SCOTUS to Hear Case on Obamacare Risk Corridor Payments

The Supreme Court today agreed to hear a case brought by health insurance companies claiming they are owed $12 billion by the government for unfunded Obamacare risk corridor payments.

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This 1932 photo of the Supreme Court, taken by a camera smuggled into the courtroom, is one of only two known to exist. Photography in the chamber is forbidden.

Risk corridor payments were designed to compensate those insurance companies that ended up with a sicker (and therefore more expensive) population of enrollees. The money was supposed to be collected from insurers with healthier populations, but the funds never added up to enough to compensate the losers fully.

The insurance companies expected the federal government to cover the shortfall, but Congressional Republicans engineered a series of budget riders forbidding the use of general funds to compensate the insurers.

Now the insurers want the money they believe is still owed to them, some $12.3 billion in all. They claim they set their insurance premiums lower in expectation of compensation for their losses and are accusing the government of “bait-and-switch” tactics.

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NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Five Cities Sue Trump Administration Over Obamacare

A coalition of five cities has sued President Trump and officials at the Department of Health and Human Services (HHS) for deliberately “sabotaging” the Affordable Care Act (ACA, or Obamacare).

white-house-receives-joint-employer-proposalThe suit hinges on a clause in the Constitution and on the judicial review powers set forth in the Administrative Procedure Act (APA).

The clause in question is known as the “take care” clause, which requires the president to “take Care that the Laws be faithfully executed.” The APA, on the other hand, allows courts to throw out government regulations deemed “arbitrary and capricious.”

Administrative lawyers argue that the Constitution gives the president wide latitude to make policy decisions affecting laws and their enforcement.

One other case relying on the “take care” clause resulted in a 4-4 tie upon Supreme Court review. That case involved President Obama and his decision to delay the deportation of millions of undocumented immigrants. (The case was heard when the court had just eight sitting justices after the death of Antonin Scalia.)

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NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Drug Companies Sue HHS to Block Price Rule

They’re mad as heck and they ain’t gonna take it anymore, so we’ll see you in court, says Big Pharma.

hhs-resets-hipaa-finesMerck, Eli Lilly and Amgen are being joined by the National Association of Advertisers in suing the Department of Health and Human Services (HHS) over a rule taking effect in July that will force manufacturers to reveal pricing in their consumer drug ads.

Their bone of contention: The rule violates their freedom of speech and will deter patients from using the drugs because list prices are generally higher than market prices, which are subject to negotiation and are often lower, according to the lawsuit.

“If the drug companies are embarrassed by their prices or afraid that the prices will scare patients away, they should lower them,” HHS spokesperson Caitlin Oakley said. “President Trump and Secretary Azar are committed to providing patients the information they need to make their own informed health care decisions.”


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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New Rules Could Shake Up Employment-Based Health Insurance

The Trump administration is rolling out rules that will allow employers to fund Health Reimbursement Arrangements (HRAs) so that their employees can purchase health insurance on their own. The rules, which take effect on Jan. 1, 2020, are currently being finalized by the departments of Treasury, Labor and Health and Human Services.

The rules follow on the heels of President Trump’s October 2017 Executive Order 13812, “Promoting Healthcare Choice and Competition Across the United States.”

HRAs will be funded entirely by employers without requiring employee contributions. The funds in the HRAs will accrue to the employees and their family members tax-free.

The White House expects 800,000 employers to choose this defined benefit contribution option, which is expected to affect 11 million employees and their families.

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NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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SCOTUS Ruling Makes Employer Discrimination Defense Harder

The Supreme Court this month resolved a split among the circuit courts regarding Title VII lawsuits and discrimination filings with the Equal Employment Opportunity Commission (EEOC).

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The U.S. Supreme Court building, completed in 1935.

Title VII of the Civil Rights Act of 1964, which prohibits discrimination in employment on the basis of race, color, religion, sex and national origin, provides that an employee must file a charge of discrimination with the EEOC within 180 days of the alleged unlawful employment practice. The agency will then, within another 180 days, issue the complainant a “right-to-sue” notice.

The circuit court split regarded whether these EEOC filings were “jurisdictional” — meaning the lawsuit could proceed only in accordance with the filing — or were just a “claim-processing rule.” If the former, then employers being sued could have a lawsuit thrown out at any time if the charges were not clearly spelled out in the EEOC filing. If the latter, employers being sued could use the filing as an affirmative defense, but such a defense could be waived if not promptly asserted in court.

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NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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First HIPAA Lawsuit by State Attorneys General Settled

Medical Informatics Engineering Inc. (MIE) has agreed to pay $900,000 to 16 states whose attorneys general had sued the company over a data breach in violation of the Health Insurance Portability and Accountability Act (HIPAA).

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OCR Director Roger Severino

Simultaneously, MIE settled with the Department of Health and Human Services (HHS) for $100,000 and committed to a two-year corrective action plan in a related breach.

The company had earlier self-reported that hackers had accessed the electronic protected health information (ePHI) of about 3.5 million people whose records it maintained.

An investigation by the HHS Office for Civil Rights (OCR) then determined that MIE had not conducted a mandatory comprehensive risk analysis before the incident. This resulted in the fine and corrective action plan, but absolved MIE of admitting guilt.

OCR Director Roger Severino said that the “failure to identify potential risks and vulnerabilities to ePHI opens the door to breaches and violates HIPAA.”


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Judge Rules ACA Contraceptive Mandate Subject to Religious Objection

U.S. District Judge Reed O’Connor of Ft. Worth, Texas, who last year ruled the entire Affordable Care Act (ACA, or Obamacare) unconstitutional, this past week ruled that individuals with religious objections must be allowed to buy insurance without the ACA-mandated contraceptive mandate.

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5th U.S. Circuit Court of Appeals Chamber

Judge O’Connor’s prior ruling is on hold pending a July 8 hearing before the 5th U.S. Circuit Court of Appeals in New Orleans. This ruling, however, props up a rule issued in November by the Department of Health and Human Services (HHS), which sought the same religious freedom from the contraceptive clause but ran into legal challenges.

That rule was put on hold in the 13 states covered by the 9th Circuit Court of Appeals by a California judge’s ruling.

In the Texas case, the plaintiff — Richard DeOtte — objected primarily to the use of abortifacients as part of the mandate. He chose to go without insurance rather than to submit to the contraceptive mandate.

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NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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SEC Releases Scaled-Down Version of DOL Fiduciary Rule

Predating the reworked and much-anticipated Trump admin fiduciary rule expected in December, the Securities and Exchange Commission (SEC) has published Regulation Best Interest, which will be enforced beginning June 30, 2020, and is now undergoing a 60-day public commentary period.

SEC-passes-fiduciary-ruleThe major change from current SEC regulations concerning transactions by broker-dealers with retail customers (i.e., private individuals rather than institutions) is that investments recommended can no longer just be “suitable” but have to be in the “best interest” of the customer.

Under Regulation Best Interest, broker-dealers must reveal any conflicts between their recommendation and the customer’s financial best interest. Broker-dealer contests and quotas over who can sell the most investments are also being nixed.

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NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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New 30-Day Commentary Period Opens for I-9 Reissue

U.S. Citizenship and Immigration Services (USCIS) has opened a 30-day public commentary period on possible revisions to Form I-9, Employment Eligibility Verification, in accordance with the Paperwork Reduction Act of 1995. The commentary period ends July 5, 2019.

e-verify-comment-period-closes-july-5-2019The act requires both a 60-day and 30-day commentary period for the I-9, whose current version expires Aug. 31, 2019. A 60-day period closed on April 30, during which time 21 comments were received.

According to the agency’s announcement in today’s Federal Register, the commentary period is for “Extension, Without Change, of a Currently Approved Collection.” In other words, USCIS intends to reissue and re-date the current form but is open to reviewing comments and suggestions for possible improvements.

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NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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EEOC Wellness Rule Rewrite Pushed Back to December

The Equal Employment Opportunity Commission (EEOC) has been under court order since 2017 to better explain the rationale behind the incentive portion of the wellness rule it promulgated in 2016.

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Janet Dhillon, new EEOC Chair

The rule governs employer-sponsored wellness programs and allows employers to offer an incentive equal to 30 percent of the cost of self-only health coverage to entice employees to participate voluntarily.

The AARP sued, saying the incentive was actually a penalty for those who didn’t wish to participate, as they would have to pay more for their health insurance, and therefore their participation would not be “voluntary.” District Court Judge John D. Bates heard arguments and ruled that the incentive in the wellness rule was “not well-reasoned.” He order the EEOC to revisit the rule and explain matters better.

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NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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