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Spectrum Employee Benefits, Inc.
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<< Older News  |  August 1, 2021

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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)
Internal Revenue Service [IRS] Link to more items from this source
[Official Guidance]
July 30, 2021

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

Tags: ARPA  •  Funding of DB Plans

CMS: Part D Premiums Projected to Increase Nearly 5% in 2022
FierceHealthcare Link to more items from this source
July 30, 2021

"The average Part D premium is projected to increase by nearly 5% from $31.47 to $33 in 2022.... The announcement comes amid several potential major changes to Medicare being debated in Congress."

Tags: Medicare  •  Prescription Drug Costs

DOL Clarifies Timing of Lifetime Income Disclosures in Benefit Statements
Kilpatrick Townsend Link to more items from this source
[Guidance Overview]
July 30, 2021

"Participant directed plans ... generally must furnish lifetime income disclosures by the benefit statement for the second quarter of 2022 ... For plans that do not allow for participant-directed investment, lifetime income disclosures must be included in the benefit statement for the first plan year ending on or after September 19, 2021, which ... for calendar year plans ... must be furnished no later than October 15, 2022."

Tags: Retirement Plan Administration

DOL Provides FAQs on Interim Final Rule on Lifetime Income Disclosures for DC Plans
Voya Link to more items from this source
[Guidance Overview]
July 30, 2021

"The DOL acknowledges that 'many retirement plans have been providing various types of illustrations for several years.' The DOL notes that the ages in the interim final rule must be used for lifetime income disclosures, but that plan administrators may provide participants with additional lifetime income illustrations[.]"

Tags: Retirement Plan Administration

IRS Giveth New Options for Voluntary Correction But Also Taketh Away
Employee Benefits Law Group Link to more items from this source
[Guidance Overview]
July 30, 2021

"If you are a plan sponsor or you are working with a plan sponsor that has a qualification failure that does not neatly fit within the safe harbor guidelines of EPCRS and you are not sure that you want to reveal your identity to the IRS in a VCP application, you should act fast and file an anonymous VCP application as soon as possible. The last day to file such an application is December 31st[.]"

Tags: Retirement Plan Administration

Fifth Circuit: Plan Participants Lacked Standing to Bring ERISA Fiduciary Breach Claims
Jackson Lewis P.C. Link to more items from this source
July 30, 2021

"[T]he Fifth Circuit observed that although the plan eventually began offering a stable value fund -- the plaintiffs' preferred type of capital preservation investment -- the participants never invested in this option. For that reason, the appellate court concluded that the participants failed to show that the challenged acts of the defendants caused their injury[.]" [Ortiz v. American Airlines, Inc., No. 20-10817 (5th Cir. Jul. 19, 2021)]

Tags: Fiduciary Duties  •  Retirement Plan Investments

Greater Price Transparency, Advanced Explanation of Benefits Requirements Coming Soon
Hall Benefits Law Link to more items from this source
[Guidance Overview]
July 30, 2021

"The CAA requires that health plan participants receive an advance explanation of benefits (EOB) whenever they schedule a health care service at least three business days in advance. Participants are also able to request an advance EOB for a health care service whether or not the service has been scheduled."

Tags: Consolidated Appropriations Act, 2021   •  Health Plan Administration

CMS Toolkit on COVID-19 Vaccine: Health Insurance Issuers and Medicare Advantage Plans (PDF)
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS] Link to more items from this source
[Guidance Overview]
July 30, 2021

17 pages; Jul. 30, 2021. "CMS issued this toolkit to help health insurance issuers and Medicare Advantage plans identify the issues that need to be considered and addressed in order to provide coverage and reimbursement for vaccine administration. Because COVID-19 vaccines will be federally purchased, this toolkit primarily focuses on vaccine administration.... This toolkit:

  • Provides a list of operational considerations for issuers and Medicare Advantage plans as they design their approach to promoting COVID-19 vaccinations, and information on how issuers and Medicare Advantage plans can communicate with providers and enrollees on vaccinations and coverage;
  • Outlines legislative and regulatory provisions applicable to issuers that ensure that enrollees can receive a COVID-19 vaccine in a convenient setting, with no out-of-pocket costs;
  • Encourages issuers and Medicare Advantage plans to implement streamlined processes to quickly administer COVID-19 vaccine coverage; and
  • Describes how issuers and Medicare Advantage plans can maximize the number of their enrollees who get vaccinated once a COVID-19 vaccine becomes available."

Tags: Health Plan Administration  •  Health Plan Design

Seventh Circuit Holds ERISA Does Not Preempt Bankruptcy Creditors' State Law Claims Against Corporate Directors and Officers
Roberts Disability Law Link to more items from this source
July 30, 2021

"The court noted the limited precedent in this area but that the Fifth Circuit and several district courts have held that ERISA does not preempt corporation-law claims against dual-hat directors and officers." [Halperin v. Richards, No. 20-2793 (7th Cir. Jul. 28, 2021)]

Tags: ERISA Preemption  •  ESOPs  •  Fiduciary Duties

DOL Cyber Scrutiny Higher for 'Those Running the Systems'
American Retirement Association [ARA] Link to more items from this source
July 30, 2021

"[According to Tim Hauser, Deputy Assistant Secretary for National Office Operations at EBSA, the] most detailed proscriptive best practices in the recent DOL guidance were aimed at recordkeepers and 'those running the systems' -- and the DOL has higher expectations on cybersecurity practices among those organizations. Costs/risk exposure are a relevant consideration -- the [DOL] would expect quite a bit more of those who have more data, and more exposure."

Tags: Cybersecurity  •  Retirement Plan Administration

Enforceability of Arbitration Provisions: There Might Be More to the Analysis
Faegre Drinker Link to more items from this source
July 30, 2021

"When an arbitration provision is found in an ERISA plan document itself, courts have applied state-law principles when evaluating whether the plan document contains a binding agreement to arbitrate between and among the plaintiff, the plan itself and the defendants named in the lawsuit. Yet these courts have either ignored, or not adequately addressed, the fact that ERISA itself contains rules for contract formation. The ERISA rules for contract formation -- and not state-law principles -- might govern whether an agreement to arbitrate exists in an ERISA plan document."

Tags: Fiduciary Duties  •  Retirement Plan Administration  •  Retirement Plan Design

Oregon Issues Temporary Rule Expanding the Scope of Its Paid Sick Leave Law During a Public Health Emergency
Littler Link to more items from this source
[Guidance Overview]
July 30, 2021

"[E]ffective immediately and through January 17, 2022, eligible employees may take covered leave for absences connected to: [1] an emergency evacuation order of level 2 (SET) or level 3 (GO) issued by a public official with the authority to do so, if the affected area subject to the order includes either the location of the employer's place of business or the employee's home address; and [2] a determination by a public official with the authority to do so that the air quality index or heat index is at a level where continued exposure to such levels would jeopardize the employee's health."

Tags: FMLA and Other Leave  •  Local Regulation

Do You Understand Your Investment Policy Statement?
Verrill Dana LLP Link to more items from this source
July 30, 2021

"Even the most thorough and detailed IPS will be of limited utility unless the plan fiduciaries who are adopting the IPS can understand the document.... For that reason, an IPS should: [1] provide meaningful guidelines that committee members can apply in fulfilling their duties; and [2] be written a way that an intelligent and engaged committee member can understand and implement."

Tags: Fiduciary Duties  •  Retirement Plan Investments

Summary of DCIIA/SPARK 2021 Public Policy Series: Domestic Themes (PDF)
Defined Contribution Institutional Investment Association [DCIIA] Link to more items from this source
July 30, 2021

"The combination of a new administration and Congress in Washington, together with the COVID pandemic, shutdown, recession and recovery has focused industry minds and accelerated trends in policy, practice and technology. The defined contribution (DC) savings industry demonstrated notable resilience amid this market volatility and accelerated its consideration of many best practices that bode well for the future."

Tags: Retirement Plan Design  •  Retirement Plan Policy

Seeing the Bigger QDIA Picture
planadviser Link to more items from this source
July 30, 2021

"A close look at selecting and evaluating qualified default investment alternatives (QDIA) forces some questions about the value an adviser can add to the process.... [Although] advisers may be good at helping to craft custom funds, this might not always be appropriate.... [T]here are so many different low-cost, off-the-shelf solutions that most plan sponsors can typically find one that meets their needs[.]"

Tags: Retirement Plan Investments

HHS and DOJ Issue Guidance on 'Long COVID' as a Disability
Jackson Lewis P.C. Link to more items from this source
July 30, 2021

"Although the guidance acknowledges that long COVID is not always a disability, it indicates that an individualized assessment is necessary to determine whether a person's condition or symptoms substantially limit a major life activity. The guidance also provides examples of when long COVID could meet that definition under applicable law."

Tags: FMLA and Other Leave  •  Health Plan Design

Insurers Push Back on CMS' Proposals to Extend ACA Open Enrollment, Bring Back Standardized Plans
FierceHealthcare Link to more items from this source
July 30, 2021

"Several insurers and advocacy groups commented on the proposals outlined in the Centers for Medicare & Medicaid Services' Notice of Benefit and Payment Parameters, which outlines ACA marketplace exchange regulations for the 2022 coverage year. Insurers worried that extending the open enrollment period could lead to adverse selection and raise premiums for consumers."

Tags: Health Plan Design  •  Health Plan Policy

Trends in Executive Compensation Litigation
Thomson Reuters Practical Law Link to more items from this source
July 30, 2021

"This Article discusses trends in executive compensation-related litigation relating to: [1] Failures to adequately disclose perquisites paid to named executive officers (NEOs) as required by Item 402 of Regulation S-K ... [2] Compensation paid to a controlling shareholder relating to the individual's role as an executive or board member ... [3] Executive misconduct ... This Article also recommends actions for companies to consider in light of the recent executive compensation-related litigation."

Tags: Executive comp  •  Nonqualified Plans

How a Contemporary Benefits Administration Solution Can Elevate Your Employee Experience
bswift Link to more items from this source
July 30, 2021

"Nearly 70% of HR professionals surveyed felt a contemporary ben admin system can help employees better understand their benefit options.... 66% of HR professionals surveyed reported that a contemporary ben admin system improved the relationship between HR and the rest of the organization.... 63% of HR professionals feel a contemporary ben admin system can help employees feel better connected to their healthcare experience."

Tags: Health Plan Administration  •  Retirement Plan Administration

IRS Information Release 2021-160: Paid Leave Credit Available for Providing Leave to Employees Caring for Individuals Obtaining or Recovering from a COVID-19 Immunization (PDF)
Internal Revenue Service [IRS] Link to more items from this source
[Official Guidance]
July 29, 2021

"The IRS today updated frequently asked questions (FAQs) on the paid sick and family leave tax credits under [ARPA]. The updates clarify that eligible employers can claim the credits for providing leave to employees to accompany a family or household member or certain other individuals to obtain immunization relating to COVID-19 or to care for a family or household member or certain other individuals recovering from the immunization.

"The paid sick and family leave credits reimburse eligible employers for the cost of providing paid sick and family leave for reasons related to COVID-19. The revised FAQs make clear this includes leave taken by employees to care for certain individuals to obtain immunization relating to COVID-19 or to recover from immunization relating to COVID-19. This new reason for paid sick or family leave also applies for the comparable credits for self-employed individuals."

BenefitsLink note: the following Revised sections of the FAQs have been updated as of July 29, 2021:

Tags: ARPA  •  FMLA and Other Leave

The Mega Backdoor Roth: Here We Go Again
DWC Link to more items from this source
July 29, 2021

"The Mega Backdoor Roth comes into play in one of two ways. The individual either takes an in-service withdrawal and rolls it to a Roth IRA or utilizes an in-plan Roth rollover feature to convert to Roth within the plan. This may sound like a complicated cool investment strategy, but it RARELY works."

Tags: Misc. Distribution Issues  •  Retirement Plan Design  •  Retirement Plan Information for Employees

What Empower's Purchase of Pru Retirement Business Means for Advisers
Fred Barstein, via RPA Convergence Link to more items from this source
July 29, 2021

"What is the value of an adviser to record keepers? The overwhelming answer is that advisers sell the plan. They represent a sales force of almost 300,000 with personal relationships with plan sponsors. Providers do not have to recruit, manage or pay these advisers directly. Everything else is ancillary."

Tags: Retirement Plan Administration  •  Retirement Plan Investments

Senate Finance Committee Hearing: Building on Bipartisan Retirement Legislation: How Can Congress Help?
Committee on Finance, U.S. Senate Link to more items from this source
July 29, 2021

Video of July 28 hearing, with links to witness testimony: [1] Aliya Robinson, The ERISA Industry Committee; [2] Brian H. Graff, American Retirement Association; [3] David Certner, AARP; and [4] The Honorable Tobias Read, Oregon State Treasurer.

Tags: Retirement Plan Design  •  Retirement Plan Policy

Proposed Regs Would Substantially Expand Mandatory Electronic Filing of Information Returns
Thomson Reuters / EBIA Link to more items from this source
[Guidance Overview]
July 29, 2021

"The requirement to aggregate returns when calculating electronic filing thresholds, combined with the lower thresholds themselves, will likely eliminate paper filings for all but the smallest employers. The regulations' impact would be especially acute for smaller applicable large employers (ALEs), who have been able to file Forms 1094-C and 1095-C on paper when reporting information for employer shared responsibility. Since ALEs by definition have at least 50 full-time-equivalent employees, they are likely to pass the 100-return threshold when taking into account Forms W-2 and 1095-C."

Tags: Health Plan Administration

Joint Agencies Issue FAQs Regarding Plan Coverage for HIV PrEP Treatment
EPIC Link to more items from this source
[Guidance Overview]
July 29, 2021

"Health plans with policy years beginning on or after June 30, 2020, must cover PrEP as preventive care under the ACA.... The Final Recommendation gives information about whom the USPSTF determined to be at high risk for HIV acquisition.... The Departments' FAQs explain that plans must provide coverage without cost-sharing for PrEP drugs and items and services included as part of determining whether PrEP is appropriate for the individual and ongoing follow-up and monitoring."

Tags: Health Plan Costs  •  Health Plan Design


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