Your
Monthly Newsletter from Integrated Benefit Solutions
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May 2019
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Parts
of AHP Final Rule Are Struck Down by Federal Court
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On March 28, 2019, a federal judge ruled that
parts of the Trump administration’s 2018 final rule
on association health plans (AHPs) were invalid. The court
directed the Department of Labor (DOL) to reconsider how the remaining
provisions of the final rule are affected.
In its ruling, the court stated that the final rule was an
“end-run” around the ACA and that the DOL exceeded its authority
under ERISA.
The court specifically struck down two parts of the rule:
- The
provision defining “employer” to include associations of
disparate employers
- The
provision expanding membership in these associations to
include working owners without employees
Employers
and business owners without employees that have joined an AHP, or
are considering doing so, should review how their plans may be
affected by the court’s ruling. According to the DOL,
participants in AHPs affected by the court’s decision have a
right to benefits as provided by the plan or policy, although
these plans may change their rules going forward.
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DOL’s
Newly Proposed Overtime Rule: What’s Included
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The DOL recently issued a proposed rule
that would change the salary thresholds for the “white collar”
overtime exemptions under the Fair Labor Standards Act (FLSA).
Under the proposal, the minimum salary level for executive,
administrative and professional employees would increase from
$455 to $679 per week ($35,308 per year). This is significantly
lower than the $913 salary level set in the 2016 final rule
(which never took effect due to an injunction).
The proposal would allow employers to use nondiscretionary
bonuses and incentive payments (including commissions) that are
paid annually or more frequently to satisfy up to 10 percent of
the standard salary level. The minimum salary level for highly
compensated employees would also increase from $100,000 to
$147,414 per year (an increase from the 2016 final rule’s annual
threshold of $134,004).
What’s
next?
The proposed rule does not provide for any automatic adjustments
to the salary thresholds. Instead, the DOL is asking for public
comments on the proposed rule’s language for periodic review to
update the salary threshold. Any future update would continue to
require notice-and-comment rulemaking.
For more information on the proposed rule, see the DOL’s Notice of Proposed
Rulemaking: Overtime Update, which includes a fact sheet
and frequently asked
questions.
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DOJ Supports
Federal Court Ruling Invalidating the ACA
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On Dec. 14, 2018, a federal judge ruled in Texas v.
Azar that the entire Affordable Care Act (ACA) is
invalid due to the elimination of the individual mandate penalty
in 2019. In response, on March 25, 2019, the U.S. Department of
Justice (DOJ) filed a letter with
the 5th Circuit Court of Appeals agreeing with the lower court’s
ruling. This means that the DOJ believes the lower court’s ruling
should stand, and the ACA should be struck down as
unconstitutional.
Following the ruling, however, the federal judge issued a stay
and partial final judgment
in the case. As a result, the ACA will remain in place pending
appeal. The Department of Health and Human Services also confirmed
that it will continue administering and enforcing all aspects of
the ACA.
All briefs and responses in this appeal are due by mid-May 2019,
and oral arguments will be scheduled shortly thereafter.
Following oral arguments, a decision on the appeal will be
issued. However, many industry experts anticipate that the
Supreme Court will likely take up the case, which means that a
final decision will not be made until that time.
While these appeals are pending, all existing ACA provisions will
continue to be applicable and enforced. Employers and individuals
must continue to comply with all other applicable ACA
requirements. This ruling does not impact the 2019 Exchange
enrollment, the ACA’s employer shared responsibility (pay or
play) penalties and related reporting requirements, or any other
applicable ACA requirement.
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Tips for
Hiring New Graduates
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At colleges across the country, the Class of
2019 is graduating. Thinking of staffing up your business by
hiring a new college graduate? Learn some tips on how to prepare
these hires for your workplace by watching the video below.
For more hiring best practices, visit our Recruitment
& Hiring section.
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