Mental health treatments are to be treated on a par with other medical conditions according to the Mental Heath Parity Act or MHPA, which has been extended through December 31, 2007.
This will have a considerable impact on New York employee benefit plans. But what does this mean for the average worker?
If you receive employee benefit plans that cover medical and mental health, it means that both areas have to be covered equally.
This means that mental health treatments can no longer be capped at amounts significantly lower than those allowed for the treatment of other medical condition, including surgery.
A simply example is that, say for instance that your plan caps mental health cover at $15,000 and other medical conditions are capped at $250,000 then this is no longer legal.
Note that this only applies to plans that provide coverage for mental health treatments. It does not mean that plans have to cover mental health in cases where it was not covered before the Mental Health Parity Act.
The MHPA was previously signed into law in 1996, and included a “sunset clause” that meant that the bill would expire in September 31, 2001. Since that date, 5 amendments have meant that the expiration date has been extended.
This ruling applies to over 150 million workers throughout the United States, according to the Employee Benefits security Administration that is responsible for ensuring that health insurance laws are not violated.
Mental Health conditions that the Act covers include stays in a rehabilitation center for drug or alcohol dependency as well as visits to a licensed therapist, psychologist or psychiatrist. It also includes hospital admission to the mental health wing for conditions such as depression and post-traumatic stress disorder.
Workers covered by the Mental Health Parity Act need no longer worry so much about the cost of seeking out treatment.
All employers are familiar with the Family and Medical Leave Act, in large part because of the Family and Medical Leave, or FMLA, poster that they most keep in every one of their work sites. But they are also familiar with it because probably many of your employees use the Family and Medical Leave Act to take time off from work to care for a newborn baby, or to care for a sick loved one in their family. Then again, they themselves might be sick, and need the Family and Medical Leave Act to be able to take time off to care for themselves. The Family and Medical Leave Act entitles them to up to six weeks of time off, unpaid, for some of the very same reasons mentioned above.
But the federal government does not have any labor law that entitles workers in this country to get any sort of paid time off for family, personal, or even vacation reasons. We have covered this issue a lot lately, because there are movements in many of the states to create laws that allow for paid time off for family or personal reasons. There is even that federal grass roots movement we talked about earlier that is pushing for Congress in Washington DC to pass mandatory minimum paid time off for vacations.
One such movement right now is occurring in New York state, and it may be happening right under your noses, employers. That is because it is not happening as a big debate in the legislature, just yet. Instead, the governor of the state, Gov. Eliot Spitzer, has offered up his own legislation that would allow employees in the state to take paid time off for personal and medical reasons.
For instance, they could use the time off to take a loved on to get a physical, or to get mental health care, or even to get spiritual health care. The bill would allow such time off to be taken for spouses and all so called domestic partners. The bill could even be applied for grandchildren, and as always, for new parents in order to have time with their newborn or newly adopted child. Doctors could be traditional physician types, as well as dentists, chiropractors, foot doctors, religious healers, and psychologists.
Under the law, the level of benefits would work this way: employees could get as much as $170 per week for as much as 12 weeks off for family and or medical reasons. The funding would come through the workers’ comp system, and in fact, the new family and medical leave program would be a part of the overall state workers’ comp system.
This would work, according to my sources who quote officials from the Spitzer camp, because employees would be indirectly but entirely funding their own benefits. That is through an additional 45 cents per week deduction that employers would be able to take out of their employees’ pay checks to cover the costs of the family leave benefits. At the moment, employers can take out 60 cents deduction for workers’ comp.
This bill comes after Gov. Spitzer proposed and got passed new reforms to the New York workers’ comp system, bringing higher benefits to injured employees and lower costs to employers. That is just what is at risk, say critics of this latest proposal. According to my sources, opposition to the family and medical leave plan say that it could threaten all of the savings brought in by the workers’ comp reform, and that it could cause workers’ comp insurance companies to raise rates.
Nevertheless, the legislature and Gov. Spitzer and fine-tuning a final agreement on this bill. If passed, it would affect nearly all private employers and about half of all employers in the public sphere.
Hey, what do you know? The state of New York has got SUTA Dumping on its mind. As I explained a bit earlier, it was actually the federal government that got all of the states thinking about ways to prevent this form of unemployment insurance tax evasion. In fact, it was our current president, President George Bush, who signed the SUTA Dumping Prevention Act of 2004.
It was actually legislation last year in New York that brought the Empire State up to snuff with this presidential directive. The new laws in the state effectively prohibit all forms of SUTA dumping, and makes it so that any employers or their tax and financial advisers who participate in SUTA dumping to be tracked and punished.
As we know, SUTA dumping can occur when employer set up fraudulent companies in order to write off, essentially, employees and lower their unemployment insurance tax rates. However, SUTA dumping can occur any time that the whole experience based tax rating system is abused in order to give employers a better experience rating and thus lower tax rates.
In New York, a penalty can could be as much as 10 percent of the employer’s taxable wages in the last full year, or up to $10,000—whichever is the higher figure. When it comes to tax or financial advisors who are willingly advising their clients to participate in SUTA dumping, the penalty for them is that they can face a penalty of as much as $10,000. What’s more, violators of the New York anti-SUTA dumping law could expect to be charged with a Class E felony. That is not a misdemeanor. That’s felonies were talking about, folks.
And as New York State Department of Labor folks like to say, they have ways of detecting SUTA dumping. They also encourage others to report suspected SUTA dumping to their Unemployment Insurance Fraud Control Unit.
When it comes to the unemployment system in the territory of Puerto Rico, we’re talking some stand out factoids when it comes to the other unemployment benefit systems that we have seen across the United States.
For instance, did you know that in Puerto Rico, the range of qualifying wages for the maximum total potential benefit is the lowest—at $6080. The range of qualifying wages for the maximum total potential is the figure that comes out of the maximum weekly benefit amount that workers can earn from being on unemployment insurance in a week multiplied by the maximum potential number of weeks that the worker can remain on unemployment benefits before the Puerto Rico unemployment insurance system stops the payments.
That makes sense when you consider that in Puerto Rico in 2000, to take a recent year with reliable figures, the maximum weekly benefits that workers could receive when they are unemployed is the lowest of all of the U.S.-based systems—at $133. Puerto Rico though allows these payments to be made out for one of the longest periods of time, which is 26 weeks in total. There are 51 unemployment benefits systems that allow this duration period before they cut off benefits, including Puerto Rico, Washington DC, and the Virgin Islands.
Now because Puerto Rico has such a low weekly allowance level, does that mean employers should take a lesser approach to dealing with the unemployment insurance system? Should they follow the rules of the Puerto Rico unemployment system any less closely than they would in another state. That is not for me to answer. I am not an employer in Puerto Rico, not do I like to pass judgment here at my blog. I will say what I always say—it doesn’t hurt an employer to at least be organized!
Here is an interesting question that we haven’t looked at yet. We took a look so far in this blog at how states deal with employers who are nonprofit companies, agricultural companies, small companies, and new companies when it comes to charging on unemployment insurance. We have also looked at how states deal with companies that are large employers and have employees in multiple states spread across this great land of ours.
But have we looked at an employer that no longer is an operating business, whether because they closed shop, went bankrupt, or just retired and quit? Well, we have considered one similar situation: when a company is bought out by another company. In that case, the new buying company assumes the unemployment insurance tax liability and experience rating for the old bought company.
But let’s say a company just goes out of business. No one else buys them or acquires them. The company just fades into the long list of companies that were has beens, the long list of failed and closed businesses. What happens to their unemployment insurance liability in this case? Is it nil and void? Does the state pick up the tab for some of those former employees of this company? For all of the former employees?
Well, at least in the state of New York, a so called “closed” unemployment insurance tax account can still receive notices that it is being charged by former employees who are claiming unemployment insurance benefits against it. And even in this case, if you are the former employer, it is your job to still review these benefits charges and make sure they are correct and justified.
If down the road you can actually rehire the employees you had to let go, you are encouraged by the state of New York to do so by contacting the former employees directly.