Enhanced Penalties and Stiffer Enforcement for HIPAA Violations
In our two prior posts concerning the Final Omnibus Rule under HIPAA we focused on changes to the breach notification requirements and rule changes affecting business associates . We now turn to the augmented penalty and enforcement provisions incorporated in the Final Rule. Many commentators have perceived stepped up...
Are You Ready for a HIPAA and ACA Audit?
It's no secret that the Office of Civil Rights of the Department of Health and Human Services has been expanding its enforcement activity under the privacy and security standards of HIPAA. And it's not surprising that enforcement activity is in the offing under the Affordable Care Act as well...
Final Omnibus Rules Under HIPAA Will Affect Business Associate Arrangements
In a previous post about the new Final Omnibus Rule under HIPAA, we highlighted important changes regarding the process by which potential privacy breaches must be evaluated and classified for notification purposes. As we observed in that post, changes that have been characterized by the Office of Civil Rights...
HHS Makes Significant Changes to HIPAA Breach Notification Rules
Three years ago, almost to the day, we posted the first of a two part analysis of the Interim Final Rules published by the U.S. Department of Health and Human Services ("HHS") governing the HIPAA privacy breach notification requirements. We now return to that subject in light of the...
New EPCRS Guidance Expands Scope of 403(b) Plan Corrections
Nearly 20 years after the IRS first established a limited program for the correction of 403(b) plan administrative errors, 403(b) plans have finally been placed on equal footing with qualified plans with respect to the correction of operational, documentary, and demographic failures under the Employee Plans Compliance Resolution System...
Same-Sex Marriage and Your Employee Benefit Plans
Maine has now officially joined nine other states in allowing same-sex marriage. The new Maine law ("An Act to Allow Marriage Licenses for Same-sex Couples and Protect Religious Freedom") was approved by a referendum election on November 6, 2012, and it became effective December 29, 2012. Some municipal offices...
Working with the New Annual Limit on FSA Contributions
The Patient Protection and Affordable Care Act modified the rules relating to cafeteria plans to impose a new $2,500 annual limit on the amount that an employee may elect to contribute to a health flexible spending account ("health FSA"), effective January 1, 2013. The modification came in the form...
2012 Year End Benefit Plan Compliance Checklist and Reminders for Employers
By comparison to past years, the end of 2012 and beginning of 2013 seem not to bring all that much in the way of new legal compliance burdens regarding retirement plans, health plans, and deferred compensation plans. For the most part employers face the continued implementation of changes in...
IRS Blesses Leave-Based Donation Programs for Hurricane Sandy Relief
Echoing the guidance provided back in 2005 in the aftermath of Hurricane Katrina, the IRS has published Notice 2012-69 to support leave-based donation programs for the relief of the victims of Hurricane Sandy. Leave-based donation programs allow employees to elect to forego vacation, sick, or personal leave in exchange...
HSAs in Operation: Ten Common Questions
It's open enrollment season and many employers are implementing high-deductible health plans (HDHPs) with a Health Savings Account (HSA) feature. Our prior posts about HDHPs and HSAs have explored the general eligibility requirements for HDHP/HSA arrangements and HSA contributions . Today we address common questions about the operation of...
Retention of Records for Employee Benefit Plans: How Long Is Long Enough?
Revised November 14, 2022 From time to time employers ask us how long they need to retain records relating to their ERISA plans. Though the question is most frequently asked with respect to retirement plans, it applies to health and other welfare benefit plans as well. The rules under...
Summary of Benefits and Coverage Must be Provided Soon
As employers prepare for their fall 2012 open enrollment efforts, we wanted to offer a reminder that a Summary of Benefits and Coverage (or "SBC") will now have to be provided to group health plan participants and beneficiaries. For group health plans having open enrollment periods, this new requirement...
How Should Employers Handle Medical Loss Ratio Rebates?
Many employers have now received rebates from insurance companies whose use of premium dollars to pay non-health benefit expenses exceed the limits imposed under the medical loss ratio ("MLR") standards of the Patient Protection and Affordable Care Act. Under the Affordable Care Act, insurance carriers in the large group...
The Verdict on Health Care Reform: Impact on Employer Health Plans
The United States Supreme Court ruled yesterday that the Patient Protection and Affordable Care Act of 2010 ("ACA") is constitutional in almost all respects, striking down only those provisions that would withhold all Medicaid funds from States that do not implement the expanded Medicaid coverage prescribed by the ACA.The...
July 1 Deadline Approaching for Service Provider Disclosures
As all sponsors and fiduciaries of tax-qualified retirement plans should know by now, written fee and expense disclosures are due to be provided to plan fiduciaries by "covered service providers" by July 1. As we explained in a prior post , this important disclosure is mandated by final regulations...
Section 409A Basics: When is a Payment Date Close Enough?
Code Section 409A(a)(2)(A) prescribes six times or events when deferred compensation may be paid: separation from service, the disability of the participant, the death of the participant, a specified time or fixed schedule specified under the plan, a change in control of the employer, or an unforeseeable emergency. In...
The First Circuit’s DOMA Decision: What It Means for Employers
On May 31, 2012 the U.S. Court of Appeals for the First Circuit, in Massachusetts v. United States Department of Health and Human Services , declared Section 3 of the Defense of Marriage Act (DOMA) unconstitutional. Section 3 defines marriage for purposes of applying all federal statutes as "a...
HSA Contributions: Making Sense of the Moving Parts
As we have noted, high-deductible health plans (HDHPs) with a Health Savings Account (HSA) feature are growing in popularity. Our last post on HDHP/HSA arrangements explored some of the general eligibility questions we are asked most frequently. Today we address common questions about HSA contributions. 1. Are contributions limited...
Section 457(f) Should Not Apply to the Deferred Compensation Plan of a For-Profit Subsidiary of a Tax-Exempt Organization – Right?
Special thanks to Peter J. Dill, a Senior Consultant at Towers Watson (Boston), for his consultation and input on this post. Treasury Regulations meant to reconcile the "substantial risk of forfeiture" provisions of Code Section 409A and Code Section 457(f) are expected to arrive some day. Those regulations have...
Participant-Level Fee Disclosure for ERISA and Non-ERISA Plans
After our recent post on the fiduciary-level fee disclosure rules under ERISA Section 408(b)(2), we wanted to complete the picture for plan fiduciaries by revisiting the participant-level fee disclosure rules under ERISA Section 404(a). These rules require fiduciaries of participant-directed individual account plans (such as 401(k) and 403(b) plans...
Section 409A Basics: Deferral Elections and Discretionary Bonuses
The Final Regulations under Code Section 409A took effect nearly five years ago. By now those of us who regularly deal with deferred compensation issues have fully internalized the core requirements of Section 409A. We have even managed to sensitize our clients and other professionals to the possibility that...
Plan Fiduciaries Should “Welcome” Final Regulations Regarding Service Provider Disclosures
Last week the U.S. Department of Labor published Final Regulations dealing with service provider disclosures under Section 408(b)(2) of ERISA. This is the latest in a series of regulatory initiatives undertaken by the DOL to ensure that plan fiduciaries, as well as plan participants and beneficiaries, obtain meaningful information...
Three Tips for Cycle A Determination Letter Filers
Happy New Year! The deadline for Cycle A filers (employers with EINs ending in 1 or 6) to submit determination letter applications to the IRS for their tax-qualified retirement plans closes on January 31, 2012. That means that employee benefits lawyers and other professionals all over the country (including...
Implementing an HSA with HDHP: How Hard Could it Be?
High-deductible health plans (HDHPs) with a Health Savings Account (HSA) feature are growing in popularity. While implementing an HDHP/HSA arrangement can be complicated, having a sense of the landscape can prevent uncomfortable bumps and bruises. This post explores some of the general eligibility questions we are asked most frequently...
TIGTA Finds IRS Examinations Are Adversely Affected By Information Dropped from Electronic Form 5500 Filings
Prior to January 2010, the DOL manually processed Form 5500 paper returns and schedules. Beginning in January 2010, the DOL began using a new system called EFAST 2 to process Form 5500 filings electronically. Because the Code does not require certain filers to provide information electronically, a variety of...
New IRS Church Plan Guidance Should Influence Participant Disclosures
IRS Revenue Procedure 2011-44 imposes a new notice requirement upon any employer requesting a ruling from the IRS to confirm the status of an employee benefit plan as a "church plan" within the meaning of Code Section 414(e). The notice, for which the IRS has provided a model, is...
Tax-Free Treatment of Cell Phones, Without the Burdensome Recordkeeping
It is fairly common for employers to provide employees with cell phones or to reimburse employees for the business use of their personal cell phones. Until recently, properly receiving favorable tax treatment for such employer-provided cell phones and reimbursements required burdensome recordkeeping. IRS Notice 2011-72 and an accompanying Field...
Unclaimed Benefits and State Escheat Laws
From time to time we are asked whether a plan administrator must report and remit unclaimed plan benefit payments as abandoned or unclaimed property to various states under their escheat and unclaimed property statutes. Clients are usually asking about how to handle uncashed retirement plan benefit checks, and this...
Two Things EPCRS Does Not Tell You About Retroactive Amendments, But You May Want to Know
The Employee Plans Compliance Resolution System (EPCRS) is the IRS' comprehensive correction system for tax-qualified retirement plans, currently set forth in Rev. Proc. 2008-50 (we expect a new EPCRS Rev. Proc. to be released in the near future). One correction method under EPCRS allows operational failures to be voluntarily...
Five Things Employers Should Like About Restricted Stock
Employers large and small often ask us how they can reward key employees for their contributions to the success of the company and provide a meaningful inducement for them remain with the company. These companies often have annual incentive plans, but they typically are looking for a longer term...
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