Category: COVID-19

Acting U.S. Attorney Levy Forecasts False Claims Act COVID Cases Targeting Private Lenders Of CARES Act Loans That Failed In Their Obligation To Safeguard Government Funds

Acting U.S. Attorney Joshua Levy discussed the enforcement priorities for the Massachusetts U.S. Attorney’s Office (USAO) during a Q&A session on May 29, 2024, and made clear that the historical focus of the office remains the top priority: detecting and combating health care fraud, waste, and abuse. In particular, both Levy and Chief of the USAO’s Civil Division, Abraham George, have recently indicated that the government will pursue large dollar COVID fraud cases both criminally and civilly. As we have discussed previously, we expect False Claims Act (FCA) COVID cases to materialize in the coming years as the government zeroes in on wrongdoers via enhanced data analytics and AI tools as well as via traditional investigative methods and the forthcoming Whistleblower Rewards Program.

Recent COVID FinTech Lender, Kabbage, $120 MM False Claims Act Settlement

The recent Kabbage settlement is illustrative of the types of COVID cases the office is looking to bring pursuant to the FCA. Acting U.S. Attorney Levy discussed the settlement, publicized in May, with now-bankrupt online lender, Kabbage Inc. Kabbage allegedly knowingly processed and submitted thousands of false claims for Paycheck Protection Program (PPP) loan forgiveness, loan guarantees, and processing fees. The PPP – a loan program for small businesses created via the Coronavirus Aid, Relief, and Economic Security (CARES) Act – was administered the federal Small Business Administration (SBA). The CARES Act authorized private lenders to approve PPP loans for eligible borrowers who could later seek forgiveness for the loans if borrowers used the loans for eligible expenses, including employee payroll.

Among other things, participating PPP lenders were obligated to 1) confirm borrowers’ average monthly payroll costs by PPP loan documentation; and 2) follow applicable Bank Secrecy Act/Anti-Money Laundering (BSA/AML) requirements. SBA guaranteed any unforgiven or defaulted PPP loans as long as the private lender adhered to PPP requirements.

Private lenders received a fixed fee calculated as a percentage of the loan amount. Here, U.S. Attorney Levy’s office alleged that Kabbage awarded inflated and fraudulent loans to maximize its profits, then sold its assets and left the remaining company financially depleted, leading to bankruptcy. Kabbage was allegedly aware of the following errors as of April 2020, failed to correct them, and continued to make improper loan disbursements after learning of the issues:

  1. double-counting state and local taxes paid by employees when calculating gross wages;
  2. failing to exclude annual compensation above $100,000 per employee; and
  3. improperly calculating employee leave and severance payments.

Kabbage also allegedly failed to implement appropriate fraud controls to comply with the PPP, BSA, and AML by knowingly:

  1. removing underwriting steps to facilitate processing a high volume of loan applications and maximizing loan processing fees;
  2. setting substandard fraud check thresholds;
  3. relying on automated tools that were inadequate in identifying fraud;
  4. devoting insufficient personnel to conduct fraud reviews;
  5. discouraging its fraud reviewers from requesting information from borrowers to substantiate their loan requests; and
  6. submitting to the SBA thousands of dubious PPP loan applications that were fraudulent or highly suspicious.

The settlement, which will result in the U.S. securing up to $120 million pursuant to bankruptcy proceedings, resolves qui tam complaints brought by two separate whistleblowers: an accountant who submitted PPP loan applications to multiple lenders and a former analyst in Kabbage’s collection department.

Predictions for Future COVID Fraud Enforcement

Acting U.S. Attorney Levy’s comments make clear that we can expect to see FCA COVID cases targeting private lenders of CARES Act loans that failed in their obligation to safeguard government funds. To date, COVID fraud prosecution has largely targeted “low-hanging fruit” criminal cases, such as those involving submission of false information to obtain COVID relief funding that the recipient spends on luxury items. We discussed in April that the COVID Fraud Enforcement Task Force (CFETF) and a bipartisan group of Senators had, via a report and draft legislation, pleaded with Congress to increase funding to prosecute COVID fraud. Investigations such as those involving Kabbage require a large investment of resources and, as U.S. Attorney Levy commented, his office must prioritize large-dollar COVID fraud cases most likely to result in specific and general fraud deterrence.

As we have written previously, the government is playing a long game tracking COVID fraud. The Justice Department’s CFETF reported in April that to date, the DOJ had seized or forfeited $1.4 billion in stolen relief funds as well as bringing criminal charges against 3,500 defendants and 400 civil settlements. With a ten-year statute of limitations and increasingly more accurate data analytics tools, we expect the DOJ will continue to identify and recover misappropriated funds from large and lower dollar fraudsters. So long as COVID fraud enforcement remains a well-funded priority of the government, we anticipate a steady stream of FCA COVID settlements involving lenders and borrowers. The government is casting a wide net to recoup the nearly $300 billion in COVID fraud estimates. We will continue to monitor and report on developments.

©1994-2024 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.
For more on COVID, visit the NLR Coronavirus News section.

Department of Justice Ramps Up Investigations of Private Clubs that Received PPP Loans

As Varnum’s government investigations team has previously discussed, (link) the COVID-era Paycheck Protection Program (PPP) resulted in millions of businesses receiving emergency loans. The PPP’s hurried implementation, coupled with confusion among recipients over eligibility requirements, created an environment ripe for both fraud and the issuance of loans to ineligible recipients. Over the past few years, the Department of Justice (DOJ) has focused on fraud by among other things, opening civil investigations under the False Claims Act and bringing criminal charges against PPP loan recipients who misused loan proceeds on luxury items. But recently, the DOJ has shifted its focus to a new category of PPP recipients: social clubs that may have been technically ineligible for the loans they received.

The opportunity for improper loans to social clubs comes about because of a technical wrinkle in how Congress wrote the American Rescue Plan Act of 2021. In this Act, Congress made social clubs (i.e. golf clubs, tennis clubs, yacht clubs) organized under 26 U.S.C. § 501(c)(7) eligible for PPP loans. However, Congress incorporated an agency regulation that prohibited loans to “private clubs and businesses which limited the numbers of memberships for reasons other than capacity.” The result is that social clubs that limit their number of members for any reason besides capacity were technically ineligible for PPP loans.

In recent months, the DOJ has issued Civil Investigation Demands (CIDs) to clubs that it believes might not have been eligible for PPP loans. These CIDs are demands for documents and interrogatory answers and often relate to employment records, income statements, the membership admission process, prospective members’ applications, the club’s governance, and membership information. CIDs are expansive and the government can use the club’s answer in future civil or criminal proceedings.

Given the DOJ’s new focus, clubs should review their PPP paperwork now and consult with an attorney to determine whether their loan was properly issued. If the clubs find technical violations, proactively approaching the government through counsel may be beneficial. If a club receives a CID, it should immediately contact an attorney to begin preparing the appropriate response.

© 2024 Varnum LLP
by: Ronald G. DeWaard, Regan A. Gibson, Gary J. Mouw, Neil E. Youngdahl of Varnum LLP

For more news on Paycheck Protection Program Fraud Enforcement, visit the NLR Criminal Law / Business Crimes section.

Federal Court Confirms Case Challenging Bank of America’s Fraudulent COVID Relief Program Can Proceed

In a significant step forward for consumer protection, the Northern District of California confirmed that claims that Bank of America’s (“BofA”) misled its customers with false promises to provide overdraft fee relief during the COVID-19 pandemic could proceed.

The litigation centers on allegations that BofA widely advertised a COVID-19 bank fee relief program to garner publicity and goodwill but, instead of honoring its promises, the Bank abruptly and quietly ended any relief just a few months into the raging pandemic. Instead of announcing the shutdown, BofA kept promoting the program when none existed. Plaintiffs and other Americans across the country, who were suffering significant financial hardship as a result of the pandemic, trusted the bank’s marketing, and incurred significant fees that the bank refused to waive.

Plaintiffs Anthony Ramirez, Mynor Villatoro Aldana, and Janet Hobson have lodged claims on behalf of a putative nationwide class and state subclasses. The Court’s denial of BofA’s motion to dismiss supports plaintiffs’ allegations that the bank’s continued advertisement of the defunct relief program was deceptive and unlawful, depriving consumers across the country of millions of dollars in promised fee refunds.

This decision bolsters consumer protection rights and reinforces the judiciary’s role in ensuring that big banks like BofA make good on their promises to financially struggling customers.

The case is Ramirez, et al. v. Bank of America, N.A., Case No.: 4:22-cv-00859-YGR in the United States District Court for the Northern District of California.

A copy of the order is available here.

© 2024 by Tycko & Zavareei LLP
For more news on BofA COVID-19 bank fee relief program litigation, visit the NLR Litigation / Trial Practice section.

2024: The Year of the Telehealth Cliff

What does December 31, 2024, mean to you? New Year’s Eve? Post-2024 election? Too far away to know?

Our answer: December 31, 2024, is when we will go over a “telehealth cliff” if Congress fails to act before that date, directly impacting care and access for Medicare beneficiaries. What is this telehealth cliff? Let’s back up a bit.

TELEHEALTH COVERAGE POLICIES

Current statute (1834(m) of the Social Security Act) lays out payment and coverage policies for Medicare telehealth services. As written, the provisions significantly limit Medicare providers’—and therefore patients’—ability to utilize telehealth services. Some examples:

  • If the patient is in their home when the telehealth service is being provided, telehealth is generally not eligible for reimbursement.
  • Providers cannot bill for telehealth services provided via audio-only communication.
  • There is a narrow list of providers who are eligible to seek reimbursement for telehealth services.

COVID-19-RELATED TELEHEALTH FLEXIBILITIES

When the COVID-19 pandemic hit in 2020, a public health emergency (PHE) was declared. Congress passed several laws, and the administration acted through its own authorities to provide flexibilities around these Medicare telehealth restrictions. In general, nearly all statutory limitations on telehealth were lifted during the PHE. As we all know, utilization of telehealth skyrocketed.

The PHE ended last year, and through subsequent congressional efforts and regulatory actions by the Centers for Medicare and Medicaid Services (CMS), many flexibilities were extended beyond the end of the PHE, through December 31, 2024. Congress and CMS continue to grapple with how to support the provision of Medicare telehealth services for the future.

CMS has taken steps through the annual payment rule, the Medicare Physician Fee Schedule (MPFS), to align many of the payment and coverage policies for which it has regulatory authority with congressional deadlines. CMS has also restructured its telehealth list, giving more clarity to stakeholders and Congress as to which pandemic-era telehealth services could continue if an extension is passed. But CMS can’t address the statutory limitations on its own. Congress must legislate. CMS highlighted this in the final calendar year (CY) 2024 MPFS rule released on November 2, 2023, noting that “while the CAA, 2023, does extend certain COVID-19 PHE flexibilities, including allowing the beneficiary’s home to serve as an originating site, such flexibilities are only extended through the end of CY 2024.”

THE TELEHEALTH CLIFF

This brings us to the telehealth cliff. CMS generally releases the annual MPFS proposed rule in July, with the final rule coming on or around November 1. If history is any indication, Congress is not likely to act on the extensions much before the current December 31 deadline. This sets up the potential for a high level of uncertainty headed into 2025.

If we go over, this telehealth cliff would directly impact care and access for Medicare beneficiaries. The effects could be felt acutely in rural and underserved areas, where patients have been able to access, via telehealth, medical services that may have been out of reach for them in the past. The telehealth cliff would also impact how providers interact with their patients, and their collective ability to continue to utilize telehealth in a way that has benefited patients and providers alike. It could also influence how health plans choose to cover these services in the private marketplace beyond 2024. Such a dramatic change would impact business decisions for many providers and practices heading into 2025. And, at a time when provider shortages are still a significant issue, it would eliminate an option that has allowed many providers, practices and facilities to extend scarce resources for patient care.

TAKE ACTION

Stakeholders should be raising these concerns to Congress now. There are many ways to engage, including reaching out directly to key Members of Congress, looking for opportunities to testify or submit written testimony for relevant congressional hearings, and participating in organized events where Members of Congress will be present. This cliff can be avoided, but not without a concentrated effort and a lot of noise.

© 2024 McDermott Will & Emery
For more on Telehealth, visit the NLR Communications, Media & Internet section.

Out with the Old? Not So Fast! A Quick Review of 2023 Highlights

2023 has brought many updates and changes to the legal landscape. Our blog posts have covered many of them, but you may not remember (or care to remember) them. Before moving on to 2024, let’s take a moment to review our top five blog posts from the year and the key takeaways from each.

VAX REQUIREMENT SACKED IN TN: MEDICARE PROVIDERS LOSE EXEMPTION FROM COVID-19 LAWS

Our most read blog of 2023 covered the federal COVID-19 vaccination requirement that applied to certain healthcare employers, which was lifted effective August 4, 2023. (Yes, in 2023 we were still talking about COVID-19). However, keep in mind that state laws may still apply. For example, Tennessee law generally prohibits employers from requiring employee vaccination, with an exception for entities subject to valid and enforceable Medicare or Medicaid requirements to the contrary (such as the federal vaccine requirement). However, now that the federal vaccine requirement is gone, there is no exception for these Medicare or Medicaid providers, and they are likely fully subject to Tennessee’s prohibition.

INTERPRETATION OF AN INTERPRETER REQUEST? 11TH CIRCUIT WEIGHS IN ON ACCOMMODATION OF DEAF EMPLOYEE

In this blog post, we covered a recent Eleventh Circuit case in which the court addressed ADA reasonable accommodation requests . The employee requested an accommodation, and the employer did not grant it—but the employee continued to work. Did the employee have a “failure to accommodate” claim? The Eleventh Circuit said yes, potentially. The court clarified that an employee still must suffer some harm—here, he needed to show that the failure to accommodate adversely impacted his hiring, firing, compensation, training, or other terms, conditions, and privileges of his employment. So, when you are considering an employee’s accommodation request, think about whether not granting it (or not providing any accommodation) could negatively impact the employee’s compensation, safety, training, or other aspects of the job. Always remember to engage in the interactive process with the employee to see if you can land on an agreeable accommodation.

POSTER ROLLERCOASTER: DOL CHANGES FLSA NOTICE REQUIRED AT WORKPLACES

If your business is subject to the FLSA (and almost everyone is), you probably know that you must provide an FLSA poster in your workplace. In this blog post, we reported that there is an updated FLSA “Employee Rights” poster that includes a “PUMP AT WORK” section, required under the Provide Urgent Material Protections (PUMP) for Nursing Mothers Act (more information on the PUMP Act here).

HOLIDAY ROAD! DOL WEIGHS IN ON TRACKING FMLA TIME AGAINST HOLIDAYS

In this now-timely blog post from June 2023, we discussed new guidance on tracking FMLA time during holidays. The DOL released Opinion Letter FMLA2023-2-A: Whether Holidays Count Against an Employee’s FMLA Leave Entitlement and Determination of the Amount of Leave. When employees take FMLA leave intermittently (e.g., an hour at a time, a reduced work schedule, etc.), their 12-week FMLA leave entitlement is reduced in proportion to the employee’s actual workweek. For example, if an employee who works 40 hours per week takes 8 hours of FMLA leave in a week, the employee has used one-fifth of a week of FMLA leave. However, if the same employee takes off 8 hours during a week that includes a holiday (and is therefore a 32-hour week), has the employee used one-fourth of a week of FMLA leave? Not surprisingly, the DOL said no. The one day off is still only one-fifth of a regular week. So, the employee has still only used one-fifth of a week of FMLA leave. Review the blog post for options to instead track leave by the hour, which could make things easier.

OT ON THE QT? BAMA’S TAX EXEMPTION FOR OVERTIME

Alabama interestingly passed a law, effective January 1, 2024, that exempts employees’ overtime pay from the 5% Alabama income tax. In this blog post, we discussed the new exemption. It is an effort to incentivize hourly employees to work overtime, especially in light of recent staffing shortages and shift coverage issues. The bill currently places no cap on how much overtime pay is eligible for the exemption, but it allows the Legislature to extend and/or revise the exemption during the Spring 2025 regular session. If you have employees in Alabama, be sure to contact your payroll department or vendor to ensure compliance with this exemption.

As always, consult your legal counsel with any questions about these topics or other legal issues. See you in 2024!

© 2023 Bradley Arant Boult Cummings LLP
For more news on 2023 Legal Landscape Updates, visit the NLR Labor & Employment section.

COVID Vaccine Class Action Reminds Employers to Individually Consider Accommodations

Tyson Foods, Inc. (“Tyson”) is no stranger to religious accommodation lawsuits over the impact of its COVID-19 vaccine mandate given its continued efforts to operate through the height of the pandemic in 2021—but the battle just heated up with a proposed class action complaint filed in the Eastern District of Arkansas.

Tyson’s recent troubles derive from its 2021 vaccine mandate (the “Vaccine Mandate”) requiring all leadership team members to be vaccinated by September 24, 2021, all corporate team members to be vaccinated by October 1, 2021, and all other team members to be vaccinated by November 1, 2021. The Vaccine Mandate coincided with an OSHA rule (which the Supreme Court subsequently ruled unconstitutional) requiring workers with at least 100 workers to be vaccinated or to produce weekly test results showing that they were virus-free. Tyson, a huge company with warehouse operations, clearly fell within its ambit and had strong incentives to keep its workforce safe.

Notably, while in place, the OSHA rule required employers to grant medical and religious exemptions from the mandate. Likewise, Tyson’s Vaccine Mandate required Tyson to afford reasonable accommodations to employees with sincerely-held religious beliefs that prevented them from receiving the vaccine, as required by the OSHA rule. However, various plaintiffs have alleged that the only accommodation typically offered to religious objectors was to be placed on an unpaid leave of absence called LOA+, which lasted approximately one year. Plaintiffs claim that requests to telework were refused in favor of this unpaid leave.

One of the first suits to be filed was Reed, et al., v. Tyson Foods, Inc., No. 21-CV-01155-STA-JAY, 2022 WL 2134410 (W.D. Tenn. June 14, 2022), in which several plaintiffs sought injunctive relief against the Vaccine Mandate in part on religious and disability theories under Title VII and the ADA. Though parts of the case were allowed to proceed, these specific claims were dismissed without prejudice for failure to exhaust administrative remedies. Tyson also succeeded on defeating religious claims based on the Religious Freedom Restoration Act (“RFRA”) on a motion to dismiss in another Tennessee case, after failing to secure dismissal in another, similar case based on Title VII and the RFRA. Compare Johnson v. Tyson Foods, Inc., No. 21-CV-01161-STA-JAY, 2023 WL 3901485 (W.D. Tenn. June 8, 2023) with Hayslett v. Tyson Foods, Inc., 636 F. Supp. 3d 900 (W.D. Tenn. 2022). The latter case settled out-of-court in July 2023.

Beyond these, Tyson also faced other single-plaintiff suits on religious vaccine accommodation grounds in Tennessee, Kentucky, and Missouri, with varying results. Matthews v. Tyson Foods, Inc., No. 1:22-CV-1192-STA-JAY, 2023 WL 25733 (W.D. Tenn. Jan. 3, 2023)(motion to dismiss denied under Tennessee state law); Collins v. Tyson Foods, Inc., No. 1:22-CV-00076-GNS, 2023 WL 2731047 (W.D. Ky. Mar. 30, 2023)(motion to dismiss granted under RFRA, ADA, and Kentucky state law, but denied under Title VII); Reese v. Tyson Foods, Inc., No. 3:21-05087-CV-RK, 2021 WL 5625411 (W.D. Mo. Nov. 30, 2021) (motion to dismiss granted as to public policy and invasion of privacy claims, but denied under state discrimination law). Some of these cases were subsequently settled, as well.

On November 16, 2023, plaintiff Sarah Pearson brought a proposed class action complaint in Pearson v. Tyson Foods Inc., 4:23CV01080, purporting to represent:

All Arkansas based Tyson employees or former Arkansas based Tyson employees who worked remotely (telework) prior to August 3, 2021, who requested a religious accommodation to continue working remotely (telework) in response to Tyson’s COVID Vaccine Mandate, and who were instead placed on LOA+ by Tyson;

and

All Arkansas based Tyson employees or former Arkansas based Tyson employees who worked remotely (telework) prior to August 3, 2021, who requested a religious accommodation when Tyson ended its COVID Vaccine Mandate on October 31, 2022, and who were subsequently not reinstated to the same job and terminated.

For each, Pearson recites the allegations required to sustain a class action: numerosity (in excess of 50 putative class members, per her complaint), commonality, typicality, and adequacy. These allegations can prove tricky in the case of sincerely-held religious beliefs and leaves of absence, but not necessarily impossible. Compare Robinson v. Gen. Motors Co., No. 4:15-CV-158-Y, 2015 WL 13731154 (N.D. Tex. Oct. 21, 2015) (denying class certification in part because “determining individual class members would require the Court to wade through thousands of leave requests and evaluate each individual’s circumstance . . . to determine whether a GM employee even qualifies . . .”) with Jennings v. St. Luke’s Health Network, Inc., No. 5:23-CV-1229, 2023 WL 5938755 (E.D. Pa. Sept. 12, 2023) (denying without prejudice motion to strike class action allegations in religious discrimination vaccine case, pending discovery).

Here, Pearson’s complaint reveals numerous specific allegations which are likely specific to her, including that Tyson offered her an in-person job in a different city once the Vaccine Mandate ended, which she declined.  However, it remains to be seen if Tyson’s alleged policy of placing all religious objectors on leave may break through the barriers to commonality, typicality, and adequacy otherwise posed by, e.g., different religions, belief systems, communications with human resources, and leave requests.

Following these recent developments, employers are advised to remember that religious discrimination accommodation requests should not be taken lightly, and should result in an individualized interactive process with each employee. Even apparently implausible religious beliefs, associated with religions that do not otherwise espouse such beliefs, may be (or be deemed by a court to be) sincerely-held.

Copyright © 2023, Hunton Andrews Kurth LLP. All Rights Reserved.
For more news on COVID-19 Vaccine Mandates, visit the NLR Labor & Employment section.

United States | Winter Travel Reminders

With the winter holidays approaching, many foreign national employees are planning to visit family abroad, vacation overseas and perhaps renew their visas while out of the country. Here are a few key reminders as we approach the holiday travel season:

Travelers should be sure to check their passports and visas. Travelers are encouraged to check how much time they must have on their passport to travel to their destination country — a minimum of six months’ validity is required for many countries, including the United States in some cases. Travelers who require a visa to reenter the U.S. should make sure their visa is valid for reentry.

Some consulates remain delayed. Some travelers may be planning to renew visas while abroad. Visa processing has improved substantially since last year, but wait times for business and tourist visas continue to be significant at some consular posts, such as Colombia, India and Mexico. Travelers should consult the appropriate embassy or consulate website for the most up-to-date information regarding appointment availability and requirements for expedited requests.

Administrative processing can delay visa issuance. BAL has seen an improvement in the number of visa applications flagged for additional administrative processing. However, some applications may still require further administrative processing, which typically delays visa applications. Travelers should note that even if a visa renewal is approved at the time of an interview, it may take a few weeks to receive the visa foil. Employers with employees who have an administrative processing case and a particularly urgent need to be in the country should contact BAL.

Travelers should consult entry restrictions for destination countries. While most countries have lifted COVID-19 entry rules, some continue to enforce vaccination and testing requirements. Employees should be aware of their destination country’s requirements and procedures and factor additional time into their travel plans if necessary.

Travelers should review State Department travel advisories. Individuals are encouraged to visit the State Department’s travel advisory website ahead of departure for detailed information about potential travel concerns at their destination.

BAL Analysis: Foreign nationals planning to travel this holiday season should be sure to check their passport and visa validity before leaving the U.S. Those planning to renew visas while abroad should anticipate possible delays; while wait times have improved, some consulates remain backlogged and administrative processing can cause additional delays. Travelers are also urged to review their destination country’s entry requirements and may wish to consult State Department travel warnings.

©2023 Berry Appleman & Leiden. All Rights Reserved.
For more news on Holiday Travels in the United States, visit the NLR Immigration section.

The End of the COVID Public Health Emergency and Its Effect on Employee Benefit Plans

The COVID-19 public health emergency ends on May 11, 2023. The emergency resulted in two big changes to welfare plans: the relaxation of certain notification and timing requirements, and the requirement for plans to cover COVID testing and vaccination at no cost to plan participants. While the public health emergency ends May 11, 2023, plans have a grace period until July 11 to take certain actions and come into compliance with the normal rules.

Plan Sponsor Requirements

Before the grace period ends, plan sponsors will generally need to follow the rules that existed before COVID. Among the most important of these rules are the requirements for plan sponsors to:

  • Timely provide all notices, including those for HIPAA and COBRA.
  • Review COVID-related coverage under their employee assistance programs (EAPs) to determine if such coverage would be considered “significant medical care,” which can result in additional reporting and compliance obligations.
  • Review telehealth options to ensure they are properly integrated and provided by an entity that can comply with the post-COVID requirements. Telehealth rules were substantially relaxed during COVID. With telehealth now expected and utilized by more participants, getting telehealth right is more crucial than before.

Plan Sponsor Decisions

With the end of the public health emergency, plan sponsors must also make several important decisions with respect to their employee benefit plans:

  • Whether testing will continue free of charge or will be subject to cost sharing.
  • Whether non-preventative care vaccines for COVID will continue to be free of charge.
  • Whether costs for certain COVID-related services will continue to be posted.

As they are mostly based on what costs the plan sponsor or plan will cover going forward, these plan sponsor decisions are largely business-related. In the absence of a choice by the plan sponsor, the insurance provider will likely make a default choice. The important legal consideration is that the plan documents and employee communications should be consistent and accurately reflect the plan sponsor’s decisions.

Participant Requirements

In addition to the changes for plan sponsors, the end of the public health emergency will result in the reinstatement of a number of rules applicable to participants. Participants will need to:

Follow the HIPAA Special Enrollment timing rules.

Elect COBRA within the 60-day window for elections.

Make all COBRA payments timely.

Timely notify the plan of disabilities and qualifying events under COBRA.

Follow the timing limitations of their plans and insurance policies regarding filing claims, appeals, and external reviews.

Next Steps

First, plan sponsors should decide what COVID-related coverage will remain fully paid by the plan, if any. Some insurance companies are already starting to communicate with participants, and maintaining a consistent message will avoid unnecessary problems.

Second, plan sponsors should review their EAP and telehealth coverages for compliance with the rules that will soon be in effect. To the extent necessary, plan sponsors should update the documentation for their plans.

Finally, plan sponsors should consider a voluntary reminder communication to participants. Many rules have been relaxed over the last two years or so, and participants may be confused regarding the rules. A reminder may save stress for participants and those administering the plan, and will also serve to document the plan sponsor’s intention to properly follow the terms of the plan.

© 2023 Varnum LLP

For more healthcare legal news, click here to visit the National Law Review.

New York HERO Act Enhanced Workplace Safety Committee Enforcement Provisions Enacted

On December 28, 2022, New York Governor Kathy Hochul signed into law Senate Bill 9450, which added new enforcement provisions to the New York Health And Essential Rights Act’s (NY HERO Act) workplace safety committee requirements. The new law went into effect immediately upon the Governor’s signature.

As a reminder, the NY HERO Act was enacted in response to the COVID-19 pandemic. Section 1 of the NY HERO Act required employers to adopt and distribute an infectious disease exposure prevention plan (“safety plan”) and activate such safety plan upon the designation of an airborne infectious disease as a highly contagious communicable disease that presents a serious risk of harm to the public health. While no current designation is in effect (the designation of COVID-19 ended on March 17, 2022), employers should be prepared to activate their safety plan in the event of a designation, and should review their existing safety plan periodically for any updates as required by the NY HERO Act.

Section 2, the often-overlooked portion of the NY HERO Act, provides employees the right to establish and administer a joint labor-management workplace safety committee. The recent law adds new enforcement provisions, and serves as an amendment to this section of the NY HERO Act. It requires employers to recognize workplace safety committees formed by employees pursuant to the NY HERO Act within five business days of receiving a request from employees for committee recognition. Failure to do so will result in penalties of $50 a day until the violation is remedied. Previously, there was no explicit timeframe required for employers to recognize a workplace safety committee and no related specific civil penalties.

While the New York Department of Labor has issued FAQ guidance related to Section 1 of the NY HERO Act, the new law is the first development or update regarding Section 2 since the NY HERO Act was enacted and subsequently amended.

The new law serves as a reminder that the NY HERO Act, and, relatedly, COVID-19’s impact on the workplace, are not completely in the rearview mirror. Employers should confirm their compliance with the NY HERO Act by:

  • evaluating their existing safety plans and revising or updating them as needed;
  • distributing their safety plans to all new hires;
  • including their safety plans in all updated handbooks;
  • ensuring their safety plans are posted in a visible and prominent location in the workplace; and
  • reviewing the workplace safety committee obligations and requirements, especially in light of the added enforcement provisions.

Article By Susan Gross Sholinsky, Steven M. Swirsky, Robert J. O’Hara, Nancy Gunzenhauser Popper, and Christopher Shur of Epstein Becker & Green, P.C.

For more labor and employment legal news, click here to visit the National Law Review.

©2023 Epstein Becker & Green, P.C. All rights reserved.

Top Legal News of 2022: A Review of the Most Notable and Newsworthy Thought Leadership from the National Law Review’s Contributors

Happy New Year from the National Law Review! We hope that the holiday season has been restful and rejuvenating for you and your family. Here at the NLR, we are wrapping up the second season of our legal news podcast, Legal News Reach. Check out episode seven here: Creating A Diverse, Equitable and Inclusive Work Environment with Stacey Sublett Halliday of Beveridge & Diamond! A few weeks ago, we also announced the winners of our 2022 Go-To Thought Leadership Awards! Each year, around 75 recipients are selected for their timely and high-quality contributions to the National Law Review. This year’s slate of winners was particularly competitive – to see the full list, check out our 2022 National Law Review Thought Leadership Awards page.

As we look forward to a bright and busy 2023 for the legal industry, it is more prudent than ever to review the previous year and all that came with it. 2022 was a chaotic and monumental year for not only the legal profession, but for the world at large. The invasion of Ukraine, global supply chain issues, and the ongoing coronavirus pandemic were only some of the many challenges all industries and sectors faced. In the United States, companies and employers dealt with enormous changes at every level, including but not limited to the reversal of Roe v. Wade, shifting attitudes toward cannabis legalization, and ever-changing standards for COVID-19 vaccinations.

Read on below for some thought leadership highlights from this past year, and for a reminder of all that we’ve passed through in 2022:

January

Most prominently in 2022, the US Supreme Court handed down substantial rulings for coronavirus vaccine mandates, which affected not only healthcare workers but all employers across the country. With a 6-3 majority, SCOTUS stayed the Biden Administration’s OSHA Emergency Temporary Standard that applied to all private employers, but simultaneously ruled in a 5-4 majority that issued a 5–4 unsigned majority that vaccine mandates for medical facilities and medical workers can remain.

January also saw noteworthy changes to labor law in the United States, inviting a handful of significant standard changes for all employers. At the end of 2021 and early in 2022, the NLRB considered cases that altered the standard for determining independent contractor status, as well as the standard that established whether a facially neutral work rule violates Section 8(a)(1) of the National Labor Relations Act. These changes also paved the way for briefings on determining appropriate bargaining units.

Read January 2022’s thought leadership focusing on Labor and Employment law and the related Supreme Court rulings  below for more information:

Supreme Court Stays Private Vaccine Mandate; Upholds Requirement for Certain Healthcare Workers

On Again, Off Again Vaccine Mandates: What Should Employers Do Now?

NLRB Rings in the New Year by Inviting Briefing on Multiple, Far-Reaching Standards Impacting Employers

February

On February 24, 2022, Russia launched a large-scale ground invasion of Ukraine, leading to considerable damage and loss of life and throwing the geopolitical landscape into chaos. Both in February and in the months since, the Russia-Ukraine war has placed an extraordinary  strain on the global supply chain and businesses around the world, as the European Union, the United Kingdom, and the United States have continued to enforce sanctions and trade regulations. Companies must be careful to comply with these orders as the political landscape continues to change and learn how to juggle the dual headaches of the lingering COVID crisis and evolving Ukrainian war

Domestically, President Biden nominated Ketanji Brown Jackson to the US Supreme Court. Succeeding Justice Stephen Breyer, Judge Jackson graduated magna cum laude from Harvard University in 1992 and cum laude from Harvard Law in 1996 and has since served as a judge on the U.S. Court of Appeals for the District of Columbia Circuit. She is the first African American woman to serve on the United States’ highest court of law.

Read select thought leadership articles below for more information:

President Biden Nominates D.C. Circuit Judge Ketanji Brown Jackson to U.S. Supreme Court

Russian Invasion of Ukraine Triggers Global Sanctions: What Businesses Need to Know

Consequences from the Ukrainian Conflict

March

March of 2022 saw the long term  impacts from the military conflict in Ukraine emerge locally and around the world. Sanctions continued to affect businesses, leading to global supply chain slowdowns and difficulties in manufacturing and shipping and new immigration changes and challenges. In the US, the Securities and Exchange Commission “SEC” issued new and noteworthy regulations regarding Environmental, Social & Corporate Governance “ESG” and climate change disclosures for public companies. The Supreme Court also heard oral argument for a large slate of cases, perhaps most notably in ZF Auto. US v. Luxshare, Ltd. and AlixPartners v. The Fund for Prot. of Inv. Rights in Foreign States, which interpreted provisions of Title 28 of the US Code’s (“Section 1782”) reach in seeking US-style discovery from a interested party to a foreign proceeding and whether or not ection 1782 can be used to obtain key information for private international arbitrations.

Read key thought leadership articles published in March for more details:

SEC Issues Long-Awaited Proposed Rule on Climate Disclosures

U.S. Supreme Court Hears Oral Argument on Circuit Split Over Scope of 28 U.S.C. § 1782 for Obtaining Discovery in International Arbitrations

The Effects of the Military Conflict in Ukraine on Supply Contracts

April

In April of 2022, the Biden Administration made notable changes to the National Environmental Policy Act, better known as NEPA, which had been substantially altered under the Trump Administration. A number of key provisions were returned to their pre-Trump state in order to better center the administration’s larger focus on environmental justice. Also of note, a US court for the first time contested the Center for Disease Control’s  “CDC’s” travel mask mandate, on the grounds that it exceeded the CDC’s Statutory Authority under the Administrative Procedure Act “the federal APA”. This ultimately led to a vacating of the COVID travel mask mandate on a nationwide basis.

Elon Musk announced his intention to purchase Twitter in April of 2022, as well. Twitter ultimately adopted a shareholder rights plan, known as a poison pill, in hopes of preventingMusk’s hostile takeover. Poison pills are widely regarded as the an effective but a draconian anti-takeover defense available.

Read select  thought leadership articles below for more information:

Biden Administration Walks Back Key Trump Era NEPA Regulation Changes

Twitter Board of Directors Adopts a Poison Pill

Administrative Law Takeaways from the Federal Travel Mask Mandate Decision

May

On May 17th, the first case of Monkeypox in the United States was reported in Massachusetts. In response, the Environmental Protection Agency “EPA” and the federal government implemented a number of policy changes in hopes of preventing a wider spread, including the speedy authorization of anti-Monkeypox claims for certain registered pesticides and disinfectant products.

The SEC and administrative law at large received a considerable blow after the Fifth Circuit’s ruling in Jarkesy v. SEC. The Fifth Circuit Court held that the SEC in-house courts violated a series of constitutional protections, which may result in far-reaching impacts for how administrative bodies are used to regulate in the future. Additionally in May, the Senate confirmed Commissioner Alvaro Bedoya for the Federal Trade Commission “FTC”, shifting the balance of power back at the Commission in favor of the Democratic Party.

Read the following highlighted thought leadership articles published in May  for more information:

EPA Authorizes Anti-Monkeypox Claims for Pre-Designated Disinfectant Products

Fifth Circuit Holds That SEC Administrative Law Courts Are Unconstitutional

Big News at The FTC: Democrats Finally Get the Majority Back

June

In June of 2022, the Supreme Court released its decision in Dobbs v. Jackson, reversing Roe v. Wade’s 50-year precedent of ensuring abortion as a  protected right. Dobb’s is a  momentous decision and has resulted in a myriad of complex issues for employers, healthcare providers and individuals, including the updating of employee policies, healthcare provisions, ethical and criminal considerations for healthcare providers and the protection of personal data, and ultimately represents a massive shift away from women’s bodily autonomy in the United States. And the partial advance leak of the Dobb’s ruling, added to the myriad of concerns about the stability and public perception of the Supreme Court.

Other notable litigation and legislation in June included the passing of the Uyghur Forced Labor Prevention Act, subjecting the importers of raw materials from China to new enforcement provisions. The Supreme Court also ruled in West Virginia v. EPA, limiting the SEC’s ability to enforce ESG requirements on public companies. The West Virginia v. EPA ruling  presents a considerable obstacle for the Biden Administration’s ongoing climate goals.

Read select legal news  articles below for more information:

Employment Law This Week: SCOTUS Overturns Roe v. Wade – What Employers Should Consider [VIDEO]

Uyghur Forced Labor Prevention Act Enforcement Starts on Imports from China and on Imports with China Origin Inputs

Implications of West Virginia v. EPA on Proposed SEC Climate Rules

July

July of 2022 saw a great deal of changes for the Equal Opportunity Commission’s “EEOC’s” COVID testing guidance for employers. The largest change is determining if testing is needed to prevent workplace transmission and interpreting the business necessity standard under the American with Disabilities Act “ADA”.. The labor law landscape around the country also saw an increased focus on pay transparency laws – most notably, New York state passed a bill requiring employers to post salary or wage ranges on all job listings. Notably, this law is quite similar to one already in effect in New York City and Washington state, Colorado, and Jersey City.

Beginning most prominently in July, the cryptocurrency world also found itself under increased scrutiny by the federal government. Of note this month, the SEC filed a complaint against certain Coinbase employees, alleging insider trading and claiming that these employees had tipped off others regarding Coinbase’s listing announcements. This move was one of the more aggressive moves made by the SEC toward the digital asset industry.

Read select legal thought leadership articles published in July for more information:

EEOC Revises COVID-19 Testing Guidance for Employers

SEC v. Wahi: An Enforcement Action that Could Impact the Broader Crypto / Digital Assets Industry

Pay Transparency Laws Are All The Rage: Looks Like New York State Is Joining the Party

August

On August 12, 2022, the Inflation Reduction Act (“IRA”) was passed by Congress, representing enormous changes for industries across the country. Perhaps most notably, the landmark legislation contained new government incentives for the clean energy sector, creating tax incentives for renewable energy projects that previously did not exist. The Act also included 15% alternative minimum corporate tax and a 1% excise tax on stock buybacks to raise government revenue.

The Inflation Reduction Act also provided significant funding for tribal communities, including but not limited to the reduction of drug prices, the lowering of energy costs, and additional federal infrastructure investments. While the funding is not as significant as COVID relief from previous years and there are still some remaining hurdles, the IRA provides groundbreaking new opportunities for Native communities, including those in Alaska and Hawaii.

Read the select legal articles published in August for more information:

The Inflation Reduction Act: How Do Tribal Communities Benefit?

The Inflation Reduction Act: A Tax Overview

Relief Arrives for Renewable Energy Industry – Inflation Reduction Act of 202

September

In September of 2022, Hurricane Ian made landfall in the United States, caused substaintial property damage and loss of life despite preparations ahead of time. After addressing safety concerns, policyholders began reviewing their insurance policies, collecting documentation and filing claims. In addition to filing claims for property damage, corporate policyholders also filed claims for business interruption and loss of business income.

Lawsuits opposing the remaining COVID-19 vaccine mandates also continued throughout the month of September, exceeding 1,000 complaints nationally. Previously, lawsuits had largely targeted the Biden Administration, but additional focus was also directed toward large employers with vaccine mandates.

Of global significance, Queen Elizabeth II, the UK’s longest reigning monarch, passed away at 96 years old. Her funeral was held September 19, 2022, and was a national holiday in the United Kingdom marking the last day of public mourning.

Read following key thought leadership articles on Hurrican Ian, UK Bank Holiday due to the Sovereign’s passing and Employer’s COVID Mandate headaches  for more information:

Hurricane Ian – Navigating Insurance Coverage

Bank Holiday Announced for Her Majesty Queen Elizabeth II’s State Funeral

Challenges Against Employer COVID-19 Vaccine Mandates Show No Sign of Slowing

October

October saw forward movement in environmental justice, cannabis decriminalization, and Artificial Intelligence  “AI” regulation. The EPA launched their new Office of Environmental Justice and External Civil Rights, to work with state, local, and tribal partners providing financial and technical support to underserved communities disproportionately impacted by the ill effects of climate change. The EPA’s new office has 200 staff members across 10 regions and is expected to provide a unifying focus on civil rights and environmental justice for the EPA and federal government as a whole.

President Biden’s pardon of federal marijuana charges and mandate to review the plant’s Schedule I status signaled a shift in cannabis regulation, with the president urging state officials to follow his example and consider the contrast between wealthy cannabis business owners and those imprisoned for possession in the recent past.

Later in the month, the White House Office of Science and Technology Policy addressed the swell of artificial intelligence technology with their Blueprint for an AI Bill of Rights, which provides guidelines to prevent privacy violations, implicit bias, and other forms of foreseeable harm.

Read selected thought leadership articles below for more information:

EPA Launches Their New Office: What Does the Office of Environmental Justice and External Civil Rights Mean for Companies and ESG in the United States?

“Up in Smoke?” President Biden Announces Pardons and Orders Review of Cannabis Classification

The White House’s AI Bill of Rights: Not for the Robots

November

November was dominated by a nail-biting midterm election season, a cryptocurrency catastrophe, and NDA (Non Disclosure Agreement) reform. While the midterms did not result in a Red Wave as expected, Republicans were able to regain a small majority in the House of Representatives, with the Senate remaining in Democratic control.

The digital finance world was considerably less stable, with the second largest cryptocurrency trading platform, FTX, filing for bankruptcy three days after its lawyers and compliance staff abruptly resigned. The collapse brought into stark relief the importance of solidifying the cryptocurrency custody and insurance landscape.

Also of note, President Biden signed the Speak Out Act, rendering unenforceable nondisclosure and nondisparagement agreements signed prior to incidents of sexual harassment or assault. The law’s passage offers employers the opportunity to review their states’ more robust laws in this area and ensure clauses meant to protect trade secrets and proprietary information don’t inadvertently create issues for sexual misconduct claimants.

Read select  thought leadership articles below fora deeper dive:

2022 Midterm Election Guide

The Spectacular Fall of FTX: Considerations about Crypto Custody and Insurance

Nondisclosure and Nondisparagement Agreements in Sexual Harassment and Assault Cases: Speak Out Act Heads to President’s Desk

December

In December, the Federal Trade Commission (FTC) released their hotly anticipated “Green Guides” amendment proposals, intended to combat greenwashing amidst growing demand for environmentally friendly products. The amended Guides for the Use of Environmental Marketing Claims would impose stricter standards for the use of terms such as “recyclable,” “compostable,” “organic,” and “sustainable” in advertising and on packaging.

Meanwhile, Congress narrowly avoided a railroad worker strike by passing Railway Labor Act legislation affirming all tentative agreements between rail carriers and unions. The contracts included a roughly 24% increase in wages over 4-5 years, along with an extra day of leave. Biden promised to address paid leave further in the near future.

The National Labor Relations Board (NLRB) closed out 2022 with a number of impactful decisions favoring workers. Employees have expanded remedies for National Labor Relations Act violations and protection during Section 7 questioning, while employers have the burden of proof when seeking to expand micro-units or deny union protestors.

Read select legal thought leadership pieces below for more details:

Congress Votes to Impose Bargaining Agreement to Avoid Nationwide Railroad Strike

FTC Starts Long-Awaited Green Guides Review

NLRB Issues Flurry of Blockbuster End-of-Year Decisions (With More to Come?) (US)

Thank you to our dedicated readers and as always to our highly regarded contributing authors and our talented NLR editorial staff for working day in and day out to produce one of the most well read and reputable business law publications in the US.  Have a happy 2023!

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