HRA vs. FSA vs. HSA: What’s the Difference?

As the price of healthcare continues to increase, employers can assist employees by providing employees the opportunity to enroll in special accounts to help pay for medical expenses. Some of these accounts enable the employer to share the cost burden with the employee while providing tax-savings to each. Generally, there are three (3) employer-sponsored vehicles that are commonly used to help pay for qualified medical expenses: (1) Health Reimbursement...

Continue reading…

Is Your Denial Letter Good Enough?

Plan administrators are engaged to administer claims on the plan’s behalf, which include determinations of eligibility and denying coverage, among other services. When a claim is denied, the plan administrator is required to provide adequate notice to the participant, among other things. The Employee Retirement Income Security Act of 1974 (“ERISA”) generally requires the notice to include the specific reasons for the denial and to provide citations to the...

Continue reading…

AbbVie v. Payer Matrix Pending Litigation

Introduction: In May 2023, AbbVie, a pharmaceutical manufacturing company, filed suit against Payer Matrix, a company that provides alternate funding options for their clients, usually health plans, by way of enrolling participants in the health plan into programs aimed at providing expensive specialty medication for low income and uninsured participants. After realizing Payer Matrix’s business model, AbbVie filed suit against Payer Matrix and alleged that Payer Matrix violated, and continues...

Continue reading…

Recovering Overpayments After the SECURE Act 2.0. How do Plans Proceed?

Multiemployer benefit plans are governed by the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Internal Revenue Code. The SECURE Act 2.0 (“SECURE Act”) became effective on December 29, 2022, as part of the 2023 Consolidated Appropriations Act. The law brings significant changes to the Department of Labor (“DOL”) and Internal Revenue Service (“IRS”) regulations on benefit overpayments, which occur, for example, when retirees, or their beneficiaries,...

Continue reading…

The Growing Popularity of “Weight Loss” Drugs – And The Impact on Health and Welfare Plans

By now, most people are aware of the new weight loss “wonder drugs” like Ozempic, Wegovy, Rybelsus, and Mounjaro. Through clever marketing and catchy jingles these drugs have made their way from Hollywood to main street U.S.A. And while many are being used off-label, some manufacturers are asking the U.S. Food and Drug Administration to approve them for weight loss treatment. As demand for these drugs continues to grow, plan...

Continue reading…

Withdrawal Liability and How it Can Affect Successor Employers

Multiemployer pension plans are defined benefit retirement plans maintained pursuant to a collective bargaining agreement between employers and a union. A defined benefit plan is a retirement plan structure that guarantees a specific retirement benefit at retirement. The benefit amount may either be a pre-established set amount, or an amount based on a specific formula which typically considers factors such as time of employment and age. In 1974, Congress...

Continue reading…

IRS Substantiation Rules Update

The IRS’s Chief Counsel released a memorandum that confirmed the IRS’s position on the substantiation of medical and dependent care expenses. See IRS Chief Counsel Memorandum 202317020. The guidance addressed two questions: (1) How are medical reimbursements treated if they are not properly substantiated and (2) Whether plans can adopt short-cuts to the substantiation rules, such as “sampling,” self-certification, de-minimis rules, or treating certain providers as “favored.” While the...

Continue reading…

ESG – Investment Concerns

In November of 2022, the Department of Labor (DOL) published a final rule that allows retirement plan fiduciaries to consider environmental, social, and governance (ESG) factors when selecting retirement investments and exercising shareholder rights (proxy voting). This rule runs contra to the Trump Administration’s rules, which only allowed fiduciaries to consider ESG as a “tiebreaker” between similar investment options. As one may have expected, the new rule has been...

Continue reading…

Air Ambulance Reporting Remains in Limbo

On December 27, 2020, the No Surprises Act was signed into law. That Act introduced sweeping changes to how group health plans are allowed to handle payment of non-network providers and balance billing. However, it also required the Departments of Labor, Health and Human Services, and the Treasury to create reporting rules for air ambulance claims. The Act required plans to report the following on air ambulance claims:

  1. Whether...

    Continue reading…

Funding Status – Critical Status

What is Critical Status? In 2006, Congress passed the Pension Protection Act of 2006 (PPA). The PPA created four classifications for multi-employer pension plans that relate to the plans funding status: critical (red), seriously endangered (orange), endangered (yellow), and reasonably healthy (green). The plan’s status is determined by an annual valuation of the plan’s assets and liabilities, conducted by the plan’s actuary. The PPA requires the plan’s actuary to submit...

Continue reading…