From ChamberChoice

The Patient Protection and Affordable Care Act (“ACA”) permits employers to charge higher premiums to tobacco users for medical coverage (except where limited by state law). This should be done in conjunction with a wellness plan that offers tobacco cessation counseling, and employers generally will determine tobacco use by requiring employees to complete a questionnaire. Currently, tobacco use is defined as using tobacco products an average of four or more times per week within the past six months, excluding religious or ceremonial uses.

The popularity of electronic cigarettes (or “e-cigarettes”) creates a dilemma for employers who feature a tobacco surcharge in their benefit plan. Many electronic cigarette or vaping products do not include leaf tobacco at all, although many do include nicotine. In mid-2016, the Food and Drug Administration began to regulate electronic cigarette products. This led many employers to begin including such products under the definition of “tobacco use.” However, it is still unclear whether the provisions of the ACA discussing tobacco use are intended to cover vaping and electronic cigarettes.

Therefore, if employers want to include vaping in the definition of tobacco use, they should explicitly do so in the affidavit or other form that employees complete to verify whether or not the employee uses tobacco. Employers should also consider how they wish to treat the use of electronic cigarettes that do not feature any nicotine – categorizing the use of these products as “tobacco use” may or may not be permitted; but the employer can protect itself by adopting a clear, consistent policy. Further federal regulatory guidance on this issue is needed, and employers should closely follow any developments in this area as the regulatory environment surrounding electronic cigarette and vaping devices changes over the next few years.

Employers may also wish to update any workplace or employee tobacco use policies to include electronic cigarette products. Tackling this issue prospectively will help avoid employee complaints of inconsistent treatment. This policy should be consistent with how the employer treats tobacco use for benefit purposes, and it should be advertised to all employees and other individuals (volunteers, contractors, clients, students, etc.) who may be affected by or subject to the policy.

This newsletter gives a basic overview of recent regulation as in effect on the date of the newsletter. Please be aware that the determination of the requirements and the application of these rules to each employer may differ due to a number of variables. Nothing in this newsletter should be construed as legal advice.

From PA Chamber of Business & Industry

The 2019-20 budget process is officially underway and with it has come a renewed sense of optimism that a budget will be finalized by the June 30th constitutional deadline. With year-to-date revenue collections currently $290 million above estimate, the governor’s budget proposal does not include any broad-based tax increases. While making it clear there were some items in which they disagreed on, Republican legislative leaders have been quick to commend the governor for setting a bipartisan tone and emphasizing the issues on which elected officials can find common ground on.

As I noted in last month’s column, workforce development was a major theme of the governor’s address. This is an issue that crosses party lines and brings together groups that aren’t often on the same page when it comes to policy issues – a fact that the governor highlighted in his speech. As part of the administration’s efforts on this issue, the governor has signed an Executive Order creating the Keystone Economic Development and Workforce Command Center – which aims to bring together the various elements of state government that oversee workforce development programs with the private sector to identify ways to close the jobs skills gap; fill the many open positions that exist throughout the state and make Pennsylvania more competitive on a national and global scale. I’m honored that the governor has asked me to help lead this effort. Joining me as a co-chair is Pennsylvania AFL-CIO President Rick Bloomingdale. With workforce development a cornerstone of the PA Chamber’s mission, we look forward to continuing to partner with the Wolf administration, elected officials and our counterparts in the labor community to develop innovative solutions to address the Commonwealths’ workforce challenges.

There are, however, some components of the governor’s budget proposal that cause concern for the state’s broad-based business community. Once again the Wolf administration has proposed tying a reduction in the state’s Corporate Net Income tax rate with the implementation of mandatory unitary combined reporting. While the PA Chamber has long argued that the state’s CNI tax rate – which is one of the highest effective rates in the nation – needs to be lowered, we disagree that it should be linked to a combined reporting proposal. This complex, overly broad tax reporting system will only lead to increased administrative and litigation costs and will put Pennsylvania at a greater competitive disadvantage.

Additionally concerning is the administration’s push for an aggressive increase to the state’s minimum wage rate. The administration’s plan calls for employers, in just a few months, to increase entry level wages by more than 65 percent. Restaurants – many of whom already operate on thin profit margins – would see their wages increase by more than 235 percent and ultimately by more than 500 percent, due to the governor’s plan to eliminate the tipped wage. We are warning lawmakers of the negative unintended consequences that result from mandated wage increases – which can include increased labor costs; reduced hours and even job loss. Also, it’s important to note that the actual demographics of the state’s minimum wage earners paint a much different picture than what wage proponents would have you believe. According to the PA Department of Labor and Industry’s Minimum Wage Advisory Board’s “2019 Minimum Wage Report,” the vast majority of minimum wage earners have no children and almost 60 percent are under the age of 25.

As part of our advocacy efforts on this issue, we are encouraging employers statewide to let us know how this proposal would impact their individual businesses. Being able to provide real-life examples from Pennsylvania job creators will help us make the case to lawmakers that they must pursue alternative solutions to help low-income Pennsylvanians without risking job loss and other negative impacts. Employers can share their feedback – which can remain anonymous – on the PA Chamber’s website.

Over the coming weeks, the PA Chamber will be working closely with our local chamber partners to urge lawmakers to enact a responsible spending plan that doesn’t place undue burdens on the backs of the Commonwealth’s job creators. Check the PA Chamber’s website for more information on all of these issues, as well as for updates on our advocacy efforts.