Employer Health Care Benefits — Preparing for 2018


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I last wrote about health care in late March, shortly after the House of Representatives failed to bring the American Health Care Act (AHCA) to a vote. Since then, after a few amendments, the House did pass the AHCA, but with all the other brouhahas in Washington over the last few weeks, it’s questionable whether the Senate will get to health care anytime soon.

There are some good provisions in the AHCA as passed by the House. Among other things, the AHCA makes the following changes to Obamacare:

  • The individual mandate was repealed, as was the employer mandate;
  • The 2.3% medical device tax was repealed;
  • The net investment tax was repealed, as was the .9% Medicare high earner tax;
  • The Cadillac tax for expensive plans was delayed (and will probably never be permitted to take effect, since neither Republicans nor Democrats like this provision); and
  • Health Savings Accounts were expanded, effective in 2018

All of these provisions provide less government control over the health care marketplace. In the long run, these changes would generally be helpful for employers.

Still, as most people recognize, without an individual mandate, some incentive is necessary to get healthy people to opt into health insurance before they get sick and to maintain that coverage. The AHCA continuous health insurance coverage incentive replaces the individual mandate penalty. This incentive operates much like HIPAA certificates of coverage. As long as they do not let their health insurance lapse for more than 63 days, individuals cannot be charged higher premiums because of preexisting conditions. Moreover, the premium penalty for the first plan year cannot exceed 30%.

There is an exception to this 30% limit, but the exception permits insurers to charge late enrollees with pre-existing condition higher premiums only if the state has waived the community rating rule and the state has established a high-risk pool to help people with preexisting conditions fund their coverage.

The AHCA is far from a perfect bill, and it is likely to face substantial amendments in the Senate before it comes to a vote in that chamber. And Congress has many other priorities this session as well. So what will happen with respect to health care legislation by the end of the year is anyone’s guess.

Nevertheless, we are at the time of year when many employers are examining their options for health plans for their employees for the year ahead. What should employers do in this time of uncertainty?

Obamacare, the Affordable Care Act, is still the law, so until Congress acts, employers must comply with the mandates and reporting requirements. With the individual mandate in place, employees will want to know their employer-provided health care options in a timely fashion.

Moreover, although the Cadillac tax has been kicked down the road and its ultimate implementation is uncertain, avoidance of the tax—or preparation for it—will take time to structure.

For 2018 at least, the current employer responsibilities are likely to remain in place. Employers must continue to manage their benefit plans, tweaking them as makes most sense for their workforce. There remain many reasons why employers should support their employees’ health and wellness if they want to be employers of choice.

Employers, what concerns you the most about health benefits in 2018?

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Favorite Firing: Failure to Rescind a Resignation


flag-28567_640Every once in a while, a difficult employee resigns, and his or her managers breathe a sigh of relief. The employer might have wanted to be rid of this employee, but there weren’t grounds to discharge the individual. But what if the employee wants to rescind the resignation—does the employer have to take the employee back? In Featherstone v. Southern California Permanente Medical Group, B275225 (April 19, 2017), the California Court of Appeals said no—once the employee resigns, there is no requirement that the employer allow the person to return.

The Facts: Ruth Featherstone worked for the Southern California Permanente Medical Group. She had had prior health problems necessitating her absence from work. Despite her absences, there is no indication in the Court’s opinion that she had any performance difficulties.

In mid-December 2013, she returned to work after an absence for surgery and recuperation. About a week after her return, she allegedly suffered a temporary disability due to an adverse drug reaction to medication. She claimed that while she was under the influence of this drug, she first orally resigned and then several days later confirmed the resignation in an email. At the time, her supervisors did not suspect that she was behaving abnormally and processed the resignation promptly so that Ms. Featherstone could receive her final paycheck in a timely manner under California law.

Unbeknown to any of her managers, Ms. Featherstone’s family noticed that her behavior was unusual, and she was rehospitalized. She was hospitalized for several days. On the day she was released from the hospital, she confirmed her resignation to her employer. It wasn’t until about five days after she confirmed her resignation that she told her managers she had been under the influence of medication when she resigned. Only then did she ask to rescind her resignation.

Despite the sympathetic circumstances of Ms. Featherstone’s request to rescind her resignation, the medical group refused to rescind it, because they did not think they had done anything improper in accepting it. As mentioned above, there is no indication of any problems with the plaintiff’s performance, so this reader wonders why the employer was reluctant to rescind the resignation.

Ms. Featherstone later sued, claiming disability discrimination and retaliation under the California Fair Employment and Housing Act (FEHA). The trial court granted the medical group’s motion for summary judgment, and the Court of Appeals affirmed for two reasons: (1) First, the employer’s refusal to allow the plaintiff to rescind her resignation was not an adverse employment action under the FEHA, and (2) the plaintiff failed to show that the management employees who accepted and processed her resignation knew of her alleged temporary disability at the time.

The Moral: In this case, the employer’s good-faith action in accepting the resignation was upheld. As the California Court of Appeals said, for an employer’s action to be found to be a pretext for discrimination, the employee

“ ‘cannot simply show that the employer’s decision was wrong or mistaken, since the factual dispute at issue is whether discriminatory animus motivated the employer, not whether the employer is wise, shrewd, prudent or competent.’ ” (Hersant v. Department of Social Services (1997) 57 Cal.App.4th 997, 1005.) To meet his or her burden, the employee “ ‘must demonstrate such weaknesses, implausibilities, inconsistencies, incoherencies, or contradictions in the employer’s proffered legitimate reasons for its action that a reasonable factfinder could rationally find them “unworthy of credence,” ’ ” and hence infer “ ‘that the employer did not act for [the asserted] nondiscriminatory reasons.’ ” ’

The California Court of Appeals first found that

“refusing to allow a former employee to rescind a voluntary discharge—that is, a resignation free of employer coercion or misconduct—is not an adverse employment action.”

The Court of Appeals cited a California Supreme Court case, Yanowitz v. L’Oreal USA Inc. (2005) 36 Cal.4th 1028, for the proposition that only actions affecting a current employee are covered, not those affecting a former employee.

“[A]n adverse employment action is one that affects an employee, not a former employee, in the terms, conditions or privileges of his or her employment, not in the terms, conditions or privileges of his or her unemployment.”

The Court of Appeals also cited federal authorities under the Americans with Disabilities Act.

However, I am not sure the Court of Appeals’ reasoning is persuasive—another court might well find that former employees are covered for at least some purposes. If I were reviewing an employee’s request to rescind his or her resignation, I would probably analyze the situation more deeply.

At the very least, an employer should at least be sure there is no element of coercion in the resignation, no sign of constructive discharge. In addition, the employer should be sure there is no express or implied contract of employment and that the employee is truly an at-will employee. Both of these possibilities were examined by the Court of Appeals in Featherstone.

This case also turned on the fact that the medical group had no knowledge of Ms. Featherstone’s adverse reaction to the drug when it processed her resignation. Had her managers had some inkling of this possibility, they might have had a duty to inquire and to accommodate her situation by permitting her to rescind her resignation made under the influence of the medication—the Court in this case did not have to address that situation.

While this case will be helpful to employers who want to stand by an employee’s initial decision to resign, it will still be important for employers to investigate the circumstances surrounding both the resignation and the request to rescind it. Ultimately, this case may be more helpful when good employees resign than when problem employees resign in a pique and later want to return—and those are the employees the employer might most want to lose.

Have you had to deal with an employee’s request to rescind a resignation? What did you do?

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Lessons Learned in Office Remodels and Relocations


beige-316396_640Over the years, I’ve been involved in two corporate department remodels, once as one of the primary designers of the new office space, and the other time as a department chair when members of my staff worked on the layout and logistics. Neither was an enjoyable experience, but I learned important lessons along the way. Here are my primary takeaways:

1. Have size and space guidelines, but don’t be rigid

One of the remodels involved attorneys, who insisted they needed private offices because of attorney/client privilege issues. But some of the lawyers were not high enough in the corporate hierarchy to warrant private offices in the corporate guidelines. The attorneys won that argument.

In the other remodel, some Human Resources managers received private offices and others at the same pay grade did not. The decisions rested on who spent significant time counseling employees. Those who did not get private offices had access to small conference room near their cubicles.

The biggest issues actually involved administrative personnel, some of whom dealt with significant amounts of paper and needed more space than the guidelines permitted. In retrospect, more individuality would have been a good thing.

With today’s move away from cubicles to more open space environments, these issues may become even more significant. Have a philosophy, but allow for exceptions when warranted.

2. Keep technology needs in mind

The legal office redesign I worked on came at a time when personal computers were just beginning to be used. Some lawyers were technologically adept, and others had never used a PC. But we mandated space, equipment, and Ethernet connectivity for everyone.

In both of the remodels I was involved with, file storage was a critical need. Over time, the move to paperless work environments are likely to accelerate. These days, large monitors, wi-fi access, or portable tablets may be the critical features necessary for efficiency.

But what will the technology of the future require? Involve your IT personnel in anticipating what your office will need in the next five years at least . . . the next decade if you can see that far into the future.

3. Natural light is important for morale

One of my departments moved to space that was underground. We did everything we could with pale colored walls and good lighting, but we couldn’t avoid the feeling that we worked in a cave.

The other department moved from underground space to space with windows. The temptation was to put managerial offices against the windows, but we avoided that. We kept the windows open to all, which made our support personnel feel much more valued. Those managers who had enclosed offices had to step outside to get a view (which was only of a parking garage anyway), which helped keep them less isolated from their staff.

4. Give your planning team leeway to make decisions

There are a myriad of daily decisions involved in relocating a department. How to lay out the space, what color paint, fabrics for the furniture, just to name a few. The planning team should be empowered to make most of these decisions—or at least to narrow the options. That’s why they’re on the team.

If the department head reserves all decisions for himself or herself, the planning team will end up demoralized, management time will be wasted, and the plan will be idiosyncratic and unlikely to stand the test of time.

5. Involve all employees in the process

Just because there is a planning team doesn’t mean that other employees should have no say in the process. Hold a kick-off meeting where everyone can voice opinions. It will help the remodel team to know which issues are emotional for employees.

And have a few milestone meetings or send out periodic updates to the whole department. Keep people informed on the progress and timeline and what decisions have been made to date.

beige-316395_6406. Make it fun

One of the planning teams in our remodel called themselves the “MOO-ve” team. They adopted a cow logo which they included on all their communications. At least we had something to laugh about as we sorted through forty-plus years of files before the department relocated.

Those are six lessons I learned during my work on office relocations. Here’s an article with another list of lessons learned. And for articles on the nitty-gritty of planning an office remodel, see here and here.

What have you learned when relocating an office?

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The Myth of 100 Days, and the Reality


presidential sealMuch of the news for the past couple of weeks has revolved around how is President Trump doing in his first one hundred days in office. President Trump himself set high expectations before he was inaugurated, and recently he has been trying to tamp down the importance of the 100 day marker. He hit that marker this past Saturday.

One hundred days is an arbitrary period. It is less than a year, less than one-twelfth of a president’s term of office. Nevertheless, it is used as a milestone not only for new Presidents but also for new corporate executives.

I’ve read many articles outlining what a new CEO or CFO or head of Human Resources—or any other “chief” of a corporate function, for that matter—ought to accomplish when he or she takes office. Here are just a few articles telling new executives what to do in their first one hundred days:

Five Myths of a CEO’s First 100 Days, by Roselinde Torres and Peter Tollman, January 30, 2012, in Harvard Business Review

Your First 100 Days as CEO—Eight Must-Avoid Traps, by Scott Weighart, Bates Communications

An Action Plan for New CEOs During the First 100 Days, by M.S.Rao, October 8, 2014, on TrainingMag.com

Assuming Leadership: The First 100 Days, by Patrick Ducasse and Tom Lutz, The Boston Consulting Group

Rather than go through all the recommendations, which they are not entirely consistent, I want to focus on two topics: setting up for long-term success and strong communications. These, in my opinion, are critical marks of new leaders.

1. Long-Term Success

One area in which there is a difference of opinion among the experts is whether to strive for “quick wins” or whether to focus on setting up for success in the long term. The two aren’t mutually exclusive, and a few quick wins can win over supporters who will improve the chances of long-term success.

It all depends on whether the wins are what the organization needs or wants, or whether the new leader achieves them by running roughshod over the organization. If the early wins are gained at the expense of long-standing corporate culture, then the new executive will be seen as insensitive.

I believe that long-term success is more important than early victories. It is better for the new executive to be seen as listening to stakeholders than to introduce change without an understanding of the impact on the organization. Obviously, if there are some early wins that most stakeholders approve of, then the new CEO should undertake them immediately. But these actions will have the best impact if they are consistent with the CEO’s long-term strategic plan and vision.

2. Communications

Most commentators agree that it is critical for the new executive to take control of communications, but to balance listening with revealing his or her own vision and priorities. The executive must be seen as a leader, but also as someone who understands the organization’s needs. Particularly for executives hired from the outside, it is critical that the new leader not come across as arrogant and dismissive of the company’s past.

Building relationships with those in the organization is essential. That requires an open dialogue in which the new executive really listens to the stakeholders and also reveals his or her own intentions and beliefs. The incoming CEO will have his or her preferred communications style, but must also adapt to the needs of the organization. Also, it is important to set realistic expectations on what will and will not change and how fast change will come.

So, on these two points, how is President Trump doing?

Each of us will have our own answer to this question. In my opinion, President Trump gets decidedly mixed results.

He has had some short-term successes (the confirmation of Justice Gorsuch, the limited strike on Syria) and some failures (the travel ban, the failure of the House health care reform proposal). But I don’t believe he has defined his vision of long-term success clearly enough. We don’t yet know what he hopes to accomplish in four years, which campaign promises he means to keep and which he does not . . . and maybe also how he has changed since taking office. Without this clarity, it is hard to decide if he is focused on the long term.

On the communications front, his core audience still seems supportive of the President, but he does not appear to be expanding his reach beyond his base. People who didn’t like candidate Trump tweeting now find tweets by President Trump are even scarier. Maybe he doesn’t care about broadening his appeal, but I think it would be wise if he did. And to broaden his appeal, he will have to communicate in more than 140 characters. He will have to appear to listen as well as to speak and to speak at length and with heart.

As with any change, some people will show patience toward President Trump, others will have no patience. Some will be skeptical, but silent. Others will be vocally displeased. Much like what happens in any organization when a new executive enters the scene.

What do you think of President Trump’s first one hundred days?

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A Free Short Story Offer


Two other suspense writers featured in the Murder U.S.A. anthology and I are offering a free collection of short stories. This offer is only good through May 7, so act now to receive our book.

Just click here to download the free stories.

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Happy reading!

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Apologize When You Make a Mistake


I’ve written on a couple of occasions about apologies (see here and here). In one post, I said that lawyers often don’t recommend apologies because of the potential legal risk.

But when you’re wrong, you’re wrong. Sometimes, an apology is the best solution.

United logoTwo situations have been in the news recently which have caused public relations disasters. In one, United Airlines bumped a man from his seat on a flight because the airline needed the seat to transport crew to another airport to fly another plane. The passenger refused to deplane, and he was injured when airport security physically removed him.

The United Airlines CEO apologized, but his apology was deemed insincere.

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Press Secretary Sean Spicer. Photo by Gage Skidmore.

In the second situation, Sean Spicer, President Trump’s Press Secretary, compared Assad of Syria to Hitler, but said that while Assad had gassed his people, Hitler had not—obviously forgetting the millions of people Hitler had gassed in concentration camps.

Mr. Spicer apologized, but his apology was deemed insufficient.

Mr. Spicer’s error was a mistake of fact. He knows full well—and he should have remembered—that Hitler was responsible for the Holocaust. I’m not a Trump fan, nor a Spicer fan, and I cringed when I heard Mr. Spicer’s remark. But I assume his mind deserted him for a moment. Within hours he apologized for his mistake.

In my opinion, that should be the end of the story. But opponents of the Trump Administration do not seem willing to let it go. How can anyone forget the Holocaust? they ask. Well, people’s brains do stupid stuff sometimes. Hasn’t yours?

Shouldn’t we be forgiven our stupidity?

In my opinion, the United Airlines situation is the harder case. This was not a simple error of fact. It was a matter of corporate policy—United bumps passengers when their seats are needed for smooth operation of the airline. And airlines are permitted by law to physically remove passengers from airplanes when the passengers are argumentative or combative.

But somehow, humanity got lost in this situation. A doctor in his sixties, who said he needed to see patients the next day, who had paid for a ticket and had a valid boarding pass, and who was already seated in his assigned seat, was injured when he protested the airline’s random revocation of his seat assignment. (I’ve read conflicting reports on whether United had the right to bump someone who was not technically on an “overbooked” flight.)

Then the CEO said the airline would “re-accommodate” the passenger. This word choice was unfortunate—the man had not been accommodated in the first place, so how could he be re-accommodated? How would “re-accommodation” help his injuries? In addition, the initial corporate statement blamed the passenger for being disruptive.

I think back to the post I wrote about a 2012 post in Contented Cows, in which the author stated that when you need to take accountability for a mistake, you should

  • Apologize quickly and without excuses or weasel words, and
  • Clean up the mess you made.

In this case, Sean Spicer apologized directly, without much in the way of weasel words, though he perhaps tried to explain himself too much. He is trying to clean up the mess he made, and we should allow him to do so.

By contrast, United Airlines made excuses, used weasel words, and shifted the blame in its initial attempt to apologize. It will probably take them a long time to clean up the mess they made.

When have you had to apologize? How well do you think you handled it?

 

 

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Should a Mediator Let the Parties Vent?


conflictI attended a mediation training program several months ago in which the question was asked: As a mediator, should I let the parties vent or should I control what they say to each other?

First of all, let’s recognize the absurdity of thinking that a mediator can control what the parties say. A mediator can help the parties shape how they communicate, but the mediator cannot control anything.

But it is a good question to ask whether and how the parties should vent their emotions during a mediation.

I always believed–both as an attorney with clients and witnesses who were sometimes distraught and as a mediator trying to resolve sensitive disputes–that emotions were part of the case and needed to be recognized. Still, how those emotions are dealt with can affect whether the parties will reach agreement. I often found myself in the position of absorbing my client’s venting, or, in a mediation, one of the parties’ venting. I listened to them, and sometimes just having someone listen to them diffused the emotional tension in their conversation and they could move on to settle the case.

Early on, the mediator needs to assess how the parties are communicating. Can they express themselves well? Can they describe their feelings in addition to the facts? Do they listen to each other? How do they react to each other’s statements about their feelings? If the parties are already in a situation that requires mediation, it is quite likely that one or both of them cannot deal with their emotions and/or those of the other party. If they both could address the facts rationally, they would settle the matter themselves. But if they can’t deal with their emotions effectively, the mediator will most likely need to intervene.

How can the mediator intervene?

One way is to hold separate caucuses with the parties. In a caucus, the mediator can listen to the emotional content and help filter it. Then the mediator can coach the party on expressing his or her emotions in a less confrontational or blaming way. Alternatively, the mediator can convey the party’s position through shuttle diplomacy and decide what to share with the other side. Both of these methods can defuse tension. Which to use depends on how capably and quickly the party can learn to express his or her feelings constructively.

Another method to use, particularly when caucusing is impractical, is for the mediator to rephrase the emotional statements in a way that recognizes their validity but doesn’t blame the other party.

So, for example, the mediator might rephrase Employee A’s statement “Employee B is always bad-mouthing me to everyone else in the department” into “When Employee B says something about how you handled a task, you feel he is telling other people you aren’t doing a good job.” When Employee A agrees with this statement (he will likely agree or expand on the statement), then the mediator can turn to Employee B to ask, “Do you mean to imply that Employee A isn’t doing a good job?” Often this will lead to a fruitful discussion about what was really meant.

Emotions have to be considered in any mediation. How they are dealt with will depend on the parties’ communications skills and past relationship. The mediator needs to address the emotions, but must also understand that control is impossible.

When have you had to diffuse emotions during a negotiation?

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