Monthly Archives: July 2013

Employers Face Obesity Discrimination Issues

Discrimination, Employee Rights, Hiring, Medical, , , ,

In June, the AMA recognized obesity as a disease, instead of just an issue of poor judgment. As an employer, you now have to think about obesity in terms of the Americans with Disabilities Act (“ADA”). To be protected under the ADA, an employer must have a physical or mental impairment that affects a major life activity, such as walking or bending, or affects a major bodily function, such as the cardiovascular system. In addition, the ADA protects people who are “regarded as” having a disability, even if they don’t.

With the AMA’s decision as ammunition, you as an employer are now in the crosshairs of many more disability claims because the Centers for Disease Control says 35.9% of American adults over 20 are obese. We don’t know all the ramifications yet, but it is reasonable to assume that the AMA’s label will eventually change your legal obligations.

As an employer, you are going to need address the obesity of your employees in three ways:

  1. You must not discriminate against obese applicants or employees by treating them adversely in hiring, promotions, discharge, compensation, job training, or other terms and conditions of employment. Appearance discrimination hasn’t found much support in the courts before the AMA’s decision, but this could give that kind of claim new life. This means that the overweight applicant who you fear will have absenteeism problems because of health issues cannot be excluded on that basis from hiring consideration. Also, that obese employee who you have consistently passed over for a promotion because you think he is lazy, or the fat assistant who wants to go into sales but you don’t believe she presents a professional image, may have a discrimination claim against you either because he/she is disabled by obesity or is regarded as such. Finally, when you are firing an employee, you’ll need to have well-documented reasons if obesity could be a claim.
  2. You will have to accommodate an obese employee’s reasonable requests for bigger, more comfortable furniture, more doctor’s visits or additional time to perform certain physical functions at work. As with any disability, you will have to handle these requests with discretion and sensitivity. I imagine that public theaters, airplanes and stadiums will also have to address this issue of whether they will have to provide larger seats.
  3. You must prevent harassment based on a person’s disability. That means that fat jokes will have to be tamped down just as you would racial or religious slurs to prevent a hostile work environment.

At a time when some parts of the federal government (HHS, DOL and IRS) are promoting wellness programs under Obamacare and encouraging employers to adopt programs that reward employees who stop smoking, lower their cholesterol or their BMI, the federal discrimination enforcement agency, the EEOC, is going to be scrutinizing wellness programs that may stigmatize obese employees. As an employer, you are going to need to walk a fine line with your wellness incentives. Heck, just having a motivation poster glorifying skinny people climbing to the top of a mountain may imply a negative stereotype of disabled obese employees.

There are no easy answers to this new issue. The AMA’s decision, by itself, doesn’t carry any legal weight. But it could influence the courts and accelerate the EEOC’s efforts to make appearance a protected class. My advice is to avoid becoming the test case on this issue and just use some care and common sense when dealing with obese employees.

 

PPACA Pay or Play Penalties Delayed

Benefits

You have probably heard the news by now that the Obama administration announced that it is delaying enforcement of one piece of the Patient Protection and Affordable Care Act (PPACA) for one year. The starting date for the mandate that employers with 50 or more full-time equivalent employees have to offer affordable health insurance to their employees beginning January 1, 2014 or face penalties of $2000-$3000 per employee has been delayed until January 1, 2015. This is a huge relief to many businesses, particularly restaurants, hotels, retail establishments and construction companies, who have not traditionally provided health insurance to all of their employees and were scrambling to try to figure out their strategy for complying with the law without the cost of the benefits putting them out of business. Employers still have to make those tough decisions, but will not do so in as big a rush as they were facing and hopefully will have more guidance in making those decisions.

However, every employer needs to understand that this delay in the pay or play penalties for employers and the reporting by employers of the details of the health coverage that they offer does not mean that many other parts of the PPACA aren’t going to be effective on January 1, 2014. For example, the individual mandate, requiring that every American have health insurance, has not been delayed. This means that every citizen has to have coverage in 2014, but many will not have any insurance offered through their employers on that date. Fortunately, the IRS penalty for a person who doesn’t have health insurance is only $95 for 2014 and won’t increase until after that.

PPACA provisions that are not going to be affected by the delay and will therefore need to be addressed in 2014 by employers who already provide health insurance include the 90-day limit on waiting period for benefits eligibility, the maximum deductibles of $2000 single/$4000 family on new plans and renewals, the “community ratings” guidelines, which require premiums not to be based on health status, but on age, geography and tobacco use (which will benefit older, sicker groups and hurt younger, healthier groups), the elimination of pre-existing conditions exclusions, the requirement to provide at no additional cost certain preventive care (including contraception), the summary of benefits and coverage disclosure rules that dictate how health plan benefits information has to be presented to participants, and the taxes on employers, including the $63/person fee for every participant in a health plan, the $2/person PCORI fee to fund research, and the premium tax of 2.54% for participants of fully-insured medical plans.

For those employers who do not provide health insurance yet to the majority of your workforce, you can take this time to shop around for better rates, to better structure your workforce as full-time or part-time, to set up better time-keeping systems to know how many hours each employee works each week, and to better train your human resources and benefits staff. However, you must understand that this delay should in no way stop your efforts to get ready for compliance with PPACA. It is breathing room, a break, but the work still needs to be done.

Gay Marriage Affects Texas Employers

Benefits, Discrimination, Employee Rights, Personnel Policies

 

Regardless of your political beliefs about gay marriage, you are going to need to start dealing with the legal implications in your business. The U.S. Supreme Court’s two decisions regarding gay marriage, issued June 26, will leave you as an employer with more questions than answers right now. Even though Texas doesn’t recognize same-sex marriages, there are going to be issues raised by your employees about the application of benefits and employment laws to same sex couples even within the 37 states that don’t yet allow gay marriages. As Justice Antonin Scalia wrote in his dissent:

Imagine a pair of women who marry in Albany and then move to Alabama, which does not “recognize as valid any marriage of parties of the same sex.” Ala. Code §30–1–19(e) (2011). When the couple files their next federal tax return, may it be a joint one? Which State’s law controls, for federal-law purposes: their State of celebration (which recognizes the marriage) or their State of domicile (which does not)? (Does the answer depend on whether they were just visiting in Albany?) Are these questions to be answered as a matter of federal common law, or perhaps by borrowing a State’s choice-of-law rules? If so, which State’s?

Justice Scalia could have continued with questions such as: Must an employer offer COBRA continuation coverage of health insurance to a same-sex spouse, since COBRA is federally regulated, not a state issue? Does an employer in Texas have to provide Family and Medical Leave for an employee to provide his same-sex spouse (who legally married elsewhere) with care for a serious medical condition? Again, FMLA is a federal law, not a state one. There is some speculation among lawyers that President Obama will direct federal agencies such as the Department of Labor, when interpreting federal statutes such as FMLA or COBRA, to treat the “State of celebration”, as Scalia called it, as the state that matters, not the state of residence. This could mean that you as a Texas employer could be liable under FMLA, for example, even though gay marriage isn’t allowed in Texas.

In addition, many employee handbooks define “immediate family” for purposes of bereavement leave, personal leave, nepotism and health insurance benefits and include just the word “spouse” without a definition. Are you going to make a distinction in your business that the “spouse” must be an opposite-sex spouse? And if you do, will you at some point face a federal lawsuit for discrimination?

Is your head spinning yet from these questions?

The courts and the administrative branch will eventually give us the answers to these questions, but as an employer, you have to deal with many of them now as best you can. My suggestion is that if any question involving same-sex marriage arises with your employees, you call an employment lawyer immediately to find out the very latest regulations on this issues.