ROUNDUP OF DEVELOPMENTS FOR 2010 AFFECTING CALIFORNIA EMPLOYERS

• COBRA Subsidy Extended: Our Spring 2009 Newsletter described in detail new obligations on employers to subsidize COBRA continuation coverage. Those obligations were amended by law on December 19, 2009.

  First, eligibility for the 65% subsidy has broadened to include employees subject to involuntary termination through February 28, 2010 (the previous cutoff date was December 31, 2009).

  Second, eligible employees are now entitled to fifteen months of subsidized payments, rather than the previous maximum of nine months.

  But what about people whose nine months of eligibility under the previous law have already lapsed? For them, if they continued COBRA coverage and began paying 100% of the premium, employers must either reimburse them the 65% subsidy for each month’s premium up to the fifteen-month maximum, or apply the 65% to future premium payments. If they discontinued COBRA coverage upon the expiration of the nine-month period, they may retroactively renew COBRA coverage, but only if they pay the entire amount that would have been paid under the new law had they continued coverage, i.e., 35% of their monthly premium for each month their coverage has lapsed up to the fifteen-month maximum, and 100% of the premium thereafter.

  The Department of Labor, on its website, has made available various forms required to notify former employees of the change in the law.

• Expansion of FMLA for Military Families: Two categories of protected leave for military families have expanded under recent legislation.

  Military Caregiver Leave: Family members are allowed leave to care for service members who have suffered a serious injury or illness in the line of duty. Previously, this category generally applied only to family members of active members of the Armed Forces (including members of the National Guard and Reserves). It now includes family members of veterans who were active service members at any time within five years of the date they underwent treatment. Also, covered injuries or illnesses now include preexisting conditions when those conditions have been aggravated by service in the line of duty.

  Qualifying Exigency Leave: This category allows leaves for family members to attend to “qualifying exigencies,” as defined in Department of Labor regulations. Previously, it generally only applied to members of the National Guard or Reserves if and when they were called to active duty. It now includes current members of the Armed Forces (i.e., active, non-reservists) whenever they are deployed to a foreign country.

• IRS Reduces Mileage Reimbursement Rate: The mileage reimbursement rate set by the IRS for 2010 has been reduced to 50 cents per mile. Under California law, this rate is presumed reasonable for the reimbursement of employees for miles driven in their own vehicles.

• Recognition of Same-Sex Marriages of other States: Passage of Proposition 8 created uncertainty about the treatment in California of same-sex marriages entered into validly in states that recognize such marriages, like Massachusetts and Iowa. This amendment mandates that couples in such marriages have the same legal rights and obligations as married opposite-sex couples. The sole exception is that the union cannot be legally called a “marriage” if it was entered into after the passage of Proposition 8 on November 5, 2008. Employers must therefore treat a same-sex marriage the same as an opposite-sex marriage if the same-sex marriage was validly entered into in another state. Employers are reminded that equal treatment also must be afforded to registered domestic partnerships, as well as same-sex marriages entered into in California from June 16, 2008 and November 4, 2008 (i.e., California same-sex marriages entered into between the day the California Supreme Court legalized same-sex marriage and the passage of Proposition 8).

• California Civil Air Patrol Leave: California law requires employers to grant unpaid leave for various reasons, such as for volunteer firefighters to perform emergency duty and for parents to attend a child’s school conference. This new law requires up to ten days of leave per year for members of the California Wing of the civilian auxiliary of the U.S. Air Force, commonly called the California Civil Air Patrol, to attend to emergency operational missions. Employers with 15 or more employees must grant such leave and restore the employee upon his or her return to the same or equivalent position. The employee’s benefits must continue to accrue during the leave and the employee cannot be required to exhaust vacation or sick days while on leave.