Industry News
02/21/2012 - The Data Security Chain Must Get Stronger by March 1, 2012
A chain is only as strong as its weakest link. This principle is on display in the Massachusetts data security regulations (201 CMR 17.00), which require companies to protect personal information not only by implementing their own safeguards, but also by forcing companies to fortify the other links in the chain by having their vendors sign contracts committing to do the same. When the regulations went in to effect on March 1, 2010, they grandfathered existing contracts with vendors, meaning that these contracts were not required to contain the data security assurances. But the grandfathering ends on March 1, 2012.
As of that fast-approaching date, companies must contractually require all third-party service providers who touch personal information to implement and maintain appropriate security measures. This change in the law affects every business. We all have vendors that handle our personal information, including: payroll providers, banks, lawyers, insurers, benefits providers, shredding and disposal companies, cleaning companies, and record storage companies, to name a few.
A good third-party service contract will require a vendor to:
-- protect all personal information in the manner required by law and regulations;
-- have a Written Information Security Program (“WISP”);
-- enter into contracts with its third-party service providers;
-- provide immediate notification in the event of a data security breach; and
-- provide indemnification for any mishandling of personal information.
And know that even the best contract might not be enough. Companies are required to take reasonable measures to select vendors capable of maintaining appropriate security measures to protect personal information. So, if your business involves significant amounts of personal information, it might not be appropriate to use Joe’s Shredding and Acupuncture, no matter what contract Joe is willing to sign. You would want to use a company whose name and reputation would instill a bit more confidence.
In some cases, especially where a lot is at stake, it would be appropriate to go an additional step and actually enter into discussions with vendors regarding what they do to protect personal information, and to ask to see their WISP.
If all of this sounds extreme, consider this: if a vendor loses your customers’ personal information that they have given to you, will your customers hold it against the vendor or you? In deciding whether to bail on you, will they even make the distinction? And will plaintiff’s lawyers give you a pass because you are able to ascribe blame to another company? The answers to these questions make it clear that companies need to do their best to ensure that their vendors are strong links in the data security chain.
What is your business doing to confirm that its vendors are protecting personal information? What kinds of contracts do you have in place? Have you seen your vendors’ WISP’s? The HRW Data Security Team would be glad to discuss these issues with you and to give you sample language that you can use in your contracts with third-party service providers.
-- C. Max Perlman
Photo: www.photo-dictionary.com
02/21/2012 - Key Issues to Consider for Outreach and Enrollment Efforts under Health Reform
This report identifies key issues to consider for outreach and enrollment efforts in implementing the coverage expansions under health reform. It is part of the Health Reform Roundtables series.
02/21/2012 - Key Facts on Health Coverage for Low-Income Immigrants Today and Under Health Reform
This fact sheet provides an overview of coverage options for immigrants today and under health reform, and highlights key barriers to enrollment and access.
02/21/2012 - The President’s Budget Request: What Does It Mean For U.S. Global Health Efforts?
This February 21, 2012 webcast features an expert panel discussing the President's FY 2013 budget proposal and potential implications for global health. It is part of the Foundation's "U.S. Global Health Policy: In Focus" series.
02/17/2012 - U.S. Funding for the Global Health Initiative (GHI): The President's FY 2013 Budget Request
This fact sheet provides an overview of the Obama Administration's fiscal year 2013 budget plan for the Global Health Initiative, a proposed six-year, $63 billion effort to develop a comprehensive U.S. government strategy for global health.
02/16/2012 - Pulling it Together: Small Area Variations and the ACA’s Coverage Expansions
In his latest column, Kaiser Family Foundation president Drew Altman spotlights a Foundation analysis showing the highly variable impact that Affordable Care Act (ACA) coverage expansions will have at the local level across the country, and discusses what this might mean for reactions to the law.
02/15/2012 - Mapping the Effects of the ACA's Health Insurance Coverage Expansions
This analysis estimates the share of the non-elderly population in over 2,000 geographic areas across the U.S. who had family income up to four times the poverty level in 2010 and were either uninsured or buying coverage on their own. The analysis includes an interactive tool that allows users to enter in their zip codes and see the percentage of people in their communities who could be helped by subsidies to help pay for private insurance or eligible for Medicaid starting in 2014 under the Affordable Care Act.
02/15/2012 - Budget Tracker: Status of U.S. Funding for Key Global Health Accounts
This resource provides regularly updated information on the status of U.S. funding for key global health programs throughout the budget and appropriations process.
02/13/2012 - A Mid-Year State Medicaid Budget Update for FY 2012 & A Look Forward to FY 2013
This KCMU report finds that, while most states are on track with their Medicaid budget and enrollment trends for FY 2012, some states are trying to close 2012 budget gaps by making mid-year revisions, including restricting additional benefits and provider payment rates. The report builds on findings from Kaiser's most recent comprehensive 50-state Medicaid budget survey.
02/13/2012 - Quality Care for Less Money: Can Regional Successes Go National?
This Kaiser Family Foundation event features clips from an upcoming PBS documentary with former Washington Post correspondent T.R. Reid – <i>U.S. Health Care: The Good News</i> – followed by a panel discussion examining the issues raised in the documentary and the challenges, constraints and potential solutions for achieving affordable, effective health care in the U.S.
02/02/2012 - DOL Proposes Significant Changes to the Home Health Care Industry
On December 27, 2011 the Department of Labor’s Wage and Hour Division published a Notice of Proposed Rulemaking to revise the Fair Labor Standards Act (FLSA) regulations pertaining to companionship services and live-in domestic services.
Due to significant shifts in the home health care industry over the last 35 years, the Department of Labor (DOL) is proposing to change the regulations interpreting the FLSA with respect to two types of domestic workers: 1) domestic workers who provide companionship services to a person who because of advanced age or mental or physical infirmity cannot care for his or her own needs (“companion domestic workers”); and 2) domestic service employees who reside in the household where they are employed (“live-in domestic workers”). Currently, companion domestic workers are “exempt” from the requirements of the FLSA – meaning they do not need to be paid minimum wage or overtime. Live-in domestic workers are “exempt” from the FLSA’s requirement that they be paid overtime.
Today, workers who provide in-home care to individuals are performing duties and working in circumstances that were not envisioned when the companionship services regulations were first promulgated in 1974. And the DOL contends that workers that are employed by in-home care staffing agencies are not the workers that Congress envisioned when it enacted the companionship exemption (i.e., neighbors performing elder sitting), but instead are professional caregivers entitled to FLSA protections. The number of workers providing these services has also greatly increased.
Companion Domestic Workers
The DOL’s proposed amendment more clearly defines the tasks that may be performed by a companion domestic worker to remain exempt from the minimum wage and overtime requirements of the FLSA. Currently, the regulations define “companionship services” as fellowship, care and protection for a person who because of advanced age or mental or physical infirmity cannot care for his or her own needs. Companion domestic workers are permitted to prepare meals, make beds, wash clothes and engage in other similar services and still maintain the exemption from minimum wage and overtime. The current regulations also allow the companion domestic worker to perform general household work (as long as it is limited to 20% of the companion’s job duties).
The proposed regulations would significantly limit the duties a companion domestic worker could engage in and still remain exempt from the FLSA. Companion domestic workers would no longer be permitted to perform unlimited care services and would be limited to duties of “fellowship and protection,” such as watching television together, visiting with friends and neighbors, taking walks, or engaging in hobbies. Incidental intimate personal care services, such as occasional dressing, grooming, and driving to appointments, would be permitted if this work is performed in conjunction with the fellowship and protection of the individual and does not exceed 20 percent of the total hours worked by the companion domestic worker in the workweek. But the companion could not perform general household tasks or many of the care services domestic workers currently perform.
The proposal also clarifies that “companionship services” do not include the performance of medically-related tasks for which training is typically a prerequisite. The current regulations specifically identify trained personnel such as nurses as outside the scope of the exemption, and this clarification more clearly identifies what constitutes medically-related services.
Live-in Domestic Workers
The DOL’s proposal also limits the application of the overtime pay exemption to individuals, families and households employing a live-in domestic worker. Live-in domestic workers employed by a third party employer would be entitled to minimum wage and overtime from that third party employer. This would be the case even if the live-in domestic worker was jointly employed by an individual, family or household along with a third party The proposed regulations would also revise the recordkeeping requirements for live-in domestic workers. Under the proposal, employers would be required to maintain an accurate record of hours worked by such workers, just as other covered employees must keep such records.
Staffing Agencies
Finally, the Department proposes to change the regulation to make clear that employees of third party employers such as staffing agencies are not exempt from minimum wage and overtime protections. This will limit the exemptions currently applied to companion and live-in domestic workers to those employed only by the family or household using the services. Third party employers, such as in-home care staffing agencies, could not claim the exemption, even if the employee is jointly employed by the third party and the family or household.
Any changes to the FLSA regulations on the companionship and live-in domestic services exemptions will have a significant effect on workers and employers in the home healthcare industry and will inevitably become a hot-button issue. The Department of Labor has posted a website providing detailed information about the proposed changes at http://www.dol.gov/whd/flsa/companionNPRM.htm and invites interested parties to submit written comments on the proposed rule on or before February 27, 2012 at http://www.regulations.gov.
By Kara M. DelTufo
Image Source: http://mrg.bz/py614N
If you have any questions about the information above, please contact Kara M. DelTufo directly or fill out this form and I will contact you.
02/01/2012 - A Guide to the Supreme Court&#39;s Review of the 2010 Health Care Reform Law
This brief examines the pending Supreme Court case challenging the 2010 Affordable Care Act, including the key constitutional questions issues and the parties' legal arguments.
01/31/2012 - How will the Affordable Care Act affect small businesses and their employees?
This fact sheet summarizes key provisions in the Affordable Care Act that may affect small businesses and their employees. The fact sheet explains the law’s small business tax credits and the Small Business Health Options Program exchanges to be established in each state by 2014, both of which are designed to make it easier for small businesses to purchase insurance for their workers.
01/30/2012 - It’s Beginning to Look A Lot Like W-2 Season
Though tax day is not until April 17th, most employers are focused on January 31, 2012. This is the day when every employer engaged in a trade or business who pays remuneration, including noncash payments, of $600 or more for the year for services performed by an employee, must give employees Form W-2, Wage and Tax Statement reflecting information about:
• the employee's wages, tips, other compensation; • social security, Medicare, withheld income taxes; and • advance earned income credit (EIC) payments.
Employers must also send a copy of the W-2 to the Social Security Administration. Some employers may not be inclined to worry about this – particularly if a third-party payroll service provider provides the W-2 statements. But the IRS states that this does not relieve an employer of the responsibility to ensure that Forms W-2 are furnished to employees. And employers who fail to comply may be subject to IRS penalties.
By Kara M. DelTufo
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If you have any questions about the information above, please contact me or another member of the HRW Team or fill out this form and we will contact you.
01/30/2012 - The U.S. Global Health Initiative
This fact sheet looks at the components and organization of the Global Health Initiative (GHI), a U.S.-based effort aimed at organizing the many government structures, programs, and funding streams engaged in global health.
01/26/2012 - Kaiser Health Tracking Poll -- January 2012
The January Health Tracking Poll probes the public's views and expectations about the Supreme Court case on the health reform law and the public's knowledge and opinions of Republican presidential candidate Mitt Romney's health care positions.
01/19/2012 - The High Costs of Worker Misclassification
Independent Contractor or Employee?
This is a common issue employers struggle with and sometimes take their chances on. But in Massachusetts a wrong answer comes with high costs. While worker misclassification can be an expensive mistake under Massachusetts law – employers who violate the Massachusetts Wage Act are liable for treble damages and attorneys’ fees – a recent plea deal between the attorney general’s Fair Labor Division and a Massachusetts construction company and its owners illustrate an even greater cost – jail time.
On January 10, 2012, a Watertown construction company and its owners pleaded guilty in state court to 20 counts related to payroll classification as well as one count of failing to pay workers the prevailing wage. The company and its owners were charged with failing to disclose millions of dollars in misclassified subcontractor payroll in order to evade payment of workers’ compensation premiums and unemployment insurance taxes. (See Attorney General’s January 10, 2011 Press Release, http://www.mass.gov/ago/news-and-updates/press-releases/2012/2012-01-10-newton-contracting-plea.html).
One of the owners was sentenced to a two-year prison term (suspended for five years), and ordered to pay $100,000 in restitution to a workers' compensation insurer and $150,000 in fines. The other owner was sentenced to two years of probation and ordered to pay $74,000 in fines. This is on top of the restitution paid to the Commonwealth’s Division of Unemployment Assistance and to employees for wage violations. The company and its owners also were barred from bidding on or contracting for public construction projects for five years.
Besides the very severe penalties the employer suffered in this matter, it’s also a good example of how government agencies are collaborating in an effort to stop misclassification of workers – which is considered insurance fraud.
In the case of the Watertown construction company, complaints were first received by the Massachusetts Joint Enforcement Task Force on the Underground Economy and Employee Misclassification, which audited the company and discovered multiple employees misclassified as independent contractors, meaning the company had failed to disclose to the state more than $2.4 million in misclassified payroll for each quarter from 2006 to 2008. The Insurance Fraud Bureau was also involved: it determined that the firm misclassified half of its workforce as subcontractors to evade workers' compensation premiums between 2005 and 2009. And the Attorney General's Fair Labor Division discovered that the company had misclassified employees working on a Suffolk County jail project as laborers, paying them $44.10 per hour, instead of the state prevailing wage for roofers of $53.86. The company subsequently paid more than $5,000 in restitution to employees.
This sort of collaboration is also occurring on the federal level. On September 19, 2011, the U.S. Department of Labor entered into an agreement with the Internal Revenue Service to improve departmental efforts to combat worker misclassification. In addition, labor commissioners and other agency leaders representing seven states – including Massachusetts – agreed to share information and coordinate law enforcement with the U.S. Department of Labor’s Wage and Hour Division and, in some cases, its Employee Benefits Security Administration, Occupational Safety and Health Administration, Office of Federal Contract Compliance Programs and Office of the Solicitor.
Which raises the question, why is the government going to such lengths to crack down on worker misclassification? In short, it comes down to revenue. While misclassification deprives workers of unemployment insurance and workers compensation, it also deprives the state and federal government of tax revenue that it would otherwise receive from payroll taxes. In addition, as a result of misclassification, the Commonwealth often incurs additional costs, such as providing health care coverage for uninsured workers, providing workers’ compensation benefits paid by the Workers’ Compensation Trust Fund, and unemployment assistance without employer contribution into the Division of Unemployment Assistance fund, among other indirect costs.
The takeaway here: when it comes to properly classifying employees, employers are better safe than incarcerated.
If you have any questions about the information above, please contact Kara M. DelTufo directly or fill out this form and I will contact you.
01/18/2012 - Establishing Health Insurance Exchanges: An Update on State Efforts
This issue brief examines states' progress in setting up the state-based health insurance exchanges through which millions of Americans are expected to purchase coverage under The Patient Protection and Affordable Care Act (ACA) beginning in 2014.
01/18/2012 - Briefing, Survey Examine 2012 Data From 50-State Survey of Medicaid and CHIP Eligibility and Enrollment Policies
Report and other materials from the Jan. 18, 2012 public briefing on KCMU's annual 50-state survey of Medicaid and CHIP Eligibility and Enrollment Policies.
01/18/2012 - Performing Under Pressure: Annual Findings of a 50-State Survey of Eligibility, Enrollment, Renewal, and Cost-Sharing Policies in Medicaid and CHIP, 2011-2012
The annual 50-state survey of Medicaid and CHIP eligibility rules, enrollment and renewal procedures and cost sharing practices, found that, despite continued fiscal pressures on states, eligibility policies remained stable in nearly all state Medicaid and Children’s Health Insurance Programs during 2011.
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