An Over-the-Counter Remedy for the Health Risk Assessment Headache
A number of clients have recently asked a relatively simple question: Can they require an employee to take a health risk assessment ("HRA") as a condition of participation in a wellness program or group health plan? This question seems simple enough. Nevertheless, the answer involves unraveling a complex web...
Church Plan Administrators Are Subject to State Law Claims
A "church plan" – whether maintained by an actual church or by a church affiliated organization (such as a college or hospital that is church controlled) – is exempt from ERISA unless it makes an irrevocable electionto subject itself to ERISA. Most church plans do not make that election...
Agencies Broadly Expand Required Preventive Services for Women Under Health Care Reform
On Monday Treasury, Labor, and HHS released an amendment to the interim final regulations on preventive care. This amendment adopts new standards that broadly expand required preventive services for women under health care reform. As discussed in prior posts , health care reform requires that non-grandfathered health plans cover...
Choices, Competition and Clout: New Proposed Regulations on Health Insurance Exchanges
Last week the U.S. Department of Health and Human Services ("HHS") released proposed regulations designed to implement the provisions of the Affordable Care Act calling for the establishment of State-based affordable insurance exchanges ("Exchanges"). As explained by HHS in the preamble to the proposed regulations, "Exchanges will offer Americans...
IRS Getting Better and Better at Selecting and Auditing Noncompliant Plans
According to a report recently published by the Treasury Department's Inspector General for Tax Administration, the IRS has significantly improved its ability to select noncompliant retirement plans for examination and is achieving greater success results in those examinations. The report describes the methods used by the IRS to identify...
DOL Finalizes (and Adjusts) Delay in Fee Disclosure Rules, Clarifies Quarterly Notice Requirement
Yesterday the DOL's Employee Benefits Security Administration (EBSA) issued a final rule delaying the applicability dates of the new fiduciary and participant fee disclosure rules. This final rule extends the effective date of the new fiduciary-level fee disclosure rules under ERISA Section 408(b)(2) from July 16, 2011 to April...
Traps for the Unwary: COBRA and Retiree Medical
Employers often ask about their obligations to offer COBRA benefits to terminating employees who are eligible for retiree medical coverage, and with good reason. The interplay between COBRA and alternative retiree coverage is complicated, and an employer faces steep penalties in the event of a mistake. Whether COBRA coverage...
IRS Swamped by EPCRS Applications: The Price of Popularity
The IRS Employee Plans Compliance Resolution System (EPCRS) has been a true success story for the Service and for plan sponsors. Under EPCRS, a plan sponsor may voluntarily correct a wide variety of errors made in the administration or drafting of a tax-qualified retirement plan, with a more limited...
Double Dose of Relief for Non-Profit Hospitals and Certain Insurance Companies Under Health Care Reform
Over the past week the IRS has doled out a double dose of relief for non-profit hospitals and health insurance organizations that were facing reporting and compliance deadlines created by the Affordable Care Act: (1) delayed reporting of community care/community benefit activities by tax-exempt hospitals; and (2) temporary reprieve...
Benefits Law Update Named a Top 10 Blog by HR Daily Advisor
We are pleased to announce that HR Daily Advisor has named us to their 2011 list of top 10 blogs for compensation and benefits. Many thanks to the editors at HR Daily Advisor for selecting us. We'll do our best to justify the honor.
Five Things to Consider in Completing Form 990: Tips from an Expert
We are pleased to offer a guest post by Warren Kerper , Managing Principal in the Boston office of Sullivan, Cotter and Associates, Inc. Warren advises tax-exempt employers, especially health care organizations and colleges and universities, in the design and establishment of a wide variety of executive compensation arrangements...
Electronic Disclosure Comment Period Ends
As we discussed in an earlier post , in April the Department of Labor's Employee Benefits Security Administration (EBSA) issued a Request for Information (RFI) soliciting views, suggestions, and comments to determine whether to expand or modify the rules regarding electronic distribution of employee benefit plan information under ERISA...
DOL Officially Proposes Delay in Application of Fiduciary Fee Disclosure Rules
The DOL's Employee Benefits Security Administration (EBSA) has finally provided official notice of its proposal to delay the applicability date of the new fiduciary fee disclosure rules under ERISA Section 408(b)(2), from July 16, 2011 to January 1, 2012. Although EBSA announced its intention to propose this delay back...
Maine Revamps Its Health Insurance Laws
Last week Maine Governor Paul LePage signed into law new legislation (L.D. 1333) intended to make sweeping changes to the Maine individual and small employer group health insurance markets. Reasonable minds disagree on the efficacy (and desirability) of the law. While many of the changes primarily affect those who...
IRS Launches Universal Availability Rule Compliance Project
The IRS Employee Plans Compliance Unit (EPCU) has kicked off its long awaited compliance initiative focusing on how higher education organizations apply the "universal availability rule" to their 403(b) plans . As we've explained in a prior post , under the universal availability rule if a 403(b) plan permits...
DOL (Finally) Considers Changes to Electronic Disclosure Rules
The Department of Labor's Employee Benefits Security Administration (EBSA) has determined that it may be time to update the rules regarding electronic disclosures. (The current rules were published back in 2002.) Accordingly, EBSA has issued a Request for Information (RFI) soliciting views, suggestions, and comments to determine whether to...
IRS Describes Potential Approaches to Employer Shared Responsibility Under Health Care Reform
Treasury and the IRS have given us a peek at how they may implement the employer shared responsibility provisions of health care reform, set to take effect in 2014. These provisions, commonly known as the "play or pay" mandate, will impose a penalty on applicable large employers that do...
The Presumption of Prudence Persists: In re UBS ERISA Litigation
In 1995 the Third Circuit Court of Appeals broke new ground in the area of fiduciary liability under ERISA when it found that an action of a fiduciary "should be presumed to be reasonable" if the terms of a retirement plan "require or strongly encourage" the fiduciary to take...
Intermediate Sanctions and Executive Compensation - A Quick Refresher
Executive pay in the exempt organization setting has been subject to scrutiny and regulation since long before corporate bad actors and the financial crisis prompted Congress to pass laws limiting compensation and imposing process requirements for banks, public companies and other for-profit employers. The basic rules that apply to...
Reporting Health Care Costs on Form W-2
The Affordable Care Act requires employers to report on Form W-2, for informational purposes only, the cost of the group health benefits provided to each employee. IRS Notice 2011-28 (issued March 29, 2011) provides interim guidance on how this new information reporting obligation is to be implemented. Employers are...
Expanded Form 1099 Reporting Repealed, Free Choice Vouchers Likely Next
Late yesterday President Obama signed into law legislation to repeal the expanded Form 1099 reporting requirements passed under health care reform. This new legislation, supported by the President, marks Congress' first successful rollback of health care reform. As discussed in an earlier post , the new legislation repeals a...
HHS Early Retiree Reinsurance Program to Stop Accepting Applications
If your company has a retiree medical plan and has not applied to participate in the Early Retiree Reinsurance Program (ERRP), now is the time to do so. HHS has announced that it will stop accepting applications for the ERRP as of 30 calendar days after April 5, 2011...
Health Care Reform: One Year Later (Part 2)
This is the second in our two-part series of posts regarding the status of health care reform one year after the Patient Protection and Affordable Care Act was signed into law. Part 1 summarized the state of compliance by employers, offered a quick survey of regulatory guidance and highlighted...
Health Care Reform: One Year Later (Part 1)
One year ago today President Obama signed the Patient Protection and Affordable Care Act – the landmark health care reform legislation – into law. A week later he signed the Health Care and Education Reconciliation Act of 2010 (containing the "Senate fixes") to complete the legislative process that made...
New IRS Guidance on Terminating Section 403(b) Plans
Those of us who deal with Section 403(b) plans (a/k/a tax sheltered annuity plans) rejoiced when Treasury published Final Regulations under Code Section 403(b) back in 2007. Those regulations addressed many questions that either had not been dealt with, or had been dealt with only through a collection of...
Maine Receives Waiver from Medical Loss Ratio Requirements Under Health Care Reform
The federal Department of Health and Human Services has granted Maine's request for a waiver from health care reform's medical loss ratio rule . This new rule requires health insurance companies to devote at least 80 cents (85 cents in the large group market) of every premium dollar to...
A Prudent Process Protects Fiduciaries
Section 404(a)(1)(B) of ERISA requires a fiduciary to discharge its duties with respect to an ERISA plan "with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of...
Ignoring the IRS Is Not a Good Idea (another example)
On February 23, 2011, the IRS indicated that its 401(k) Compliance Check Questionnaire Project is entering its next phase. As discussed in a prior post , in May 2010 the IRS, through its Employee Plans Compliance Unit, sent letters to a statistically valid sample of 1,200 401(k) plan sponsors...
HHS Releases Information Regarding Early Retiree Reinsurance Program Expenditures
Earlier this week HHS revealed that it expects to distribute about $3.6 billion in reimbursements under the Early Retiree Reinsurance Program (ERRP) to employers and other sponsors of retiree medical plans during fiscal 2011. (The federal fiscal year runs from October 1 through September 30.) The remaining funds, approximately...
DOL Announces Delay in Application of Fiduciary Fee Disclosure Rules
Today EBSA (part of the DOL) announced its intention to delay the applicability date of the new feedisclosure rules under Section 408(b)(2) of ERISA, from July 16, 2011 to January 1, 2012. These interim final rules , published on July 16, 2010, require certain pension plan service providers to...
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