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Who Cares Whether I Give a COBRA Notice for My Company's Dental Plan?

"Employers ... may forget that COBRA extends to all group health plans, including dental, vision and medical flexible spending account plans. A recent federal district court decision highlighted the risk to employers who forget those facts.... [An] employee who at the time she terminated employment was covered by the group dental plan, but not the group medical plan ... obtained new employment about five months later that provided her with dental coverage and during the time she did not have dental coverage, she did not incur any dental claims.... The penalty to the employer: $37,950 for failure to give a dental COBRA notice ... [plus] 42,192.50 for attorney's fees and $2,910.87 for costs for an aggregate of $83,063.45. " [Evans v. Books-A-Million, No. CV-07-S-2172-S (N.D. Ala. Oct. 29, 2012)]

Small Employer Was Obligated to Provide COBRA Coverage Mistakenly Offered to Ex-Employee

"A recent district court decision from Ohio considered the situation of a small employer that issued a COBRA notice to a former employee who then elected and paid for COBRA coverage. After the former employee had been covered under COBRA for at least 12 months, ... The DOL informed the employer that it was not subject to federal COBRA law because of its small size. The employer at that point terminated the COBRA coverage ... The district court determined that the employer had superior knowledge of whether the employer was covered by COBRA and so was equitably estopped from now denying COBRA coverage to the former employee. " [Hanysh v. Buckeye Extrusion Dies, Inc., No. 4:11CV528 (N.D. Ohio, Sept. 5, 2012)]

Health Care Reform: An Implementation Timeline for Employers

"Here's a brief timeline highlighting important health care reform dates for employers.... [S]ome dates will change as 2014 draws nearer, and [the author] will update the timeline accordingly."

More ACA Provisions Take Effect in 2014: What Employers Should be Thinking About Now

"Employers have choices to make before 2014. They can offer health coverage, or not offer coverage and pay the penalty. Employers need to be aware that simply offering a health plan does not satisfy the employer mandate ... [T]he health plan must be affordable and offer minimum essential coverage."

A Wrap Plan Can Be Helpful for Your Health & Welfare Benefits

"A recent district court decision in Ohio considered ... [an] AD&D plan booklet [that] did not grant discretion to the plan administrator or the insurance carrier to decide claims. However, the employer had adopted a wrap document that did contain such discretion. In addition, the summary plan description noted that the employer had discretion to decide claims. The court concluded that the wrap document and the plan booklet together constituted the plan document so the grant of discretion applied to the AD&D claim denial."

Do I Have a Top Hat Plan?

"A recent decision from the federal district court for the Eastern District of Kentucky considered the percentage of the total workforce invited to join the plan (less than 1%) and the nature of the plan members' employment duties (generally high ranking management personnel) to determine that the plan constituted a top hat plan.... [The court rejected] an argument that the plan did not qualify as a top hat plan because a few plan participants were not 'high ranking management personnel' ... holding that so long as the plan was maintained 'primarily' for the purpose of providing the deferred compensation for the top hat group, the plan met the 'top hat' group requirement." [Cramer v. Appalachian Regional Healthcare, Inc., No. 5:11-49-KKC (E.D. Ky, Oct. 29, 2012)]

Can a Non-Compete Provision be Added to a Severance Agreement?

"Even though the employer had some discretion with respect to the form of separation agreement, [a federal district court in Illinois] would not permit the employer to condition the severance payment on compliance with a no compete. To add such a requirement, the employer should have amended the severance plan; the proposed separation agreement was not itself such an amendment." [Pactiv Corp. v. Rupert, No. 11C7247 (N.D. Ill., Nov. 1, 2012)]

Tax Consequences of Plan Disqualification for Highly Compensated Participants

"The highly compensated participant argued that only the portion of the benefit that accrued during 2004, which was the only year for which the statute of limitations was still open, could be included in his income. The IRS argued that ... even though the benefits had accrued over a number of years,... the participant should be taxed on the entire vested benefit in the year the plan was disqualified. The court agreed with the IRS: Because the participant had never paid tax on any of the accrued benefit, the entire vested benefit was included in income in that year." [Yarish v. IRS, U.S. Tax Court No. 24096-08 (Oct. 4, 2012)]

What is Publicly Traded Stock?

"In a recent private letter ruling, the IRS considered the situation of a company that had a class of preferred stock traded on the over-the-counter bulletin board. The IRS ruled that this stock was not publicly traded because the regulations under Section 401(a)(35) require that the employer security be traded on an exchange registered under Section 6(a) of the Securities Exchange Act of 1934 or under certain foreign exchanges.... Therefore ... the shares were not treated as 'publicly traded' and the plan was not required to meet the diversification requirements of Section 401(a)(35)."