News and Insights
Visit regularly for up-to-date information on relevant news, firm announcements and additions to our AZ Health Law Blog.
Earlier this year, the EEOC’s Phoenix District Office filed suit against Community Care Health Network, Inc., doing business as Matrix Medical Network in Arizona, alleging Matrix violated federal law. The EEOC’s suit alleges Matrix rescinded a job offer to Patricia Pogue after discovering Ms. Pogue was pregnant.
Title VII of the Civil Rights Act of 1964, as amended by the Pregnancy Discrimination Act of 1978, the (“PDA”), prohibits employment discrimination based on sex, including pregnancy. Acts of pregnancy discrimination may include:
- Firing a pregnant employee;
- Laying off a pregnant employee;
- Refusing to hire a pregnant employee;
- Harassing a pregnant employee;
- Refusing to provide accommodations for a pregnant employee;
- Demoting a pregnant employee;
- Forcing a pregnant employee to change positions or take time off.
The PDA, which applies to employers with 15 or more employees, protects employees who go on leave due to pregnancy, childbirth, or a related medical condition. Employers must hold an employee’s job open on the same basis as it does for other employees who go on leave.
According to the EEOC’s suit, Matrix offered Ms. Pogue a position as credentialing manager. After Ms. Pogue accepted the offer, she informed Matrix she was pregnant and would need maternity leave. Approximately one week later, Matrix asked Ms. Pogue why she did not disclose her pregnancy during the job interview. Matrix then rescinded the job offer.
The EEOC’s suit against Matrix seeks back wages, compensatory, and punitive damages for Ms. Pogue. Further, the EEOC is seeking a permanent injunction enjoining Matrix from engaging in any discriminatory practices based on a person’s sex, including pregnancy.
The EEOC has focused in on PDA discrimination cases during the past couple of years. The EEOC receives, on average, more than 3,500 charges of pregnancy discrimination each year. In 2017, the EEOC settled multiple pregnancy discrimination cases for a total amount of $15 million in monetary damages.
All employers, including medical practices, should institute and carry out policies and practices to prevent pregnancy discrimination in the workplace. Employers that would like more information about pregnancy discrimination, including advice on creating and implementing effective anti-discrimination policies, may contact the attorneys at Milligan Lawless for assistance.
Effective January 1, 2019, Arizona-based small employers will be required to provide continuation of employer-sponsored health plan benefits to qualifying former employees and their covered dependents. Currently, employers who employ at least 20 employees (as calculated by determining the number of employees employed on more than fifty percent of the employer’s typical business days in the previous calendar year) are required to offer continuing group coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act (COBRA or “federal COBRA”). Arizona’s new law, referred to as a “mini-COBRA,” will apply to employers with at least one but not more than 20 employees during the preceding calendar year.
Under the law, former employees who elect to continue coverage will receive benefits at the group cost, including the employer’s contribution and administrative fee (capped at five percent of the premium). To be eligible for continued coverage under the new law, employees and their covered dependents must 1) be enrolled in a group medical insurance plan for a minimum of three months, 2) be ineligible for Medicare coverage, and 3) experience a “Qualifying Event” thereafter losing coverage. The law defines a “Qualifying Event” as follows: voluntary or involuntary termination of employment for a reason other than gross misconduct or reduction of hours required to quality for coverage;divorce or separation from the employee; death of the employee; the employee becomes eligible for Medicare coverage; a dependent child ceases to be a dependent child under the insurance plan; a retired former employee and his or her dependents lose coverage within one year before or after the employer files for bankruptcy.
Within 30 days of the occurrence of a Qualifying Event, mandated employers must provide written notification to an employee of his or her right to continue coverage(though the law considers a written notice timely if it is postmarked within 44 days of the Qualifying Event and mailed to the employee’s last known address).In the event that a covered dependent resides at a different address than the employee, the employer must deliver a separate written notice to the dependent. The written notice must inform the employee and his or her dependents of their right to continue coverage, the amount of the full cost of coverage (including the employer’s administrative fee), the process and deadlines for electing continuation of coverage, the dates and times for making payments, and the consequence for failure to pay in a timely manner (i.e., loss of coverage). For those employees and/or dependents receiving mini-COBRA coverage, employers are also required to provide at least 30 days advance notice of any changes to coverage (e.g., rates, plan, benefits,etc.).
To continue coverage, employees must provide written notification to the employer within 60 days of the date of the employer’s notice. After electing coverage, employees have 45 days to submit the initial premium to the employer. Mini-COBRA coverage terminates upon the earliest of the following events: 18 months following the commencement of coverage; the employee’s failure to timely pay premiums; the date on which the employee or a covered dependent becomes eligible for coverage under Medicare, Medicaid, or any other health benefit plan (with respect only to that person); the date on which an employer terminates coverage under the health benefit plan for all employees (the employee and covered dependents are eligible to participate in a replacement plan); or the date a dependent child would otherwise lose coverage under the terms of the health benefit plan due to age (with respect only to that dependent child). In the event that a covered dependent is deemed disabled at the time of the Qualifying Event, the dependent may be eligible for extended coverage.
Mini-COBRA Broken Down
Continued Coverage: Employees and their covered dependents receive continued employer-sponsored health plan benefits at the group cost.
Mandated Employers: Employers with at least one but no more than 20 employees during the preceding calendar year.
Eligible Employees: Employees must be covered under a group medical insurance plan for a minimum of three months; ineligible for Medicare coverage; experience a Qualifying Event.
Notification Requirements: Employer’s notice required within 30 days of the Qualifying Event. Separate notice required if a covered dependent resides at a different address.
Employer’s Administrative Fee: Capped at five percent.
Election of Coverage: Employees have 60 days from the date of employer’s notice to submit written notice of their desire to continue coverage. Initial premium is due within 45 days of electing coverage.
How Long Does Coverage Last: Generally 18 months, though coverage time may vary under certain circumstances.
Employers who would like more information about Arizona’s mini-COBRA law are encouraged to contact the attorneys at Milligan Lawless for assistance.