Monday, September 30, 2013

FMLA Law Talk

John J. Egbert introduces Employer Tool #5: Request recertification when appropriate.  

Friday, September 27, 2013

Employers Must Provide Notice of Coverage Options to Employees

In preparation for the implementation of the Patient Protection and Affordable Health Care Act, the US Department of Labor has adopted certain rules imposing obligations upon employers to give notice to employees about their health insurance options.

FMLA Law Talk

John J. Egbert introduces Employer Tool #4: Ask sufficient questions. 

Wednesday, September 25, 2013

FMLA Law Talk

John J. Egbert introduces Employer Tool #3: Carefully evaluate whether certification qualifies for FMLA leave. 

FERC Staff Present Gas-Electric Coordination Quarterly Report at Commission Open Meeting

On September 19, 2013, the staff of the Federal Energy Regulatory Commission (FERC) issued its Gas-Electric Coordination Quarterly Report to the Commission in Docket No. AD12-12 covering the period June 2013 through August 2013. The staff also presented the FERC Commissioners with a quarterly update on the same period.

The report and the update identify and summarize regional coordination initiatives and FERC actions, including the proposed rulemaking issued on July 18 regarding inter-industry communications. In the notice of proposed rulemaking, FERC sought public comment on express FERC authorization to share non-public information between interstate natural gas pipelines and electric transmission operators. In the proposed rule, FERC sought comment on a No-Conduit Rule prohibiting disclosure of the non-public information after receiving it. The comment period closed on August 26, and FERC received 33 public comments. Now, FERC is reviewing the comments and will issue a Final Rule upon completion of the review.

Tuesday, September 24, 2013

FMLA Law Talk

John J. Egbert introduces Employer Tool #2: Insist that the employee provides certification issued by a health care provider. 

Monday, September 23, 2013

Relief from the Dodd-Frank Act Requirements for Certain Seller Financers


The Dodd-Frank Act, passed in 2010, established new requirements for loan originators who finance owner-occupied residential properties.  This year, the Consumer Financial Protection Bureau (CFPB) issued regulations to implement certain portions of the Act.  These regulations will be effective on January 10, 2014.

The Act’s passage raised many questions among the public regarding its effect on individual, non-institutionalized lenders.  On June 7, 2013, the CFPB released a compliance guide to assist small loan originators and creditors in this regard.  Generally speaking, a seller financer of an owner-occupied residence is defined as a “loan originator” and is required to abide by a significant number of new regulations under the Act.  These regulations impose a multitude of requirements regarding loan originator compensation, qualification, and mandatory procedures.  The guide, however, describes an exclusion from the new requirements for two categories of seller financers.

Under the first exclusion, a seller financer is not categorized as a “loan originator” under the Act if the financer is a natural person, estate, or trust, and meets the following additional requirements:  1) it provides seller financing for only one property in any 12-month period; 2) it previously owned the property securing the financing; 3) it did not construct, or act as a contractor for the construction of, a residence on the property in the ordinary course of business; 4) the financing does not include a repayment schedule that results in negative amortization; and 5) the financing has a fixed or an adjustable rate that resets after five or more years (rate adjustments may be subject to reasonable annual and lifetime limits).

Under the second exclusion, a seller financer is not required to be a natural person, estate, or trust, and may provide financing for up to three properties during a 12-month period.  But to qualify for this exclusion, the above-listed requirements for the first exclusion must be met; the financing must be fully amortizing; and the financer must determine in good faith that the consumer has a reasonable ability to repay the loan. 
Assuming one of the two exclusions applies, the seller financer is relieved from the compensation, qualification, and procedural requirements placed on “loan originators” under the Act.  The guide and further information may be located on the CFPB website at the following address:

Each case a business or individual may face is unique and may require legal advice. This article does not constitute, and should not be considered, legal advice. You are urged to consult with an attorney on your own specific legal matters. If you would like additional information regarding the content of this article, please contact Mr. Womack at or 602-262-5865.                           

FMLA Law Talk

 John J. Egbert introduces Employer Tool #1: Insist on Proper & Timely Notification.

Jennings Strouss Attorneys Will Present at Upcoming APPA Legal Seminar

Newell Blog Author Card
Sarmentero Blog Author Card

Jennings, Strouss & Salmon attorneys will be presenting at the upcoming APPA Legal Seminar held on October 20-23, 2013 in Seattle, WA.

APPA's Legal Seminar is an educational and professional development opportunity for attorneys as well as senior and mid-level utility managers and elected and appointed officials who oversee utility policy. Attendees gain an appreciation and greater understanding of current legal and regulatory developments affecting public power systems, as well as the practical legal issues facing municipal utilities.

Below is a list of the Jennings Strouss attorneys who will be presenting, along with their topics.

Debbie Swanstrom - Now What? CFTC Obligations and Compliance in the Age of Swaps

Gary Newell - The Public Utility Regulatory Policies Act of 1978, 35 Years Later

Andrea Sarmentero-Garzon - The Latest Threat to Capacity Markets: Customers!

Click here to learn more about Jennings Strouss’ legal and consulting services in energy and utility law.

Thursday, September 19, 2013

Deadline Looms for Complying with HITECH and HIPAA Omnibus Rule

Covered entities and business associates must comply by September 23, 2013

On January 25, 2013, the U.S. Department of Health and Human Services’ (HHS) omnibus rule was published in the Federal Register. The final rule amends certain rules under the Health Insurance Portability and Accountability Act (HIPAA) of 1996 and the regulations implementing the Health Information Technology for Economic and Clinical Health (HITECH) Act, which was enacted in 2009.
The changes in the omnibus rule provide the public with increased privacy protection and strengthens the government’s ability to enforce the law. HIPAA has primarily been focused on health care providers, health plans and other entities that process health insurance claims; however, the revisions expand many of the requirements to business associates of those entities that receive and have access to protected health information. The modifications of the omnibus rule also change the circumstances in which breaches of unsecured health information must be reported to HHS.
There are many actions covered entities and business associates need to take in order to comply with the requirements of the final omnibus rule by the September 23, 2013 deadline.


Health care providers, health plans and other covered entities should reevaluate their practices and take the following steps:
  • review and update Notices of Privacy Practices consistent with the Omnibus Rule
  • review existing business associate agreements, and revise those agreements as necessary, consistent with the omnibus rule. Business associate agreements that were in place prior to January 25, 2013, which were in compliance as of that date, and for which the underlying contract has not been amended or renewed since March 26, 2013, do not need to be amended until the earlier of the date on which the underlying contract was amended or renewed, or September 22, 2014
  • identify whether other persons or entities with which the covered entity has a relationship are now to be considered “business associates,” given the revised definition of “business associate” under the omnibus rule
  • enter into new business associate agreements as necessary, given the conclusions reached above
  • educate and train personnel regarding HIPAA and HITECH compliance, including new breach reporting provisions
  • review, and amend, current protocol for the possible breach of protected health information (PHI), including procedures for evaluating whether a breach has occurred and processes for breach reporting
Business Associates

Individuals and entities who are not covered entities should determine whether they will be implicated under the revised definition of “business associate.”  Under the HITECH Act and the final omnibus rule, business associates are directly liable for certain actions or omissions, such as:
  • the use or disclosure of PHI in a manner that is not in accordance with its business associate agreement or with HIPAA’s privacy rule
  • failure to make reasonable efforts to limit PHI to the minimum necessary to accomplish the intended purpose of the use, disclosure or request
  • failure to disclose PHI to HHS, when required by HHS
  • failure to enter into business associate agreements with subcontractors that create or receive PHI on their behalf
In order to comply with the requirements of the final omnibus rule, business associates should, at a minimum:
  • designate a privacy and security compliance officer to be responsible for the development and implementation of policies, procedures and compliance with the administrative safeguards required by HIPAA
  • implement written policies and procedures regarding HIPAA compliance and security
  • conduct a risk management assessment to determine compliance and risks, prepare documentation of that assessment, and develop a risk management plan
  • review, and amend, current protocol for the possible breach of protected health information (PHI), including procedures for evaluating whether a breach has occurred and processes for breach reporting
  • educate and train personnel regarding HIPAA compliance, including new breach reporting provisions
  • identify covered entities with whom the business associate does business and review business associate agreements
  • identify subcontractors with whom the business associate does business and whom have access to PHI, and confirm that adequate business associate agreements have been executed with those subcontractors
Each case a business or individual may face is unique and may require legal advice. This article does not constitute, and should not be considered, legal advice. You are urged to consult with an attorney on your own specific legal matters.

Wednesday, September 18, 2013

Law Talk Wednesdays

Our attorney, John J. Egbert, introduces some tools to help employers reduce FMLA abuse. 

Monday, September 16, 2013

Arizona Rejects Electric Industry Restructuring


Arizona deregulated its electric industry in the late 1990s, along with a number of other states. Fortunately for Arizona the 2000 meltdown in California stopped Arizona’s efforts at deregulation in its tracks. In 2002 the Arizona Corporation Commission undid a key component of deregulation, the divestiture of generation by the incumbent utilities. In 2004 the Arizona courts found aspects of the planned industry restructuring to violate the Arizona Constitution.

In March of this year a group of power marketers and a handful of large customers convinced the Commission to open a docket to reexamine whether Arizona should restructure its electric industry. The concept of restructuring was also strongly supported by conservative think tank The Goldwater Institute.

The Commission established a two step process to examine the issue. The first step was to consider whether it is a good idea to restructure the industry. The second step was to work through the many issues inherent in restructuring.

The issue was hot in Arizona. The proponents engaged in an extensive media campaign including full page advertisements and opinion pieces. The proponents also went directly to the public through speakers and written materials. Many community members, including consumer groups, chambers of commerce and elected officials joined with the incumbent utilities to oppose the move.

On behalf of the Salt River Project, Jennings Strouss and Salmon submitted written material opposing restructuring. JSS pointed out that Arizona is doing quite well with its vertically integrated structure. Arizonans enjoy relatively low electric prices and reliable service. Arizona utilities offer a wide variety of choices and options and provide award winning customer service.

JSS argued that restructuring would put Arizona’s success at risk. The incumbent utilities who are now dedicated only to providing service to Arizona customers would be dismantled, and replaced with out of state power marketers motivated to maximize profits. Under a market based structure reliability would suffer, as evidenced in other states as their deregulated markets mature. Assets important to Arizona, particularly the coal-fueled generation facilities, would be put at risk under a structure that encourages only new generation that is cheapest and quickest to the market.

JSS argued that without the commitment by the incumbent utilities to fuel diversity and system stability, customers will be subjected to significant price swings. JSS pointed out that the innovation and choice touted by the proponents already exist in Arizona. And, in a deregulated market there are winners and losers. The likely losers would be residential and small business customers.

JSS also pointed out that Arizona would lose significant control over its electric industry, as the oversight of electric prices (now determined by the wholesale market) and the transmission system (which would move into an RTO) would be by FERC, no longer by the Corporation Commission.

Finally JSS pointed out that prices will be higher, not lower in a restructured market. In Texas, for example, the prices in the non-deregulated areas (public power entities who did not participate in restructuring) have consistently been lower and more stable than prices in the deregulated areas. And this makes common sense as restructuring only adds expense; it does not reduce the fundamental cost of generating electricity.

On September 11 the Corporation Commission, in a surprise move, voted 4 – 1 to close the docket and end the inquiry into electric industry restructuring. While restructuring proponents are talking about a run at the same issue in the legislature, or even through a constitutional amendment, it is probable that, as a practical matter, the Commission vote again ends the restructuring movement in Arizona.

Friday, September 13, 2013

IRS Recognizes Same-Sex Marriage for Federal Tax Purposes

By Nancy C. Pohl & Michael J. Payne

Nancy C. Pohl
In Revenue Ruling 2013-17, the IRS provided the much anticipated guidance it had promised in the wake of the Supreme Court’s ruling in Windsor v. U.S. , 133 S.Ct 2675 (2013), which invalidated key provisions of the 1996 Defense of Marriage Act.  Several key issues were left unanswered by Windsor, including the paramount issue of what definition of marriage was to be used – the state where the marriage took place, or the state of residence.
The Ruling definitively establishes that the validity of a same-sex marriage for federal tax purposes depends on the state where the marriage took place, and not the married couple’s place of domicile.  Thus, a same sex couple who are Arizona residents and get married in another state that recognizes same sex marriage would be considered married for federal tax purposes.

The Ruling also concludes that domestic partnerships, civil unions, or other similar formal relationships recognized by some states will not be recognized as marriage relationships under federal tax law.   

Michael J. Payne
For federal income tax purposes, the Ruling states that legally married same-sex couples generally must file their 2013 federal income tax returns using either the "married filing jointly" or "married filing separately" filing status.  Individuals who were in same-sex marriages during the unexpired statute of limitations period (generally the 2010, 2011, and 2012 tax years) may file amended returns to claim refunds for overpayment of tax, if less tax would be due under a married filing status.  Additionally, employees who purchased same-sex spouse health insurance coverage from their employers on an after-tax basis may treat the amounts as pre-tax and excludable from income.

The Ruling also has significant gift and estate tax impacts.  Same-sex married couples now can utilize the marital deduction for federal estate and gift taxes, generally allowing them to transfer as much as they want to each other without having to pay any federal estate or gift tax.  Additionally, the Ruling allows the widow or widower in a same-sex married couple to utilize the deceased spouse’s unused estate tax exclusion (currently $5.25 million if no portion has been utilized) against the widow or widower’s estate at his or her death.  The use of the deceased spouse’s unused estate tax exclusion is commonly referred to as "portability".   Moreover, these couples can also take advantage of gift-splitting, which allows spouses to combine the annual gift tax exclusion.  In 2013, gift splitting would allow a married couple to jointly give $28,000 to any person without incurring gift tax.

Wednesday, September 4, 2013

Times Are Changing for Women in Business

Our attorneys Norma Izzo Milner, Nancy Pohl and Kami Hoskins were featured in a Scottsdale Living article discussing how times are changing for businesswomen.

Click here to view the article.