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Meet the Law Firms Fighting 401(k), Health Plan Class Actions

"For the second year in a row, [Morgan Lewis & Bockius LLP is] the law firm getting the most ERISA class action business.... Dorsey & Whitney LLP follows closely in number of ERISA class actions.... Skadden Arps Slate Meagher & Flom has been hired to defend eight ERISA class actions in the past year.... Proskauer Rose LLP, Alston Bird, Groom Law Group Chartered, and Reed Smith LLP are defending seven class actions, respectively.... Steptoe & Johnson LLP was hired to defend six ERISA class actions.... O'Melveny & Myers LLP and Sidley Austin LLP are defending four class actions each."

Executive Compensation Due Diligence in M&A Transactions

"A thorough review of the compensation arrangements of the target company should be conducted early in the transaction process as part of the broader due diligence process. This review allows the acquirer to gain a comprehensive understanding of the target's compensation program and to uncover any compensation-related liabilities or legal/regulatory compliance issues ... The acquirer's compensation diligence may surface information needed to accurately draft the transaction documents and to plan for post-closing integration of the target's compensation programs."

The World According to ARP: Key Employee Benefits Changes

"Plan sponsors will need to track all assistance-eligible individuals receiving the COBRA subsidy and related amounts in order to take advantage of the employer tax credit for the cost of such COBRA premiums.... Single-employer pension plan sponsors should consult with their actuaries to determine the effect that the new pension funding stabilization rules will have on the sponsor's funding obligations, including the effect on annual funding notices."

Text of PBGC Technical Update 21-1: Effect of ARP on 4010 Reporting

"This Technical Update 21-1 provides [PBGC] guidance on the effect of the American Rescue Plan Act of 2021 (ARP) ... on annual financial and actuarial reporting under section 4010 of ERISA and part 4010 of PBGC's regulations. This Technical Update waives 4010 reporting requirements in situations where the reporting obligation is triggered solely because of a retroactive election permitted by ARP and IRS Notice 2021-48. It also provides guidance with respect to actuarial information reported in a 4010 filing that changes because of ARP."

More Filers, More to File: ERISA Agencies Slate Major Expansion, Revamp of Form 5500 for 2019

"Although the new forms are not slated for use until plan years beginning in 2019 (with the first filings in 2020), many of the data that they demand are not routinely collected and may not be easily retrievable from current information systems. Some changes are matters of form rather than substance. Some questions have been moved to different schedules, others have been rephrased, and numerical codes for plan features have been replaced by a series of 'yes/no' choices. More substantively, the new regime will expand both the universe of plans that must file annual reports and the quantity of information that the reports must include."

Untangling the SECURE Act's Retirement Plans: PEPs, ARPs, and MEPs

"In addition to creating PEPs, the SECURE Act includes a provision that creates an alternative to PEPs, ARPs, and MEPs by allowing consolidated Form 5500 reportings for certain single-employer plans. Specifically, the law directs the IRS and DOL to work together to modify Form 5500 so that all members of a group of plans may file a consolidated Form 5500."

DOL Fact Sheet: Final Rule on Association Retirement Plans (ARPs) and Other Multiple-Employer Plans (MEPs)

"The Final Rule will help strengthen retirement security for American workers ... ARPs and MEPs exist now, but the Final Rule offers new options ... The Final Rule includes a regulatory safe harbor for PEO MEPs ... ARPs and other MEPs have many possible benefits ... MEPs will increase retirement savings ... Request for Information on 'Open MEPs' "

IRS Releases Guidance with Respect to ARP Elections

"The changes made by [ARPA] will affect minimum funding requirements generally. The possible retroactive application of these changes, and the elections permitted with respect to their application, raise a number of issues ... There are also decisions for sponsors about whether to apply the interest rate changes in 2020 and 2021 for all purposes (including benefit restrictions) or just for purposes of minimum funding. [Notice 2021-48] generally provides wide latitude on the treatment of these issues."

How Many People with Employer-Sponsored Insurance Use the Drugs Slated for Medicare Price Negotiations

"Among the 167 million people with employer-sponsored insurance in 2022, 3.4 million people used at least one of the ten drugs that have been identified for Medicare price negotiations.... The most common was Jardiance, a drug used to treat diabetes and heart failure, with over 911,000 enrollees; the least common was Imbruvica, a drug used to treat blood cancers, with only 5,000 enrollees."

Humana Sues Slate of Drugmakers, Alleges Anticompetitive Practices to Protect HIV Drug Monopoly

"Humana alleges the companies conspired to impede and delay competition for their HIV drugs, allowing Gilead to retain a monopoly for years past when generics should have been introduced in the market. That resulted in Humana (and other payers) shelling out more for HIV drugs than they otherwise would have, with the payer alleging it has sustained and continues to sustain damages due to the overcharges."

Proposed Overhaul of Form 5500 Slated for 2019 Plan Years (PDF)

"Many new questions are designed to make fiduciaries evaluate plan compliance with tax and ERISA requirements, as well as to provide the Agencies with improved tools for enforcement.... Particularly in light of the recent IRS curtailment of determination letter requests ... the Agencies may see the Form 5500 as a way to support compliance reviews -- whether performed by the Plan Administrator or the Agencies via audit."

DOL Slated to Release Fiduciary Rule on April 6

"The [DOL's] final conflict-of-interest rule is scheduled to be released April 6. While [DOL] officials declined to comment, some critics are weighing in. House Speaker Paul Ryan, R-Wis., tweeted ... that the final rule 'is Obamacare for financial planning.' Mr. Ryan promised congressional action to hold up the rule, which he said will make it harder for some people to get financial advice."

ACA Premiums Slated to Rise by an Average of 7.5 Percent

"The highest proposed rate increase so far came in Nevada, where consumers with Time Insurance Co. might see their insurance premiums rise by 36 percent. Some consumers in Arizona, on the other hand, could see rates drop by 23 percent. Overall, the highest average price increases under ObamaCare so far have come in Indiana, where some consumers will see prices rise by 15.4 percent. The biggest average savings were found in Oregon, where premiums will drop an average of 2.5 percent in 2015."

Comprehensive Supreme Court Hearing on PPACA Slated for March 2012

As summarized by this excellent post on SCOTUSBlog, the Court has allocated 5 1/2 hours of argument to the PPACA challenge, 2 hours of which will focus on the constitutionality of the individual insurance mandate, with another hour allocated to the constitutionality of PPACA's expansion of Medicaid coverage.

GM Slates $6 Billion Pension Contribution

Excerpt: General Motors Co., Detroit, will contribute at least $4 billion in cash and $2 billion in GM common stock to the company's $85.9 billion U.S. hourly and salaried pension plans, the company announced Thursday.

House Slated to Vote on Legislation Providing That Employer-Provided Cell Phones Not Be Treated by IRS As a Taxable Fringe Benefit to Employees

Excerpt: Dow Jones reported that the Internal Revenue Service (IRS) interprets current law to require the inclusion of the value of a work cell phone in employee pay, unless detailed records are kept establishing that the phone is not used for personal calls.

Supreme Court Slated to Hear One ERISA Case

Excerpt: The issue in Conkright vs. Frommert involves how much deference a court must give to an ERISA plan administrator's interpretation of the terms of the plan. A group of Xerox Corp. retirees who left and then returned before retiring brought the suit. At issue is the method of accounting for lump sum distributions received by the employees when they first left the company when determining the benefits to which they were entitled at retirement.

Text of IRS Notice 2021-48: Guidance on Single-Employer Defined Benefit Pension Plan Funding Changes Under the American Rescue Plan Act of 2021 (PDF)

18 pages. Topics addressed include: Application of Section 430(c)(8) of the Code and Section 9706 of the ARP Effect of Section 9706 of the ARP on interest adjustments with respect to certain contributions made pursuant to Section 3608(a) of the CARES Act Applying the ARP segment rates to statutory hybrid plan interest credits Manner and Timing of Making Elections under the ARP Rules for Elections under Section 430(f) of the Code as a Result of the ARP and Flexibility to Redesignate Contributions Between Plan Years Election to add to a prefunding balance Revocation of an election to use a prefunding balance or funding standard carryover balance Revocation of an election to reduce a prefunding balance or funding standard carryover balance Redesignation of plan year for contributions Changes in AFTAP under Section 436 of the Code as a Result of the ARP Prospective application of change in benefit restrictions reflecting amendments made by the ARP Retroactive application of change in benefit restrictions reflecting changes under the ARP Rules with respect to elections under Section 3608(b) of the CARES Act Recharacterization of contributions made to avoid benefit limitations pursuant to Section 436 of the Code Corrections Reporting Requirements for Changes for the 2019 Plan Year Reporting Requirements for Changes for the 2020 Plan Year

Text of EBSA Notice of the Availability of the Model Health Care Continuation Coverage Notices Required by the American Rescue Plan Act of 2021

"These model documents include an ARP General Notice, a Notice in Connection with Extended Election Periods, an Alternative Notice, and a Notice of Expiration of Period of Premium Assistance.... [T]he Department also developed a Summary of ARP requirements to include the following supplemental disclosures, which should be included with the ARP General Notice, the Alternative Notice, and the Notice in Connection with Extended Election Periods: [1] A summary of the ARP's premium assistance provisions. [2] A form to request the premium assistance under the ARP. [3] A form for an individual to use to satisfy the ARP's requirement to notify the plan (or issuer) that the individual is eligible for other group health plan coverage (other than coverage consisting of only excepted benefits, coverage under a health FSA, or coverage under a QSEHRA) or that the individual is eligible for Medicare. 'Each model notice is designed for a particular group of qualified beneficiaries. When provided in combination with these supplemental disclosures, these model documents contain all of the information needed to satisfy the content requirements for the ARP's notice provisions."

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."