Human Resources, Union/Labor Relations and Personnel Expertise

The Contents of this News Letter are intended for general information and should not be construed as legal advise or opinion.

NewTest Program for Medical Savings Accounts
Beginning in 1997, certain individuals (those who work for companies with 50 or fewer employees or are self-employed) may participate in a medical savings account (MSA) plan. The plan will have two components: (1) a catastrophic health insurance policy with a high deductible (for individual coverage, at least $1500; for family coverage, at least $3,000) and (2) a medical savings account.

The MSA is a trust created / organized in the US only for the purpose of paying qualified medical expenses (Sec. 213 d) of the account holder and qualified dependents. Trustee is a bank, insurance company or Secretary approved entity. No part of trust assets will be invested in life insurance contracts. Cash only contributions required except allowed rollovers. Annual tax exempt contributions may not exceed the maximum allowed. This may be the future of medical coverage.

ADA and "Reasonable Accommodation"
CA:5: It is important, for purposes of proving ADA discrimination, to distinguish between employer's knowledge of employee's disability verses its knowledge of any limitations experienced by employee as result of that disability, since ADA requires employers reasonably to accommodate limitations, not disabilities.

401 (k) Basics
Eligibility - 21 years of age
Service - 2 years, 1 year if vesting schedule
Exclusions - Union employees, Nonresident employees, any other classes
Types of contribution - Employee deferral, employer match, discretionary, QNEC (Qualified Non Elective Contribution), QMAC (Qualified Matching Contribution), and after tax
Maximum contribution - 25% or $30,000
Maximum compensation - $150,000
Types of plans - Defined Benefit, Defined Contribution 401 (k) is now available to tax exempt 501 (c) (3) as well as other exempt.

New rules on owners contributions lets managers put away more.

Texaco Revisited: Recordings in Employment Litigation
State laws regarding tape recordings and wiretaps will preempt federal statutes in most litigation. State wiretap and surveillance statutes come in two types: (1) Those that - like the federal statute - allow taping with the consent of one party to the conversation; and (2) those that require the consent of all parties to the conversation. The federal statute does not preempt more restrictive state statutes. See us. v. Felton, 592 F. Supp. 172, 193 (W.D. Pa. 1984).

The Washington statute requires all-party consent to taping, and contains the additional requirement that the recording party make an announcement to all parties to the conversation on the tape itself that the conversation is to be recorded. Wash. Rev. Code Ann. 9.73.030 (West 1988). The actual consent does not need to be recorded.