HR Regulatory Update

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Paycheck Fairness Act

On the first anniversary of the Lilly Ledbetter Fair Pay Act, Congresswoman Rosa DeLauro and Senator Chris Dodd celebrated by calling for Congressional action on the Paycheck Fairness Act (PFA) (S 182).

This Act would amend the Equal Pay Act (EPA) provisions of the Fair Labor Standards Act to prohibit retaliation against employees for sharing salary information with co-workers, allow prevailing plaintiffs to recover compensatory and punitive damages in EPA cases, and facilitate the filing of class actions lawsuits under the EPA.

Perhaps more significantly, the PFA would make it easier for complaining employees to establish a pay discrimination claim. Currently, an employer can defend a pay discrimination claim under the EPA by showing that a differential in pay is based on any factor other than sex. Thus, for example, if an employer pays a male employee more than a female employee who performs the same job, the employer can defend this difference by showing that it is based on a factor other than sex, such as because the male employee has a college degree and the female employee does not.

Senator Dodd called the Ledbetter Act a "first step" towards ensuring that men and women are treated equally in the workplace. Further, Senator Dodd stated, "Where the Lilly Ledbetter Fair Pay Act was designed to ensure that women have a right to hold their employers accountable for gender discrimination in wages, the Paycheck Fairness Act seeks to ensure that they won't have to."

The House combined this Act with the Lilly Ledbetter Fair Pay Act and sent it to the Senate; however, it was not included in the final version of that Act. The PFA was scheduled for a hearing before the Senate Health, Education, Labor, and Pensions (HELP) Committee on February 4; however, the hearing has been postponed.

Interim Final Regulations for the Mental Health Parity Act

Interim final regulations for the Mental Health Parity Act have been released. The final rules will go into effect on April 5, 2010 and will be applicable to health plan years that begin on or after July 1, 2010.

The Mental Health Parity Act does not require health plans to cover treatment for substance abuse or mental illness, but requires that plans which do include such benefits treat these conditions on par with other illnesses. This means that group health plans may not impose higher deductibles or caps on hospital room stays for mental health or substance abuse treatment. Nor can they impose more stringent preauthorization requirements for such treatment.

The interim final rules affect benefits in six categories: inpatient in-network; inpatient out-of-network; outpatient in-network; outpatient out-of-network; emergency care; and prescription drugs. The rules specify that if a group health plan provides coverage for substance abuse and/or mental health services in any one or more of these six categories, it must be on par with the medical and surgical benefits offered in that category.

The Mental Health Parity Act applies to both public and private group plans with 50 or more employees. It also applies to Medicaid managed-care plans, but the interim final rules do not cover Medicaid.