News Items

"When the plan administrator receives a QDRO for a pension plan, does it have an affirmative duty to ask whether the divorce decree has any provisions regarding life insurance beneficiary designations? If the plan administrator receives a divorce decree with a provision regarding a life insurance beneficiary designation, does it have an affirmative obligation to determine whether the domestic relations order is 'qualified' and, if not, advise the parties so it can be corrected? Does the plan administrator need to revise its QDRO procedures to apply to welfare benefit plans as well as pension plans?"

"[A] federal court preliminarily enjoined the rule's gender identity and termination of pregnancy provisions on a nationwide basis, finding them contrary to the applicable civil rights law, the Religious Freedom Restoration Act, and the Administrative Procedure Act. A second federal court agreed. Because the preliminary injunction continues to be in effect, HHS cannot, and has not since the date of the injunction, enforced the rule's provisions the court said are likely unlawful. The proposed rule would revise the provisions subject to those injunctions to conform with the plain understanding recognized by the court." [HHS also published a Factsheet on Section 1557, and an advance copy of the Proposed Regulations.]

"What are the absolute gems in this version of the SECURE Act? [1] Creates the Pooled Employer Plan (the new name for what has been referred to as an open MEPs). [2] Increases the Required Minimum Distribution start date from 70-1/2 to 72 (no one likes calculating a half year). [3] Allows penalty-free distributions of up to $5,000 within a year for new parents (birth or adoption). [4] Extends the period of time for companies to adopt new plans beyond the end of the year to the due date for filing the company tax return. [5] Permits employers to add a safe-harbor feature to their existing 401(k) plans once the year has already started if they agree to make at least a 4% of pay contribution to employees (instead of the regular 3%). What is potentially much ado about nothing? The annuities!"

"Many believe the overwhelming bipartisan support for SECURE in the House makes early passage of a final bill by the Senate more likely. In the current context, however, risks to final passage remain.... On May 14, 2019, Senators Portman (R-OH) and Cardin (D-MD) introduced the Retirement Security and Savings Act of 2019. The bill generally tracks legislation the Senators introduced last year, and many of the proposals included in it are expected to be part of the nextbipartisan retirement policy reform effort (after SECURE/RESA)."

"Self-correction requires an analysis of the facts of a plan operational failure to determine whether self-correction is an option as well as the correction process. It is imperative ... to maintain the correction data and document the process taken to correct a mistake as evidence of the decision to self-correct and the manner in which the correction was made."

"[The DOL's] spring regulatory agenda ... contained a noteworthy entry calling for information to help revise the statute's regulations to help 'reduce administrative and compliance burdens on employers.' What do employers need to know about this impending development, and how might they influence this process to their benefit?"

"Taking the announcement at face value, it certainly appears to suggest that the DOL is interested in revisiting the regulations to determine the ongoing pain points for employers and employees and how regulatory changes could enhance FMLA administration.... Whether it's the scope of information an employer can obtain on a certification, the parameters of recertification and second opinions, or how employers can ensure intermittent leave is being used in the manner for which it was intended, there is plenty to clarify in these regulations!"

"[B]ecause gross misconduct terminations tend to involve heightened emotions and disputed facts, there is an increased risk of a costly court challenge. The employer in this case prevailed on its gross misconduct claim, albeit for procedural reasons, and this court declined to assess penalties ... But an employer that is wrong about gross misconduct can face not only an award of retroactive COBRA coverage but also the imposition of penalties of up to $110 per day for failure to provide required notices." [Rodriguez-Soto v. Presbyterian Med. Anesthesia Grp., No. 17-1477 (D.P.R. Mar. 22, 2019)]

"The SECURE Act is designed to expand access to workplace retirement plans, particularly for small businesses, and will improve the ability for employers to extend greater access to annuity options in those plans. House committees have debated the proposal for several weeks."

"Certain compensation practices are known for raising investor concerns, leading to difficult conversations between investors and boards and higher levels of investor opposition of executive pay programs. But beyond outright egregious practices, a careful review of the diverse set of compensation programs available may reveal some compensation practices that do not appear as significantly concerning but can raise pointed questions about a compensation program's alignment with shareholders' interests."

"The problem was the document in which the anti-assignment provision appeared. It was not in a formal plan document, nor in a Summary Plan Description or a Statement of Material Modification. It was contained in the Administrative Services Agreement (ASA) between the plan insurer and the plan sponsor. The court determined that, for purposes of enforcing a provision against plan participants, the provision must appear in a 'plan document.' " [Long Island Neurosurgical Associates, P.C. v. Highmark Blue Shield, No. 18-81 (E.D.N.Y. Mar. 20, 2019)]

"One solution to most instances of surprise billing is to simply eliminate the possibility of being treated by an out-of-network emergency, ancillary, or similar clinician at an in-network facility.... [O]ne approach ... would require these facility-based clinicians to contract with every health plan that the facility at which they practice accepts (or alternatively, choose to secure payment from the hospital rather than insurers)."

"In affirming its denial of class certification, the court recognized that ERISA Section 502(a)(3) does not address which parties may be sued under the statute and 'admits of no limits . . . on the universe of possible defendants.' However, the court recognized that there are limits on a plaintiff's ability to bring a Section 502(a)(3) claim against a nonfiduciary.... The court ultimately found that the appropriate equitable relief requirement doomed the plaintiff's class claims against the third-party administrator." [Duggan v. Towne Properties Group Health Plan, No. 15-623 (S.D. Ohio, Mar. 31, 2019)]

"[This study finds] that as individuals build up balances in HSAs, they use more health care services than they otherwise would. In essence, HSA balances may blunt the cost-reducing effect of high-deductible health plans over time.... [E]mployers may want to consider the impact of the size of the plan's deductible. Another approach is to explore education around the long-term benefits of saving the HSA balance for health care expenses in retirement."

"[Y]our strategy needs to involve sending bite-size chunks of information throughout the year.... [W]ith advancements in technology, print and digital pieces take on many different forms.... Write your titles in ways that capture [employees'] attention and provide information using minimal words.... Take out the jargon ... Have fun with themes ... Ask for feedback."

"The imaging service may have made a significant misstep when it prematurely concluded that no patient PHI was exposed despite the alert from the FBI. Its later admission that PHI of more than 300,000 patients was exposed set the stage for this significant settlement and comprehensive [corrective action plan (CAP)]."

"One study found that less than half of eligible employees participate in their plan's initial assessment phase, and the participation rate drops to less than 20% when programs actually kick in.... [Factors] important to achieving desired goals with wellness programs [include]: Leadership engagement on all levels ... Alignment ... with the organizational core mission and values, objectives, operations and cultural norms.... Opportunities for engagement ... Communication ... Continuous evaluation ... Quality of programming."

"[The proposed bill would] create a public option that will allow individuals and small businesses to purchase health insurance through the state. The proposal also calls for re-establishing the individual mandate ... The bill would also have the state seek permission from the federal government to buy prescription drugs from Canada and calls for taxing opioid manufacturers."

"ACA challenges are now under consideration by the Supreme Court and federal appellate and district courts across the country. This post provides a status update on ongoing litigation over the risk corridors program, cost-sharing reductions, the risk adjustment program, association health plans, and short-term plans."

"President Trump is expected to release an executive order as early as next week to mandate the disclosure of prices in the health-care industry ... The order could direct federal agencies to pursue actions to force a host of players in the industry to divulge cost data ... The administration is also looking at using agencies such as the Justice Department to tackle regional monopolies of hospitals and health-insurance plans over concerns they are driving up the cost of care[.]"

"The Setting Every Community Up for Retirement (SECURE) Act is designed to expand access to workplace retirement plans, particularly for small businesses, and will improve the ability for employers to extend greater access to annuity options in those plans. The measure also requires retirement plans to provide participating workers with an illustration of how much monthly income a retirement savings account might deliver. Additionally, the bill raises the age to begin required minimum distributions from retirement accounts from 70-1/2 to 72."

"[T]he House version of the legislation would repeal the age cap for contributing to individual retirement accounts, currently 70-1/2. It would also increase the age to start taking required withdrawals from 401(k)s and IRAs to 72 from 70-1/2.... The bill passed Thursday, which includes many of the provisions in a similar bill in the Senate, would encourage 401(k)-style plans to offer annuities by giving certain employers some protection from future liability if their chosen insurer fails to pay claims.... Both the House and Senate versions allow employers without an affiliation to band together to offer a 401(k)-type plan."

"Employees who put at least 2 percent of their income toward student loan payments will qualify for Abbott's 5 percent contribution to their 401(k) account -- without the worker having to put his own money into the 401(k).... After a burst of sign-ups following the August rollout, enrollment has increased steadily. All workers who are paying off their own student loans are eligible, including brand new hires. Older workers paying for a child's education cannot participate."

"A [May 3, 2019] request for information (RFI) on 'state relief and empowerment waivers' ... aims to encourage innovative reforms that strengthen state health insurance markets.... Employers with multistate worksites could face differing state requirements that complicate determining shared-responsibility compliance or pursuing a defined contribution approach to help employees buy individual insurance. As states pursuing waivers seek additional funds to make the reforms work, employers could end up paying new health plan assessments that vary from state to state. If a state's assessment involves self-insured employers, litigation over ERISA preemption of the new state levy could lead to further uncertainty."

"Auto enrolling your employees in an HSA plan is not as straightforward as a 401(k), due to the healthcare eligibility requirements.... Some HSA providers benefit from state law that provides that an HSA is automatically established on the first day of coverage under an HSA-qualified healthcare plan as long as the HSA is opened before the federal income tax filing deadline for that year. If you're considering this option, find an HSA provider that benefits from this provision."