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Evidence of Insurability: Why Employers Must Get This Right

"If EOI is required, coverage does not exist until it is approved. However, courts often are unforgiving to employers when an EOI failure surfaces after death or disability, thus opening risk to breach of fiduciary duty claims or equitable relief. Plan administrators that proactively manage EOI and communicate clearly can avoid costly disputes when it matters most."

Reminder: Gag Clause Attestation Due December 31st

"Plans must attest that agreements with third party administrators, pharmacy benefit managers, and other service providers do not include prohibited gag clauses, which are provisions that restrict access to provider cost or quality information, de-identified claims data, or related disclosures or sharing that information with a HIPAA business associate."

Why a Protected Benefits Analysis Is Necessary When Merging Retirement Plans

"[P]lan provisions and benefits that should be considered as part of the protected benefits analysis when merging from the old plan into the new merged plan: [1] Top paid group election for highly compensated employees ... [2] Vesting schedules ... [3] Distribution events ... [4] Optional forms of benefit."

Recent Wins for Plan Sponsors in Response to Plan Forfeitures Litigation

"A California district court recently issued an opinion in favor of the plan sponsor and determined that such participant claims would add benefits that were not provided under the plan and also conflicted with ERISA's settled practice of permitting the use of forfeitures as authorized under the plan's terms.... [T]wo other recent plan forfeiture decisions in Mississippi and Texas reached similar results in favor of the employers." [Hernandez v. AT&T Services, Inc., No. 25-0676 (C.D. Calif. Nov. 14, 2025)]

Post-Termination of Employment Payments: Which Amounts Are Considered 401(k) Plan Compensation?

"In general, pure severance pay ('Severance Pay') is not considered Plan Compensation, but post-severance payments related to compensation earned and accrued during employment ('Post-Severance Pay') are Plan Compensation.... Some plan documents exclude all post-termination payments, including Post-Severance Pay from compensation, so it's always important to review the plan's definition of Plan Compensation [.]"

Be Careful with Amendments to Your Nonqualified Plans

"An important takeaway for an employer-sponsor of a top hat plan is that the plan's language pertaining to plan amendments, or termination of the plan itself, needs to be carefully drafted to preserve the employer's discretion, otherwise the employer could be contractually limited in its rights to take future actions." [Hoak v. Ledford, No. 24-12148 (11th Cir. Aug. 26, 2025)]

SBCs as Easy as ABCs?

"It's that time of year when employers are finalizing their open enrollment materials. Along with benefit changes and annual disclosures, employers should also review their Summary of Benefits and Coverage (SBC) and understand when it needs to be distributed."

A Plan Document a Day Keeps the Physician Lawsuits Away

"The U.S. Court of Appeals for the Fifth Circuit ... made the following points: [1] When assignment forms are broadly drafted, they may be ambiguous as to who the assignee is, but that does not invalidate the assignments. [2] There is not a requirement that an assignment form include a standalone 'right to sue' provision when the form assigns 'all rights' or 'all insurance benefits.' [3] An ERISA plan administrator may be prevented from enforcing plan provisions ... against a claimant if the administrator refuses to provide the document containing those provisions to the claimant." [Angelina Emergency Med. Assoc. v. Blue Cross and Blue Shield of Ala., No. 24-10306 (5th Cir. Aug. 8, 2025)]

Compliance Reminder for Executive Top Hat Plans

"A recent Sixth Circuit Court of Appeals case reminds us that these plans must satisfy unique compliance requirements to continue to remain exempt from such ERISA provisions. This case determined that plan participants did not have a state law fiduciary duty claim because ERISA preempts state laws, provided that the top hat plan complies with certain requirements[.]" [Aldridge v. Regions Bank, No. 24-5603 (6th Cir. Jul. 17, 2025)]

July 29th Is Deadline for Distribution of SMM for Calendar Year Plans

"In considering whether to distribute the SMM versus an updated SPD, plan administrators should consider the number of modifications that need to be described and whether the use of the SMM alone would sufficiently apprise covered persons of their benefits, rights, and obligations under the plan."