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We routinely tell clients with fewer than twenty employees that they do not have to provide COBRA coverage to terminated employees.  Effective July 10, 2009, this will no longer be true for those small employers who provide healthcare coverage for their employees.  On that date, Pennsylvania's "Mini-COBRA" Law will require those employers to provide COBRA coverage to employees and their participating dependents who experience a "qualifying event," such as termination or a reduction in hours.  The coverage will continue for nine months after termination, but the terminated employee can continue the coverage under certain circumstances.  Mini-COBRA will require small employers to provide notice to employees that the coverage exists, and notice upon termination of the availability of the coverage.  Employers could charge the terminated employee 105% of the premium for Mini-COBRA coverage, subject to the subsidy created by the American Recovery and Reinvestment Act ("ARRA").
 
The ARRA subsidy requires employers to help terminated employees defray the cost of healthcare.  If an employee loses coverage under a health plan between September 1, 2008 and December 31, 2009 as a result of the employee's involuntary termination of employment, and elects Mini-COBRA continuation coverage, the employee will pay not more than 35% of the full premium for up to nine months.  The employer must provide the remaining 65% of the premium for a period of nine months, or until the employee obtains other coverage.  The employer is entitled to a tax credit as a result of these payments.
 
By July 10, 2009, small employers in Pennsylvania should work with their health insurance providers to assure that Mini-COBRA coverage will be available to eligible employees.  Antheil Maslow & MacMinn, LLP can provide guidance for employers to ensure compliance, and to prepare the notices required by the law. 

mike-revnate.jpgMike Mills, a Partner of the Firm, published an article in the Spring 2009 Pennsylvania CPA Journal reviewing sophisticated federal estate tax planning strategies.  To read the full article:

No Better Time for GRATs & IDGTs

Have you been losing sleep, worrying about complying with the new Red Flags Rule? We have good news (and another Client Alert) for you.  Moments after we sent our Client Alert last week, the Federal Trade Commission (FTC) issued an eleventh hour stay of enforcement.  The deadline for complying with the Red Flags Rule is now August 1, 2009. 

In recognition of the ongoing debate over the new rule, the FTC decided to give financial institutions and other creditors additional time to develop and implement written identity theft prevention programs.  The FTC also wanted to give Congress more time to consider the scope and impact of the rule.  As we discussed in our Client Alert, the Red Flags Rule is intended to combat fraud and identity theft by requiring most businesses, health care providers and other organizations that allow payment over time to implement policies to detect the warning signs (red flags) of identity theft.  These policies include a written identity theft prevention protocol.  The FTC also announced that it will publish a template for “low-risk” businesses, such as businesses that know their customers personally. 

If you have any questions or would like assistance with preparing an identity theft prevention policy, please contact your primary attorney at the firm.  If you are not presently represented by us, please contact Susan Maslow, Patricia Collins or Joanne Murray at (215) 230-7500.

 

By now, you have no doubt heard of the new Red Flags Rule, which are intended to combat fraud and identity theft.  Most businesses, health care providers and other organizations that allow payment over time will be required to implement policies to detect the warning signs (red flags) of identity theft.  These policies include a written identity theft prevention protocol.  We’re taking this opportunity to remind you that these new rules go into effect May 1, 2009.  The Federal Trade Commission offers excellent guidance on these new rules:

For healthcare providers: http://www.ftc.gov/bcp/edu/pubs/articles/art11.shtm

For other businesses and organizations:  http://www.ftc.gov/bcp/edu/pubs/articles/art10.shtm

All covered entities might find this FTC guide of interest: http://www.ftc.gov/bcp/edu/pubs/business/idtheft/bus23.pdf

If you have any questions or would like assistance with preparing an identity theft prevention policy, please contact your primary attorney at the firm.  If you are not presently represented by us, please contact Susan Maslow, Patricia Collins or Joanne Murray at (215) 230-7500.

 

 

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Susan A. Maslow, a Partner of the Firm, will serve as a panel member in the CBCC program “Succeeding in the New Economy: An Economic Summit” and will offer her perspective and general counsel as a business lawyer. 

This event will take place on the campus of Delaware Valley College  on Tuesday May 19th from 8:30 a.m to 1:00 p.m.   Ms. Maslow will serve with a panel of experts representing the local and regional business and government sector.

macminn_09.jpgWilliam T. MacMinn, a Partner of the firm, presented a program to physicians at Franford Hospital concerning issues of Professional Liability on April 23, 2009.

Bill concentrates his practice in the area of litigation, including Commercial Litigation, Personal Injury, Products Liability, Employment Litigation, Estate Litigation, Real Estate, and Arbitration. He represents a broad spectrum of individuals, corporations and institutions in commercial, employment litigation, collection, construction and personal injury actions.

collins_17.jpgAssociate Patricia C. Collins co-presented to 40 members of the Women’s Business Forum of Bucks County on March 4, 2009 regarding Employment Law & Independent Contractor Agreements.  Collins provided a general overview of employment best practices as well as highlighted interview questions to avoid. 

Patty’s knowledge of employment law includes the Employee Retirement Income Security Act; federal and state employment discrimination laws, and employment contracts and wage claims. Patty is frequently invited to speak to employers about employment law, and provides training for their employees.

 In December 2008, we issued a Client Alert summarizing the Consumer Product Safety Improvement Act of 2008 (the “CPSIA”) and the numerous regulations issued by the Consumer Product Safety Commission (the “CPSC”) interpreting that legislation. Since the enactment of the CPSIA and the issuance of those regulations, there has been much confusion in the various affected industries as to what actions are required by the legislation and concern over the impact of the new rules on businesses, particularly small businesses. Indeed, many businesses in the toy industry referred to February 10,2009 (the date the regulations were to have taken effect) as “National Bankruptcy Day” because of the profound impact the regulations were expected to have on small businesses. 

  Important New Rules for Consumer Product Manufacturers and Importers

 

            Earlier this year, in response to the dramatic increase in the number of unsafe consumer products, particularly toys, in the U.S. marketplace, Congress passed the Consumer Product Safety Improvement Act of 2008 (the “CPSIA”).  The CPSIA has a sweeping impact on manufacturers and importers of consumer products.  As required by the CPSIA, the Consumer Product Safety Commission (the “Commission”) quickly issued regulations interpreting the new legislation as it is intended to apply to all consumer products and to the subcategory of children’s products, with the promise of more regulations to come.


 

 All Products

             The new legislation requires manufacturers and/or importers to certify, based on a test of the product or a reasonable testing program, that the product complies with all applicable rules, bans, standards or regulations under the Consumer Product Safety Act (the “CPSA”) or any other law that is enforced by the Commission.  This certificate is generally referred to as a “general conformity certificate.”  These rules went into effect on November 12, 2008.   

While certification was required under the CPSA prior to the new legislation, the scope of the certification has been broadened to include other laws.  As a result, the certification is now required for many more consumer products.

 

Initially, there was confusion as to which parties were responsible for issuing the certificate: manufacturers, importers and/or private labelers.  The Commission recently issued a clarification: (i) for imported products, only the importer needs to issue the certificate; and (ii) for products manufactured in the United States, only the domestic manufacturer is required to issue the certificate (i.e., private labelers are not required to issue certificates).

 

The product testing may be done by the manufacturer itself, or the manufacturer may elect to have an independent third party laboratory test the product.  Although it is an added cost, one advantage of having an outside lab test the product is the potential defense it affords the manufacturer from product liability claims. 

 

            There are specific content and delivery requirements for the certificates.  The penalties for failing to supply an adequate certificate upon request by the Commission or the Customs and Border Patrol are quite harsh.  In addition to other civil and criminal penalties, the manufacturer risks that all products in the shipment will be destroyed.

 

            The CPSIA also includes a new, lower lead in paint limit that applies to all products.  This limit, currently at 600 ppm, will be reduced to 90 ppm on August 14, 2009.


 

 Children’s Products            

Required Third Party Testing
 

The CPSIA requires that all children’s products that are subject to a children’s product safety rule must now be tested by an independent third party laboratory accredited by the Commission to assure compliance with applicable safety rules.  “Children’s products” are generally products that are designed or intended primarily for children age 12 and younger.  A list of accredited labs may be found on the Commission’s website.  The law does permit the establishment of manufacturer in-house testing laboratories, but imposes stringent requirements on those laboratories (which are called “firewalled labs”). 

 

            The effective date for this new third party testing requirement varies with the applicable safety rule.  The following is the schedule published by the Commission: 

 

Product Rule

Third Party Testing Required

Lead Paint

December 22, 2008

Lead Content – 600 ppm

February 10, 2009

Cribs and Pacifiers

January 2009

Small Parts

February 2009

Children’s Metal Jewelry

March 2009

Baby Bouncers, Walkers and Jumpers

June 2009

Lead Content – 300 ppm

August 2009

Children’s Product Safety Rules

September 2009

 

   Other Requirements 

 

            The CPSIA imposes a variety of other requirements in relation to children’s products, among them the following:

 

Ø      The acceptable lead level in children’s products has been significantly reduced.  New limits will be phased in over the next three years.  The first new limit takes effect on February 10, 2009 and reduces the acceptable amount of lead in children’s products to 600 ppm.  The Commission’s general counsel has issued an opinion that this requirement applies retroactively to products manufactured prior to February 10 and in inventory on February 10.  Not surprisingly, this opinion has generated a great deal of controversy and objection in the manufacturing community but as it stands, it reflects the likely enforcement position of the Commission.

 

Ø      The CPSIA requires the Commission to study and develop safety standards for infant and toddler products, such as cribs (including portable cribs, play pens and cribs used in hotels and child care facilities), toddler beds, high chairs, booster chairs, bath seats, gates and play yards, infant carriers, strollers, swings, and walkers.  While Congress gave the Commission some latitude in prioritizing its work, it directed the Commission to begin issuing the new regulations in August, 2009 and to continue to issue regulations at the pace of at least two per year. 

 

Ø      In August 2009, the Commission is also required to issue a new regulation mandating the use of postage-prepaid product registration cards, to be used in connection with product recalls and similar notifications.

 

Ø      The new law also requires manufacturers to affix a tracking label or permanent mark on all children’s products that identifies the source of the product, the date of manufacture and batch number.  Note that this new provision applies to children’s clothing and shoes in addition to toys and other children’s products.  This requirement will go into effect on August 14, 2009. 

 

Ø      The packaging for certain toys and games intended for use by children must contain a cautionary statement regarding choking hazards.  Further, if a product is required to carry this cautionary statement, all advertisements (including websites and catalogs) relating to the product must also contain the same cautionary statement.  The effective date of this requirement for website content is December 12, 2008; the effective date for printed materials (including catalogs) is February 10, 2009.

 

Ø      The CPSIA also prohibits the sale or distribution of any children’s toy or child care articles that contain certain levels of specified phthalates.  The Commission is directed to issue an interim rule governing phthalates on or before February 14, 2009.  Further regulation is contemplated, and the Commission will establish a Chronic Hazard Advisory Panel to study the effect of phthalates on children’s health.

 

           

If you have any questions regarding the new legislation, please feel free to contact Joanne M. Murray, Esq. of AMM at jmurray@ammlaw.com or (215) 230-7500 ext. 15.

 

NEW COBRA COVERAGE RULES IMPOSE ADDITIONAL FINANCIAL AND ADMINISTRATIVE  BURDENS ON EMPLOYERS

 The Consolidated Omnibus Budget Reconciliation Act (“COBRA”) requires employers who employ twenty or more employees to allow terminated employees to elect continuation coverage.  The coverage will continue for eighteen months after termination, but the terminated employee can continue the coverage under certain circumstances.  COBRA requires employers to provide notice to employees that the coverage exists, and notice upon termination of the availability of the coverage.  Previously, employers could charge the terminated employee 102% of the premium for COBRA coverage. As a result of the American Recovery and Reinvestment Act (the “Act”), employers may now be required to help terminated employees defray the cost of healthcare.