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McGuireWoods Comment Letter to SEC on Proposed Pay Ratio Rules (PDF)

"Registrants should be allowed to identify the median employee by using statistical sampling based on a definition of compensation other than 'annual total compensation' under Item 402.... We recommend that the final rule follow the proposed rule by not including leased employees, independent contractors or other individuals who are not statutory employees of the registrant in the determination of the median employee.... We recommend that the final rule give companies the flexibility to choose a date other than the last day of the company's most recent completed fiscal year for identifying the company's employees for purposes of calculating the pay ratio."  MORE >>

McGuireWoods Healthcare Reform Guide Updates

This edition covers: Postponed Deadline for Insured Group Health Plans to Comply with Nondiscrimination Rules; Virginia Seeks Direct Review of PPACA; Florida District Court Grants Justice Department Stay on Ruling Declaring PPACA Unconstitutional; and, Progress Made Toward Repeal of New 1099 Reporting Rules, But Future Still Uncertain.

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McGuireWoods Comments on Proposed Rules for Shareholder Approval ofExecutive Compensation and Golden Parachute Compensation (PDF)

5 pages. "Our comments focus on to the interplay of several of the proposed rules with common executive compensation practices."  MORE >>

McGuireWoods Healthcare Reform Guide: Grandfathered Health Plans

Excerpt: The statutory language allows the following events to occur without changing grandfathered status: Participants in a grandfathered plan may renew their coverage (for example, during the next open enrollment) after the date of enactment. Participants may enroll their dependents for coverage, including dependents who were not covered at the date of enactment. New employees and their dependents may be enrolled in a grandfathered plan.'

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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."  MORE >>

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.]

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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."  MORE >>

Comparison of Health Reimbursement Accounts to Flexible Spending Accounts (PDF)

3-page chart prepared by McGuireWoods LLP; thanks to Jeffrey R. Capwell of the firm for this contribution!

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Jackson Health System Slammed With $2.15 Million Penalty for Privacy Breaches

"The [HHS] Office for Civil Rights (OCR) has collected over $2.15 million in civil penalties from Miami-based Jackson Health System (JHS) for multiple violations of the Security and Breach Notification Rules under HIPAA.... This is the first publicized imposition of civil monetary penalties under HIPAA in recent years, in contrast to the many publicized settlements of alleged violations, indicating that JHS' violations were severe."  MORE >>

Cybersecurity and Retirement Plans

"Are qualified retirement plans really at risk? ... What kind of information (and assets) 'precisely' is at risk? ... What steps should be taken to safeguard retirement plan assets and information?"

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Federal Enforcement Isn't the Only HIPAA Concern: States Flex Their Muscles

"Despite the lack of significant settlements for HIPAA enforcement by the federal Office of Civil Rights (OCR) so far in 2018, states have not hesitated to patrol privacy and security breach activity and take action against perceived violations.... Two recent settlements suggest that states are ramping up their enforcement activities."

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HIPAA in Due Diligence, Part 3: Risk Mitigation Strategies

"Given the uptick in enforcement against both covered entities and business associates and ever-increasing fines, it is important to take a proactive approach to quickly address compliance gaps.... [I]t is important to ensure that any post-close compliance is completed within a specified time, such as 30, 60, 90 or 120 days post-close.... Buyers should consider whether it is appropriate to obtain specific indemnification or escrow of funds to cover potential HIPAA non-compliance.... If the seller is involved in any government or third party investigation or settlement negotiation related to HIPAA compliance, buyers should consider obtaining a waiver of liabilities and rights from the government or third party prior to close."

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HIPAA in Due Diligence, Part 2: Cloud Server Data and HIPAA Compliance

"For an online or virtual data room administrator, opening access to an inquiring stakeholder, valuator, or reviewer party to an acquisition target company's documentation may be as simple as a few clicks and perhaps an email or two. However, if any document contains personal or identifiable health information, a number of privacy and data protection regulations may deem access to such information by an unauthorized party to be a violation.... HIPAA may impose significant penalties on target providers posting the PHI and the unauthorized parties accessing the PHI alike."

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HIPAA in Due Diligence: Four Key Questions

"To better understand a seller's overall HIPAA compliance, there are four key diligence questions upon which buyers should focus their efforts in a transaction: [1] Does the seller have the core HIPAA documentation in place? ... [2] Is the seller complying with its policies? ... [3] How does the seller address potential HIPAA security and breach risk areas? ... [4] What is the nature of risk related to any identified gaps?"

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Is HIPAA a Sleeping Giant?

"So far, 2018 has been a light year in terms of HIPAA enforcement. There have been only two publicly-disclosed settlements.... Theories include that the priorities of the current administration are driving less enforcement, that the OCR is focusing its efforts on the current round of audits, and that the OCR is simply holding back on some settlements so that it can ensure a consistent approach to multiple settlements that it will announce in the near future. No matter the answer, it is not safe to assume that things will remain quiet on the HIPAA front."

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HIPAA Breach Reporting: 2017 Trends and Mends

"OCR data shows that HIPAA privacy breach reports affecting 500 or more individuals remained relatively stable when compared to 2016, increasing slightly from 327 to 345. Hacking and IT incidents, however, rose by 25%, with 142 in 2017 compared to 113 in 2016."

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HIPAA Guidance Issued on Man-in-the-Middle Attacks

"OCR states that when electronic protected health information (ePHI) that is protected under the Health Insurance Portability and Accountability Act (HIPAA) is transmitted over the internet, covered entities and business associates should include factors for securing end-to-end communication in their security risk analysis required by the HIPAA Security Rule."  MORE >>

Sun Capital Decision Threatens Lenders with Controlled Group Liability (PDF)

"Earlier this year, Sun Capital was cited by a multiemployer plan seeking to hold a lender jointly and severally liable for the employer's withdrawal liability s a member of the employer's controlled group. Lenders need to be alert to circumstances that may give rise to such potential controlled group claims, which have been brought both by multiemployer pension plans and by the [PBGC].... Lenders should always be wary of loans to companies that sponsor defined benefit pension plans or that contribute to multiemployer plans."  MORE >>

Year-End Update on Executive Compensation (PDF)

4 pages. Excerpt: In anticipation of the 2010 proxy season, companies should review all of their executive pay practices to determine whether any could be deemed problematic, and whether such arrangements should be eliminated or modified to address potential criticism.  MORE >>

ERISA Litigation Study, April 15, 2009 (PDF)

21 pages.  MORE >>