ARTICLES 2017-12-21T17:54:10+00:00

ARTICLES    

 

INFORMAL IRS GUIDANCE ON SUBSTANTIATION OF HARDSHIP DISTRIBUTIONS

August 2017|

Earlier this year, the IRS issued new guidance on the substantiation of hardship distributions. Substantiation Guidelines for Safe-Harbor Distributions from Section 401(k) Plans (February 23, 2017), available at https://www.irs.gov/pub/foia/ig/spder/tege-04-0217-0008.pdf.  As background, 401(k) plans may allow employees to receive a distribution that is necessary to satisfy an immediate and heavy financial need. The regulations include a safe harbor for certain kinds of expenses that are automatically deemed to be in the nature of a heavy and financial [...]

LEGAL DEVELOPMENTS IMPACTING HEALTH AND WELFARE PLANS (OTHER THAN HEALTH CARE REFORM) 2016 YEAR-END UPDATE

January 2017|

1.   In 2016, the IRS, DOL and HHS (the "Agencies") issued additional guidance on the federal mental health parity law. They confirmed plans cannot impose different "non-quantitative treatment limitations" (such as preauthorization requirements) on mental health and substance abuse benefits, unless the limits resulted from the same "processes and strategies" used to determine limits on the plan's medical benefits. Also in 2016, three federal district courts considered whether mental health parity requires covering treatment received at residential treatment [...]

HEALTH CARE REFORM (“PPACA”) LEGAL DEVELOPMENTS 2016 YEAR-END UPDATE

January 2017|

1.   Under PPACA, non-grandfathered plans must provide in-network preventive care benefitswithout cost-sharing. In 2016, the IRS, DOL and HHS (the "Agencies") published FAQs clarifying preventive care requirements for colonoscopies and contraceptives. Also, the U.S. Preventive Services Task Force issued multiple new and/or updated preventive care recommendations, for example: (1) statin use to prevent heart disease; (2) tuberculosis screening; (3) skin cancer screening; (4) tobacco use counseling and interventions for non-pregnant adults; and (5) women's preventive care.Details [...]

LEGAL DEVELOPMENTS IMPACTING RETIREMENT PLANS 2016 -YEAR-END UPDATE

January 2017|

1.   In July 2016, the IRS issued guidance formalizing major changes to its determinationletter program. Notably, the guidance confirmed the IRS will stop issuing most types of determination letters, advised that expiration dates in prior determination letters no longer apply, and stated the IRS's intent to annually publish a Required Amendments List establishing deadlines for certain plan amendments. 2.   The DOL finalized its regulation on the definition of an ERISA fiduciary. The regulation is scheduled to [...]

U.S. SUPREME COURT SUBROGATION RULING

February 2016|

Montanile v. Board of Trustees of Nat. Elevator Industry Health Benefit Plan A copy of the decision is available at: http://www.supremecourt.gov/opinions/15pdf/14-723_1bn2.pdf. Many ERISA health plans will advance payment of a participant's accident-related medical expenses so long as the participant promises to reimburse the plan out of the participant's third-party settlement or other recovery (for example, a car insurance settlement). However, when the participant spends the settlement without reimbursing the plan, federal courts have disagreed about whether [...]

LEGAL DEVELOPMENTS IMPACTING RETIREMENT PLANS 2015 YEAR-END UPDATE

January 2016|

1. At the request of President Obama, the DOL issued proposed regulations on the definition of an ERISA fiduciary and corresponding changes to the DOL's prohibited transaction exemptions. The proposals, if adopted, would make it more likely that a person providing investment advice would qualify as an ERISA fiduciary. The proposal has sparked considerable debate, with the DOL receiving more than 3,000 written comments. The DOL intends to finalize the regulations and exemptions in the first half [...]

HEALTH CARE REFORM (“PPACA”) LEGAL DEVELOPMENTS 2015 YEAR-END UPDATE

January 2016|

1. In November 2015, the IRS, HHS, and DOL (the "Agencies") published final regulations on many PPACA benefit mandates , including the rules regarding grandfathered health plans, preexisting condition exclusions, lifetime and annual dollar limits, rescissions, coverage of adult dependent children, claims and appeal procedures, and patient protections. The final regulations are effective for plan years beginning in 2017 or later, and will replace prior regulations issued in 2010. The final regulations break little new ground—they incorporate [...]

JANUARY 2015: LEGAL DEVELOPMENTS IMPACTING HEALTH AND WELFARE PLANS (OTHER THAN HEALTH CARE REFORM (“PPACA”)) 2014 YEAR END UPDATE

January 2015|

1. In June 2013 the Supreme Court issued its decision in U.S. v. Windsor, invalidating a section of DOMA, the law which limited federal recognition of marriages to opposite-sex couples.U.S. v. Windsor, 133 S. Ct. 2675 (2013).   On June 5, 2014, the Washington State Attorney General, Office of the Insurance Commissioner, and Human Rights Commission (the "Washington Agencies") jointly issued an announcement clarifying that under Washington State law (which recognizes same-sex marriages and prohibits discrimination on [...]

RECENT CASE LAW REGARDING RETIREMENT PLAN INVESTMENTS IN EMPLOYER STOCK: THE PRESUMPTION OF PRUDENCE

September 2014|

Background Congress created a statutory framework that encourages employee ownership of company stock through retirement plans-- including tax incentives, special dividend and loan provisions, and an exemption from ERISA’s duty to diversify plan assets. Beginning in 1995 with the Third Circuit, several courts applied a presumption that employer stock is a "prudent" investment under ERISA.Moench v. Robertson, 62 F. 3d 553 (3rd Cir. 1995). Before 2014, the Second, Third, Fifth, Seventh, and Eleventh Circuits applied [...]

RECENT CASE LAW REGARDING RETIREMENT PLAN INVESTMENTS IN EMPLOYER STOCK: INCORPORATION OF SECURITIES LAW FILINGS INTO SPDs

September 2014|

Background It is not uncommon for retirement plans holding employer stock to incorporate in summary plan descriptions, by reference, stock filings made under securities law. This practice satisfies certain securities law disclosure requirements. Recent case law suggests that incorporation of securities law filings by reference into an SPD is a fiduciary act, and so may lead to ERISA §404 fiduciary liability if the filings include false or misleading information. Recent Case Law Misrepresentations in a [...]