July Government Updates
DOL Issues Final Rule on Association Health Plans
The Department of Labor (DOL) has released a final rule on association health plans (AHPs), which will allow small businesses to band together and purchase health insurance while not meeting all of the requirements under the Affordable Care Act (ACA). As finalized, AHPs will not need to comply with the ACA’s essential health benefits provision that require health insurance plans to cover 10 services, including maternity and newborn care, mental health and ambulance rides. As part of the rule, AHPs cannot charge less healthy individuals higher premiums or restrict membership based on health status.
The rule also modifies the definition of “employer” under the Employee Retirement Income Security Act (ERISA), allowing more entities, including associations, to sponsor group health care coverage. In order to be recognized as an association able to offer group health insurance coverage, the organization must be 1) in the same trade, industry or profession throughout the U.S., or 2) in the same principal place of business within the same state or a common metropolitan area, even if the metro area extends across state lines.
An estimated 400,000 will receive health care coverage because of the rule, according to the Congressional Budget Office. AHPs are expected to go on the market starting September 1.
Immigration Bills Fail in the House of Representatives
House Republicans were unsuccessful in passing either a hard line or compromise immigration bill in June. The outcome means that Congress is unlikely to address comprehensive immigration reform this year.
On July 21, a conservative immigration bill introduced by Rep. Bob Goodlatte (R-VA) was not approved by a vote of 193 to 231. Moderate Republicans joined Democrats in voting against the bill. That was followed by a vote on June 27 on a compromise immigration bill that failed by a vote of 121 to 301, despite having the support of Republican Leadership.
House members forced action on immigration following the threat of a discharge petition, which would have forced a floor vote on a moderate bill that included some provisions that Republican Leadership did not support. In response, House Republican leaders tried to forge a compromise less than five months before the midterm elections.
NLRB Announces New Alternative Dispute Resolution Pilot Program
The National Labor Relations Board (NLRB) has announced a new pilot program intended to increase the use of alternative dispute resolution panels in settling unfair labor practice cases pending before the Board. Since December 2005, the NLRB’s alternative dispute resolution (ADR) program has assisted parties in settling unfair labor practice cases pending before the Board.
Participation in the Board’s ADR program is voluntary, and a party who enters into settlement discussions under the program may withdraw its participation at any time. For parties who have chosen to participate in the ADR program, mediators have assisted parties in reaching settlements in approximately 60 percent of cases. There are no charged fees or expenses for using the program.
The Board established the ADR program in response to the success experienced by other federal agencies and the federal courts in settling contested cases through ADR, as well as the success of the NLRB’s own settlement judge program at the trial level. The intent of the pilot program is to broaden resolution options and help reach a settlement that is acceptable to all parties.
Voter in Missouri to Decide Right-to-Work Referendum
On August 7, voters in Missouri will decide the future of the state’s right-to-work law. In February 2017, then-Governor Eric Greitens signed legislation into law that does not require workers to join a labor union or pay union dues as a condition of employment. However, implementation of the law is on hold after opponents gathered more than 310,000 signatures to place the issue on the ballot.
The ballot initiative, known as Proposition A, if successful would overturn Missouri’s right-to-work law. A “yes” vote upholds the law and a “no” vote repeals it.
The vote comes as labor union membership continues to decline throughout the country. According to the Bureau of Labor Statistics, 8.7 percent of Missouri’s wage and salary workers belonged to a union in 2017.
Administration Issues Executive Order on Administrative Law Judges
President Donald Trump issued an executive order on July 10 that allows federal administrative law judges to be hired directly by agencies rather than from a pre-approved pool of candidates. Federal government agencies such as the Department of Labor (DOL) and National Labor Relations Board (NLRB) have administrative law judges to help promote settlements in labor disputes.
Critics of the executive order are concerned that it will politicize the appointment of administrative law judges. Under the current system, the federal government’s Office of Personnel Management (OPM) recommends three qualified candidates to an agency for an administrative law judge vacancy. The executive order does away with that practice by pulling candidates out of the competitive service process, where they are evaluated by OPM, and instead would be subject to a more traditional political appointment process.
The executive order is in response to a recent Supreme Court decision that found administrative law judges were “inferior officers” under the Constitution and as such are subject to the Appointments Clause.
White House Proposes Government Reorganization
The White House has released “Delivering Government Solutions in the 21st Century,” a plan that would reorganize and reform the federal government. Among the reforms contained in the document are merging the Department of Labor and Department of Education, privatizing the postal service, and relocating more staff and offices outside of the Washington area.
Congressional approval would be needed for many of the proposals. In the previous Administration, then-President Barack Obama was unsuccessful when he asked for similar reorganizational authority to merge six agencies into the Department of Business and Trade. For its part, the White House has vowed to work with Congress to help implement the plan.
President Trump Nominates Assistant Secretary for Labor Policy
President Trump has nominated Bryan Jarrett, the Department of Labor’s (DOL) current acting wage and hour administrator, to become assistant secretary for policy at the Department. In this role, Jarret would provide advice to Labor Secretary Alex Acosta on policy development, program evaluation, regulations, program implementation, compliance strategies, research and legislation under DOL’s purview. Prior to joining DOL last fall, Jarrett worked for the law firm Morgan, Lewis & Bockius in California, and before that was a circuit court law clerk.