As employers continue preparing for health plan changes that take place in 2015 under the Affordable Care Act, I have been following a number of developments that remind me of the importance of thinking globally with respect to revisions to benefits. What I mean by that is just because you can do something does not necessarily mean you should do something because of the breadth of other laws that impact employers beyond ERISA and the ACA.
Earlier this week, a number of news outlets reported how some companies were adding egg freezing benefits to their health plan fertility coverage. The health plans cover the cost of female employees who want to cryogenically preserve eggs to be used to have children. In one quote I read, it suggested that this would allow women more opportunity to wait to have children until after their career has matured. But a concern with this type of benefit is that the company is sending a message that if you have children when you are younger, the company sees you as being not career oriented. Women who chose not to take advantage of the benefit might feel discriminated against if they are not promoted as quickly. So the risk for these companies is that women who decide to have children can make claims for discrimination.
Wellness plans have to be carefully considered as well. Recently, the EEOC announced that it had filed two suits against employers under the Americans with Disabilities Act by requiring employees to submit to medical examinations and inquiries that were neither job-related nor consistent with business necessity. The EEOC contended that these programs were not voluntary and thus violated the ADA. Since the EEOC has not yet issued guidance on how employers may structure their wellness programs to avoid violations of the ADA, this leaves employers up in the air over whether their voluntary wellness programs, while permissible under the ACA, will run afoul of the EEOC.
Finally, I saw a notice that AT&T is terminating its retiree medical and replacing it with an HRA. AT&T anticipates this will help them control costs associated with their medical plan. As someone who has defended employers in class action litigation brought by retirees for terminating medical coverage, I can say for certain that while it may be permissible to make that change, the process for doing it properly requires much more than just announcing change and implementing the new plan. Careful consideration has to be given to each phase of the process. I am not suggesting AT&T has not followed the appropriate procedure, but merely suggesting that making a change like this is a much longer and more involved process than a new notice might reveal.
The point being that while employers are diligently seeking ways to manage ACA compliance and health benefits costs, they should not lose sight of the adage that just because you can do something does not mean you should do it. Any change to a benefit plan comes with some risk and it has to be fully evaluated before the change is made. The more an employer considers potential risks, the less likely they are to get bad press.
Keith R. McMurdy is a partner with Fox Rothschild focusing on labor and employment issues; he can be reached at firstname.lastname@example.org or (212) 878-7919.
The information in this legal alert is for educational purposes only and should not be taken as specific legal advice.
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