Varnum Establishes Health Care AI Task Force to Advise on Compliance and Privacy

Varnum Establishes Health Care AI Task Force

Varnum is pleased to announce the formation of the Health Care Artificial Intelligence (AI) Task Force focused on the use of AI technologies and machine learning in the health care industry. This initiative is designed to provide comprehensive advisory services to hospitals, health care systems, medical providers, health care technology companies and other health care organizations regarding the intersection of health care laws and AI compliance, with a particular emphasis on privacy considerations.

In an era where technological advancements are reshaping the health care landscape, AI applications promise to revolutionize patient care, administrative efficiency, and clinical outcomes. However, these innovations come with a host of legal and ethical challenges, particularly in relation to patient privacy and data protection. The Varnum Health Care AI Task Force aims to navigate these complexities and guide health care entities in implementing AI solutions that are both effective and compliant with the highest standards of privacy and security.

Task Force Focus and Objectives

The primary objective of the Health Care AI Task Force is to help health care organizations balance the need for efficient service delivery with the imperative to protect sensitive patient data while meeting high clinical standards. The task force will achieve this by:

  1. Advising on AI Integration: Providing strategic counsel on integrating AI technologies into health care operations in a manner that complies with existing laws and regulations, as well as monitoring and advising on future regulatory structures.
  2. Privacy and Data Security: Focusing on the unique privacy concerns that arise with AI applications in health care. This includes ensuring compliance with the Health Insurance Portability and Accountability Act (HIPAA), the General Data Protection Regulation (GDPR), and other relevant legislation, including privacy-related laws enacted by more than a dozen U.S. states.
  3. Policy Development: Assisting in the creation and implementation of robust policies and protocols that safeguard patient information while leveraging AI to enhance health care delivery.
  4. Risk Management: Identifying potential legal risks associated with AI deployment and recommending proactive measures to mitigate these risks, as well as response protocols if a breach occurs.

Expert Leadership and Team Composition

Varnum’s Health Care AI Task Force is composed of seasoned attorneys with deep expertise in health care law, data privacy, and AI technologies. Leading the task force are four partners with distinguished track records in advising health care clients on regulatory compliance and counseling large corporations on innovative technologies and privacy regulations.

“Our goal is to provide our clients with the guidance they need to adopt AI technologies,” said data privacy attorney Jeff Stefan.  “We are helping clients leverage the power of these revolutionary advancements and avoid their equally significant risks. 

Sarah Wixson, who co-chairs Varnum’s Health Care Practice Team, noted the particular concerns of AI for health care providers.

“As AI continues to evolve, it is crucial for health care providers to stay ahead of the curve by understanding and adhering to the legal frameworks that govern these technologies,” Wixson said. “Our task force is committed to helping our clients navigate this complex landscape.”

Privacy Considerations and Compliance

One of the central pillars of the task force’s mission is to address the privacy concerns associated with AI in health care. AI systems often rely on vast amounts of data, including personal and sensitive health information, to function effectively. This raises significant privacy issues that health care organizations must address to remain compliant and protect patient trust.

The AI Task Force will guide clients on:

  • Data Minimization: Ensuring that AI systems only use the minimum amount of personal data necessary for their function.
  • Anonymization and De-identification: Implementing techniques to anonymize or de-identify patient data to protect privacy while still enabling AI analysis.
  • Consent Management: Establishing robust processes for obtaining and managing patient consent for the use of their data in AI systems.
  • Security Measures: Enhancing cybersecurity measures to protect against data breaches and unauthorized access.

Strategic Policy Recommendations

The task force will also provide strategic recommendations on policy development to help health care organizations manage AI-related privacy risks effectively. This includes:

  • Comprehensive Privacy Policies: Drafting and implementing privacy policies that address the specific challenges posed by AI.
  • Training and Awareness: Conducting training sessions for health care staff on the legal and ethical considerations of AI.
  • Continuous Monitoring: Establishing mechanisms for the continuous monitoring and auditing of AI systems to ensure ongoing compliance with privacy laws.

Commitment to the Health Care Industry

Varnum is committed to supporting our health care clients as they navigate the transformative potential of AI. By providing expert legal guidance and strategic advice, the Varnum Health Care AI Task Force will help health care providers harness the benefits of AI while ensuring robust privacy protections for patients.

For more information about the Varnum Health Care AI Task Force and its services, please contact your Varnum attorney.

New Programs Available for Undocumented Immigrants

Biden Unveils New DHS Programs for Undocumented Immigrants

President Biden announced that Department of Homeland Security (DHS) will roll out two new programs later this summer for certain undocumented immigrants.

ADJUSTMENT OF STATUS: Available for eligible undocumented immigrant spouses and children of U.S. citizens

DHS will consider case-by-case requests for certain non-citizen spouses and children of U.S. citizens to apply for parole without leaving the U.S. For spouses to apply, the non-citizen spouse must satisfy the following criteria:

  • Present in U.S. without admission or parole
  • Lived in U.S. for at least 10 years as of June 17, 2024
  • Legally valid marriage to U.S. citizen as of June 17, 2024
  • Do not pose threat to public safety or national security
  • Otherwise eligible to apply for adjustment of status
  • Merit favorable exercise of discretion.

Importantly, non-citizen children of a potential requestor may also be eligible for parole under this same process outlined above so long as:

  • Physically present in U.S. without admission or parole, and
  • Qualifying stepchild relationship to U.S. citizen as of June 17, 2024.

Eligible non-citizen spouses and children will first apply with USCIS for case-by-case assessment of parole application. If approved, eligible non-citizen spouses and children of U.S. citizens will be given three-year period to then adjust status and apply for lawful permanent residency, will be permitted to remain in the U.S., and will be eligible for work authorization for up to three years.

EMPLOYMENT-BASED NONIMMIGRANT VISA PROCESS FOR CERTAIN U.S. COLLEGE GRADUATES: DACA recipients and other Dreamers

The Biden Administration also announced changes to the process for DACA recipients and other Dreamers to receive employment-based nonimmigrant visas. To be eligible, individual must have earned degree at accredited U.S. institution of higher education and have received offer of employment from U.S. employer in field related to degree.

Applications for both programs are not yet open and further guidance will be announced soon. Programs are expected to begin later this summer. Individuals who may be eligible should contact Varnum immigration attorneys with any questions.

Florida House Bill 1203 Includes Broad Changes for HOAs

Major HOA Reforms in Florida: Key Changes Under House Bill 1203

Big legislation changes for homeowners associations in Florida in 2024. Read the full recap.

Florida Gov. Ron DeSantis recently signed into law House Bill 1203 which adopted broad changes for homeowners associations throughout the state. Effective July 1, 2024, House Bill 1203 provides a comprehensive overhaul of many issues affecting HOAs, including director education, records maintenance, meeting requirements and fines. While there are many changes, the following outline highlights some of the more important updates.

  • Architectural and Improvement Committee Decisions: Architectural, construction improvement, and other similarly tasked committees must provide owners with written notice of the rule or covenant relied upon to deny the owner’s request for the construction of a structure or other improvement.
  • Interior Modifications: Prevents the enforcement of a rule or covenant restricting what can be done inside the interior of structures for changes that are not visible from the parcel’s frontage, an adjacent parcel, common area or community golf course.
  • Revised Fining Process: Adds new requirements to the fining process for HOAs, such as the committee providing notice of its determination within seven days of the hearing, requiring that fines for violations that are cured prior to the hearing cannot be imposed, and providing a 30-day window for the payment of all fines. HOAs may not impose fines for leaving garbage receptacles out within 24 hours before or after the designated garbage collection time or for leaving holiday decorations or lights on a structure or other improvement longer than allowed under the covenants or rules unless the decorations or lights remain up for more than a week past the removal deadline and the association provides written notice of the violation to the owner.
  • Parking Restrictions: Covenants and rules restricting the parking of pickup trucks from parking anywhere other passenger vehicles are permitted are no longer enforceable. Similarly, covenants and rules prohibiting commercial vehicles or other vehicles with visible insignias from parking in an owner’s driveway are not permitted unless the vehicle meets the definition of a commercial vehicle under Section 320.01(25), Florida Statutes.
  • Director Education Requirements: Requiring all directors to participate in annual continuing education courses approved by the State. Directors of communities of less than 2,500 parcels will need four hours annually of approved courses while directors of communities of 2,500 or more parcels will need eight hours annually.
  • Website and Digital Records: As of January 1, 2025, all HOAs that contain 100 parcels or more must maintain a website and host digital copies of most of the association’s official records, including notices of meetings.

There are many other changes for homeowners associations all aimed to foster transparency and clarity within HOA governance, empowering members with accessible information while promoting fairness and accountability in rule enforcement.

It is recommended that all homeowners associations review the new requirements and start preparing their communities. For a full breakdown of this statue and the changes coming to homeowners associations in Florida, view our full recap.

New Florida Law Requires HOAs to Provide Members with Association Rules and Covenants

Florida Law Mandates HOAs to Distribute Rules and Covenants

Big legislation changes for homeowners associations in Florida in 2024. Read the full recap.

Florida Gov. Ron DeSantis recently signed into law House Bill 59 regarding the rules and covenants of homeowners associations. Effective July 1, 2024, House Bill 59 requires HOAs to furnish every member of the association, as well as all future members, with either a physical or digital copy of the association’s rules and covenants. Furthermore, in the event of any amendments or alterations to these rules or covenants, updated copies must be promptly distributed to members. Prior to October 1, 2024, all existing HOAs must provide a physical or digital copy of the association’s rules and covenants to every member of the association.

Homeowners associations are granted the option to streamline this process by providing links to the complete set of rules and covenants on their official websites, subsequently notifying all members by email or traditional mail. It is encouraged that the association send copies of all its governing documents and rules to ensure compliance with this new law.

While this directive appears straightforward, its implications are profound. While many HOAs are dedicated to cultivating safe and harmonious communities, instances have arisen where certain associations have garnered attention for enforcing fines based on rules that are either ambiguous or overly restrictive, sometimes perceived as arbitrary, obsessive, or even vindictive.

This measure aims to foster transparency and clarity within HOA governance, empowering members with accessible information while promoting fairness and accountability in rule enforcement.

It is recommended that all homeowners associations take steps now to review their rules and covenants and prepare to distribute copies of the same to its members. Should you require assistance navigating these changes, our Condominium and Homeowners Association Team stands ready to offer expert guidance and support tailored to your specific needs.

New Florida Law Requires HOAs to Adopt Hurricane Protection Measures

Florida Mandates Uniform Hurricane Protection Standards for HOAs

Big legislation changes for homeowners associations in Florida in 2024. Read the full recap.

Last week, Florida Gov. Ron DeSantis signed into law House Bill 293 in an effort to help protect Florida’s single-family homes. Effective immediately, all homeowners associations in the state are mandated to establish hurricane protection specifications along with any other pertinent factors as determined by the association’s board of directors. These specifications should be adopted to ensure a cohesive external appearance for buildings within the HOA – including considerations such as “color and style” – while adhering to relevant building codes and affording exceptional protection to Florida homes.

The primary objective of House Bill 239 is to safeguard the welfare and safety of the state’s residents, as well as to guarantee consistency and uniformity in the implementation of hurricane protection measures by parcel owners. It is imperative to note that, except in cases where violations to these specifications occur, HOAs are prohibited from preventing homeowners from installing or upgrading hurricane protection products. This legislation applies universally to all homeowners associations, regardless of when the community was created.

Hurricane protection products under House Bill 239, include but are not limited to:

  • Roof systems recognized by the Florida Building Code which meet ASCE 7-22 48 standards
  • Permanent fixed storm shutters
  • Roll-down track storm shutters
  • Impact-resistant windows and doors
  • Reinforced garage doors
  • Erosion controls
  • Exterior fixed generators
  • Fuel storage tanks
  • Other hurricane protection products used to preserve and protect the structures or improvements on a parcel governed by the association

Most weather analysts have projected an above average hurricane season for 2024, predicting one of the busier hurricane seasons on record. This increase in activity has been attributed to record warm water temperatures and the influence of La Niña. As such, it underscores the critical importance of proactive measures to safeguard property and ensure the well-being of residents.

It is strongly encouraged that all homeowners associations begin the process of considering the standards for hurricane protection that are right for their communities and adopt a resolution encompassing these guidelines immediately. Should you require assistance navigating these changes, our Condominium and Homeowners Association Team stands ready to offer expert guidance and support tailored to your specific needs.

Colorado Enacts Comprehensive AI Law: Key Insights for Businesses

New Colorado Law Sets Precedent for AI Consumer Protections

On May 17, 2024, Colorado Gov. Jared Polis signed Senate Bill 24-205, “Concerning Consumer Protections in Interactions with Artificial Intelligence Systems,” into law. The law, which becomes effective in February 2026, regulates creators of AI systems that do business in Colorado (Developers) and users of most AI technologies that impact Colorado consumers (Deployers). The law broadly defines the “high risk” AI systems that are subject to its regulation: apart from several narrow exceptions (such as systems that perform a narrow procedural task or certain enumerated technologies like cybersecurity applications or AI-enabled video games), the law will regulate “any artificial intelligence system that, when deployed, makes, or is a substantial factor in making, a consequential decision.” 

“Consequential decisions” are those that have “a material legal or similarly significant effect on the provision or denial to any consumer of, or the cost or terms of “health care services, financial or lending services, educational opportunities, employment matters, essential government services, housing, insurance or legal services. 

If your business operates within one of these contexts in which “consequential decisions” are made regarding consumers—e.g., health care, financial services, education, or insurance, among others—and you plan on using AI potentially impacting Colorado residents, Colorado’s Senate Bill 24-205 deserves your close attention. Even if you are sure that your use of AI in one or more of the contexts above is not going to make decisions affecting Colorado residents, Colorado’s law still deserves your attention because it will drive the conversation and perhaps serve as the blueprint for similar laws on the horizon. 

In fact, on the same day he signed the bill, Gov. Polis noted to Colorado’s General Assembly that he did so “with reservations” and that by signing the bill he “hope[s] that it furthers the conversation, especially at the national level.”

Under the newly signed bill, Deployers—those who use AI in a way that affects Colorado consumers in the manner and context discussed above—will have significant obligations that are good to keep in mind even this far in advance of the law’s effective date. The governing principle underpinning the law is preventing algorithmic discrimination. To this end, Deployers will be required to “exercise reasonable care to protect individuals from known or foreseeable risks” of such discrimination. This requires affirmative measures such as reviewing AI usage and conducting annual impact assessments; creating and abiding by an AI risk management policy; identifying and documenting risks of such discrimination; notifying consumers that an AI system has been deployed with detail regarding the system’s purposes, risks, and types of information processed; permitting consumers to opt out of the AI system; and notifying the Attorney General of any such discrimination within 90 days of discovering it. 

Developers have similarly broad obligations with regard to exercising reasonable care to protect individuals from known or foreseeable risks of algorithmic discrimination in the course of a product’s intended use. These obligations include disclosures regarding the types of AI systems that they have developed and any known or reasonably foreseeable risks of discrimination associated with such products. The law will also require Developers to extensively document assessments of the system’s data, purpose, intended benefits, governance and mitigation, limitations, and other such information that will facilitate Deployers’ assessments of their use of the system. 

Although it is unknown whether Senate Bill 24-205 will take effect in its current form, the law will certainly drive the national conversation regarding future AI governance. Businesses implementing, or planning on implementing, AI to drive “consequential decisions” such as those impacting consumers in the health care, financial, educational, or employment context, would do well to take a closer look at Senate Bill 24-205 with the goal of establishing a foundation to operationalize its requirements in the near future.

For more information on how state, federal and international AI and privacy laws may impact your business, contact your Varnum attorney.

Foreign Investment in REITs Subject to New IRS Regulations

IRS Finalizes Regulations Impacting Foreign Investment in D-REITs

The IRS recently finalized regulations (TD 9992) that stand to significantly affect foreign investment in real estate investment trusts (REITs) structured to qualify as “domestically-controlled” REITs (D-REITs). D-REITs have long been a popular investment vehicle for foreign persons due to various tax benefits. Namely, certain foreign persons can avoid filing a U.S. tax return or paying capital gains taxes under FIRPTA rules when selling stock in a D-REIT.

To qualify as a D-REIT, a majority of a REIT’s stock must be held (directly or indirectly) by U.S. persons (including business entities). Prior to the new IRS regulations, foreign investors did not affect the calculation of the D-REIT qualification threshold if such foreign investment was made through a U.S. C-corporation that owned stock in the D-REIT. IRS guidance from 2009 held that C-corporations will be treated as domestic holders of REIT stock for purposes of D-REIT qualification (PLR 200923001).

With exceptions, the new regulations generally allow the IRS to “look through” U.S. C-corporations and determine whether the corporations’ shareholders are foreign persons. If more than 50% of a U.S. C-corporation’s shareholders are foreign persons, the C-corporation will not qualify as a U.S. person for purposes of D-REIT qualification.  Accordingly, many REITS that have relied on the previous guidance may stand to lose D-REIT status under the new IRS regulations.

Luckily for foreign D-REIT investors, the new regulations provide a 10-year transition period for existing D-REITs to come into compliance. Provided such existing D-REITs do not trigger an early expiration of the transition period through certain new acquisitions, new foreign investment, or other pitfalls provided in the new regulations, U.S. C-corporations will continue to be treated as U.S. persons, despite a majority interest being held by foreign shareholders, until 2034.

Varnum’s Tax and Real Estate teams are available to assist and answer any questions about the new IRS regulations.

Get Ready But Wait: Lawsuit Filed to Block New U.S. DOL Salary Regulation

Lawsuit Filed to Block DOL's New Minimum Salary Rule

Update July 1, 2024: The Department of Labor’s new salary threshold for most white-collar exemptions is now in effect, please contact your Varnum attorney for guidance.

Employers should take note of a recent lawsuit filed to block the implementation of the U.S. Department of Labor’s (DOL) new final rule to increase minimum salary levels required to satisfy exempt status for many employees. This action is similar to an effort launched against the DOL in 2016, which resulted in a nationwide injunction preventing a proposed increase to minimum salary levels.

The lawsuit, Plano Chamber of Commerce v. U.S. Department of Labor, was filed in the Eastern District of Texas on May 23, 2024. It seeks an injunction against the DOL rule and raises similar arguments to those that were successfully asserted in the 2016 lawsuit.

The current final rule was announced in April 2024 and is scheduled to go into effect July 1, 2024, as we covered in a previous alert. It remains to be seen how the court will rule in this present legal challenge. For now, employers should continue to prepare to implement any changes that may be necessary to comply with the rule in case it goes into effect as scheduled. However, employers may wish to monitor developments for a few more weeks before the July 1, 2024, effective date prior to implementing such changes in case an injunction is issued. If you have further questions about the above legal developments, please contact a member of the Labor and Employment Team.