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Effective January 1, 2019, Arizona-based small employers will be required to provide continuation of employer-sponsored health plan benefits to qualifying former employees and their covered dependents. Currently, employers who employ at least 20 employees (as calculated by determining the number of employees employed on more than fifty percent of the employer’s typical business days in the previous calendar year) are required to offer continuing group coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act (COBRA or “federal COBRA”). Arizona’s new law, referred to as a “mini-COBRA,” will apply to employers with at least one but not more than 20 employees during the preceding calendar year.
Under the law, former employees who elect to continue coverage will receive benefits at the group cost, including the employer’s contribution and administrative fee (capped at five percent of the premium). To be eligible for continued coverage under the new law, employees and their covered dependents must 1) be enrolled in a group medical insurance plan for a minimum of three months, 2) be ineligible for Medicare coverage, and 3) experience a “Qualifying Event” thereafter losing coverage. The law defines a “Qualifying Event” as follows: voluntary or involuntary termination of employment for a reason other than gross misconduct or reduction of hours required to quality for coverage;divorce or separation from the employee; death of the employee; the employee becomes eligible for Medicare coverage; a dependent child ceases to be a dependent child under the insurance plan; a retired former employee and his or her dependents lose coverage within one year before or after the employer files for bankruptcy.
Within 30 days of the occurrence of a Qualifying Event, mandated employers must provide written notification to an employee of his or her right to continue coverage(though the law considers a written notice timely if it is postmarked within 44 days of the Qualifying Event and mailed to the employee’s last known address).In the event that a covered dependent resides at a different address than the employee, the employer must deliver a separate written notice to the dependent. The written notice must inform the employee and his or her dependents of their right to continue coverage, the amount of the full cost of coverage (including the employer’s administrative fee), the process and deadlines for electing continuation of coverage, the dates and times for making payments, and the consequence for failure to pay in a timely manner (i.e., loss of coverage). For those employees and/or dependents receiving mini-COBRA coverage, employers are also required to provide at least 30 days advance notice of any changes to coverage (e.g., rates, plan, benefits,etc.).
To continue coverage, employees must provide written notification to the employer within 60 days of the date of the employer’s notice. After electing coverage, employees have 45 days to submit the initial premium to the employer. Mini-COBRA coverage terminates upon the earliest of the following events: 18 months following the commencement of coverage; the employee’s failure to timely pay premiums; the date on which the employee or a covered dependent becomes eligible for coverage under Medicare, Medicaid, or any other health benefit plan (with respect only to that person); the date on which an employer terminates coverage under the health benefit plan for all employees (the employee and covered dependents are eligible to participate in a replacement plan); or the date a dependent child would otherwise lose coverage under the terms of the health benefit plan due to age (with respect only to that dependent child). In the event that a covered dependent is deemed disabled at the time of the Qualifying Event, the dependent may be eligible for extended coverage.
Mini-COBRA Broken Down
Continued Coverage: Employees and their covered dependents receive continued employer-sponsored health plan benefits at the group cost.
Mandated Employers: Employers with at least one but no more than 20 employees during the preceding calendar year.
Eligible Employees: Employees must be covered under a group medical insurance plan for a minimum of three months; ineligible for Medicare coverage; experience a Qualifying Event.
Notification Requirements: Employer’s notice required within 30 days of the Qualifying Event. Separate notice required if a covered dependent resides at a different address.
Employer’s Administrative Fee: Capped at five percent.
Election of Coverage: Employees have 60 days from the date of employer’s notice to submit written notice of their desire to continue coverage. Initial premium is due within 45 days of electing coverage.
How Long Does Coverage Last: Generally 18 months, though coverage time may vary under certain circumstances.
Employers who would like more information about Arizona’s mini-COBRA law are encouraged to contact the attorneys at Milligan Lawless for assistance.
The Americans with Disabilities Act (ADA) requires employers to provide reasonable accommodations to qualified individuals with a disability, unless doing so would trigger significant operational difficulties or expenses for the employer. Employees on leave for a disability may request reasonable accommodations in order to return to work. The employee may make the request, or the request may be outlined in a doctor’s note releasing the employee to return to work with certain restrictions.
When an employer becomes aware of an employee’s need for a possible accommodation, it is the duty of the employer to discuss the accommodation needs with the employee. Employers run afoul of the ADA when they impose “100% healed or recovered” policies. These policies refer to a practice mandating an employee be released to work without any restrictions before she may return to work. For example, if an employee is on medical leave for a surgery to address a disability and the employee’s physician releases her to work with a 20-pound lifting restriction, the employer cannot refuse to allow the employee to return to work with the lifting restriction if the employee’s essential functions do not require lifting 20 pounds. To do so would violate the ADA.
In May 2016, the Equal Employment Opportunity Commission (EEOC) issued guidance entitled “Employer-Provided Leave and the Americans with Disabilities Act.” Since issuing that guidance, the EEOC has been targeting employers with 100% Healed Policies. Recently, the EEOC set its sights on Corizon Health Inc., and Corizon LLC, (Corizon), nationwide health care companies that operate in Phoenix, Arizona.
On September 19, 2018, the EEOC filed suit against Corizon in the District of Arizona. The EEOC suit alleges Corizon violated federal law by discriminating against employees with a 100% healed policy. The EEOC states Corizon required employees with disabilities to be 100% healed or to be without any medical restrictions before they were allowed to return to work. The EEOC states this practice is a clear violation of the ADA.
The EEOC’s Phoenix Office, in filing this suit, has made clear it is committed to challenging 100% healed policies. Elizabeth Cadle, District Director of the EEOC’s Phoenix District Office, stated in a press release,
“Employers should never have 100% return to work policies that require employees to have no medical restrictions. That policy tells employees that the company will not provide reasonable accommodations for employees with medical restrictions.”
What does this mean for Arizona employers?
If you are an Arizona employer with a 100% healed policy, you should contact legal counsel immediately to discuss policy revisions. While the ADA does not require employers to return every employee to work after medical leave, the law may prohibit automatic denials based on broad 100% healed requirements. Employers should consult with legal counsel to ensure their policies support a case-by-case analysis of employee accommodation requests. If you have a 100% healed policy, or have questions or concerns about your current accommodation and equal employment policies, contact the Milligan Lawless attorney with whom you usually work.
In the wake of the #MeToo movement, the United States Equal Employment Opportunity Commission (EEOC) has sent a message to employers that cracking down on workplace sexual harassment continues to be an enforcement priority. Immediately following a meeting last June that reconvened the EEOC’s Select Task Force on the Study of Harassment in the Workplace, the agency announced the filing of seven separate lawsuits against employers throughout the country over allegations of sexual harassment and other forms of misconduct.
The EEOC’s actions demonstrate the need for employers to take proactive measures toward eliminating and preventing sexual harassment within their workforce.
What is Sexual Harassment?
Sexual harassment is broadly defined as
Sexual harassment can take myriad forms, including all of the following: commenting on an individual’s body or sexual attractiveness; requesting sexual favors; transmitting or displaying sexually explicit emails, texts, or images; telling obscene jokes; making offensive gestures; and engaging in unwanted touching.
Sexual harassment is considered a form of sex discrimination that violates Title VII of the Civil Rights Act of 1964.
Sexual harassment also represents significant economic costs to employers in the form of increased absenteeism, reduced productivity, higher staff turnover, and the financial/reputational damage of high-profile payouts.
A Proactive Approach
The EEOC has made clear that employers are charged with exercising reasonable care to identify and correct sexual harassment in the workplace. To that end, employers should consider these practical steps:
Adopt a Written Anti-Harassment Policy
An employer can help minimize its exposure by adopting and communicating a strong, written anti-harassment policy. The EEOC advises that the policy should, at a minimum, include the following elements:
Employers should include the policy in their employee handbooks and distribute to all employees.
Provide Effective Training
Employers should provide sexual harassment training to all levels of employees. Employers should also consider providing additional and separate training to management.
The EEOC states that anti-harassment training is most effective when it is, among other things:
Conduct Appropriate Investigations & Take Effective Remedial Action
When an employee reports a complaint of sexual harassment, employers can help protect themselves by promptly investigating the claim. As soon as an employer learns of a complaint, it should determine whether a fact-finding investigation is necessary and how it will be conducted. To the extent possible, investigations should be kept confidential.
In the event that an employer determines that harassment has occurred, it must undertake immediate and appropriate corrective measures. Corrective measures should be designed to stop the harassment, correct its effects on the complainant, and ensure that the harassment does not recur.
Employers should keep in mind that corrective measures that adversely affect or penalize the complainant could constitute unlawful retaliation.
Consult with Legal Counsel for Additional Information
Employers that would like more information about workplace sexual harassment, including advice on creating and implementing effective anti-harassment policies, may contact the attorneys at Milligan Lawless for assistance.
On April 30th, 2018, Dr. Rita Luthra was convicted of violating the HIPAA Privacy Rule and of obstruction of a criminal health care investigation. A federal jury found that Dr. Luthra allowed a pharmaceutical sales representative to access her patient records and lied to federal investigators. Criminal charges under the federal Anti-Kickback Statute (“AKS”) were alleged initially but subsequently dropped.
Dr. Luthra’s conviction stems from her involvement with a pharmaceutical sales representative with Warner Chilcott. Warner Chilcott was the subject of a criminal investigation by the U.S. Department of Justice (DOJ) in 2015. The investigation resulted in Warner Chilcott pleading guilty to a felony charge of health care fraud and agreeing to pay $125 million to resolve criminal and civil liability arising from alleged illegal marketing practices of certain drugs.
According to the government, the Warner Chilcott sales representative asked Dr. Luthra to participate in the company’s speaker program because Dr. Luthra prescribed a high volume of osteoporosis medication. Dr. Luthra agreed and spoke at medical education and speaker training events held in her office. The events involved Dr. Luthra speaking to the sales representative for about thirty minutes while she ate food provided by the representative for Luthra and her office staff. Warner Chilcott paid Dr. Luthra approximately $23,500 for her services.
In January 2011, Warner Chilcott launched a new osteoporosis drug which Dr. Luthra prescribed. Many insurance companies required a prior authorization before covering the new drug. In response to receiving numerous denials for Dr. Luthra’s prescriptions for the new drug, she asked the sales representative to assist one of her medical assistants with obtaining prior authorizations. The sales representative agreed, was given access to Dr. Luthra’s medical records to complete the prior authorizations, and filled out the prior authorizations.
Dr. Luthra later provided false information to OIG investigators when interviewed about her relationship with Warner Chilcott. She was convicted of a criminal violation of HIPAA for the improper disclosure of her patients’ protected health information to the sales representative. It is illegal to knowingly disclose protected health information in violation of the Privacy Rule. Most HIPAA enforcement activities are in the form of civil enforcement. However, the Privacy Rule also establishes criminal penalties for certain wrongful disclosures of protected health information.
Dr. Luthra’s sentencing has not yet been scheduled. Nonetheless, Dr. Luthra’s HIPAA violation provides for a sentence of up to one year in prison and/or a fine of up to $50,000. The obstruction conviction carries a higher potential penalty of up to five years in prison and a fine of up to $250,000.
While criminal prosecutions of HIPAA violations are rare, this case serves as a reminder that HIPAA is more than a series of privacy and security rules; HIPAA establishes criminal liability and potential jail time for HIPAA violations. This case reflects the DOJ’s continuing scrutiny of physician-pharmaceutical manufacturer relationships, particularly those that can affect health care decision making. Providers should be mindful of their relationships with pharmaceutical companies, and third parties who may have access to protected health information. Moreover, if a provider is the subject of an investigation, he or she should be truthful and engage competent counsel at the early stages of the investigation.
For more information, or if you need assistance with an investigation or evaluating whether your relationships comply with HIPAA, please contact Miranda Preston or another health care attorney at Milligan Lawless.
The law mandates that, beginning October 1, 2017, physicians must consult a prescription monitoring program (PMP) prior to prescribing an opioid analgesics or benzodiazepine in schedules II-IV.
Under the new regulations, Arizona health care institutions must establish and implement more comprehensive plans and procedures for prescribing or ordering an opioid or administering an opioid.
Physicians who prescribe opioids, and health care institutions licensed by Arizona’s Department of Health Services, should be aware of this new law, and new rule. If you have any questions regarding these new laws, or would like assistance with updating your policies and procedures to conform to these requirements, please feel free to contact Milligan Lawless.
 SB 1283 (2016), signed by Arizona Governor Doug Ducey in 2016 amended A. R. S. § 36-2606.
 9 AZ Adc. Ch.10, Ariz. Admin. Code R9-10-120.