New Year’s Compliance Checklist

As the New Year begins, make sure your organization is prepared for rules and legislation that will significantly impact you within the coming months. Here are three items that should be at the top of your list for 2014.

1. Tighten up your internal compliance procedures.

Thanks to two major recent developments, many employees could be dreaming about newfound whistleblower riches in 2014. In October, the SEC announced that it had awarded more than $14 million to a whistleblower whose information led to a government enforcement action that saw the recovery of significant investor funds. It was the largest award ever made by the government whistleblower program.

The Supreme Court has taken on a significant whistleblower case to be decided in 2014, Lawson v. FMR LLC, which may open the door for more whistleblower retaliation claims to be filed under the Sarbanes-Oxley Act (SOX) in the coming years. The Court will decide whether SOX affords protection only to employees of public companies, or whether its protection extends to employees of private companies providing services or goods to public companies as contractors or subcontractors.

The Court’s decision could extend SOX’s protection significantly to employees of many private U.S. companies, exposing businesses to the risk of SOX claims they never anticipated. It’s time to review your internal compliance procedures to ensure you don’t give your own workers a reason to blow the whistle.

2. Review your organization’s corporate compliance policy on employee social media.

Has your organization ever required an employee or potential employee to provide access to their social media information and profiles, including names and passwords? If you have, you should know that in 2014 such a request could lead to a lawsuit.

With the explosive growth of social media, many of your employees may have one or multiple social media profiles which can provide an inside look at their personal information — including hobbies, relationship status, likes and dislikes, private photographs, and opinions. The latter could include negative comments about their employer or work colleagues, or photos that reveal alarming behaviors. For that reason, some companies request access to potential employees’ social media accounts prior to hiring them. Managers fearful of criticism or the sharing of proprietary company information may also monitor the accounts of current employees. However, because social media is primarily used for personal connections, employer access to such information often makes individuals feel their privacy is being invaded.

In an increasing number of states, legislators have passed statutes that prohibit employers from requiring a prospective or current employee to provide password or access information to his/her social media account as a condition of employment. To date, 12 states have enacted such legislation, and similar bills are pending in almost every other state.

In 2013 the National Labor Relations Board ruled that two employees fired over Facebook postings criticizing their supervisor were wrongfully discharged.

Here is a helpful state-by-state rundown of current or pending legislation. Make sure your corporate compliance policy recognizes that requesting social media access from an employee might be prohibited in your jurisdiction.

3. Review 2014 Affordable Care Act reforms.

Is your organization’s health care house in order? The Affordable Care Act (ACA) was the biggest compliance news of 2013. While some of ACA’s key reforms have been postponed to 2015, several others will become effective in 2014. Employers should know them and have an action plan and compliance strategy in place now. Among the 2014 ACA reforms:

Grandfathered health plan status
A “grandfathered” plan — one that was in existence when health care reform was enacted on March 23, 2010 — is exempt from some of ACA’s mandates. However, if you make certain changes to your plan that go beyond permitted guidelines, it is no longer grandfathered. Triggers that could cause your plan to lose grandfathered status in 2014 include increasing percentage of cost-sharing (coinsurance) requirements. If you have a grandfathered plan, determine whether it will maintain that status for the 2014 plan year. If you move to a non-grandfathered plan, confirm that it has all of the additional patient rights and benefits required by ACA.

Increased wellness program incentives
For plan years beginning on or after January 1, 2014, the maximum award for health-contingent wellness programs increases from 20 to 30 percent. It can be increased to a maximum reward of 50 percent for wellness programs designed to prevent or reduce tobacco use. Employers should confirm that their programs comply with current law and consider increasing 2014 rewards.

Maximum 90-day waiting periods
Effective January 1, 2014, health plans may not have a waiting period that exceeds 90 days. Whether you have a group plan or stand-alone HRA, review all enrollment periods and make changes if necessary.

New transitional reinsurance fee
Effective for the 2014 calendar year, this reform applies to health insurance issuers and self-funded group health plans. Both will now have to pay fees to a transitional reinsurance program for the first three years of health insurance exchange operation (2014-2016). The fees will be used to help stabilize premiums for coverage in the individual market. Fully insured plan sponsors do not have to pay the fee directly, and certain types of coverage are excluded from the reinsurance fees. The IRS’s “ACA Section 1341 Transitional Reinsurance Program FAQs” is a helpful resource on this topic.

The year 2013 was a pivotal one for employers, and 2014 is sure to be just as interesting. This checklist should help you stay one step ahead of the changing regulatory landscape.

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