Each student is required to use the Web, newspaper, journal, etc. to find one recent (2019 – present) article that relates to any chapter in your textbook and make a 5-minute PowerPoint presentation.

Regulating Employee Benefits Chapter Outline The Need for Government Regulation Labor Unions and Employee Benefits The National Labor Relations Act of 1935 The Internal Revenue Code The Fair Labor Standards Act of 1938 The Employee Retirement Income Security Act of 1974 Defining Pension Plans and Welfare Plans Scope of Coverage for Pension Plans and Welfare Plans Title I: Protection of Employee Rights Title II: Amendments to the Internal Revenue Code Relating to Retirement Plans Title III: Jurisdiction, Administration, Enforcement, Joint Pension Task Force, and Other Issues Title IV: Plan Termination Insurance The Consolidated Omnibus Budget Reconciliation Act of 1985 The Health Insurance Portability and Accountability Act of 1996 The Pension Protection Act of 2006 The Patient Protection and Affordable Care Act of 2010 Equal Employment Opportunity Laws The Equal Pay Act of 1963 Title VII of the Civil Rights Act of 1964 The Age Discrimination in Employment Act of 1967 The Pregnancy Discrimination Act of 1978 The Americans with Disabilities Act of 1990 The Civil Rights Act of 1991 The Genetic Information Nondiscrimination Act of 2008 Summary Key Terms Discussion Questions Cases 1. Understanding Your Employee Benefits: Continuing Health-Care Insurance 2. Managing Employee Benefits: A Discriminatory Time-Off Policy Endnotes Learning Objectives In this chapter, you will gain an understanding of: 1. The need for government regulation in the employment setting. 2. The National Labor Relations Act of 1935. 3. The Internal Revenue Code. mar12281_ch03_061-088.indd 61 12/8/16 6:54 AM 62 Part One Introduction to Employee Benefits 4. The Fair Labor Standards Act of 1938. 5. The Employee Retirement Income Security Act of 1974 (ERISA) and key amendments such as the Pension Protection Act, COBRA, and HIPAA. 6. The Patient Protection and Affordable Care Act of 2010. 7. Equal-opportunity employment laws. This chapter is an introduction to some of the complex federal regulations that shape benefits practice. A sound working knowledge is essential for effectively managing employee-benefits programs. Exhibit 3.1 lists the laws that we review in this chapter. THE NEED FOR GOVERNMENT REGULATION To understand why we spend time reviewing the regulation of employee benefits, it is important to answer the following question: How much can Congress or the courts tell an employer how to run its business, who it should hire or fire, and how it should treat its employees? Legal experts Bennett-Alexander and Hartman shed light on this question: The freedom to contract is crucial to freedom of the market; an employee may choose to work or not to work for a given employer, and an employer may choose to hire or not to hire a given applicant. As a result, the employment relationship is regulated in some important ways. Congress tries to avoid telling employers how to manage their employees. . . . However, Congress has passed employmentrelated laws when it believes that the employee is not on equal footing with the employer. For example, Congress has passed laws that require employers to pay minimum wages and to refrain from using certain criteria, such as race or gender, in arriving at specific employment decisions. These laws reflect the reality that employers stand in a position of power in the employment relationship. Legal protections granted to employees seek to make the power relationship between employer and employee one that is fair and equitable.1 The main focus of this chapter is on the regulation of employee benefits in the private sector—for-profit companies such as Walmart and not-for-profit agencies such as the American Cancer Society—rather than the on the public sector— municipal, county, state, and federal governments. A complex set of public laws across the levels of government determine the regulation of benefits in the public sector, and these topics are largely outside the scope of this book. For instance, most features of public-sector benefits are not subject to every provision of the Employee Retirement Income Security Act (ERISA). Nevertheless, it is imperative to note that many states and municipalities have adopted laws that seemingly overlap with federal regulation. For example, many states have minimum wage laws that set the minimum wage higher than the federal minimum wage. mar12281_ch03_061-088.indd 62 12/8/16 6:54 AM Chapter 3 Regulating Employee Benefits 63 LABOR UNIONS AND EMPLOYEE BENEFITS The National Labor Relations Act of 1935 Congress enacted the National Labor Relations Act of 1935 (NLRA) to restore equality of bargaining power between employees and employers. As discussed in Chapter 1, the industrialization of the U.S. economy and the economic devastation during the Great Depression placed workers at a disadvantage; they were subject to poor pay, unsafe working conditions, and virtually no job security. Workers banded together to negotiate better terms of employment, but employers were not willing to negotiate because collective action could jeopardize their control over the terms of employment. Consequently, employees continued to experience poor working conditions, substandard wage rates, and excessive work hours. For example, a tragedy occurred at the Triangle Shirtwaist factory located in New York City in 1911. Approximately 150 teenage girls perished when a fire broke out on the eighth floor of the building. Most were burned alive in their work areas, and others jumped out of the windows to their deaths on the sidewalks about 80 feet below. The company routinely kept the exits locked during work shifts, and a single fire escape could not support the weight of the people attempting to escape. A strong public reaction across the country led politicians to embrace the idea that one of the responsibilities of government is to protect the welfare of workers. Ultimately, the New York Factory Investigating Commission, established to investigate the circumstances of the fire, led to the passage of New York State’s Industrial Code, providing the impetus for national laws such as the NLRA to help protect the interests of workers. EXHIBIT 3.1 Legal Influences on Discretionary Benefits Practices ● The National Labor Relations Act of 1935 ● The Internal Revenue Code ● The Fair Labor Standards Act of 1938 ● The Employee Retirement Income Security Act of 1974 (ERISA) and noteworthy amendments: ● The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) ● The Health Insurance Portability and Accountability Act of 1996 (HIPAA) ● The Pension Protection Act of 2006 (PPA) ● The Patient Protection Affordable Care Act 2010 (PPACA or ACA) ● Equal Employment Opportunity laws: ● The Equal Pay Act of 1963 ● Title VII of the Civil Rights Act of 1964 ● The Age Discrimination in Employment Act of 1967 ● The Pregnancy Discrimination Act of 1978 ● The Americans with Disabilities Act of 1990 ● The Civil Rights Act of 1991 ● The Genetic Information Nondiscrimination Act of 2008 (GINA) mar12281_ch03_061-088.indd 63 12/8/16 6:54 AM 64 Part One Introduction to Employee Benefits Coverage The NLRA applies to private-sector companies, except for companies whose main business is passenger or freight rail, or air carrier. The act does not extend protection to agricultural workers; domestic service workers; independent contractors; or employees of the federal, state, or municipal governments. The National Labor Relations Board (NLRB) oversees the enforcement of the NLRA. Relevance to Employee Benefits Section 1 of the NLRA declares the policy of the United States to protect commerce “by encouraging the practice and procedure of collective bargaining and by protecting the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing for the purpose of negotiating the terms and conditions of their employment.” Collective bargaining refers to the process in which representatives of employees (e.g., General Motors employees are represented by the United Auto Workers union) and representatives of company management negotiate the terms of employment. Under the NLRA, the possible subjects for bargaining fall into one of three categories: mandatory, permissive, or illegal. Mandatory bargaining subjects are those that employers and unions must bargain over if either constituent makes proposals about them. The following employee-benefits items are mandatory subjects: ▯ Disability pay—supplemental to what is mandated by Social Security and the various state workers’ compensation laws (Chapter 6). ▯ Health (Chapter 5). ▯ Paid time off (Chapter 8). ▯ Retirement plans (Chapter 4). Permissive bargaining subjects are those subjects on which neither the employer nor the union is obligated to bargain. The following employee-benefits items fall in the permissive subjects category: ▯ Administration of funds for employee-benefits programs. ▯ Retiree benefits (e.g., medical insurance). ▯ Workers’ compensation, within the scope of state workers’ compensation laws. Illegal bargaining subjects include proposals for contract revisions that are either illegal under the NLRA or violate federal or state laws. For example, employers and labor unions may not bargain over particular standards for employee-benefits plans set forth by the Employee Retirement Income Security Act of 1974 (ERISA), including minimum funding standards; minimum participation standards; minimum vesting standards; benefit accrual standards; and joint, survivor, and preretirement survivor benefit requirements. The role of labor unions goes well beyond the collective bargaining process. Increases in layoffs and plant shutdowns promote immediate cost savings for mar12281_ch03_061-088.indd 64 12/8/16 6:54 AM Chapter 3 Regulating Employee Benefits 65 companies, but these activities threaten the bargaining power of unions. Unions are sometimes willing to accept lower pay and benefits in exchange for job security. Unions also were instrumental in securing the Worker Adjustment and Retraining Notification (WARN) Act, which generally requires that management give at least a 60-day advance notice of a plant closing or mass layoff. An employer’s failure to comply with the requirement of the WARN Act entitles employees to recover pay and benefits for the period for which notice was not given, typically up to a maximum of 60 days. THE INTERNAL REVENUE CODE The Internal Revenue Code (IRC) is the set of regulations pertaining to taxation in the United States (e.g., sales taxes; company or employer income taxes; individual or employee income taxes; and property taxes). Taxes represent the main source of revenue to fund federal, state, and local government programs. The Internal Revenue Service (IRS) is the government agency that develops and implements the IRC, and it levies penalties against companies and individuals who violate these regulations. Since the early 20th century, the federal government has encouraged employers to provide retirement benefits to employees with tax breaks or deductions. In other words, the government has allowed employers to exclude retirement plan payments from their income subject to taxation. This “break” has reduced the amount of a company’s required tax payments. In general, the larger the contributions to retirement plans, the greater the reduction in the amount of taxes owed to the government. The IRC contains multiple regulations for legally required and discretionary benefits. As noted in Chapter 1, the Federal Insurance Contributions Act (FICA)2 taxes employees and employers to finance the Social Security Old-Age, Survivor, and Disability Insurance (OASDI) program. Unemployment insurance benefits are financed by federal and, sometimes, state taxes levied on employers. Federal tax is levied on employers under the Federal Unemployment Tax Act (FUTA). The IRC provides incentives for employers that offer discretionary benefits and for employees as recipients of these benefits. In general, an employee may deduct the cost of some benefits from his or her annual income, thereby reducing tax liability. Employers may also deduct the cost of benefits from their annual incomes when the costs are ordinary and necessary expenses of companies’ trade or business. For example, the costs of electricity for a factory and the purchase of raw materials to manufacture products are ordinary and necessary expenses. Payroll costs and benefits costs also qualify as ordinary and necessary business expenses. The tax deductibility of the costs of some benefits also requires that employers meet the provisions of the Employee Retirement Income Security Act of 1974. Benefits qualify for tax deductibility when nondiscrimination rules are mar12281_ch03_061-088.indd 65 12/8/16 6:54 AM 66 Part One Introduction to Employee Benefits followed. In the case of retirement plans, nondiscrimination rules prohibit employers from giving preferential treatment to key employees and highly compensated employees—for example, by contributing a larger percentage of annual salaries to executives’ retirement accounts and a smaller percentage to other employees’ retirement accounts; and, health-care benefit offerings are the same for all employees. We take up the definitions of key employees and highly compensated employees in Chapter 11 on executive employee benefits. THE FAIR LABOR STANDARDS ACT OF 1938 The Fair Labor Standards Act (FLSA) contains provisions for minimum wage, overtime pay, and child labor. Coverage The FLSA provisions apply to private-sector employers and federal, state, or local government agencies. The U.S. Department of Labor enforces this act. Of particular importance is the act’s overtime pay provision. The overtime pay provision applies to employees whose jobs are classified as nonexempt by the act and excludes jobs that are classified as exempt by this act. Generally, executive, administrative, learned professional, creative professional, computer, and outside sales employees are exempt from the FLSA overtime provision. Most other jobs are nonexempt. Nonexempt jobs are subject to the FLSA overtime pay provision. Determining whether jobs are exempt from the FLSA overtime pay provision has become even more complex since the U.S. Department of Labor introduced revised guidelines, known as the FairPay Rules, in August 2004. Previously, an employee was considered exempt under the FLSA overtime pay provisions if he or she earned more than the minimum wage and exercised independent judgment when working. Under the new FairPay Rules, workers earning less than $47,476 per year—or $913 per week—are guaranteed overtime protection. Relevance to Employee-Benefits Practices Under the overtime pay provision, nonexempt employees are entitled to pay at an amount equal to one and one-half times their normal hourly rate for hours worked in excess of 40 hours during a workweek. A workweek, which can begin on any day of the week, is seven consecutive 24-hour periods, or 168 consecutive hours. Employee benefits linked to pay, as in the case of unemployment insurance and contributions to a retirement plan, increase correspondingly during those overtime hours. For example, let’s assume that a nonexempt employee contributes 5 percent of annual pay to a retirement account. Let’s also assume that this employee’s hourly pay equals $14.42 without overtime pay. Her annual contribution equals $1,500 ($14.42 per hour × 40 hours per week × 52 weeks per year × 5 percent). If this employee works 300 hours on an overtime basis, a mar12281_ch03_061-088.indd 66 12/19/16 6:42 AM Chapter 3 Regulating Employee Benefits 67 5 percent contribution would be greater. Her additional hourly pay would equal one-half of her normal hourly pay rate—$7.21 ($14.42/ 2). This employee’s additional contribution to retirement equals $108.15 ($7.21 × 300 overtime work hours × 5 percent). THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 The Employee Retirement Income Security Act of 1974 (ERISA) regulates the establishment and implementation of several employee-benefits practices. These include medical care (Chapter 5), life and disability insurance programs (Chapter 6), and retirement programs (Chapter 4). Deficiencies in the private-sector pension system, which undermined workers’ retirement security, prompted this law’s passage. For example, prior to ERISA, employers could arbitrarily determine when employees could begin participation in the company’s retirement plan. It was in employers’ interests to set a high minimum age or years of service to qualify for participation because older workers would have fewer years of employment than younger workers. As we will see later, the years of service criterion is oftentimes important in determining retirement benefits amounts. ERISA is a far-reaching and complex law. Some law schools devote one or more courses to ERISA regulations. As is the case with other laws, various stakeholders, including employees, employers, and even the government, have comprehended its language differently, which has led to a multitude of court rulings to help guide interpretation. Moreover, ERISA has been amended several times to further balance the interests of employees and employers. For example, COBRA mandates that former employees have the opportunity to continue health-care coverage for a period of time by paying the premium. The Pension Protection Act of 2006 permits an employer to automatically enroll employees in its defined contribution retirement plan and to deduct a small amount of pay for deposit into an employee’s account. Prior to this law, permitting automatic enrollment, many employees who had the choice to participate did not do so. Ultimately, the federal government stepped in to promote savings for retirement because of concerns that a significant number of people would not have sufficient funds to retire. Coverage ERISA generally covers private-sector employee-benefits plans. The following employee-benefits plans are not subject to ERISA requirements: federal, state, and local government plans; church plans; workers’ compensation plans; plans maintained outside the United States for nonresident aliens; and top hat plans, which we discuss in Chapter 11, and which refer to deferred compensation plans for a select group of managers or highly compensated employees. Finally, ERISA excludes plans covering only business partnerships or sole proprietors. The U.S. Department of Labor enforces ERISA. mar12281_ch03_061-088.indd 67 12/8/16 6:54 AM 68 Part One Introduction to Employee Benefits Relevance to Employee-Benefits Practices Until the passage of ERISA in 1974, employer-sponsored retirement plans were largely unregulated. The IRC, the Taft–Hartley Act of 1947, and the Federal Welfare and Pension Plans Disclosure Act of 1958 applied limited restrictions to the operation of employer-sponsored plans. ERISA has several major objectives:3 ▯ To ensure that workers and beneficiaries receive adequate information about their benefits plans. ▯ To set standards of conduct for those managing employee-benefits plans and plan funds. ▯ To determine that adequate funds are being set aside to pay promised pension benefits. ▯ To ensure that workers receive pension benefits after they have satisfied certain minimum requirements. ▯ To safeguard pension benefits for workers whose pension plans are terminated. ERISA has four broad titles and general sections contained within each title. Exhibit 3.2 displays a listing of the titles and sections. Title I specifies a variety of protections for participants and beneficiaries. Title II includes the IRC provisions pertaining to the taxation of employee-benefits and pension plans. Title III addresses the administration and enforcement of ERISA, including the jurisdiction of relevant federal agencies. Title IV contains terms for pension insurance programs, including the establishment of the Pension Benefit Guarantee Corporation (PBGC). Titles I and II contribute several minimum standards necessary to “qualify” retirement plans for favorable tax treatment. Additional regulations (e.g., U.S. Treasury rules) also contribute minimum standards for the same purpose. Failure to meet any of the minimum standards “disqualifies” pension plans for favorable tax EXHIBIT 3.2 Summary of ERISA Titles Title I: Protection of Employee Rights 1. Reporting and disclosure 2. Participation and vesting 3. Funding 4. Fiduciary responsibilities 5. Administration/enforcement 6. Continuation coverage and additional standards for group health plans 7. Group health plan requirements Title II: Amendments to the Internal Revenue Code Relating to Retirement Plans Title III: Jurisdiction, Administration, Enforcement, Joint Pension Task Force Title IV: Plan Termination Insurance mar12281_ch03_061-088.indd 68 12/8/16 6:54 AM Chapter 3 Regulating Employee Benefits 69 treatment. Pension plans that meet all of these minimum standards are known as qualified plans. Nonqualified plans fail to meet at least one minimum standards. We take up a review of the ERISA minimum standards in this chapter and in subsequent chapters where there is relevance to a particular benefits practice. Defining Pension Plans and Welfare Plans ERISA applies to pension plans and welfare plans. Pension plans are any plan, fund, or program that: (i) [P]rovides retirement income to employees, or (ii) results in a deferral of income by employees for periods extending to the termination of covered employment or beyond, regardless of the method of calculating the contributions made in the plan, the method of calculating benefits under the plan, or the method of distributing benefits from the plan.4 ERISA defines a welfare plan as: any plan, fund, or program which was heretofore or is hereafter established or maintained by an employer or by an employee organization, or by both, to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries through the purchase of insurance or otherwise, (A) medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death, or unemployment, or vacation benefits, apprenticeship, or other training programs, or day care centers, scholarship funds, or prepaid legal services, or (B) any benefit described in section 302(c) of the Labor Management Relations Act, 1947 (other than pensions on retirement or death; and insurance to provide such pensions).5 The two most commonly used pension plans in companies are defined benefit plans and defined contribution plans, which are discussed in great detail in Chapter 4. For the purposes of introducing ERISA, a brief definition of each is warranted, because some of the ERISA provisions refer to one type versus another. A defined benefit plan, also referenced as a pension plan in the law, guarantees the retirement benefits. This benefit usually is expressed in terms of a monthly or an annual sum equal to a percentage of a participant’s preretirement pay multiplied by the number of years he or she has worked for the employer. Although the benefit in such a plan is fixed by a formula, the level of required employer contributions fluctuates from year to year. The contribution depends on the amount necessary to ensure that benefits are paid as promised. Under a defined contribution plan, employers and employees make annual contributions to separate accounts established for each participating employee, based on a formula contained in the plan document. The amount each participant receives in retirement depends on the performance of the selected investment vehicle (e.g., company stock, government bonds). Typically, formulas call for employers to contribute a given percentage of a participant’s annual pay each year. Employers invest these funds on behalf of the employee in any of a number of ways, such as company stock, diversified stock market funds, or federal government bond funds. mar12281_ch03_061-088.indd 69 12/8/16 6:54 AM 70 Part One Introduction to Employee Benefits Another important term is multiemployer plans (also known as Taft-Hartley plans). The Labor Management Relations Act of 1947, also known as the TaftHartley Act, spurred the growth of multiemployer plans in the private sector. Multiemployer plans may include pension or welfare benefits for workers generally in industries where it is common to move from employer to employer when work becomes available, such as in the skilled trades (e.g., carpentry), the trucking industry, mining, public utilities, and the entertainment industry (theater and film companies). The participating companies are generally small. As the name indicates, multiemployer pension plans cover workers with more than one employer, compared to most pension and welfare plans, which are sponsored by a single employer. Particular characteristics of Taft-Hartley plans include the following: ▯ A limited set of employee benefits, which are listed in Exhibit 3.3. ▯ Employers’ contributions must be held in trust for the purpose of paying benefits to employees and their dependents. ▯ Labor and management must be equally represented in the administration of the joint trust fund, with an established procedure to resolve stalemates. ▯ The trust fund must be audited annually by a neutral organization. ▯ A separate trust fund must be established to hold contributions for pensions. Pension fund money cannot be mixed with a welfare fund (e.g., health care and disability). Scope of Coverage for Pension Plans and Welfare Plans Although ERISA covers both pension plans and welfare plans, most of its provisions pertain to pension (retirement) plans. The protection of employee rights (Title I) addresses seven issues, which are described next. Only two issues (1 and 4) apply to welfare plans; two additional issues (6 and 7) address group health plans exclusively. EXHIBIT 3.3 Permissible Benefits in Taft-Hartley Plans ● Health-care benefits ● Pension benefits ● Life insurance ● Unemployment benefits ● Accident insurance ● Occupational illness/injury benefits ● Training and education (including apprenticeships and educational scholarships) ● Pooled vacation, holiday, and severance benefits ● Financial assistance for housing ● Child-care centers ● Disability/sickness insurance ● Legal services mar12281_ch03_061-088.indd 70 12/8/16 6:54 AM Chapter 3 Regulating Employee Benefits 71 Title I: Protection of Employee Rights Title I contains provisions that provide employees protections for benefits rights: 1. Reporting and disclosure. 2. Minimum standards for participation and vesting. 3. Funding. 4. Fiduciary responsibilities. 5. Administration and enforcement. 6. Continuation coverage and additional standards for group health plans. 7. Group health plan portability, access, and renewability requirements. Congress endorsed the need for Title I based on four major considerations. First, Congress observed that many companies terminated pension plans after employees completed several years of service. Second, many companies were forced to terminate pension plans due to insufficient funding. Third, many companies did not provide employees information about their pension plans (e.g., the rate at which benefits accumulate over time). Fourth, the absence of federal regulations setting minimum standards for funding pension programs resulted in the financial failure of many pension plans, leaving beneficiaries without any retirement benefits. Altogether, these problems threatened employee security and self-sufficiency in retirement. As noted earlier, most employees do receive Social Security retirement benefits, but oftentimes the amounts are insufficient to fully fund individuals through retirement. Part 1: Reporting and Disclosure These provisions impose three requirements on employers regarding pension plans and other employee-benefits plans. First, employers must provide employees with understandable and comprehensive summaries of their pension and welfare benefits plans, information about changes to these plans, and advance notification of planned termination of these plans. Second, employees are entitled to receive reports on their status in the plans, including service credits and accumulated benefits. Third, employers are required to report detailed financial and actuarial data about the plans to the U.S. Treasury Department. Companies may satisfy this reporting requirement by completing Form 5500. This form can be obtained from the IRS Web site at www.irs.gov. Part 2: Participation and Vesting Strict participation requirements apply to pension plans. Specifically, employees must be allowed to participate in pension plans after they have reached age 216 and have completed one year of service (based on 1,000 work hours).7 These hours include all paid time for performing work and paid time off (e.g., vacation, sick leave, holidays). The one-year requirement may be extended to two years if the company grants full vesting after two years of participation in the pension plan. In addition, companies may not exclude employees from participating in pension mar12281_ch03_061-088.indd 71 12/8/16 6:54 AM 72 Part One Introduction to Employee Benefits plans because they are too old. (Too old is not defined in the law. It references an employer’s choice of age for limiting participation.) Vesting refers to an employee’s nonforfeitable rights to pension benefits.8 Part 3: Funding ERISA imposes several funding requirements. Essentially, employers must contribute sufficient annual funding for all pension benefits earned by employees. In the event of underfunding, companies must notify plan participants. Failure to comply with this funding requirement leads to monetary penalties, which are expressed as a percentage of the amount in question. The percentage may vary based on the length of time an employer remains in violation. In the event of underfunding, employers must make the necessary adjustments to meet future liabilities. Failure to correct underfunding entitles the federal government to place liens against the employer’s assets; that is, the government takes charge of assets until the underfunding situation is resolved. Part 4: Fiduciary Responsibilities Fiduciaries are individuals who manage employee-benefits plans. A variety of individuals or organizations may serve as fiduciaries. Common ones include: ▯ Employers. ▯ Insurance companies. ▯ Attorneys. ▯ Corporate directors, officers, or principal stockholders. ERISA requires fiduciaries to use care in the exercise of their duties while charging reasonable fees and costs to fulfill their responsibilities.9 Three additional fiduciary responsibilities include:10 ▯ Using the care, skill, and diligence that a prudent person would use under similar circumstances. ▯ Diversifying plan investments to minimize the risk of large losses. ▯ Acting according to the plan document, as long as it is consistent with ERISA. Part 5: Administration and Enforcement Three federal government agencies share responsibility for the administration and enforcement of ERISA provisions: the U.S. Department of Labor, the Internal Revenue Service (IRS), and the Pension Benefit Guarantee Corporation (PBGC). Title III of ERISA empowers the U.S. Department of Labor and the IRS to administer and enforce specific sections of this act. Title IV established the PBGC. Part 6: Continuation Coverage and Additional Standards for Group Health Plans The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) amended ERISA by providing employees and beneficiaries the right to elect continuation mar12281_ch03_061-088.indd 72 12/8/16 6:54 AM Chapter 3 Regulating Employee Benefits 73 coverage under group health plans if they would lose coverage due to a qualifying event. COBRA and such concepts as qualifying events are reviewed later in this chapter. Part 7: Group Health Plan Portability, Access, and Renewability Requirements The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is another amendment. HIPAA imposes requirements on group health and health insurance issuers relating to portability, increased access by limiting preexisting limitation rules, renewability, and health-care privacy. HIPAA is reviewed later in this chapter. Title II: Amendments to the Internal Revenue Code Relating to Retirement Plans Title II amends the IRC relating to the tax treatment of pension and welfare benefits plans. Benefits professionals often describe the interplay between ERISA and the IRC as the “carrot and the stick.” The IRC provides the carrot, or incentive, for employers to establish employee-benefits plans by granting favorable tax treatment. ERISA serves as the stick, or deterrent to possible illegal employer treatment, by providing legal remedies to employees and beneficiaries. Some of these amendments mirror the following Title I provisions: participation, vesting, and minimum funding standards. Additional amendments pertain to nondiscrimination of coverage requirements (Chapter 4, for the treatment of employer-sponsored retirement plans), contribution and benefits limits to company-sponsored retirement plans (Chapter 4), and Individual Retirement Accounts and Keogh Plans for self-employed persons. The first two amendments are reviewed later in the relevant chapters. The third amendment falls outside the scope of employer sponsored plans. Title III: Jurisdiction, Administration, Enforcement, Joint Pension Task Force, and Other Issues Title III of ERISA grants power to the U.S. Department of Labor for administering and enforcing Title I of ERISA: reporting and disclosure requirements and fiduciary responsibility. The U.S. Department of Labor’s Employee Benefits Security Administration, an agency of the department, possesses responsibility for enforcing Title I. The Employee Benefits Security Administration enforces ERISA by conducting investigations through its 10 regional offices and five district offices located in major cities throughout the country. These field offices conduct investigations to gather information and evaluate compliance with ERISA’s civil law requirements as well as criminal law provisions relating to employee-benefits plans. Title IV: Plan Termination Insurance Title IV established the Pension Benefit Guarantee Corporation (PBGC), which is a tax-exempt, self-financed corporation created to insure defined benefit pension plans. Its operations are financed by insurance premiums set by Congress and paid for by sponsors of defined benefit plans, investment income, assets from mar12281_ch03_061-088.indd 73 12/8/16 6:54 AM 74 Part One Introduction to Employee Benefits pension plans trusteed by the PBGC, and recovery of at least some money from the companies formerly responsible for the plans. The PBGC pays monthly retirement benefits, up to a guaranteed maximum. It is also responsible for providing the current and future pensions for those who have not yet retired. Since 1974, the PBGC has provided payments to about 1.5 million workers in 4,800 failed plans and, in 2015 alone, paid total benefits of approximately $5.7 billion. The PBGC currently insures about 27,500 private defined benefit pension plans covering more than 44 million American workers and retirees. Under the PBGC’s pension insurance programs, the administrators and plan sponsors have a number of reporting and administrative responsibilities. THE CONSOLIDATED OMNIBUS BUDGET RECONCILIATION ACT OF 1985 COBRA is a substantial amendment to ERISA, Title I (Part 6: Continuation Coverage and Additional Standards for Group Health Plans). Coverage COBRA applies to private-sector companies with at least 20 employees. However, ERISA does not apply to state or federal government employment.11 The U.S. Department of Labor enforces COBRA. Relevance to Group Health Plans Companies are required to permit qualified beneficiaries12 to elect continuation coverage under group health plans if they would lose coverage due to a qualifying event. A qualified beneficiary generally is an individual covered by a group health plan on the day before a qualifying event who is an employee, an employee’s spouse, or an employee’s dependent child. Qualifying events are certain events that would cause an individual to lose health coverage. In other words, an employee or his or her dependents may continue to receive employer-sponsored health insurance for a designated period of time. To fully understand COBRA, it is necessary to know the meanings of qualifying events, qualified beneficiaries, and continuation coverage. Qualifying events include the following: ▯ Death of the covered employee. ▯ Termination or reduction in hours of employment (other than by reason of misconduct). ▯ Divorce or legal separation. ▯ Dependent child ceasing to meet the health plan’s definition of a dependent child. ▯ Covered employee becoming eligible for Medicare benefits under the Social Security Act.13 mar12281_ch03_061-088.indd 74 12/8/16 6:54 AM Chapter 3 Regulating Employee Benefits 75 Qualified beneficiaries may be the covered employees themselves when the qualifying event is termination of employment (other than by reason of misconduct) or a reduction in work hours. The election period generally refers to the period that begins on or before the occurrence of the qualifying event, and it extends for at least 60 days. Beneficiaries are responsible for paying the insurance premium. Companies are permitted to charge COBRA beneficiaries a premium for continuation coverage of up to 102 percent of the cost of the coverage to the plan. The 2 percent markup reflects a charge for administering COBRA. Continuation coverage must be identical to coverage offered to active employees in terms of deductibles, coinsurance, plan options, and benefit limitations. For instance, an employer pays $250 per month per employee to provide health insurance protection. A qualified beneficiary would generally pay the monthly premium plus an additional 2 percent. In this case, that amount would be $255 =[$250 + (2% × $250)]. THE HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT OF 1996 The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a substantial amendment to ERISA, Title I (Part 7: Group Health Plan Portability, Access, and Renewability Requirements). This act contains three main provisions. The first provision ensures that employees (and their dependents) who leave their employer’s group health plan will have ready access to coverage under a subsequent employer’s health plan, regardless of their health or claims experience. The second provision limits the length of time that health plans and health plan issuers may impose preexisting conditions and identifies conditions to which no preexisting condition may apply. As we discuss in Chapter 5, preexisting health condition generally refers to a medical condition for which a diagnosis was made or treatment given prior to enrolling in a health-care plan. The third provision protects the transfer, disclosure, and use of health-care information. Coverage HIPAA applies to all employers offering group health plans. The U.S. Department of Health and Human Services enforces HIPAA. Availability and Portability HIPAA prohibits discrimination against individuals and beneficiaries based on health status and related factors. Specifically, health plans may not create rules that would limit eligibility for initial enrollment, terminate continued eligibility for currently covered employees and beneficiaries, or require higher premiums based on any of the reasons listed in Exhibit 3.4. Health-Care Privacy Effective February 2003, covered health-care entities must receive a patient’s consent for use and disclosure of health records.14 Covered care entities include health mar12281_ch03_061-088.indd 75 12/19/16 6:34 AM 76 Part One Introduction to Employee Benefits plans, health-care clearinghouses, and those health-care providers who conduct certain financial and administrative transactions (e.g., electronic billing). Also, employers may not make employment decisions based on health status unless they receive written employee consent. Before employers obtain written consent, they must fully disclose how and for what purpose the health information will be used. THE PENSION PROTECTION ACT OF 2006 The Pension Protection Act (PPA) was designed to strengthen employee rights and is an amendment to ERISA. The PPA focuses on bettering employee rights in at least two ways. The first consideration applies to defined benefit plans, and the second applies to defined contribution plans. First, this law should strengthen the financial condition of the PBGC, which is a self-financed corporation established by ERISA to insure private-sector defined benefit plans. Companies that offer defined benefit plans are required to pay an insurance premium to protect retirement income promised by these retirement plans. Companies that underfund these plans pay substantially higher costs for insurance protection because they are at greater risk for not having the funds to pay promised retirement benefits. The PPA aims to strengthen the PBGC financial condition by making it more difficult for companies to skip making premium payments. Finally, the PPA raises the amount that employers can contribute to pension funding with tax advantages, creating an additional incentive to adequately fund pension plans. Second, the PPA makes it easier for employees to participate in defined contribution plans. Millions of workers who are eligible to participate in their employers’ defined contribution plans do not contribute to them. There are a variety of reasons why employees choose not to participate; however, a prominent reason is that most individuals feel they do not have sufficient knowledge about how to choose investment options that will help them earn sufficient money for retirement. In addition, once employees make the decision to participate in these plans and have been making regular contributions, they are not likely to stop. With these issues in mind, the PPA enables companies to enroll their employees automatically in defined contribution plans and provides greater access to professional advice about investing for retirement. Finally, this act requires companies to offer multiple investment options to allow employees to select how much risk they are willing to bear. EXHIBIT 3.4 Prohibited Reasons for Limiting Participation in Group Health Plans under HIPAA Source: 29 C.F.R. §2590.702. ● Health status. ● Medical condition, including physical and mental illness. ● Claims experience. ● Receipt of health care. ● Medical history. ● Genetic information. ● Evidence of insurability (including conditions arising out of acts of domestic violence). ● Disability. mar12281_ch03_061-088.indd 76 12/8/16 6:54 AM Chapter 3 Regulating Employee Benefits 77 THE PATIENT PROTECTION AND AFFORDABLE CARE ACT OF 2010 The Patient Protection and Affordable Care Act of 2010 (PPACA or ACA) mandates health-care coverage and sets minimum standards for health-care plans. The goal of so-called health-care reform was to reduce the number of uninsured U.S. residents by 32 million by 2016.15 The U.S. Congressional Budget Office estimates that the cost of health-care reform over the next 10 years will cost approximately $971 billion through the year 2019,16 which will be paid by individual taxpayers and companies. Individuals who can afford to purchase health coverage must do so either by participating in an employer-sponsored plan or by purchasing health coverage independently. Companies with at least 50 employees are required to offer affordable health insurance under the law to full-time employees. These requirements are known as the individual mandate and employer mandate, respectively. We discuss the PPACA in detail within Chapter 5 (employer-sponsored health care) because many of the law’s provisions are closely intertwined with design elements of health-care plans. EQUAL EMPLOYMENT OPPORTUNITY LAWS Several federal equal employment opportunity laws prohibit illegal discrimination against protected classes of individuals regarding all employment practices, including employee benefits. The Equal Employment Opportunity Commission (EEOC), a federal government agency, oversees the enforcement of these laws. Job applicants and employees file claims with the EEOC if they have reason to believe that they were discriminated against on the basis of race, color, sex, religion, national origin, age, or disability, or believe that they have been discriminated against because of opposition to a prohibited practice or participation in an equal employment opportunity matter. The EEOC provides a number of services to employers, including training sessions and policy manuals, that help them comply with the following laws: ▯ The Equal Pay Act of 1963. ▯ Title VII of the Civil Rights Act of 1964. ▯ The Age Discrimination in Employment Act of 1967. ▯ The Pregnancy Discrimination Act of 1978. ▯ The Americans with Disabilities Act of 1990. ▯ The Civil Rights Act of 1991. ▯ The Genetic Information Nondiscrimination Act of 2008. The scope of coverage varies somewhat for each law. Specific coverage requirements are stated below for each law. The Equal Pay Act of 1963 Congress enacted the Equal Pay Act of 1963 to remedy a serious problem of employment discrimination in private industry: “Many segments of American mar12281_ch03_061-088.indd 77 12/8/16 6:54 AM 78 Part One Introduction to Employee Benefits industry have been based on an ancient but outmoded belief that a man, because of his role in society, should be paid more than a woman even though his duties are the same.”17 Coverage The Equal Pay Act applies to the same organizations as does the FLSA. The U.S. Department of Labor enforces the FLSA. Relevance to Employee-Benefits Practices The Equal Pay Act of 1963 is based on a simple principle. Men and women should receive equal pay for performing equal work. Specifically: No employer . . . shall discriminate within any establishment in which such employees are employed, between employees on the basis of sex by paying wages to employees in such establishment at a rate less than the rate at which he pays wages to employees of the opposite sex . . . for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions, except where such payment is made pursuant to (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex.18 The definition of wages in the Equal Pay Act encompasses employee benefits. The EEOC defined wages to include all payments made to, or on behalf of, an employee as compensation for employment. Thus, employers must provide equal employee benefits to male and female employees who perform equal work, along with their beneficiaries, regardless of cost differences. The Equal Pay Act of 1963 pertains explicitly to jobs of equal worth. Companies assign pay rates to jobs according to the levels of skill, effort, responsibility, and working conditions. Skill, effort, responsibility, and working conditions represent compensable factors. Exhibit 3.5 lists the U.S. Department of Labor’s definitions of these compensable factors. EXHIBIT 3.5 U.S. Department of Labor’s Definitions of Skill, Effort, Responsibility, and Working Conditions Source: U.S. Department of Labor, Equal Pay for Equal Work under the Fair Labor Standards Act. Dec. 31, 1971. Skill Experience, training, education, and ability as measured by the performance requirements of a job. Effort Mental or physical. The amount of effort expended in the performance of the job. Responsibility Working Conditions The degree of accountability required in the performance of a job. The physical surroundings and hazards of a job, including dimensions such as inside versus outside work, heat, cold, and poor ventilation. mar12281_ch03_061-088.indd 78 12/8/16 6:54 AM Chapter 3 Regulating Employee Benefits 79 Title VII of the Civil Rights Act of 1964 Title VII of the Civil Rights Act of 1964 prohibits illegal discrimination against protected-class individuals in employment. The Civil Rights Act grew out of broader social unrest among underrepresented minorities who spoke out against their unfair treatment throughout society. For example, prior to Title VII, employers could legally refuse to hire highly qualified individuals simply on the basis of race, color, religion, sex, or national origin. Coverage Title VII protects employees who work for all private-sector employers; local, state, and federal governments; and educational institutions that employ 15 or more individuals. Title VII also applies to private and public employment agencies, labor organizations, and joint labor management committees controlling apprenticeship and training. The EEOC enforces Title VII. Relevance to Employee-Benefits Practices Title VII provides for the following: It shall be an unlawful employment practice for an employer—(1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation including employee benefits [emphasis added], terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin; or (2) to limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s race, color, religion, sex, or national origin.19 The Age Discrimination in Employment Act of 1967 The Age Discrimination in Employment Act of 1967 (ADEA) prohibits illegal discrimination in employment on the basis of age. The ADEA specifies that it is unlawful for an employer: (1) to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s age; (2) to limit, segregate or classify his employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s age; or (3) to reduce the wage rate of any employee in order to comply with this Act.20 Coverage The ADEA applies to all private-sector employers with 20 or more employees; state and local governments, with some exceptions; employment agencies serving covered employers; and labor unions with 25 or more members. The EEOC enforces the ADEA. mar12281_ch03_061-088.indd 79 12/8/16 6:54 AM 80 Part One Introduction to Employee Benefits Relevance to Employee-Benefits Practices The ADEA makes specific reference to employee benefits. It also sets limits on the development and implementation of employer “early retirement” practices, which many companies use to reduce the size of the workforce. Most early retirement programs are offered to employees who are at least 55 years of age. These early retirement programs are permissible when companies offer them to employees on a voluntary basis. Forcing early retirement upon older workers represents age discrimination.21 The Older Workers Benefit Protection Act (OWBPA)22—the 1990 amendment to the ADEA—placed additional restrictions on employer-benefits practices. When employers require that all employees contribute toward coverage of benefits, under particular circumstances, they can also require older employees to pay more for health-care, disability, or life insurance than younger employees. This is the case because these benefits generally become more costly with age (e.g., older workers may be more likely to incur serious illnesses, thus insurance companies may charge employers higher rates to provide coverage for older workers than younger ones). However, an older employee may not be required to pay more for the benefit as a condition of employment. Where the premium has increased for an older employee, the employer must provide three options to older workers. First, the employee has the option of withdrawing from the benefit plan altogether. Second, the employee has the option of reducing his or her benefit coverage in order to keep his or her premium cost the same. Third, an older employee may be offered the option of paying more for the benefit in order to avoid otherwise justified reductions in coverage. Employers can legally reduce the coverage of older workers for benefits that typically become more costly as employees further age only if the costs for providing those benefits are significantly greater than the cost for younger workers. When costs differ significantly, the employer may reduce the benefit for older workers only to the point where it is paying just as much per older worker (with lower coverage) as it is for younger workers (with higher coverage). This practice is referred to as the equal benefit or equal cost principle. The Pregnancy Discrimination Act of 1978 The Pregnancy Discrimination Act of 1978 (PDA) is an amendment to Title VII of the Civil Rights Act of 1964. The PDA prohibits discrimination against pregnant women in all employment practices. Congress enacted the Pregnancy Discrimination Act because various court rulings revealed that adverse treatment of pregnant women did not violate the “sex” provision of Title VII. In Nashville Gas Co. v. Satty,23 the court held that excluding benefits for pregnant women from the company’s disability plan did not violate Title VII. Its decision was based on the following rationale: Both men and women who were not pregnant benefited from the company’s disability plan, and there was no reason to believe that men received more benefits than women. Coverage The Pregnancy Discrimination Act applies to the same organizations as does Title VII of the Civil Rights Act. The EEOC enforces this act. mar12281_ch03_061-088.indd 80 12/8/16 6:54 AM Chapter 3 Regulating Employee Benefits 81 Relevance to Employee-Benefits Practices Employers must not treat pregnancy less favorably than other conditions covered under employee-benefits plans, including health insurance and disability insurance. For example, an employer that allows temporarily disabled employees to take disability leave or leave without pay must allow an employee who is temporarily disabled due to pregnancy to do the same. The PDA protects the rights of women who take leave for pregnancy-related reasons. Protected rights include credit for previous service, accrued retirement benefits, and accumulated seniority. The Americans with Disabilities Act of 1990 The EEOC ruled that employers must offer benefits to workers with disabilities on the same basis as those offered for nondisabled employees. To rectify abuses to the disabled, Congress passed the Americans with Disabilities Act (ADA) in 1990. In particular, employers are required to provide the same health-care coverage to employees regardless of disability status. Also, an employer may not fire or refuse to hire a person with a disability or any qualified person with a family member who is disabled or dependent with a disability either because the health insurance policy does not cover the disability or because the costs of insurance coverage would increase. Finally, retirement plans cannot impose different requirements on employees with disabilities, such as longer vesting periods. On September 25, 2008, President George W. Bush signed the Americans with Disabilities Act Amendments Act of 2008 (ADAAA), making important changes to the definition of the term disability. These changes make it easier for an individual seeking protection under the ADA to establish that he or she has a disability. According to the EEOC, Congress found that persons with many types of impairments—including epilepsy, diabetes, multiple sclerosis, major depression, and bipolar disorder—had been unable to bring ADA claims because they were found not to meet the ADA’s definition of disability. Yet Congress thought that individuals with these and other impairments should be covered. The ADAAA explicitly rejected certain Supreme Court interpretations of the term disability and a portion of the EEOC regulations that it found had inappropriately narrowed the definition of disability. Coverage The ADA applies to the same organizations as does Title VII of the Civil Rights Act. The EEOC enforces the ADA. Relevance to Employee Benefits Lawsuits alleging ADA violations have been extremely complex, particularly regarding benefits. For example, an employee could claim under the ADA that he or she is a qualified individual with a disability and simultaneously apply for disability benefits. These claims appear to be contradictory. On one hand, the employee is mar12281_ch03_061-088.indd 81 12/8/16 6:54 AM 82 Part One Introduction to Employee Benefits capable of working with reasonable accommodation. On the other hand, the same employee’s application for disability benefits indicates otherwise. For example, Giles injured his back while performing his job as a machinist at General Electric (GE). Eventually, he required surgery. Following surgery and a convalescent period, Giles’s surgeon gave medical clearance for him to return to work, subject to a permanent lifting restriction of 50 pounds and a “medium physical demand level.” These restrictions prohibited Giles from performing his work as a machinist, which led GE to terminate his employment. Giles received company-sponsored long-term disability benefits. After exhausting these disability benefits, Giles wanted to return to work at GE. He asked GE to make reasonable accommodation for his disability; such accommodation would make him a qualified individual with a disability. At the same time, Giles applied for disability benefits under the Social Security program. GE refused to make reasonable accommodation to support his application for Social Security benefits. Giles pursued a lawsuit claiming that GE violated the ADA, and he won the suit. GE appealed the decision to the U.S. Court of Appeals for the Fifth District. In Giles v. General Electric Co., the appellate court upheld the lower court’s decision to award Giles $590,000 for damages, front pay, and attorneys’ fees.24 The Court of Appeals reasoned that the application for Social Security benefits did not contradict Giles’s claim that he could work with reasonable accommodation. These benefits would have been denied if GE had reinstated Giles. The Civil Rights Act of 1991 Congress enacted the Civil Rights Act of 1991 to overturn several Supreme Court rulings that limited employee rights. Perhaps most noteworthy is the reversal of Atonio v. Wards Cove Packing Company.25 The Supreme Court ruled that the plaintiffs (employees) must indicate which employment practices were discriminatory and demonstrate how so. Since the passage of the Civil Rights Act of 1991, employers must show that the challenged employment practice is a business necessity. Business necessity is a legally acceptable defense against charges of alleged discriminatory employment practices under Title VII and the Civil Rights Act of 1991. Under the business necessity defense, an employer must prove that the suspect practice prevented irreparable financial damage to the company. Coverage The Civil Rights Act of 1991 provides coverage to the same groups protected under the Civil Rights Act of 1964. The 1991 act also extends coverage to Senate employees and political appointees of the federal government’s executive branch. The EEOC enforces this act. Relevance to Employee-Benefits Practices Waiting periods based on seniority influence who is eligible to receive benefits. Also, as discussed throughout this book, employers increase the level of benefits based on seniority. For example, employees earn more annual vacation days as mar12281_ch03_061-088.indd 82 12/8/16 6:54 AM Chapter 3 Regulating Employee Benefits 83 their length of service increases. The Civil Rights Act of 1991 overturned the Supreme Court’s decision in Lorance v. AT&T Technologies,26 which allowed employees to challenge the use of seniority systems only within 180 days from the system’s implementation date. Now, employees may file suits claiming discrimination either when the system is implemented or whenever the system negatively affects them. The Genetic Information Nondiscrimination Act of 2008 The Genetic Information Nondiscrimination Act of 2008 (GINA) protects job applicants, current and former employees, labor union members, and apprentices and trainees from discrimination by making unlawful the misuse of genetic information to discriminate in health care and employment. GINA contains two titles, which went into effect on November 21, 2009. Title I of GINA applies to employer-sponsored group health plans. This title generally prohibits discrimination in group premiums based on genetic information and the use of genetic information as a basis for determining eligibility or setting health-care premiums. Title II of GINA prohibits the use of genetic information in the employment setting, restricts the deliberate acquisition of genetic information by employers and others covered by Title II, and strictly limits them from disclosing genetic information. The law incorporates many of the definitions, remedies, and procedures from Title VII and other statutes protecting federal, state, and congressional employees from discrimination. Coverage Title II applies to private and state and local government employers with 15 or more employees, employment agencies, labor unions, and joint labor–management training programs. It also covers Congress and federal executive branch agencies such as the U.S. Department of Labor. Relevance to Employee Benefits GINA was enacted because of developments in the field of genetics, the decoding of the human genome, and advances in the field of genomic medicine. Genetic tests now exist that can inform individuals whether they may be at risk for developing a specific disease or disorder. As a result, people have concerns about whether they may be at risk of losing access to health coverage or employment if insurers or employers have their genetic information. The EEOC enforces GINA.