Blue Cross Blue Shield Immigration Issues

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A PRACTICAL GUIDE TO MANAGING CORPORATE IMMIGRATION COMPLIANCE RISKS FOR THE “BLUES”

Eliot NormanWorksite Enforcement and Corporate Immigration Compliance Team Williams Mullen [email protected] updates:http://tinyurl.com/immupdateswww.williamsmullen.com/immigration6481801_2.ppt

http://www.williamsmullen.com/immigration

2 www.williamsmullen.com


Immigration Compliance Risks: AGENDA

Immigration moves from “back burner” to “front burner” I-9 Risks, Penalties and Fines Moving from I-9 to I-9 Electronics Systems and then to E-Verify Reducing Risks of Liability for

Your Contractors’ Immigration Violations Immigrants and “No-Match” SSNs Potential §111 MMSEA Liability to CMS in area of reporting

SSNs? Immigration and Health Care Reform go “Hand-in Hand” Managing Internal Recruitment/Retention of foreign talent Summary: “Best Practices” and “Safe Harbors” for Corporate Counsel and HR Managers


President Obama on Worksite Enforcement

Typical Press Conference on April 29th

“What has Surprised, Troubled, Enchanted, and Humbled you?

Then got asked the Immigration Question. His answer in part:

“We can't continue with a broken immigration system. It's not good for anybody. It's not good for American workers. [We need to be] “taking seriously the violation of companies. That’s again something we can start doing administratively.”

http://www.google.com/imgres?imgurl=http://www.tvweek.com/blogs/ratings-chart-attack/2009/02/10/ObamaFirstPressConference09.jpg&imgrefurl=http://www.tvweek.com/blogs/ratings-chart-attack/2009/02/obama_conference_draws_369_mil.php&h=291&w=430&sz=39&tbnid=kEooeYrGbdpeLM::&tbnh=85&tbnw=126&prev=/images%3Fq%3Dpicture%2Bof%2Bobama%2Bat%2Bpress%2Bconference&hl=en&usg=__evp9_CAdbUQAUhxWnES-vJ6beeQ=&ei=4Z_8SaGUCZ6ltgfo7a3FCg&sa=X&oi=image_result&resnum=2&ct=image


New Assistant Secretary at DHS From the Senate Confirmation Hearings: John Morton,

New Director of ICE and former federal prosecutor on April 23rd:

Q. “What is your view of the worksite enforcement operations conducted by ICE?”A. “ WE NEED TO PLACE RENEWED FOCUS ON EMPLOYERS TO ENSURE THAT THEY ARE PLAYING BY THE RULES…THIS FOCUS SHOLD INCLUDE MORE ROUTINE USE OF CIVIL SANCTIONS…AND WE SHOULD CONTINUE TO DEVELOP PROGRAMS SUCH AS E-VERIFY TO ENCOURAGE COMPLIANCE.”

Mentioned good old days of $25 million annually in civil fines. Time to bring em back.


Fines Against Employers for Immigration Violations

Substantive Violations: Range from $375 to $3200 for First Offense: Paperwork Violations: Range from $110 to $1100 for each I-9 Form Substantive fines: assessed per illegal worker Risk Factors; 500 to 1000 hires per year; 5000 to 15,000 I-9 records As Federal Contractors: E-Verify: Are you Ready? Substantive Violations: can’t fix, government does not have to prove that employer

knew it hired or continued to employ illegal alien to assess fines. E-Verify Fines of $500 to $1000; for continuing to employ worker after final

nonconfirmation (FNC) notice that employee is unauthorized (i.e.paperwork does not match DHS and SSA records):

Comparable Fines, debarment and other remedies against “Blues” as Federal Contractors

VALUE OF DESK AUDIT OF SAMPLE OF 25 I-9 FORMS: determine scope of problems in advance of government inspections, audits


“Best Practices” and “Safe Harbors”


The New I-9 Form and List of Acceptable Documents


NEW LIST OFACCEPTABLEDOCUMENTS

EMPHASIS: “ALL DOCUMENTS MUST BE UNEXPIRED”

and

Be more careful inAccepting List A Documents that show Identity and WorkEligibility


NEW I-9 FORM Effective April 3, 2009

Section 1: Employee fills in but Employer Pays Fine if its not Correct or Complete: Data Used For E-Verify

Translator/Preparer Certificate

Section 2: HR: Fills in Info From Originals of List A OR List B and C Documents

HR Certification: “UNDER PENALTY OF PERJURY”

Section 3: HR Re-VerifiesWork Authorization, again under “penalty of perjury”

LIABILITY RISKS


MINI-WEBINAR The Nuts and Bolts of Filling in the NEW I-9 Form (effective April 3, 2009)

Link to audio and slides for your HR Managers or others who Missed It. http://www.williamsmullen.com/filling-in-the-new-i-9-03-23-2009/

http://www.williamsmullen.com/filling-in-the-new-i-9-03-23-2009/

http://www.williamsmullen.com/filling-in-the-new-i-9-03-23-2009/


PART ONE:Lets Look At A Couple of Those Nuts and Bolts


$110 Fine


Simple Case?

Gopalan Balasubramanian Indian Software Engineer that works on your

Legacy IT Systems responsible for trillions of bits of data

Has a valid H-1b, walks in to do his I-9 on first day of work


“VALID FOR WORK ONLY WITH DHS AUTHORIZATION”

UNEXPIRED DRIVER’S LICENSE


Section 1: Not Completebut employee is saying:I only have temporary workpermit by checking boxX=“An alien authorized towork until”

Section 2HR Uses Drivers Lic & SS Card

I-9 “Done Wrong”

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxx

xxxxxxxxx

$375 Fine+


xxxxxxxxxxxxxxxxxxxxxxxxx

Section 2: HR recognizestemporarily employed; Fills In List A with double combination of ForeignPassport and I-94 Card

Section1: Employee completes data with # and Date. Determines how Section 2to be completed by HR.

I-9 Done “Right”

TO DO: COME UP WITH SPREADSHEET REMINDERTO RE-VERIFY Section 3July 15, 2010 Still have CONTINUING LIABILITY RISK


Job Applicant Completes Section 1: BUT EMPLOYER PAYS THE FINES


Summary: Legal Issues

Remote facilities and review of originals Are we controlling when we ask Are we controlling what we ask? Can we ask more about work authorization of applicants? Or

are we asking too much? Risks of OFCCP audits? Avoiding Document Abuse? 3 Business Day Document Rule Receipt Rule To copy or not to copy: “Best Practice”


Summary: I-9 is one of those Ultimate Government Forms

Should be Simple 1 Page Form But has 3 Sections with 2 different persons completing it. one is the employee: he knows the least and can cause

the most trouble. Even your team comes from different, unconnected

groups: Recruitment, HR, Payroll, Instructions don’t help much 50 Page Handbook with 63 FAQ No Wonder Score Cards = D+ at best


Managing Risks Checklist forI-9 Nuts and Bolts

1. Sample, Scorecard, Train the “Trainers”, Certify, Self-Audit: and then go back 6 months later and do it again.

2. When Box 4 (temporary employment eligibility) is checked in the new Section 1, “Stop, Look, and Listen”

3. Get the List of Available documents out as early as possible in the application process: New and old U.S. Citizens in particular are going to have problems with the new I-9;

4. Go to Electronic I-9s: internal check against filling in Section 1 incompletely and proceeding to Section 2; and making sure Section 2 squares with info on Section 1.

5. Scan existing I-9s and Documents presented and shred the paper ones.

6. Purge your I-9 Data using the 3yr/1yr Rule.


Reducing Liability and Risks: I-9 Compliance: “Best Practices”

7. M&A Situations: Successor Company can rely on I-9 Forms it inherits from the acquired firm: does not have to re-verify identity/work authorization of employees.

Liability, however, also carries over for any violations. Consider using immigration counsel to evaluate liability as part of due diligence

Query whether this is the time to integrate I-9s into your system, clear up issues, errors, make corrections, eliminate “skeletons” in the closet

Use same approach with H-1Bs or pending Green Card applications held by employees of acquired company: must be promptly transferred to acquiring company or Newco. If you “assume immigration liabilities” in the deal documents, you can avoid $2300 in government filing fees per H-1B worker

8. SINGLE BEST PRACTICE (other than Score Cards and Training the Trainers): Move to I-9 Electronic System, then scan in and shred the paper. Avoids training and re-training. Reduces error rate dramatically.


PART TWO: GOING ELECTRONIC WITH THE I-9s RECENT WEBINAR May 4, 2009 12 pm. EDT.

The “Nuts and Bolts” of Electronic I-9s

Eliot Norman, Team LeaderWorksite Enforcement and Corporate Immigration Compliance Team Williams Mullen [email protected]://tinyurl.com/electronicI-9s www.williamsmullen.com/immigration

http://www.williamsmullen.com/immigration


PART THREE: Moving from I-9 to E-Verify

Voluntary with 107,000+ employers signed up Nuts and Bolts of how it works MOU with DHS and SSA: implications and obligations Expansion to Federal Government and Federal Contracts States: 17 now have E-Verify Statutes I-9s: still there whether you do E-Verify or Not


E-Verify: “Safe Harbor”

SAFE HARBOR: Participation in E-Verify does not provide automatic or “blanket” protection from worksite enforcement. However, an employer “who verifies work authorization under E-Verify is presumed to have not knowingly hired an unauthorized alien.”

Affirmative Obligation on Employers: Employer must notify DHS if it continues to employ any worker after

receiving a final non-confirmation (FNC) (meaning worker is not who he says he is or does not have work authorization)

Failure to so notify DHS: Employer is subject to $500 to $1000 civil money penalty

Employer is subject to rebuttable presumption that it has knowingly employed an unauthorized alien if it continues to employ a worker for whom it has received a final non-confirmation.

Obligation to notify employee of TNC “as soon as possible”


14 E-Verify States in Red as of April 2009

June 2009: Add 3 more: Arkansas, Nebraska, Utah


E-Verify: “Best Practices”

1. Sooner “Blues” shift to E-Verify the better. May have to anyways. 2. Should spur elimination of paper I-9 Forms. No sense inviting errors TWICE3. Purchase or develop in-house Software that integrates the I-9 Data into the E-

Verify Data. Makes no sense to fill in the I-9 By Hand; and then retype data from one form (I-9) to the other (E-Verify).

4. Consider re-running through E-Verify all employees or all employees assigned to Federal Contracts or where state laws apply. (assuming E-Verify is expanded to Federal Contracts)Remember, under the proposed Federal Contractor rules, E-Verify applies to all new hires (whether assigned to the federal contracts or not) and to all employees assigned to the contracts. Under proposed Federal mandates, you have the option of applying E-Verify to all existing employees covered by your MOU with USCIS. State laws apply (so far) only to new hires.


E-Verify: “Best Practices”

5. Ultimately, given crazy patchwork quilt of state law and federal contractor mandates, once you are in E-Verify, you might as well apply it as broadly as possible. Caveat: there is only a 180 day window to roll it out .

6. Your HR Team needs 24/7 web-based access to I-9 and E-Verify processes to review real-time reports, monitor, train, and ensure compliance. You may not want to do it with the I-9 paper records and the government’s E-Verify software, which don’t link up and don’t issue alerts when work permits expire.

7. Cost/Benefit analysis. Compute the woman-hours needed to keep up with 5,000, 10,000 disconnected records. Avoid Risks of errors and “routine use of civil fines” per Morton at ICE.


E-Verify: “Best Practices”9. Same team responsible for I-9s should handle E-Verify. Avoid disconnect.

Integrate payroll, I-9 and E-Verify software systems.10. False TNC (non-confirmation notices.) Escalate for review by well-trained E-

Verify team. There are technical exceptions and E-Verify is now adapting software to be more flexible. Ultimately, counsel has to weigh whether to continue employing worker while waiting for resolution vs. risks of civil fine for continuing to employ despite Government saying: “this person is not a match.”.

11. Use of E-Verify should eliminate risks of ICE audits and create “Safe Harbor” from liability for substantive violations on I-9 Forms. Government resources are focused elsewhere. Government should go after the “Don’t Ask, Don’t Tell Employers”, not those wired into the SSA and DHS databases.

12. Recent USCIS proposed rule-making and MOA between USCIS and ICE: raise, however, concerns about sharing of data in the E-Verify system for enforcement purposes.


PART FOUR: Reducing Liability Risks from Contractors’ Immigration Violations

What are the Issues? Wal-Mart I Wal-Mart II “Constructive Knowledge”: How defined?


“Best Practices” For Reducing Risks from Contractors’ Immigration Violations

1. Know your contractor, sub-contractor, most importantly your sub-sub contractor. 2. Your preferred vendor contracts do not preclude parceling out IT contract work to smaller

companies who may not be immigration-compliant. Should they? 3. Review contracts. Don’t leave it all up to the IT Managers.

Add indemnification and certification clauses, including obligation (at contractor expense) to hire outside auditor to verify that contractor’s employees are authorized to work. Wal-Mart and Verizon now impose these obligations on all contractors, who in turn flow-down these obligations to sub-contractors.

Prohibit any non-compete/liquidated damages clauses that preclude your IT recruiters from hiring away global talent from your contractors/subcontractors.

4. Confirm enrollment of sub-contractors on federal contracts in E-Verify and in States where E-Verify now applies.

5. Consider requiring subcontractors to enroll in E-Verify for new hires as part of commercial contracts, particularly when out-sourcing for IT services.


“Best Practices” For Reducing Risks from Contractors’ or Other Company’s Immigration

Violations

7. Screen, centralize inquiries from workers requesting sponsorship for Green Cards so conflicts between status represented on I-9 Forms and status requested can be resolved.

8. Engage immigration counsel to assist with evaluation of requests by foreign national contractor employees to be hired directly by your company, evaluate legality under H-1B regulations of any employment contracts, payback provisions imposed by your contractors on employees.

9. M&A: special situation: due diligence, evaluation of I-9 Forms, status of any foreign national employees to avoid liability to successor firm. Allow for timely conversion of pending H-1Bs and Green Cards to new company. Avoid fines, violation of DHS and DOL regulations. Should you rely on E-Verify and I-9 filings of acquired company or re-start the process?7


PART FIVE: Social Security No-Match


THE ICE TIMETABLESSN No-Match under October 2008 Final Rule

DAY 0: Employer receives letter from SSA indicating mismatch of employees name and social security number (SSN)

DAYS 0-30 Employer checks own records, makes any necessary correction of errors in the SSN and verifies corrections with SSA. 0-30

DAYS 31-90: If the discrepancy still cannot be resolved, employer notifies employee and asks employee to assist in correction of SSN by contacting the SSA himself to resolve the matter.

DAYS 31-90 Employer receives necessary documents from the employee, employer must verify with the SSA that the employee’s name matches his SSN and document the verification with SSA in the employee’s I-9 file.


THE ICE TIMETABLESSN No-Match

DAYS 91-93 If the discrepancy still cannot be resolved, employer and employee perform special I-9 procedures to verify identity and work authorization of employee -- without accepting any document using the suspect SSN number and employee must present a document with a photograph to establish identity or both identity and employment authorization.

END OF DAY 93: Employer must terminate employee if (1) the discrepancy in his/her SSN is not resolved AND (2) employer cannot verify his/her identity and work authorization after a new I-9 is completed using different documents.

Bonus: qualify for “Safe Harbor” if follow the 10-30-90-3=93 Day Timetable

If at that point your company terminates the employee, you have “Safe Harbor” from any finding that you knowingly employed an unauthorized worker.


“Best Practices” Social Security No-Match

1. Adopt and follow the 30 day rule to clear up discrepancy; if you can’t, give the employee an additional 60 days to fix; if he can’t, give him 3 extra days to I-9 successfully or terminate employment.

Only exception: employee can’t fix but can present I-9 documents that establish identity and work authorization that do not contain the erroneous SSN

But this narrow exception may be moot given move to E-Verify and requirement of valid SSN for E-Verify Purposes.

2. Ensure that same internal team handling I-9 and E-Verify receives any “No –Match” letters from SSA

This avoids disconnect, lack of attention, as its usually payroll that communicates with SSA


PART SIX: Insurers or TPAs for GHPs“On the Hunt” for SSNs

(§111 of MMSEA as implemented by CMS) Good News out of Seattle Conference


Part Seven: Immigration Reform and Health Care Reform Go “Hand-in-Hand”?


EMTALA and Illegal Immigrants


***Diagnosis Critical*** Reuters: “Latest US Hospital Profits Fall to Zero”

Uninsured usage of Hospital Stays and ER services: 33%+ Increase in last 10 years 13 million illegal immigrants: 20% to 25% of uninsured? They are sicker and require more costly care


President Obama on Immigration System

“We can't continue with a broken immigration system. It's not good for anybody. It's not good for American workers.”

We can’t continue with health care system that has 13 million illegal immigrants living and working outside of it, putting additional burden on others (Hospitals, GHPs, BCBS Companies) to pick up the costs of the care, either directly or indirectly.

http://www.google.com/imgres?imgurl=http://www.tvweek.com/blogs/ratings-chart-attack/2009/02/10/ObamaFirstPressConference09.jpg&imgrefurl=http://www.tvweek.com/blogs/ratings-chart-attack/2009/02/obama_conference_draws_369_mil.php&h=291&w=430&sz=39&tbnid=kEooeYrGbdpeLM::&tbnh=85&tbnw=126&prev=/images%3Fq%3Dpicture%2Bof%2Bobama%2Bat%2Bpress%2Bconference&hl=en&usg=__evp9_CAdbUQAUhxWnES-vJ6beeQ=&ei=4Z_8SaGUCZ6ltgfo7a3FCg&sa=X&oi=image_result&resnum=2&ct=image


Impact on hospitals? (EMTALA and Immigration—Mr. Jiminez)

8 yrs ago Jimenez suffered traumatic brain injury in car crash;

Florida non-profit hospital couldn’t find rehab center willing to accept him, so it kept him as a ward for years at cost of $1.5 million. Did EMTALA require hospital to provide long-term care?

Florida non-profit hospital deported him to Guatemala


The Future: Health Care Reform Should Be Linked to Immigration Reform


Congressional Inaction on Reform and Relief

Obama wants Health Care Reform Bill on his desk in October 2009. Immigration Reform maybe in 2010? Should they be linked?


THE FUTURE


Part Eight: : Managing Your Internal Immigration Program

Surprisingly, there is still a 3% Gap between skills sets out there in U.S. workforce and requirements of high tech companies like a BCBS entity:

Areas where a BCBS company may hire foreign nationals: statisticians, application developers, business/ operations research

analysts, decision support consultants, application architects, almost any position requiring analytical/quantitative skills

Areas where there are risks, including DOL audits of PERM and H-1B filings, correct handling of the I-9 Forms for the 1% of your workforce that is foreign

Area where you need to apply same cost/benefit analysis as other company operational policies under your control

Examples where policies and procedures need to be uniform and adopted


Examples of Internal Immigration Policy Issues

Are representations on immigration filings with federal agencies in conflict with minimum qualifications on internal job descriptions?

Are you dealing with multiple outside immigration counsel, even letting the foreign nationals hire their own counsel to file papers on behalf of your company, after all, is it “just a bunch of forms”?

Should company get training, take more routine immigration work in-house and use outside counsel only for complex matters?

Need to get a handle on promises made by recruiters, establish a uniform policy

IT department decisions on when to hire a foreign national; or sponsor H-1Bs Conversion of foreign IT Contractors: cost/benefit analysis Recruitment from U.S. graduate schools: OPT F-1s for foreign nationals or

adopt a no foreign graduate student policy?


Part Eight : Conclusion1. I-9s: Critical Document when

workers hired, poorly managed process at most companies

2. Need to move to Electronic I-9 Systems and Shred the antiquated Paper I-9 Files

3. E-Verify: state and federal mandates, use for 10% of new hires provides impetus to clean up problem #1

4. Blues can and should reduce liability Risks for Contractor Immigration Violations

5. Immigrants and “No-Match SSNs: 10 million in the system

6. §111 MMSEA Liability to CMS: Potential Impact of Immigration/SSN issues in this area?

7. Can’t leave illegal immigrants out of health care reform or risk a “meltdown” at our hospitals. Illegals make up 25% of 48 million uninsured.

8. Also Need to think about how best to manage comprehensive program for recruitment and retention of global talent inside the “Blues”.


General Conclusion: “Immigration Merits More Attention at Corporate Counsel Level”

FINAL PRACTICE POINTERS

1. Immigration remains an important HR issue: and it also affects employees, contractors, GHPs and their subscribers, federal contracts, health care providers

2. I-9 Civil Penalties Avoidance: need for Sampling, Scorecard, Training and self-audit. 3. Paper I-9 Records are a ticking “time bomb” : Scan and Shred them; 4. Go to Electronic Format for I-9s to synch with E-Verify

5. Decide how far you go in implementing E-Verify: new hires, all states, some states, all employees assigned to federal contracts; all locations; subsidiaries?

6. Recognize that you can take on additional immigration liabilities in M&A situations7. Contract away Liability Risks for Contractors’ and Sub-Contractors’ immigration violations.

Impose E-Verify on your critical contractors to extent permitted by state and federal laws. 8. Implement 93 Day Timetable for resolving SSN “No Matches”9. Adopt proactive strategies for dealing with potential §111 Liability under MMSEA? 93 day

Safe Harbor Rule?


Conclusion: “Immigration Merits More Attention at Corporate Counsel Level”

Final Points Recognize that if your own workforce is more international than 10 years ago,

your internal immigration hiring/retention policy also probably needs review or an update. You need to know what procedures are in place for transferring foreign H-1Bs now working as contractors to direct- hire employees. Are you hiring foreign graduate students from U.S. universities for hard-to-fill positions requiring quantitative skills? Ask whether you have an immigration hiring and retention policy in place dealing with sponsorship for Green Cards and requiring reimbursement of expenses if the employee leaves your employ?

Reducing Risks of Immigration Compliance often goes hand-in-hand with developing coherent and cost effective policies for dealing with international diversity within your own workforce.


Questions? Questions?

Eliot Norman , Immigration andWorksite Enforcement Team804-783-6482 [email protected] updates: http://tinyurl.com/immupdateswww.williamsmullen.com/immigration

http://tinyurl.com/immupdates

Blue Cross Blue Shield Immigration Issues

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Transcript of Blue Cross Blue Shield Immigration Issues