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Employment Benefits

Tuesday, August 8, 2017

Fifth Circuit Affirms Use of Single Document as SPD and Plan


A federal appellate court in the fifth circuit has affirmed a trial court’s holding that a single document can serve as both the formal plan document and the summary plan description (SPD) for an ERISA plan. The case is Rhea v. Alan Ritchey, Inc., 858 F.3d 340 (5th Cir.
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Tuesday, August 1, 2017

Federal Appellate Court Rules ERISA Does Not Preempt California Law Voiding Discretionary Clauses in Disability Plans


In a federal appellate court ruling on the limits of federal-law preemption under the Employee Retirement Income Security Act of 1974 (“ERISA”), the United States Court of Appeals for the Ninth Circuit has upheld a California law that takes away the right of insurers to have the final say on benefit determinations in disability plans.

Background.  Under the facts in Talana Orzechowski v. Boeing Co. Non-Union LTD Plan, et al.
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Friday, July 28, 2017

IS AMERICA MISSING THE MARK ON TRULY IMPORTANT BENEFITS?


Employees Often Need Employer’s Support When Caring for Loved Ones

In a new survey conducted by the Northeast Business Group on Health (NEBGH) in conjunction with the American Associate of Retired Persons (AARP), caregiving ranked among the highest ten employee benefits’ priorities for employees.  At least 129 benefits managers from larger U.S. corporations were asked to respond to questions regarding attitudes in their workplaces towards allowing employees time and supporting them for their caregiving responsibilities.  The survey included 76 employers with more than 5,000 employees, 40 employers with 1,000-5,000 employees and 13 employers with less than 1,000 employees.
Read more . . .


Tuesday, July 11, 2017

United States Department of Labor Initiates Review of Fiduciary Rule


On June 8, 2017, the United States Department of Labor (“DOL”) took a first step in its review of the DOL’s previously promulgated and highly anticipated fiduciary regulations (“Fiduciary Rule”), which were intended to better define who is a fiduciary and when related prohibited transaction exemptions apply with respect to plan participants’ retirement benefits.  The review was ordered by President Trump earlier in 2017.  That first step was the delivery to the White House Office of Management and Budget (“OMB”) of a request for information (“RFI”) regarding the Fiduciary Rule.

Background.  In April 2017, the DOL had extended by 60 days, to June 9, 2017, the compliance deadline for the Fiduciary Rule, including 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.
Read more . . .


Wednesday, June 14, 2017

United States: Department of Labor's New Fiduciary Rule Became Effective June 9, 2017


The U.S. Department of Labor (DOL) has announced that the new fiduciary conflict of interest rule and related exemptions will begin taking effect on June 9, 2017. However, the DOL also announced a relaxed enforcement standard for the rest of 2017

The rule expands the “investment advice fiduciary” definition under the Employee Retirement Income Security Act of 1974 (ERISA). These fiduciary standards require advisers to adhere to a best interest standard when making investment recommendations, charge no more than reasonable compensation for their services and refrain from making misleading statements.
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Wednesday, May 31, 2017

Federal Court of Appeals Affirms Prohibition against Employment Discrimination Based on Sexual Orientation


In a landmark decision issued on April 4, 2017, the United States Court of Appeals for the Seventh Circuit held in Hively v. Ivy Tech Community College of Indiana, No. 15-1720 (en banc), that discrimination in employment based on a person’s sexual orientation is prohibited by Title VII of the Civil Rights Act of 1964 (“Civil Rights Act”). In particular, the Court of Appeals held that discrimination on the basis of sexual orientation is a form of unlawful sex discrimination.

Background.
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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 . . .


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.
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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 . . .


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