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This week’s stories include ...
(1) Employer Health Plans Post-ACA
Top of mind for everyone right now is health care. Repealing the Affordable Care Act (ACA) appears to be one of the first priorities of the new Congress and the Trump administration. The repeal-and-replace effort likely faces many procedural and political challenges, and the speed and timing of the changes remain uncertain. Cassandra Labbees from Epstein Becker Green tells us how companies should proceed in this uncertain environment:
“It is difficult for employers to prepare for the uncertainty ahead. Right now, there is no replacement plan, so it will be interesting to see what proposals are made. ... An ACA replacement plan may redesign the current eligible expenses, contributions, and out-of-pocket limitations on HSAs, flexible spending arrangements, and health reimbursement accounts. HSAs require individuals to anticipate health care expenses, spend wisely in their health care choices, and save money. ... This may impact the ability of employers to stay competitive and ensure the health of their workforce. The needs of the employer would need to be taken into consideration when deciding what benefits to provide if these changes take place.”
(2) Changes in the Labor Landscape
Some are optimistic that the incoming administration will shift the balance of power within the National Labor Relations Board to favor employers. They expect President Trump’s appointees to claw back many controversial decisions by the Obama-era Board, like relaxing the joint-employer standard and embracing micro-bargaining units that made it easier for unions to organize. While we may eventually see this type of change, employers should not expect it anytime soon. Although the Board will have a Republican majority once President Trump fills the two vacant seats, the Board still will have two Democratic members, including the Chairman, and a Democratic General Counsel. Even after a new General Counsel is in place, any cases he brings to the Board will take time to get through the administrative process. We didn’t see significant changes until three years into the Obama administration, and employers should expect change to come slowly under the Trump administration as well.
(3) Wage and Hour Changes
When it comes to minimum wage law, President Trump has, at different times, supported and opposed a $10 federal minimum wage. Andrew Puzder, his nominee for Secretary of Labor, is on record as opposing an increase. But change is already happening at state and local levels. The year 2017 brings minimum wage increases to 21 states and the District of Columbia, with voters in five additional states approving increases in the 2016 election. Employers with offices in multiple states will be especially impacted by this patchwork of minimum wage laws, many of which are set to increase annually for the next few years. On the overtime front, the new Department of Labor is likely to withdraw the white-collar regulations enjoined last November, but salary thresholds recently increased in New York, and other states could follow suit.
(4) Increased Cyber Threats in 2017
The hacking controversies that plagued the 2016 election have brought cyber threats front and center. The Democratic National Committee is the latest prominent organization that has fallen victim to hacking. President Trump has tapped Rudolph Giuliani to advise him on the issue. Because so many breaches are caused by negligent or malicious employees, it is vital that data security becomes part of the workplace culture. Brian Cesaratto, from Epstein Becker Green, has more:
“Last year was a remarkable end to a presidential political year where headlines concerning the new administration coming in are coupled with headlines about hacking; it’s in the news every day. So with the threats real and growing each year, it’s critical that companies team up in their HR and IT departments to combat that threat. IT brings to the table technical know-how, the technical background. HR brings to the table the ability to talk to employees, to train employees, so that employees understand what the threats are and what they should and shouldn’t do. ... If the people understand that if they take the right steps they can protect themselves, they can protect their jobs, they can protect their friends and colleagues, they’ll take those steps.”
(5) The Future of Retirement Plans
While other issues are grabbing headlines, multiemployer retirement plans are an area in which President Trump may be forced to take action quickly. With the multiemployer system stressed nearly to the breaking point, we could begin seeing more employers cutting benefits or partitioning plans in an effort to remain solvent. This would leave the Pension Benefit Guaranty Corporation, the government’s insurer of insolvent multiemployer funds, to foot the bill. Unfortunately, the fund itself is projected to become insolvent by 2025. These factors will likely increase pressure on Congress and the administration to take action to solve this problem.