DOL Rule Increasing Salary Threshold Set Aside

SESCO Management Consultants

The U.S. District Court for the Eastern District of Texas has vacated and set aside the U.S. Department of Labor (DOL)’s final rule increasing the salary threshold for the “White Collar” overtime exemptions under the Fair Labor Standards Act (FLSA) on a nationwide basis.

  • The court held that each of the three components of the rule exceeded the DOL’s statutory authority under the FLSA. The court had previously enjoined enforcement of the rule against the State of Texas in its capacity as an employer of state employees; its final decision now vacates the rule for all employers nationwide.

  • This means, most notably, that the increase in the salary level to be exempt to $1,128.00 per week ($58,656 per year) will NOT go into effect January 1, 2025. The court also struck down the July 1, 2024, increase to $844.00 per week ($43,888 per year). Finally, the court held that the final rule’s automatic “escalator” provision, which would have increased the threshold every three years going forward, was also unlawful.

  • As such, the current salary threshold to be exempt under an applicable white-collar exemption is $684.00 per week ($35,568 per year). 

What Comes Next?

  • The January 1, 2025, increase will not go into effect as scheduled, and as a matter of law, the July 1, 2024, increase is nullified. The salary threshold will revert to $684 per week ($35,568 per year).

  • Employers that previously adjusted salaries or the exemption status of employees to meet the July 1 salary level of $844.00 per week ($43,888 per year) may have the opportunity to reduce the salary increase and/or exemption status of affected employees. Clients are advised to consult with SESCO before considering whether to rescind those changes on a going-forward basis.

  • The DOL may seek to appeal the lower court’s decision to the Fifth Circuit Court of Appeals. That said, with the upcoming change in the presidential administration, we predict that under new leadership the DOL would likely abandon any appeal and allow the lower court’s decision to stand. Going forward, it is less clear whether the Trump administration will revisit some or all the rule, repealing it entirely, or perhaps adopting a different formulation.

State Salary Thresholds

To ensure compliance, SESCO clients need to be aware of state salary threshold requirements that are higher than the Federal requirement. 

The following states have their own salary thresholds that employers need to comply.

  • California: twice the state's minimum wage rate for a 40-hour workweek ($1,280.00 per week as of January 1, 2024).
  • Colorado: changes July 1 of each year ($1,057.69 per week as of July 1, 2024).
  • Maine: $844.00 per week as of July 1, 2024; $1,128.00 per week as of January 1, 2025.
  • New York: $1,300.00 per week as of March 13, 2024.
  • Washington: twice the state's minimum wage rate for a 40-hour workweek ($1,302.40 per week as of January 1, 2024).

If employers have any questions or concerns, we recommend they contact us to ensure compliance. For assistance, contact us at 423-764-4127 or by email at [email protected]
 

CMS Hospice Quality Reporting Program Forum (HOPE Assessment)

Thursday, December 12th (11:00 a.m. – 12:00 p.m. MT)

CMS will host a webinar to share an Introduction to Hospice Outcomes and Patient Evaluation (HOPE), and answer questions at the end of the webinar as time permits. 

Register below to attend. When approved, you’ll receive an invitation to join the webinar.

REGISTER HERE
 

Potential American Rescue Plan Act (ARPA) Home and Community-Based Services (HCBS) Direct Provider Payment 

The Department anticipates implementing an American Rescue Plan Act (ARPA) Home and Community-Based Services (HCBS) direct provider payment, pending approval from the Joint Budget Committee (JBC). 

Background
Funding has been made available to states through ARPA so that states may improve HCBS programs and services. States were given authority to use funding to supplement their efforts but not supplant current spending on HCBS. The Department has been working to implement 61 initiatives based on these requirements since 2021 and will end all ARPA spending by March 31, 2025. See the Department’s ARPA web page for more information. 

The Department intends to provide a final HCBS provider payment for select services utilizing ARPA HCBS funding pending JBC approval because providers have been, and continue to be, extremely valued partners in Colorado’s efforts and mission to see people receive services needed to remain living in the community of their choice. 

Provider Action Needed
All provider claims for the period of July 1, 2024, through December 31, 2024, must be submitted no later than February 28, 2025, to receive this retroactive HCBS rate increase and subsequent payment. This claims data will be used to determine the provider payment equivalent to the retroactive increase for eligible services. It is not anticipated that providers will need to resubmit claims to receive this payment, but the enhanced rate will only be available to those providers who have submitted claims by February 28, 2025. Providers will miss out on this one-time ARPA payment if claims are not submitted by February 28, 2025.

Providers are encouraged to start preparing now. Submit claims for this time period as soon as possible to ensure agencies are able to take advantage of this enhanced rate for all of the work and services provided.

More information will be forthcoming about this effort, including information on the JBC’s decision, the eligible services and the date for payments. Ensure all HCBS provider claims are submitted for services rendered July 1, 2024, through December 31, 2024, as soon as billing rules allow.
 

CMS Allows 5 States to Adopt Multiyear Continuous Medicaid Eligibility for Children

HealthCare Dive / By Emily Olsen

Continuous enrollment ensures beneficiaries don’t suddenly lose access to care if their financial circumstances change, while reducing administrative burden for states, according to the CMS. 

Under the latest waivers, Colorado and Pennsylvania will also provide a year of continuous eligibility for some people ages 19 through 64 who were recently incarcerated. Hawaii will offer two years of ongoing enrollment for children ages six through 19, while Minnesota will provide a year of continuous eligibility for people ages 19 through 21.

It’s the latest move from the Biden administration to expand continuous eligibility for Medicaid. Though all states are required to continuously cover children in Medicaid and CHIP for one year, the CMS has approved nine other state requests to expand continuous eligibility for specific groups.

Continuous enrollment policies could also help avert disenrollments for administrative reasons — a significant challenge during Medicaid redeterminations, according to Elisabeth Wright Burak, a senior fellow at Georgetown’s CCF. 

States began rechecking enrollees’ eligibility for Medicaid last year after a period of continuous enrollment during the COVID-19 pandemic. Millions of Americans have been removed from the program since.

Nearly 70% of disenrollments during the unwinding period were for procedural or paperwork reasons, suggesting some of the beneficiaries who were cut from Medicaid might still be eligible, according to health policy research firm KFF.

Children were also inappropriately disenrolled due to a systems error during redeterminations last year, forcing federal regulators to pause enrollment checks in 30 states.

Further turbulence for Medicaid could be on the horizon after President-elect Donald Trump assumes office early next year. The Republican-controlled government could implement Medicaid work requirements to narrow eligibility or use block grants to limit funding.
 

DEA and Telehealth

NAHC

At 4:15 p.m. [ET last Friday], the U.S. Department of Health and Human Services (HHS) jointly with the Drug Enforcement Administration (DEA) issued a rule, titled 'Third Temporary Extension of COVID-19 Telemedicine Flexibilities for Prescription of Controlled Medications'. This Third Temporary Rule extends the telemedicine flexibilities for prescribing controlled medications, originally set to expire on December 31, 2024, through December 31, 2025. These flexibilities have been in effect since March 2020.

The rule provides the following in pertinent part:

With the deadline of December 31, 2024, granted by the Second Temporary Rule quickly approaching, DEA, jointly with HHS, is now issuing a third temporary extension (Third Temporary Rule) to ensure a smooth transition for patients and practitioners that have come to rely on the availability of telemedicine for controlled medication prescriptions. This additional time will allow DEA (and also HHS, for rules that must be issued jointly) to promulgate proposed and final regulations that are consistent with public health and safety, and that also effectively mitigate the risk of possible diversion. Furthermore, this Third Temporary Rule will allow adequate time for providers to come into compliance with any new standards or safeguards eventually adopted in a final set of regulations.  

This Third Temporary Rule, like the First and Second Temporary Rules, covers the portions of the March 2023 NPRMs related to extensions of the telemedicine flexibilities in place during the COVID-19 PHE, and it extends, through December 31, 2025, the telemedicine flexibilities that have been in place since March 2020 for prescribing controlled medications via the practice of telemedicine.

The DEA and HHS anticipate releasing a final set of regulations in the future, but no specific timeframe has been provided. In implementing this extension, the DEA and HHS considered stakeholder feedback from E.O. 12866 meetings-of which the Alliance took part- along with the impending expiration of existing flexibilities and input from Telemedicine Listening Sessions and Tribal Consultations. 
 
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