Employment Law: Pension, Benefits,        Liability & Policies     The Insurance Perspective of Employment IssuesOctober 1...
OverviewEmployment Practices Liability – EPLI • Definition &Types of claims • Claim ScenariosDirectors & Officers – D&O • ...
OverviewTypes of Employee Benefits • Group Benefits – Disclosure Requirements and Compliance • Pension Plans – Disclosure ...
EPLIEmployment Practices Liability – EPLIDefinition: Coverage for suits or claims brought against an employer for:  - Wron...
EPLIScenarios1. The executive assistant to the Chief Financial Officer was terminated for   divulging confidential informa...
D&ODirectors & Officers – D&ODefinition: Coverage for suits or claims brought against an employer and theindividual Direct...
D&OScenarios1. A grant making foundation receiving private donations was   alleged to have used those funds for purposes n...
EPLI / D&OPolicy Structure & CoverageLimits – typically $1,000,000 per claim with the same amount in the aggregateLimits –...
EPLI / D&OPolicy Structure & CoverageDefinition Of Insured:  - Company / Organization  - Individual Insureds Including:   ...
EPLI / D&OProtection prior to claims- Employee Handbooks- HR Department Policies and Procedures- Board and Management     ...
Employee HandbookWhat should be includedEmployment Policies-   Drug Free Workplace-   Employment Authorization-   Employee...
Employee HandbookWhat should be includedLeave and Benefits-   Annual Leave-   Benefits Overview-   Cobra-   Compensation- ...
Employee HandbookWhat should be includedConditions Of Employment-   Email / Internet / Social Media-   Confidentiality-   ...
Employee HandbookWhat should be includedCompensation and Administrative-   Emergency Procedures-   Employee Information-  ...
Workers CompensationOverviewGenerally, workers’ compensation insurance coverage is mandatory for allemployers who have one...
Workers CompensationComplianceThe requirement to insure workers’ compensation liability is mandatory forany employer who: ...
Workers CompensationPenalty & ExampleSection 305 of the Pennsylvania Workers’ Compensation Act specifies that anemployer’s...
Employee BenefitsEmployee BenefitsThere are two types of employee benefits:• Those that the employer must provide by law (...
Employee Benefits Legal                             ComplianceEmployee Benefits Legal ComplianceCAFETERIA PLANS• Also know...
Employee Benefits Legal                            ComplianceEmployee Benefits Legal CompliancePPACA (cont.)• Medical Loss...
Employee BenefitsEmployee Benefits Legal ComplianceFamily and Medical Leave Act of 1993• Unpaid job protected leave for ce...
Employee Benefits                                ComplianceEmployee Benefits Legal ComplianceFringe Benefits• Major forms ...
Employee Benefits                                ComplianceEmployee Benefits Legal Compliance•   Newborns’ and Mothers’ He...
Employee BenefitsEmployee Benefits Legal ComplianceTax Advantaged Plans (see comparison chart)• HSAs• HRAs• FSA’s• Archer ...
Employee Benefits                                 ComplianceEmployee Benefits Legal ComplianceSummary Plan Description• Em...
Employee BenefitsEmployee Benefits Legal ComplianceMedicare Secondary Payer• Medicare is not responsible for paying first•...
PensionsPensions•   Defined Benefit Plan Disclosure Requirements (handouts)•   Defined Contribution Disclosure Requirement...
Contact InformationTodd Whiteman                      Rick EnscoeProperty Casualty                  Employee BenefitsEnsco...
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Employment Law: Pension, Benefits, Liability & Policies

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Law School for Non-Profit Organizations Presentation for United Way of Washington County, Washington County Bar Association & Washington County Community Foundation

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Employment Law: Pension, Benefits, Liability & Policies

  1. 1. Employment Law: Pension, Benefits, Liability & Policies The Insurance Perspective of Employment IssuesOctober 19, 2012Presented By: - Todd Whiteman Property Casualty - Rick Enscoe Employee Benefits
  2. 2. OverviewEmployment Practices Liability – EPLI • Definition &Types of claims • Claim ScenariosDirectors & Officers – D&O • Definition & Types of claims • Claim ScenariosPolicy Structure & Coverage • Process and requirementsProtection Prior To ClaimsEmployee Handbooks • What to includeWorkers Compensation • Overview • Compliance 2
  3. 3. OverviewTypes of Employee Benefits • Group Benefits – Disclosure Requirements and Compliance • Pension Plans – Disclosure Requirements and ComplianceEmployee Benefits Legal Compliance • Cafeteria Plans • PPACA • COBRA • FMLA • ERISA • Fringe Benefits • Health Insurance • HIPAA • HSA’s, FSA’s and other Tax Favored Plans • Medicare Secondary Payer • Summary Plan DescriptionIntroduction to Disclosure Requirements for Defined Contribution PlansIntroduction to Disclosure Requirements for Defined Benefit Plans 3
  4. 4. EPLIEmployment Practices Liability – EPLIDefinition: Coverage for suits or claims brought against an employer for: - Wrongful Termination - Wrongful Hiring Practices - Sexual Harassment - Failure To Promote - Employee Rights Violations - Breach Of Contract - Emotional Distress / Stress 4
  5. 5. EPLIScenarios1. The executive assistant to the Chief Financial Officer was terminated for divulging confidential information to staff regarding impending company layoffs. A suit was brought by the assistant for retaliation and sexual harassment as she claimed the CFO always made suggestive comments and improperly touched her. $420,000 claim payment2. A claim was brought by a former employee for religious discrimination. She alleged the hiring practices of the Insured were unlawful because they stated they would only hire Christian workers. Once it was learned that the plaintiff was not a Christian, she was passed up for a promotion. $345,000 claim payment.3. An overnight supervisor at a residential facility for disable adults was found sleeping on the job. After an immediate termination the claimant alleged racial discrimination even though the majority of the supervisors employed by the insured were the same race. The insured was not found liable but defense costs exceeded $30,000. 5
  6. 6. D&ODirectors & Officers – D&ODefinition: Coverage for suits or claims brought against an employer and theindividual Directors and Officers for: - Organization Mismanagement - Supervisory Actions / Inactions - Lack Of Due Diligence By The Board Or Committees - Breach Of Duty - Misappropriation Of Funds - Breach Of Contract 6
  7. 7. D&OScenarios1. A grant making foundation receiving private donations was alleged to have used those funds for purposes not associated with the foundation’s underlying mission. A group of supporters sued the foundation’s board alleging misappropriation of funds and breach of duty. Defense costs exceeded $65,000.2. Government grant given to the foundation to finance an international event was not enough to cover the expenses of the event. Government brought suit against the foundation as monies were used for other purposes than financing the event.3 The Executive Director was terminated due to unauthorized spending of the center’s funds. The executive director then sued for wrongful termination. 7
  8. 8. EPLI / D&OPolicy Structure & CoverageLimits – typically $1,000,000 per claim with the same amount in the aggregateLimits – Shared aggregate over all coverages can be provided to lower the costDeductible / Retention – amount the insured will pay in advance of the carriercovering the claim or amount the claim payment will be reduced atsettlementClaims Made – type of policy triggering coverage when the claim is made, notwhen the occurrence happenedRetro Date – date coverage was first purchasedFull Prior Acts – coverage back to the inception of the organizationReporting Period – determines when the claim must be reported for coverageto apply. In a claims made and reported policy the claim must be turned induring the same policy period that the insured receives notice of claim 8
  9. 9. EPLI / D&OPolicy Structure & CoverageDefinition Of Insured: - Company / Organization - Individual Insureds Including: * Directors * Officers * Trustees * Employees * Committee Members 9
  10. 10. EPLI / D&OProtection prior to claims- Employee Handbooks- HR Department Policies and Procedures- Board and Management 10
  11. 11. Employee HandbookWhat should be includedEmployment Policies- Drug Free Workplace- Employment Authorization- Employees With Disabilities- Equal Employment Opportunity- Life Threatening Illnesses- No Solicitation/Distribution- Open Door- Introductory Period- Sexual Harassment- Whistle Blower- Anti-Discrimination 11
  12. 12. Employee HandbookWhat should be includedLeave and Benefits- Annual Leave- Benefits Overview- Cobra- Compensation- Military Leave- Tuition Reimbursement- FMLA (Family and Medical Leave Act)- General Policies / Absences- Jury Duty- Holidays- Leave without Pay- Paid Tim Off (PTO) 12
  13. 13. Employee HandbookWhat should be includedConditions Of Employment- Email / Internet / Social Media- Confidentiality- Harassment- Personal Conduct- Safety & Security- Discipline- Resignation- Standards Of Professionalism- Termination 13
  14. 14. Employee HandbookWhat should be includedCompensation and Administrative- Emergency Procedures- Employee Information- Employee Departure- Reference Checks- Employee Privacy- Hours- Overtime- Performance Appraisals- Punctuality and Attendance- Smoking- Employee Acknowledgment 14
  15. 15. Workers CompensationOverviewGenerally, workers’ compensation insurance coverage is mandatory for allemployers who have one or more employees, whether they’re part-time orfull-time, including family members.Coverage ensures medical and wage-loss benefits to employees who areinjured during the course of their job. Employers who so provide coverage areprotected against lawsuits filed by injured workers. 15
  16. 16. Workers CompensationComplianceThe requirement to insure workers’ compensation liability is mandatory forany employer who: - employs at least one employee who could be injured or develop a work- related disease in this state, or - could be injured outside the state if the employment is principally localized in Pennsylvania, or - could be injured outside the state, while under a contract of hire made in Pennsylvania, if the employment is not principally localized in any state, if the employment is principally localized in a state whose workers’ compensation laws do not apply, or the employment is outside the United States and Canada 16
  17. 17. Workers CompensationPenalty & ExampleSection 305 of the Pennsylvania Workers’ Compensation Act specifies that anemployer’s failure to insure its workers’ compensation liability is a criminaloffense and classifies each day’s violation as a separate offense with a fine upto $500 per offense, either a third-degree misdemeanor or, if intentional, athird-degree felony.CAS Home Health Care Inc., owned by Sean Williams, in Philadelphia, pleadedguilty to five misdemeanor counts of the third degree on Nov. 9, 2011, inPhiladelphia County Court of Common Pleas for failing to insure its workerscompensation liability. Judge David C. Shuter placed CAS Home Health CareInc. on probation for a period of five years, ordered it to pay all court costsand restitution to the Uninsured Employers Guaranty Fund in the amount of$71,397.43. The bureaus Compliance Unit reports that CAS Home Health CareInc. is now in compliance with Pennsylvania workers compensation law. 17
  18. 18. Employee BenefitsEmployee BenefitsThere are two types of employee benefits:• Those that the employer must provide by law (social sec./workers comp.)• Those that the employer offers to compensate their employees ( health and retirementBoth have legal and tax implications for the employerEMPLOYERS MUST KEEP THE FOLLOWING IN MIND:• Which Benefits covered by law (such as FMLA)• Which Benefits that are voluntary and the laws that apply to each (COBRA)• For each benefit determining who is the covered• Making sure that each is classified in the correct class• Which benefits are regulated by federal/state lawsHealth and retirement plans fall under ERISA. 18
  19. 19. Employee Benefits Legal ComplianceEmployee Benefits Legal ComplianceCAFETERIA PLANS• Also known as Section 125 plans• POP plans• FSA’s (2013 law limits contributions to $2500)• PPACA has a number of laws that impact cafeteria plansPPACA enacted March 23, 2010• Minimum Value• Information Reporting on Health Insurance Coverage• Disclosure of Return Information• Small Business Health Care Tax Credit• FSA’s (eliminated OTC drugs unless prescription is obtained)• Medical Device Tax• Health Insurance Premium Tax (2014)• Health Coverage for older children (< age 27)• Tax on Indoor Tanning Salons• W-2 Health Coverage Reporting 19
  20. 20. Employee Benefits Legal ComplianceEmployee Benefits Legal CompliancePPACA (cont.)• Medical Loss Ratio (rebates to consumers)COBRA - Consolidated Omnibus Reconciliation Act of 1985• Group health plans with 20 or more employees (50% rule)• Part time employees are counted fractionally by hours• Qualified Beneficiaries are eligible• Review of Qualifying Events• QB must notify plan administrator within 60 days• The QB has 45 days from that date to pay initial premium• Premium charges can be 102% of the premium• Cobra disabled persons may extend the coverage 11 more months (29 months) plans may charge 150% of the premium]• Medicare Entitlement 36 months• State Mini Cobra 20
  21. 21. Employee BenefitsEmployee Benefits Legal ComplianceFamily and Medical Leave Act of 1993• Unpaid job protected leave for certain family and medical events• Events include; childbirth, adoption, serious health condition of the employee or immediate family member (spouse, child or parent)• 12 weeks unpaid during any 12 month period• Health Benefits must be maintained• Military Caregiver and Qualifying Exigency Leave recently expanded• 26 weeks for military care giver to a covered service member (includes veterans• Be mindful of State variations of the law• Be mindful how FMLA defines the terms• Incapable of Self Care or Instrumental Activities• Physical or mental disability• “in loco parentis”• Posting notices/notice from employees• Medical Recertifications 21
  22. 22. Employee Benefits ComplianceEmployee Benefits Legal ComplianceFringe Benefits• Major forms of fringe benefits are health insurance plans, retirement plans and paid time off• Employees Gross income can be effected (auto usage) but will not be reflected for benefits like moving expenses, retirement planning services, meals etc.Health Insurance – Related Laws• CHIPRA• COBRA• ERISA• FMLA• GINA• Mental Health Parity Act• Mental Health Parity and Addiction Equity Act 22
  23. 23. Employee Benefits ComplianceEmployee Benefits Legal Compliance• Newborns’ and Mothers’ Health Protection Act• USERRA• Women’s Health and Cancer Rights Act of 1998• HIPAA 23
  24. 24. Employee BenefitsEmployee Benefits Legal ComplianceTax Advantaged Plans (see comparison chart)• HSAs• HRAs• FSA’s• Archer MSAs 24
  25. 25. Employee Benefits ComplianceEmployee Benefits Legal ComplianceSummary Plan Description• Employers over 100 lives must provide to all benefits participants• What the plan provides• How it operates• When the employee can participate• How service and benefits are calculated• How to file claims and appeals• Cost Sharing provisions• How preventive services are covered• Provisions for the use of network providers• Provisions requiring pre-authorizations• Annual 5500 filings required; plan numbers must match 25
  26. 26. Employee BenefitsEmployee Benefits Legal ComplianceMedicare Secondary Payer• Medicare is not responsible for paying first• Your group health plan pays first if the following conditions apply: - 65 or older covered by your current employer - Employer has 20 or more employees and covers the same services as Medicare - Medicare will pay amounts not paid by your group plan up to the Medicare approved amounts.• Medicare is secondary payer to: - Group Health Insurance - Auto/liability insurance - Workers Comp - Federal Black Lung - Veterans Administration’ - End Stage Renal Disease 26
  27. 27. PensionsPensions• Defined Benefit Plan Disclosure Requirements (handouts)• Defined Contribution Disclosure Requirements (handouts)• 401 (k) Disclosure Requirements (handouts)• 403 (b) Disclosure Requirements (handouts) 27
  28. 28. Contact InformationTodd Whiteman Rick EnscoeProperty Casualty Employee BenefitsEnscoe Long Insurance Group, LLC Enscoe Long Insurance Group, LLC80 Emerson Lane, Suite 1305 80 Emerson Lane, Suite 1305Bridgeville, PA 15017 Bridgeville, PA 15017412-206-0364 412-206-0363twhiteman@enscoelong.com renscoe@enscoelong.comwww.enscoelong.com www.enscoelong.com 28

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