Benefits Law Update

A blog from the attorneys of Verrill

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With CARES Act, Congress provides retirement plan relief and group health plan changes

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, 2020, includes a number of provisions that affect retirement plan sponsors and participants. These provisions are designed to provide relief to participants and employers facing financial difficulty as a result of the coronavirus pandemic...
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Paying Health Insurance Premiums for Furloughed or Laid Off Employees

Employers of all sizes in nearly every industry have had to lay off or furlough employees in an attempt to deal with the massive business disruptions caused by the spread of COVID-19. Facing this reality, many employers have asked whether they can pay monthly health insurance premiums on behalf...
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Congress Passes Emergency Paid Leave Laws in Response to Coronavirus Pandemic

On March 18, Congress passed and the President signed into law the Families First Coronavirus Response Act , a temporary measure designed to increase the availability of paid leave during a time when many employees are being directed to stay at home. The following is a brief summary of...
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Leave Sharing Programs: A Critical Bridge for Employees Affected by COVID-19

The federal government may soon be providing paid leave assistance to employees affected by COVID-19. In the meantime, however, employers that maintain leave sharing programs can leverage those programs to help soften the financial impact on employees forced to miss work because of COVID-19. Leave sharing programs allow employees...
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High-deductible health plans can cover coronavirus costs

Recognizing the need to eliminate potential administrative and financial barriers to testing for and treatment of the 2019 Novel Coronavirus (COVID-19), in Notice 2020-15 , posted today on IRS.gov, the IRS advised that high-deductible health plans (HDHPs) can pay for COVID-19-related testing and treatment, without jeopardizing their status. This...
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Supreme Court: written disclosures not enough to show actual knowledge in ERISA suits

The United States Supreme Court unanimously decided last week that a plan participant who received written disclosures about the plan’s investments, but does not remember reading them, does not necessarily have “actual knowledge” of the content of the disclosures. This is important because ERISA imposes a shorter statute of...
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Supreme Court – Updates for 2020

We are barely two months into the new year and already there are significant updates to the 2020 Supreme Court Preview included in our December 2019 Client Advisory (available here ). Below are updates regarding the employee benefit cases before the Court previously mentioned in our Advisory: IBM v...
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SECURE Act: Change to RMD Trigger Age Should Trigger Your Attention Now

As summarized in our January 7 Client Advisory , the SECURE Act includes many changes that affect the design and administration of retirement plans. One of those changes is the increase to the trigger age for required minimum distributions (“RMDs”) from age 70½ to age 72. The change is...
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What You Need to Know About the SECURE Act

The Setting Every Community Up for Retirement Enhancement Act of 2019 (the “SECURE Act”) is the most far reaching new law affecting retirement benefits in more than a decade. Due to its importance, we have developed a client advisory highlighting key aspects of the SECURE Act that affect the...
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December 2019 Client Advisory

This Client Advisory, originally distributed in December 2019, highlights important developments in the law governing employee benefit plans and executive compensation over the past year. It offers insight into what these developments mean for employers and plan sponsors and previews developments we expect to see in 2020. The following...
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Final Regulations on 401(k) Hardship Withdrawals

In September, the Treasury Department issued final regulations governing hardship withdrawals from 401(k) plans. The final regulations update the existing 2004 regulations to reflect recent statutory changes made to the hardship withdrawal rules under Section 401(k) of the Internal Revenue Code (“Code”), including: permitting the withdrawal of earnings on...
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DOL Proposes New Electronic Disclosure Rules for Retirement Plans

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At long last, the Department of Labor (DOL) has issued an update to its safe harbor rules governing electronic distributions of retirement plan disclosures. When finalized and adopted, the new safe harbor rules will update guidance that has been in place since 2002. The new rules do not apply...
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403(b) Plans Must Comply with the “Once In, Always In” Rule This Year

Tax-exempt employers whose 403(b) plans have failed to comply with the "once in, always in" eligibility rule in the past should be well on their way to compliance by now. IRS Notice 2018-95 granted limited relief from this common administrative failure. The grace period for non-compliance has ended for...
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Plan Sponsors: You Should Have a Model QDRO

ERISA Section 206(d)(3)(G)(ii) requires sponsors of qualified retirement plans to maintain written procedures for the administration of qualified domestic relations orders ("QDROs"), and the plan administrator has an obligation to ensure that a domestic relations order received by the plan is "qualified" before making the payments or taking other...
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Who is a Highly Compensated Employee?

Identifying an employer's highly compensated employees is crucial to the administration of qualified retirement plans, as well as 403(b) plans that provide employer contributions. This post provides an overview of the rules for determining who is a highly compensated employee. The dollar amount used in this post is the...
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Recap of Change to Retirement Plan Rollover Rules for Plan Loan Offsets

The Tax Cuts and Jobs Act of 2017 ("2017 Tax Act") includes a provision that changed the rollover rules for certain plan loan offset distributions and that may not be well known to retirement plan sponsors and participants. Money purchase, profit sharing, 401(k) and 403(b) plans may make loans...
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Revenue Procedure 2019-19: Enhancements to EPCRS are Great News for Plan Sponsors

Newly published Revenue Procedure 2019-19 modifies and supersedes prior IRS guidance regarding the Employee Plans Compliance Resolution System (EPCRS) to allow plan sponsors to self-correct an expanded number of problems that may affect retirement plan operations or documents. The new guidance, which took effect April 19, 2019, provides a...
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Handling Missing Participants under Code Section 409A

Deferred compensation payments are due to one of your former executives, but the former executive is nowhere to be found. You know that the IRS has strict timing rules for payments subject to Code Section 409A (but maybe not as strict as you think ). The end of the...
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Form 1094 and Form 1095 Reporting for Expatriate Employees

Every IRS Form 1094/1095 filing season (roughly January and February of each year), we receive questions on reporting for expatriate employees. The most common questions: do we need to furnish a Form to expat employees working in the U.S. (sometimes called "inpats") who are covered under a regular or...
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IRS Guidance Regarding the Section 4960 Excise Tax Is (Somewhat) Helpful

IRS Notice 2019-09 provides guidance intended to help "applicable tax-exempt employers" determine whether compensation paid to their most highly compensated employees will be subject to the 21 percent excise tax imposed under Code Section 4960. Notice 2019-09 is indeed helpful to those of us who have to interpret the...
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ERISA Preemption of State Slayer Statutes: Does it Matter?

Over the last decade, courts around the country have been asked to decide whether ERISA preempts state slayer statutes – state laws that prohibit a murderer from collecting benefits as the beneficiary of the victim's estate or as the surviving spouse of the victim under an insurance policy or...
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December 2018 Client Advisory

This Client Advisory, originally distributed in December 2018, highlights important developments in the law governing employee benefit plans and executive compensation over the past year. It offers insight into what these developments mean for employers and plan sponsors and previews developments we expect to see in 2019. The following...
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Proposed Regulations on 401(k) Hardship Withdrawals

Last month, the Treasury Department issued highly anticipated proposed regulations governing hardship withdrawals from 401(k) plans. The proposed regulations address recent statutory changes made to the hardship withdrawal rules under Code Section 401(k), including: permitting the withdrawal of earnings on elective deferrals in the event of a hardship; permitting...
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Join Us for Managing 401(k) Plan Fiduciary Risk on 11/8

In today's ever-changing and challenging 401(k) environment, plan sponsors find themselves in a new and seemingly complex environment. Regulations are becoming increasingly complicated, the number of class action lawsuits continues to rise, and employees insist on access to less expensive options with better performance, without understanding what the fees...
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FMLA, Disability, & Sick Leave Management: A Panel Discussion

Join the Maine Employee Benefits Council (MEBC) on Wednesday, October 17 for a panel discussion on the Family Medical Leave Act (FMLA), disability, and sick leave management. Panelists will discuss federal and state specific paid leave laws, examine the requirements for Maine employers who have employees in the particular...
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New Tax Credit for Paid Leave – Part 2: IRS Issues Helpful Guidance

As expected, the IRS recently issued additional guidance concerning the new paid leave tax credit codified as Code Section 45S. (You can read Part 1 of this series here .) The guidance, set forth in IRS Notice 2018-17 , is presented in the form of 34 questions and answers...
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IRS issues updated 402(f) rollover distribution notices

The IRS has issued new model notices for recipients of rollover distributions from qualified retirement plans. The updated notices reflect changes from the 2017 tax reform act, as well as regulatory changes enacted since previous versions of the notices were published. The model notices provide a safe harbor for...
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