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<< Older News  |  July 12, 2020

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DOL Proposes New Guidance for Fiduciaries
Paul Hastings LLP Link to more items from this source
[Guidance Overview]
July 10, 2020

"The 'new' fiduciary regulation actually reinstates the old ERISA regulation defining who is an 'investment advice fiduciary' (the 'Five-Part Test') which had been revoked with the 2016 Rule, and also reinstates various class exemptions and Interpretive Bulletins ... that had long been in effect prior to the adoption of the now-defunct 2016 Rule.... The Proposed Exemption generally covers any advice to acquire, hold, dispose of, or exchange securities, as well as certain principal transactions and advice to plan participants to rollover assets from an ERISA plan to an IRA."

Tags: Fiduciary Duties  •  Retirement Plan Investments

The DOL's Final Regs on E-Disclosure of Retirement Plan Documents Become Effective Soon -- Are You Ready?
The Wagner Law Group Link to more items from this source
[Guidance Overview]
July 10, 2020

"The voluntary safe harbor provides two optional methods for electronic disclosure. The first method, generally referred to as 'notice and access,' is website posting, whereby plan administrators post covered documents on a website, if appropriate notices of internet availability (NOIA) have been furnished to the electronic address of the covered individual.... The second option is the 'email delivery method', under which plan administrators may send covered documents directly to the electronic address of a covered individual, with the covered documents being provided either in the body of an email or as an attachment."

Tags: Retirement Plan Administration

IRS Addresses Employer Reporting Rules for FFCRA Credits and Self-Employed Individuals
Thomson Reuters Practical Law Link to more items from this source
[Guidance Overview]
July 10, 2020

"The Form W-2 reporting requirements at issue in the IRS's guidance will help self-employed individuals who also receive qualified paid leave wages from an employer determine the amount by which they must reduce their claimed qualified sick leave equivalent or qualified family leave equivalent tax credits."

Tags: FFCRA  •  FMLA and Other Leave

Almost Half of Adults in Families Losing Work During the Pandemic Avoided Health Care Because of Costs or COVID-19 Concerns
Urban Institute Link to more items from this source
July 10, 2020

"Almost half (45.5 percent) of adults in families losing work or work-related income reported unmet need for medical care in the family because of costs in the 30 days before the survey and/or avoidance of care because of concerns about exposure to the coronavirus. Among adults in families losing work or work-related income because of the outbreak, more than half of those with lower incomes and those with uninsured family members, those in families with chronic conditions, and parents living with children under 19 were in families that avoided health care because of cost or concerns about exposure to the coronavirus."

Tags: Coronavirus (COVID-19)  •  Health Plan Design

About 5% of Adults in Families Losing Jobs During the Pandemic Also Lost Employer-Sponsored Health Insurance
Urban Institute Link to more items from this source
July 10, 2020

"Though coverage did not change between March/April and May for the overall sample, adults in families losing jobs reported a 4.9 percentage-point decline in [employer-sponsored insurance] during this period, from 59.0 percent to 54.1 percent, and a 3.5 percentage-point increase in private nongroup coverage, from 7.9 percent to 11.4 percent."

Tags: Coronavirus (COVID-19)  •  Health Plan Design

IRS Reminder: IRA Contributions Made by July 15 Count as 2019 Tax Deduction
Internal Revenue Service [IRS] Link to more items from this source
[Guidance Overview]
July 10, 2020

"Taxpayers can file their 2019 tax return now and claim the deduction before the contribution is actually made. But the contribution must then be made by the July 15 due date of the return, not including extensions.... Eligible taxpayers can usually contribute up to $6,000 to an IRA for 2019. The limit is increased to $7,000 for taxpayers who were age 50 or older by the end of 2019."

Tags: Individual Retirement Accounts (IRAs)

Managing Required Minimum Distributions in 2020
Withum Smith+Brown, PC Link to more items from this source
[Guidance Overview]
July 10, 2020

"Individuals have until August 31, 2020, to repay or roll over RMDs taken in 2020 that are no longer required under the CARES Act waiver. Amounts repaid to the same IRA will not be treated as a rollover for purposes of the rule restricting owners to one rollover in a 12-month period. The normal 60-day limitation on rollovers will not apply to RMDs received in 2020 and rolled over by August 31, 2020."

Tags: CARES Act  •  Coronavirus (COVID-19)  •  Required Minimum Distributions (RMDs)

Editor's Pick IRS Temporarily Relaxes Cafeteria Plan Midyear Election Change and FSA Rules
Jones Walker Link to more items from this source
[Guidance Overview]
July 10, 2020

"Employers will need to engage with their cafeteria plan vendor to coordinate the implementation of any changes and to identify any potential issues or limitations, such as vendor capabilities. Employers wishing to adopt the claims period extension will also need to determine whether FSA forfeitures have already been applied to pay for plan expenses. If so, the employer will likely have to restore these amounts.... [E]mployers should consider how the changes will be communicated to employees, in accordance with ERISA (particularly for Health FSAs)."

Tags: Cafeteria Plans  •  Coronavirus (COVID-19)

DOL Proposal Would Curtail Social Investing
Mercer Link to more items from this source
[Guidance Overview]
July 10, 2020

"Although only a small portion of retirement plan assets is currently invested in ESG funds, the agency recognizes that fiduciaries, sponsors and participants recently have placed greater emphasis on ESG factors. DOL perceives this trend as alarming and worries fiduciaries may be selecting ESG funds that sacrifice investment returns for nonpecuniary interests."

Tags: Retirement Plan Investments - ESG

Editor's Pick DOL Provides Retirement Plans with Additional Safe Harbor for Electronic Disclosure of Required Plan Notices Under ERISA
Trucker Huss Link to more items from this source
[Guidance Overview]
July 10, 2020

"The new, additional safe harbor does not supersede the 2002 safe harbor.1 It goes beyond the 2002 safe harbor by covering all retirement plan participants and beneficiaries who have not opted-out, not just those who are 'wired at work' or who affirmatively consent to electronic delivery. The final rule only applies to required retirement plan disclosures that are within the jurisdiction of the DOL and is fundamentally similar to the proposed rule, published on October 23, 2019."

Tags: Retirement Plan Administration

Recent COBRA Developments Call for Employer Attention
Davis Wright Tremaine LLP Link to more items from this source
[Guidance Overview]
July 10, 2020

"The [DOL's] posting of revised model COBRA notices, the extension of various key COBRA deadlines and several class actions filed against employers for allegedly deficient COBRA notices all highlight the need to revisit COBRA compliance."

Tags: COBRA  •  Coronavirus (COVID-19)

Key Changes to Rules Implementing ACA Nondiscrimination Provisions
Dickinson Wright PLLC Link to more items from this source
[Guidance Overview]
July 10, 2020

"The Final Rule makes clear that health insurance companies are not considered to be principally engaged in the provision of healthcare solely because they sell health insurance, if not doing so through one of the marketplaces. Due to this change, many health insurers will likely argue that when the rule changes take effect, Section 1557 no longer applies to them, or if it does, only to a small portion of its program. Benefits administrators may or may not be able to make a similar argument."

Tags: Health Plan Administration  •  Health Plan Design

Is Personal Information of Retirement Plan Participants an ERISA Plan Asset?
Jackson Lewis P.C. Link to more items from this source
July 10, 2020

"The essence of the allegations is that employers breach their fiduciary duties of loyalty and prudence when they permit plan service providers to profit from the use of plan assets -- sensitive personal information of plan participants -- for non-plan purposes.... There are some measures plan sponsors can take to minimize the risk of these kinds of claims. [1] Consider relationships with plan service providers more carefully and earlier in the process.... [2] Limit by contract the ability of plan service providers to use plan participant data to market or sell to participants products unrelated to the retirement plan, unless the participants initiate or consent."

Tags: Fiduciary Duties  •  Retirement Plan Administration

CareerBuilder 401(k) Lawsuit Dismissed: No ERISA Violation in Fees or Investment Options
Proskauer Link to more items from this source
July 10, 2020

"The [federal district] court found that the plan offered an acceptable mix of options with expense ratios ranging from .04% to 1.06% -- within the range found to be reasonable as a matter of law by other courts. The court also found that plaintiff's allegations that defendants removed or modified a majority of the funds in the plan over a five-year period actually supported an inference that defendants had a prudent process in place for monitoring the plan's funds." [Martin v. CareerBuilder, No. 19-6463 (N.D. Ill. Jul. 1, 2020)]

Tags: Fiduciary Duties  •  Retirement Plan Investment Costs

CMS Relaxes Timelines for MLR Reporting and Rebates Due to COVID-19
Thomson Reuters / EBIA Link to more items from this source
[Guidance Overview]
July 10, 2020

"CMS has issued a bulletin announcing that, as a result of updates to HHS's risk adjustment timelines due to the COVID-19 emergency, it will not take enforcement action against an insurer that submits the 2019 MLR annual reporting form by August 17, 2020, instead of the usual July 31 deadline. In addition, CMS will not take enforcement action against an insurer that prepays part or all of its estimated 2019 MLR rebate before filing its 2019 MLR annual reporting form, either as a premium credit before September 30, 2020, or as a lump-sum check or reimbursement."

Tags: Health Plan Administration  •  Health Plan Costs

Sacramento, Santa Rosa, and San Mateo County Enact Emergency Paid Sick Leave Ordinances
Littler Link to more items from this source
[Guidance Overview]
July 10, 2020

"[T]hree local governments in Northern California enacted emergency paid sick leave ordinances.... In part, these laws aim to fill gaps left by the federal [FFCRA] ... [This article] separately address[es] what each ordinance requires, demonstrating how differently cities may approach implementation of emergency paid sick leave ordinances. These varying approaches further complicate the patchwork of emergency paid sick leave requirements in California, which includes a statewide mandate for certain food sector workers and now nine local ordinances."

Tags: Coronavirus (COVID-19)  •  FFCRA  •  FMLA and Other Leave  •  Local Regulation

CARES Act Expansion of In-Service Withdrawals Highlights 403(b) Plan Surrender Charge Disparity
Hall Benefits Law Link to more items from this source
July 10, 2020

"These plans typically feature annuities that require the payment of a surrender charge of up to 12% on asset withdrawals or transfers.... If surrender charges do apply, it could make better financial sense to take out a loan, a process which has been made easier for those affected by COVID-19 through the CARES Act.... [M]ost 403(b) loans are collateralized -- the insurance company will freeze a portion of the account and then make a separate loan that it earns profits on."

Tags: CARES Act  •  Coronavirus (COVID-19)

Problems with Co-Provider 457(b) Plan Arrangements
Best Best & Krieger LLP Link to more items from this source
July 10, 2020

"[A] 'co-provider' arrangement ... [has] a single governmental 457(b) plan that is evidenced by a single plan document, with more than one plan recordkeeper and at least one plan investment consultant.... The chances of compliance violations (i.e., excessive deferrals, hardships, loans, etc.) were dramatically increased by having two recordkeepers not communicating with one another.... Neither of the recordkeepers were in a position to track all of the plan-level, participant-level limits and restrictions."

Tags: 457 Plans  •  Retirement Plan Administration

COVID-19 Leaves of Absence: How-To Guides for Large and Small Employers in New Jersey
Fox Rothschild LLP Link to more items from this source
[Guidance Overview]
July 10, 2020

"Some employment laws vary depending on a company's size as measured by the number of employees. These flowcharts -- one for employers with fewer than 500 employees and one for those with 500 or more -- apply to leave requests through the end of 2020. They are designed to help businesses navigate the web of intersecting city, state and federal leave laws and regulations such as the [FFCRA], the New Jersey Family Leave Act and the New Jersey Earned Sick Leave Law."

Tags: Coronavirus (COVID-19)  •  FFCRA  •  FMLA and Other Leave

COBRA: A Closer Look at Who Enrolls and the Case for Subsidies
Employee Benefit Research Institute [EBRI] Link to more items from this source
July 10, 2020

"COBRA beneficiaries are more likely than those receiving coverage through a full-time employee to have certain health conditions ... and they are more likely to have spent more days in a hospital than those receiving coverage through a full-time employee. The average COBRA beneficiary uses more health care services and spends significantly more than the average person covered by insurance via a full-time employee.... Subsidies can help reduce adverse selection against COBRA plans."

Tags: COBRA  •  Health Plan Costs

Getting to the Whys of Spending in Retirement
Employee Benefits Research Institute [EBRI] Link to more items from this source
July 10, 2020

"The data show that the average individual aged 55-64 spent $54,500 in 2017. By ages 65-74, spending had decreased on average to $50,300 however, and by ages 75-85 it came in at around $38,500. But not only does the amount of money being spent decreases, the propensity for people to spend heavily in certain areas also changes ... What we cannot understand from the data, however, is why people are changing their spending as they do. This is critically important in designing retirement spending strategies."

Tags: Retirement Plan Design

Public Pension Reform and the 49th Parallel: Lessons from Canada for the U.S.
Clive Lipshitz and Ingo Walter, via SSRN Link to more items from this source
July 10, 2020

"Using a primary dataset, [the authors] benchmark the 25 largest U.S. plans against their ten largest Canadian peers, exploring key issues in a paired analysis. Calibrating the two approaches, [they] extract key lessons from the Canadian experience for the U.S. and end with applicable policy recommendations."

Tags: Retirement Plan Design  •  Retirement Plan Policy  •  State and Local Government Plans

How Flexible Is Your Health Plan's PBM Partner?
Evolent Health Link to more items from this source
July 10, 2020

"Characteristics of the most flexible PBMs [include] [1] Health plan representation on the Pharmacy and Therapeutics Committee.... [2] The opportunity to guide formulary and [utilization management] criteria.... [3] Acceptance of upside and downside risk.... [4] Mutually beneficial performance goals.... [5] Accountable, customized performance reporting for your market.... [6] Preferred, exclusive and custom arrangements for specialty drug management."

Tags: Health Plan Design  •  Prescription Drug Costs

Supreme Court Says Broad Exemption from Contraceptives Mandate Can Survive ... for Now
Lockton Link to more items from this source
July 10, 2020

"The majority of employers sponsoring group medical plans provide cost-free contraceptives to their female members and are willing to do so without regard to mandates and exceptions. For those employers the court's ruling is inconsequential. But for those employers that hold religious or moral objections to contraceptives, the court's ruling allows them to maintain the status quo, at least for now." [Little Sisters of the Poor Saints Peter and Paul Home v. Pennsylvania, No. 19-431 (S. Ct. Jul. 8, 2020)]

Tags: Health Plan Design

Text of Agency Proposed Regs: Grandfathered Group Health Plans and Grandfathered Group Health Insurance Coverage
Employee Benefits Security Administration [EBSA]; U.S. Department of Labor [DOL] Internal Revenue Service [IRS]; Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS] Link to more items from this source
[Official Guidance]
July 10, 2020

76 pages. "This notice of proposed rulemaking would, if finalized, amend the 2015 final rules to provide greater flexibility for grandfathered group health plans and issuers of grandfathered group health insurance coverage to make certain changes without causing a loss of grandfather status. However, there is no authority for non-grandfathered plans to become grandfathered, and therefore these proposed rules would not provide any opportunity for a plan or coverage that has lost its grandfather status under the 2015 final rules to regain that status....

"These proposed rules would amend the 2015 final rules in two ways.

  • First, these proposed rules include a new paragraph (g)(3) which would specify that grandfathered group health plans and grandfathered group health insurance coverage that are HDHPs may make changes to fixed-amount cost-sharing requirements that would otherwise cause a loss of grandfather status without causing a loss of grandfather status, but only to the extent those changes are necessary to comply with the requirements for HDHPs under section 223(c)(2) of the Code.
  • Second, these proposed rules include a revised definition of 'maximum percentage increase' in redesignated paragraph (g)(4), which provides an alternative method of determining that amount based on the premium adjustment percentage. This alternative method would be available only for grandfathered group health plans and grandfathered group health insurance coverage with changes that are effective on or after the effective date of a final rule.

"The Departments request comments on all aspects of these proposed rules. "

Tags: Health Plan Design


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