization and their manager. HR leaders can play an integral role in establishing this kind of workplace culture.

Members of the Jackson Lewis Healthcare industry group work with clients on all these issues on a daily basis. Please contact the Jackson Lewis attorney you work with or one of our industry group members if you have any questions about these key takeaways.

Healthcare organizations across the United States are facing an unprecedented labor shortage. Many healthcare employers are moving quickly to implement creative solutions that will attract and retain a qualified workforce. Kaiser Health News reports that “after the pressure cooker of the past two-plus years led to staff turnover and a rash of early retirements, hospitals nationwide are focused on recruiting full-time nurses.”

While filling an ever-growing labor deficiency is a priority for many organizations, it is crucial to consider the legal implications of incentives and ensure they are designed and implemented in a compliant manner. As indicated in a recent report by Nurse.com, here are five prevalent employee incentives in healthcare, along with areas of employment law compliance that are sometimes overlooked.

  1. Loan Repayment and Tuition Advancement.
    Consider: Is the repayment amount or tuition advancement taxable income to the employee? Employers may implement Educational Assistance Programs that allow for tax-free payments, but there are several specific requirements to qualify.
  2. Bonuses.
    Consider: Does the bonus need to be included in an employee’s regular rate of pay for the purpose of overtime calculation under the Fair Labor Standards Act (FLSA)? Most bonuses must be included. Discretionary bonuses may be excluded, but there are specific statutory requirements. Examples of bonuses that may be excluded if they meet the statutory requirements include: bonuses for overcoming a challenging situation, bonuses for extraordinary effort, employee-of-the-month bonuses, and referral bonuses.
  3. Remote Work.
    Consider: Employees who are not exempt from overtime payment under the FLSA must track and report all time worked – including those quick late-night emails. In addition, employers are often required to comply with employment laws in that state where a remote worker resides if different than the state where the employer is located, and may be subject to other requirements as a result of doing business in that state.
  4. Independent Contractors.
    Consider: Does the relationship meet the current independent contractor test under the FLSA? The Biden Administration withdrew a narrower, more employer-friendly independent contractor analysis and has signaled intent to implement the “ABC test” currently in place in California. Also, keep in mind that many states have separate independent contractor tests.
  5. Focus on the Pipeline.
    Consider: Scholarship and volunteer programs can be a great way to increase a qualified workforce. These programs can also be designed with a goal of increasing diversity. State laws in this area are ever-changing and it is helpful to work with counsel on compliant program structure.

Please contact the Jackson Lewis attorney with whom you usually work or a member of our Healthcare group who can provide additional best practices and resources as we navigate these challenges together.

The Employee Retirement Income Security Act of 1974 (“ERISA”) aims to balance the dual policies of (1) ensuring fair and prompt enforcement of rights under employee benefit plans, and (2) encouraging the creation of such plans. To strike this balance, ERISA pairs comprehensive rules regarding fiduciary responsibility with federal causes of action that allow plan participants and beneficiaries to recover benefits due, enforce ERISA’s mandates, obtain injunctive relief, and, where applicable, obtain attorney’s fees. At the same time, to protect employers and plan sponsors from operating under a patchwork of potentially conflicting state and local regulations, ERISA promotes uniformity in benefits administration by preempting “any and all state laws insofar as they may now or hereafter relate to” any ERISA benefit plan. 29 U.S.C. § 1144(a).

The Supreme Court is currently considering a petition for certiorari that addresses the application of ERISA preemption to local “play-or-pay” laws. Ostensibly, these location-specific laws are intended to improve low-wage employee access to affordable health coverage by requiring large employers to make enhanced healthcare expenditures on behalf of such employees who reside in that location. To evade ERISA preemption, these laws typically provide that, instead of altering their existing ERISA plans to accommodate the enhanced benefits, employers can simply cut a check in the same amount directly to their employees, or in some cases the local government.

Seattle passed such a law in September 2019. Seattle Ordinance SMC 14.28 (“Ordinance”) mandates that large employers in the hotel sector operating within the City make monthly healthcare payments on behalf of their covered local employees. Payments increase depending on whether the employee is single or has a spouse and/or dependents. Employers who fail to comply with the Ordinance are subject to fines, penalties, and other damages. Employers may comply by creating new ERISA plans specifically for the covered employees, increasing contributions for their employees to existing ERISA plans, or making payments directly to the covered employees.

The ERISA Industry Committee, a nonprofit trade association, brought suit alleging that ERISA preempted the Ordinance because it “relates to” an ERISA benefit plan. The District Court granted the City’s motion to dismiss, holding that ERISA does not preempt the Ordinance because it offers employers a compliance option (i.e., the direct cash payments to employees) that does not require creating a new ERISA plan or altering an existing ERISA plan. ERISA Industry Committee v. City of Seattle, 2020 U.S. Dist. LEXIS 81750 (W.D. Wash. May 8, 2020). In an unpublished opinion, the Ninth Circuit affirmed. 840 F. A’ppx. 248 (2021).

The Committee petitioned for certiorari to the United States Supreme Court, arguing that the Ninth Circuit’s decision deepened an existing split with other courts of appeals, which have held that even a direct payment option interferes with ERISA plan administration because it requires employers to consistently monitor state and local minimum spending requirements and adjust their healthcare expenditures.

Large employers have a vested interest in the Supreme Court granting certiorari and reversing the Ninth Circuit decision. Even though local play-or-pay laws may serve the salutary purpose of ensuring good benefits for local employees, large employers maintain that such purpose cannot trump the overriding federal concern that nationwide employers be able to design benefits that work for their nationwide workforce. ERISA already imposes significant obligations on plan sponsors and fiduciaries when it comes to benefits administration, and it is important that those employers be able to administer their plans uniformly pursuant to ERISA.

The direct-payment option does not make play-or-pay laws such as the Ordinance any less intrusive upon ERISA’s domain. As the Committee argued in the proceedings before the district and appeals courts, direct payments are “financially more onerous and therefore not a realistic and legitimate alternative” to altering an employer’s current coverage to address covered employees. This effectively compels employers to alter their current coverage to meet the requirements of whatever local play-or-pay laws may be in effect in every jurisdiction in which they operate. Such tiptoeing through administrative raindrops of multiple (and potentially conflicting) local regulations – and the additional costs and complications associated with such maneuvering – is precisely what ERISA preemption is intended to eliminate.

If you need more information or have questions, please contact the Jackson Lewis attorney with whom you regularly work, or any member of our ERISA team.

In furtherance of the Biden Administration’s January 28, 2021, Executive Order 14009 and April 5, 2022, Executive Order 14070 to protect and strengthen the ACA, the Treasury Department and IRS published a proposed rule on April 7, 2022, advancing an alternative interpretation of Internal Revenue Code Section 36B. Employers can breathe a sigh of relief as the proposed changes do not alter the Employer Shared Responsibility Payment (ACA penalty) construct. Employers can continue to offer affordable employee-only coverage and spousal or dependent coverage that is unaffordable. However, the potential indirect effects of the proposed regulations on employers are noteworthy. For more information, please see this post at our Benefits Law Advisor blog.