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Proposed Excepted Benefits Regs Have Good News for EAPs and Self-Insured Vision and Dental Plans

"The proposed regulations also clarify the requirements for employee assistance plans (EAPs) to qualify as excepted benefits beginning in 2015. An EAP will constitute an excepted benefit as long as [1] the EAP does not provide 'significant' benefits that consist of medical care, [2] the EAP benefits are not coordinated with benefits under another group health plan ... [3] employees do not have to pay a premium to participate in the EAP, and [4] the EAP does not require cost sharing. The regulators requested comments on how to define 'significant' for this purpose."

Sixth Circuit Allows 'Reasonable' Modifications of Retiree Health Benefits

"The Court listed three considerations for the district court to examine in making its reasonableness determination: (1) Does the modified plan provide benefits 'reasonably commensurate' with the old plan? (2) Are the proposed changes 'reasonable in light of changes in health care?' and (3) Are the benefits 'roughly consistent with the kinds of benefits provided to current employees?'" [Reese v. CNH Am. LLC, 11-1359, 2012 WL 4009695 (6th Cir. Sept. 13, 2012)]

Top 10 Employee Benefits New Year's Resolutions for 2017

"[1] Fiduciary, Know Thyself.... [2] Look over your service providers' shoulders.... [3] Resolve to improve your plan governance.... [4] Wrap yourself in the protective cloak of procedurally prudent process.... [5] And add a protective layer of fiduciary insurance.... [6] Calendar reporting and disclosure requirements.... [7] Keep an eye on Twitter (yes, really).... [8] Or at least keep an eye on D.C. ... [9] Keep the other eye on the courts, particularly on fee litigation.... [10] And if you have one eye left, keep it on government enforcement action."

Fiduciary Could Not Use ERISA 502(a)(3) to Seek Disability Benefits for Employee

"The court determined that the employer was not a plan fiduciary for purposes of making claims determinations, and therefore could not rely on [ERISA section 502(a)(3)] to sue the fiduciary that held such authority (i.e., the insurer). The court noted that even if the employer was considered to be a fiduciary, ERISA does not afford a fiduciary the right to sue if the relief sought can be obtained directly by the participant under 502(a)(1)(B) ... Thus, an employer's leverage, if any, to pressure insurers to pay benefits rests with the power to move the business to a different insurer." [Duda v. Standard Ins. Co., No. 12-1082 (E.D. Penn. Apr. 30, 2015)]

For ACA, Don't Stop at Your Benefits Plans: Remember to Check Your Handbook

"[If] you chose to exclude 'part-time' employees (i.e. those who work less than 30 hours a week) from your health plan, make sure that exclusion is stated in your handbook. If you are using lookback measurement periods allowed by the regulations, you should also make mention of them in the handbook.... [If] your definition of 'part-time' is different for health benefits than it is for other purposes (hours, compensation, vacation, etc), that distinction should be made clear in the handbook.... You should also mention if a waiting period applies and what it is."

New IRS Guidance on Retiree Health Benefits Funded Through Captive Insurance Subsidiaries

"While [Rev. Rul. 2014-15] provides favorable tax precedent, it does not address all ERISA implications. In particular, it is a prohibited transaction to use plan assets to purchase insurance from a captive insurance company in the employer's controlled group and no statutory or class exemption is available. Accordingly, an individual prohibited transaction exemption must be obtained to avoid excise taxes or Department of Labor penalties."

Supreme Court to Review Rules Governing Vesting of Retiree Health Benefits under CBAs

"Application of the [UAW v. Yard-Man, Inc.] presumption to collective bargaining agreements has resulted in uncertainty for employers and retirees, inconsistent outcomes for collective bargaining agreements covering employees in different circuits, and forum-shopping by retirees seeking application of Sixth Circuit precedent. A Supreme Court opinion should resolve the uncertainty for employers and retirees alike and eliminate the jurisdictional gamesmanship that has long plagued these cases." [M&G Polymers USA, LLC v. Tackett, No. 13-1010 (on appeal from 6th Cir., cert. granted May 5, 2014)]

Collective Bargaining Agreements: Creating Vested Retiree Medical Benefits

"Citing a line of cases addressing the vesting of retiree benefits ... the [federal district] court held that the CBAs' promised 'continuance' of the healthcare coverages employees had 'at the time of retirement' and that such coverages 'shall be continued thereafter' for retirees, their spouses and eligible dependents and that any changes could be made 'by mutual agreement between the Company and the Union' was unambiguous language demonstrating the plaintiffs' right to vested lifetime retirement healthcare coverage."

Other Benefits Components of the, Ahem, 'Relief' Act

"[T]hanks to the fiscal cliff, you can educate your workforce, help them build a family, encourage them to take mass transit, and let them convert their 401(k) savings to Roth! Helpful? Yes. But unlikely to save 'fiscal cliff' from the English-language chopping block, particularly when combined with the substantial additional tax burdens imposed by the 'Relief' Act."

How Would Your Defined Benefit Plan Fare in an IRS Audit?

"In its June 8, 2012 edition of the Employee Plans News, the Internal Revenue Service gave interesting insight into areas of non-compliance revealed in a targeted audit of defined benefit pension plans. These audit findings create a helpful checklist for defined benefit plan sponsors to review the status of plan compliance efforts."