Issue 51-May 2016
Annual Meeting of the Board of Directors
by Jonathan R. Shull, Chief Executive Officer
The Annual Meeting of the Board of Directors will be held Wednesday, July 20, 2016 at 7:00 p.m.
Those attending will have the opportunity meet the Executive Committee, Authority staff, and network with the members of the California JPIA. The business meeting will present information about the Authority’s objectives, vision, and accomplishments over the past year, including recognition of the winners of the 2016 risk management awards; and the budget for fiscal years 2016-17 and 2017-18.
In addition, voting delegates will elect four Executive Committee members. Also, the Board of Directors will elect one member from the Executive Committee to serve as Vice-President for a two-year term.
The meeting will be held at the Authority’s La Palma campus at 8081 Moody Street. A buffet dinner will be served al fresco at 5:30 p.m. with the Board of Directors meeting immediately following. Voting delegates and up to one additional member representative traveling in excess of 100 miles are eligible to receive lodging and travel reimbursement for attending the meeting. A $100 stipend will be provided to the voting delegate or alternate of each member agency attending the meeting.
On an annual basis the California JPIA asks members to certify designated California JPIA Director and Alternate(s) prior to the annual Board of Directors meeting. Please click here to complete the certification. Registration for the Annual Meeting of the Board of Directors will open in June. For questions or assistance please contact Denise Covell, Office Assistant.
I hope you will be able to join us.
Lt. General Russel L. Honoré USA (Ret.), Keynote Speaker at 21st Annual Risk Management Educational Forum
“Shelter from the storm” is a familiar idea that conjures up images that illustrate times in the human experience where a sense of calm, safety and warmth replaces feelings of danger, crisis and even failure. If anyone knows how to successfully lead and execute a mission, it is Lt. General Russel Honoré, USA (Ret.), who saved a city in 2005 by taking swift charge of military relief efforts in Hurricane Katrina-battered New Orleans.
Drawing from 37 years of military experience, Gen. Honoré brings his bold, no-nonsense leadership approach to businesses and organizations to help them better identify and prepare for the challenges of the future. With an emphasis on the importance of innovation, risk assessment, and social entrepreneurship, he provides valuable insight and strategies for both public and private sectors to solve a broad array of issues—from jobs and energy to healthcare and technology. He also reveals leadership tactics that optimize efficiency and effectiveness of operations and outlines the importance of developing the next generation of problem-solvers.
Storms rage in the world of risk, bringing difficulty and hardship, and imposing real costs for public agencies and the communities they serve. Make your plans now to seek shelter, and let us help you weather the storm.
Registration will open within the next two weeks for the 21st Annual Risk Management Educational Forum, entitled Weathering the Storm, to be held at the Hyatt Regency Indian Wells Resort & Spa on October 12 – 14, 2016.
For 2016, the Authority’s Executive Committee has again waived registration for Members. Lodging scholarships will be available on a limited basis. Non-member registration fee is $475.00. For questions, email us at email@example.com.
Answers to Common Employer Questions About Transgender Employees
By Kelly A. Trainer, Monica Sanchez McQueen, and Amber N. Morton
Burke, Williams & Sorensen, LLP
Many employers have questions about legal rights of transgender employees, as well as about the practical implications of having an employee transition in the workplace. Below we provide some general guidance on some of the most common questions about transgender employees. Employers with specific questions should involve legal counsel and/or their assigned Risk Manager for additional assistance and specific guidance.
1. WHAT DOES TRANSGENDER MEAN?
In California, the term “transgender” refers to any person whose expression of gender is different than the sex they were assigned at birth. For purposes of the California Fair Employment and Housing Act (“FEHA”) the California Code of California Regulations defines “transgender” to refer to a person whose gender identity differs from the person’s sex at birth. A transgender person may or may not have a gender expression that is different from the societal expectations of the sex assigned at birth and transgender person may or may not identify as “transsexual.” 2 C.C.R. § 11030(e).
Under federal standards, there is no statutory definition of the term “transgender.” However, the Equal Employment Opportunity Commission (“EEOC”) interprets the term “transgender” to be “an umbrella term for persons whose gender identity, gender expression, or behavior does not conform that that typically associated with the sex to which they were assigned at birth.” Lusardi v. U.S. Department of the Army, EEOC Appeal No. 120133395 (April 1, 2015).
2. HOW DOES AN EMPLOYEE ESTABLISH TRANSGENDER STATUS?
In California, the Department of Fair Employment and Housing (“DFEH”) recently issued guidelines for employers regarding transgender employers. The DFEH noted that there are two types of gender transitions – social transition and physical transition. A social transition, according to the DFEH, involves a process of socially aligning one’s gender with the employee’s internal sense of self. This would include changes in name and pronoun and bathroom facility usage. A physical transition refers to medical treatments an individual undergoes to physically align their bodies with their internal sense of self. This could include medical treatment through hormone therapies or surgical procedures. The employee could undergo either a social or physical transition, or both. An employer cannot require an employee to undergo a particular step in the transition as a condition to the employer’s treatment or accommodation of the employee.
Similar to the California standards, the EEOC has stated that Title VII does not require a transgender employee to undergo any specific medical treatment as a prerequisite for equal opportunity. Lusardi v. U.S. Department of the Army, EEOC Appeal No. 120133395 (April 1, 2015). Further, the EEOC stated that when an employee notifies his or her employer that the employee has begun living and working full time as a particular gender the employee is entitled to be treated in accordance with that specified gender.
Based on the DFEH guidance and EEOC interpretation, employees may establish transgender status by notifying their employer. However, as no definitive process has been established by the regulations or laws, employers should also be aware of other cues, such as an employee requesting a change in their name or pronoun at work, which would possibly trigger protections under anti-discrimination laws. If an employer has questions regarding whether an employee has established transgender status, the employer should consult with legal counsel as it is likely to be dependent on the facts and circumstance of each individual case.
3. WHAT CAN AN EMPLOYER ASK TO ASCERTAIN “TRANSGENDER” STATUS?
There have been few cases discussing what questions, if any, an employer may ask an employee to establish the employee’s transgender status. Under the DFEH guidelines, during the pre-employment period, employers may ask about an employee’s employment history, and may still ask for personal references, in addition to other nondiscriminatory questions. However, an interviewer should not ask questions designed to detect a person’s sexual orientation or gender identity, including asking about his or her marital status, spouse’s name, or relation of household members to one another. For applicants and employees, employers should not ask questions about a person’s body or whether they plan to have surgery because this information is generally protected by medical privacy laws. Generally, employers should exercise caution to ensure they are asking employees questions that are non-discriminatory and not intruding upon protected areas.
4. IS A TRANSGENDER EMPLOYEE LEGALLY PROTECTED?
Under the FEHA, employers are prohibited from discriminating against individuals on the basis of sex, gender, gender identity, or gender expression. Gov. Code § 12940 (a). For purposes of the statute, the term “sex” includes a person’s gender identity and gender expression. A person’s “gender identity” is a person’s identification with a specific gender, whether that be male, female or transgender. How that person expresses that “gender identity” such as by their appearance or behavior is considered that person’s “gender expression.” 2 C.C.R. § 11030(a)-(b). Accordingly, the FEHA protects transgender employees from workplace discrimination.
In addition to the protections currently afforded to transgender employees, employers should also be aware that the Fair Employment and Housing Council of the DFEH issued a notice of proposed rulemaking on May 13, 2016, stating its intention to amend the FEHA regulations regarding transgender identity and expression. The Council will hold a public hearing on the proposed regulations on June 27, 2016 in Los Angeles.
Title VII also prohibits employers from discriminating against any individual on the basis of sex. 42 U.S.C. § 2000e-2. Title VII, however, does not contain language that explicitly includes gender identity or gender expression transgender as included within the definition of “sex” and does not specifically include transgender as a protected status. 42 U.S.C. § 2000e. However, the EEOC interprets and enforces Title VII’s prohibition of sex discrimination as forbidding employment discrimination based on gender identity or sexual orientation. Macy v. Dept. of Justice, EEOC Appeal No. 0120120821 (April 20, 2012).
5. WHAT LIABILITY COULD AN EMPLOYER FACE FROM A TRANSGENDER EMPLOYEE?
Employers face potential liability under the FEHA and Title VII for discrimination against employees on the basis of their being transgender. Employees who suffer discrimination have the option of proceeding with the hearings before the DFEH or EEOC, or pursuing their claims in a lawsuit.
Under the FEHA and Title VII, employees who establish discrimination have a number of remedies available to them. First, employees may be entitled to lost compensation, including back pay and future earnings. Employees may also be entitled to compensatory damages, such as for emotional distress, and punitive damages. Under Title VII, compensatory and punitive damages are capped according to the size of the employer. 42 U.S.C. § 1981a(b). Under the FEHA, however, there is no statutory limit on the amount of punitive damages awardable. Further, employees may also be entitled to their attorney’s fees.
6. MUST AN EMPLOYER ALLOW AN EMPLOYEE TIME OFF FOR TRANSITION-RELATED SURGERY UNDER DISABILITY LEAVE LAWS?
Under the California Family Rights Act (“CFRA”) and the Family and Medical Leave Act (“FMLA”), an eligible employee may take an unpaid leave of absence for the employee’s own serious health condition. A “serious health condition” entitling an eligible employee to leave means an illness, injury, impairment or physical or mental condition that involves either in-patient care (i.e., an overnight stay) in a hospital or continuing treatment or supervision by a health care provider.
In general, some transition-related treatments and procedures may not qualify for leave, but it is possible that others may. Despite this general guidance, determination of whether a “serious health condition” is covered is fact-specific and depends on the employee’s individual circumstances. An employer should follow normal notification procedures and review each medical certification to determine CFRA and FMLA applicability. Employers should contact legal counsel with any specific questions about eligibility for CFRA or FMLA.
7. DOES AN EMPLOYEE HAVE THE RIGHT TO BE ADDRESSED BY THE NAME AND PRONOUN THEY PREFER?
Employers and other employees should use the name and gender pronoun that corresponds with an employee’s gender identity.
It is unlawful to harass an employee because of a gender transition, such as by intentionally and persistently failing to use the name and gender pronoun that correspond to the gender identity with which the employee identifies, and which the employee has communicated to management and employees. Lusardi v. U.S. Department of the Army, EEOC Appeal No. 120133395 (April 1, 2015).
Most transgender employees adopt a name during their transition that better represents their gender identity. As a practical matter, this may involve an employee being called a different name before legal documentation has been updated. This is no different than an employer permitting an employee named Andrew to be identified at work by the name Andy. Andy may not be an employee’s legal name, yet an employer may permit the use of the nickname on a business card or e-mail address. There are however, certain documents maintained by an employer that require a legal name change, and employers should follow those procedures in the same way they would process another type of name change (such as in the case of a marriage or divorce).
Many employers are surprised to discover that there is no one correct process for updating a name and/or gender marker to match one’s gender identity. Employers should also keep in mind that some employees may not want to change all of their identity documents. As a part of their transition some employees may want to change both their name and gender on their identity documents, others may only want to change their gender.
8. WHAT ABOUT THE BATHROOM OR A LOCKER ROOM?
It is unlawful for an employer to deny an employee equal access to a common restroom corresponding to the employee’s gender identity. Lusardi v. U.S. Department of the Army, EEOC Appeal No. 120133395 (April 1, 2015).
In addition to guidance from the EEOC on this, the DFEH recently issued guidelines explain the obligations of employers when it comes to bathrooms and locker rooms. The guidelines make clear that California employers must allow transgender employees access to a restroom or locker room that corresponds to the employee’s gender identity, regardless of the employee’s assigned sex at birth.
The DFEH recommends that where possible, an employer should provide an easily accessible unisex single stall bathroom for use by any employee who desires increased privacy, regardless of the underlying reason. However, use of a unisex single stall restroom should always be a matter of choice and an employer may not force an employee to use one as a matter of policy or due to continuing harassment in a gender-appropriate facility.
The DFEH’s guidance is consistent with a “Guide to Restroom Access for Transgender Workers” published by the Occupational Safety and Health Administration (“OSHA”). This publication provides guidance to employers on best practices regarding restroom access for transgender workers. OSHA’s goal is to assure that all employees, including transgender employees, have access to restrooms that correspond to their gender identity.
9. WHAT ABOUT A DRESS CODE OR GROOMING STANDARDS?
It is lawful for an employer to impose dress and grooming standards. However, if such a standard discriminates on the basis of sex, gender, gender identity, or gender expression, and if it also significantly burdens the individual in his or her employment, it is unlawful.
An employer who requires a dress code must enforce it in a non-discriminatory manner and allow employees to dress in a manner suitable for that employee’s gender identity. The DFEH guidance clarifies that this means, for instance, that a transgender woman must be allowed to dress in the same manner as non-transgender women, and that her compliance with such a dress code cannot be judged more harshly than non-transgender women.
10. WHAT IF AN EMPLOYEE OBJECTS TO WORKING WITH A TRANSGENDER EMPLOYEE?
Employers should take every action to establish an inclusive, diverse, and respectful working environment for all employees, and employers should be prepared to take appropriate action to enforce their anti-discrimination policies. Should an employee object to working with a transgender employee, the employer should address it in the same manner it would address an employee saying that he or she objected to working with an employee because of that employee’s protected characteristic (such as race, religion, color, national origin, sexual orientation, etc.). As such, the employer should ascertain the basis of the employee’s objection and respond accordingly.
A more challenging issue would be presented if the employee alleged religious grounds because employers have an affirmative obligation to consider reasonable accommodations to an employee’s sincerely held religious beliefs. In this event, the employer should consult with legal counsel to be sure that its obligations in responding to the objecting employee are met, while satisfying its own obligations to prevent harassment and discrimination in the workplace.
However, employers should also be aware that in evaluating the religious objections of one employee that the beliefs of one employee would rarely, if ever, be a legitimate basis for discrimination or harassment in the workplace.
11. WHAT IS THE PROCESS FOR AN EMPLOYEE TRANSITIONING?
Each person who goes through a gender transition has a different path, and employers should be prepared to defer to the gender transition plan that the employee has established with his or her support team. A process will likely include the following steps:
- Notification to the employer by the transitioning employee;
- Development of a transition plan, with consideration given to internal policies and the employee’s preference, which can include the following:
- When announcements will be made;
- What the employee’s role will be in making announcements;
- Timeline for social transition and physical transition;
- Evaluation of anticipated issues, such as with restrooms, uniforms, new name, etc.;
- Processes for updating legal records and benefits; and
- Recognition that the transition plan will need to be fluid and change as circumstances warrant;
- Notification to the employee’s supervisor(s);
- Notification to the employee’s coworkers;
- Notification to any necessary third parties; and
- General education and responses to employee questions about the transition.
12. DO EMPLOYERS NEED TO HAVE A POLICY ON TRANSGENDER ISSUES?
At a minimum, employers should be sure their workplace harassment and discrimination policies clearly include sexual orientation, sex, gender, gender identity, and gender expression in the scope of protections.
Employers are not legally required to have a policy on gender transitions, but it can be a good practice to adopt such a policy. Certainly having a policy in place can make a gender transition procedurally easier for the transitioning employee, the employer, and other employees. If an employer is considering adopting such a policy, it should consider including information on the following:
- Which position is charged with assisting the transitioning employee with his/her workplace transition (such as Human Resources);
- What the transitioning employee can expect from the employer;
- What the employer expects from a transitioning employee, from other staff, and from supervisors;
- What the general procedures are for a workplace transition (although the procedures should be broad enough to allow for tailoring to the transitioning employee’s specific plan); and
- Any answers to frequently asked questions such as dress code, bathrooms, benefits, or leaves of absence.
 The DFEH guidance is available here: http://www.dfeh.ca.gov/res/docs/Publications/Brochures/2016/DFEH163TGR.pdf
Join Social Media Conversations with the Authority
To reach new members and better connect with current members, the following social media channels have been started for Authority members to engage with the latest information, issues and ideas regarding local government risk management.
Connect with our latest topics:
“Did you know that California law identifies over 40 different employment positions with mandated reporter responsibilities?” Like, comment and share:
“As of April 1st, new Fair Employment and Housing Act regulations are in effect. Are you in compliance? Read about new FEHA regulations.” Follow us, comment, and share about risk management:
LinkedIn Discussion Group
“What is an agency to do when it discovers makeshift BMX parks on its property?” Join the conversation, or pose a question or idea about risk management and the California JPIA: https://www.linkedin.com/groups/6786001
“Scholarship opportunities available for lodging at our 21st Annual Risk Management Educational Forum. Apply today!” Tweet, retweet and follow the California JPIA:
For information on how to join these sites or participate in discussions, please contact Courtney Morrison, Administrative Analyst, by email or by phone at
myJPIA – New Features
In 2014 the California JPIA released its members-only website, myJPIA in order to provide better information and service to Members. Through the myJPIA Learning Management System, Members can register for training courses, access the Authority’s library of helpful resources and documents, report claims, get detailed information about coverage programs, request Evidence of Coverage letters, and download Memoranda of Coverage and Certificates of Coverage.
On May 16, the Authority launched new features in its myJPIA Learning Management System, empowering users with self-serve functionality to manage agency information and contacts within their own user profile. Many other upgrades were also activated into the system to make the overall user experience more efficient and intuitive for managing agency information, contacts, and learning activities.
In addition, new user-friendly tutorials are live for quick tips on every action. The entire self-help video library is posted directly within myJPIA for instant support throughout the Learning Management System. Click on the following links to view enhancement examples:
Print a Certificate of Completion: http://www.cjpia.org/VideoTutorials/2.5-web.mp4
View training I’m registered for: http://www.cjpia.org/VideoTutorials/2.6-web.mp4
The California JPIA’s mission is to provide innovative risk management solutions to you, our public agency partner. Please let us know how we are doing.
By Michelle Aguayo, Training Coordinator
The first of two Management Academies was held April 25 – 28, 2016 at the Westlake Village Inn in Westlake Village. Forrest Story, principal consultant for Public Sector Excellence and John Perry, President of Human Productivity Systems, facilitated the three-and-a-half day academy.
The Management Academy exposed participants to leadership principles and practices that motivate and sustain employee performance, improve customer service, and increase productivity. The program focused on the essentials of leadership designed for lead staff, new supervisors, those who are considering a supervisory role, and experienced supervisors and managers who want to review some of the basics.
The Management Academy format was expanded last year to allow participants more time to travel to the Academy, as well as augmenting John Perry’s Job Person Environment Assessment session. This session is an integral part of the Academy as participants complete a pre-assessment and have their results provided during the session along with detailed explanations of job-person match types and environment/energy mapping. “John Perry is an insightful, knowledgeable, experienced, and professional presenter and an excellent communicator! What a treat to listen to and participate with him,” expressed Anna Cross, Mission Playhouse Director, from the City of San Gabriel who attended the Academy for the first time.
- The Role of the Public Sector Supervisor
- Decision Making
- The Job Person Environment Assessment
- Orientation Training, Coaching, and Delegation
- Writing Policies, Procedures, and Programs
- Performance Appraisal and Dealing with Performance Issues
- Public Service Ethics
Thirty-two participants representing twenty agencies attended the Management Academy. Due to the high demand of the Management Academy, the Authority has scheduled an additional Academy September 26 – 29, 2016 at the Hyatt Regency Resort in Indian Wells. Registration for the Academy will remain open until August 25, 2016.
Public Works Academy
The Public Works Academy will take place June 7 – 9, 2016 at the Shorebreak Hotel in Huntington Beach.
Public Works has some of the largest exposures to a municipal agency. The three-day Academy emphasizes best practices needed to effectively manage those risks. Geared for experienced public works supervisors and managers, the following topics will be presented at the Academy:
- Risk Management for Public Works presented by Tim Karcz, Poms & Associates Risk Services
- Workers Compensation presented by Jeff Rush, California JPIA
- Intro to Cal-OSHA presented by Dick Monod de Froidville, retired Cal/OSHA
- Investigating Claims and Preserving Evidence presented by Scott Grossberg, Grossberg & Hoehn
- Conducting Risk Reviews presented by Tim Karcz, Poms & Associates Risk Services
- Contractual Risk Transfer presented by Marjorie Segale, Segale Consulting Services, LLC
- Traffic Control for Construction Zones presented by Temo Galvez, City of Fountain Valley
- Design Immunity presented by Mike Wroniak, Collins Collins Muir + Stewart, LLP
- Dangerous Conditions presented by Dave Ferrante and Mike Wroniak, Collins Collins Muir + Stewart, LLP
- Unwarranted Traffic Control Devices presented by Scott Grossberg, Grossberg & Hoehn
- Public Works Exposures and Lessons Learned presented by Paul Zeglovitch, California JPIA
Registration is free of charge for members, and includes three nights at the hotel, breakfast, lunch, and all training materials.
For further information about the Management Academy and Public Works Academy contact Michelle Aguayo, Training Coordinator, by email or phone at or (562) 467-8777.
Meet Your York Risk Services Team
York Risk Services Group recently added a new unit manager to the California JPIA’s designated claims team.
Eric Justus has transitioned into the role of unit manager and he brings with him over a decade of claims handling experience. His background includes working with multiple public agencies and dealing with the benefits that are unique to the public sector. This is his first opportunity to work in a management capacity and when asked why he wanted to take on his new role he noted his “overall passion for helping others succeed” and an opportunity for career growth. When asked what he hopes to accomplish as a unit Manager Eric expressed a desire instill a sense of pride in working for York and with the California JPIA members and to keep his team “engaged and committed to strive for excellence.”
When Eric is not busy at work, he has plenty of other passions to keep him occupied. He likes to build old cars including a 1955 VW Sedan and a 1930 Ford Model A Roadster. He is also looking forward to another season of Dodgers baseball and when the football season returns later this year, he will be rooting for the Kansas City Chiefs. He and his girlfriend also like to travel with their dogs.
Photo: Eric Justus, York Risk Services Group
The Court Report
Court of Appeals Says County Failed to Justify Public Records Cost
(Reprinted from the Metropolitan News Enterprise, April 29, 2016)
Stanislaus County failed to justify the fees it charges for copying public records and must reconsider and potentially make refunds, the Fifth District Court of Appeal ruled yesterday.
The court reinstated an action by California Public Records Research, Inc., which sought a writ of mandate compelling the county to reduce its fees of $3 for the first page and $2 for each additional page. The plaintiff claims the county violates a Government Code section requiring the fees be set “in an amount necessary to recover the direct and indirect costs of providing the product or service,” and said there was no reason it should have to pay $33 for a copy of a standard deed of trust.
Stanislaus Superior Court Judge William Mayhew denied relief, holding that the county’s Board of Supervisors acted within its discretion in setting the fees.
Justice Donald Franson Jr., however, said the county failed to present sufficient evidence to show that the fee schedule it adopted in 2001 represents its current, actual costs of copying and producing the documents.
Franson said the county apparently relied on a study that was based on averaging per-document, rather than per-page, costs.
The study cited an official’s estimate that it took three minutes of clerical time to copy an average document, and that the average cost of copying a document was $2.97, or 99 cents per minute of clerical time.
The problem, the jurist said, was that “the study did not explain how the $2.97 in costs related to the per page recommendations.”
He gave the examples of a two-page document for which the county would charge $5, a seven-page record with a $15 charge, a 22-page instrument with a $45 charge, and a 30-page copy for which $61 would be charged.
“[T]he record contains no evidence that documents with these page lengths require that much staff time to copy and process,” Franson wrote. “The absence of evidence about the amount of time spent copying the second and subsequent pages of a document renders it impossible to apply the time-based methodology set forth in the 2001 study to calculate the costs to County of providing copies of those pages. Therefore, we have eliminated the time-based methodology as a way to support the fees charged for copies of the second and subsequent pages of an official document.”
Nor, he said, did the county—which rejected the plaintiff’s argument that it should charge something comparable to the 15 cents per page charged by commercial copy services, saying its copying process was more complex—present an alternative basis for calculating the fees the way it did.
The county, he acknowledged, has some leeway in setting fees, since the statute allows it to recover its “indirect costs.” But such costs, he said, must “be reasonably attributed to (i.e., reasonably related to) providing copies and excludes costs that cannot be reasonably attributed to the service of providing copies.”
On remand, he said, the trial court should issue a writ directing the county to establish a new fee schedule based on its direct costs, including “the amounts paid for (a) the paper, ink and toner used to make the copy, (b) the photocopier, including its operation and maintenance, and (c) the salary and benefits of the person making the copy,” and its indirect costs, including “(a) salary and benefits of all staff necessary for operating the clerk-recorder’s office, (b) lease payments for the building and equipment, (c) costs of utilities, services contracts, computers, equipment, and furniture; (d) maintenance and depreciation of office equipment; (e) office cleaning; and (f) insurance, office supplies and necessary travel expenses.”
In an unpublished portion of the opinion, Franson agreed with the trial judge that as long as copying fees do not exceed the county’s costs, they are not special taxes and need not be approved by local voters.
The case is California Public Records Research, Inc. v. County of Stanislaus, F07061.
EEOC Issues Final Rules on Employer Wellness Programs
(Reprinted from the Society for Human Resources Management website, May 17, 2016)
The rules clarify limits on financial incentives to spur participation in voluntary programs
The U.S. Equal Employment Opportunity Commission (EEOC) has issued new final rules that describe how employer-provided wellness programs can comply with the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA).
The two rules, to be published in the Federal Register on May 17, also address how ADA- and GINA-compliant wellness programs can stay consistent with the Health Insurance Portability and Accountability Act (HIPAA), as amended by the Affordable Care Act (ACA).
The final rules, which will go into effect in January 2017, apply to all workplace wellness programs, including those in which employees or their family members may participate without also enrolling in a particular health plan.
“All in all, the rules are very much in line with what the EEOC proposed last year,” said Brian Marcotte, president and CEO of the National Business Group on Health, a nonprofit association of large U.S. employers. “While we may have hoped for some additional flexibility, the rules do what the EEOC was asked to do—clarify for employers where their wellness plan incentives stand with respect to ADA and GINA compliance.” But Nancy Hammer, senior government affairs policy counsel at the Society for Human Resource Management (SHRM), said that “the EEOC failed to change many of the aspects of the rules that SHRM felt conflicted with existing rules under the ACA for wellness plans, and which SHRM felt served as roadblocks to employers trying to improve the overall wellness of their employees and keep their health care costs in check,” some of which are noted below.
What’s Allowed and What Isn’t
The ADA and GINA generally prohibit employers from obtaining and using information about employees’ health conditions or about the health conditions of their family members, including spouses. Both laws, however, allow employers to ask health-related questions and conduct certain medical examinations, such as biometric screenings to determine risk factors, as part of a voluntary wellness program. Last year, the EEOC issued proposed rules that addressed whether offering an incentive for employees or their family members to provide health information as part of a wellness program would effectively render the program involuntary.
“The EEOC received comments on both rules from a broad array of stakeholders and considered them carefully in developing this final rule,” said EEOC Chair Jenny R. Yang, in a news statement.
Limits on Financial Incentives
Under HIPAA as amended by the ACA, wellness programs may offer incentives of up to 30 percent of the cost of an individual’s annual health premiums, and for tobacco-cessation programs, up to 50 percent of the cost of health premiums.
The final ADA rule clarifies that wellness programs that ask questions about employees’ health or include medical examinations may offer incentives of up to 30 percent of the total cost of self-only coverage, and that, specifically:
• Where the employer requires the employee to be enrolled in a particular health plan in order to participate in the wellness program, the incentive to the employee may not exceed 30 percent of the total cost of the self-only version of the plan in which the employee is enrolled.
• Where the employer offers more than one self-only health plan, and does not require the employee to be enrolled in a particular health plan in order to participate in the wellness program, the incentive may not exceed 30 percent of the lowest cost major medical self-only plan the employer offers.
• Where the employer does not offer a health plan, and offers a wellness program that is open to employees, the incentive may not exceed 30 percent of the total cost to a 40-year-old nonsmoker purchasing self-only coverage under the second-lowest cost Silver Plan available on the state or federal exchange in the location that the employer identifies as its principal place of business.
“The final rules still limit the incentive an employer can offer to encourage participation in a wellness plan to 30 percent of total costs of ‘employee-only coverage,’ even though the ACA expressly permits employers to offer incentives based on the cost of the wellness program the employee selects—whether employee-only or family coverage,” said Hammer.
In addition, the final GINA rule provides that the value of the maximum incentive attributable to a spouse’s participation may not exceed 30 percent of the total cost of self-only coverage, the same incentive allowed for the employee.
Under the GINA rule, no incentives are allowed in exchange for the current or past health status information of employees’ children or in exchange for specified genetic information (such as family medical history or the results of genetic tests) of an employee, an employee’s spouse, and an employee’s children.
Regarding incentives to motivate employees to stop using tobacco, the ADA rule—unlike the ACA—makes a distinction between tobacco-cessation programs that require employees to be tested for nicotine use and programs that only ask employees if they smoke. “A wellness program that merely asks employees whether or not they use tobacco (or whether they ceased using tobacco by the end of the program) is not a wellness program that asks disability-related questions. Therefore, the rule’s 30 percent incentive limit does not apply and an employer can offer an incentive up to 50 percent of the cost of self-only coverage,” the EEOC stated.
However, where an employer requires any biometric screening or other medical procedure that tests for the presence of nicotine or tobacco, the rule’s 30 percent incentive limit applies, according to the rule.
The new rules “contradict existing rules allowing an incentive up to 50 percent for smoking cessation, and they retained a convoluted requirement to apportion the incentive to spouses under the Genetic Information Nondiscrimination Act,” said Hammer.
Under existing HIPAA regulations, a participatory wellness program must be made available to all similarly situated individuals regardless of health status. The ACA implementing regulations require that wellness programs provide a reasonable alternative or waiver for achieving a wellness incentive if an individual can’t participate or achieve program goals due to a health condition or disability.
In its final ADA rule, the EEOC reiterated that, “absent undue hardship” to the employer—a phrase that is not explained—“the ADA requires employers to make all wellness programs, even those that do not obtain medical information, available to all employees [and] to provide reasonable accommodations (adjustments or modifications) to employees with disabilities.” These accommodations should “enable employees with disabilities to earn whatever financial incentive an employer or other covered entity offers.”
The ADA final rule does not change any of the exceptions to confidentiality in EEOC’s existing ADA regulations, but adds two new requirements. An employer:
• May only receive information collected by a wellness program in aggregate form that does not disclose, and is not reasonably likely to disclose, the identity of specific individuals except as necessary to administer the plan.
• May not require an employee to agree to the sale, exchange, transfer, or other disclosure of medical information or to waive confidentiality protections under the ADA in exchange for an incentive or as a condition for participating in a wellness program, except to the extent permitted by the ADA to carry out specific activities related to the wellness program.
The ADA rule also requires that employers give participating employees a notice that tells them what information will be collected as part of the wellness program, with whom it will be shared and for what purpose, the limits on disclosure, and the way information will be kept confidential.
The GINA rule includes a requirement that statutory notice and consent provisions for health and genetic services be provided to employees and their family members.
The interpretive guidance published along with the final ADA rule and the preamble to the GINA final rule identify some best practices for ensuring confidentiality, such as:
• Adopting and communicating clear policies.
• Training employees who handle confidential information.
• Encrypting health information.
• Providing prompt notification of employees and their family members if breaches occur.
EEOC Appeals Wellness Suit Dismissal
Some of the provisions in the Equal Employment Opportunity Commission’s (EEOC’s) new final rules are likely to end up in court and the EEOC may not always prevail.
For instance, in January 2016 a federal district court in Wisconsin dismissed an EEOC lawsuit against an employer’s alleged “involuntary” wellness plan and held that the plan did not violate the Americans with Disabilities Act, as the EEOC contended. In the case, EEOC v. Flambeau Inc., the district court held that an employer can require workers to undergo health screenings as a condition for receiving employer-provided health coverage. The court agreed with the company’s stance that its wellness exams fell under the ADA’s safe harbor.
In April, the EEOC appealed that decision to the Court of Appeals for the Seventh Circuit. Whether the Seventh Circuit upholds or reverses the lower court’s decision, the case may ultimately be headed to the U.S. Supreme Court.
Summer Camp/Program Transportation
by Roy Angel, Senior Risk Manager
With summer rapidly approaching, many of Members offer summer camps or programs, and in many instances transportation of participants to and from various locations is provided by the Member. Members either utilize the services of a private transportation provider (the preferred risk transfer method), or they elect to use staff or volunteers and their own vehicles to transport camp/program participants. Below are tips to help mitigate liability when employing either method of participant transport.
If your budget allows for the use of a private transportation company, be certain to draft indemnification and insurance language in the third-party agreement to transfer most of the risk to the transportation company. Sample insurance language is available in the Authority’s Contractual Risk Transfer Manual or you can refer to the Vendor Agreement for Reoccurring Services template located on the Authority’s website. Private transportation companies are regulated through the California Public Utilities Commission (CPUC). Members can check to see if a company is a licensed passenger carrier (and whether the carrier is insured) on the CPUC website, http://www.cpuc.ca.gov. When requiring insurance, the Authority recommends a minimum of $10,000,000 for Auto Liability coverage.
If you choose to use staff/volunteers and agency vehicles to transport participants, the Authority offers the following risk management considerations:
- Enroll all staff and volunteers, who may be driving participants, in the DMV Employer Pull Notice Program. More information can be found on the CA DMV website.
- List drivers as “Safety Sensitive” employees and perform drug tests per DOT guidelines.
- If using volunteers, re-visit the Authority newsletter article Managing Volunteer Risks written by Jim Gross.
- Ensure that drivers have satisfactory driving records and that they meet the standards outlined in your agency’s vehicle use policy. If you do not have an updated vehicle use policy, refer to the Vehicle Use Policy template on the Authority’s website.
- Ensure staff/volunteers and drivers are knowledgeable of ADA standards and ADA Accessibility Guidelines. See Justice Department Reaches Agreement with Philadelphia-Area YMCA to Ensure Equal Opportunities for Children with Diabetes.
- If using a paratransit vehicle, it must be inspected by the California Highway Patrol on an annual basis. Further information can be found in CA Vehicle Code Section 34501 on regulations governing paratransit vehicles.
If you elect to rent a vehicle to transport participants, please remember that property coverage is not extended to rental vehicles through the Authority’s Property Program; Members are encouraged to seek coverage through the rental company.
If you have any questions, or if you are in need of additional information, please contact your assigned Risk Manager.
Reducing the Risk and Occurrence of Heat-Related Illnesses
by Melaina Francis, Risk Manager
Summer is fast approaching and so is the concern for heat related injuries. As temperatures start to rise, it is good to remember these three simple words: Water, Rest, and Shade. Taking these precautions can mean the difference between life and death. The Authority recommends agencies begin tailgating the heat illness topic early in the season to discuss signs, symptoms, and preventive measures.
Many people are exposed to heat on the job, outdoors or in hot indoor environments. Operations involving high air temperatures, radiant heat sources, high humidity, direct physical contact with hot objects, or strenuous physical activities have a high potential for causing heat-related illness. Outdoor operations conducted in hot weather and direct sun, including public works, facility maintenance, public safety, and parks and recreation, also increase the risk of heat-related illness.
Excessive exposure to heat can cause a range of heat-related illnesses from heat rash and heat cramps to heat exhaustion and heat stroke. Heat stroke can result in death and requires immediate medical attention. Those most at risk include:
- Infants and young children
- Elderly people
- Individuals with heart or circulatory problems or other long-term illness
- People who work outdoors
- Athletes and people who like to exercise – especially beginners
How can heat illness be prevented?
Employers should establish a comprehensive heat illness prevention program to train staff about the hazards of heat exposure and their prevention. Good workplace practices include: providing workers with water and rest in the shade to cool down; gradually increasing workloads and allowing more frequent breaks for new workers or workers who have been away for a week or more to build a tolerance for working in the heat (acclimatization); modifying work schedules as necessary; planning for emergencies and training workers about the symptoms of heat-related illnesses and their prevention; and monitoring workers for signs of illness. If workers are new to working in the heat or returning from more than a week away from work, and for all workers on the first day of a sudden heat wave, implement a work schedule to allow them to acclimate to the heat gradually. Working in full sunlight can increase heat index values by 15 degrees Fahrenheit, so please keep this in mind, and plan additional precautions for staff working in these conditions.
If you have questions regarding your agency’s heat illness prevention program, please contact your assigned Risk Manager.
Playground risk: Not all fun and games
(Reprinted from National Underwriter Property & Casualty, April 13, 2016)
What if I told you there is a product that — for several decades — has caused about 14 deaths and injured about 200,000 children 14 and younger every year, and resulted in estimated costs of well over $1 billion?
What if I added that the steps to mitigate these deaths and injuries were widely known and fairly straightforward, but were rarely implemented?
The good news is that there is no such product. The bad news is that the numbers are very real, and they are caused by a part of communities across the United States that is generally seen as a safe environment that is an essential part of growing up: Playgrounds.
There are an estimated 80,000 playgrounds in the United States run by schools or municipalities where kids from 6 months old to 12 years old play. These are rightly celebrated, and their funding and creation is often greeted with much attention from media, politicians and the communities they serve. However, playground risk is overlooked, even though most injuries to children in childcare and children ages 5 to 14 in schools take place on playgrounds. You can see from the statistics referenced previously that little progress has been made despite the glaring evidence that risks exist.
Why this situation has lingered is difficult to say. It may be that, unlike a product connected to a clearly identifiable company, playgrounds are disconnected, far-flung, and owned and operated by a wide variety of organizations, from schools to municipalities to community groups. This may make it a challenge to effect the widespread and consistent change needed.
Reducing playground injuries
Back to the good news: We know what causes playground injuries and we know how to reduce them. This is where the eye rolling usually starts about insurance. Just last week while inspecting a playground, someone said to me “Oh, you’re here to take all the fun out of the playground.”
While I understand the sentiment, it is far from the reality.
The reason playgrounds are so beloved and have become so ingrained in our culture is that they provide kids with an environment in which to challenge themselves physically, mentally and socially. The playground is where children learn to — quite literally — overcome obstacles and take (measured) risks. But this does not mean that the environment must be a hazardous one.
Laws vary state by state; however, there are well-established guidelines and standards for effective risk management through each of stage of a playground’s “life cycle”:
- Build or modify.
- Install, repair or change.
- Ongoing operations.
The American With Disabilities Act, the American National Standards Institute, and the Consumer Product Safety Commission have all done good work in developing widely accepted standards that owners of playgrounds should adhere to in order to protect children from harm, and themselves from liability.
While I won’t go through them here, it may be surprising how simple it is to reduce or eliminate playground hazards. Just installing proper signage can encourage proper supervision, and having the right surface (like mulch, sand, or pea gravel) can prevent some of the 20% of playground deaths caused by falls to the playground surface.
Inspection programs needed
But the physical changes are easy. Real change takes real commitment. Playgrounds need to be inspected monthly and audited once a year, and inventories need to be updated when changes are made. Injuries need to be reported, and employees need to be trained on what constitutes a hazardous condition.
It’s the job of insurance and risk professionals to facilitate and encourage this commitment by ensuring there is a formalized playground safety program in place. This must include a robust inspection protocol that will enable staff to find hazards before the children do, as well as a process to take equipment out of service while repairs are made.
The results of such an effort can be dramatic. Playground-related injuries at North Carolina childcare centers dropped 22% after a law was passed requiring new playground equipment and surfacing to conform to U.S. Consumer Product Safety Commission guidelines.
Taking a hard line on safety from the outset will preserve the enjoyment that playgrounds provide by ensuring the environment is both challenging and safe for our most precious citizens. If some make glib comments about “taking the fun out of playgrounds,” it’s a small price to pay.
Gail White Retires
by Jim Thyden, Insured Programs Manager
It is with joy for her, and sadness for us, that we share that our long-tenured and valuable colleague and good friend, Gail White, of Alliant Insurance Services, has chosen to retire. We wish Gail the best and appreciate the many years of dedicated service she provided to the Authority and its membership. Gail’s duties will be performed by Christopher Gray who has assisted Gail on all matters related to the Authority for the past year. Chris’s contact information is as follows:
Mr. Christopher Gray
Alliant Insurance Services, Inc.
1301 Dove Street, Ste. 200
Newport Beach, CA 92660
Chris has worked at Alliant for over three years. Upon graduating from the University of California Santa Barbara, he immediately began working as an agent within personal lines insurance. After eight years in the personal lines industry, he began working at Alliant within the Public Entity Department.
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