HR Legislative Update

With the nation's economy remaining the pivotal issue in upcoming elections, it's projected that congressional action on most workforce-related matters will remain pending during the remainder of 2012. That said, according to reporting by CUPA-HR, here are some recent changes set to take effect that will impact higher education employers.

Department of Health and Human Services (HHS)

Final rule on student health insurance coverage. On March 21, 2012, HHS published in the Federal Register the final rule on student health insurance coverage under the Patient Protection and Affordable Care Act and the Public Health Service Act. The rule finalizes that student health plans will have the same consumer protections as individual market insurance with some adjustments. The rule includes a phase-in period for providers to institute new higher annual limits, with a cap completely eliminated after the 2013-14 academic year, and makes plans subject to the medical loss ratio beginning in 2013, starting at 70 percent in 2013 and moving to at least 80 percent by 2014. The rule does not include self-funded student health plans. A grace period of one year on the new contraception coverage requirement was included for student health plans for nonprofit religious institutions. The rule took effect April 20. For additional detail, see also the "Final Rules Issued on Student Health Insurance" from NACUBO.

Health insurance exchange regulations and preventive services advance notice of proposed rulemaking. On March 12, 2012, HHS released long-awaited final regulations on health insurance exchanges that will finalize how the states set up their individual insurance exchanges. Beginning in 2014, consumers and small businesses will be able to use these marketplaces to buy private health insurance plans. Within the 600 pages of the final rule, HHS emphasizes the flexibility the rule will give to states, even allowing states that have been slow to implement a state exchange, or are avoiding implementation completely, to create hybrid exchanges where the backup federal exchange can fill in the gaps in the exchange they are creating. Through the exchanges, states will certify "qualified health plans;" offer a Web site and toll-free hotlines to help consumers compare plans and enroll; and determine consumers' eligibility for enrollment. On March 21, 2012, HHS also published an advance notice of proposed rulemaking on its new and highly controversial preventive services policy that President Obama and HHS Secretary Kathleen Sebelius announced on February 10, 2012. According to the HHS release, the proposal will "provide women with access to recommended preventive services including contraceptives without cost sharing, while ensuring that nonprofit religious organizations are not forced to pay for, provide, or facilitate the provision of any contraceptive service they object to on religious grounds." Several religious organizations disagree with the HHS characterization of the rule and have indicated opposition. There will be a 90-day public comment period, ending June 19. HHS also plans to hold public listening sessions.

Department of Labor (DOL)

ERISA fee disclosure rules. As part of its fee transparency initiative, the DOL has issued two new regulations that impact Employee Retirement Income Security Act (ERISA) plan sponsors and service providers. These new regulations, which take effect July 1, 2012, require that participants and plan sponsors be given information they need to make informed decisions concerning plan investments and services, including information about fees and expenses. CUPA-HR hosted a free webinar May 1, 2012, on "The New ERISA Fee Disclosure Rules-What Plan Sponsors and HR Need to Know and Do" detailing what employers should be receiving from service providers, what employers need to provide to participants and to employees who are eligible but not participating, and the consequences of failing to comply.

Equal Employment Opportunity Commission (EEOC)

New guidance on criminal background checks. On April 25, 2012, the EEOC released new guidance on lawful use of arrest and conviction records (criminal background checks) for employment purposes. (See "EEOC Enforcement Guidance") The EEOC's long-standing position has been that reliance on criminal history in making employment decisions may have disproportionate negative impact based on race and national origin in violation of Title VII of the Civil Rights Act of 1964. The EEOC states in a related press release that the guidance updates relevant data, consolidates previous EEOC policy statements on this issue into a single document, and illustrates how Title VII applies to various scenarios that an employer might encounter when considering the arrest or conviction history of a current or prospective employee. Among other topics, the guidance discusses:

• How an employer's use of an individual's criminal history in making employment decisions could violate the prohibition against employment discrimination under Title VII.
• Federal court decisions analyzing Title VII as applied to criminal record exclusions.
• The differences between the treatment of arrest records and conviction records.
• The applicability of disparate treatment and disparate impact analysis under Title VII.
• Compliance with other federal laws and/or regulations that restrict and/or prohibit the employment of individuals with certain criminal records.
• Best practices for employers.

Final rule on ADEA changes. On March 30, 2012, the EEOC issued a final rule amending the Age Discrimination in Employment Act (ADEA) regulations on the Reasonable Factors Other Than Age (RFOA) defense under the ADEA concerning claims of disparate impact. This final rule takes effect April 30, 2012. The regulations will raise the standard for defending disparate impact for age potentially to a level similar to Title VII for race or sex. Under this rule, an employer needing to downsize will need to do so cautiously and pay particular attention to the impact of neutral policies on older workers. The rule explains the meaning of the RFOA defense to employees, employers, and courts, and makes EEOC's regulations consistent with Supreme Court case law. The rule applies to private employers with 20 or more employees, state and local government employers, employment agencies, and labor organizations. The final rule strikes the appropriate balance between protecting older workers from discriminatory, unreasonable business decisions and preserving an employer's ability to make reasonable business decisions.

Guidance on employing veterans. On February 28, 2012, the EEOC also issued some revised guidance documents on employment of veterans with disabilities and the Americans With Disabilities Act (ADA). One is a guide for employers and one is a guide for wounded veterans. The guides were updated from original versions published in February 2008 before the amendments to the ADA became law. The new guidance explains how the rights of veterans with disabilities are different in the ADA and the Uniformed Services Employment and Reemployment Rights Act and provides information on how reasonable accommodations can be made to returning veterans, as well as contact information for organizations that can help with those adjustments.

Legislative Watch

While minimal legislative activity is projected in upcoming months, CUPA-HR is also monitoring the following items:

• Public Safety Employer Employee Cooperation Act (PSEECA). This act requires public employers to recognize and bargain with police, firefighter, and EMT unions.
• Paycheck Fairness Act (PFA). This would amend the Equal Pay Act and allow for unlimited punitive and compensatory damages, even for unintended pay disparity.
• Employment Nondiscrimination Act (ENDA). This act prohibits discrimination in employment on the basis of a person's actual or perceived sexual orientation or gender identity.  It is unlikely that Congress will try to pass it this year, though there is no opposition from the employment community.
• Public Employee Pension Transparency Act. Due to growing concern about state budgets, this bill would establish federal accounting and disclosure standards for state and local public pension plans. It would prohibit any federal bailouts and also would prohibit state and local governments from issuing tax-exempt bonds if they do not comply. Background: Congress is seeking to establish new accounting and disclosure requirements regarding pensions, but this is opposed by several public groups because it creates a worrisome precedent regarding federal regulation of state government and taxation of their bonds. The one-size-fits-all approach also interferes with states' recovery efforts. Considerable dialogue is anticipated on this issue, and many observers contend that the federal government's efforts may un-do the work already accomplished by states.
• Legal Workforce Act. This would streamline the current I-9 process and require employers to run new hires through the E-Verify employment verification system. Employers support this bill in large part. There is a safe harbor for good faith compliance, and it provides for preemption of state and local laws. The bill would be phased in over two years. The problem is that it would require public employers and federal contractors to run existing employees through the E-Verify system within six months of enactment—an issue, since the timing to get Social Security numbers for foreign nationals can be a lengthy process.

Nancy Maguire is a project management specialist for NACUBO. E-mail: nancy.maguire@nacubo.org