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The Hazards of Not Changing Beneficiaries Post-Divorce

"A recent case by the Tennessee Court of Appeals highlights the importance of changing one's insurance and retirement policy beneficiaries after divorce. This is true no matter what the divorce documents say and no matter what any order signed by a Judge says." [Estate of Birdwell v. O'Dell, No. M2024-00025-COA-R3-CV (Ct. App. Tenn. Feb. 24, 2025)]

ACA Reporting Update: Some Relief and Process Streamlining for Employers

"Although the two new laws provide only incremental relief from the burdensome reporting requirements to which ALEs are subject, the 90-day period for responding to Letter 226J and the 6-year statute of limitations provide a few new tools to limit potential exposure to the 4980H penalties."

If the Deadline for Self-Correcting Retirement Plan Errors Is Indefinite, Why Do I Have to Hurry?

"The ability of a plan sponsor to self-correct an eligible inadvertent failure indefinitely and with no last date appears to broaden the time allowed in the EPCRS' correction process that applies to significant operational failures. However, the reality is that plan sponsors must still diligently identify and correct errors. Plan sponsors should implement established practices and procedures to support compliance with the Code as required by Notice 2023-43 and have an effective process for identifying and correcting operational errors and then documenting the correction efforts."

Both Employers and Participants Benefit from New IRS Guidance on Correcting Inadvertent Benefit Overpayments

"[New] Code Section 414(aa) relieves a plan from potential disqualification if the plan fiduciary fails to obtain repayment from any participant or other party on account of any inadvertent benefit overpayment by a plan. ... Code Section 402(c)(12) provides that any inadvertent overpayment under Code Section 414(aa) will be treated as an eligible rollover distribution. If the plan requests repayment of the inadvertent overpayment, then any amount returned to the plan will be treated as an eligible rollover distribution."

What the Final MHPAEA Regs Mean for Mental Health and Substance Use Disorder Benefits

"Critics of these final rules have voiced concerns that the rules may actually limit access to mental health care or substance use disorder benefits if the group plans opt to drop the benefits entirely. The Departments have also faced criticism for issuing these final rules while not addressing healthcare workforce shortages."

Top ACA Reporting Mistakes in 2024

"[1] Failure to indicate that Minimum Essential Coverage was offered to full-time employees.... [2] Ignoring correspondence from the IRS.... [3] Failure to file altogether.... [4] Failure to show reasonable cause.... [5] Failure to consider all entities of an 'ALE group'.... [6] Not using safe harbor codes on 1095-C line 16."

Remote Employees Participating in Employee Benefit Plans: What's Local Law Got to Do with It?

"There are a myriad of ... state and local laws that a company must consider when it allows an employee to transfer to a state in which the company has not previously had a presence.... [S]tates have enacted [1] corporate laws requiring entities doing business in that state to register with the Secretary of State, [2] employment laws requiring mandatory leave, [3] state disability insurance programs, ... and [4] state-mandated retirement benefits."

Why Establish a Fiduciary Committee for Welfare Benefit Plans?

"Plan sponsors who maintain only fully insured welfare benefit plans may think that they don't have to focus on fiduciary compliance, as the insurance carrier handles the payment of claims and the plan sponsor's only financial obligation is to timely remit premium payments. However, even a fully insured plan has multiple obligations that cannot be fully outsourced to the insurer ... An employer with a self-funded plan must comply with all of [these] obligations and has additional challenges, including monitoring claims and placing stop-loss insurance."

The Difficulty of Defining a Disability: Anxiety

"[T]he plaintiff was a school teacher who alleged that, due to the mask requirements occurring under COVID-19 protocols, she experienced symptoms of anxiety.... In affirming the trial court, the Court of Appeals held that the record did 'not explain how wearing a mask induced anxiety that substantially limited [Plaintiff's] work, sleep or breathing.' " [Tyler v. Kalamazoo Public Schools, No. 363249 (Mich. Ct. App. Jan. 18, 2024)]

Retirement Plan Forfeitures: IRS's 2023 Proposals and Fiduciary Litigation Trends

"Sponsors should consider: [1] Engaging employee benefits counsel to draft plan language that is consistent with practice for use of forfeitures.... [2] Adopting procedures for the use of forfeitures that outline the intended compliance approach, consistent with the 2023 Proposed Regulations. [3] Reviewing service provider agreements and ensuring that forfeiture provisions are consistent with the adopted procedures. [4] Working with plan recordkeepers on adopting an approach to timely use accumulated forfeitures under the 2023 Proposed Regulations."