The study looks at possible reasons for the lingering unemployment, as well as the long-term effects on workers aging toward retirement age.

Age discrimination accounts for much of the reluctance to hire workers.  Sometimes age discrimination is based on irrational fears that older workers will be less technologically proficient, expect higher wages, or will be unwilling to take direction from a younger manager.  Sometimes, however, the refusal to hire people of a certain age relates to the increased health insurance premiums attributable to the addition of an older worker.

The persistently unemployed older age group will face lower social security benefits because social security is tied to the worker’s latest and lifetime earnings.  Some people will retire early, and therefore commit to lower social security benefits for their lifetime.  And by necessity, the workers may dip into savings earmarked for their retirement.  Overall, this recession will continue to affect lives for some years.  If the health care reform does not untie health benefits from employment, age discrimination is unlikely to fade away.

The study found a significant decrease in the number of workers offered and accepting health benefits over the last ten years.  Almost half of the survey respondents stated that their employers did not offer health insurance.  Others (about 15%) were not eligible, usually because they worked part-time, and a quarter of the respondents chose not to participate, either because they had coverage elsewhere, or could not afford the employee portion of the price.

Smaller businesses are less likely to offer health benefits.  Government employees and union workers enjoy more health benefits than private sector non-union workers.  In addition, employees with higher education levels are more likely to be offered health insurance at work.

Many of the opponents of the Patient Protection and Affordable Health Care Act seem to imply that nearly everyone is already insured at work, or otherwise has options.  This study shows that the availability of health insurance is spotty, and emphasizes that smaller employers simply do not offer such benefits.  The portion of the law permitting parents to cover their children until age 26 has proven very popular.  It is time to reconsider whether expecting most people to obtain health insurance benefits from their jobs is rational.

The Fourth Circuit employed a broader view of the “terms and conditions of employment” though.  Though an employment benefit is voluntarily granted by an employer, it still must not discriminate in granting the benefits.  In addition, prospective, current, and past employees are all protected from discrimination on the basis of sex.

Ms. Gerner now has a chance to go to trial on her claims of sex discrimination.

Mr. Coleman sought time off to care for a serious health condition.  When an employer has more than 50 employees, an eligible employee is generally entitled to use up to 12 weeks of leave in a year’s period to care for the employee or a family member.  When the FMLA passed, one of its stated purposes was to address sex role issues, where women are expected to be the primary caregivers for sick family members.  Because of the gender discrimination underpinnings of the law, the Supreme Court had previously held that a state can be sued, consistent with the U.S. Constitution, under the FMLA if the employee requested leave to care for a family member.

It took a different view when the employee needs time off for his or her own illness.  But when the employee needs time to take care of himself, there is no sexism implicated. Both genders get sick or injured, and there was no suggestion that this portion of the law addressed historical sex or other discrimination.  Therefore Mr. Coleman is not entitled to sue the State in federal court to enforce his FMLA rights.

This ruling affects only government employees.  Employees in the private sector are still eligible for FMLA leave for their own illnesses.

Sovereign immunity can be, and has been, waived in a number of situations.   According to The Daily Record, State Senator Jamie Raskin states that a hearing might be desirable on the issue whether the State ought to waive its sovereign immunity so as to allow employees self-care rights.

Federal law controls administration of benefit plans, such as disability, health, and pension plans, under a law known as ERISA.  But states are free to regulate insurance.  Therefore many fringe benefits have both state and federal laws affecting their content and their administration.

Maryland passed a law this year limiting the administration of disability insurance policies.  Under this new law, which went into effect on Saturday, a disability insurance in Maryland may not state that the insurance company has the sole discretion to interpret the terms of the policy.  This kind of clause has been used to prevent many people from getting disability benefits.  It has often meant that an insurance company would interpret the definition of disability to exclude someone from coverage.   I have represented individuals who have paid premiums for years, whose social security disability applications were granted, but who were denied benefits under an insurance company employee’s stretch of the English language.  Then, because of the reservation of the sole discretion to interpret its own language, the insurance company wins in court.  In Maryland, this kind of unfettered discretion will not be acceptable for new or renewed policies.  Despite the mundane language of the law, its attempts to curb abuses could have an enormously beneficial effect on disabled Marylanders.

On the plus side, however, workers were more satisfied than three years ago on physical safety at work, flexibility of the hours, and the recognition given for work accomplishments.

The pollsters warn that the results indicate a tug of war between paying workers enough to make them more productive, and using the money to hire more people.

That part of the decision related to the immunity of states from private lawsuits in federal courts.  Under the 11^th Amendment to the Constitution, states cannot be sued in federal courts unless the state has consented to the suit, or Congress has specifically, and legally, removed the immunity.

The Supreme Court earlier decided that Congress removed the immunity for FMLA suits against states when the employee was using FMLA protection to care for another person.  The FMLA protected workers in that situation because of ingrained sex discrimination, “the pervasive sex-role stereotype that caring for family members is women’s work.”

The FMLA offers protection to workers taking time off for their own illness or disability also; but according to the Fourth Circuit, the motivation for the law did not implicate any constitutional protections.  Instead, Congress found that the economic effect of job loss due to illness was profound, and sought a way to limit it when larger employers were involved.  Because there was no constitutional imperative underlying the law, Congress could not validly permit the states to be sued.

The petition for certiorari pointed out cases in which the circuit courts believe that the law has to stand or fall as a unit, therefore all of its parts must be viewed together.  Others specifically requested the high court’s guidance.

The Supreme Court does not announce why it agreed to hear a case; it becomes clearer (sometimes) after the decision comes out.  The Rehnquist Court upheld states’ rights to be free of federal legislation, but this newer Court may go in a different direction.

ERISA is the law that governs pension and other employee benefits.  It requires internal administrative appeals to be used before an employee or a beneficiary goes to court.  The appeals are decided by company personnel, or by outside administrators hired by the company, so they seldom favor the employees.

In the first case, heads they win; tails she loses.  The Fourth Circuit just turned down an appeal by a mother suing for the proceeds of her daughter’s life insurance policy.  The mother had taken out a life insurance policy on her daughter, as a dependent child.  After her daughter was murdered, she put in a claim for benefits under the policy.  The insurance company denied the benefits, on the basis that a child could be covered only up until the age of 19, or 24 if enrolled full-time in school.  The child was 25 at the time of her death.  (Debbie McCravy v. Metropolitan Life Ins. Co.)

The court ordered the return of the premiums paid for the life insurance only.  It cited other circuit courts also refusing to award the face value of a life insurance policy, but only the return of wrongfully withheld premiums.

When the insurance company is caught overcharging for insurance that it will not honor, it just repay the premiums.  When it is not caught, it gets to keep them.  There are no consumer protection-type remedies to influence the companies to catch the overpayments: when the rules say someone is ineligible for insurance, the companies should not keep the money and should notify the employee.

But yesterday the Supreme Court issued an opinion in another case under ERISA, arising out of CIGNA’s alteration of its pension plan.  Like many companies, CIGNA became alarmed at the cost of its promises to pay certain benefits to retirees, based on their years of service and last salary.  Many of these defined benefit plans were constructed on assumptions of high rates of interest on pension funds, and sometimes just plain “irrational exuberance.”  To save itself from having to pay for these benefits, CIGNA changed the plan to a cash balance equal to what each employee had already earned, and additional annual contributions.  It basically changed the plan to an IRA, and seeded each person’s fund based on how long the employee had been with the company.

The employees objected to the new plan, and claimed that CIGNA had not given proper notice of the change in benefits.  The description of the plan touted it as employee-friendly, an enhancement, and not a cost saver for the company.  None of these statements was true.  The trial court ordered CIGNA to pay benefits under a plan as reformed by the court.

The Supreme Court sent the case back for another look, based on a complex discussion of the history of trust law principles and how it relates to the statute.  The upshot is that the District Court may still impose a revised pension plan, but based on different authority.  And unlike the Fourth Circuit’s take, the issue of notice is key to the holding.

• A simple addition to the Wage Payment and Collection Act goes into effect on October 1.  It reads as follows:

“An agreement to work for less than the wage required under this subtitle is void.”

I believe this is already implied in the law.  Yet, it is helpful to state it outright, since not everyone understands that minimum wage is required.

• Job Applicant Fairness Act

As of October 1, 2011, Maryland employers may not inquire into the credit of an employee or an applicant for employment.  Exceptions include banks, credit unions, investment advisor positions, or any other job in which another law requires a credit report, such as someone needing a security clearance.  Another large exception involves an employer pulling a credit report for jobs in which there is a realistic concern about the employee’s access to money.  The exceptions are listed, and include management position, access to money or a corporate credit card, or has access to trade secrets.

The most unfortunate compromise is that the enforcement mechanism for violations is limited to filing a written complaint with the Commissioner of Labor and Industry.  Still, the knowledge that in most cases an applicant’s credit history is off-limits should help the chances of people with poor credit.  The persistent recession has hurt many people financially, and credit ratings have suffered.  That does not mean that they would not be ethical, diligent employees.

• Change in disability benefits law.  This is an enormous change in disability insurance practice.  Effective for policies sold or renewed beginning on October 1, 2011, an insurance company may not reserve sole discretion to itself to interpret the terms of the policy, or to provie standards of review that are inconsistent with the laws of the state.

The law as originally proposed would have made all discretion illegal.  That kind of change would have made an enormous difference in fights over coverage, but this is a step in favor of the person who has made a claim for disability coverage.

That leaves those of us able to find private individual plans, and those of us (now 16.3%) with no coverage whatsoever.

I reported a while back on the odd origin of health insurance as a typical employment fringe benefit.  As group health insurance becomes scarcer, it becomes clearer that we need to reform the system.  Otherwise we’ll pay in other ways.