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Northwest OH Legal Blog

Tuesday, May 23, 2017

WHAT PLACE WILL NEIL GORSUCH HOLD IN U.S. BENEFITS HISTORY?


Judge Neil Gorsuch was confirmed on April 7, 2017 as the 113th Justice of the Supreme Court.  Coming from the 10th Circuit Court of Appeals, Judge Gorsuch fills the late-Justice Antonin Scalia’s seat.  Since Judge Gorsuch has been labeled a conservative, many employee benefits professionals wonder how he will affect future cases related to retirement and health plans. Gorsuch, age 49, takes a disciplined, cautious approach and rejects expansive views of employment laws and administrative agencies’ authority. He has often ruled to strike down government regulations but has defended religious freedoms consistently.
Read more . . .


Thursday, May 18, 2017

Staying Eligible for Temporary Total Disability


An injured worker is eligible for Temporary Total Disability when he or she is hurt at work, cannot return to the job he or she was working when injured, and a different “light duty” job is unavailable. If the injured worker stays with that employer, there is usually little concern. But injured workers are often concerned if they can change jobs. If an injured worker changes jobs, will he or she receive temporary total compensation if the injury is re-aggravated?

According to the Ohio Supreme Court, the employer is free to switch jobs. Back in 2000, in a case called Baker v.
Read more . . .


Tuesday, May 9, 2017

Wellness Plan Benefits May Be Taxable to Employees


Employers may offer their employees various types of benefit arrangements that are designed to reduce their employees’ tax obligations by using a combination of wellness programs, voluntary benefits and cafeteria plans. However, the Internal Revenue Service (IRS) has provided guidance that points out that many of these arrangements are treated as taxable benefits by the IRS.

In May 2016, the IRS issued IRS Chief Council Advice Memorandum 201622031, which addressed the tax treatment of three different situations in which wellness benefits result in taxable income to employees. It provides as follows:

Situation 1: The employer provides health coverage with a separate no-cost wellness program that provides health screenings and other services that generally qualify as a tax-favored accident and health plan under Internal Revenue Code section 106. Employees that participate in the wellness program may also earn cash rewards and other benefits that do not qualify as Code section 213(d) medical expenses, such as gym memberships.
Read more . . .


Friday, April 28, 2017

An Ounce of Prevention is Worth the Avoidance of a Data Breach Health and Welfare Plan Fiduciaries Must Prepare for Battle


The data that health and welfare plans may store or exchange with service providers electronically often includes participants’ names, addresses, dates of birth and pertinent health information or even social security numbers.  Technology experts claim that health plan breaches are much more valuable to hackers than credit card breaches because health records and plan eligibility data have a longer “shelf life” than credit card data, which can be changed or eliminated when the credit card company is notified to shut the card down.  Health care plan information therefore has a higher “resale” value than other data obtained after a technology breach. 

Rather than wait to be a victimized health plan, plan sponsors and fiduciaries must take precautionary measures to prevent data breaches within their own organizations and between their plan and the service providers that support their plan’s operations.  By implementing several simple processes and educating employees and participants regarding these processes, plan trustees can block the efforts of not only hackers but can also prevent the unauthorized release of private health information and pertinent identity-revealing data of plan participants and their dependents.
Read more . . .


Tuesday, April 25, 2017

DOL Extends Fiduciary Rule Applicability Date


The Department of Labor (DOL) has issued a final rule delaying the applicability date defining who is a fiduciary and related prohibited transaction exemptions for 60 days.

The rule also extends for 60 days the applicability dates of the Best Interest Contract Exemption and the Class Exemption for Principal Transactions in Certain Assets Between Investment Advice Fiduciaries and Employee Benefit Plans and IRAs. It requires that fiduciaries relying on these exemptions for covered transactions adhere only to the Impartial Conduct Standards (including the “best interest” standard), as conditions of the exemptions during the transition period from June 9, 2017, through January 1, 2018.

The April 4, 2017 News Release from the Department of Labor states as follows:

US LABOR DEPARTMENT EXTENDS FIDUCIARY RULE APPLICABILITY DATE

The U.S.
Read more . . .


Tuesday, April 11, 2017

New Law to Benefit Firefighters with Cancer Takes Affect


Legislation signed by Governor John Kasich to benefit firefighters who contracted cancer because of their service took effect on April 6, 2017. Although, firefighters could previously file a Workers’ Compensation claim for such an injury, they would often face difficulty getting their claims allowed because it was difficult to prove their service caused this injury. The new law creates a rebuttable presumption that the cancer was caused by his or her work as a firefighter. In other words, the BWC will have to prove that another factor caused the firefighter to contract cancer. The BWC issued a notice regarding this new law prior to taking effect:

Firefighters will still have to prove their employment caused cancer under two circumstances.
Read more . . .


Wednesday, April 5, 2017

United States Appellate Court Reinstates COBRA Rights for Employee Who Was Dismissed for Allegedly Stealing Stale Cake


A recent federal appellate court decision highlights the distinction between firing an employee for cause and firing an employee for gross misconduct for purposes of determining a terminated employee’s eligibility to continue employer-provided health insurance under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”).

Background.  In Mayes v. Winco Holdings, Inc., 2017 WL 461484 (9th Cir.
Read more . . .


Tuesday, March 28, 2017

WILL AMENDMENTS TO ERISA CLAIMS AND APPEALS’ PROCEDURES FOR DISABILITY BENEFITS STICK FOR 2018?


The Department of Labor (“DOL”) recently finalized amendments to the ERISA (Employee Retirement Income Security Act) claims and appeals procedures for disability benefit plans. The final rule released December 16, 2016, took effect on January 18, 2017, but will only apply to claims for disability benefits filed on or after January 1, 2018. 

But don’t stop reading because you don’t sponsor a stand-alone disability plan. While many retirement and health plan sponsors may not think this amendment applies to their plans, they should re-examine the specific details contained within its provisions. On the contrary, the implications of this amendment are likely to apply to any ERISA plans that provide benefits conditioned upon a finding of disability, including pension and 401(k) plans.
Read more . . .


Tuesday, March 21, 2017

Special Circumstances Considered When Calculating Workers' Comp Disability Payments


In many cases, Workers’ Compensation claimants are entitled to disability payments. There are several forms of disability payments within the system, and each has its own formula in which the amount is calculated based on the claimant’s earnings prior to the injury. The most common is the Average Weekly Wage. This is calculated by taking all of a claimant’s wages earned from all jobs in the past year and dividing by 52. For example, a Claimant who earned $52,000 in the prior year would have an Average Weekly Wage of $1,000: $52,000/52 = $1,000.
Read more . . .


Thursday, March 16, 2017

Use of Target Date Funds in Defined Contribution Plans


Target date funds first came to market in 1994. The enactment of the Pension Protection Act of 2006 (PPA) greatly expanded the growth of target date funds.

A target date fund, also known as a lifecycle, dynamic-risk or age-based fund, is a collective investment scheme( often a mutual fund or a collective trust fund) designed to provide a simple investment solution through a portfolio whose asset allocation mix becomes more conservative as the target date (usually retirement) approaches.

The PPA allowed plan sponsors to direct participants' retirement contributions to a target date fund if they did not choose otherwise. The Department of Labor (DOL) issued a fiduciary safe harbor for plan sponsors that chose to offer target date funds to their participants as a default investment option, known as a "qualified default investment alternative.
Read more . . .


Tuesday, March 7, 2017

Internal Revenue Service Issues 2016 Required Amendments List for Tax-Qualified Retirement Plans


On June 29, 2016, the Internal Revenue Service (“IRS”) released supplemental guidance detailing anticipated changes to its determination letter program for individually designed retirement plans (“IDPs”) that are tax-qualified under the Internal Revenue Code (“Code”).  The changes are generally effective January 1, 2017.  Although IRS Revenue Procedure 2016-37 covers many changes to the IRS’s determination letter program, most of the changes relate to when an IDP— 

  • must be amended for legally required changes, or
  • may request a determination letter.

Background.  Pursuant to IRS Revenue Procedure 2016-37, an IDP’s Code Section 401(b) remedial amendment period for required amendments is based on a so-called “Required Amendment List” (“RA List”) that is published by the IRS, unless legislation or other guidance provides otherwise.
Read more . . .


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