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

ARTICLES    

 

LEGAL DEVELOPMENTS IMPACTING RETIREMENT PLANS 2017 YEAR-END UPDATE

February 2018|

In August 2017, a Ninth Circuit district court held a plan fiduciary violated its continuing duty to monitor plan investments under ERISA when it did not replace retail-class mutual funds with lower cost institutional-class funds. (This is the latest proceeding in the Tibble case, where the court held that an ERISA fiduciary has a continuing duty to monitor investments. The ruling effectively extends ERISA’s six-year statute of limitations so long as an investment remains a [...]

LEGAL DEVELOPMENTS IMPACTING HEALTH AND WELFARE PLANS 2017 YEAR-END UPDATE

February 2018|

The Tax Cuts and Jobs Act was signed into law in December 2017. The Act eliminated the individual mandate of the Affordable Care Act (ACA) beginning in 2019. And so individuals will no longer owe a tax penalty for failure to have health coverage.  Also under the Act, employers can no longer deduct commuting and transportation benefits (e.g., parking, bus and train passes), but employees may continue to exclude them from income.  And employees cannot [...]

CHANGES TO THE IRS DETERMINATION LETTER PROGRAM FOR INDIVIDUALLY DESIGNED PLANS

February 2018|

In 2015, the IRS announced a dramatic curtailment of its determination letter program for individually designed plans. Previously, plan sponsors were permitted to submit their plans for review by the IRS every five years in order to obtain a determination letter stating the plan was qualified under the tax code. If a plan timely adopted interim amendments during the remedial amendment cycle, then it would have until the end of the remedial amendment cycle to [...]

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 [...]