Implications for Employers Following the Obergefell Decision

On June 26, 2015, the US Supreme Court (SCOTUS) made the monumental decision ruling that the Fourteenth Amendement of the United States Constitution requires that all states permit marriage between same-sex couples as well as recognize marriages performed in other states between same-sex couples. The decision was close at 5-4, with Justice Kennedy joined by Justices Ginsburg, Breyer Sotomayor, and Kagan while Chief Justice Roberts and Justices Scalias, Thomas, and Alito dissented.

The Majority
Justice Kennedy’s decision drew from the Fourteenth Amendment’s Due Process Clause which states that no state shall, “deprive any person of life, liberty, or property without due process of law” and has extended to include “certain personal choices central to individual dignity and autonomy, including intimate choices that define personal identity and beliefs.” As the Supreme Court has long included marriage among these choices, the right to marry is identified as a fundamental liberty protected by the Constitution.

The Dissent
Alternatively, the dissenters were not convinced that the marriage of same-sex couples was protected under the Constitution. The main dissent, written by Chief Justice Roberts and joined by Justices Thomas and Scalia, argued “though the policy arguments for extending marriage to same-sex couples may be compelling, the legal arguments for requiring such extension are not.” Other dissenters also argued that the First Amendment would cease to protect religious objectors to same-sex marriage and while “religious believers may continue to ‘advocate’ and ‘teach’ their views of marriage,” their ability to ‘exercise’ them would be questionable.

Implications for Employers
While some implications of the ruling still remain unclear, it has been made absolutely apparent that distinguishing between ‘marriage’ and ‘same-sex marriage’ is no longer permissible in any case. Employers also may need to consider whether to modify practices which afforded benefits to domestic partners, as domestic partners are now official spouses and domestic partner coverage may no longer be necessary. Employers located in states that have not previously recognized same-sex marriages should review their standing retirement and benefit plans and make sure that they are compliant with the law as now interpreted. While it is clear that tax-qualified retirement plans must recognize same-sex marriages for purposes of spousal rights, it still remains unclear whether rights such as those to spousal coverage under welfare benefit plans are recognized.


Possible Effects of Proposed FLSA Regulations

On June 30, 2015, the Department of Labor’s Wage and Hour Division (WHD) proposed to amend the Fair Labor Standards Act (FLSA) Regulations, specifically those regulations involving “white collar” exemption for executive, administrative, and professional employees. The Notice of Proposed Rulemaking outlines the proposed changes to the FLSA regulations, what would remain the same, and what it will mean for both employees and employers alike.

What Are The Changes?

One change that has been made perfectly clear in the proposal for the FLSA Regulations will be higher minimum salaries for exempt employees, even those who are generously compensated. As of now, the FLSA requires that employers pay overtime for employees who work in excess of 40 hours in a particular work week. However, certain groups working in jobs referred to by the FLSA as executive, administrative or professional, are exempt from overtime pay requirements. These exemptions include those who make a certain weekly salary as well as “highly compensated” employees who “customarily and regularly” perform one of these exempt duties. The change in the DOL’s proposed rules is an increase in the minimum weekly salary to the 40th percentile of weekly earnings for full-time salaried employees based on BLS data. For the first time in the FLSA’s history, the salary and compensation levels of all employees would be induced to the BLS data and updated annually, thereby eliminating the process of further rule making.

What Will Remain The Same?

According to the proposal, everything else about the FLSA Regulations will remain the same, for now. The new salary levels still won’t apply to outside sales employees or other professionals such as lawyers, teachers and doctors. The WHD did not propose any changes to the duties tests for the white collar exemptions. The current duties test those employees who perform executive, administrative, or professional duties on a regular basis. The proposed salary level increase to $50,440 is substantial. The salary level will likely eliminate exempt positions offered on a part-time basis, which are still possible at $455/week. A change in the duties test will likely be unnecessary as the salary level will accomplish the goal of using a single test of exempt status.

Impacts On Employers

Employers should start planning now for the new regulations’ future impact on operations and finances, and consider participating in the public comment period with WHD. It is unlikely that the DOL will provide an extensive grace period for compliance once the proposed rule is finalized. Planning to complete a preliminary assessment of all positions they currently treat as exempt will help avoid abrupt impacts next year. Many employers should begin budgeting for salary increases and/or increased overtime costs in 2016. Employers’ only opportunity to provide comments on the level increase will extend for 60 days. The WHD is seeking comments on the following questions:

1. What, if any, changes should be made to the duties tests?

2. Should employees be required to spend a minimum amount of time performing work that is their primary duty in order to qualify for exemption? If so, what should that minimum amount be?

3. Should the Department look to the State of California’s law (requiring that 50% of an employee’s time be spent exclusively on work that is the employee’s primary duty) as a model? Is some other threshold that is less than 50% of an employee’s time worked a better indicator of the realities of the workplace today?

4. Does the single standard duties tests for each exemption category appropriately distinguish between exempt and nonexempt employees? Should the Department reconsider our devision to eliminate the long/short duties test structure?

5. Is the concurrent duties regulation for executive employees working appropriately or does it need to be modified to avoid sweeping nonexempt employees into exemption? Alternatively, should there be a limitation on the amount of nonexempt work? To what extent are exempt lower-level executive employees performing nonexempt work?

The public comment period will likely be the only substantive opportunity for employers to comment on any regulatory changes. The WHD can and likely will use the responses to these questions to implement duties test changes in the Final Rule without any further public comment period.

New Jersey Focused On Paid Sick Leave

Last year, the New Jersey Assembly introduced a bill that would require employers to provide paid sick leave to their employees. Under the proposed bill, employers with less than ten employees would be required to permit employees to accrue one hour of paid sick leave for every 30 hours worked and up to 40 hours in total each year. Employers with ten or more employees would also be required to permit employees to accrue one hour of paid sick leave for every 30 hours worked and up to 72 hours in total each year.

Employers would be prohibited from taking any retaliatory actions against an employee who uses sick leave or complains about an employer engaging in misconduct with respect to the leave entitlement. The Assembly took no action on the bill after it advanced out of the Assembly Budget Committee last December, but the New Jersey Senate has now advanced a similar version of the bill.

On Monday, June 22, 2015, the Senate Labor Committee took the first action on the revised bill, advancing it by a 3-2 vote and making some important amendments. As originally introduced, the bill permitted employees to use paid leave for their own medical care, as well as for medical care for a family member.

If approved, New Jersey would become one of only a handful of states — after California, Connecticut and Massachusetts — to approve requiring paid sick time for all workers. A number of New Jersey communities have already adopted similar sick time rules locally.

According to the State Election Law Enforcement Commission, the paid sick leave legislation was the most heavily lobbied bill in 2014. A coalition of business groups has filed a complaint, however, calling the constitutionality of the law into question. This complaint was shot down by a New Jersey Superior Court in April of 2015.

Whether or not a paid sick leave law will be enacted on a state level is projected to be a popular issue as we move towards the 2016 election, especially in light of Governor Christie’s recent campaign announcement for the presidency.

Five HR Errors That Can Cost Your Company

Five easy-to-reverse errors that can cost your company in an employment lawsuit:

  1. No Documentation
    The importance of maintaining office documents is often overlooked by many employers. Whether your company is facing harassment claims or Wage and Hour discrepancies, documentation can dramatically influence an employer’s chance of success when facing company lawsuits. The likelihood of successfully enduring employment litigation can often directly correlate to the amount of documentation in the hands of the employer.
  2. Inadequate Time Records
    Inaccurate or misleading time records can be a burden for employers. In order to avoid running into legal issues when employees are not properly recording their time, policies must be enforced to ensure company protection.
  3. Minimal Effort In Familiarizing Oneself With Policies And Changes To Policies
    Is there one person with full knowledge of the employment policies implemented by the company? Information about the policies put into place by the company, when they were implemented and why they were implemented is critical knowledge. This information should be available to more than just one in person in the event that said person leaves the company.
  4. Lack Of Routine Communication With Employees
    It is imperative that employers conduct employee reviews routinely and accurately. Communicating goals and performance expectations to employees is critical in avoiding litigations such as wrongful termination, discrimination or retaliation claims.
  5. No Written Policies
    It is critical to have policies clearly spelled out in writing to prevent an employee from claiming that he or she is being arbitrarily singled out for discipline. Important policies should appear clearly in an employee handbook or in some other manner.

Workplace Bullying – A Serious Form of Harassment

Over the past decade, the dangers of bullying in both middle and high school environments have become increasingly apparent. While seminars are frequently given on harassment and discrimination in the workplace, bullying is often overlooked as a form of harassment. However the Workplace Bullying Institute reported that in a 2014 survey, 27% of respondents reported that they had experienced bullying in the workplace and 72% reported being aware of workplace bullying.

Bullying is a very real issue in the workplace, and there are six basic ways to identify it:

  1. Intentional disregard of general instructions or guidance
  2. Physical intention to block or bump into another
  3. Sabotage
  4. Teasing, gossiping, or demeaning comments or actions
  5. Verbal intimidation and rude comments
  6. Withholding information that another person needs to perform his or her duties

No matter what position the employee holds in the company, bullying accusations must always be taken seriously and dealt with accordingly. Employees should not be afraid to file a report of bullying or harassment, whether they are direct victims or witnesses. Harassment can create a hostile and unsafe work environment, which can result in direct monetary loss to the employer, and more importantly, damages to the victim’s mental health and stability. We have a responsibility to protect our employees. Fostering positivity and comfort in the workplace is essential in increasing productivity, morale, and ensuring the happiness and healthiness of employees.


Why Do You Need A Broker?

With the introduction of online insurance and HR services, technology, without a doubt, is a force to be reckoned with. While growing technology has some people questioning the need for brokers, the importance of personalized, face-to-face communication is clearer now than ever before.

With massive adjustments in the insurance industry being implemented by the Affordable Care Act, insurance brokers have never been more essential. Benefits are complicated. Unlike a pre-programmed technology platform, we look at your benefits strategy holistically.

Many employers find it difficult to understand the complicated inner-workings of both insurance policies and HR requirements without consulting a professional. Unless they are experts in both of these fields, speaking individually with an insurance broker can provide much more clarity than an algorithm ever could.

Brokers are still crucial to developing a successful benefits program. Here are four reasons why:

  1. Brokers look beyond the algorithm to make knowledgeable decisions.
    One of the most important aspects of consulting a broker is that they are living, breathing human beings. Brokers understand the importance of making well-educated decisions and are committed to making sure the consumer’s individual needs are satisfied. Try getting that kind of service from a math equation!
  2. Brokers are experts in a wide range of products and services.
    Believe it or not, brokers can be monumental in helping employers and employees save money on their insurance plans. Surprisingly, a significant number of Americans are overinsured as a result of purchasing premium health plans they don’t understand and will ultimately never use. Brokers can help steer clients away from making highly uninformed decisions in ways algorithms cannot. 
  3. Brokers can help companies maintain compliance with local and federal regulations. 
    There have been many changes in the insurance industry with the introduction of the ACA. Thankfully, brokers have the skills and experience to help remain up to date on current policy changes. Experienced brokers also have the knowledge of inter-state laws and policies which provide a local expertise that self-service programs cannot offer. 
  4. Brokers can help navigate and plan for national changes.
    The ACA is constantly causing changes in the market. Brokers can be helpful in planning for changes so as not to surprise employers when the time comes. In 2018, a Cadillac tax will be in effect, charging large fees for high-end plans. Because brokers can follow these changes, employers will not be shocked when their prices rise in the coming years.

We are the human connection in helping you navigate the complicated web of benefits and compliance. We are your advocates, dedicated to solving your problems. By choosing us as your broker, you and your employees will have someone on your side.

Web Marketplace Delay May Hinder Obamacare’s Goals


With under 90 days left until Obamacare’s government-run health exchanges are due to begin, Web insurers are “still being locked out of” offering plans on the Affordable Care Act’s exchanges. This lag could potentially “depress enrollments, and jack up insurance rates.”

At this point, no Federally-run, state-based, or partnership exchanges have “given and other for-profit Web markets the green light.” Experts warn that if Web-based markets are unable to partner with government exchanges, it could result in 1 million or more people failing to sign up for insurance under the law.

This delay may also signify that some of the exchanges will not be ready for business by the official October 1st target date.

How Will The Affordable Care Act (ACA) Add Up To Higher Costs?

The goals of the Affordable Care Act are to make insurance more accessible and affordable, to allow people to pay for quality instead of quantity of care, and to find sustainable funding to pay for reform provisions. However, there are 3 ways in which the ACA will add up to higher costs.

1. New Benefit Requirements: The ACA requires all health insurance policies sold to individuals and small employers to include essential health benefits, including prescription drugs and pediatric services. These added benefits come at a higher cost.

2. New Taxes and Fees: The ACA imposes new taxes and fees on the health industry, including a medical device tax, insurer tax, and exchange user fee. Some new taxes and fees will result in higher costs for the consumer.

3. New Rating Guidelines: The new guidelines lead to higher premiums for younger people who tend to be healthier. If young people cannot afford coverage and choose not to be insured, costs will go up for everyone.


For more info, check out this video provided by Horizon Blue Cross Blue Shield.

Brian Tarpey Honored as MDRT Royal Order Excalibur Knight


Brian Tarpey of the Tarpey Group at the MDRT Excalibur Knight pinning ceremony.  Pictured with him are John Nichols (a fellow Excalibur Knight), Gil Haggart (President of the MDRT Foundation), and India Ehioba (Executive Director of the MDRT Foundation).

The Excalibur Society comprises the highest level of donors to the MDRT Foundation: Excalibur Knight.  Brian Tarpey was inducted as an Excalibur Knight of the Royal Order along with John Nichols by accumulating individual lifetime contributions of USD $250,000 or more. Donors can achieve Legion of Honor or Royal Order Excalibur Knight status by donating additional deferred gifts such as life insurance and/or bequests.

The ceremony was held at the Urban Club in Philadelphia, PA at the 2013 MDRT Annual Meeting. Ironically, neither Tarpey nor Nichols knew the other was being pinned at the reception despite the fact that the two friends worked side by side at the Vancouver Annual Meeting unloading 50lb bags of rice and oats during the Million Meal Challenge.

Brian Tarpey is the youngest Royal Order Excalibur Knight in 10 years  of membership with the Million Dollar Round Table.

New Options Offered In State Insurance Exchanges

The number of insurers that offer non-group plans to consumers this fall in state-run health insurance exchanges will be much greater than the current number, according to an analysis from the Robert Wood Johnson Foundation (RWJF).

RWJF’s State Health Reform Assistance Network compared insurers offering plans prior to national health reform with insurers applying to operate in state exchanges. The analysis uses data from all 10 states that have released information on carriers that will operate in their insurance marketplaces (California, Colorado, Connecticut,District of Columbia, Maryland, Massachusetts, Oregon, Rhode Island, Vermont, and Washington).

Across the 10 states, the number of carriers offering non-group insurance plans will increase substantially, from 52 to 70 plans–an increase of 35 percent. Six of the 10 states will see more insurers operating on the non-group exchange compared to the number of significant competitors pre-reform. Four states expect no change (see table above).

“More carriers competing in a state means more choice for consumers. That increases pressure on insurers to reduce price and improve service,” said Andy Hyman, who leads health coverage programs at the Robert Wood Johnson Foundation. “This level of competition signals that the state exchanges will be vibrant marketplaces.”

Researchers focused on the non-group market because it currently offers limited options and little information to guide consumer choice, and will therefore be substantially altered by the Affordable Care Act. They say that because tax credits for individual coverage premiums require obtaining insurance through an exchange, most insurance companies committed to the non-group market will choose to participate.

Massachusetts is the only state for which the researchers have an indication of the long-term impact of reform on competition. In the seven years since the state implemented health reform, they say the number of competitors more than quadrupled and market share is now far more evenly distributed as well. The analysis says that in the year before reform (2005), Blue Cross Blue Shield of Massachusetts (BCBSM) dominated the non-group market with an 80 percent market share. In 2013 it has less than 40 percent of non-group enrollment. With re-structuring of the state’s exchange to comply with the ACA for 2014, five carriers are expected to have nearly as much, or more, non-group enrollment as BCBSM.

“How competition will develop in the states is still evolving, but early evidence is showing an increase in competition in most state-based exchanges,” saidHeather Howard, director of RWJF’s State Health Reform Assistance Network and a lecturer in public affairs at Princeton University. “The robust competition we’ll see in these states is good news for consumers, because companies have an incentive to provide high-quality, affordable plans through the state-based exchanges, and carriers are clearly interested in these new markets.”