Category: Plan Administration
New Tax Credit for Paid Leave: What Benefits Professionals Should Know
The 2017 Tax Cuts and Jobs Act contains a two-year pilot project, developed by Senators Angus King (I-ME) and Deb Fischer (R-NE), that provides a tax credit to employers that offer at least two weeks of paid leave to low and moderate income employees. If your company already offers...
Voluntary Compliance with ERISA Does Not Preclude Church Plan Status
The IRS has once again confirmed that an employee benefit plan maintained by a church or church-affiliated organization is not subject to ERISA unless the plan sponsor makes an affirmative written election to have ERISA apply to the plan. That is the case even if the plan historically has...
401(k) Plan Sponsors – Time to Revisit Your Hardship Withdrawal Provisions
The Bipartisan Budget Act of 2018 ("Budget Act") includes several changes to the rules governing hardship withdrawals from 401(k) plans. Because the changes apply to plan years beginning after December 31, 2018, 401(k) plan sponsors should start considering their options now and make decisions regarding which changes, if any...
IRS Appears Likely to Expand Determination Letter Program in 2019
All signs point to the IRS expanding access to the determination letter ("DL") program for individually designed plans in 2019. This would be a welcome move for employers and other plan sponsors, who have been unable to obtain determination letters with respect to most ongoing plans since the DL...
IRS Reduces 2018 HSA Family Contribution Limit
UPDATE: On April 26, 2018, the IRS reversed course and restored the limit on deductible contributions to health savings accounts (HSAs) for individuals with family coverage under a high deductible health plan to $6,900, the original amount announced last fall. According to the IRS , individuals who received an...
Time is Running Out – New Disability Claims Procedures Take Effect April 2, 2018
It has been a long time coming, but the Department of Labor's final rule regarding disability benefit claims procedures (the "Final Rule") will finally take effect on April 2, 2018. Employers need to determine which of their ERISA plans will be subject to the Final Rule and implement the...
Controlled Group Rules for Tax Exempt Organizations: A Brief Review
Corporate entities under common control are generally treated as a single employer for purposes of applying the core rules that govern employee benefit plans and executive compensation arrangements. For that reason, a complete and accurate controlled group analysis can be critical in determining and monitoring the legal compliance status...
Noteworthy Federal Cases Relating to Employee Benefit Plans in 2017
Here is a round up of cases decided by the U.S. Supreme Court and the First and Second Circuit Courts of Appeals in 2017 involving ERISA employee benefit plans. While courts decided a number of cases pertinent to benefit plans, we found these to be noteworthy: United States Supreme...
Practical Guidance for Required Minimum Distributions and Missing Participants
Retirement plan administrators often run into this problem: a participant has reached his or her required beginning date – the date on which distributions must commence under the required minimum distribution (RMD) rules of Code Section 401(a)(9) – and the participant cannot be located. A recent IRS Field Memorandum...
Sound Process and Good Recordkeeping Demonstrate Compliance with COBRA Notice Requirements
Earlier this year the Eleventh Circuit Court of Appeals provided a reminder of how important it is for an employer to establish and follow proper COBRA notice procedures and preserve some type of evidence that the procedures are followed. Employers who do those things will find that their efforts...
Avoiding a Patchwork of Pitfalls: Gobeille v. Liberty Mutual Insurance Co.
In the first decision issued since the passing of Justice Scalia, the Supreme Court of the United States held that ERISA preempts a Vermont statute requiring third party administrators of self-insured group health plans to report claims information to state health care databases. Gobeille v. Liberty Mut. Ins. Co...
IRS Issues Guidance on Employer Health Plan Opt-Out Payment Arrangements
Late last month the IRS released, in the form of 26 Q/As in Notice 2015-87 , guidance on the application of various provisions of the Affordable Care Act to employer-sponsored health coverage. The Notice covers a number of important issues, including the effect of health reimbursement account contributions, cafeteria...
Client Advisory - Winter 2016
This Client Advisory highlights certain developments regarding the Affordable Care Act (most significantly, the delay of the ACA reporting requirements and the "Cadillac" tax), discusses the EEOC's proposed rules for wellness programs and the outcome of recent EEOC wellness program litigation, reviews important cases recently decided by and pending...
Restating Your Preapproved Plan Document: Opportunities and Pitfalls
Purveyors of preapproved defined contribution plan documents are now in the process of distributing document restatement packages to employers. The restated documents reflect updates required by changes in law, including the Pension Protection Act of 2006, which previously had been reflected in a series of addenda and amendments to...
2014 Year-End Employee Benefit Plans Compliance Advisory
The 2014 end-of-year rush seems somewhat less frantic than in years past. Nevertheless, with a month left in the year many employers may find themselves scrambling to meet plan amendment and notice deadlines, and planning for 2015 may still be in process for some. This summary discusses a few...
CMS Delays HPID Application Deadline
On October 31, 2014, the Centers for Medicare & Medicaid Services (CMS) issued a statement delaying enforcement of the health plan identifier (HPID) requirement. Specifically, Controlling Health Plans (CHPs) are no longer required to obtain HPIDs by the originally announced deadline of November 5, 2014, which has been delayed...
Are you Experienced? A Look at the HPID Application Experience
Under final rules issued September 5, 2012 by the Department of Health and Human Services under HIPAA, nearly all employer group health plans are required to obtain a unique health plan identification number (HPID) by November 5, 2014. (We summarize the final rules briefly here .) Health plans with...
Deadline Approaches for Business Associate Agreement Compliance Updates
Employer group health plans and other covered entities that have not already amended business associate agreements (BAAs) to incorporate changes required by the Final Omnibus Rule must do so by September 22, 2014. (You can read our prior blog post on the Final HIPAA Omnibus Rule here...
2014 Mid-Year Supreme Court Case Review
The 2013-2014 term of the Supreme Court of the United States produced opinions that will have substantial effects on the design and administration of most employee benefits plans. This summary highlights three key decisions, one significant procedural ruling, and an emerging issue likely headed for Supreme Court review, all...
Fiduciary Committee Best Practices – Part 2: Preparing Meeting Minutes
In Part 1 of this two-part series we suggested that the key to compliance with the fiduciary requirements of ERISA can be boiled down to a simple proposition: follow a prudent process and document it. We used that proposition as a basis for offering five foundational steps that a...
Fiduciary Committee Best Practices – Part I: The Basics
Even in areas of law where the landscape of rules, regulations, and risks seems constantly to be changing, certain core concepts and basic principles hold fast. In the case of fiduciary responsibility under ERISA, the core concepts and basic principles can be boiled down to three key elements: (1...
IRS Guidance Confirms Treatment of Same Sex Spouses under Cafeteria Plans
IRSNotice 2014-01 , issued yesterday, provides helpful guidance for the administration of cafeteria plans after the U.S. Supreme Court's decision in the Windsor case. The guidance provides answers to a number of questions that employers and plan administrators have been asking, including the following: May a participant who was...
2013 Year End Benefit Plan Compliance Update and Reminders for Employers
As 2013 draws to a close and we look ahead to 2014, there is no shortage of benefit plan administrative challenges with which employers must contend. While the Patient Protection and Affordable Care Act of 2010 ("ACA") remains very much at the forefront of these challenges, retirement plan and...
Fort Halifax Redux: Identifying an ERISA Plan Made Simple Again
We are frequently asked by clients whether a severance policy or program is an "ERISA plan" and, thus, subject to ERISA's documentary, administrative, reporting, and disclosure requirements. A recent decision from the United States District Court for the District of Puerto Rico provides a helpful analysis of this re-occurring...
IRS Modifies Health FSA Rules to Permit Carryover of up to $500
Late last week the IRS released Notice 2013-71 , modifying the health flexible spending account ("health FSA") use-it-or-lose-it rule to allow participants to carry over up to $500 in unused health FSA funds. Although not unexpected (the Service has hinted at such a change a number of times over...
State Exemptions for Religious Organizations After the DOMA Decision and Revenue Ruling 2013-17
The "place of celebration" rule adopted by the IRS in Revenue Ruling 2013-17 means that legally married same-sex couples are now recognized as married for federal tax purposes regardless of the state in which they reside. This ruling clearly affects the design and operation of employer-sponsored benefit plans in...
IRS Releases Guidance on DOMA Decision
Yesterday Treasury and the IRS released much needed guidance regarding the U.S. Supreme Court's decision on the Defense of Marriage Act. Specifically, Treasury and the IRS ruled that they will adopt a "place of celebration rule" under which legally married same-sex couples will be recognized for federal tax purposes...
The Sun Capital Case Could Have Broader Implications for Employee Benefit Plans
The widely publicized case of Sun Capital Partners III, L.P. v. New England Teamsters & Trucking Ind. Pension Fund, No. 12-2312, __ F.3d __, 2013 WL 3814984 (1st Cir. July 24, 2013) , has made the private equity investment community a touch uneasy. In holding that a fund organized...
The Verdict on DOMA and Proposition 8: Impact on Employee Benefit Plans
Today the United States Supreme Court overturned Section 3 of the Defense of Marriage Act ("DOMA") and reinstated a California judge's order that Proposition 8 (the California ballot initiative defining marriage as between a man and a woman) is unconstitutional. Although it will take time to sort through the...
Seasonal Workers and Your Employee Benefit Plans
Summer is fast approaching and we find ourselves answering a number of questions regarding the coverage of seasonal workers in employee benefit plans. For employers planning to ramp up hiring for the summer season we offer this brief review of the treatment of seasonal employees for purposes of your...
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