News Items

27 pages. "This notice provides guidance on the employer credit for paid family and medical leave under section 45S of the Internal Revenue Code. This notice also announces that the Department of the Treasury and the [IRS] intend to publish proposed regulations under section 45S.... This notice includes sections on the following topics: A. Eligible Employer; B. Family and Medical Leave; C. Minimum Paid Leave Requirements; D. Calculating and Claiming the Credit; E. Effective Date."

"If you use the IRS model notices for eligible rollover distributions, you should update yours to the new standards. If you use an alternative notice (which is also permitted), you should modify it to address the issues in the new models.... For the practitioner community, Notice 2018‑74 serves as a helpful checklist of recent rollover changes."

"Plaintiff alleged that Unum wrongfully terminated her long term disability benefits under the Boy Scouts of America Long Term Disability Plan. Plaintiff filed a motion to compel responses to discovery requests aimed at ascertaining Unum's business practice of forecasting and targeting disability claims for potential 'recoveries' or terminations.... The court found Unum's boilerplate objections to be improper especially when Unum failed to submit any evidentiary declarations supporting the objections." [Gray v. Unum Life Ins. Co. of America, No. 17-1778 (C.D. Cal. Sept. 21, 2018; unpub.)]

"[U]nder the assumption that there are no opt-outs under [the Automatic Retirement Plan Act of 2017 (ARPA] the [retirement savings shortfall (RSS)] would be reduced by $645 billion or 15.6 percent of the current $4.13 trillion retirement deficit. If auto-portability were added to the system simultaneously with ARPA, the RSS would be reduced by an additional $287 billion for a total reduction of $932 billion or 22.6 percent of the current deficit."

16 pages."401(k) plans are the largest share of DC plan assets, with more than two-thirds of DC plan assets held in 401(k) plans.... More than one-third of 401(k) plan participants are younger than 40.... Most 401(k) plan participants receive plan contributions from their employers.... Equities figure prominently in 401(k) plans, and younger 401(k) plan participants are highly engaged in equity investing.... Fewer than one in five 401(k) plan participants have loans outstanding."

"If employees don't understand the words in 401k meetings or materials, not much learning will ensure.... Math illiteracy might be a greater learning obstacle in 401k ed than jargon.... If you want to get serious, do a number audit. Start with a printout of the presentation and copies of all the basic 401k handouts and electronic media. As you go through these materials, draw a circle around each number you find. Ask the ed provider how are they certain the math-challenged employees understand it."

"IRS regulations ... do not permit an employee to select any option available when a particular election change event occurs, but instead limit options according to the type of event that has occurred.... [This article focuses] on IRS rules governing changes for two types of FSAs -- health FSAs and Dependent Care Assistance Plans (DCAPs)."

"After determining the governing state law and the date of the POA, the plan administrator needs to determine if the state law's requirement for a valid POA have been met. These requirements may include, for example, notarization or witnesses.... Even where notarization is not required, a notarization of the POA should be reviewed to determine its validity, as the POA was apparently intended to be notarized. Once the POA's form has been determined to be valid, the more difficult task comes with determining if the agent's act is authorized by the POA."

46 pages. Draft; Sept. 2018. "When a lump sum is offered in a traditional pension plan, the amount of the lump sum often varies based on market interest rates.... [The IRS] requires the use of an 'annuity substitution' approach for the purpose of valuing certain benefits expected to be paid in lump sum form. This practice note discusses the valuation of these benefits for financial accounting purposes."

"The central question is how truly voluntary something is when a large financial incentive is attached. As a result of the court decision, ... workers may find their employers starting to offer smaller incentives for these programs. Also, the programs might include more options for qualifying for those incentives -- a choice, for instance, between undergoing a medical exam or completing online health education training."

"More providers are offering some sort of telemedicine or remote monitoring service. While some payers have begun partnering with telehealth vendors, many plans have no reimbursement schedule at all for telehealth. Depending on their coverage, a patient may be effectively barred from these programs unless they are willing to pay out of pocket."

"[V]irtually every new Cash Balance Plan is incorporating the Market Return design right from the start. Reasons ... include: [1] Contribution stability ... [2] Reduced exposure to unfunded benefits ... [3] Increased stability as plan matures ... [4] Investment policy not driven by desire to 'hit the bogie' ... [5] Ability for participants to capture 'upside' potential ... [6] Similarity to 401(k) plan experience."

"In some cases the hospitals had reviewed and assessed patient privacy issues concerning the filming and adopted protections concerning patient privacy, for example, providing the film crews with the same HIPAA privacy training that workforce members received ... Despite these protections, however, HHS concluded in its investigations that the hospitals: [1] Impermissibly disclosed patients' protected health information (PHI) to the television crews by permitting filming without first receiving patient authorizations. [2] Failed to adequately safeguard patient PHI from disclosure."

"Before full implementation of the [ACA's] insurance reforms, ... insurers generally were permitted to consider health factors in determining the offer of insurance, its price, and covered health services. Although references to individuals with preexisting conditions commonly focus on the possibility of denial of insurance, they also pertain to the offer of insurance that is more expensive on the basis of health factors and to insurance that excludes health services to treat preexisting conditions."

"This notice provides that the suspension of the exclusion from income provided by section 132(a)(6) under section 132(g)(2) does not apply to amounts received directly or indirectly by an individual in 2018 from an employer for expenses incurred in connection with a move occurring prior to January 1, 2018, that would have been deductible as moving expenses under section 217 of the Code if they had been paid directly by the individual prior to January 1, 2018[.]"

"[Montana] Governor Steve Bullock announced the creation of a bipartisan work group that will design a bill ordering the state to submit a Section 1332 waiver that would form a public program.... Recent federal policies are expected to raise premiums in Montana by $1,300 on average ... Bullock vetoed a reinsurance bill in Montana in 2017 because it would have given the state insurance commissioner too much power[.]"

"PBGC's final regulation omits proposed changes to plan solvency provisions ... Commenters were concerned that the revised tests would 'make mergers and transfers more difficult or prohibit them, would substantially expand burden for plan sponsors, and would restrict options for plans.' ... In addition to updates and reorganization of the existing regulations, the final regulation outlines the process to be followed for multiemployer plan mergers[.]"

"[1] Offer a purpose-driven portfolio of benefits.... [2] Optimize the financing of benefits programs.... [3] Use technology to engage employees and help them make informed choices.... [4] Gain efficiencies through operating model and administration technologies.... [5] Use data-driven insights for informed decision making."

"For those technology executives who derive a significant amount of income from stock-based compensation, a variety of planning opportunities are available -- such as estate planning, change in residency, and charitable giving. Regardless of which avenues are pursued, early planning is instrumental in helping executives get the most value from their options."

"Mr. Hartogensis is an investor and technology sector leader in software development, with experience managing financial equities, bonds and private placements. He currently serves as director of a family trust. He co-founded Auric Technology LLC, a company that develops customer relationship management software. He is also Senate Majority Leader Mitch McConnell, R-Ky., and Secretary of Transportation Elaine Chao's brother-in-law."

"H.R. 6757, the Family Savings Act of 2018 ... include[s] changes to the rules governing multiple and pooled employer retirement plans, the creation of new tax-preferred 'Universal Savings Accounts,' to which an individual would be able to contribute up to $2,500 each year, and an exemption from required minimum distribution rules for individuals with account balances below certain amounts. The staff of the Joint Committee on Taxation (JCT) estimates that enacting the bill would reduce revenues by $21.0 billion over the 2019‑2028 period."

"[1] Start With Employee Awareness ... [2] Provide Regular Training Programs ... [3] Make It Personal And Relatable ... [4] Be Transparent About Security Procedures ... [5] Use Entertaining Videos To Convey Your Points ... [6] Tie Training To Their Personal Lives ... [7] Keep It Simple And Easy."

"CBO's health insurance simulation model (HISIM) generates estimates of health insurance coverage and premiums for the population under age 65. HISIM is used to help develop baseline projections ... and also to model proposed changes in policies that affect health insurance coverage. Currently, CBO is developing and testing a new version of HISIM to respond to continued Congressional interest in understanding the effects of legislative proposals that significantly affect health insurance coverage. The new model will be used to help develop CBO's spring 2019 baseline projections and subsequent cost estimates."

"When operating under the assumption that any plan can be hacked, you can prepare appropriately. Organizational policies and training will ensure cybersecurity understanding and consistent practices across the board. The most effective cybersecurity strategy includes both a prevention plan as well as a response plan of action against a breach."

"[T]his approach is perfectly legal and makes complete sense if you have the resources to pull it off. If an employee calls off work, they already are required to call their supervisor so that the shift can be covered. However, if they also want the FMLA to apply to this absence, they are required to call a second number. This second call can be required to another employer intake line or a third-party administrator handling calls on the employer's behalf."