Unlimited Vacation – Good Idea? or Too Many Headaches?

Posted on April 25th, 2019

Who wouldn’t want unlimited vacation time? Here are a few advantages, as well as pitfalls.

Who wouldn’t want unlimited vacation? Employees like it because they gain more time to relax and can come back to the office refreshed and ready to work.

Employers, like you, can benefit, too. Oftentimes you can save money by not paying employees for unused vacation days. The Financial Times reported in 2017 that a big firm can save millions of dollars’ in unused leave it otherwise would pay to departing employees.

Some companies — particularly start-ups, tech companies or nonprofits — offer unlimited vacation to entice talented job candidates or offset low salaries. It’s also considered a perk for executive-level or exempt employees. The benefit cannot be offered to nonexempt employees, though, because their paid time is governed by wage and hour laws.

Of course, as with any great idea, there are pitfalls. Here are downsides you should know if you decide to offer unlimited vacation to your employees.

The Downside

One problem with offering unlimited vacation is employees often take less time off than employees who have a set number of vacation days. One reason is that many companies have a “use it or lose it” policy which encourages employees to use time off. The 2017 HR Mythbusters report by HR software company Namely found that employees who were eligible for unlimited vacation took off an average 13 days a year, while those with capped vacation days took about 15 days off. Many employees with unlimited time off felt guilty taking a vacation, particularly if they worked for a company with a workaholic culture.

Another negative consequence is that some states, such as Illinois, require employers to log employees’ work hours as well as vacation or paid time off (PTO) accruals and usage. Companies that don’t keep track of days off may argue that the state requirement doesn’t apply since employees cannot accrue guaranteed vacation time. The Illinois Department of Labor disagrees. The Department says all employers “must pay an employee who separates from employment a monetary equivalent equal to the amount of vacation pay to which the employee would otherwise have been allowed to take during that year but had not taken.” With unlimited vacation, how would employers know how many days the employee meant to take, but didn’t? Should employers take employees’ word or use an average of the days used by all employees or by specific employees? It can get complicated.

Unlimited vacation and PTO policies also create issues when trying to follow Family and Medical Leave Act (FMLA) rules. Federal law requires that employers allow available paid leave to run concurrently with an employees’ FMLA leave. If a policy simply provides for unlimited PTO, with no cap, that might mean that an employee’s entire 12-week FMLA leave must be paid. But, with a time off cap, paid leave would be limited to the time the employee had not yet used.


There are a number of actions you can take to ensure that an unlimited leave policy is a true benefit for you and your employees:


•    Talk to your legal counsel about managing the transition from fixed PTO in a way that does not violate your state and local wage laws. For example, if you are in a jurisdiction requiring you to provide a certain number of days of paid sick leave, consider adding language to your policy to make it clear that employees will be provided with the required number of paid sick days.

•    Make sure the new rules also coordinate with paid parental leave or short-term disability policies.

•    Establish rules to ensure that unlimited vacation doesn’t hurt your company’s operation. For instance, you can limit consecutive days off or require employees to get management approval for time off.

•    Even though you offer unlimited time off, you should continue to monitor your employees’ vacation and sick days and their reasons for absences. You will be in compliance if your state requires it, moreover you will also have information you may need to defend yourself against certain claims.

•    Regularly review and update your policy to ensure you stay up to date with changes in the law. 

How Employer-Sponsored Dental Insurance Supports Employees’ Overall Health

Posted on April 12th, 2019

Employer-sponsored dental insurance can play an integral part in your employees’ health.

Regular dental exams detect issues before they become big problems. Dentists gain insight into patients’ overall health by looking at the health of the mouth, teeth and gums. In addition, dental problems also can affect overall health.

Mouths are full of bacteria. In a clean mouth, 1,000 to 100,000 bacteria live on each tooth surface. Daily brushing and flossing keeps bacteria levels down, but certain medications — such as decongestants, antihistamines, painkillers, diuretics and antidepressants — can reduce saliva flow. Saliva is important because it washes away food and neutralizes acids produced by bacteria in the mouth that might lead to disease. Those who do not clean their mouths regularly could be looking at serious disease and decay.

While your employees can practice good oral hygiene as a way to avoid disease, the importance of regular dental checkups and cleanings cannot be overstated. This is where dental insurance can help. Dental policies generally cover two preventive visits annually and a portion of the costs for preventive care, fillings, crowns, root canals and oral surgery. Some plans also cover orthodontics, realigning teeth and jaws; periodontics, the structures that support and surround the tooth; and prosthodontics, fitting dental prostheses.


Diseases and Conditions Influenced by Poor Oral Health

Here are a few of the conditions that can be detected with regular exams.

•    Cardiovascular disease – While some researchers debate whether poor oral health can actually lead to heart disease, studies show that inflammation and infections caused by oral bacteria might be a factor in heart disease, clogged arteries and stroke.

•    Endocarditis – Endocarditis is an infection of the inner lining of the heart and occurs when bacteria or other germs from one part of the body, including the mouth, spread through your bloodstream and attach to damaged areas in the heart.

•    Glaucoma – Glaucoma occurs when normal fluid in the eye doesn’t drain properly. This creates pressure that damages the optic nerve, resulting in sight loss. Although there are a number of reasons why glaucoma occurs, including age, family history, racial background and medical conditions, such as diabetes, some researchers believe oral infections might trigger a series of events where the bacteria from an inflamed tooth or gums spreads to the optic nerve.

•    Periodontitis – Periodontitis is a severe form of gum disease and has been linked to premature birth and low birth weight, as well as increased risk for heart disease and diabetes.


Dental Insurance Options

Comprehensive health insurance benefits help small businesses attract top talent, and many employees expect it. According to the National Association of Dental Plans, about 50 percent of both small and large employers offer dental benefits.

Small businesses — those with 50 or fewer full-time equivalent employees — are not required to provide health care insurance coverage, including dental insurance. However, employees are increasingly depending on employers to provide health benefits.

The average cost of providing dental coverage for a small employer depends on the state and other factors. In California, for example, an employer pays $20 to $50 per person per month.

The American Dental Association estimates that individuals who do not have dental coverage pay approximately $370 per year out-of-pocket for annual exams, cleanings and X-rays.

If you are interested in providing dental insurance for your employees, here are some options:

•    Preferred Provider Organization (PPO) plans require members to see dentists who are in-network to get discounts. They often are able to choose an out-of-network dentist, but their out-of-pocket costs may be higher. This is the most common type of dental insurance and often is referred to as “100-80-50” coverage. That means that the plan covers up to 100 percent of fees for cleanings and normal preventive care and usually up to 80 percent of the costs for basic services, such as restorative care like fillings and simple procedures. Coverage includes up to 50 percent of dental fees for major procedures like crowns and reconstructive bridges.

•    Dental health maintenance organizations (DHMO) utilize a group of dental professionals who provide care for a more affordable premium.

•    Group dental plans are similar to a membership buyers’ club. For a small annual fee, members have access to a network of dentists offering reduced fees.

•    The Small Business Administration offers qualifying companies (25 or fewer full-time employees and average annual wages under $50,000) a small business tax credit when they pay 50 percent or more toward employees’ self-only health insurance premiums. While this discount does not apply to dental insurance, it may free up funds so employers may offer other benefits like Dental, Vision or Life insurance.


For information about providing dental for your employees, please contact us. 


Legal Alert: CMS Extends Transition Relief for Non-Compliant Plans through 2020

Posted on April 10th, 2019

Alert Summary from Danielle Capilla

Continuing its trend for the sixth year, the Centers for Medicare and Medicaid Services (CMS) has extended transitional relief to “grandmothered” health plans. Grandmothered plans are non-grandfathered plans in the small group and individual market, that CMS has allowed to continue renewing despite their non-compliance with certain ACA requirements, including community rating and providing essential health benefits.

Employers should remember that the CMS policy gives state Insurance Commissioners the options to allow renewal of these grandmothered plans, and each state will make its own decisions about permitting these plans to renew. Historically, most states have permitted continued renewal of grandmothered plans. In 2019, 32 states permitted grandmothered plans.


On March 25, 2019, the Centers for Medicare & Medicaid Services (CMS) announced a one-year extension to the transition policy (originally announced November 14, 2013 and extended five times since) for individual and small group health plans that allows issuers to continue policies that do not meet ACA standards.  The transition policy has been extended to policy years beginning on or before October 1, 2020, provided that all policies end by December 31, 2020.  This means individuals and small businesses may be able to keep their non-ACA compliant coverage through the end of 2020, depending on the policy year.  Carriers may have the option to implement policy years that are shorter than 12 months or allow early renewals with a January 1, 2020 start date in order to take full advantage of the extension.


The Affordable Care Act (ACA) includes key reforms that create new coverage standards for health insurance policies. For example, the ACA imposes modified community rating standards and requires individual and small group policies to cover a comprehensive set of benefits.

Millions of Americans received notices in late 2013 informing them that their health insurance plans were being canceled because they did not comply with the ACA’s reforms. Responding to pressure from consumers and Congress, on Nov. 14, 2013, President Obama announced a transition relief policy for 2014 for non-grandfathered coverage in the small group and individual health insurance markets. If permitted by their states, the transition policy gives health insurance issuers the option of renewing current policies for current enrollees without adopting all of the ACA’s market reforms.

Transition Relief Policy

Under the original transitional policy, health insurance coverage in the individual or small group market that was renewed for a policy year starting between Jan. 1, 2014, and Oct. 1, 2014 (and associated group health plans of small businesses), will not be out of compliance with specified ACA reforms.  These plans are referred to as “grandmothered” plans.

To qualify for the transition relief, issuers must send a notice to all individuals and small businesses that received a cancellation or termination notice with respect to the coverage (or to all individuals and small businesses that would otherwise receive a cancellation or termination notice with respect to the coverage).

The transition relief only applies with respect to individuals and small businesses with coverage that was in effect since 2014. It does not apply with respect to individuals and small businesses that obtain new coverage after 2014. All new plans must comply with the full set of ACA reforms.

One-year Extension

According to CMS, the extension will ensure that consumers have multiple health insurance coverage options and states continue to have flexibility in their markets. Also, like the original transition relief, issuers that renew coverage under the extended transition relief must, for each policy year, provide a notice to affected individuals and small businesses.

Under the transition relief extension, at the option of the states, issuers that have issued policies under the transitional relief in 2014 may renew these policies at any time through October 1, 2020 and affected individuals and small businesses may choose to re-enroll in the coverage through October 1, 2020. Policies that are renewed under the extended transition relief are not considered to be out of compliance with the following ACA reforms:

  • community premium rating standards, so consumers might be charged more based on factors such as gender or a pre-existing medical condition, and it might not comply with rules limiting age banding (PHS Act section 2701);
  • guaranteed availability and renewability (PHS Act sections 2702 & 2703);
  • if the coverage is an individual market policy, the ban on preexisting medical conditions for adults, so it might exclude coverage for treatment of an adult’s pre-existing medical condition such as diabetes or cancer (PHS Act section 2704);
  • if the coverage is an individual market policy, discrimination based on health status, so consumers may have premium increases based on claims experience or receipt of health care (PHS Act section 2705);
  • coverage of essential health benefits or limit on annual out-of-pocket spending, so it might not cover benefits such as prescription drugs or maternity care, or might have unlimited cost-sharing (PHS Act section 2707); and
  • standards for participation in clinical trials, so consumers might not have coverage for services related to a clinical trial for a life-threatening or other serious disease (PHS Act section 2709).
About the Authors.  This alert was prepared by Marathas Barrow Weatherhead Lent LLP, a national law firm with recognized experts on the Affordable Care Act.  Contact Peter Marathas or Stacy Barrow at pmarathas@marbarlaw.com or sbarrow@marbarlaw.com.


The information provided in this alert is not, is not intended to be, and shall not be construed to be, either the provision of legal advice or an offer to provide legal services, nor does it necessarily reflect the opinions of the agency, our lawyers or our clients.  This is not legal advice.  No client-lawyer relationship between you and our lawyers is or may be created by your use of this information.  Rather, the content is intended as a general overview of the subject matter covered.  This agency and Marathas Barrow Weatherhead Lent LLP are not obligated to provide updates on the information presented herein.  Those reading this alert are encouraged to seek direct counsel on legal questions.

© 2019 Marathas Barrow Weatherhead Lent LLP.  All Rights Reserved.


Benefits of Green Construction

Posted on April 5th, 2019

  Siting and design efficiency –the goal is to minimize impact in terms of a building’s location and the surrounding environment.

  Energy efficiency –includes minimizing air leakage with high performance windows and insulation, reducing the need for natural light by maximizing solar gain with strategic placement of walls and windows, and implementing renewable energy sources through solar, wind and hydro power, and biomass. A related objective is to reduce the impact on the electrical grid by reducing peak demand and implementing sustainable energy features such as sufficient indoor thermal mass, good insulation, photovoltaic panels, thermal or electrical energy storage systems and smart building (home) energy management systems.

  Water efficiency –to the extent feasible, facilities should increase their dependence on water that is collected, used, purified, and reused on-site.

  Materials efficiency –building materials from “green” sources are preferred, such as recycled products, materials from certified forests and rapidly renewable plant materials like bamboo and straw.

  Indoor environmental and quality enhancement –Typically, most building materials and cleaning/maintenance products emit gases, some of them toxic, such as many VOCs (volatile organic compounds), including formaldehyde. One objective is to avoid these gases which can have a detrimental impact on occupants’ health, comfort, and productivity. Other objectives include improving a building’s thermal quality with improved airflow and personal temperature control and using hypo-allergenic building materials such as wood. 

Auto Insurance Policy Changes You Should Know About

Posted on April 5th, 2019

Including updates on flying cars, key fobs and pet injury coverage.

The language of the standard auto insurance policy used by most insurance companies was changed slightly last year. Here are some of the highlights of the changes that went into effect starting September 1, 2018. 

Of the ten principal changes we’ll mention here (out of a total of 30), five apply to the main policy and five are new endorsements made available.

1.   Newly acquired auto – Previously you did not need to notify your insurance company about a newly acquired auto, unless you wanted to include physical damage coverage. Now when you acquire a car, new or used, it must be reported to the insurance company within 14 days. Often there is a difference in premium with a new car even when it’s a replacement vehicle and the insurance companies want to calculate the appropriate premium.

2.   Public conveyance exclusion – Coverage for using your car as a “public or livery conveyance” was excluded in all circumstances, even when its use as such was on behalf of a volunteer or non-profit organization. Work as a volunteer or for a non-profit is now an exception.

3.   Racing exclusion – Use, ownership or maintenance of a vehicle inside a racing facility for any reason was excluded. There is now coverage if the owner is there participating in an educational skill development training course.

4.   Flying cars – Apparently, flying cars are coming soon. At least the Insurance Services Office (ISO), the organization that provides the wording for these policies, thinks so. The new language now makes it clear that your insurance policy applies strictly to terrestrial vehicles.

5.   Transportation expenses – Reimbursement for transportation expenses when a vehicle is damaged was previously $20 per day up to $600; it’s now $30 per day up to $900. The insured now has a duty to report statements of transportation expenses as often as reasonably required.


Optional endorsements:

6.   Key fob – Replacing a key fob costs about $200 and they’re a pain to lose. This endorsement pays reasonable expenses incurred to replace an insured’s key fob if lost or stolen for a covered car without applying a deductible.

7.   Pet injury coverage – When a pet in the front seat is injured in an accident, this endorsement will provide coverage for veterinary expenses. Coverage only applies if both collision and comprehensive damage are insured.

8.   Child restraint system – The National Highway Traffic Safety Administration recommends that car seats be replaced after every collision. This endorsement covers the expense.

9.   Replacement cost coverage – To qualify for replacement cost coverage, the auto must be added within 24 months of purchase, have less than 24,000 miles, be owned by the original owner and must be a total loss. The endorsement states that it will replace with the same make, model and trim level, but it does not specify the same year.

10. Additional Resident of Your Household Endorsement – This is an “additional insured” type of endorsement that amends the definition of “family member” to include a named resident, such as a nanny or domestic partner. The insured is required to notify the carrier if residency changes.

If you feel any of these changes pertain to you, please contact us to determine whether your insurance is affected, as many of the changes were not adopted in all states and by all insurance companies.

Legal Alert: New Court Ruling on Association Health Plans

Posted on April 1st, 2019

Association Health Plans allowed small businesses to band together for more affordable healthcare, and they have been a hot topic of late. After the Department of Labor under the Trump administration issued its final ruling on Association Health Plans (AHPs) last summer, several states took up issue with it. Specifically, eleven states and the District of Columbia sued the DOL, arguing that the broad availability of AHPs as outlined in the final rule goes against the consumer protections provided by the Affordable Care Act, and that the new regulation reflects a misinterpretation of the Employee Retirement Income Security Act of 1984 (ERISA).

On March 28, Federal Judge John Bates sided with these states and ruled to blocked components of the new AHP rule. Specifically, he stated that the provision allowing small business and the self-employed to buy health insurance on the large-group market was a clear “end run” around the ACA, and, therefore, illegal.

AHPs are not being subject to the same requirements of the ACA, such as the provision of essential healthcare and the ability to base premiums on individual demographic factors. This led some to believe that the quality of healthcare provided by an AHP will not be adequate. Further, the final rule’s expansion of the term “employer” goes against ERISA’s intent to protect large companies’ plans. By enabling small businesses and individuals to join together and benefit from large group insurance rates, Judge Bates argued, AHPs violate components of the ACA that clearly define rules according to entity size.

What does this mean for AHPs now? Firstly, the new AHP rules in the eleven states who filed a suit and D.C. is no longer valid. Other states may choose to be more generous, as insurance is still regulated at the state level. Otherwise, the old AHP regulations, the ones in existing prior to June of 2018, still apply.

Ultimately, the court’s ruling yesterday stems from a misalignment between the Final Rule, ERISA and the ACA.

This legal alert was created by Karin Landry, ACI, CLTC, GBA. Karin is the Managing Partner for Spring Consulting Group. Karin has over 25 years of experience in the insurance, health care, risk financing, retirement and benefits industries. She is an internationally recognized leader in captive insurance strategy, benefits and financing. She is Past-Chairman of the Board of The Captive Insurance Company Association and a member of the ERISA Industry Committee and was recently appointed to the Board of Directors for Fallon Community Health Plan. 

The information provided in this alert is not, is not intended to be, and shall not be construed to be, either the provision of legal advice or an offer to provide legal services, nor does it necessarily reflect the opinions of the agency, our lawyers or our clients.  This is not legal advice.  No client-lawyer relationship between you and our lawyers is or may be created by your use of this information.  Rather, the content is intended as a general overview of the subject matter covered.  This agency is not obligated to provide updates on the information presented herein.  Those reading this alert are encouraged to seek direct counsel on legal questions.