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Searching for Articles published in May 2014.
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Posted on May 16, 2014, Authored by ,

Punt Blocked - Former Green Bay Packers Kicker Found Guilty of Defrauding the IRS with Two Las Vegas Businessmen

Posted on May 29, 2014, Authored by Amy E. Ebeling
Amy E. Ebeling
Attorney
Wausau Office
, Filed under Tax Deductions

A federal jury in Las Vegas found a former NFL punter, Joseph Prokop, and two Las Vegas businessmen guilty of defrauding the IRS and aiding in the preparation of false tax returns. The three men used two Nevada companies named the "National Audit Defense Network" and "Oryan Management and Financial Services" to promote and sell a product they called the Tax Break 2000. Tax Break 2000 was marketed as a method to claim up to $10,475 in income tax credits and deductions under the Americans With Disabilities Act (ADA). The scheme alleged that you could get a tax credit for making facilities ADA compliant with little to no cost. The tax credit, however, requires taxpayers who claim the credit to actually make building modifications to be eligible for the credit. Tax Break 2000 also came with a "Pre-Paid Audit Protection" plan on claimant's tax returns. Prokop was the marketing director for Oryan Management and Financial Services, the company prosecutors said created Tax Break 2000. Prokop played for the Green Bay Packers in 1985 as well as five other NFL teams from 1987 to 1992. Moral of the story - be wary of the tax products you see advertised (even if marketed by a former player of our coveted Green Bay Packers) including products that come with audit protections (generally, those prepaid audit defenses are worth exactly what you pay for them). Some tax products may be a great way for you and your business to save some tax dollars, but be sure to consult a trusted tax advisor before taking any action.

Access to Company Property During Off-Duty Time - No Restrictions

An employer would normally think that it could pass a work rule that says an employee does not have access to company property when the employee is off-duty and not working. This makes sense, because there is no reason for the employee to be on company property if they are not there to perform work. We now have to think twice, because the National Labor Relations Board (NLRB) recently found that a company violated the rights of an employee when it implemented and enforced a policy preventing employees access to its property during off-duty time without prior supervisor authorization. In the recent decision of American Baptist Homes of the West d/b/a Piedmont Gardens and Service Employees International Union, United Healthcare Workers-West, the NLRB held the Nursing Home violated the rights of its employees when it disciplined two employees for meeting in the employee break room after their regular hours to visit with a union official. The rule restricted the access of off-duty employees without prior supervisor approval and a notice was posted stating the union was not permitted to hold meetings in the employee break room. The union challenged this rule claiming it violated the rights of the employees to organize and discuss working conditions. The NLRB found the rule was unlawful because it gave unlimited discretion to management to determine when and why employees would have access to company property. This is another example of the NLRB imposing restrictions on a company because of the exercise of union rights and the freedom of employees to engage in union-related activities. The NLRB is imposing a very distinct agenda that opens the door to an unfettered freedom for employees to engage in union organizing activities. Companies must be careful in the implementation of policies to avoid a finding that they have interfered with the rights of their employees. While such a finding may not be harmful to the company, the exercise of this right (and the support of the NLRB) may be damaging to the relationship between a company and its employees.

Jointly Providing Health Care Fee Information to Payors

Posted on May 22, 2014, Authored by John H. Fisher, II
John H. Fisher, II
Attorney
Wausau Office
, Filed under Health Care

As health care provider networks move down the path toward clinical integration, we are often asked to provide guidance on how information can be jointly provided to payors. The antitrust laws recognize that collective sharing of some pricing information, even by otherwise competing providers, can be beneficial and does not necessarily violate antitrust laws. However, there are significant limitations on what can be jointly provided and how the information can be shared. At the outset, it should be clarified that collective negotiations by competing providers who are not financially or clinically integrated should never take place and constitutes a per se violation of federal antitrust laws. Prohibited activities include any action in contemplation of or in furtherance of an agreement on fees or other aspects of reimbursement. It is unlawful for a non-integrated group of competing providers to agree on or suggest a central fee schedule. Any activity relating to prospective fees should be avoided. Competing providers can jointly provide information on fees currently being charged or that have been charged in the past as long as certain safeguards are implemented and strictly followed. The FTC and DOJ have stated that the joint provision of historic fee information to payors raise little anticompetitive concerns as long as the following conditions are met: Collection of fee information is managed by a third party; Any information that is made available to competing providers must be at least three (3) months old; Data provided to participating providers must meet further requirements, including: a. It must be aggregated so recipients cannot identify the prices charged by individual providers; b. There must be at least five (5) providers reporting data that goes into an integrated statistic; and c. No provider can represent more than twenty-five percent (25%) on a weighted basis for any statistical item. I normally recommend that provider groups create antitrust policies that address the provision of fee information to payors and other sensitive antitrust issues. Even an organization that is significantly clinically integrated should be concerned with the method used to convey fee information to payors. Adopting and applying specific antitrust policies is a step toward assuring antitrust compliance. Antitrust policies should include detailed processes for conveying fee information that incorporate the parameters applicable to the organization.

Revisit Your Choice of Entity - Is Pass-Through Taxation Right For You?

Posted on May 16, 2014, Authored by Amy E. Ebeling
Amy E. Ebeling
Attorney
Wausau Office
, Filed under Tax Deductions

Did you pay more tax on the income generated by your business or investments in 2013 than in years past? With the 2013 tax year in the books, we are getting our first look at the impacts of the American Taxpayer Relief Act of 2012 and the 3.8% net investment income tax enacted by the Affordable Care Act. With the filing of their 2013 returns, many taxpayers are realizing they are paying higher taxes and should now be asking the question, "Do I have the right entity for my business or investment holdings?" As you may know, C corporation entities are taxed at corporate tax rates and income earned by pass-through entities, such as limited liability companies and S corporations, is passed through to the individual owners and taxed at individual rates. If you recall, the American Taxpayer Relief Act of 2012 was passed into law on January 1, 2013, and signed into law by President Obama on January 2 following the heated debate over taxes and the so-called "Fiscal Cliff." Among other things, the American Taxpayer Relief Act of 2012 increased income tax rates for certain individuals, raised the top tax rate for capital gains and dividends from 15% to 20%, and reinstated phase-outs for certain deductions. Additionally, the Patient Protection and Affordable Care Act, as amended by the Health Care and Reconciliation Act of 2010, imposed the additional 3.8% tax on net investment income of individuals and trusts and estates. As a result of these changes, the top individual income tax bracket is at least 4.6% more than the top corporate income tax bracket, but that difference could be much more with limited individual deductions and the 3.8% net investment income tax. Recognizing the disparity between applicable individual income tax and corporate tax rates, it is clear that many taxpayers need to revisit their choice of entity. Some taxpayers may pay less tax by utilizing a corporation entity rather than a pass-through entity such as a limited liability company because income will be taxed at a lower rate. Whether a taxpayer would benefit from such tax rate leveraging is an important question and, in true lawyer fashion, the answer is, "it depends." As you may have guessed, the "choice of entity" decision is a complicated one that not only involves a complex tax analysis but also an analysis of a variety of non-tax factors. First, before we can even start crunching the numbers (don't worry, I won't even mention the algebraic equation sitting on my desk right now that sets forth the formula for the number crunching), we need to have an understanding of a variety of factors. For example, what are the plans with respect to the earnings in the entity? Will the entity retain the earnings and reinvest them or will the earnings be paid out to the owners? Next, what are the long term plans for entity ownership? Will the current owner own the entity until death? If so, capital gains tax on corporate stock could be eliminated, thereby offsetting the disincentive effect of the second level of tax on distributed C-corporation earnings. Did I lose you yet? I've only scratched the surface when it comes to the tax analysis of the "what entity is best?" question and there are many non-tax factors to also consider (never let the tax tail wag the economic dog). The point is, now is the time to revisit and re-ask, "What entity is best for me?" While the answer to the question "what entity is best" is not a straight forward one, it is a question that the Ruder Ware attorneys are happy to help you answer by considering all tax and non-tax issues. Follow Amy on Twitter @AmyTaxEsq

Cruel Intentions

Last week, a Wisconsin Court of Appeals decided the case of Ardell v. Milwaukee Board of School Directors and Lynne A. Sobczak. The case is important to school districts and local governments alike because the outcome may change the way municipalities review and respond to public records requests. Ardell sought disclosure of certain public records from the Milwaukee School District (MSD) relating to an MSD employee's personnel file. MSD initially allowed the disclosure of records, but then reconsidered, denying the request because "the public interest in protecting the safety and welfare of the employee clearly outweighed the public interest in disclosure" - Ardell appealed this decision. The appeal was rooted in the general principal that a municipality may not consider the identity of the requester when making its decision. The court recognized that the general principal is exactly that a municipality should not consider the identity of the requester when determining whether information should be released under the Wisconsin open records law. However, in this case, Ardell had a history of violence and harassment of the MSD employee, as well as a criminal history of domestic abuse against the employee. The court agreed that Ardell's purpose in requesting the employment records was not a legitimate one; rather, his intent was to continue to harass and intimidate the MSD employee. In sum, the facts of the case favored nondisclosure of the records, despite the presumption favoring public access to records, based upon concerns for the safety of the employee. While this case may simply be an exception to the general rule of disclosure, municipalities can add this decision to its resources when responding to public records requests. It shows that municipalities do have tools to protect its employees from dangerous and harassing behavior in the form of records requests.

Texting While Driving - Illegal But Paid

Many municipalities and states have adopted a law that prohibits texting while someone is driving. Individuals are prohibited from texting or even dialing the phone while driving. This prohibition is probably violated much more than it is complied with, but regardless of what the prohibitions may be, employers may still be "on the hook" for paying an employee who is talking or texting while driving if the topic is work related. There has been a lot of litigation about whether time spent travelling by an hourly employee is compensable. Travel by an hourly paid employee may include (1) the regular commute to and from work; (2) travel during the regular work day; (3) travelling from one place of work to another place of work as part of regular duties; or (4) making a stop for business reasons while travelling to or from work. Under most of these circumstances, the employee will be paid for the time spent performing work and the time spent travelling from one location to another location to perform work duties. The interesting question is whether an employer is required to pay an employee for the commute time to and from work. Normally, this time is considered non-compensable because it is travel to and from work by the employee and not part of the work duties required to be performed by the employee. If the employee is stopping for business reasons during the commute at the start or end of the workday, it is likely that time would be considered work time because there is a requirement that some level of work be performed for the benefit of the employer. It will depend upon whether the stop for business reasons is incidental or an important requirement for work. The more challenging question is whether pay should be given to the employee if the employee is talking while travelling and the phone call is business-related. An argument can be made that the employee should be compensated for that time because they are performing work-related business. In a recent decision by the Connecticut Supreme Court, the Court acknowledged in a footnote, that the employee would be considered performing work if the employer is telephoning an employee during the regular commute time and engaging the employee in a discussion concerning work-related issues. Travel time to and from work may now become more of a work-related activity and subject to pay requirements.

OIG Proposes New Civil Monetary Penalty Rules

Posted on May 19, 2014, Authored by John H. Fisher, II
John H. Fisher, II
Attorney
Wausau Office
, Filed under Health Care

On May 12, 2014, the Office of Inspector General (OIG) published a proposed rule that would amend the civil monetary penalty (CMP) rules of the OIG to incorporate new CMP authorities, clarify existing authorities, and reorganize regulations on civil money penalties, assessments, and exclusions. The proposed regulations are intended by the OIG to update regulations to codify the changes made by the Affordable Care Act of 2010 (ACA). The ACA significantly expanded the OIG's authority over health care fraud and abuse in federal health care programs. The proposed regulations effectuate and define the OIG's expanded fraud and abuse authorities covering the following: Failure to grant OIG timely access to records; Ordering or prescribing while excluded; Making false statements, omissions, or misrepresentations in an enrollment application; Failure to report and return an overpayment; and Making or using a false record or statement that is material to a false or fraudulent claim. In addition, the OIG proposes new regulations that define the method for calculating overpayments that are made where a provider employs an excluded party. There is currently some degree of uncertainty on how a provider should calculate an overpayment when the excluded party is not a "directly billing" provider. The OIG proposal would be consistent with the "cost of employment" method that is suggested in the Revised Self Disclosure Protocol that was released by the OIG on April 17, 2013.

Could Religious Leaders Be Taxed on Their Housing?

On November 22, 2013, the federal district court for the Western District of Wisconsin struck down Internal Revenue Code Section 107(2) which exempts from income tax any compensation that is received by a "minister of the gospel" which is considered a housing allowance. The Freedom From Religion Foundation filed suit against the government on the argument that its atheist leaders did not receive the same exclusion as religious leaders and as a result, the code section was unconstitutional. The court agreed and stated that any tax exemption for religious organizations must also benefit similarly situated nonreligious organizations. However, the court stated that it's ruling would only apply after all appeals had run their course. In April of 2014, the government appealed the ruling of the district court. So what does this mean for religious organizations and their leaders? It means we will need to keep a watchful eye on the appeals process as the outcome of this case could drastically affect the way religious organizations operate and the compensation of their leaders. This may be an issue that is actually taken up by the Supreme Court given the consequences to religious leaders. Stay tuned.

Self Disclosure and Repayment: Employment of Excluded Party

Posted on May 19, 2014, Authored by John H. Fisher, II
John H. Fisher, II
Attorney
Wausau Office
, Filed under Health Care

One area it is relatively common to find compliance infractions involves the employment of individuals by a health care provider who may be listed on the list of parties who are excluded from federal health care programs. Most providers have integrated routine background checks and excluded party searches into their hiring program. Occasionally, an excluded individual may slip past, only to be discovered on a subsequent routine follow-up database search. It is recommended that providers search the OIG list on a monthly basis for all employees. Payment may not be made under a federal health care program for items or services "furnished, ordered, or prescribed" by excluded individuals or entities. If a provider employs an excluded provider and receives reimbursement for his or her services, the reimbursement received will be an overpayment under federal law. Additionally, receipt of such reimbursement can involve civil monetary penalties. If a provider discovers that an excluded individual has been employed, the usual course is to make a self disclosure to the federal government using existing self-disclosure protocols. In most cases, using the self-disclosure protocol will minimize the financial and other risks to the provider who employed the excluded individual. The decision and method of making the self disclosure are very important and require assistance from experienced legal counsel. This is not an area where providers should "go at it alone." When making a self disclosure, the provider is required to identify the total amounts claimed and paid by the federal health care programs for those items or services that were provided by the excluded individual. When the excluded individual generates specific billings attributable to his or her services, identifying the amount of overpayment is fairly straightforward. It is more difficult to identify the amount of overpayment when there is no specific billing attributable to the excluded provider. Revised self-disclosure protocols which were issued by the Office of Inspector General acknowledge the difficulty that arises where there is no direct billing attributable to an excluded provider. Example of typical situations include services furnished by nurses, respiratory therapists, and billing and other administrative personnel, the damages amounts can be difficult to quantify. In cases such as those identified above, the OIG suggests the provider utilize the total costs of employment or contracting the excluded party for the period of time during the exclusion to estimate the value of the items and services provided by that excluded individual. Total costs of employment are then multiplied by the percentage of revenues attributable to federal health care programs to determine the amount of costs that are properly allocated to federal health care programs. In the general, the OIG will look at the resulting amount as a proxy for the amount of damages to the federal health care programs resulting from the employment of the excluded individual for purposes of working out a self disclosure settlement. Additional details are provided on the various elements that go into this calculation. As in all cases involving self disclosure, the disclosing party should undertake a complete investigation of the situation prior to making a disclosure. The compliance file should be appropriately documented. Consideration should be given to whether the investigation should take place under the attorney-client privilege. These considerations are beyond the scope of this article as are the other details involved in the investigation process or the self-disclosure process. Providers should be mindful of the fact that employment of an excluded party is a serious compliance situation. The issue should be handled judiciously. In most, if not all cases, self disclosure is the best route for providers to take when it is discovered that an employee has been excluded. The strategy for making the self disclosure and the approach taken by the provider will greatly impact the outcome.

Ruder Ware Launches Banking and Financial Matters blog

Ruder Ware is launching a new blog, Ruder Ware Banking & Financial Matters, which will have posts prepared by members of Ruder Ware's Banking & Financial Institutions Focus Team. Our attorneys handle a wide variety of matters for banks and other financial institution clients, and we plan to publish legal updates focused on the issues most relevant to these clients. We understand how easy it is to be inundated by news these days, so we plan to sort through the information that we believe will have a direct impact on our banking and financial institution clients and post articles that are both timely and relevant. Like many bloggers, we may even try to have some fun while we're at it. For those of you who may not be familiar Ruder Ware, our Banking & Financial Institutions Focus Team is comprised of attorneys who work extensively with banks and other financial institution clients in a variety of areas, including the following: Negotiating secured and unsecured financing transactions on behalf of commercial lenders, including transactions involving syndicate lending and agency relationships Drafting loan and credit agreements, security agreements, mortgages, and other collateral instruments; notes, intercreditor and subordination agreements; participation agreements; and collateral agency and collateral trust agreements Representing state and national banks and bank holding companies, as well as other financial institutions, before state and federal bank regulators to obtain regulatory approval for branch expansion and in connection with other regulatory issues Handling bank and bank holding company formations, acquisitions, and sales, as well as bank and bank holding company merger and other change-of-control transactions Counseling financial institution clients regarding new facility development and related matters requiring regulatory approval Assisting financial institution clients with developing loan underwriting policies and loan documentation policies to comply with safe and sound banking practices mandated by state and federal bank regulators Providing legal advice to financial institution clients regarding capital infusion transactions, as well as structuring and implementing shareholder buyouts Drafting and obtaining regulatory approval for voting trust agreements and shareholder agreements involving financial institutions Negotiating and documenting bank holding company loans Providing regulatory interaction with and representation before the Federal Deposit Insurance Corporation, Federal Reserve Board of Governors, Office of the Comptroller of the Currency, and the Wisconsin Department of Financial Institutions Addressing employment and employee benefit issues affecting financial institutions, including executive employment and noncompete agreements and nonqualified deferred compensation programs Representing secured and unsecured lenders and other creditors in Chapter 7, Chapter 11, and other bankruptcy court proceedings as well as in prepetition negotiations and other types of insolvency proceedings Representing creditors' committees and handling assignments for the benefit of creditors Advising lenders with respect to workouts and restructurings outside of bankruptcy We hope you enjoy Ruder Ware's Banking & Financial Matters Blog, and we welcome your feedback and topic ideas.

Attorney Matthew D. Rowe Elected to Meritas Board of Directors

Posted on May 13, 2014, Authored by ,

Ruder Ware is pleased to announce the appointment of Attorney Matthew D. Rowe to the Board of Directors for Meritas, a global alliance of independent business law firms. Mr. Rowe was elected to the position at the alliances recent annual meeting. In his role as board member, Mr. Rowe will be responsible for reviewing and establishing policy and setting strategy for the alliance. Mr. Rowe will also act as an organizational leader, serving as a liaison to member firms on administrative issues. He will maintain contact with members, encourage and promote cross communications, and gather feedback on Meritas initiatives. Mr. Rowe will serve a three-year term, during which time he will also serve on the finance committee. Meritas Board of Directors is comprised of 21 lawyers from its member firms around the world. Were thrilled that Matt will be joining the Meritas board of directors, said Tanna Moore, president and CEO of Meritas. Matt has always been a strong advocate for the organization, and Meritas will continue to rely on his insights during strategic planning, business development, and member recruitment, retention and development efforts. Mr. Rowe has been involved with Meritas for a number of years, during which time he has served as Ruder Wares primary Meritas contact in addition to serving on the finance committee. Mr. Rowe practices primarily in the areas of corporate finance and securities, mergers and acquisitions and related acquisition financings, and the representation of financial institutions in connection with regulatory and other matters. He holds a bachelors degree from the University of Wisconsin-Eau Claire, where he graduated magna cum laude. He is also a cum laude graduate of the University of Minnesota Law School

CMS Changes Meaningful Use Timeline

Posted on May 21, 2014, Authored by John H. Fisher, II
John H. Fisher, II
Attorney
Wausau Office
, Filed under Health Care

The Centers for Medicare and Medicaid Services (CMS) issued a new proposed rule today that changes the timeline for meaningful use electronic health record (EHR) technology. The new proposed rule would be consistent with previous CMS announcement regarding extension of Stage 2 and Stage 3 timelines. The proposed rule recognizes the difficulties that software vendors appear to be having making changes to their software platforms to accommodate upgrades to Stage 2 criteria. The proposed rule gives providers some degree of flexibility in meeting meaningful use criteria. Providers are permitted to use criteria from 2013 upgrade enhancements, to attest to compliance with the 2014 criteria. The proposed rule would also add an additional year to the Stage 2 phase and would delay the commencement of Stage 3 until 2017. The proposed rule is the most recent step that CMS has taken in recognition of some of the difficulties that are being encountered by software vendors. Recent action by CMS also recognized a possible exemption that providers could use if they are delayed in implementing meaningful use as a result of vendor delays.

Messenger Model Contracting - A Structure of the Past

Posted on May 19, 2014, Authored by John H. Fisher, II
John H. Fisher, II
Attorney
Wausau Office
, Filed under Health Care

There are many organizations around the country that use a messenger model as a managed care contracting mechanism. Under the messenger model, an intermediary is used to shuttle offers from managed care organizations to individual providers who sign on to the network. Messenger model networks should not be confused with clinically integrated systems. Clinical integration requires the network entity to perform a much more robust range of services and requires providers to make a much more serious commitment to comply with system standards. In fact, messenger model networks are inherently non-integrated and are normally used because of perceived difficulty and expense involved in the clinical integration process. Messenger model networks are largely ineffective at achieving quality or efficiency enhancements, largely due to the very limited activity that the messenger can undertake. In order to remain compliant with antitrust laws, the messenger can do little more than convey offers from payors to network providers. A messenger cannot become involved in negotiation of fees on behalf of providers. The limited function of the messenger creates a very real risk of violating the antitrust laws. Over time, a messenger may begin to push the envelope and cross over into performing activities that may cause a per se violation of the antitrust laws. Even if the messengers procedures are carefully established at inception, changing circumstances or lack of ongoing legal support may lead to subtle changes in activity over time. These issues tend to not arise until there is an impasse with a payor or someone is adversely impacted by the network. By that time, there could be a very long history of noncompliant messenger activity. Unfortunately, inappropriate activities by the messenger can have a negative legal impact on the individual provider members. After all, the crux of the antitrust laws is focused on agreements between competing providers (i.e., competing network physicians). For these reasons (along with others), it is generally acknowledged that the messenger model is a structure of the past. As payment mechanisms shift away from traditional fee for service payment toward global, bundled, episodic, shared saving, and even capitated payments, the messenger model becomes even more unworkable and obsolete. For this reason, most messenger models are now exploring ways to achieve higher levels of clinical integration between providers. Ruder Ware is actively involved in advising provider groups on the transition to clinical integration.

Closed Session Agendas - How Much Detail?

There is a great deal of debate how much detail you must use on the open meeting agenda when the local government board is convening into closed session. It is clear the agenda must state what section of the Open Meetings Law is being used as the exception to allow a closed meeting, and there must be a statement, with some specificity, of the type to be discussed in the closed session. It is also clear that a local government body cannot simply state the number of the state statute being used to go into closed session and not indicate with more detail the topic to be discussed in the closed session. What is not clear is the amount of detail that must be used when preparing an agenda for a closed session meeting. It is commonly recognized that you must state in the meeting notice and in the motion to go into closed session, the statutory reference by number that is being relied upon to adjourn into closed session. We believe that the more appropriate practice is to state the number of the state statute and the actual language of the state statute as part of the meeting notice for going into a closed session meeting. While this level of detail may not be required by the statutes, it is the most effective way to communicate to the public the reason for going into the closed session and the rationale that is relied upon for adjourning into closed session. It is also necessary to identify with some degree of specificity the item that will be discussed in the closed session. You do not have to list names of individuals that will be talked about in the closed session, but you have to convey enough information so the public knows what will be talked about in the closed session. The exact language will, of course, depend upon the exact topic that you anticipate discussing and how much need there is for confidentiality. For example, a local government board that is adjourning into closed session to discuss the terms of a development agreement with a company that is proposing to locate in the municipality, has to indicate there is a discussion about a development agreement but would not have to name the company that the development agreement would apply to. There is a fine line between notifying the public of the purpose for the closed session meeting and the need to retain confidentiality because of the topic of the closed session. Local governments would be well-served to provide more detail about the statutory exception relied upon for adjourning into closed session and also provide some detail about the topic to be discussed in closed session without adversely affecting the need for confidentiality. Closed session agenda items should be reviewed closely with legal counsel to ensure compliance with the statutory requirements.

Off-Duty Conduct - Taking Adverse Employment Action

There is a lot of controversy today about the right of an employer to take adverse employment action (i.e. firing someone) for off-duty conduct. Employers have more access to things happening outside the workplace and are very concerned about their overall reputation in the community. Unfortunately, there are various laws that protect an employee from any type of adverse employment action because of lawful off-duty conduct. The most obvious protection is found in Wisconsin statutes which provide that it is discrimination to take adverse employment action against someone who engages in lawful off-duty conduct involving the use of products. This law was written to prevent discrimination against an employee who smokes off-duty when the employer prohibits smoking in the workplace. This law has been expanded, however, to cover many other types of uses of lawful products during off-duty hours. One example is medical marijuana that would be considered a lawful product in some states that could be used during off-duty hours although employers still may discipline an employee if the presence of marijuana exists when the employee is in the workplace. Another example might be use of caffeine before coming to work. Another law that protects employees for lawful conduct is the possession of concealed carry weapons when off work. Employers may not prohibit an employee from possessing a weapon and leaving it in their personal vehicle on Company property even though an employer can prohibit an employee from having a concealed carry weapon in the workplace. This again is an area where employers are limited in how they can address the conduct of an employee during off-work hours. A more difficult area to assess is the use of social media by an employee during non-work hours. The National Labor Relations Board has issued a number of decisions holding that an employer may not restrict what an employee says on social media about the workplace because a restriction would constitute a violation of the rights of an employee to organize or to comment about working conditions. The content of a social media post may be subject to some scrutiny by an employer but much will depend upon the nature of the comment and whether the comment addresses an issue of protected speech under the National Labor Relations Act. Regulating the off-duty conduct of an employee is something that has come under a great deal of scrutiny both through legislative acts and legal rulings. Employers must be very careful when considering adverse employment action against an individual because of what they have done during non-work hours. Employers still have the right to protect the reputation of their business but the limits to that protection require a great deal of scrutiny before action is taken.

Is Life Insurance a Suitable Investment? Trustees No Longer Required to Monitor Suitability

Posted on May 18, 2014, Authored by Shanna N. Yonke
Shanna N. Yonke
Attorney
Wausau Office
,

Under existing Wisconsin law, the trustee of an irrevocable trust that owns life insurance contracts is required to monitor the contracts to determine whether they are suitable investments for the trust and, if necessary, to take steps to prevent the lapse of the insurance coverage. These requirements apply whether or not the trustee was involved in the decision to purchase the insurance contract as an investment of the trust and often involve a cost to the trust. As of July 1, 2014, a new Wisconsin law provides the trustee of an irrevocable trust that owns life insurance contracts will no longer be required to monitor the contracts if (1) the contracts are acquired on or after July 1st or (2) the trustee provides notice to trust beneficiaries that the trustee elects to be governed by the new law. In these circumstances, the trustee is not liable for any loss resulting from the failure to investigate the strength of the contract or company; exercise any contract option, right, or privilege; diversify the contract relative to other contracts or assets; monitor the health or financial condition of the insured; or prevent the contract's lapse. As a result of this change, the beneficiaries of an irrevocable trust that owns life insurance contracts should determine who will monitor the ongoing suitability of the trust's insurance contracts. If you have questions about how this new law affects you or your trust, please contact any of the attorneys in the Trusts & Estate Practice Group at Ruder Ware.

Employers Should Take Required FMLA Notices Seriously - But All Hope is Not Lost if Mistakes are Made

Posted on May 13, 2014, Authored by Ruder Ware Attorneys, Filed under Employment

When an employee requests a leave of absence that may be for an FMLA-qualifying reason, his or her employer is required to provide notice to the employee of eligibility for leave under the FMLA (as most employers are aware, the Department of Labor has created a handy-dandy form to accomplish this purpose - WH-381). The purpose of the eligibility notice is straightforward - to inform the employee about whether he or she meets the requirements to be eligible for leave under the FMLA (e.g., worked the required number of hours). At the same time, an employer is also required to provide an employee with notice of his or her "rights and responsibilities," if ultimately qualifying for FMLA leave (this notice is conveniently combined with the notice of eligibility within form WH-381). Typically, employers also include a request for medical certification that the employee's request for leave is for an FMLA-qualifying reason. This notice must be provided to employees within five business days. Finally, if the employer determines that the leave request is FMLA qualifying, it must provide an employee with a notice designating leave as FMLA qualifying (again, within five business days). Occasionally, an employer may require an employee to submit to a "fitness-for-duty" exam at the conclusion of the FMLA leave - and this must be noted in the designation notice (form WH-382). An employer who fails to meet these notice obligations risks an "inference with FMLA rights" lawsuit and significant financial exposure. However, a recent case is a good reminder that technical notice violations do not always spell disaster for employers because employees must show that technical violations prejudice them. In Bellone v. Southwick-Tolland Regional School District, the court determined that although the employer failed to provide the required eligibility notice, and also failed to timely provide the correct designation notice (it provided the notice designating the leave as FMLA qualifying about one month after the employee exhausted his 12 weeks of FMLA leave), the employee could not prove that he was harmed in any way by the deficient and untimely notices. In Southwick-Tolland Regional School District, the employee could not show harm because he failed to offer any evidence that he could have returned to work during his leave, or that he would have structured his leave any differently had he received proper and timely notice. This case is a good reminder to employers that strictly observing the FMLA notice requirements is not just a bunch of Bellone.

Provider Self Disclosure Process

Posted on May 22, 2014, Authored by John H. Fisher, II
John H. Fisher, II
Attorney
Wausau Office
, Filed under Health Care

A growing area of the health care legal practice involves counseling clients on issues that could require self disclosure under OIG or CMS procedures. The Office of Inspector General has procedures that a provider may follow to disclose possible violations of the Anti-Kickback Statute or other federal laws. Providers have the opportunity to avoid much more serious consequences that could arise from federal prosecution or civil action. The Center for Medicare and Medicaid Services has a similar procedure that can be used to disclose and settle violations of the federal Stark Law There are a number of factors that providers must consider when deciding whether to use either self disclosure process. The first factor is always to determine whether a violation of any applicable law has occurred. The answer to the threshold question is oftentimes not as clear as one would hope in situations that can result in such serious consequences. Even if the compliance problem is clear, it is often difficult to determine the extent of the problem or the amount of overpayment that might be at issue. If you encounter a situation that you believe may involve a compliance infraction, it is best to obtain professional advice on the process to follow that will reduce your risk of exposure. Not every error in billing requires you to use the self disclosure process. Knowing when the formal process should be used can be difficult and generally requires a documented investigation of all facts and circumstances. I have posted a number of blog articles on our health law blog which you can read to get further background on the self disclosure process. Links to some of my past articles on this topic follows: New 2013 Self Disclosure Protocols OIG Self Disclosure Protocol Revisions Explained Voluntary Self Disclosure Decisions Can Be Complicated Stark Law Self Disclosures Through 2013 Stark Law Period of Disallowance

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