On April 23, 2024, the Federal Trade Commission (FTC) voted 3-2 along party lines to ban all new noncompete agreements nationwide and render existing noncompete agreements binding most workers unenforceable. The Final Rule, slated for publication in the Federal Register, provides that employers’ use of noncompete agreements amounts to an “unfair method of competition” that runs afoul of Section 5 of the FTC Act.
For a deeper dive, join our multidisciplinary team of employment and antitrust lawyers for a webinar covering what employers need to know about the Final Rule and what to do next.
FTC’s Final Noncompete Rule: What It Means and Next Steps for Employers Wednesday, May 8, 2024 Webinar | 2:00 – 3:00 pm (EDT)
On February 6, 2024, the US Centers for Medicare & Medicaid Services (CMS) issued a letter to all Medicare Advantage (MA) organizations and Medicare-Medicaid plans. The letter covered frequently asked questions and answers related to the coverage criteria and utilization management requirements in the CMS Final Rule issued on April 5, 2023.
Among the FAQs was guidance related to the use of artificial intelligence (AI) and other technologies to assess coverage decisions. CMS wrote, “An algorithm or software tool can be used to assist MA plans in making coverage determinations, but it is the responsibility of the MA organization to ensure that the algorithm or artificial intelligence complies with all applicable rules for how coverage determinations by MA organizations are made.” For example, in a decision to terminate post-acute care services, an algorithm or software tool can be used to predict the potential length of stay, but that prediction alone cannot be used as the basis to terminate services.
CMS also expressed concern that algorithms and AI technologies can exacerbate discrimination and biases, emphasizing that MA organizations must comply with nondiscrimination requirements of Section 1557 of the Affordable Care Act.
During this election year, McDermottPlus is actively monitoring annual regulations that federal agencies are expected to release, as well as “ad hoc” regulations that will be released at the discretion of federal agencies.
This chart displays health-related regulations that may be issued this year, organized by federal agency and date of potential release.
The Congressional Review Act (CRA) empowers Congress to act to invalidate regulations issued by federal agencies. These regulations include final rules, interim final rules and guidance documents. The CRA is most practically used by a new Congress to invalidate regulations issued by a previous administration and received within 60 legislative days of the previous Congress’ adjournment.
Should Republicans gain control of both chambers of Congress and the presidency, the 119th Congress could use the CRA to nullify certain Biden administration regulations. With federal elections looming later this year, this article reviews the CRA and how it might impact the current administration’s regulatory agenda.
A recently decided US Court of Appeals for the Ninth Circuit case, Ryan S. v. UnitedHealth Group, Inc., offers some useful insights on the enforcement by private litigants of the Mental Health Parity and Addiction Equity Act (MHPAEA). Like other similar cases, the case invites questions about the impact of potential changes under the proposed regulations issued under MHPAEA last year. Despite that the issues at this stage are procedural, the case nevertheless offers some useful insights, which this post explores.
According to the complaint, the group health plan under which Ryan S. was covered was administered by UnitedHealthcare. The plan covered outpatient, out-of-network mental health and substance use disorder (MH/SUD) benefits at 70% of covered charges and at 100% once the out-of-pocket maximum was met.
Ryan S. completed two different outpatient, out-of-network substance use disorder programs, coverage for which was denied on multiple occasion and for disparate reasons. As the complaint explains, the denials resulted from UnitedHealthcare’s use of an algorithm that assessed patients’ progress and referred cases for additional review. This additional layer of review was not applied to outpatient, out-of-network medical/surgical (M/S) claims. Ryan S. alleges that UnitedHealthcare applied a more stringent review process to benefits claims for outpatient, out-of-network MH/SUD treatment than to otherwise comparable M/S treatment. The complaint states this disparity in applicable review standards violates:
MHPAEA
The Employee Retirement Income Security Act (ERISA) fiduciary rules
The failure to follow the terms of the plan as required by ERISA
The Disposition of the Plaintiffs’ Claims
The district court had dismissed all the claims. The Ninth Circuit reversed on MHPAEA and ERISA fiduciary claims but let stand the district court’s dismissal of the claim related to plan terms.
MHPAEA requires that any limitations on “mental health or substance use disorder benefits” in an ERISA plan be “no more restrictive than the predominant treatment limitations applied to substantially all [covered] medical and surgical benefits.” Thus, said the court, to succeed, a plaintiff must show an ERISA plan that offers both M/S and MH/SUD benefits imposed a more restrictive limitation on MH/SUD treatment than limitations on treatment for M/S issues. The court then identified three situations in which such a violation might occur:
Facial exclusion cases: A plaintiff can allege that a plan contains an exclusion that is discriminatory on its face.
“As-applied” cases: A plaintiff can allege that a plan contains a facially neutral term that is discriminatorily applied to MH/SUD treatment.
Internal process cases: A plaintiff can allege that a plan administrator applies an improper internal process that results in the exclusion of an MH/SUD treatment.
In the court’s view, the complaint raises internal process claims. As such, violations cannot be discerned with reference to the plan document. The court therefore saw no reason to disturb the district court’s dismissal of the claim relating to plan terms.
With respect to the MHPAEA and ERISA fiduciary claims, [...]
New state privacy laws regulating health data impose significant obligations and heightened litigation and regulatory risks. During this webinar, Elliot Golding and Sam Siegfried discussed how these laws apply, what they require, and practical tips to implement and operationalize compliance.
Taxes can have a significant impact on family offices, influencing decisions around structure, investing and overall planning strategies. McDermott’s Family Office Tax webinar series explores the latest trends and guidance on tax planning for family offices and identifies opportunities to optimize tax efficiency.
Our first webinar covered the legal, tax and administrative considerations a family office faces when creating incentive and deferred compensation plans for employees. Discussion topics included:
Compensation strategies as tools to use in competing in the “war for talent”
Long-term incentive arrangements to reward performance and foster retention
Leveraged and non-leveraged co-investment opportunities
Benefits of carried interest, phantom equity and profit sharing
If you employ part-time workers and/or engage independent contractors, sit up and take note: 2024 brings significant changes to how you must manage your workforce. The US Department of Labor’s (DOL) revised Independent Contractor Rule introduces additional uncertainty as to how the agency and perhaps courts will decide independent contractor misclassification disputes. Provisions of the SECURE 2.0 Act, meanwhile, will simultaneously impose a new mandate for employers to provide part-time workers with expanded access to retirement benefits.
In this webinar, McDermott Partners Brian J. Tiemann and Joseph K. Mulherin, along with Tom Robertson of Graystone Consulting, discussed the steps employers must take to ensure compliance with these new regulations taking effect in 2024.
Topics included:
How the SECURE 2.0 Act, starting this year, expands the criteria under which employers must offer part-time employees the opportunity to participate in employer-sponsored 401(k) and 403(b) retirement plans
The DOL’s changes to its Independent Contractor Rule, compliance considerations, tips for strengthening the independent contractor argument and mitigating misclassification risks
Other benefits considerations employers must be aware of if required to reclassify workers, such as the mandate to provide employee health insurance under the Affordable Care Act
In late December 2023, the Internal Revenue Service (IRS) issued Notice 2024-2 (the Notice), providing guidance on key provisions of the SECURE 2.0 Act of 2022 (SECURE 2.0). SECURE 2.0, which was passed in December 2022, includes more than 90 provisions affecting US retirement plans, many of which are specifically aimed at enhancing savings opportunities for workers. The Notice provides guidance on many of the provisions of SECURE 2.0 in the form of questions and answers. This article covers the most significant provisions affecting 401(k) and 403(b) qualified retirement plans.
On January 11, 2024, the US Department of Health and Human Services (HHS) published its new final rule governing federal healthcare conscience protection statutes. The 2024 final rule, which went into effect March 11, 2024, repeals the majority of the prior final rule from 2019 that was found to be unlawful by three federal courts and reverts to the 2011 framework created by the Obama administration to address rights of conscience.
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