A Betrayal Among Friends: Privacy Issues Surrounding Posts on Facebook

Melissa V. Skrocki of Giordano, Halleran & Ciesla, P.C. recently had an article regarding Facebook Privacy published in The National Law Review:

Exactly what protections should be granted to individuals who post information on Facebook? This was the question before the US District Court of NJ at a summary judgment hearing in the case of Deborah Ehling v. Monmouth-Ocean Hospital Service Corp., et al., 2012 BL 131926 (D.N.J. May 30, 2012). The Plaintiff was an employee of Monmouth-Ocean Hospital Service Corporation (“MONOC”) and also served as the Acting President of the local union for Professional Emergency Medical Services Association – New Jersey. In her union role, she filed multiple complaints against MONOC that she claims initiated MONOC’s retaliatory conduct against her.

The Plaintiff maintained a Facebook account during the term of her employment with MONOC and designated a number of her co-workers as friends on the website. The Plaintiff stated in her complaint that MONOC “gained access to Ms. Ehling’s Facebook account by having a supervisor(s) summon a MONOC employee, who was also one of Mr. Ehling’s Facebook friends, into an office” and “coerc[ing], strongerarm[ing], and/or threaten[ing] the employee into accessing his Facebook account on the work computer in the supervisor’s presence.” Id. at 2 citing Am. Compl. 20. The MONOC supervisor viewed and copied numerous postings by the Plaintiff including one regarding a shooting at the Holocaust Museum in Washington D.C. in which the Plaintiff posted:

An 88 yr old sociopath white supremacist opened fire in the Wash D.C. Holocaust Museum this morning and killed an innocent guard (leaving children). Other guards opened fire. The 88 yr old was shot. He survived. I blame the DC paramedics. I want to say 2 things to the DC medics. 1. WHAT WERE YOU THINKING? and 2. This was your opportunity to really make a difference! WTF!!!! And to the other guards…go to target practice.

Id. at 2 citing Certificate of Elizabeth Duffy Ex. C, ECF No. 11. On June 17, 2009, MONOC sent notice of the Plaintiff’s Facebook post claiming concern for a disregard of patient safety to the New Jersey Board of Nursing and the New Jersey Department of Health, Office of Emergency Medical Services. The Plaintiff then brought her suit against MONOC in which, among other claims, she alleged a violation of the New Jersey Wiretapping and Electronic Surveillance Control Act (“NJ Wiretap Act”) and a common law invasion of privacy, for which MONOC moved for dismissal of each complaint.

The Plaintiff maintains that the Defendant violated the NJ Wiretap Act by the unauthorized accessing and monitoring of the Plaintiff’s electronic communications stored in her Facebook account. An individual will violate the NJ Wiretap Act if that person: “(1) knowingly accesses without authorization a facility through which an electronic communication service is provided or exceeds an authorization to access that facility, and (2) thereby obtains, alters, or prevents authorized access to a wire or electronic communication while that communication is in electronic storage.” N.J.S.A 2A:156A-27(a). The NJ courts have determined that the NJ Wiretap Act does not apply where the communication was received by the recipient, stored by such recipient and then retrieved or viewed by another without permission because “the strong expectation of privacy with respect to communication in the course of transmission significantly diminishes once transmission is complete.” White v. White, 344 N.J. Super. 211, 200 (Ch. Div. 2001).

The Court dismissed Plaintiff’s NJ Wiretap Act claim because the Plaintiff failed to allege that the Defendant viewed Plaintiff’s post during transmission. The Court found that the Plaintiff’s comments were clearly in post-transmission storage when they were accessed by the Defendant and as such, the NJ Wiretap Act does not apply.

The Plaintiff further claimed that the Defendant committed a common law invasion of her privacy by accessing her Facebook page without permission. In order to establish a claim for invasion of privacy under New Jersey law, a plaintiff must be able to prove that: “(1) her solitude, seclusion, or private affairs were intentionally infringed upon, and that (2) this infringement would highly offend a reasonable person.” Ehling at 5 citing Bisbee v. John C. Conover Agency Inc., 186 N.J. Super. 335, 339 (App. Div. 1982). The Plaintiff maintains that she had a reasonable expectation of privacy in her posts on the Facebook site because she had limited access to her account to those individuals deemed “friends” on the website. Accordingly, Plaintiff maintains that her comments were not generally available to the public. Conversely, the Defendant disputes that such an expectation of privacy can arise when the Plaintiff made her post available to “dozens, if not hundreds, of people.” Ehling at 6.

The Court considered the emerging privacy issues which surround social networking sites. It noted that:

On one end of the spectrum, there are cases holding that there is no reasonable expectation of privacy for material posted to an unprotected website that anyone can view. On the other end of the spectrum, there are cases holding that there is a reasonable expectation of privacy for individual, password-protected online communication.

Id. at 5 (emphasis and internal citations omitted). Despite the clear boundaries on the continuum of online privacy issues, the courts have not come to a clear consensus regarding the expectations of privacy for those communications which fall somewhere in between public websites and password-protected email accounts. Most courts acknowledge that a communication may still be considered to be private even if it has been disclosed to one or more persons. Interestingly though, the answer of question as to how many people must know a fact before it is considered public varies greatly among the courts. As reported by the Ehling Court, in Multimedia Wmaz v. Kuback, the court found that disclosure of information by the plaintiff to sixty people did not render it public. Id. at 6 citingMultimedia Wmaz v. Kuback, 212 Ga. App. 707, 7-0 & n. 1 (Ga. Ct. App. 1994). Conversely, the Eight Circuit found that the plaintiff did not have an expectation of privacy when she shared certain information with two of her coworkers. Id. at 6 citing Fletcher v. Price Chopper Foods of Trumann, Inc. (8^th Cir. 2000).

Given the unsettled nature of this area of law, the Court rejected the Defendant’s motion to dismiss the Plaintiff’s violation of privacy claim and will hear arguments on this point during the trial.

It will be interesting to see where the NJ District Court falls within the privacy continuum but one thing is clear: it is best to follow the advice of Facebook, “Always think before you post. Just like anything else you post on the web or send in an email, information you share on Facebook can be copied or re-shared by anyone who can see it.”

Generic Top-Level Domain Names Summit

The National Law Review is pleased to bring you information about the upcoming Generic Top-Level Domain Names Summit:

World Research Group is proud to announce the Generic Top-Level Domain Names Summit : The Challenges and Opportunities Facing the Financial, Pharmaceutical, Consumer Goods, and Other Branding Companies Since ICANNs Program, which will be held onSeptember 13, 2012 in Los Angeles, California. This event will discuss the implications and affects of ICANN’s new top level domain program, the risk and opportunities presented by this revolutionary transformation, and discovering what the next steps are for these companies.

California Court Enforces Waivers of Class and Private Attorneys General Act “PAGA” Representative Claims

The National Law Review recently published an article regarding PAGA Representative Claims written by Labor & Employment Practice of Morgan, Lewis & Bockius LLP:

Recent court decision represents significant development for parties seeking to enforce arbitration agreements containing class and representative waivers.

On June 4, a unanimous panel of the California Court of Appeal for the Second District upheld a lower court’s ruling compelling individual arbitration of a plaintiff’s wage and hour claims and dismissing both class and representative claims under the California Labor Code Private Attorneys General Act (PAGA). Iskanian v. CLS Trans. Los Angeles, LLC, — Cal. Rptr. 3d —, No. B235158, 2012 WL 1979266 (Cal. Ct. App. 2d Dist. June 4, 2012). In so ruling, the court (i) held that the U.S. Supreme Court’s opinion in AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011) (Concepcion), preempted any California law prohibiting arbitration of certain claims; (ii) rejected a recent decision from the National Labor Relations Board (NLRB); and (iii) held that employees may validly waive their right to bring PAGA claims on behalf of others as part of an arbitration agreement.

Background

As a driver for defendant CLS Transportation, LLC (CLS), plaintiff Arshavir Iskanian signed a “Proprietary Information and Arbitration Policy/Agreement” providing that any and all employment-related disputes would be submitted to binding arbitration. The arbitration agreement contained a waiver of the right to bring claims on behalf of a class or as a representative of others.

Notwithstanding this arbitration agreement, Iskanian filed a putative class action complaint against CLS, alleging that the company failed to pay overtime, provide meal and rest breaks, reimburse business expenses, provide accurate and complete wage statements, and pay final wages in a timely manner. CLS moved to compel arbitration, which the trial court initially granted. Shortly after the trial court issued its order, the California Supreme Court issued its opinion in Gentry v. Superior Court (Circuit City Stores), 42 Cal. 4th 443 (2007), holding that class action waivers in employment arbitration agreements were unenforceable as contrary to public policy. On appeal, CLS’s initial motion to compel arbitration was reversed, and the case proceeded to litigation in Superior Court.

Soon after the U.S. Supreme Court issued its opinion in Concepcion, which overruled California law in regards to class action waivers in commercial contracts, CLS renewed its motion to compel arbitration. The trial court granted the motion, and a second appeal followed.

Gentry Overruled

On appeal, the court affirmed, holding that Concepcion overruled Gentry and rejecting the plaintiff’s “vindication of statutory rights” argument. Finding that a purported intent to vindicate statutory rights “is irrelevant in the wake of Concepcion,” the court held that “[t]he sound policy reasons identified in Gentry for invalidating certain class waivers are insufficient to trump the far-reaching effect of the [Federal Arbitration Act (FAA)].” Iskanian, 2012 WL 1979266 at *5. Thus, the court held that any California statute or policy prohibiting arbitration of certain claims is invalid, and that under the FAA, class and representative waivers should be enforced according to their terms “so as to facilitate streamlined proceedings.” Id.

Rejection of D.R. Horton

The court also rejected the plaintiff’s argument that a recent decision by two members of the NLRB in D.R. Horton, Inc., 357 NLRB No. 184 (2012), barred enforcement of class and representative waivers in employment arbitration agreements as a violation of Section 7 of the National Labor Relations Act (NLRA).

Finding several faults with the D.R. Horton decision, the Iskanian court declined to give any deference to the NLRB, noting that “the FAA is not a statute the NLRB is charged with interpreting.” Iskanian, 2012 WL 1979266, at *6. The court instead followed the Supreme Court’s binding authority in CompuCredit Corp. v. Greenwood, 132 S. Ct. 665 (2012), that, unless the FAA is “overridden by a contrary congressional command,” then “agreements to arbitrate must be enforced according to their terms.” Iskanian, 2012 WL 1979266, at *7. Finding no such “congressional command” in the NLRA, the court rejected D.R. Horton. Id.

PAGA Waivers Enforceable

Departing from two prior decisions issued by other California Courts of Appeal, theIskanian court held that the representative action waiver of PAGA claims in the parties’ arbitration agreement was enforceable under Concepcion. The court compelled individual arbitration of the plaintiff’s PAGA claim, holding that “any state rule prohibiting the arbitration of a PAGA claim is displaced by the FAA.” Id. at *9. The court further held that California’s “Broughton-Cruz rule”—which bars arbitration of public injunctive relief actions—has been overruled by Concepcion. Accordingly, “the public policy reasons underpinning the PAGA do not allow a court to disregard a binding arbitration agreement. The FAA preempts any attempt by a court or state legislature to insulate a particular claim from arbitration.” Id. The court concluded that the plaintiff could not pursue representative claims against CLS.

Implications

The Iskanian decision, when coupled with another recent California opinion,Kinecta Alternative Financial Solutions, Inc. v. Superior Court (Malone), 205 Cal. App. 4th 506 (2012), which held that class allegations may be dismissed when a court compels individual arbitration, represents a significant development for parties seeking to enforce arbitration agreements containing class and representative waivers.

The Iskanian decision, however, creates a clear split in authority among California Courts of Appeal regarding the enforceability of PAGA representative action waivers. See, e.g., Brown v. Ralphs Grocery Co., 197 Cal. App. 4th 489 (2d Dist. 2011) (holding that PAGA waivers were not enforceable); Reyes v. Macy’s, Inc., 202 Cal. App. 4th 1119 (1st Dist. 2011) (following Brown and refusing to compel individual arbitration of PAGA claims). This split may lead to California Supreme Court review, which means that the issue may not be resolved anytime soon.

While awaiting a final outcome, employers should carefully consider enforcement of arbitration agreements and the scope of waivers contained in such agreements.

ICC – Economic Sanctions in the Global Economy

The National Law Review is pleased to bring you information regarding the upcoming ICC Institute’s Economic Sanctions in the Global Economy Conference:

At a time when the global financial crisis has severely impacted trade flows and hampered world growth, what is the effect and the justification for the extraterritorial application of economic sanctions?

The long arm reach of law enforcement agencies sets global companies unprecedented challenges in terms of conflict of laws and regulatory jurisdiction. Dozens of criminal, administrative or regulatory investigations on both sides of the Atlantic are currently targeting billions of dollars worth of commercial transactions and cross-border payments. Penalties in the hundred of millions of dollars are regularly disclosed sanctioning global companies and banks for their past cross-border dealings . What is the right balance between the governments’ objective of moving to a safer world and the business reality? How are judges and arbitrators expected to adjudicate a claim for non-performance triggered by foreign economic sanctions?

Conference highlights
This event is unprecedented in bringing together senior government officials from both sides of the Atlantic and decision makers in global companies as well as their counsel. Speakers and participants have a unique opportunity to discuss in an open public-private forum the regulators’ approach towards economic sanctions and the expectation of industry leaders as to how sanctions could be better conceived and applied.

Who should attend?

Lawyers, compliance officers, bank executives, general managers, payment and treasury officers in companies and banks, government officials and academics.

How The White House’s Endorsement of Same-Sex Marriage Affects Employment Law

Recently Anjali Chavan of Dinsmore & Shohl LLP had an article regarding the White House’s Endorsement of Same-Sex Marriage, featured in The National Law Review:

On May 9, 2012, President Barack Obama became the first sitting U.S. President to affirm his belief that same-sex couples should be able to get married. Weeks later, the First Circuit Court of Appeals declared a portion of the Defense of Marriage Act (“DOMA”) unconstitutional.¹ These announcements are just two of many events that have shaped the current landscape in this country with respect to the rights of lesbian, gay, bisexual, and transgender (“LGBT”) Americans.

As LGBT issues are being placed at the forefront of American politics, employers would do well to pay attention, as these changes may necessitate changing employment policies, educating staff, and potentially defending against employment lawsuits for previously unchartered claims, including discrimination based upon sexual orientation and gender identity or expression.

On June 12, the U.S. Senate Health, Education, Labor and Pension Committee (“HELP Committee”) is set to consider the Employment Non-Discrimination Act (“ENDA”). ENDA seeks to expand the protections of Title VII to cover sexual orientation and gender identity and will prohibit discrimination in hiring and employment by nonreligious employers with at least 15 employees.

ENDA will be a federal mandate proscribing any discrimination based on sexual orientation or gender identity by both public and private employers—thereby bringing employees living in states without such protections like Ohio,² Kentucky,³Pennsylvania,⁴ and West Virginia,⁵ under the umbrella of federal protection.

The Sixth Circuit Court of Appeals has found that Title VII protects transgender employees—holding that discriminating against employees who do not identify with their gender, act like members in their gender, or conform with sexual stereotypes is a form of sex discrimination violates Title VII. Barnes v. City of Cincinnati, 401 F.3d 729 (6th Cir. 2005); Smith v. City of Salem, 378 F.3d 566 (6th Cir. 2004).

Further underscoring the shifting landscape of LGBT rights was the Equal Employment Opportunity Commission’s (“EEOC”) recent ruling in Macy v. Holder, expanding the prohibition against sex discrimination of Title VII to cover transgender workers.

In Macy v. Holder, the EEOC held that Mia Macy’s complaint of discrimination based on gender identity, change of sex, and/or transgender status can be brought under Title VII. Macy, a former police detective in Phoenix, Arizona, relocated to San Francisco and applied for an open position at the Bureau of Alcohol, Tobacco, Firearms and Explosives (“Agency”) for which she was qualified. Macy originally applied for the position as a man and interviewed with the Director as a man. Macy asserted that the Director told her on two separate occasions that she would have the position pending completion of a background check. A few months after her original application, Macy informed the Agency that she was beginning the process of transitioning from male to female. After the Agency received notice of Macy’s change of name and gender, the agency contacted Macy and told her the position was no longer available due to lack of funding. Macy later discovered that the Agency filled this position with another person.

The EEOC found that charges of discrimination based on transgender status or gender identity are cognizable under Title VII’s sex discrimination prohibition and any such claims must be processed by the EEOC.

That Title VII’s prohibition on sex discrimination proscribes gender discrimination, and not just discrimination based on biological sex, is important. If Title VII proscribed only discrimination on the basis of biological sex, the only prohibited gender-based disparate treatment would be when an employer prefers a man over a woman, or vice versa. But the statute’s protections sweep far broader than that, in part because “gender” encompasses not only a person’s biological sex but also the cultural and social aspects associated with masculinity and femininity.

* * *

[G]ender discrimination occurs any time an employer treats an employee differently for failing to conform to any gender-based expectations or norms.

The growing trend in the United States reveals that employment law is changing and adapting to provide a more inclusive environment for LGBT employees. Even though your state or federal circuit court may not recognize certain protections for LGBT individuals, many cities and counties around the country do have such protections in their local ordinances. As employers are navigating these issues in hiring, promoting, and firing, they should be cognizant of the local, state, and federal laws that may be at play. Employers must take the time to recognize and understand these changes, and consider revising their employee manuals and employment policies to comply with these changes.

(1) Massachusetts v. U.S. Dep’t of HHS, et al., Case Nos. 10-2204, 10-2207, & 10-2214, 2012 U.S. App. LEXIS 10950, (1st Cir. May 31, 2012) (affirming the lower court’s holding finding Section 3 of DOMA which defines marriage for federal purposes as a union between a man and a women, to be an unconstitutional encroachment on the power to define marriage granted to the states by the Tenth Amendment).
(2) Ohio prohibits discrimination by public employers based on sexual orientation.
(3) Kentucky prohibits discrimination by public employers based on sexual orientation and gender identity.
(4) Pennsylvania prohibits discrimination by public employers based on sexual orientation and gender identity.
(5) West Virginia provides no protections for LGBT employees.

Retail Law Conference 2012

The National Law Review is pleased to bring you information about the upcoming Retail Law Conference:

at the Westin Galleria in Dallas, Texas

November 7-9, 2012

This event is the perfect opportunity to discuss the latest issues affecting the retail industry while obtaining important continuing legal education (CLE) credits.

Open to retail and consumer product general counsel, senior legal executives and in-house attorneys and their teams, the exceptional dialogue presented at this conference will help your organization navigate the current legal landscape of the industry.

On May’s Employment Report

The U.S. Department of Labor had an article regarding May’s Employment Report published in The National Law Review:

While Friday’s jobs report was a bump in the road to recovery, our labor market continues to show signs of economic growth. We have had 27 straight months of private sector job growth, which has helped 4.3 million Americans get back to work. This expansion has been broad, with every industry (except government) showing clear growth in the past two years.

Last month, we saw strong growth in health care, transportation and warehousing, and wholesale trade. In particular, manufacturing continues to be a symbol of the resilience of American industry, with nearly 500,000 jobs added over the last 28 months. This has been the strongest growth in manufacturing in any 28 month period since April 1995.

The ratio of available jobs to jobseekers has declined from 1:7 to 1:3 from 2009 to 2012.

Additionally, millions more Americans are working today compared to the end of 2009. Competition for jobs has also eased in recent months. During the height of the recession, there were 7 jobseekers for every available job, making it very difficult to find employment. Today, as more jobs are becoming available, the ratio has declined to just over 3 jobseekers for every job opening – improving the chances for an unemployed individual to find an opportunity.

The steady increase in employment has also helped drive the unemployment rate down to the low 8% mark. Yet, there has been some debate about what is causing the unemployment rate to decline – is it people leaving the labor force or people getting jobs? The facts are clear: since August 2011 (when the rate started its steady decline) the primary factor in bringing the unemployment rate down has been people getting jobs.

99% of Decline in Unemployment Rate Since August 2011 is Because of People Finding Jobs

But we have to do more. The economic situation continues to be a challenge for too many Americans who desperately want a job. We won’t be satisfied with our efforts until every American who wants a job can get a one.

At the Department of Labor, we are taking a number of steps to help the unemployed get back to work faster, including reforms to the unemployment insurance system. These reforms will provide states with more flexibility to respond to changes in the economy, provide employers with tools to avoid layoffs, help the unemployed get back into the workforce faster and even expand opportunities for the unemployed to start their own businesses.

However, as Secretary of Labor Hilda Solis said on Friday, congress must come together to work on the to do list President Obama developed. These plans will encourage businesses to bring jobs back to the U.S.; help small businesses grow and hire more workers through tax credits; create more job opportunities for our veterans; invest in the clean energy economy; and help struggling homeowners with refinancing options so they can stay in their homes.

By Adriana Kugler on June 4, 2012

Adriana Kugler is the Chief Economist for Secretary of Labor Hilda L. Solis.

8th Annual FCPA & Anti-Corruption Compliance Conference

The National Law Review is pleased to bring you information about the upcoming 8th FCPA & Anti-Corruption Compliance Conference:

8th FCPA and Anti-Corruption Compliance Conference
Identifying Changes to the Global Anti-Corruption Compliance Landscape to Maintain and Upgrade Your Existing Compliance Program

Event Date: 12-14 Jun 2012
Location: Washington, DC, USA

Beyond dealing with the FCPA and UK Bribery Act, there are upcoming changes to global Anti-Compliance initiatives being enacted by other major countries. It is imperative that organizations are made aware of these new rules and regulations to be able to meld them all into their organization’s anti-corruption compliance program. Maintaining a robust global compliance program along with performing proper and detailed 3^rd party due diligence is of the upmost importance.

Marcus Evans invites you to attend our 8^th Annual Anti-Corruption & FCPA Conference. Hear from leading executives within various industries on how to identify new areas of concern when dealing with bribery or working within a company to update an anti-corruption compliance program.

Attending this event will allow you to learn how to mitigate the effects of any possible instances of corruption and bribery both at home and abroad. Discuss solutions and best practices that companies have found when dealing with their anti-corruption compliance programs. This conference will not only review the newest enforcement cases, but also highlight practical solutions to problems dealing with FCPA and global anti-corruption measures.

Attending this conference will allow you to:

-Overcome the issues in dealing and conducting an internal investigation with Dell
-Identify anti-corruption liability concerns for US companies when engaging in Joint Ventures and Mergers and Acquisitions with Crane Co.
-Perform anti-corruption audits to better identify gaps in the compliance program with SojitzCorporation of America
-Promote a culture of ethics within an organization to combat non-compliance with Morgan Stanley
-Assess the continued challenges in conducting a 3^rd party due diligence program with Parker Drilling

The marcus evans 8^th Annual Anti-Corruption & FCPA Conference is a highly intensive, content-driven event that includes, workshops, presentations and panel discussions, over three days. This conference aims to bring together heads, VP’s, directors, chief compliance officers, and in-house counsel in order to provide an intimate atmosphere for both delegates and speakers.

This is not a trade show; our 8^th Annual Anti-Corruption & FCPA Conference is targeted at a focused group of senior level executives to maintain an intimate atmosphere for the delegates and speakers. Since we are not a vendor driven conference, the higher level focus allows delegates to network with their industry peers.

Centers for Medicare & Medicaid Services Issues Final Rule Re: Student Health Insurance Coverage under the Affordable Care Act

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.‘s Alden J. Bianchi recently had an article about Student Health Insurance Coverage featured in The National Law Review:

Section 1560(c) of the Patient Protection and Affordable Care Act (the Act) provides that nothing in the Act “shall be construed to prohibit an institution of higher education … from offering a student health insurance plan, to the extent such requirement is otherwise permitted under applicable Federal, State, or local law.” On March 21, 2012, the Centers for Medicare & Medicaid Services (CMS) issued a final regulation implementing the provisions of Act Section 1560(c). This client advisory explains the key provisions of the final regulation.

The final regulation defines the term “student health insurance coverage” as:

“[A] type of individual health insurance coverage that is provided pursuant to a written agreement between an institution of higher education … and a health insurance issuer, and provided to students enrolled in that institution of higher education and their dependents, that meets the following conditions:

Does not make health insurance coverage available other than in connection with enrollment as a student (or as a dependent of a student) in the institution of higher education.
Does not condition eligibility for the health insurance coverage on any health status-related factor … relating to a student (or a dependent of a student).
Meets any additional requirement that may be imposed under State law.”

The final regulations apply only to fully insured student health plans, and not to self-funded plans, which are beyond the scope of the authority of the Department of Health and Human Services to regulate. CMS takes the position that, since student health plans are not employment based, they are not group health plans under thePublic Health Service Act (PHS Act). They are therefore regulated under the PHS Act as individual plans. That some states regulate student health plans as types of group coverage (e.g., as association “blanket” coverage) does not change their treatment under the Act as individual plans.

Certain polices of “limited duration insurance” qualify for a regulatory exemption for “health insurance coverage provided pursuant to a contract with an issuer that has an expiration date specified in the contract (taking into account any extensions that may be elected by the policyholder without the issuer’s consent) that is less than 12 months after the original effective date of the contract.” So-called “short-term limited duration insurance” is available to individuals to fill in gaps of coverage that otherwise might occur, such as when they are between jobs and without employer coverage. It is specifically excluded from the definition of individual health insurance coverage. As a consequence, the individual market protections of the Act do not apply. CMS noted in this regard, however, that —

“these policies often — (1) Allowed students to renew coverage as long as their schools had chosen to retain the policy (and, in some cases, the issuers cooperated with the universities in automatically renewing students who did not affirmatively opt out); (2) had significant numbers of students keep coverage for longer than one year; and (3) in some cases, even based annual and lifetime dollar limitations and preexisting condition exclusion limitation periods on students’ coverage under the policies from the same issuer during prior academic years.”

CMS therefore chose not to change the definition of what constitutes short-term limited duration insurance, which is defined (in 45 C.F.R. 144.103) to mean:

“… health insurance coverage provided pursuant to a contract with an issuer that has an expiration date specified in the contract (taking into account any extensions that may be elected by the policyholder without the issuer’s consent) that is less than 12 months after the original effective date of the contract.”

As a consequence, where coverage is renewable each year at the option of the student, then the coverage does not qualify as short-term limited duration insurance. Recognizing that this interpretation may require some adjustments, the preamble to the final regulation says that, “[t]he effective date of this rule is intended to provide issuers and universities that operated with a reasonable belief that their policies were short-term limited duration coverage to come into compliance ….” (The rule applies to policy years beginning on or after July 1, 2012.)

The final regulation exempts student health plans from the following of the Act’s insurance market reforms:

• Guaranteed issue and guaranteed renewability

Guaranteed issue and renewability rules, which take effect in 2014, will not apply to student health plans. For purposes of the Act’s provisions governing guaranteed issue and renewability, student health insurance coverage is deemed to be available only through a bona fide association, which is exempt from these requirements.

• Annual limits

The Act generally prohibits annual limits on the dollar value of essential health benefits. An interim final rule provides for a phase-in of annual limits before 2014. Under these interim final regulations, annual limits on the dollar value of essential health benefits may not be less than the following amounts for plan years (in the individual market, policy years) beginning before January 1, 2014:

For Plan or Policy Years Beginning on or after:	Applicable Restricted Annual Limit
September 23, 2010, but before September 23, 2011	$750,000
September 23, 2011, but before September 23, 2012	$1.25 million
For plan or policy years beginning on or after September 23, 2012, but before September 23, 2014	$2 million

The final regulation provides for a transition period for issuers of student health insurance coverage to comply with the restricted annual dollar limits requirements under the Act. Student health insurance coverage will be allowed to impose an annual dollar limit of no less than $100,000 on essential health benefits for policy years beginning before September 23, 2012, and $500,000 for policy years beginning on or after September 23, 2012, but before January 1, 2014. Beginning in 2014, health insurance issuers offering student health insurance coverage must comply with the Act’s bar on annual dollar limits.Where a health insurance issuer that provides student health insurance coverage fails to satisfy the restricted annual limits set out in the table above, the issuer must provide a notice informing students that the policy does not meet those requirements. The notice must include the dollar amount of the annual limit along with a description of the plan benefits to which the limit applies for the student health insurance coverage. The notice must also state that the student may be eligible for coverage as a dependent in a group health plan of a parent’s employer or under the parent’s individual market coverage if the student is under the age of 26. To assist with this requirement, the final regulations provide the following model language:

“Your student health insurance coverage, offered by [name of health insurance issuer], may not meet the minimum standards required by the health care reform law for the restrictions on annual dollar limits. The annual dollar limits ensure that consumers have sufficient access to medical benefits throughout the annual term of the policy. Restrictions for annual dollar limits for group and individual health insurance coverage are $1.25 million for policy years before September 23, 2012; and $2 million for policy years beginning on or after September 23, 2012 but before January 1, 2014. Restrictions for annual dollar limits for student health insurance coverage are $100,000 for policy years before September 23, 2012, and $500,000 for policy years beginning on or after September 23, 2012, but before January 1, 2014. Your student health insurance coverage put an annual limit of: [Dollar amount] on [which covered benefits — notice should describe all annual limits that apply]. If you have any questions or concerns about this notice, contact [provide contact information for the health insurance issuer]. Be advised that you may be eligible for coverage under a group health plan of a parent’s employer or under a parent’s individual health insurance policy if you are under the age of 26. Contact the plan administrator of the parent’s employer plan or the parent’s individual health insurance issuer for more information.”

• Preventive services

PHS Act Section 2713 generally bars the imposition of cost sharing for preventive services. The final regulation exempts “student administrative health fees” from this requirement by clarifying that these fees are not considered a “cost-sharing” requirement with respect to specified recommended preventive services. A student administrative health fee is defined for this purpose to mean:

“[A] fee charged by the institution of higher education on a periodic basis to students of the institution of higher education to offset the cost of providing health care through health clinics regardless of whether the students utilize the health clinics or enroll in student health insurance coverage.”

• Minimum Loss Ratios (MLRs)

Under the Act’s provisions governing “medical loss ratios” (MLRs), in general, at least 80% (in the small group and individual markets) or 85% (in the large group market) of the premiums that issuers receive for insurance policies must be spent on reimbursement for clinical services to enrollees (such as hospital and physician payments) and activities that improve health care quality. Under final MLR rules issued by the Department of Health and Human Services, limited benefit (or “mini-med” plans) and issuers of expatriate plans are required to report their mini-med and expatriate plan experience separately from their other policies for one year, and, for that one-year period, are provided an accommodation in the formula for determining the MLR. This was done because these plans have unique characteristics or expense structures that warrant loosening of MLR requirements. The final regulations take a similar approach to student health plans. The rule provides for a transition period for issuers of student health insurance coverage to comply with the Act’s MLR requirements. Issuers will be allowed to calculate their MLRs by applying a multiplier of 1.15 to the total of incurred claims and expenditures for activities that improve health care quality for the 2013 MLR reporting year. The net effect of this adjustment is to make it marginally easier for issuers to comply with the MLR rules without having to issue rebates to policyholders.

Rainmaker Retreat: Law Firm Marketing Boot Camp

The National Law Review is pleased to bring you information about the upcoming Law Firm Marketing Boot Camp:

WHY SHOULD YOU ATTEND?

Have you ever gone to a seminar that left you feeling motivated, but you walked out with little more than a good feeling? Or taken a workshop that was great on style, but short on substance?

Ever been to an event that was nothing more than a “pitch fest” that left a bad taste in your mouth? We know exactly how you feel. We have all been to those kinds of events and we hate all those things too. Let me tell you right up front this is not a “pitch fest” where speaker after speaker gets up only trying to sell you something.

We have designed this 2 day intensive workshop to be content rich, loaded with practical content.

We are so confident you will love the Rainmaker Retreat that we offer a 100% unconditional money-back guarantee! At the end of the first day of the Rainmaker Retreat if you don’t believe you have already received your money’s worth, simply tell one of the staff, return your 70-page workbook and the CD set you received and we will issue you a 100% refund.

We understand making the decision to attend an intensive 2-day workshop is a tough decision. Not only do you have to take a day off work (all Rainmaker Retreats are offered only on a Friday-Saturday), but in many cases you have to travel to the event. As a business owner you want to be sure this is a worthwhile investment of your time and money.

WHO SHOULD ATTEND?

Partners at Small Law Firms (less than 25 attorneys) Solo Practitioners and Of Counsel attorneys who are committed to growing their firm. Benefits you will receive:

Solo practitioners who need to find more clients fast on a shoe-string budget. In addition to all the above benefits, solo attorneys will receive these massive benefits:

Law Firm Business Managers and Internal Legal Marketing Staff who are either responsible for marketing the law firm or manage the team who handles the law firm’s marketing. In addition to all the above benefits, Law Firm Business Managers and Internal Legal Marketing Staff will also receive these benefits:

Of Counsel Attorneys who are paid on an “eat what you kill” basis. In addition to all the above benefits, Of Counsel attorneys will also receive these benefits:

Associates who are either looking to grow their book of new clients in the next 6-12 months or want to launch their own private practice. In addition to all the above benefits, Associates will also receive these benefits:

The National Law Forum

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