Benefits Law Update

A blog from the attorneys of Verrill

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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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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...
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Stronger Than Its Weakest Links: NYU Survives 403(b) Fee Lawsuit

In the first University 403(b) plan fee case to proceed to trial, Sacerdote v. New York University (No. 16-cv-6284 (KBF) (S.D.N.Y. July 31, 2018), the Court found that plaintiffs were unsuccessful in proving that the NYU Retirement Plan Committee breached its fiduciary duties by failing to reduce high recordkeeping...
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New Disability Claims Procedures Affect Retirement Plans and Deferred Compensation Plans Too

Much has been written about the Department of Labor's final rule regarding disability benefit claims procedures (the "Final Rule"), which took effect on April 2, 2018. And by now, most employers – and all disability insurance carriers – have taken steps to implement changes in disability plan administrative procedures...
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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...
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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...
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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...
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Near Unanimity Among the Circuits: Anti-Assignment Provisions are Enforceable

U.S. Courts of Appeals in all but four Circuits have now held that anti-assignment provisions in health insurance plans governed by ERISA are enforceable. In American Orthopaedic & Sports Medicine v. Independence Blue Cross Blue Shield , No. 17-1663, 2018 WL 2224394 (3d Cir. May 16, 2018) the Third...
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Socially Responsible Investing and the Plan Fiduciary

In the wake of mass shootings, environmental disasters, industrial accidents, drug and tobacco use pandemics, and other tragedies, retirement plan investors are paying more attention to selecting or rejecting investments based on perceived public policy benefits or detriment. For example, investors are more focused than ever on the larger...
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Wellness Programs: Where are we now?

Wellness programs are governed by overlapping and, at times, maddeningly inconsistent regulations and agency guidance. Litigation challenging the wellness program rules issued by the EEOC in 2016 has added another layer of complexity for employers attempting to design and administer wellness programs in compliance with applicable law. Nevertheless, wellness...
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Lisa S. Boehm Named Employee Benefits Lawyer of the Year

Lisa S. Boehm , a Partner in Verrill Dana's Employee Benefits and Executive Compensation Group , has been named 2018 Portland, Maine Employee Benefits (ERISA) Law "Lawyer of the Year" by Best Lawyers® . This is the second time that Ms. Boehm has been named "Lawyer of the Year,"...
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Fifth Circuit Vacates DOL Conflict of Interest Fiduciary Rule

The Fifth Circuit vacated the Department of Labor's long-suffering conflict of interest rule (commonly referred to as the "fiduciary rule"), holding that the rule exceeds the scope of DOL's regulatory authority. The decision means that the expanded definition of fiduciary, the elevated standards of conduct for certain investment advisors...
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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...
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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...
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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...
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Budget Agreement Contains Changes to 401(k) Plan Hardship Distribution Rules

The budget agreement approved by Congress and signed into law on February 9, 2018 includes several changes to the rules governing hardship distributions from 401(k) plans. These changes — which were included in the House version of the tax reform bill, but removed during the reconciliation process — may...
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How can a tax-exempt employer manage the new excise tax on executive compensation?

The executive compensation provisions of the Tax Cut and Jobs Act have been widely reported, and public companies and tax-exempt employers are now thinking about how to adjust to the new statutory changes. Tax-exempt employers face the startling new reality of a 21% excise tax on "remuneration" exceeding $1,000,000...
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Tax Reform: A Brief Overview of the Final Legislation

Congress passed the Tax Cuts and Jobs Act on December 20, 2017, and President Trump signed the bill into law on December 22nd. As everyone knows by now, the new law makes sweeping changes affecting most areas of income taxation. And while the final legislation contained fewer provisions affecting...
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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...
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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...
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Dismissal of Case Against UPenn Good News for 403(b) Plan Sponsors

Colleges and universities have finally received some encouraging news in the recent spate of class action suits against higher education 403(b) plans. Last week a federal judge dismissed all claims against the University of Pennsylvania, marking the first time that one of these recent law suits has been be...
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Supreme Court’s Church Plan Decision Restores Order (But It May Not End the Litigation)

Earlier this week, in a unanimous decision, the U.S. Supreme Court overturned decisions by three federal Circuit Courts of Appeals and held that an employee benefit plan maintained by a church-controlled or church-affiliated organization can qualify as a "church plan" exempt from ERISA regardless of who establishes the plan...
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PODCAST: Ins & Outs of Socially Responsible Investing for Retirement Plans

Verrill Dana employee benefits attorneys Eric Altholz and Chris Lockman discuss the inclusion of socially conscious/socially responsible investment options in 401(k) and 403(b) plans in their latest podcast for Verrill Voices. The podcast explores Department of Labor guidance regarding this category of investments, identified by the DOL as Economically...
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