The Affordable Care Act and Same-Sex Marriage:
Implications Under Your EPL Program
LGL010
Speakers:
• Mercedes Colwin, Managing Partner, New York Offices, Gordon & Rees LLP
• Robert Vryhof, Vice President of Risk Management, Republic Services, Inc.
Learning Objectives
• Overview of the Affordable Care Act
• What companies must comply?
• Implications for Wage and Hour and Retaliation claims
• Wellness programs: What Employers need to know
• Overview of Same Sex Marriage Laws
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EPLI Implications: Title VII and Sexual Harassment claims
FMLA Implications on Retaliation claims
EEOC Focus on gender identity or sexual orientation claims
Third party claims: Refusal of services
• Best Practices for Preventing Claims
• Modification and Reviews of company handbooks
• Manager and Employee Training
• Why do you need Employment Practices Liability Insurance
The Affordable Care Act
The Affordable Care Act
The Affordable Care Act provides Americans with
better health security by putting in place
comprehensive health insurance reforms that will:
•
Expand coverage
•
Hold insurance companies accountable
•
Lower health care costs
•
Guarantee more choice, and
•
Enhance the quality of care for all Americans
What Companies Must Comply?
Any employer with 50 or more fulltime equivalent employees (FTE)
who work an average of 30 or more
hours per week must provide health
insurance to at least 95% of their
full-time employees and
dependents up to age 26
Implications for Wage and Hour and
Retaliation Claims
The Affordable Care Act amended the Fair
Labor Standards Act to add 29 U.S.C. §218C
(section 18C), which provides protection to
employees against retaliation by public and
private employers for engaging in certain
protected activities
Implications for Wage and Hour and
Retaliation Claims- Risks to Watch Out For
Taking adverse action against employees who
receive a premium tax credit or subsidy
through a public marketplace
Cutbacks in hours that can impact a protected
class of employees
Implications for Wage and Hour and
Retaliation Claims- Risks to Watch Out For
Discrimination claims for interference with
attainment of benefits
Employees looking to reduce hours, or claim
Their employer reduced their hours, to avoid
paying ACA penalties
Wellness Programs
Under the ACA, employers may establish
certain wellness incentives of up to 30 percent
of the total cost of medical coverage
(including both employer and employee
contributions) or up to 50 percent for wellness
incentives specifically to prevent or reduce
tobacco use.
Wellness Programs:
What Employers Need to Know
To protect employees from unfair and
discriminatory practices, ACA requires
employers follow certain rules and meet
certain criteria when structuring their
individual health-contingent wellness
programs.
Wellness Programs:
What Employers Need to Know
• The program must be reasonably designed to
promote health or prevent disease
• The program must be reasonably designed to be
available to all similarly situated individuals
• Individuals must be notified of the opportunity to
qualify for the same reward through other
means, if such opportunities do in fact exist
EEOC’s Focus on Wellness
Programs
• In April 2015, the EEOC released proposed rule related to employer wellness
programs
• The proposed rule addresses the extent to which employers may use incentive to
encourage employees to participate in wellness programs that may require
inquiries into disability-related issues and genetics
• Potential implications under the ADA and GINA
Recent Cases
Burwell v. Hobby Lobby
On June 30, 2014, the United States
Supreme Court concluded that the federal
government, through Health and Human
Services (“HHS”), could not require faithbased private, for-profit employers to pay for
certain forms of birth control
ACA - EPLI Implications
• EPLI policies generally exclude coverage for claims alleging violation of
benefits laws, except retaliation
• Unless otherwise endorsed (e.g., defense costs coverage or a blended
EPL and wage and hour policy), EPLI policies also exclude coverage for
wage and hour claims, except retaliation
• Claims brought pursuant to the ACA may implicate coverage under a
fiduciary liability policy to the extent that the denial, reduction or failure to
offer benefits involves allegations of breaches of fiduciary duty
ACA- EPLI Implications
• With respect to wellness programs
• EPLI policies cover ADA and genetic discrimination claims, as well as
retaliation
• Compensatory damages, punitive damages and liquidated damages
are typically covered under EPLI policies
• Underwriters may be interested in better understanding policies and
procedures in place to ensure that wellness programs are not
discriminatory
• It is important to consider all applicable insurance policies and
provide timely notice as required under all policies that may be
implicated.
Same Sex Marriage
Federal Law
Obergefell v. Hodges 14-556(2015)
On June 26, 2015 the Supreme Court held that:
The Constitution requires that same-sex couples
be allowed to marry no matter where they live
and that states may no longer reserve the right
only for heterosexual couples.
Federal Law
United States v. Windsor
133 S. Ct. 2675, 2682-84 (2013)
The Supreme Court held that:
The federal government could not refuse to
recognize or provide benefits to people in
same-sex marriages that were conducted in
states where they were legal.
Section 3 of DOMA was unconstitutional.
Federal Law
Defense of Marriage Act (DOMA)
A federal law that allows states to refuse to
recognize same sex marriages granted under
the laws of other states
Until Section 3 of the Act was ruled
unconstitutional in 2013, DOMA, in conjunction
with other statutes, had barred same-sex
married couples from being recognized as
"spouses" for purposes of federal laws,
effectively barring them from receiving federal
marriage benefits
Federal Law
Defense of Marriage Act (DOMA)
The repeal of section 3 of DOMA creates a major
increase in protections for same-sex couples in the
United States. This grants legally married samesex couples the same benefits received by their
straight peers including:
Health insurance and pension protections for
federal employees' spouses
Social security benefits for widows and widowers
Support and benefits for military spouses
Joint income tax filing and exemption from federal
estate taxes
Same Sex Marriage:
The EEOC’S View
The EEOC interprets and enforces Title VII's
prohibition of sex discrimination as forbidding
any employment discrimination based on
gender identity or sexual orientation
Same Sex Marriage:
The EEOC’S View
Employment discrimination based on gender
identity or sexual orientation includes:
• Failing to hire an applicant because she is a transgender
woman
• Firing an employee because he is planning or has made a
gender transition
• Denying an employee equal access to a common restroom
corresponding to the employee's gender identity
• Denying an employee a promotion because he is gay or
straight
Same Sex Marriage
The EEOC’s View
The Strategic Enforcement Plan of 2012-2016:
Adopted by a bipartisan vote in December of 2012, lists
"coverage of lesbian, gay, bisexual and transgender
individuals under Title VII's sex discrimination
provisions
EEOC held that discrimination against an individual
because that person is transgender (also known as
gender identity discrimination) is discrimination
because of sex and therefore is prohibited under Title
VII
The Commission has also held that discrimination
against an individual because of that person's sexual
orientation is discrimination because of sex and
therefore prohibited under Title VII
Same Sex Marriage:
FMLA Implications
The FMLA allows eligible employees to take leave
from their jobs to care for a spouse with a serious
health condition (among other reasons). Until recently,
many employees in same-sex marriages either could
not qualify for FMLA leave to care for their spouse or
were forced to overcome hurdles in proving the validity
of their marriage in the state where they lived or the
state where the marriage was celebrated
Same Sex Marriage:
FMLA Implications
Following the decision in Obergefell v.
Hodges employers making FMLA spousal
leave eligibility determinations no longer
need to consider state law in determining
the validity of an employee’s same-sex
marriage. All married couples will be
covered, regardless of their sex, where
they were married or where they live
Same Sex Marriage
Third Party Claims & Refusal of
Services
Whether photographers, florists,
bakers and other vendors who are
Christians should have a right to
refuse services for same-sex
marriages has emerged as a major
cultural and legal battle, one that has
intensified since the Supreme Court
decision in June establishing samesex marriage as a constitutional right
Recent Cases
Craig and Mullins v. Masterpiece Cakeshop
On May 30, 2014, the Colorado Civil Rights Commission
determined that Masterpiece Cakeshop unlawfully
discriminated against David Mullins and Charlie Craig by
refusing to sell them a wedding cake​
By unanimous decision in the Colorado Court of Appeals
on August 13, 2015 affirms a finding in May 2014 from the
Colorado Civil Rights Commission that the Masterpiece
Cakeshop’s policy of turning away same-sex couples
violates Colorado’s Anti-Discrimination Act.
Ingersoll v. Arlene’s Flowers
A Benton County Superior Court judge ruled on
February 18, that a florist in Richland, WA violated
the state’s anti-discrimination law when she denied
service to a gay couple for their wedding
The court agreed with the suit’s contention that the
refusal of Arlene’s Flowers to sell flowers to the
couple violates the longstanding Washington Law
Against Discrimination and the Consumer
Protection Act
Same Sex Marriage: EPLI
Implications
• EPLI policies cover claims alleging discrimination, harassment, including
on the basis of sexual orientation or gender identity
• Retaliation is also covered broadly under EPLI policies
• Denial or reductions of benefits or retaliation because of an employee’s
sexual orientation or gender identity may implicate the FMLA
• Some EPLI policies expressly include violation of FMLA in the definition of wrongful
employment act
• Liquidated damages, often associated with FMLA claims, are typically included in the
definition of “loss” but ensure that it also includes such damages under the FMLA.
Same Sex Marriage: EPLI
Implications
• With respect to extension of coverage to spouses, while not typically at
issue in EPLI claims, the provision should include domestic partners
“under the internal policy of the insured entity” -- to address jurisdictions
that still may not recognize same-sex marriage
• Third party coverage may also be implicated in denial of services cases,
but these claims may also be covered under a commercial general liability
policy
• Consider which coverage should be primary and align the other insurance clause to
reflect the intent of the insured and the underwriter.
Best Practices for Preventing Claims
Modification and Review of
Company Handbook
• Whether the employee handbook is uniformly inclusive of
the rights of employees in same-sex marriages;
• Whether human resources forms, policies and procedures
(especially those relating to FMLA leave) are inclusive of
eligible employees in same-sex marriages;
• Whether the employee benefits plans and policies define
“spouse” in a manner consistent with both the federal and
state definitions
Manager and Employee Training
Supervisors and human resources personnel
should receive additional training to so as to
ensure that eligible employees in same-sex
marriages are not wrongfully denied FMLA
leave
Questions
Or
Comments
The Affordable Care Act and Same-Sex Marriage:
Implications Under Your EPL Program
LGL010
Speakers:
• Mercedes Colwin, Managing Partner, New York Offices, Gordon & Rees LLP
• Robert Vryhof, Vice President of Risk Management, Republic Services, Inc.