Jeffery L. Thompson Constangy, Brooks & Smith, LLP Telephone: 478-621-2414

1. Georgia Association of Development Professionals Latest Labor & Employment Law Trends Jeffery L. Thompson Constangy, Brooks & Smith, LLP Telephone: 478-621-2414 E-mail: jthompson@constangy.com

2. Patient Protection and Affordable Care Act

3. Implementation Schedule

4. 2013 Changes • Plans must provide a participant notice regarding the upcoming exchanges (after Department of Labor issues guidance regarding the notice). • Health flexible spending account limit will be $2,500.

5. 2014 • An additional change scheduled for implementation is: • Establishment of state insurance exchanges.

6. 2014 and Beyond • Requirement for individuals to have health insurance or pay a tax penalty. • Individuals without “minimum essential coverage” would be required to pay a penalty tax of the greater of $695 per year, up to a maximum of three times that amount per family ($2,085), or 2.5% of household income • The enrollment in the health insurance marketplace exchanges is to begin Oct. 1, 2013, with insurance coverage taking effect on Jan. 1, 2014.

7. 2014 and Beyond • The penalty would be phased in accordingly: • $95 in 2014, or 1.0% of taxable income • $325 in 2015, or 2.0% of taxable income • $695 in 2016, or 2.5% of taxable income • Beginning after 2016, the penalty will be increased annually according to cost-of-living adjustment

8. 2014 and Beyond • Beginning in 2014, the maximum waiting period an employer can impose upon an employee is 90 days. • Beginning on January 1, 2014, plans and insurers will be required to eliminate restrictions on plan entry based on a pre-existing condition, and they will be prohibited from excluding coverage for a pre-existing condition.

9. On July 2, 2013, the Obama Administration announces one year delay of employer mandate

10. Coming up in 2015 • Employers with 50 or more full-time workers are required to offer affordable health insurance by 2015 or face fines of $2,000 to $3,000 per employee.

11. 2015 and Beyond • Employers are required to provide a qualifying grouphealth plan that meets the ACA requirements. • Provides minimum essential benefits (for fully insured small group plans, also provides all required “essential health benefits”), • Limits cost-sharing for such coverage, and • Provides either a bronze, silver, gold, or platinum level of coverage (meaning benefits that are the equivalent to (respectively) 60%, 70%, 80%, or 90% of the full benefits provided by the plan).

12. 2015 and Beyond “Essential health benefits” include (at this point): • Laboratory Services • Preventive and Wellness Services • Chronic Disease Management • Prescription Drugs • Pediatric Services, including oral and vision care • Ambulatory Patient Services • Emergency Services • Hospitalization • Maternity and Newborn Care • Mental Health and Substance Abuse Services • Behavioral Health Treatment

13. Issues - Viability • If enrolling in a health care plan is viewed as optional for U.S. citizens because of the low penalties, those who consider themselves healthy are less likely to enroll because it is not in their economic best interest. • Much of the law’s success depends on having young, healthy people sign up for insurance. • They have much lower health care expenses. • Their insurance premiums help offset the higher medical expenses of older, sick people in a health plan.

14. Issues - Conflict • State Exchanges • Few states have proceeded with their implementation activities. • Many states have not taken any action toward the establishment of a state health insurance exchange.

15. Issues - Enforcement • IRS Enforcement • Since the decision labeled the penalty a tax, it will be collected by the IRS. • The IRS may have few options for collection because: • Congress restricted the agency’s collection authority, • The IRS cannot file a tax lien against individuals who do not comply with the health insurance mandate, and • The IRS can only collect the money by withholding it from tax refunds or Social Security checks.

16. HIPAA PRIVACY REQUIREMENTS UPDATE

17. HIPAA Privacy Rule • The HIPAA Privacy Rule was originally effective April 14, 2003 with a one-year extension for certain "small plans". The HIPAA Privacy Rule regulates the use and disclosure of Protected Health Information (PHI) held by "covered entities“.

18. HIPAA Privacy Rule • In February of 2009, the Health Information Technology for Economic and Clinical Health Act (“HITECH”), which was contained in the American Recovery and Reinvestment Act (“ARRA”), modified The Privacy and Security Rules originally enacted in HIPAA.

19. HIPAA Privacy Rule • On January 25, 2013, HHS published the final rule that implements mandated changes to the HIPAA Privacy Rule set forth by HITECH. • It is effective March 26, 2013.

20. What Does This Mean To Me? • If you improperly request or disclose an individual’s protected health information, you could face significant monetary penalties and possible prison time.

21. Civil Penalties • Increased Tiered Penalties: • Tier 1: If a person is not aware of the violation (and would not have known with reasonable diligence), the penalty is $100 - $50,000 per violation, not to exceed $1,500,000 for all violations of the same requirement in the same calendar year. • These are violations in which the offender did not realize he or she violated HIPAA and would have handled the matter differently if he or she had.

22. Civil Penalties • Tier 2: If a violation is due to “reasonable cause” (but not willful neglect), the penalty is $1,000 - $50,000 per violation, not to exceed $1,500,000 for all violations of the same requirement in the same calendar year. • The final rule defined reasonable cause as an act or omission in which a covered entity or business associate knew, or by exercising reasonable diligence would have known, that the act or omission violated HIPAA but in which the covered entity or business associate did not act with willful neglect.

23. Civil Penalties • Tier 3: If violation is due to willful neglect and is corrected in 30 days, the penalty is $10,000 - $50,000 per violation, not to exceed $1,500,000 for all violations of the same requirement in the same calendar year. • Willful neglect means conscious, intentional failure or reckless indifference to the obligation to comply with the administrative simplification provision violated.

24. Civil Penalties • Tier 4: If a violation is due to willful neglect and is not corrected in 30 days, the penalty is at least $50,000/violation, not to exceed $1,500,000 for all violations of the same requirement in the same calendar year.

25. Civil Penalties • State AGs. State AGs are authorized to bring a civil action for HIPAA violations to enjoin violations and seek damages on behalf of residents. • Damages are calculated by multiplying the number of violations by $100. The penalty is not to exceed $25,000 for all violations of an identical requirement during a calendar year.

26. Civil Penalties • Court may award costs and reasonable attorneys’ fees to State. • State action may NOT be brought during pendency of Federal action. • Individual Compensation. Mechanism for individuals to recover a portion of HHS civil penalty or monetary settlements.

27. Criminal Penalties • Up to $50,000 fine and 1 year in prison for obtaining or disclosing PHI. • Up to $100,000 fine and up to 5 years in prison for obtaining PHI under “false pretenses”.

28. Criminal Penalties • Up to $250,000 fine and up to 10 years in prison for obtaining or disclosing PHI with the intent to sell, transfer or use for commercial advantage, personal gain, or malicious harm.

29. Increased Enforcement Mechanisms • Increased Audits. HHS will conduct periodic audits of covered entities and business associates, even if no complaint is filed. • Willful Neglect: • An audit is required if preliminary investigation of a complaint indicates willful neglect. • HHS is required to impose a penalty for violations due to willful neglect.

30. How Does HIPAA Impact Employment Medical Files? • Even though employment medical files are not subject to HIPAA, the files should be kept confidential subject to general privacy policies of the employer.

31. What Does This Mean To Me? • If you improperly request or disclose an individual’s protected health information, you could face significant monetary penalties and possible prison time.

32. Increased Enforcement Mechanisms • Increased Audits – HHS will conduct periodic audits of covered entities and business associates, even if no complaint is filed. • Willful Neglect – • An audit is required if preliminary investigation of a complaint indicates willful neglect. • HHS is required to improse a penalty for violations due to willful neglect.

33. What are the Authorization RequirementsD? • PHI may be used by covered entities for purposes of treatment, payment, and health care operations (“TPO”) without authorization. • PHI must be disclosed to the government in the case of a HIPAA investigation. • Otherwise, participant authorization is required.

34. What Must a Plan Do to Ensure Privacy? • Identify Business associates • HITECH expanded the definition of business associate • Business associates must report to the covered entity any breach of unsecured dPHI, as required by the HITECH security breach notification regulations.

35. What Must a Plan Do to Ensure Privacy? • Policies and procedures for participant complaints must be developed and communicated, and records must be maintained. • Retaliation for participant complaints is prohibited.

36. Motivation and Support

37. Let’s Start With You • Save Lives • Save Families • Save Finances • Build Hope

38. First – Help Yourself • Recalibrate • Start Day Off Right • Health = Happiness • Love/Respect For Family/Friends • Be A Friend To Yourself

39. First – Help Yourself • Set Positive Goals • Have Something To Look Forward To • Hide Sometimes • Let Work Glorify God

41. Final Thoughts • It Starts At Home

42. Questions?