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Searching for Articles published in April 2013.
Found 10 Results.

Attorney Jane Lokken Receives "Woman of Achievement" Award From The Eau Claire Area Chamber of Commerce

Posted on April 25, 2013, Authored by ,

Ruder Ware is pleased to congratulate Jane Lokken on receiving the Woman of Achievement Award from the Eau Claire Area Chamber of Commerce. This award celebrates the potential of all women as valued members and leaders of their community, honoring an individual who strives toward the highest level of professional accomplishment and excels in her chosen field. On announcing the award, the Chamber cited Jane's active involvement in the Eau Claire community for over 25 years. Currently, she is the chair-elect of the Eau Claire Community Foundation and on the Board of Directors of Clear Vision Eau Claire, U.S. Bank Eau Claire's Advisory Board, and the University of Wisconsin - Eau Claire Foundation. She is also a member of the Ethics Committee for Mayo Clinic Health Systems NW WI Region. Jane has twice been Chair of the State Bar of Wisconsin Elder Law Section and has been listed as a Best Lawyer in elder law since 2007. She is also a member of the National Academy of Elder Law attorneys and on the Board of Directors of its Wisconsin Chapter

Tasty Tax Morsel - The IRS Wants A Bite!

Posted on April 23, 2013, Authored by Amy E. Ebeling, Filed under Tax Deductions

A colleague posted the other day about including the value of employer provided meals when calculating overtime compensation. Employers often provide delicious edibles to promote healthy eating, improve morale, and foster collaboration over lunch. Employers, however, provide those meals, snacks, and beverages to employees without chewing over the tax implications. Meals provided by employers are generally taxable fringe benefits. Several exceptions, however, exclude chow from fringe benefit taxation under specific circumstances. De minimis meals, such as coffee, soda, doughnuts, or meals that have so little value, that accounting for them would be unreasonable or administratively impractical are not taxable as fringe benefits. Think of this as the Homer Simpson, "Mmm, donuts," exception. Meals provided on an employer's premises for the convenience of an employer are also non-taxable fringe benefits. Meals are provided for the convenience of the employer if the meals are provided for a substantial business reason other than to provide the employee with additional pay. Employers and the IRS have long battled Iron Chef style in Tax Court Stadium over what constitutes "a substantial business reason." Employers have argued, and many have agreed, there are real benefits for workers having unplanned, unstructured face-to-face interaction over lunch, but whether those benefits rise to the level of "a substantial business reason" is unclear. Despite spicy arguments from employers, the IRS continues to seek a bite out of employee meals. There are other exceptions to the taxation of meals as a fringe benefit so before you provide your employees their next meal, stop and mull over the tax consequence.

There's No Such Thing as a Free Lunch - Just Ask the Department of Labor

Posted on April 12, 2013, Authored by Ruder Ware Attorneys, Filed under Employment

A few days ago I was reading the Wall Street Journal and came across an interesting article about whether daily, fringe-benefit meals are taxable - a watered-down version of the article may be accessed here. Apparently (and probably not too surprising to most), the IRS is considering whether these free lunches are fringe benefits on which employees should pay additional tax. The article is interesting, but it doesn't address a related concern whether such meals must also be included in an employee's wages for purposes of calculating overtime compensation. Significantly, according to the federal Department of Labor, "[u]nder the FLSA [federal Fair Labor Standards Act], board [meals] customarily [regularly] furnished by the employer to his or her employees are considered wages under certain circumstances. The payment of wages as goods or services is allowed under the FLSA and applies to situations where board [is] furnished by the employer to the employee in addition to stipulated wages." In these circumstances, the reasonable cost or the fair value of the goods, or of furnishing the facilities must be added to the employee's cash wages before determining the regular rate of pay. The requirement to include the reasonable cost/fair value of employer-furnished meals in an employee's "regular rate of pay" is often missed by employers when calculating overtime compensation. Employers who are aware of the requirement often have difficulty wading through the regulations governing the proper calculation. I guess it's true, it is becoming more difficult to find a good, inexpensive meal!

No Backup Plan Needed, Exchanges Will be Ready by October 1 Says HHS Secretary

Posted on April 15, 2013, Authored by Mary Ellen Schill, Filed under Employment

Last week I had the pleasure of talking Affordable Choice Act with human resource and benefits professionals in Madison and Wausau. From some of the questions I was fielding it was clear that there were some out there who doubted whether the federally facilitated exchanges will be operational by October 1, as required by the ACA. Wisconsin is one of 33 states where the federal government is operating all or part of the exchange (now referred to as the Marketplace). During our discussions I speculated that the decision to postpone implementation of the Marketplace would probably be made sooner rather than later, as I didn't think a decision later in the year (even if it delayed the Marketplace) would be helpful to anyone. I'm sure it was just a coincidence, but last Friday Kathleen Sibelius, HHS secretary, told the House Ways and Means Committee that the federal exchanges will be ready and open for business by October 1. She also stated that there was no need for HHS to have a backup plan, because the October 1 deadline will be met. From my experience the Marketplace is getting more and more interest from employers with less than 100 employees. Since the passage of the ACA most of the discussion of the Marketplace has revolved around individual use. Recent guidance on the Small Business Health Options Program (SHOP) (see my earlier blog post) has made businesses and their advisors more aware of the ability of employers to take their full-time employees and SHOP the Marketplace.

Subrogation Under ERISA

Posted on April 25, 2013, Authored by Russell W. Wilson, Filed under Employment

Mary Ellen Schill and I were talking about the e-alert that we posted April 19 on the right of reimbursement for self-insured group health plans under ERISA in light of the US Airways v. McCutcheon case decided by the U.S. Supreme Court on April 16. A couple of points caught our attention. The scope of reimbursement can be as broad as possible so long as the plan is drafted accordingly. If the plan language does not have any gaps, then the Court will not inject a default gap filler based on equity principles. But when there are gaps, the Court will supply a default, which may drastically affect the amount of reimbursement. So drafting is key. Yet, as Justice Kagan describes in her well-written opinion, drafting a reimbursement clause to apply even before deduction of contingent attorney fees and costs could be self-defeating. What personal injury lawyer will agree to take an injury case if the lawyer knows that the contingent fee might be consumed in the right of reimbursement enjoyed by the self-insured group health plan? In that situation, the only manner by which the self-insured group health plan may obtain reimbursement would be to file a separate action in federal court. Having said that, the plan sponsor is at liberty to negotiate from a position of the broadest possible language. Stay tuned for further details!

Being At Work Is An Essential Job Function

Posted on April 19, 2013, Authored by Dean R. Dietrich, Filed under Employment

One of my colleagues recently wrote about an Eighth Circuit Court of Appeals ruling that determined whether an employee is disabled. That determination was based on the employee's ability to perform the essential functions of the job. Rather than considering the actual duties being performed by the employee, the Court looked to the job description prepared by the employer, which described the essential functions of the position. This decision places great importance on the job descriptions prepared by an employer. A recent decision from the District Court in the Fifth Circuit held that attendance at work could be considered an essential function of a position. If that occurs, an employee who could not meet the employer attendance requirements would not be considered a "qualified employee" under the Americans With Disabilities Act and would not qualify for protection such as a reasonable accommodation. While this is an initial stage of the Court rulings, it too highlights the importance of having accurate job descriptions and comprehensive job descriptions that identify the expectation of attendance at work as a requirement of the job. Many employers have not invested the time to update job descriptions. This may result in a loss of an opportunity to clearly identify the job expectations for a position and insure that all employees must be able to perform the essential duties of the job in order to be considered a protected employee that may be eligible for reasonable accommodations if suffering a disabling condition. Employers should also be careful to clearly indicate the attendance expectations for a position in order to be able to argue the attendance requirement as being an essential function of the position held by the employee. Often, the best way to review a job description is to ask the supervisor to review the description of all the positions that the supervisor is involved in actually supervising. It is important to have common language in all job descriptions, but it is also important to have specific descriptions that clearly identify the duties of the position. These recent Federal Court cases show the importance of an accurate job description.

Attorney John Fisher, II Presents at National Health Care Compliance Institute in Washington, D.C.

Posted on April 29, 2013, Authored by ,

Ruder Ware health care and compliance attorney John Fisher, II was a featured speaker at the Health Care Compliance Association's 2013 Compliance Institute. The Institute was attended by nearly 3,000 compliance officers, attorneys, and vendors from across the country. Mr. Fisher spoke on the topic "Compliance Issues in Mergers and Acquisitions." John holds Certification in Healthcare Compliance (CHC) with the Health Care Compliance Association and is a Certified Compliance Ethics Professional (CCEP) with the Society for Corporate Compliance and Ethics joining only a handful of other practicing attorneys in the country who hold dual compliance certifications. Mr. Fisher's presentation covered many of the following issues: The role of the compliance officer in mergers and acquisitions. Compliance related due diligence requests. The scope of compliance due diligence. Successor liability and assumption of liabilities by purchasers. Compliance impact of deal structure and agreement terms. Compliance effectiveness reviews in mergers and acquisitions. Common due diligence compliance risk areas. For more information on compliance and health law issues, visit our health care law blog at

Accurate Job Descriptions Key in ADA Case

Posted on April 7, 2013, Authored by Kevin J.T. Terry, Filed under Employment

The Eighth Circuit recently decided a case that stands for the notion that an employer's description of the essential functions of an employee's job, and not the employee's specific personal experience in the job, is critical in determining whether or not an employee is qualified for protection under the ADA. In Knutson v. Schwan's Home Service, Inc., the employee was terminated because he was no longer able to meet the physical standards set forth in the job description as a warehouse manager. Included in that description was the ability to be licensed to drive a commercial vehicle. Knutson suffered a serious eye injury after which he was unable to obtain the medical waiver necessary to qualify him for the required DOT certification. Because he was unable to be licensed as a commercial driver, the employer said he was unable to perform an essential function of the job with Schwan's and terminated employment. Knutson argued that driving truck was not an essential function of the job because he had only actually driven a commercial vehicle a handful of times while employed as a warehouse manager. The court rejected this argument, and instead relied on the written job description and the company's judgment of the duties of a warehouse manager. Even though the managers do not necessarily drive commercial trucks on a daily basis, the employer's judgment of the essential job functions and the need for managers to be able to drive commercial trucks proved to be "highly probative." While this decision is not binding in Wisconsin, it is a reminder of how important accurate job descriptions can be to employers. Just as handbooks and policies need to be updated by the employer frequently, employers must review job descriptions to assure that each accurately reflects the core duties, qualifications, and responsibilities associated with the position.

Employers Must Saddle Up: Organized Labor Has a New Trojan Horse

Posted on April 30, 2013, Authored by Ruder Ware Attorneys, Filed under Employment

This past month, the federal Occupational Safety and Health Administration (OSHA) caught the employer community off guard with an unexpected, union-friendly pronouncement, one that provides labor unions free reign to infiltrate non-union workplaces. On April 5, 2013, OSHA publicly announced [through a letter of interpretation/Standard Interpretation to the United Steelworkers Union dated February 21, 2013, but not released until April 5, 2013] that during inspections of non-union workplaces, employees are permitted to seek representation from anyone including, significantly, agents from outside labor unions (even if the specific union is not the bargaining representative of employees at the workplace). Employees have always been able to designate outside third-party representatives in connection with workplace investigations (e.g., industrial hygienist or safety consultant). However, the expansion of this policy initiative/standard to include outside union personnel when the union is not the bargaining representative of employees is contrary to the language of OSHA's governing regulations, as well as longstanding agency guidance and past practice. This controversial decision may be challenged because OSHA failed to engage in notice and comment rulemaking before revising the standard.

U.S. Supreme Court Decides Important Self-Insured ERISA Plan Reimbursement Case

Posted on April 19, 2013, Authored by Mary Ellen Schill, Russell W. Wilson,

Plan administrators and sponsors of self-insured group health plans under the Employee Retirement Income Security Act of 1974 ("ERISA") should be aware of a case decided by the U.S. Supreme Court on April 16, 2013, US Airways, Inc. v. McCutcheon. The facts that gave rise to the lawsuit are typical. A participant in a self-insured group health plan sponsored by his employer, who was seriously injured in a car accident, hired an attorney and sued the other parties in the accident. The group health plan had paid the participant's medical expenses resulting from the accident. The amount of available liability insurance was inadequate to cover the participants damages (there was a million dollar injury but a gross insurance recovery of only $110,000). The contingent fee for the participant's lawyer amounted to $44,000, leaving the participant with a net recovery of $66,000, which was $866 less than the amount the self-insured health plan paid for the participant's medical expenses. Asserting its right of reimbursement under the terms of the plan document, the plan sought full reimbursement from the participant: not merely the $66,000 net recovery, but the $44,000 attorney fee, too. The participant in US Airways had argued (successfully in the 3rd Circuit Court of Appeals) that notwithstanding the language in the group health plan document, equitable principles should control and therefore he should not have to reimburse the plan if he wasn't fully compensated in his lawsuit for his injuries (the make whole doctrine), and secondly the plan would be unjustly enriched if it did not have to contribute towards his attorneys' fees (the common fund doctrine). The self-insured group health plan countered with its right of reimbursement language in the plan document, and argued that that language should not be overridden by the asserted equitable doctrines. The Supreme Court therefore was asked to rule on whether clear plan terms can be overridden by equitable principles (such as make whole doctrines and common fund doctrines), and whether gaps in plan language can be filled by equitable principles. Do self-insured health plans have a legal right to reimbursement from the participant's net settlement recovery even if the plan participant hasn't been made whole? The Court answered this question, resoundingly, yes, so long as the language in the plan document and summary plan description clearly spell out the plan's contractual right to do so. In this case the plan language passed that test because it clearly stated that the participant "will be required to reimburse" for amounts received by way of settlement or award, and it clearly provided that the plan had first priority to reimbursement of its expenses paid. Alternatively, had the plan documents been silent as to the right of reimbursement, the law would have filled that gap in the plan language with an equity-based default rule that would have deprived the plan of the right to reimbursement because under the default rule, the participant would have to be made whole before the plan could recover. It is common for group health plan documents to contain reimbursement language similar to that in US Airways. The Court's decision on this issue is not particularly surprising, but for plan administrators and sponsors, it is a welcome reinforcement. Most injury cases are brought in state court, yet state courts are required to apply federal law under ERISA for reimbursement from self-insured health plans. The importance of US Airways is that it gives clear guidance to state court judges that the right of reimbursement out of the participant's/beneficiary's net award is paramount, so long as the requisite language is in place, which usually is the case. US Airways also makes it clear that a plan could obtain reimbursement from the participant's/beneficiary's gross settlement or award (that is, the plan would be paid before the attorneys fees were deducted), but, only so long as the plan language specifically so provides. In other words, an ERISA group health plan may include a right of reimbursement that applies to the total amount of the settlement or award, including the portion of the award which the participant used to pay contingent attorney fees and costs. In US Airways the plan language was silent on that point. Accordingly, the Court applied an equity-based default rule called the "common fund doctrine" which requires the plan to share proportionately in the participant's attorney fees and costs incurred. How an ERISA group health plans reimbursement right is designed is a decision for the plan sponsor. Intentionally or not, ERISA group health plan language is often silent as to reimbursement from the attorney fees and cost portion of the settlement or award. As the Court observed in US Airways, such silence might reflect a wiser policy selection. "Third-party recoveries do not often come free: To get one, an insured must incur lawyer's fees and expenses." In many instances if the attorney fees and costs were to be encompassed within the plan's right of reimbursement, there would be no incentive for the participant to pursue (or for an attorney to undertake) a lawsuit against the party who caused the injuries. The facts in US Airways illustrate this point. As a result of the Court's decision, Mr. McCutcheon's net recovery will be zero, the plan will receive $66,000 in reimbursement, and McCutcheon's lawyer will receive his $44,000, to which the plan will make a proportionate contribution. By contrast, if the plan's right of reimbursement were written so as to encompass attorneys' fees and costs, as well, what lawyer would agree to take the case? If the participant does not bring a suit, then the plan must decide whether to be satisfied with that outcome or instead seek to enforce its right of subrogation by bringing its own suit against the tortfeasor in federal court. Ruder Ware has experience in 1) drafting ERISA group health plan reimbursement and subrogation language which accurately reflects the plan sponsor's intent and which satisfies the clarity which the courts require, and 2) enforcing reimbursement and subrogation rights in state and federal courts on behalf of plans and their sponsors. Please contact Attorneys Russ Wilson, Mary Ellen Schill, or Dan Peters at (715) 845-4336 with any questions you have concerning this legal update.