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Text of Brief by Cambridge Financial Services, LLP Urging Supreme Court to Overturn Ninth Circuit Decision in Tibble v. Edison (PDF)

"CFS's experience in advising and counseling ERISA fiduciaries and its knowledge and understanding of prevailing and evolving best practices and 3 standards of care yields four key observations: [1] many plan fiduciaries, especially among large plans, already follow good monitoring practices, meaning that reversing the Ninth Circuit will not result in increased costs for these fiduciaries or their employers; [2] the cost of regular monitoring includes a small amount for 'benchmarking' plan fees in all service categories -- investment, administration, trustee, consulting, and the like, and is, in many cases, largely born by plan participants, not employers or fiduciaries; [3] the Ninth Circuit's decision threatens to erode the past decade's progress on fee reductions in defined contribution plans, driven in part by private lawsuits, which has saved plan participants billions of dollars ; and [4] the Ninth Circuit's standard of 'material' changed circumstances is unworkable and illogical."

Katten Muchin Rosenman LLP Comment Letter to IRS on Proposed Regs Regarding Calculation of UBTI for VEBAs (PDF)

"[U]nless Q&A-5 is revised, VEBAs which have been operating in a permissible manner will find that their investment income which was earned during the current year in which the regulation is promulgated, and perhaps even prior to the date that the regulation is enacted, will be subject to tax. I respectfully request that Q&A-5 be revised to provide that the effective date of the regulation be the first taxable year STARTING (not ENDING) on or after the date of publication of the final regulation[.]" [Editor's note: The author was the principal author of the 1980 proposed VEBA regulations.]

Davis & Harman LLP Comment Letter to SEC on Standards of Conduct and Other Obligations of Broker-Dealers and Investment Advisers (PDF)

"Because it is not possible to determine the effects of possible SEC reforms without taking into account the interaction with possible DOL reforms significantly affecting the same conduct and the same IRA market, the responses to the SEC Request will virtually all be incorrect as soon as the DOL acts, thus rendering the SEC's administrative record unhelpful.... [T]here is complete overlap between the two projects with respect to investment services provided to IRA owners. Since IRA assets were approximately $4.9 trillion as of the end of 2011, the degree of overlap between the two projects is enormous."

Study Suggests Many ACA Exchange Plans Violate Federal Parity Laws

"According to a new study focusing on consumer information, nearly 25 percent of group health plans provided through [ACA] exchanges may be violating federal mental-health parity laws.... [B]ecause mental-health and substance-use disorder services are often more expensive than medical/surgical services, insurers may benefit when consumers are dissuaded from joining plans with more generous mental-health and substance-use disorder benefits."

Supreme Court Rewrites the Rules Governing ERISA Fiduciary Duty Claims Against ESOP Trustees

"The vast majority of complaints filed in stock-drop cases to date make broad allegations that the fiduciaries 'knew or should have known' the company's stock was an imprudent investment, based on publicly available information. The Court's suggestion that a 'special circumstances' pleading obligation applies ... will make it considerably more difficult for plaintiffs making such claims to survive a motion to dismiss.... Fiduciaries of ESOPs holding non-publicly traded stock may be particularly impacted by the Court's rejection of the Moench presumption."

State PBM Regulation: Oklahoma District Court Latest to Rule on ERISA, Part D Preemption

"PCMA contended that these provisions had an impermissible connection with ERISA because they directly affected ERISA plans by dictating network composition, cost-sharing differentials, and communications with beneficiaries, or, in some cases, the benefit design of a plan.... The court acknowledged that these provisions might alter the incentives and limit some of the options that an ERISA plan can use, and would have some effect on the way PBMs pay and/or reimburse pharmacies, but held that they did not impermissibly dictate the design of ERISA plans or force the plans into making any specific choices." [Pharmaceutical Care Management Assoc. (PCMA) v. Mulready, No. 19-0977 (W.D. Okla. Apr. 4, 2022)] 

Boost to Independent Pharmacies -- Supreme Court Sides with State Regulation of PBMs

"The case is an interesting contrast to [Gobeille v. Liberty Mutual Ins. Co.] where the Court found that ERISA preempted a Vermont law requiring health plans to disclose certain plan cost information to the state. The Court determined that gathering and reporting such information were matters central to plan administration such as recordkeeping, disclosure and reporting -- areas preempted by ERISA. Had [the Arkansas law] mandated a similar duty on PBMs to track and report certain cost information the result may have been different." [Rutledge v. Pharmaceutical Care Mgmt. Assoc., No. 18-540 (S. Ct. Dec. 10, 2020)]

The Naked CEO: Personal Liability for Board Members and C-Suite Under ERISA

"The United States spends approximately $3 trillion a year on health care, making the oversight of company health plans an attractive target for plaintiffs.... The plaintiffs' bar is now arguing that ... employee premiums and other costs, such as co-pays, types of coverage, pharmacy rebates, should be considered protected ERISA plan assets, and that every decision a plan sponsor makes with respect to use of those plan assets is a fiduciary decision."

$28 Trillion and Personal Liability: ERISA Roars Back

"[T]he 10 highest ERISA class action settlements in 2017 with respect to employer-sponsored retirement plans totaled nearly $1 billion.... In recent years, ERISA fiduciary litigation has increasingly focused on excessive plan fees and expenses... Looking ahead, fiduciaries' decisions about monitoring costs and who they appoint and hire to administer health plans will be important drivers of ERISA litigation -- and often, companies are not fully aware of this growing threat."

Taking the Pulse of New Association Health Plans

"States have reacted to the final rule in dramatically divergent ways. Some states believe that AHPs will make it finally possible for small employers to offer affordable healthcare options for their employees. Other states worry that AHPs will destabilize the individual insurance marketplace. They predict that healthy people will join AHPs because they are less expensive than other insurance options, and this shift will leave sicker people in a smaller pool with higher premiums."

Your Next Cybersecurity Breach Will Be Your 401(k) -- Soon (PDF)

"With large-scale cyberattacks on the rise and cybercrime expected to cost $6 trillion annually by 2021, employers need to consider how employee data and corporate assets can be better protected from increasingly varied and adept cyber threats.... [T]hese cyber breaches risk not only the personal information of plan participants and plan's assets, but also the personal assets of board members, those in the C-Suite and other 'fiduciaries' of the retirement plan. And if you think these individual fiduciaries can be indemnified, think again. ERISA prohibits it."

'Reasonable Accommodation' Requirement in EEOC's Proposed Wellness Program Regs Will Pose Challenges for Employers

"The need to provide reasonable accommodations in this context would invariably require employers to engage in the interactive process with affected employees to determine whether a reasonable accommodation or alternative to participation in the wellness program is available. Complying with the ADA's reasonable accommodation and interactive processes are already some of the most challenging workplace issues facing employers today. Extending these requirements to wellness program participation will likely create increased challenges and burdens for employers as they attempt to structure incentives and the methods by which those incentives can be achieved."

'Controlling Health Plans' and Standard Transaction Certification (PDF)

13 pages. Presentation slides. Topics include: New ACA Provisions; HIPAA Transaction Rules; Representative Transactions; Proposed Certification Rules; Controlling Health Plan Defined; Health Plan Identifier (HPID) Final Rule; and HPID Deadlines.

'Use It or Lose It?' A Closer Look at the Recent IRS Guidance on Flexible Spending Accounts

"[C]ertain issues are left unaddressed by the Guidance, including how the carryover rule could affect an individual's eligibility to make contributions to a Health Savings Account (HSA), as well as the potential implications of replacing a planned grace period for 2013 with the FSA carryover rule. Employers should carefully consider these issues in deciding whether to adopt the carryover rule for the 2013 plan year (and for 2014 and beyond), or to wait until further guidance is issued."

The Administration's 'Fix' for Insurance Cancellations: Five Things Worth Taking Into Account

"The threshold question is whether state insurance regulators will be willing, or able, to let insurers take advantage of the relief.... Even if the states are willing to 'play ball,' insurers are under no obligation to continue these policies. Insurers will have to take into account significant business and logistical considerations in deciding how to proceed.... Not every policy that is non-compliant with the ACA market reforms can be 'saved' by this relief. Notably, it appears 'mini-med' policies cannot take advantage of the relief and therefore are no longer viable."

Will Your HRA or FSA Survive the ACA? Answering Your Questions About Technical Release 2013-03

"[A] stand-alone HRA cannot satisfy PPACA's market reform requirements, and therefore is generally not a viable option for providing employer-sponsored health coverage to active employees. However, an HRA that is integrated with a plan which meets PPACA's market reform requirements is PPACA-complaint.... Other types of tax-favored financing vehicles, such as employer payment plans under Rev. Rul. 61-146, are considered health plans and therefore cannot be PPACA-compliant on a stand-alone basis because they would violate the market reforms."

Same-Sex Spouse Has Right to Pension Benefits Under ERISA

"What is particularly interesting about the Court's analysis [in Cozen O'Connor v. Tobits] is the fact that Illinois does not issue marriage licenses to same-sex couples. Arguably, then, the Court could have concluded that Illinois does not recognize 'same-sex marriage' under its laws. However, Illinois does have a civil union statute. The court opined that because Illinois recognizes civil unions, it effectively recognizes same-sex marriages performed in other jurisdictions (such as Canada). The analysis under Tobits appears to not be whether the couple lives in a state that allows same-sex couples to be married, but rather, whether the couple lives in a state that effectively recognizes same-sex marriages performed in other jurisdictions."

The Tibble Case: 401(k) Plan Investment Selection Triggered ERISA Violation

"The trial court determined that [Edison's] investment selection process did not properly investigate the alternative of offering lower-fee institutional-class funds available from the same investment firm. Edison argued that it had acted prudently because it based its decision on advice received from Hewitt, which had been retained to provide advisory services to the plan. The Ninth Circuit rejected this argument, stating that expert advice does not absolve a fiduciary of responsibility: 'Just as fiduciaries cannot blindly rely on counsel ... or on credit rating agencies[,] a firm in Edison's position cannot reflexively and uncritically adopt investment recommendations.'"

Supreme Court Review of the Defense of Marriage Act: Implications for Employers (PDF)

7 pages. "[If] Section 3 of DOMA is ruled unconstitutional, employers will likely need to ... move to a regime for benefit administration that provides equal ERISA plan benefits and rights to employees with same-sex spouses -- at least with respect to those employees that live in states that allow for or recognize same-sex marriage.... If the Supreme Court determines it does not have jurisdiction to decide the case, plan sponsors and service providers could face interesting issues given that the First and Second Circuits have ruled that Section 3 of DOMA is unconstitutional[.]"

DOL Issues Guidance on Additional Annual Funding Notice Disclosures for Single-Employer Defined Benefit Plans

"MAP-21 ... added a new disclosure requirement requiring that information regarding segment rate stabilization be disclosed in plans' AFNs for plan years between 2012 through 2014. FAB 2013-01 addresses this disclosure requirement and also provides a supplement to the model AFN. Use of the model language -- while not mandatory -- is sufficient to demonstrate satisfaction of ERISA's AFN content requirements."